Mehrotra on Seligman and the International Tax Regime

Ajay K. Mehrotra, Northwestern Pritzker School of Law and the American Bar Foundation, has posted The Intellectual Origins of the Modern International Tax Regime: Edwin R. A. Seligman, Economic Allegiance, and the League of Nations' 1923 Report, which is forthcoming in the Journal of Law & Political Economy:

E.R.A. Seligman (NYPL)

In March 1923, a group of prominent political economists and tax law experts gathered in Geneva, Switzerland to discuss the post-World War I framework for a new international tax regime. Commissioned by the League of Nations, these experts produced a comprehensive report that gradually became the intellectual foundation of the modern international tax regime. Relying on archival materials and other primary sources, this article contends that the US expert Edwin R. A. Seligman played a vital role in revising the report. While scholars have noted Seligman's influence over US tax law and policy, his pivotal role in drafting the 1923 report has only recently been acknowledged. This article builds on this recent scholarship by investigating how Seligman's background, experiences, and ideas-particularly his analysis and advocacy of the concept of "ability to pay" and "economic allegiance"-shaped the 1923 Report, and hence the subsequent development of the modern international tax regime.

--Dan Ernst

Desierto et al. on the Political Economy of Magna Carta

Desiree Desierto and Mark Koyama (George Mason University) and Jacob Hall (University of Pennsylvania) have posted Magna Carta:

King John Granting Magna Charta (NYPL)

Magna Carta, a pivotal moment in history, institutionalized constraints on royal power. We model it as an optimal agreement between two coalitions capable of violence: the king’s loyalists and the rebel barons. This agreement is more likely when the king extracts large rents; the distribution of rents among barons is egalitarian; and barons have large resources that are non-appropriable by the king. Under these conditions, even the baron that enjoys the largest rents would be willing to lead a rebel coalition that has sufficient resources to defeat the loyalists. We test predictions with data on the universe of barons in England between 1200-1270.

--Dan Ernst

Heath on Chinese Boycotts

J. Benton Heath, Temple University Beasley School of Law, has posted Economic Sanctions as Legal Ordering:

This Article recovers a critical episode in the history of economic sanctions and considers its implications for world order today. Beginning in 1905, Chinese citizens launched a series of protests targeting American, British, and Japanese goods. These boycotts caused economic damage, disrupted international relations, and at times won significant political victories. At the same time, they captured the imaginations of peace advocates, lawyers, and scholars, who saw in the boycotts either a fundamental threat to legal ordering, a promising avenue for enforcing interstate peace, or, most radically, an engine for new kinds of political organization outside the typical forms of state and empire.

This Article argues that the debates over the early twentieth-century Chinese boycotts invite us to rethink the relationship between economic sanctions and legal ordering. Through historical and theoretical work, the Article demonstrates that boycotts were understood at the time as a form of insurgent legal ordering, which threatened the unity of the state-based legal system. Drawing on the history of the boycotts, this Article develops a theory of insurgent legal ordering. And it shows how lawyers of the period developed a response to this perceived threat that required states to centralize and control the means of economic warfare. The result not only sheds light on the history of economic sanctions, but also suggests a broader critique of the role of economic sanctions in the international legal order today.

--Dan Ernst

Parker's "Turn to Process"

Kunal M. Parker, University of Miami School of Law, has published The Turn to Process: American Legal, Political, and Economic Thought, 1870–1970, in the series Cambridge Historical Studies in American Law and Society, edited by Christopher L. Tomlins.

In The Turn to Process, Kunal M. Parker explores the massive reorientation of American legal, political, and economic thinking between 1870 and 1970. Over this period, American conceptions of law, democracy, and markets went from being oriented around truths, ends, and foundations to being oriented around methods, processes, and techniques. No longer viewed as founded in justice and morality, law became a way of doing things centered around legal procedure. Shedding its foundations in the 'people, ' democracy became a technique of governance consisting of an endless process of interacting groups. Liberating themselves from the truths of labor, markets and market actors became intellectual and political techniques without necessary grounding in the reality of human behavior. Contrasting nineteenth and twentieth century legal, political, and economic thought, this book situates this transformation in the philosophical crisis of modernism and the rise of the administrative state.

Here are some endorsements:

‘Ranging widely across disciplines, crossing political boundaries, and unsettling conventional wisdom at every turn, The Turn to Process provides a brilliant new synthesis of a transformative period in American intellectual life.’

