A Progressive Critique of the Law and Political Economy Movement

The emerging law and political economy movement (LPE) in the United States has mistakenly conflated the conservative law and economics movement of the mid-20th century with law and economics generally. As a result, LPE has failed to draw upon a rich tradition of left-wing law and economic thought that predates the conservative law and economics movement and would provide LPE with powerful analytic tools. Law and economics is not inherently conservative. Indeed, progressives themselves created the field a century ago. The centerpiece of this early work consisted of two key points about the neoclassical approach to economics. The first was that policymakers can structure markets efficiently to produce any distribution of wealth that they desire. In contemporary parlance, law determines the market. The second was that even if a policymaker is constrained to accept a particular market structure, every market generates a surplus that policymakers can in principle redistribute through price regulation or taxation without harming efficiency. In mistakenly rejecting law and economics as enemy propaganda, LPE has found itself fighting old battles or unable to make intellectual headway in new ones. The movement has treated as a major new discovery the now century-old proposition that law determines the market. Unaware of the proposition’s history, LPE has also failed to grasp that conservative law and economics long ago accepted that proposition and parried by arguing that the market also determines the law. This has prevented LPE from offering a rejoinder—a glaring omission given the role this counterattack played in the demise of the New Deal state. Lacking the concept of economic surplus that left-wing law and economics spent so much time developing a century ago, LPE has also found itself unable to appreciate the great variety of the sources of economic power. LPE has instead tended to attribute all economic power to monopoly, leading to a focus on antitrust policy when taxation and rate regulation are more likely to achieve progressive goals.