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14 Geo. Mason U. L. Rev. 253 (1991-1992)
Why Do States Regulate Admission to the Bar - Economic Theories and Empirical Evidence

handle is hein.journals/gmaslr14 and id is 261 raw text is: 1991]

Reed Olsen,* Dean Lueck,** and Michael Ransom***
After 1870, there was another line of defense against competition; the law-
yers' unions (never called by that name), which fought vigorously to protect
the boundaries of the calling. The organized profession raised (or tried to
raise) its 'standards'; tried to limit entry into the field, and (above all) tried to
resist conversion of the profession into a 'mere' business or trade.'
A basic tenet of economics is the assumption that individuals are
rational; that is, individuals attempt to make choices that, given the
circumstances, will maximize their well-being. Rationality may seem to
be singularly unrealistic to the non-economist. The theoretical models
built upon this assumption are, however, extremely useful in predicting
real world behavior.2 As such, the assumption of rationality allows
economists to explain the functioning of most market behavior. After
all, markets are composed of individuals and their actions. The assump-
tion of rationality also explains the functioning of an enormous amount
of nonmarket behavior. For example, decisions about families, religion,
and numerous other nonmarket matters are all made by rational
Economists also suggest that rational self-interest governs the
choice between different rules of law, including the regulations regard-
* Department of Economics, Southwest Missouri State University.
** Department of Economics, Louisiana State University.
Department of Economics, Brigham Young University. The authors wish to thank Wil-
liam Bolger, Executive Director of the National Resource Center for Consumers of Legal Ser-
vices, for providing data on law firms, and Jim Bowers, Joel Chaston, and John Church for their
careful reading of earlier drafts of this article.
Lawrence Friedman, A History of American Law 634 (2d ed. 1985).
For a more detailed discussion of the assumption of rationality and its utility, see Richard
A. Posner, Economic Analysis of Law 15 (3d ed. 1986).
See, e.g., Gary Becker, A Treatise on the Family (1981); Gary Becker, The Economic
Approach to Human Behavior (1976); Douglass C. North & Roger L. Miller, The Economics of
Public Issues (1987).

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