Angus Burgin - Johns Hopkins University

‘This book is a real tour de force, a return to intellectual history in the grand manner. In Kunal Parker’s synthesis, the leading theorists of law, political science, and economics in the twentieth century all contributed to, and followed, a shift away from theorizing their sciences as means to substantive ends such as justice or morality, to thinking about them only as methods or procedures. The book is marked by deep learning in the sources of all three fields and an uncommon lucidity in exposition.’

Robert W. Gordon - author of Taming the Past: Essays on Law in History and History in Law

‘In this revelatory account of ‘a world rendered process’, Kunal Parker brilliantly reframes the history of modern American knowledge-making. As foundational certainties faltered in the late nineteenth century, he contends, the language of tools, methods, and techniques remade entire disciplines and professions - with enduring consequences for how we understand law, democracy, and markets.’

Sarah Igo - author of The Known Citizen: A History of Privacy in Modern America

Professor Parker discusses the book here.

--Dan Ernst

Rutherford on American Economists and Race, 1898-1945

Malcolm Rutherford, University of Victoria, has posted Racism, Segregation, Acceptance: American Economics and Black Issues, 1890-1945:

The American economics profession has a tortured relationship with the study of issues relating to Black Americans. This paper traces that history from overt racism in the period up to about 1910, the rejection of Du Bois' attempts to work with the American Economic Association, a long period during which Black scholarship on Black issues was simply ignored, to the gradual acceptance of work dealing with Black issues after World War II.

--Dan Ernst

"The Long Law and Economics Movement" -- Gocke on "Outside In: The Oral History of Guido Calabresi"

This post, by Alison Gocke (Associate Professor of Law, University of Virginia School of Law) is the tenth in a series of posts in which legal historians reflect on Outside In: The Oral History of Guido Calabresi (Oxford University Press), by Norman I. Silber.

The Long Law and Economics Movement
 
In Karen Tani’s earlier posts on Guido’s life and work (which readers can find here, here, here, and here), she has reflected on the ways in which Guido does and does not embody a certain kind of “economic style of reasoning.” As Tani points out, Guido is associated with bringing “economics precepts and insights into legal domains where they had not previously had much purchase.” But Tani, I think rightfully, also distinguishes Guido from others whom we might group in the Law and Economics school because of his recognition that economics provides only one way of thinking about legal problems, and that societies often settle on “mixed” collectivist and market-based systems. This analysis leaves Tani somewhat ambiguous about where Guido falls in the Law and Economics tradition. I would like to use this post to suggest a different law and economics legacy to which it may be useful to compare and contrast Guido, with the hope of shedding further light on his scholarship and the history of law and economics in the United States.
 
The body of legal thought which interests me here is that of public utility regulation. Public utility regulation describes the doctrine we use to regulate certain industries, including electricity, natural gas, telecommunications, transportation, and finance and banking. It has a close association with the Law and Economics school of Guido’s cohort. Indeed, many of the economists and lawyers that make appearances in Outside In—including Harold Demsetz, George Stigler, and Richard Posner (see, e.g., OI, v.1, 228, 292-95, 327, 357-58)—cut their teeth writing influential pieces on public utility regulation before they extended their law and economics ideas to other contexts. In this light, it is curious that Guido himself chose not to step into the public utility mix early in his career.
 
But the connection between public utility regulation and law and economics appeared decades before the modern Law and Economics movement, and it is this earlier instantiation that is of interest to me. Public utility regulation as a distinct field of law arose at the end of the nineteenth and the beginning of the twentieth centuries in the United States. (For those who are interested, William Novak has written about how public utility regulation as a body of administrative law developed from a variety of common law and other principles.) Many of the economists and lawyers involved in crafting public utility regulation were part of what Herbert Hovenkamp has dubbed “The First Great Law and Economics Movement.” Hovenkamp describes members of this movement as being, on the whole, more liberal in their ideology, more “interested in the relationship between the law and the distribution of wealth in American society,” and more “dubious about markets and about the common law as a welfare-enhancing device” as compared to the modern Law and Economics movement. (Hovenkamp, p. 995)

Guido Calabresi and the “Economic Style,” Part 4 (Conclusion): A “Mixed System”

This post, by Karen Tani (University of Pennsylvania), is the fifth in a series of posts in which legal historians reflect on Outside In: The Oral History of Guido Calabresi (Oxford University Press), by Norman I. Silber.

