THE INFLUENCE OF LAW-AND-ECONOMICS ON THE IDEOLOGICAL CENTER OF CIVIL SOCIETY: THE NEW AMERICAN FORMALISM WITH A EUROPEAN COUNTERPOINT.

• Author: Ciobotaru, Sebastian

"Things fall apart; the center cannot hold; Mere anarchy is loosed upon the world" W.B.Yeats (1) ARGUMENT ROADMAP

The struggle to identify the ideological "true center" of any society is daunting. (2) There are as many approaches as there are political interests, and none can truly claim absolute impartiality. (3) However, it is empirically settled that civilizations have an increased chance to experience golden ages and flourish when their institutions, customs, and practices most accurately represent the ideals that a significant majority of the population espouse, or can reasonably agree on. (4) Those values will always have their most perfect expression in a societal "temperate" zone, what I will call throughout this Note the "true center," since only in the middle the disparate interest groups may find common ground, and strive for a consensus. (5) Working backwards from this assumption, the extremely polarized political climate currently present in the United States may provide a clue that the social and political discourse has indeed moved far from its "true center."

Throughout this Note whenever I refer to the "true center" of society, the meaning I wish to convey will be precisely tied into a positive confluence of social phenomena that, in the aggregate, facilitates cooperation and synergy and, implicitly, the thriving of a civilization. (6) It will be my assumption as well that it is desirable to have as much "centrist" discourse as possible, both in the name of stability and order (which the "right" highly values) and for the sake of true progress and equality of opportunity (satisfying the basic needs of the "left"). (7)

This Note is mainly concerned with the unfortunate influence the law-and-economics methodology is having on contemporary legal discourse and adjudication in the United States. (8) The main drive behind my critique is the desirability (9) of promoting legal discourse that helps ground the "true center" of society. This Note argues that the law-and-economics movement, both in its normative and descriptive applications to legal analysis, has significantly aided the derailment of American society from its "true center." By contrast the relatively peaceful and constant progression towards "true center" values in Europe is not being countered by a judicial method of analysis predisposed to conservative values. I discuss several reasons for this divergence throughout the Note, pointing out the irony of a nominally formalist European jurisprudence that is in fact enacting the core values of the American legal realist agenda, while the law-and-economics methodology, a purported descendent of the realists, is instituting a new limiting and conservative formalism in the United States.

This Note proceeds in five parts. First, in the introduction section, I will lay out the general state of legal commentary and adjudication looking at both law-and-economics in the United States and the modern European jurisprudence. (10) Second, I will conduct a brief historical survey of the evolution of jurisprudence in the United States, focusing on the law-and-economics movement's eventual dominance of legal discourse. (11) Third, a similar brief survey of the European history and development of jurisprudence will be outlined. (12) In the fourth part, I will present the main issue driving this Note, (13) and in the final section I will sketch out a few ways the situation I have identified may be ameliorated. (14)

1. INTRODUCTION

   The law, as an influential normative social phenomenon, must endeavor to be impartial, so it may remain one of the principal anchors of a well-balanced civil society. (15) I believe that most other human institutions can, will, and arguably should swing with the pendulum of civilization, thus avoiding stagnation and decay; but the practice and commentary of law should avoid becoming just another political tool. The proper role of legal decisions and commentaries is to provide a frictionless pivot, grounding society as close to the "true center" as possible, while preserving the constitutional (16) values of the civilization in which they operate.

