Regulation, Property Rights, and Definition of “The Market”: Law and the American Economy

This article identifies four problems in the recent interdisciplinary studies of property rights, law, and economic development in the nineteenth-century United States. First, recent studies stress too exclusively the positive functions of law in either the “release of entrepreneurial energy” or the exploitative allocation of advantages (by courts and legislatures) to the business interests leading industrialization. Second, the dichotomy between alleged “instrumentalism” as the prevailing judicial style before 1860 and “formalism” after 1865 has been exaggerated. Third, generalizations have been based too much on the eastern states and Wisconsin. Fourth, there has been a failure to identify accurately the winners and losers in the struggle over regulation and the definition of property rights. Thus, although rediscovery of the importance of institutions by economists and the renaissance of legal history among historians and legal scholars constitute welcome (converging) developments in recent scholarship, much more research is needed on these main themes in the literature.