In three earlier posts in this series (here, here, and here), I suggested the fruitfulness of placing Guido Calabresi’s life alongside the rise of what sociologist Elizabeth Popp Berman has called “the economic style of reasoning”—an approach to governance that flourished in the later decades of the twentieth century and has now become embedded in institutions (e.g., the Congressional Budget Office) and in law (e.g., the consumer welfare standard in antitrust law, executive orders mandating cost-benefit analysis of proposed regulations). [All the Berman quotes in what follows are from Thinking Like an Economist: How Efficiency Replaced Equality in U.S. Public Policy (Princeton University Press, 2022) (“TLE”).] This rise to prominence merits our attention, Berman argues, because, over time, it narrowed the boundaries of what is politically possible, in domains ranging from environmental policy, to social welfare provision, to the governance of regulated industries. It did so by de-legitimizing or crowding out political claims that conflicted with those of the “economic style,” including “claims grounded in values of rights, universalism, equity, and limiting corporate power” (TLE 4). The result, in Berman's assessment, was to reinforce a “conservative turn” in American politics--even though “the most important advocates for the economic style in governance consistently came from the center-left” (TLE 13, 19). (For the fullest and most careful explanation of the argument, please read the book!)
 
In my previous posts, I argued that Calabresi’s scholarship has resonances with “the economic style,” but also sits outside of it. The insider/outsider character of Calabresi's work was a natural outgrowth of his unique path into Law & Economics. It also reflects his real-time reactions to the success of Law & Economics. As he helped that field expand and thrive, he also felt compelled to point out the limitations of economic theory and methodology. The question I ended my last post with was: Did Calabresi’s nuanced approach to Law & Economics help legitimize and spread the less nuanced “economic style” of Berman’s concern? Or (and?) did his work plant seeds of skepticism and resistance?
 
A historian cannot answer this question with any certainty (especially not in a short blog post!), but I will surface some evidence that seems relevant to me. In doing so, I must also acknowledge my affection for the subject of this post (I was one of Calabresi’s law clerks in 2007-08 and cherish that experience). That relationship colors my views, but also, I hope, gives me insight. In what follows, I’ll discuss (1) scholarship (which I’ll bundle with teaching), (2) judicial decisions, and (3) network.

"Guido Calabresi Lauded at His Final Torts Class"

I’ve already discussed some of Calabresi’s most important scholarly writings, so I won’t repeat myself here. I’ll simply add this brief assessment. His writings—which informed six decades(!) of teaching at Yale Law School—undoubtedly did give some people their first exposure to the use of economic thinking in law and governance. That matters. Among the consumers of Calabresi’s ideas were powerful people in politics, policymaking, legal practice, and academia, as well as people who would become powerful in those domains later in life.  Moreover, I suspect that Calabresi’s stature, reputation, and charisma gave weight to his ideas. In The Rise of the Conservative Legal Movement, Steve Teles also credits Calabresi with giving Law & Economics respectability, by rebutting the notion “that it was an entirely conservative, University of Chicago project” (Teles 99).

Guido Calabresi and the “Economic Style,” Part 3: Partial Views and “Pearls Beyond Price”

This post, by Karen Tani (University of Pennsylvania), is the fourth in a series of posts in which legal historians reflect on Outside In: The Oral History of Guido Calabresi (Oxford University Press), by Norman I. Silber.

In earlier posts in this series, I suggested the fruitfulness of placing Guido Calabresi’s career alongside the rise of what sociologist Elizabeth Popp Berman has called “the economic style of reasoning”—an approach to governance that flourished in the later decades of the twentieth century and remains prominent. [All the Berman quotes in what follows are from Thinking Like an Economist: How Efficiency Replaced Equality in U.S. Public Policy (Princeton University Press, 2022) (“TLE”).] My first post described Calabresi’s education in economics and in law, as recounted in Outside In. My second post turned to his scholarship and began to explore its fit with “the economic style.” When I left off, I had covered Calabresi's writings on “the decision for accidents” (a.k.a. “the cost of accidents”), and I had mentioned both his excitement and his discomfort at the growing influence of Law & Economics. Looking back on this period, Calabresi said this to Silber: “Because of the way the field was taking off, I was becoming afraid that people would start to think of the economic approach to law as the only thing that is legal scholarship” (OI, v.1, 332).*

This worry is apparent in the use of the phrase “one view of the Cathedral” in the subtitle of Calabresi’s famous 1972 article (with Douglas Melamed) on “Property Rules, Liability Rules, and Inalienability.” Calabresi explains:

[B]ecause of a generic reference Harry Wellington made, I called it “One View of the Cathedral.” I do not think Harry was talking about law and economics at the time; he was talking about art and about how you couldn’t understand the cathedral at Reims by looking at only one of Monet’s impressionist paintings. To understand . . . you had to look at all the paintings. I liked that, and I used it because I wanted to say that law and economics was one important way of looking at legal issues, but it was not the only way.

