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In Defense of Theoretical Quietism


Sanjukta Paul (@sanjuktampaul) is Professor of Law at Michigan Law School.

Sam Moyn has recently challenged what he sees as the dominance of “theoretical quietism” in LPE, including the refusal to decide whether we are “liberals or low-key Marxists.” Consistent with the charge of quietism, I would prefer not to be having this discussion at all. Nevertheless, I feel the need to take up Moyn’s challenge on behalf of a strand of LPE work that has been least represented in the big-picture “method” discussions that have dominated pan-LPE conversations recently — but that I think does make up a good deal of core LPE work. And though I take his essay as my immediate foil, that is only because it usefully identifies and crystallizes strands that I think are present more generally and deserve examination.

LPE does not, in my view, need to work out a common theory, at least not with respect to the high-altitude theory that Moyn seems to have in mind: matters such as “a social theory of how law helps make (and occasionally transform) our relationships” or a “theory of the role of law in society — in particular, in the making and unmaking of social order.” That is to say, I don’t think it is necessary for LPE to theorize, or to choose a particular theory about, law as such. Nor do I think that LPE should seek a social or economic theory at the level of generality and abstraction of neoclassical economic analysis, one of its central antagonists.

Where the Action Is

This stance is not, however, grounded in a rejection of theory as such, but in the belief that we should take theory (in this case economic theory) somewhat more seriously on its own terms. The real juice here, in my view, mostly resides a big step down from high-altitude social or legal theory. Thus, contesting and clarifying the mid-level legal and economic concepts that actually have the most effect in the world is where (a lot of) the action is. Moyn’s post seems to suggest that, at best, failing to adopt a totalizing social theory means bringing a collection of tiny pocket-knives to a gun fight. I don’t think this is right, but to explain why I will need to characterize a strand of LPE work that can neither be described as “liberal” nor “low-key Marxist,” and with which I personally identify. (Necessarily, the characterization reflects my own views; I think I do describe work by a number of people to a substantial degree — yet ultimately, nothing essential rides on how broadly the characterization currently applies.)

The organizing motivation that I think pervades this strand of LPE work is an orientation toward normative arguments about law and policy. This isn’t limited to the kind of argument that can be written down in an amicus brief, or even in a comment to an administrative agency, though it certainly includes and is continuous with those modes. Relative to the arguments put forward by the rest of the legal academy, LPE scholars often call for fairly fundamental change to our existing concepts, frameworks, and rules. Thus, their normative conclusions frequently require a fair amount of theoretical and historical ground-clearing (taking up, perhaps, entire careers or phases of careers). Someone working in this way might draw upon (and indeed, contribute to) existing bodies of work that seek primarily to explain or describe or analyze; yet explanation, description, and analysis are not the ultimate goals.

There is a normative north star guiding the theoretical and historical work, even if it is distant at times. Some shared ideas across this strand of work seem to be:

  • the understanding that economic competition (a basic conceptual building block of high-altitude theories from right to left) is always channeled along specific, qualitative dimensions (as figures as diverse as the socialists Sidney & Beatrice Webb, the Progressive legal reformer and jurist Louis Brandeis, and the New Deal economist Gardiner Means all held), and that it is also essentially conditioned by economic coordination mechanisms, about which we make legal choices. Both of these imply the inextricable presence of law, in the form of “canalizing rules” (as Means put it), and in the form of legally allocated “coordination rights.”
  • As a result of this understanding of markets, a rejection of the theory of the self-coordinating market (“perfect competition”) — not only “in the real world” but also as an ideal or an analytical benchmark for understanding the world, or for evaluating rules that would change it;
  • As a result of this understanding of markets, interest in actively fostering an empirical research program that picks up strands most clearly associated with “the old institutionalists.” While narrower veins of that kind of qualitatively rich and legally informed empirical study of the economy do continue today, in more isolated and less cohesive ways (including to some extent by neoclassical economists themselves), the task is to uncover and broaden the channels that have largely been buried since the “second red scare” drove institutionalists from economics departments (a legacy that academic economics’ empirical turn alone does not undo);  
  • a normative commitment to distributing both participation in economic governance and income flows in significantly more egalitarian ways, across legal or policy subject-matter areas, as inclusively (across race, gender, national boundaries, etc.) as possible.

At least some of the academic work in this vein engages extensively with existing economic theory on its own terms, even if often mainly in an oppositional way. To say that this is rooted in a rejection of “ideal theory” as such, however (as is not-infrequently suggested), actually understates the position. We reject the self-coordinating market framework not because it is just one more unrealistic idealization of the world but because it is a particularly incoherent and unhelpful idealization. (This isn’t the place to set out why, but to clarify the position.)

It is also true that those of us engaged in this kind of work aren’t eager to replace the tower of ideas we’re trying to bring down with another shiny tower of equal altitude, i.e., another totalizing economic or social theory. But that doesn’t mean we seek to build nothing in place of these fallen towers. Many of us think that the most interesting and relevant objects of study for “Law and Political Economy” lie in the interaction of economic dynamics with law (not in the abstraction of “economic processes” from law), which should yield recognizable patterns of both competition and coordination, causal conclusions, perhaps even some rough-and-ready empirical rules.

