Well, we've rounded Labor Day, which means that summer's over and it's time to get down to talking scholarship. Daniel Klerman of the University of Southern California has a characteristically terrific paper, "The Economics of Legal History," on the recent writing on legal history that is influenced by (or uses may be a better term) economic analysis of law. It's forthcoming in the Oxford Handbook of Law and Economics (Francesco Parisi ed., 2014). This builds on one of his earlier pieces (which happens to be one of my favorite works of recent legal history), "Statistical and Economic Approaches to Legal History" and I guess on "Economic Analysis of Legal History," too.
Two brief observations here. First, I was a little surprised to see Morton Horwitz' Transformation of American Law, 1780-1860 get such limited attention here -- Klerman acknowledges that was about the economic effects of changes in law (in fact, Horwitz depicts economics as the driving factor behind the "transformation" of American law), but Klerman limits the chapter to works that are influenced by Posner and later scholars who apply economic analysis to law. We are all permitted to define the boundaries of our work and I agree that the boundaries in this case make sense. However, I see (and I don't think I'm the only one) Horwitz as drawing from the same core of cultural ideas as Posner and as in many ways a pretty explicit response to the growing law and economics movement. Remember that Horwitz and Posner were both writing in the early 1970s and both looked at the ways that nineteenth century judges took economic considerations into account in shaping the common law. It's just that for Horwitz the turn to economics in the nineteenth century was something to lament and for Ponser it helped make the case that there should be more economic analysis. Anyway, let's just chalk that point up to my deep affection for Transformation I!
On a bigger and more substantive point, Klerman identifies five ways in which economic analysis can illuminate legal history (and here I'm cribbing from his abstract):
1) Law as the dependent variable. This genre tries to explain why societies have the laws they do and why laws change over time. Early economic analysis tended to assume that law was efficient, while later scholars have usually adopted more realistic models of judicial and legislative behavior that take into account interest groups, institutions, and transactions costs.
2) Law as an independent variable. Studies of this kind look at the effect of law and legal change on human behavior. Examples include analyses of the Glorious Revolution, legal origin, and nineteenth-century women’s rights legislation.
3) Bidirectional histories. Studies in the first two genres analyze law as either cause or effect. In contrast, bidirectional histories view law and society as interacting in dynamic ways over time. Laws change society, but change in society in turn leads to pressure to change the law, which starts the cycle over again. So, for example, the medieval communal responsibility system fostered international trade by holding traders from the same city or region collectively responsible. Nevertheless, the increase in commerce fostered by the system undermined the effectiveness of collective responsibility and put pressure on cities and nations to develop alternative enforcement institutions.
4) Private ordering. A significant body of historical work investigates the ability of groups to develop norms and practices partly or wholly independently of the state. Such norms include rules relating whaling, the governance of pirate ships, and, more controversially, medieval commercial law (the “law merchant”).
5) Litigation and Contracts. Law and economics has developed an impressive body of theories relating to litigation and the structure of contracts. These theories often shed light on legal behavior in former times, including contracts between slave ship owners and captains, and the suit and settlement decisions of medieval private prosecutors.
I would add that such classifications are also very useful in thinking about law and cultural legal history. That is, those of us who write from cultural more than economic perspectives, should be thinking about similar ways of categorizing the influence that law and legal institutions exercise on culture (and how they are influenced). I might also expand a little on the fourth category to think about how legal institutions (such as courts) facilitate ordering and on the fifth category how legal technology (like contracts, trusts, or wills) illuminate how law functioned. They can also reveal core cultural values.
Hat tip to Dan Ernst of Legal History Blog.
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