(OI, v.1, 331). [Image at right: Rouen Cathedral, West Façade, Sunlight, 1894 by Claude Monet, oil on canvas. Credit: National Gallery of Art.]
 
This caveat is important because the article undoubtedly did further expand economics into law--from Torts into Property and beyond. And the intervention was framed in such a way that others felt inspired to push further. As Silber’s commentary explains, “[the article] attracted attention quickly, and a small swarm of academics stepped forward to build upon the ‘Cathedral’ approach” (that is, a modeling approach, in which one plays with different possible configurations of private law rights and remedies and asks about their consequences) (OI, v.1, 337). Soon Calabresi and Melamed’s schema “was being applied to scores of legal fields of study and invoked in many cases” (OI, v.1, 339).

Guido Calabresi and the “Economic Style,” Part 2: On "Economic Methods" and "Social Democratic Values"

This post, by Karen Tani (University of Pennsylvania), is the third in a series of posts in which legal historians reflect on Outside In: The Oral History of Guido Calabresi (Oxford University Press), by Norman I. Silber.
 
In an earlier post in this series, I suggested the fruitfulness of placing Guido Calabresi's career alongside the rise of what sociologist Elizabeth Popp Berman has called “the economic style of reasoning”—an approach to governance that flourished in the later decades of the twentieth century and remains prominent. [All the Berman quotes in what follows are from Thinking Like an Economist: How Efficiency Replaced Equality in U.S. Public Policy (Princeton University Press, 2022) ("TLE").] That first post described Calabresi’s education in economics and in law, as recounted in Outside In. This post turns to his scholarship and asks about how it fits (or doesn't) with “the economic style.” This question holds interest because the spread of “the economic style” had consequences—which I’ll address in more depth in a subsequent post.
 
As I noted in my last post, “the economic style of reasoning” is Berman’s term for “a distinctive way of thinking about policy” that became visible in Washington “as early as the 1950s, but really spread in policymaking between about 1965 and 1985” (TLE 3, 5). Berman’s account is nuanced, emphasizing that “the economic style” had multiple points of origin*, that various factors contributed to its spread within government, and that the economists at the core of her account “were neither monolithic nor monomaniacally committed to efficiency” (TLE  16). Nonetheless, she does identity two “stances” that are at the “core” of the “the economic style” (TLE 6). The first is “a deep appreciation of markets as efficient allocators of resources” (TLE 6). Importantly, this does not translate into a consistent preference for deregulation or minimal government, but it does mean the application of “a market lens” to all sorts of problems and “an affinity for introducing market-like elements . . . into areas, such as education or healthcare, that are not governed primarily or solely as markets” (TLE 6). The second is a tendency to “place[] a very high value on efficiency as the measure of good policy” (TLE 6). This value might come into play when deciding the best way to achieve a democratically chosen objective. It might also come into play earlier in the process, when deciding which objectives should be pursued. (For more on this argument, without reading the full book, check out Berman's September 2022 LPE blog post.)  
 
To what extent are these “core stances” apparent in Calabresi’s work? As a dilettante in the world of Law & Economics, I am not the best positioned to answer this question, but I can convey what Outside In suggests and hope to generate further conversation. (I can also point readers to more expert discussions of Calabresi's scholarly legacy, such as the contributions to this 2014 special issue of Law & Contemporary Problems.)  
 
There is no doubt that Calabresi’s writings, alongside those of Ronald Coase and others, brought economics precepts and insights into legal domains where they had not previously had much purchase. Here is Calabresi** in Outside In discussing the influence of Coase’s “The Problem of Social Cost” and his “Some Thoughts on Risk Distribution and the Law of Torts”: 

Of course, the interplay of law and economics was there before; but the relationship had focused on particular areas of law where economics had been directly relevant, like antitrust. What Coase’s article and mine did was to invite—indeed to require—people to look at areas of law that were not expressly focused on economics, like torts. In fact, to look at the legal system generally.” 

(OI, v.1, 228) (emphasis added). At this early stage of his career, Calabresi also encountered critics who seemed appalled by what he was doing—to which his general response was to concede that economic theory could not always supply an answer, but to insist that this “most dismal of theories” (as he jokingly put it in “Some Thoughts”) might still yield important insights.