Moreover, we need workable mid-level normative concepts and principles that can be deployed across areas of law and regulation, and can bridge legal and economic analysis (much as their analogues do now). We need to work out in more precision and detail what we mean by, e.g., fair competition, fair price, technical (or productive) efficiency, the cost of labor (in a real rather than monetary sense), and more. We need to think about how egalitarian a distribution of economic coordination rights is required and how that should be balanced with other values. We need to think more concretely about how various economic governance mechanisms that are all broadly egalitarian but potentially incompatible in practice should interact with each other, and if some are more appropriate to certain sectors, etc. We need a great deal of thinking about how a reconstructed “microeconomics” will interact with the new work on “whole economy” issues implicating finance, money, economy-wide prices, etc. And this is all before getting to the interactions with the architecture of various areas of law. We aren’t anywhere close yet, but the goal is indeed to replace bad ideas with good ones, even if a better economic (and legal) theory may end up looking less like another high tower, and more like a tree with bendable branches, rooted in the ground.  

One point of comity with Moyn’s view, I think, is that this strand of work ultimately aims to affect law or legal ideas through the use of legal and economic ideas. Therefore, thinking carefully about existing legal and economic ideas is often a starting point — though I am quite loath to call this a method. I don’t know that there is a specific “method” involved in identifying incoherent legal and economic ideas (or sometimes, near-meaningless labels), and trying to replace them with more coherent (as well as normatively better) ones. The best thing I can do is give an example. Here’s a recent attempt to identify something the law currently does that I think is incoherent:

There is a basic mismatch between asserting property rights against workers as putative outsiders to the corporation, and — as an extension of those same property rights — asserting what are effectively duties of agency, loyalty and obedience upon workers, appealing to their status within the enterprise. But really, this is exactly what labor law does, tying its invocation of “the employer’s” property rights together with its invocation of production and discipline. It achieves this through an ambiguous invocation of the idea of the “employer” — one that, one might note, labor discourse often mirrors when it invokes “the boss” — that must at once denote the firm as a whole, and at the same time denote only certain actors within the firm (who are not the workers in question).

Implicit in making an argument like this is the belief that a more coherent approach to balancing workers’ associational rights with other considerations is possible. Dislodging this particular tendency in labor law opens space for rules and tendencies that I think are normatively better — but I must say (as most at this stage must say), that doing this alone does not guarantee a normatively better outcome; we could even end up with worse (but more coherent) rules. You still have to make the normative case for the rule you want, but now you do it from clearer ground. And frequently, though not always, the incoherence in the status quo approach is not just random: it’s disguising a normative direction that is far more difficult to defend when clarified.  

Everything I’ve said so far also implies that it’s at least possible to affect law or legal ideas through the use of legal and economic ideasthemselves. I’m not going to take up, here, the chicken-or-egg question of whether law/legal & economic ideas or social movements have causal priority (in the aspirational process of transformative egalitarian change), because I think it’s a massive distraction. It is fairly obvious that all of it matters; there’s really only a pragmatic and individual choice about which role one shall, personally, take up. When I was a practicing lawyer embedded in the ecosystem of labor and social justice movements in Southern California — something I did for longer than I’ve been an academic — I tried to do my job as best as I could with the tools I had available to me within the constraints under which we were operating. Now, I try to play a small role in the enterprise of bringing down the tower of bad ideas that I have seen first-hand hems in law, judges, policy-makers, and therefore movements. It’s a privileged role, to be sure, but it would be silly to squander the privilege, or to bask in it without doing the work I have the opportunity to do.

A Thousand Flowers?

Finally, it’s reasonable to believe there can be a division of labor within a larger group that’s trying to move in a substantially similar direction. I am not convinced, though, that the high-altitude theory that Moyn prioritizes here is even complementary to the vision I’ve tried to articulate — in which theory will, perhaps, eventually bubble up from the ground rather than appearing fully-formed from the sky, in which it will always be more bendable than rigid, more like tree branches than like the shield of Zeus.

The soft focus of high-altitude theory may even impede our ability to “do theory” in the earlier sense, i.e., to think precisely, carefully, and rigorously about specific legal and economic ideas and their relation to one another, and to take aim at their deployment in often-mindless and contradictory ways in status quo law, policy, and practice. Moyn’s essay seems to provide an object lesson in this. In his characterization of what is happening in contestation over law & economics, he says:

LPE often talks about law and economics as a malignant force (it is) … But insofar as LPE has confronted the prescriptions of law and economics — arguing, for instance, that efficiency should not crowd out other values — it has resisted offering a more systematic normative theory.

For my part, I would never “argu[e] … that efficiency should not crowd out other values,” and I consider it a key initial goal of LPE to get beyond this self-defeating formulation. Crediting “efficiency” as a stable, unitary, or even necessarily meaningful concept is a major wrong turn. Framing a broad set of issues in terms of weighing efficiency with other values is a now-entrenched move (with real, harmful effects in the world) enabled in part by legal liberalism, which ceded the subject matter of the economy entirely to a set of colleagues who practiced the marriage of law to a specific economic theory.

The concept of allocative efficiency and the concept of technical or productive efficiency are completely distinct ideas (to take the most significant ambiguity that inheres in the label). Allocative efficiency only has meaning within the high tower of perfect competition — in which relative prices allocate productive resources to such uses in such proportions that overall utility is maximized — that we are supposedly united in rejecting. Technical or productive efficiency does not presuppose this conceptual framework at all, and is instead about the relationship between the “expenditure” of inputs and the realization of outputs in production. We do need more systematic theorization of the latter (and are working toward it), but let’s start by not ceding an inch we don’t need to in the invocation of the label “efficiency.”

Again, I think the soft focus of high-altitude theory can facilitate inattention to relatively low-hanging fruit at the level of mid-level legal and economic concepts that actually have the most effect in the world (as far as ideas go). We’ve seen that happen with the high altitude of much legal liberalism; I am skeptical that replacing that perch with another one at the same height will help us correct the mistakes that happened on the former’s watch.