The institutionalist approach to law and economics declined markedly after the Second World War and was replaced by a very different law and economics literature associated with the Chicago School. This literature represented a clear rejection of the institutionalist arguments for more social control and a renewed emphasis on the market and the ability of market forces to generate efficient results. The Chicago School saw government intervention much more as the source of problems rather than the solution. There are, however, links between the Chicago School and the institutionalists. Both contain discussions of court decision-making, both contain important considerations concerning antitrust and patent law, and both deal with issues of agency capture and the use of government regulations as barriers to entry.
This Article begins by examining the institutionalist approach to the issues of law and economics, concentrating on the work of Walton Hamilton. Hamilton devoted considerable attention to the issues of judicial decision-making, and to antitrust and patents in particular. He was closely involved in various phases of the New Deal: in the Consumers’ Advisory Board of the National Recovery Administration; in a series of important studies of pricing in a wide variety of markets; and in work with Thurman Arnold on antitrust and patents. The Article will then briefly discuss the Chicago School of law and economics with a concern for both the points of difference and points of contact between the Chicago and institutionalist literatures.
Malcolm Rutherford, The Judicial Control of Business: Walton Hamilton, Antitrust, and Chicago, 34 SEATTLE U. L. REV. 1385 (2011).