Guido Calabresi and the “Economic Style,” Part 1: The Law & Economics Education of Guido Calabresi

This post, by Karen Tani (University of Pennsylvania), is the second in a series of posts in which legal historians reflect on Outside In: The Oral History of Guido Calabresi (Oxford University Press), by Norman I. Silber.
 
When I first met Guido Calabresi, it was in an interview for a clerkship. As an outsider to the world of Yale Law School, I knew him only by reputation and had little sense of how he had achieved his stature. Prior to the interview, I tried to familiarize myself with his legal scholarship, but I lacked the intellectual grounding to really understand the importance of his interventions. The interview went just as I feared, at least from my perspective. We had a moment of connection when we talked about the infamous Korematsu case and my Japanese American grandparents’ experience at that time (the early chapters of Outside In nicely capture why this would resonate with him), but besides that, I remember feeling unsophisticated and uninteresting. I was genuinely surprised when he offered me a job.
 
One of the delights in reading Outside In has been to realize, belatedly, how deeply my research interests intersect with Calabresi’s life. In part, this is because his adulthood covers the period that most interests me as a historian, and because his personal and professional journeys brought him into contact with so many influential people in law and politics. To take one example, my first article was about the revocation of government benefits and privileges as a tool of anti-communist persecution and how this influenced Charles Reich as Reich formulated what became “The New Property.” Calabresi not only knew Reich well, but, like Reich, had clerked for Justice Black during a period when the Supreme Court grappled with loyalty/security cases. All this comes up in Outside In.

I also now see another intersection. This post (one of several) discusses Calabresi as a complex vector of what sociologist Elizabeth Popp Berman has called “the economic style of reasoning”—an approach to governance that rose to prominence in the later decades of the twentieth century and that is central to my current work on disability and law in this period. [All the Berman quotes in what follows are from Thinking Like an Economist: How Efficiency Replaced Equality in U.S. Public Policy (Princeton University Press, 2022). I use the abbreviation “TLE” for citations.]*
 
“The economic style of reasoning” is Berman’s term for “a distinctive way of thinking about policy” that became visible in Washington “as early as the 1950s, but really spread in policymaking between about 1965 and 1985” (TLE 3, 5). Less a coherent theory than a “loose approach to policy problems,” the “economic style” emphasizes the use of “basic microeconomics concepts, like incentives, various forms of efficiency, and externalities” (TLE 3, 5). Translated into policymaking (by liberals as well as conservatives), this has often meant quantification, the use of models to simplify, cost-benefit analysis, and “thinking at the margin” (TLE 5). And, compellingly, it has led to results that appear politically neutral. “[N]evertheless,” Berman cautions, the “economic style” “contains values of its own,” such as “choice, competition, and, especially, efficiency” (TLE 4).

Berman’s Thinking Like an Economist carefully documents “where the economic style of reasoning came from” and “how it spread and was institutionalized in Washington” (TLE 4). (She also explores and critiques the political consequences, to which I’ll return in later posts.) One facet of the “spread,” she argues, was through the field of Law & Economics. Here, Berman places most emphasis on Harvard and University of Chicago industrial organization economists (those interested in "the relationship between firms, industries, and markets”) and their influential converts in law (e.g., Chicago’s Richard Posner) (TLE 72). But Calabresi’s work receives mention, too, as “a separate, fruitful line of intellectual exploration” (TLE 84). In other words, Calabresi was there at the beginning and he mattered, but Berman appears to attribute the rise of economics in law schools (and beyond) largely to other figures.
 
Outside In brings additional nuance to this important account, by (1) describing Calabresi’s Chicago-skeptical training in economics, (2) documenting Calabresi’s somewhat different “economic style” (apparent in both his academic writings and his judicial opinions), and (3) suggesting that he may, in fact, have played a crucial (if complex) role in the “spread” phenomenon that Berman has rightly brought to scholars' attention. 

This post discusses the first: the Law & Economics education—or rather the economics, then law, education—of Guido Calabresi.**

Gindis and Medema on Manne's "Joint Committee"

David Gindis, University of Hertfordshire, and Steven G. Medema, Duke University, have posted
One Man a Committee Does Not Make: Henry Manne, the AEA-AALS Joint Committee, and the Struggle to Institutionalize Law and Economics:

In 1965, Henry Manne convinced the Association of American Law Schools and the American Economic Association to establish an ad hoc Joint Committee to explore the possibilities of collaborative efforts between economists and legal scholars. This paper examines the origins and activities of this Joint Committee and reveals that its work was far less about promoting increased interaction between economists and legal scholars than about a conscious attempt to use this committee to help fashion a particular form of law and economics that would reshape legal analysis in a way consistent with Manne’s vision. Though the Committee’s effective life was very short and its direct influence negligible, the lessons learned informed Manne’s subsequent efforts to institutionalize law and economics within the legal academy.

