Economic Analysis of Law

Economic Analysis of Law

Introduction: Critical legal studies

The Critical legal studies is a theory that challenges and overturns accepted norms and standards in legal theory and practice which fully emerged in the late 1970s. “Critical legal studies was a left-wing political/academic movement that now exists only as a school of thought in legal academia. Between the late 1970s and the late 1980s, a few of us produced a critique of mainstream economic analysis of law. It had little effect on its targets,
through quite a few of its propositions have been vindicated by later work by others unaware of our earlier low-tech effort.”(1)

This theory was backed by a distinct scholarly movement, the Critical Legal Studies Movement Development or CLS.

Critical Legal Studies Movement Development

“A self-conscious group of legal scholars founded the Conference on Critical Legal Studies in 1977. Most of them had been law students in the 1960s and early 1970s, and had been involved with the civil rights movement, Vietnam protests, and the political and cultural challenges to authority that characterized that period. These events seemed to contradict the assumption that American law was fundamentally just and the product of historical progress; instead, law seemed a game heavily loaded to favor the wealthy and powerful. But these events also suggested that grassroots activists and lawyers could produce social change.

Fundamentally convinced that law and politics could not be separated, the founders of CLS found a yawning absence at the level of theory. How could law be so tilted to favor the powerful, given the prevailing explanations of law as either democratically chosen or the result of impartial judicial reasoning from neutral principles? Yet how could law be a tool for social change, in the face of Marxist explanations of law as mere epiphenomenal outgrowths of the interests of the powerful?

Hosting annual conferences and workshops between 1977 and 1992, CLS scholars and those they have influenced try to explain both why legal principles and doctrines do not yield determinate answers to specific disputes and how legal decisions reflect cultural and political values that shift over time. They focused from the start on the ways that law contributed to illegitimate social hierarchies, producing domination of women by men, nonwhites by whites, and the poor by the wealthy. They claim that apparently neutral language and institutions, operated through law, mask relationships of power and control. The emphasis on individualism within the law similarly hides patterns of power relationships while making it more difficult to summon up a sense of community and human interconnection. Joining in their assault on these dimensions of law, CLS scholars have differed considerably in their particular methods and views.

Many who identify with the critical legal studies movement resist or reject efforts to systematize their own work. They seek to express claims of textual ambiguity and historical contingency in their own methods. Influenced by post-modernist developments in cultural studies, these critical scholars prefer episodic interventions to systematized theories. Some critical scholars press hard on a particular line of argument, and then shift away from it in order to avoid treating the argument itself as a kind of fetish or talisman.

Some critical scholars adapt ideas drawn from Marxist and socialist theories to demonstrate how economic power relationships influence legal practices and consciousness. For others, the Frankfurt School of Critical Theory and its attention to the construction of cultural and psycho-social meanings are central to explaining how law uses mechanisms of denial and legitimation. Still others find resonance with postmodernist sensibilities and deconstruction, notably illustrated in literary and architectural works. Some scholars emphasize the importance of narratives and stories in devising critical alternatives to prevailing legal practices. Many critical legal scholars draw upon intellectual currents in literature, pop culture, social theory, history, and other fields to challenge the idea of the individual as a stable, coherent self, capable of universal reason and guided by general laws of nature. In contrast, argue critical scholars, individuals are constituted by complex and completing sources of ideology, social practice, and power relationships.”(2)

