“Law and Neoclassical Economics”: A Response to Commentaries

Law and History Review

Volumn 16, Issue 1, 1998, Pages 163-171

  Hackney, James R ^a  

^a NORTHEASTERN UNIVERSITY   (United States)

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[No Author keywords available]

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EID: 0041906986     PISSN: 07382480     EISSN: 19399022     Source Type: Journal    
DOI: 10.2307/744326     Document Type: Letter

References (26)

1. For an example of this, see Ronald Coase's critique of A. W. B. Simpson's historical work
2. on the Coase theorem, “Law and Economics and A. W. Brian Simpson,” Journal of Legal Studies 25 (1996): 105. (“He [Simpson] writes about economics and economists from the point
3. of view of an historian and a lawyer. It is not surprising to find that his article contains so many misunderstandings of my position and misstatements about me and my work.”)
4. Hackney, “Law and Neoclassical Economics,” Law and History Review 15 (1997): 288-91.
5. James J. Heckman, “The Intellectual Roots of the Law and Economics Movement,” Law and History Review 15 (1997): 3274. “Law and Neoclassical Economics,”., 328.
6. “The Intellectual Roots of the Law and Economics Movement,”.
7. Economic studies have documented the fact that there is very little intergenerational income mobility in the United States. Gary Salon, “Intergenerational Income Mobility in the United States,” American Economic Review 82 (1992) (Papers and Proceedings of the 104th Annual Meeting of the American Economic Association): 393-108; David Cutter and Lawrence Katz, “Rising Inequality? Changes in the Distribution of Income and Consumption in the 1980's,” American Economic Review 82 (1992): 546-51.
8. Heckman, “Intellectual Roots,” 328.
9. “Intellectual Roots,”., 329.
10. For a comprehensive discussion of recent debates along these lines, see Steven Croley and Jon Hanson, “Rescuing the Revolution: The Revised Case for Enterprise Liability,” Michigan Law Review 91 (1993): 683-797.
11. Heckman, “Intellectual Roots,” 332.
12. Neil Duxbury, “Law and Economics, Science and Politics,” Law and History Review 15 (1997): 326.
13. I must admit to not fully exploring one aspect of distinction: Calabresi's paternalist beliefs about the ability of individuals to act in their own self-interest. For an extended discussion of the role of paternalism and distribution in tort and contract law doctrine, see Duncan Kennedy, “Distributive and Paternalist Motives in Contract and Tort Law, with Special Reference to Compulsory Terms and Unequal Bargaining Power,” Maryland Law Review 41 (1982): 563-658.1 am in agreement with Duxbury that more recent writings by Calabresi may clarify the nature and full implications of these and other distinctions (“Law and Economics, Science and Politics,” 326, n.22).
14. Heckman, “Intellectual Roots,” 330-31. Heckman's framing of Coase as a libertarian is somewhat in error. Coase may be more properly labeled as antistatist. See “Looking for Results,” an interview with Coase by Thomas Hozlett, Reason (January 1997), 42: “I've never started off-this is perhaps why I'm not a libertarian-with the idea that a human being has certain rights.”
15. See Frank Knight, “The Role of Principles in Economics and Politics,” American Economic Review 61 (1951): 15. (“[D]on't expect too much of ‘the state,’ be very critical in appraising the prospects for good and for harm to result before calling on ‘Leviathan’ and giving him power.”) For a discussion of Knight's libertarian views, see John McKinney, “Frank Knight and Chicago Libertarianism,” in The Chicago School of Political Economy, ed. Warren J. Samuels (New Brunswick: Transaction Publishers, 1976), 191. For an analysis of Knight's uneasiness with the laissez-faire position, see Sheryl Davis Kasper, “Frank Knight's Case for Laissez-Faire: The Patrimony of the Social Philosophy of the Chicago School,” History of Political Economy 25 (1993): 413-33.
16. Ernesto Screpanti and Stefano Zamagni have written a very good treatment of the demise of Keynesianism at the hands of neoclassicists ranging from Lionel Robbins to Milton Friedman. It is clear from their account that the era of “reigning Keynesian social planners,” as described by Heckman, was relatively short lived as a dominant theoretical project and subject to almost immediate contestation by antistatist neoclassicists. See Screpanti and Zamagni, An Outline of the History of Economic Thought (New York: Oxford University Press, 1993).
17. Screpanti and Zamagni give a detailed account of Austrian influences on “mainstream” economics. According to their chronology, the “Austrian theoretical approach joined the mainstream of the neoclassical system in the 1920's and 1930's.” See Ernesto Screpanti and Stefano Zamagni have written a very good treatment of the demise of Keynesianism at the hands of neoclassicists ranging from Lionel Robbins to Milton Friedman., 196.
18. Coase's recognition of his intellectual debt to F. A. Hayek and the institutional role Hayek played in establishing law and neoclassical economics studies at the University of Chicago is illustrative of this point. Hackney, “Law and Neoclassical Economics,” 284, n. 42, 306, n. 141.
19. See “The Fire of Truth: A Remembrance of Law and Economics at Chicago, 1932-1970,” ed. Edmund W. Kitch, Journal of Law and Economics 26 (1983): 163 (roundtable discussion of principal founders of law and neoclassical economics at the University of Chicago).
20. University of Chicago economists have had a tradition of paying particular attention to the intellectual history of their field. For a discussion of this and their motives for doing so, see John P. Henderson, “The History of Thought in the Development of the Chicago Paradigm,” in The Chicago School of Political Economy, ed. Warren J. Samuels (New Brunswick: Transaction, 1976), 341.
21. James Hackney, “The Intellectual Origins of American Strict Products Liability: A Case Study in American Pragmatic Instrumentalism,” American Journal of Legal History 39 (1995): 443-509.
22. Morton Horwitz's The Transformation of American Law, 1780-1860 (Cambridge: Harvard University Press, 1977) and The Transformation of American Law, 1870-1960 (New York: Oxford University Press, 1992) would be essential points of departure for such a study.
23. Carl Schorske, “1987 Charles Homer Haskins Lectures of the American Council of Learned Societies,” in Life of Learning, ed. Douglas Greenberg and Stanley N. Katz (New York: Oxford University Press, 1994), 64.
24. I never meant to cast any aspersions on Duxbury's exemplary account of law and neoclassical economics. It is obviously a major contribution to our understanding of the subject. However, I would not be the first to note that he “does not look closely enough into particular fields.” See Robert Gordon, “Book Review of Patterns of American Jurisprudence,” Georgetown Law Journal 84 (1996): 2225. While Gordon's criticism was limited to Duxbury's study of the legal realists, I believe it is generally illustrative. It does not hold true so much for Duxbury's cogent analysis of law and neoclassical economics contributions to antitrust law but certainly applies to his discussion of tort law contributions, which lacks doctrinal focus and text analysis.
25. Schorske, “Haskins Lectures,” 64.
26. Duxbury, “Law and Economics, Science and Politics,” 323. Whether such analyses fall under the rubric of “rigorous revisionism” or “something more sophisticated” is a matter of semantics. “Haskins Lectures,”., 324.