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Hastings International and Comparative Law Review

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Classic legal thought, law and economics, legal realism, Free Law School


Law and economics has become an integral part of U.S. legal scholarship and the law school curriculum. Ever since the legal realist movement, scholars mostly view the law from an external perspective. It may be surprising to many in the United States that European legal scholarship has been largely resistant to this development. Law is typically viewed "from the inside," that is as an autonomous discipline independent from the other social sciences. Most legal scholarship is doctrinal, meaning that legal scholars employ interpretative methods in order to systematically expose the law and to find out what the law is, frequently even before it is tackled by a court. U.S.-style legal scholarship is often considered very alien, and law and economics in particular often meets outright rejection. In this paper, we attempt to explain this divergence in the academic legal discourse using the reception of law and economics in legal scholarship in German-speaking countries as a case in point. However, we suspect that our approach can be generalized to other parts of Europe because of common roots and similar historical factors that can be identified in many parts of Europe. We propose a two-pronged explanation for why law and economics play an insignificant role in German-speaking countries while the United States has become a stronghold for it. We proceed as follows: Section II describes the rejection of the economic analysis of law in German-speaking countries and gives an overview on explanations that we found in the existing literature. Section III outlines our own hypothesis. Section IV traces the development in the United States, based on the existing literature. It starts with the classical legal thought of the late 19th century and subsequently surveys legal realism and the early development of law and economics since the 1960s. Section V describes the development of legal theory in German-speaking countries. As both legal realism and the Free Law School have pointed out, a doctrinal approach to law is equally prone to exploitation to achieve certain political ends. The current state of the discussion on legal philosophy is relevant to us insofar as it influences the ordinary legal discourse, in particular the predominant forms of legal scholarship. Section VI summarizes the above discussion.