Further Reading

  • “Alexander, G. and Skapsa, G. 1994. A Fourth Way? Privatization, Property and the Emergence of New Market Economics. New York: Routledge.
  • Baker, E. 1975. The ideology of the economic analysis of law. Philosophy and Public Affairs 5:3-41.
  • Baker, E. 1980. Starting points in the economic analysis of law. Hofstra Law Review 8:939-72.
  • Bebchuk, L. 1980. The pursuit of a bigger pie: can everyone expect a bigger slice? Hofstra Law Review 8:671-709.
  • Bratton, W. and McCahery, J. 1997. An inquiry into the efficiency of the limited liability company, of the theory of the firm and regulatory competition. Washington and Lee Law Review 34:629-86.
  • Calabresi, G. 1970. The Costs of Accidents. New Haven: Yale University Press.
  • Calabresi, G. and Hirschoff, J. 1972. Toward a test for strict liability in tort. Yale Law Journal 81: 1033-92.
  • Calabresi, G. and Melamed, D. 1972. Property rules, liability rules and inalienability: one view of the cathedral. Harvard Law Review 83: 1089-1128.
  • Coase, R.H. 1960. The problem of social cost. Journal of Law and Economics 3: 1-44.
  • Cooter, R. and Ulen, T. 1988. Law and Economics. Glenview, IL: Scott, Foresman; 2nd ed., Addison Wesley, Reading, MA: 1996.
  • Croley, S. and Hanson, J. 1990. What liability crisis? An alternative explanation for recent events in products liability. Yale Journal on Regulation 8: 1-111.
  • Dworkin, R. 1980. Is wealth a value? Journal of Legal Studies 9: 323-56.
  • Eastman, W. 1996. Everything’s up for grabs: the Coasean story in game theoretic terms. New England Law Review 31: 1-37.
  • Epstein, R. 1973. A theory of strict liability. Journal of Legal Studies 2: 131-204.
  • Hackney, J. 1995. The intellectual origins of American strict products liability: a case study in American pragmatic instrumentalism. The American Journal of Legal History 39: 443-509.
  • Heller, T. 1976. The importance of normative decisionmaking: the limitations of legal economics as a basis for a liberal jurisprudence- as illustrated by the regulation of vacation home development. Wisconsin Law Review 1976: 385-502.
  • Hohfeld, W. N. 1917. Fundamental legal conceptions as applied in judicial reasoning. Yale Law Journal 26: 710-58.
  • Horwitz, M. 1981. Law and economics: science or politics? Hofstra Law Review 8: 903-12.
  • Kaplow, L. and Shavell, S. 1994. Why the legal system is less efficient than the income tax in redistributing income. Journal of Legal Studies 23: 667-81.
  • Kelman, M. 1979a. Choice and utility. Wiscosin Law Review 1979:769-97.
  • Kelman, M. 1979b. Consumption theory, production theory and ideology in the Coase theorem. Southern California Law Review 52: 669-98.
  • Kelman, M. 1980. Spitzer and Hoffman on Coase: a brief rejoinder. Southern California Law Review 53: 1213-32.
  • Kelman, M. 1983. Misunderstanding social life: a critique of the core premises of law and economics. Journal of Legal Education 33: 274-312.
  • Kelman, M. 1984. Trashing. Stanford Law Review 36: 293-354. Kelman, M. 1987. A Guide to Critical Legal Studies. Cambridge, MA: Harvard University Press.
  • Kennedy, D. 1981. Cost-benefit analysis of entitlement problems: a critique. Stanford Law Review 33: 387-447.
  • Kennedy, D. 1982. Distributive and paternalist motives in contract and tort law with special reference to compulsory terms and unequal bargaining power. Maryland Law Review 41:563-638.
  • Kennedy, D. 1983. The role of law in economic thought: essays on the fetishism of commodities. American University Law Review 34: 939-1001.
  • Kennedy, D. 1987. The effect of the warranty of habitability on low income housing: ‘milking’ and class violence. Florida State Law Review 15: 483-519.
  • Kennedy, D. 1993. The stakes of law, of Hale and Foucault! In Sexy Dressing, Etc., Cambridge, MA: Harvard University Press.
  • Kennedy, D. 1997. A Critique of Adjudication: fin de siècle. Cambridge, MA: Harvard University Press.
  • Kennedy, D. and Michelman, F. 1980. Are property and contract efficient? Hofstra Law Review 8: 711-70.
  • Kolodney, L. 1991. Eviction-free zones: the economics of legal bricolage in the fight against displacement. Fordham Urban Law Journal 18: 507-43.
  • Posner, R. 1973. Economic Analysis of Law. Boston: Little Brown: 4th edn, 1992.
  • Shavell, S. 1980. Strict liability vs. negligence. Journal of Legal Studies 9: 1-25.
  • Schill, M. 1991. An economic analysis of mortgagor protection laws. Virginia Law Review 77: 489-538.
  • Schwartz, A. 1983. The enforceability of security interests in consumer goods. Journal of Law and Economics 26: 117-53.
  • Singer, J. 1982. The legal rights debate in analytical jurisprudence from Bentham to Hohfeld. Wisconsin Law Review 1982: 975-1059.
  • Singer, J. 1988. Legal realism now. California Law Review 76: 465-544.
  • Vandevelde, K. 1980. The new property of the nineteenth century: the development of the modern concept of property. Buffalo Law Review 29: 325-67.”(3)

Notes

  1. Duncan Kennedy, “law-and-economics from the perspective of critical legal studies”
  2. Cyberlaw, Harvard University, “Critical legal studies movement”
  3. Duncan Kennedy, “law-and-economics from the perspective of critical legal studies”

See Also

Critical legal studies
Critical theory
Judicial activism
Legal formalism
Legal realism
Critical management studies
International legal theory
Philosophy of law
Rule according to higher law
Critical race theory
Theories of Tort Law: Economic Analysis
Westlaw’s Case Analysis
Theories of Economic Regulation
International Covenant on Economic, Social, and Cultural Rights
List of Law Journals and Reviews
International economic law sources
TOP US Online Law Journals ranking
Theories of Tort Law: Justice, Rights, and Duties
Economic Discrimination
Law Journals


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