   First, contrary to this desirable goal, the Chicago School's variant of law-and-economics, (17) an approach pioneered in the late seventies, has risen to a dominant position in legal commentary by employing a purely partisan approach to societal problems under the guise of an innocuous methodology. (18) This strand of law-and-economics is presented (19) as a natural continuation of Coasean insights, (20) merely a descriptive and rational approach that illuminates judicial decision-making and law in general. (21) Of course, there were significant signs of the misuse of economics as a methodology in the law even before the Chicago School stepped in and "perfected" the method. (22) However, it was the Chicago School that ultimately reduced judges almost exclusively to their function as rational, economically minded citizens, and it described law merely as a mechanism for transferring commodities into higher value positions. (23) As such, under this methodological paradigm, judges will and should apply the law only with a constant focus on obtaining the most efficient, and economically practical outcome. (24) This goal is advocated as a natural and direct consequence of a straightforward application of the "value-neutral" science of economics to law controversies. (25)

   But, the modes of analysis that economics employs within the law, even if facially "value-neutral" and rational, tend both to achieve consistent conservative results, and, more grievously, to alter, over time and because of persistent use, the very landscape of legal analysis reducing all human interaction and conflict to actuarial tables. (26) Thus, the law itself becomes unidimensional and is relegated to a process of "maximization of utility." (27) This truncated, managerial law can no longer properly perform its natural function of impartial mediator between different societal interests, since it sees all cases through the deeply distorting lens of economics, (28) a science that has always been the handmaiden of existing power and privilege. (29)

   Second, and by way of providing a counterpoint, the European distaste for an economic approach in the analysis of the law has kept the continent strongly in the "internal-coherence-of-the-law" camp advocated by the doctrinalist approach. (30) Even though some inroads have been made by law-and-economics, (31) it nevertheless remains a fringe methodology, sparsely used by European jurists. (32) This has allowed, somehow surprisingly, greater flexibility in the enforcement of European laws. (33) This is because a European "formalist" will accept the undisputed prerogative of the legislature to legislate on any matter, as long as the law produced is harmonious with the body of law present. (34) As such, if there is sufficient political motivation to legislate in an area, the judiciary will neither block nor promote that political agenda; (35) it will simply endeavor to apply the law in a straightforward manner, while at the same time guarding against departures from the established jurisprudence. (36) This European empirical reality allows their political system to effectuate "true center" legal solutions to actual societal problems with minimal judicial interference; least of all if that judicial interference, as in the United States, is to be done in the name of misconstrued or misapplied efficiency considerations. (37)

2. A BRIEF LEGAL HISTORY OF THE UNITED STATES FOCUSING ON LAW-AND-ECONOMICS

   At its core, the United States legal tradition is conservative and formalist. (38) Formalism can be both a descriptive way of looking at adjudication and a normative way of prescribing what adjudication should do. (39) In both instances, however, the focus is always on the independence of the legal system from coordinated branches of government. (40) In a purely descriptive sense, formalists believe that judges should reach decisions exclusively by discerning the applicable principles of law and applying them to the facts before them. (41) This restrictive view of the law that does not allow for extraneous factors to be a part of a proper law analysis is now supposedly extinct. However, a nuanced version of formalism is strongly present in the writings of many U.S. judges and scholars (42) a fact that explains the ease with which conservative jurists have accepted the supremacy of economic analysis in the law. (43) These jurists have just substituted one type of formalism--law as a self-sufficient social phenomenon--with another--law that is best explained and practiced exclusively through the lens of economics. (44)

   As such, part of this Note's argument is that economic analysis of the law has now reached a formalist prevalence, both in substance and in its dominance of the American judicial commentary and adjudication. (45) Advocates of this approach consistently deny any possible flaw in the application of economics to the law, maintaining that it should almost always be a fundamental part of a legal analysis and that to deny its primacy would be an irrational way to approach a legal problem. (46) The belief is that without an economic underpinning, any legal decision becomes unfounded at best, and most likely even harmful to the interests advanced. (47) This type of absolutist faith in one's method is curious considering the supposed, and often flaunted, "value-neutral" nature of the methodology. (48) It is also eerily similar to the formalist belief in the existence of a priori principles of the law that will inevitably dictate the outcome of all controversies, with the noted difference that law should apparently now bow to neo-classical price theory, or individual behavior driven by object scarcity, and other assumptions present in liberal economics. (49)

   To return to the historical evolution, the formalist theory of old...