Law and Economics in the United States: A Brief Historical Survey

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The discipline of Law and Economics is often seen as beginning in the late 1950s, with the founding of the Formula of Law and Economics, or perhaps in 1960 with the publication of Ronald Coase's article ‘The Problem of Social Cost’. In fact, Law and Economics is much older and there was a significant Law and Economics movement during the Progressive Era (roughly 1890–1920). The movement since the 1960s is more neoclassical in character than the Progressive movement, which was strongly influenced by institutionalist economists. But even today Law and Economics makes many assumptions that are not well settled within neoclassical economics. For example, the most interesting and ubiquitous uses of the Coase Theorem occur in bilateral monopoly markets where economic efficiency cannot be proven on ordinarily neoclassical premises, and the brand of welfare economics used in much Law and Economics is hardly uncontroversial. Nonetheless, the modern Law and Economics movement is diverse in both subject matter and ideology and continues to be an exciting area of considerable intellectual controversy.

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Cambridge Journal of Economics