Chicago School(redirected from Chicago school economics)
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Related to Chicago school economics: Milton Friedman
Among contemporary movements in U.S. law, few have had as much influence as the Chicago school. This school of thought helped revolutionize legal thinking on economics from the 1970s to the 1980s. At the heart of its philosophy is the idea that economic efficiency should be the goal of national policy and law. This argument left its mark, in particular, in the area of antitrust, where the Chicago school swayed the U.S. Supreme Court for more than a decade. Although they received less attention in the 1990s than they had earlier, the school's leaders continued to rank among the preeminent—and more controversial—figures on the legal landscape.
The Chicago school takes its name from the University of Chicago, with which most of its core proponents were all affiliated at one time. These include Professor Ronald H. Coase, Judge Frank H. Easterbrook, Professor Richard A. Epstein, Professor Daniel R. Fischel, Judge richard a. posner, and Judge Ralph K. Winter Jr. robert h. bork, another prominent member, was a professor at Yale. The early work of the Chicago school, produced in the 1960s, built on scholarship by Professor Aaron Director. Director's specialty had been antitrust, the area of law that addresses Unfair Competition in business. Antitrust has a long history, in which ideas have come and gone. Through the late 1960s, the U.S. Supreme Court took a harsh view of restraints on trade. The Court ruled that certain anticompetitive practices were per se illegal—so harmful to competition that they need not even be evaluated on a case-by-case basis.
The Chicago school urged the Court to take another look. Scholars of the school praised economic efficiency. If they could show, for instance, that certain restraints on trade were actually a result of efficient competition, then why should these practices be considered illegal by courts? Underlying this view was the contention that markets could take care of themselves without the need for heavy regulation. It was not long before the Chicago school's ideas began to influence the Supreme Court. In 1977, the Court abandoned its reliance on per se rules in Continental T.V. v. GTE Sylvania, 433 U.S. 36, 97 S. Ct. 2549, 53 L. Ed 2d 568, and turned instead to a rule of "reason," opening a new era in Antitrust Law.
Throughout the 1970s, the Chicago school continued to refine its economic theory in numerous essays and treatises such as Posner's Antitrust Law (1976) and Robert H. Bork's The Antitrust Paradox (1978), both of which attacked the idea that big business is necessarily bad. The school argued that an unrestricted market, in which producers and consumers acted freely, will operate rationally and efficiently all by itself. The hands-off implications of this picture had broad significance for corporate law and national policy. Chicago school theory influenced the Reagan administration's attack on government regulation.
President ronald reagan appointed several Chicago school members to the federal bench: Posner in 1981 to the Seventh Circuit, Winter in 1982 to the Second Circuit, and Easterbrook in 1985 to the Seventh Circuit. Bork, a judge on the U.S. Court of Appeals for the District of Columbia Circuit, was nominated to the U.S. Supreme Court in 1987. However, widespread protest over his views led the U.S. Senate to block his confirmation.
In the 1990s the Chicago school continued to provoke lively debate. Bork, despite resigning from the judiciary in 1988 following his failed nomination to the Supreme Court, attracted attention with publications such as his 1990 book The Tempting of America: The Political Seduction of the Law. But in the area of antitrust, at least, the heyday of the school's influence was over. For years, the Chicago school's theory had been undergoing a reevaluation, with critics questioning its faith in government nonintervention.
Katz, Ronald S., and Janet S. Arnold. 1993. "Kodak v. Image Technical Services: Downfall of the Chicago School of Antitrust Economics." American Law Institute (January 21).
Posner, Richard A. 1975. "The Economic Approach to Law." Texas Law Review 53.
Protos, Jill Dickey. 1993. "Kodak v. Image Technical Services: A Setback for the Chicago School of Antitrust Analysis." Case Western Reserve Law Review (spring).
Rosenthal, Douglas E. 1993. "Reevaluating the Chicago School Paradigm for Promoting Innovation and Competitiveness." Canada–United States Law Journal.
Simpson, Alexander G. 1993. "Shareholder Voting and the Chicago School: Now Is the Winter of Our Discontent." Duke Law Journal (October).