Butler ran unsuccessfully as a Republican for the U.S. House of Representatives from Michigan's 11th congressional district in the 1992 elections; he defeated incumbent Representative Mark D. Siljander in the Republican primary but lost the general election to Democrat Fred Upton.
Butler received his Bachelor of Arts degree in economics from the University of Richmond in 1977 and his Master of Arts from Virginia Tech , and his Ph.D. in economics, also from Virginia Tech, in 1982. There he studied under Nobel Economics Laureate James M. Buchanan Butler received his Juris Doctor law degree from the University of Miami in 1982, where he was a John M. Olin Fellow in Law and Economics.
Butler spent three years at Texas A&M as an assistant professor of management before becoming a John M. Olin Fellow in Law and Economics at the University of Chicago Law School during the 1985-86 academic year. From 1986 to 1993, Butler was a professor at George Mason University School of Law. After 1992 Butler Fred C. and Mary R. Koch Distinguished Professor of Law and Economics at the University of Kansas School of Law and School of Business, and for a short time served as dean of the Argyros School of Business and Chairman of the Chapman University Law and Organizational Economics Center before moving to Chapman in 2001.
Butler has been involved in the political and legal spheres. While at George Mason University, he served as director of the Law and Economics Center at the George Mason University School of Law, which operates the Economics Institutes program for federal judges, which is controversial. In December 1995, Butler introduced the Economics Institute for State Judges at the University of Kansas' Law and Organizational Economics Center.
Butler has written extensively on law and economics. He has written a casebook, Economic Analysis for Lawyers (with Christopher Drahozal, Carolina Academic Press), used at the Economics Institute for State Judges. Other books by Butler include Unhealthy Alliances: Bureaucrats, Interest Groups, and Politicians in Health (1994, American Entreprise Institute) The Corporation and the Constitution (with Larry E. Ribstein; 1995, American Entreprise Institute); and Using Federalism to Improve Environmental Policy (with Jonathan R. Macey; 1996, American Entreprise Institute).