--Dan Ernst

Herzfeld on How Lawyers Came to Dominate Tax Policy

It’s gated, but, as the star footnote explains, it’s an article that some of us have been awaiting for a long time: Mindy Herzfeld, Professor of Tax Practice, University of Florida Levin College of Law, has published The Role of Professional Organizations in Practice and Policy: How Lawyers Overtook Accountants and Economists in the Early 20th Century Tax Field, in Tax Lawyer 75 (Fall 2021): 79-124:

Tax policy and practice are inherently interdisciplinary, involving the close collaboration of lawyers, accountants, and economists. But the presence and strength of the legal profession in a field that was from its start dominated by accountants and economists was not preordained. To no small degree, self-conscious action by the organized profession and effective engagement by its professional associations allowed tax attorneys to establish dominance in an area in which they saw a lucrative future. The American Bar Association (ABA) Tax Committee played an important role in helping to propel lawyers from their poor starting position in the newly created field of federal income tax after the passage of the 16th Amendment to a position of strength in a lucrative practice area with the ability to shape the development of policy.

The story of how tax attorneys came to dominate the fields of tax policy and sophisticated tax practice for much of the 20th century is a success story of strong professional organizations. This Article illustrates how the organization of attorneys focusing on taxation into a specialized group within bar associations has played an important role in making lawyers the central players in tax policy and tax practice in the United States over the 20th century. It places some of the contemporary challenges facing the legal profession in the tax area and questions over its interaction with other disciplines in historical perspective by tracing the early history of the specialization of tax lawyers within professional associations. These associations laid the groundwork for the creation of a tax bar with its own self-identity and ethical guidelines.

This Article explores the role played by the bar associations, in particular the ABA, in developing and promoting the practice of tax law among attorneys and the prestige of lawyers as tax practitioners and developers of tax policy. As part of the effort to map out the expansion of the professional associations of tax attorneys, the Article first sets out the historical background of the growth of professional organizations in the United States. It then examines the development of the U.S. federal income tax law during its first decades, along with the role economists played in that development, followed by a study of the role of the accounting profession in tax practice during this time. An exploration of the role played by a number of prominent attorneys in tax policy and tax practice and of the Association of the Bar of the City of New York sets the stage for consideration of the formation and development of the ABA Tax Committee in the 1920s. The history of the organization and activities of the ABA Tax Committee demonstrates how it became so effective in propelling attorneys to a position of significant influence within the worlds of tax legislation, tax policy, and tax practice.

--Dan Ernst

Enchantment and the History of Capitalism

[We have the following announcement.  DRE.]

Please join us for our (for now) final roundtable in the ‘Enchantment in the History of Capitalism’ series on May 5, 16:30 BST. We will be welcoming Professor Jean Comaroff, Professor Jens Beckert, and Professor Robert Kozinets for a session on enchantment in contemporary scholarship on economic life.

This is the third of a series of reading-group style workshops, intended to reflect on the meaning of enchantment and its uses in existing scholarship across different disciplines, with a longer-term view to redirect the concept and shed new light on the history of capitalism.

Please register here.  More information on our roundtables is available on the network website, We hope to see many of you there!

Anat Rosenberg and Astrid Van den Bossche
Harry Radzyner Law School
Reichman University

Magness on Coining "Neoliberalism" in Weimar Germany

Phillip Magness, American Institute for Economic Research, has posted Coining Neoliberalism: Interwar Germany and the Neglected Origins of a Pejorative Moniker:

Widespread academic use of the term "neoliberalism" is of surprisingly recent origin, dating to only the late 20th century. The vast and growing literature on this subject has nonetheless settled on an earlier origin story that depicts the term as self-selected moniker from the Walter Lippmann Colloquium, a 1938 Paris gathering of free-market academics that foreshadowed the post-war founding of the Mont Pelerin Society.

This origin story, however, is a myth that likely derives from a misreading of French philosopher Michel Foucault, who first directed modern scholarly attention to the Paris gathering. By turning to neglected German-language sources, this study shows that the term and modern concept of "neoliberalism" predate the 1938 conference. Rather, "neo/neu-liberalismus" was first popularized by a succession of Marxist and Fascist political theorists in the early 1920s, who employed it as a term of disparagement against the "Marginal Utility School" of economic thought anchored at the University of Vienna. These critics of marginalism diverged sharply on the political far-left and far-right of interwar Austrian and German politics, but shared a common disdain for the theory of subjective value promoted by the Viennese circle around economist Ludwig von Mises.

