Today it can be hard to understand why applying economics to law could be controversial, both because of the cultural prominence of economics generally and because it has become so commonplace to talk about law in economic terms: to question how regulations affect the efficiency of a particular market, for instance, or to accuse some statutory regime of enacting perverse incentives, or to suggest that some policy has been pushed past the point of diminishing returns.…
And yet, this particular economic mode of thinking and talking about the law only dates to about 1960, and only became widely influential in the 1970s and ’80s.…
Between the 1960s and 2014, then, what changed? At the basic level of events and chronology, it is not hard to trace the rise of law and economics. Scholars typically identify the University of Chicago as the relevant holy land, Ronald Coase’s 1960 article, “The Problem of Social Cost,” as the gospel of modern law and economics, and Richard Posner’s 1973 book Economic Analysis of Law, which synthesized and riffed on the burgeoning literature for a wide audience, as its letters from Paul. But to name the key texts and figures in a school of thought is one thing; it’s another to explain how and why those texts and figures gained influence—why anyone read them, much less took them seriously.
Summary of how we got here.
The cleanest way I can see to synthesize these three accounts would go something like this: [Brad] Snyder’s tale of generational rebellion explains the motivation that drove leading figures like Posner to want to chart a new path in legal thought away from legal process theory. [Daniel] Rodgers’s big-picture intellectual context explains why this particular new path was among the routes visible to them at the moment they began looking (and perhaps why it was among the more attractive such paths). And finally, [Steven] Teles’s nuts-and-bolts account explains why so many others followed down the path, once it had been marked—it reconstructs the vectors of institutional support and funding that brought these ideas into contact with judges, lawyers, legal scholars, and other interested observers of law who might not have had any particular generational motivation to worry about process theory, and who might not have had any particularly systematic exposure to the welter of market concepts that Rodgers discusses, but who, once they encountered law and economics in its various vernacular iterations, decided it sounded plausible enough to them (and/or that it served other interests they had) that they became converts.
Now maybe that’s not right because there’s some deep flaw with one or more of these accounts that I’m overlooking, or because it’s not the best calibration among the three accounts; and of course it’s too schematic, insofar as it implies that phenomena such as motivation, mindsets, and institutional support operate independently and on entirely different levels from one another. But it strikes me as one plausible enough way to explain the rise of law and economics.
Neoliberalism is basically the application of classical economic liberalism to law and politics. It was spawned by the Chicago School and its spread was funded by wealthy donors.
The trend has been away from traditional thinking toward rational choice theory and the assumptions of neoclassical economics, that is economic liberalism at the expense of social liberalism and its focus on human rights and civil liberties.
U. S. Intellectual History Blog
The trend has been away from traditional thinking toward rational choice theory and the assumptions of neoclassical economics, that is economic liberalism at the expense of social liberalism and its focus on human rights and civil liberties.
U. S. Intellectual History Blog
Three Ways of Explaining the Rise of “Law and Economics,” and Also, One Way
Guest Post by Sara Mayeux, a Sharswood Fellow at the University of Pennsylvania Law School and a PhD candidate in history at Stanford
Guest Post by Sara Mayeux, a Sharswood Fellow at the University of Pennsylvania Law School and a PhD candidate in history at Stanford
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