This earlier origin story of the term links it conceptually to modern-day uses, which often display a similar pejorative character to its interwar uses on the political left. It further helps to explain why several attendees of the 1938 conference, Mises among them, rejected the proposed term.

--Dan Ernst

Priest's "Rise of Law and Economics"

The Rise of Law and Economics: An Intellectual History (Routledge, 2020), by George L. Priest, Yale Law School, has been published:

This is a history—though, intentionally, a brief history—of the rise of law and economics as a field of thought in the U.S. college and law school academy, though the field has expanded to Europe and South America and will expand further as other legal systems develop.

This book explains the origins of the field and the sources of its growth during its formative period. It describes the intellectual roots of the field, and the field’s relationship to the understanding of the role of the legal system in directing the functioning of the economy. It describes the effect of the Great Depression and the expansion of governmental power on advancing the functional approach. The book then addresses the work of Aaron Director, during the late 1950s, on focusing economic analysis as a means of understanding the effects of the legal and regulatory system on the allocation of resources in the society. Then it turns to the subsequent intellectual founders of the field—Ronald Coase, Guido Calabresi, and Richard Posner—and attempts to explain the significance of their work. It also discusses the efforts of Robert Bork and Henry Manne toward the influence of law and economics on public policy. The book ends with the founding of the American Law and Economics Association in 1991.

This is an essential companion to law and economics texts for undergraduate law and economic students and, especially, a general supplement to first-year casebooks for law school students.

--Dan Ernst

Gindis on Manne at Miami

David Gindis, University of Hertfordshire Business School, has posted Law and Economics Under the Palms: Henry Manne at the University of Miami, 1974–1980:

Henry G. Manne described himself as the only full-time missionary for law and economics from the first glimmerings of that subject. This paper deals with the period of Manne’s career when he first assumed this role, which coincides with his time at the University of Miami Law School (1974-1980). Prior to Miami, Manne had formulated a vision for law and economics, and had developed prototypical structures for funding and running interdisciplinary conferences and intensive economics courses for law professors. Manne professionalized these at Miami, using the organizational vehicle of the Law and Economics Center (LEC) that he set up and ran until his departure. Over the course of this period, Manne recruited and invested heavily in teaching, research and conference administration capacities. The LEC branched out, particularly into the policy arena, multiplying the frequency and diversity of activities pursued. It introduced innovative ways of linking economics and legal practice, economists and legal professionals, and played a pivotal role in the integration of law and economics as intellectually integrated disciplines.

--Dan Ernst

"New Perspectives on Regulatory History"

The latest issue of Business History Review (93:4) is a special issue, New Perspectives in Regulatory History.

Introduction: New Perspectives in Regulatory History, by Laura Phillips Sawyer and Herbert Hovenkamp

Institutional Economics and the Progressive Movement for the Social Control of American Business, by William J. Novak, with a comment by Susie J. Pak

Anti-Competition Regulation, by Anne Fleming, with a comment by Rebecca Haw Allensworth

The Curious Origins of Airline Deregulation: Economic Deregulation and the American Left, by Reuel Schiller, with a comment by Lily Geismer

A Premature Postmortem on the Chicago School of Antitrust, by Daniel A. Crane, with a comment by Lina M. Khan

Prisms of Distance and Power: Viewing the U.S. Regulatory Tradition, by David J. Gerber.

The issue also includes the review essay, Corporations, Democracy, and the Historian, by Richard R. John.

--Dan Ernst

Lives and Careers of Two Alabama Booksellers and Publishers

The University of Alabama’s Bounds Law Library announces the latest book in its “Occasional Publications" series:

The Bounds Law Library has published its ninth Occasional Publication, titled Law and Miscellaneous Works: The Lives and Careers of Joel White and Amand Pfister, Booksellers and Publishers. The book features biographical essays by David I. Durham and Paul M. Pruitt, Jr. and an essay by Michael H. Hoeflich analyzing Pfister and White’s printed catalogs. In addition, the book contains facsimile images of White and Pfister’s catalogs and other documents, including White’s correspondence with publishers. Emigrants to antebellum Tuscaloosa, White and Pfister separately operated bookshops, built up clienteles, and began to publish books. When the state capital moved to Montgomery in 1846 they moved with it and soon established a partnership. Following Pfister’s death in 1857, White continued in the business of bookselling and publishing; his most notable author was Tuscaloosa lawyer and politician William R. Smith, author of The History and Debates of the Convention of the People of Alabama (1861). After secession White undertook a clandestine mission to acquire large quantities of high-grade paper for the Confederate government. Following his own personal Reconstruction, White served as publisher of the Alabama Reports (vols. 50-83), working with the clerks, lawyers, and reporters attached to that institution. All the while he continued to operate his bookstore until shortly before his death in 1896. Law and Miscellaneous Works reveals a little-known world of nineteenth-century southern booksellers and small-scale publishers and places it in the context of regional and national affairs. Law and Miscellaneous Works is free upon request. Contact Paul Pruitt (ppruitt@law.ua.edu). 

--Dan Ernst

Sanga on the Race to the Bottom in Corporation Law

Sarath Sanga, Northwestern University Pritzker School of Law, has posted On the Origins of the Market for Corporate Law:

I study the origins of the market for corporate charters and the emergence of Delaware as the leader of this market. Specifically, I assemble new data on 19th and 20th-century corporations to evaluate two widely-held beliefs: (1) the U.S. Supreme Court is responsible for enabling a national market for corporate charters in the 19th century and (2) Delaware became the leader in this market only because New Jersey (the initial leader) repealed its extremely liberal corporate laws in 1913. I argue that both claims are false: The Supreme Court always opposed a national market for corporate charters, and New Jersey’s decline began a decade before its 1913 repeal. It is more likely that the market for corporate charters emerged as a collateral consequence of interstate commerce and that New Jersey declined because Delaware and other states simply copied its laws.

--Dan Ernst

Russell on Streetcar Torts

Thomas D. Russell, University of Denver Sturm College of Law, has posted Blood on the Tracks: Turn-of-the-Century Streetcar Injuries, Claims, and Litigation in Alameda County, California:

Richmond Road 1887 (NYPL)

Streetcars were great American tortfeasors of the turn-of-the-century, injuring approximately one 331 urban Americans in 1907. In this empirical study, I consider the entire run of streetcar injuries, claims, trial-court suits, and appeals. My conclusions are based upon data drawn from the claims department records of Alameda County's principal street railway company, from all of the personal injury suits filed in the county's Superior Court, from all appellate cases involving the street railway company, and also from other sources concerning the street railway industry.

Plaintiffs in street railway cases very rarely won their cases against the company, and when they did, they won little money. In terms of the bite taken out of the street railway company, I characterize the Superior Court as a flea. I argue that Professor Gary Schwartz was wrong to characterize tort law as generous and that Judge Richard Posner is wrong to call tort law efficient. Like Professor Lawrence M. Friedman and Morton Horwitz, I see the amount taken from the street railway companies as quite small, but I see no evidence of deliberate efforts to subsidize the industry.

I argue that the term "dispute pyramid," which is common among Law & Society scholars, is misleading. I propose that we instead think in terms of a salmon run, with very large drop-offs from the levels of injuries to claims and, especially, to litigation.

I also examine in detail the operation of the street railway's claims department. I describe the relationship of the amount of money paid out through the claims department to the amount paid out in Superior-Court judgments and costs. I show that the average amounts of money that successful claimants received were very small indeed and argue, contra Posner and others, that the bargaining that took place in the claims department was very distant from the level of the trial court. For example, where Posner derived an average figure of about $5,000 for wrongful death claims using appellate data, I show that in the claims department, claimants in death cases averaged $127.32.

I also consider some of the fine work done by constitutive theorists, particularly Barbara Welke, of the University of Minnesota. I agree with most of her conclusions regarding the manner in which tort law instantiated gender norms, but I remain convinced that the operation of street railways, as social and economic activities, and also the conduct of trials had much more formative influence on norms of gender than did legal doctrine. That is, along with Chris Tomlins, I think that Welke makes too much of the formative influence of law on American discourse or ideology. This may be a small quibble.

I adapt the methods of the constitutive theorists and try to build upon Welke's excellent work to show that the streetcar companies helped to instill norms of negligence within their women riders. This made some women safer and kept others from making claims when they were injured. I argue that the street railway companies' ability to shape norms of negligence show another flaw in Posner's theory regarding the regulatory effect of tort law.

Earlier drafts of this work have been cited in the Harvard Law Review, Vanderbilt Law Review, Tulane Law Review, Wisconsin Law Review, Harvard Women’s Law Journal, Law & Social Inquiry, Journal of Tort Law, and the Connecticut Journal of Insurance Law. The author is looking for a place to publish this either as a long article or a monograph.

--Dan Ernst