Josh Wright has a very interesting post (Part I with more to come) on the future of law and ecomomics. Here is a taste:
One consequence of the increase in formal theory and empirical work is increased specialization in economics, and therefore, in economic analysis of the law by economists. I Most young economists graduating from top programs either model or do empirical work, but not both. It is also the case that the economics discipline has become specialized across fields in the sense that many disciplines do not “talk” to one another or across their respective literatures. I had this discussion with a financial economist the other day who was lamenting the lack of sophisticated in that field with respect to industrial organization economics. I suspect increased specialization has resulted in a similar detachment between many other fields in economics as well. There are many benefits from this sort of specialization. But I think it is now clearly the case that most job market candidates in L&E are either theorists or econometricians, not both. I suspect that law departments will tend towards hiring the econometricians because many lawyers are able to at least understand the intuition of regression models and read results but very few are able to read and understand theoretical models of the type published in top economics journals. But I suspect the days of the “general L&E” scholar who does theory, empirics, and dabbles in some legal doctrine are numbered.
Assuming that the modern economics literature is indeed trending towards mathematical sophistication, the most obvious and likely consequence is that L&E will become less relevant to legal and policy audiences. There are at least three possible avenues through which the increase in formalization could be costly for L&E:
- (1) Economists will do work that is detached from legal institutions and law and therefore less relevant (the “detachment” problem);
- (2) L&E scholars will do work that is very relevant, and maybe even very good, but legal scholars wont know about it or care about it because of the “translation” issues associated with the formal mathematics will prevent it from being retailed to broader audiences, (the “retail” problem);
- (3) Informal L&E will be “crowded out” of the law school landscape as it declines in value, (the “crowding out” problem) and as formal scholarship moves away from law schools toward economics departments, traditional subjects of L&E scholarship will be left to less qualified scholars (the “I know STATA and can get any regression through law review editors with a catchy enough title” problem).
My own sense is that right now, #1-3 are all important potential issues for L&E.
If I might make an observation, if Wright is correct, and I think he very well may be, then there are large implications for law and economics in particular and the future of the legal academy in general.
Wright's observations are about the natural consequence of the interdisciplinary model of the legal academy. The mark of the interdisciplinary model is "law and . . ." where the dots are replaced by some other discipline: law and economics, law and philosophy, etc. Given the sociology of the academy, legal economists who recieve their academic training in economics have their primary intellectual orientation towards the PhD discipline: the reason for this orientation is obvious. The PhD training provides a methodology oriented towards the production of scholarship; law training does not.
Over time, this orientation (towards the "home" discipline of the interdisciplinary scholar) results in the issues that Wright identifies--the increasing disconnect between law and economics scholarship and the interests of the legal academy. One possible effect is that "informal law and economics" will be crowded out. But this is not the only scenario. The alternative is the gradual decline of the interdisciplinary model and a turn towards multidisciplinarity as the alternative. (A word on that below.) This movement could be manifested in a variety of forms. For example, as the work of law and economics scholars becomes increasingly inaccessible to even their "informal law and economics" colleagues, it seems inevitable that their work will be considered increasingly marginal to the mainstream of law school faculties. This could result in the "sophisticated law and economics scholars" moving to tighter affiliations with Department of Economics. The path of migration might go: courtesy appointment becomes quarter-time appointment becomes half-time appointment with the end point being "zero time" in the law school. This path offers the "sophisticated law and economics scholar" the opportunity to interact with colleagues who understand their models and methods, and relieves law schools of the opportunity costs of supporting work that increasingly has no "cash value" except within the community of subspecialists. Rather, that "crowding out" informal law and economics, the result might be to make room for economic work that is accessible to the legal academy.
This is not to say that some law and economics subspecialities might not remain in the legal academy. As Wright notes, econometrics is part of a larger trend, the empirical legal studies movement, which draws on the methodologies of a variety of disciplines, including economics, sociology, statistics, etc. The cash value of empirical work is not in doubt, and the results can be presented in formats that are accessible to the mainstream of the legal academy. Over the very long run, it seems likely that most legal academics will acquire sufficient emprical training so as to be able to understand a regression and interpret the results of emprical work.
These speculations point to a bigger picture. The legal academy stands at a crossroads, with at least three possible paths into the future. One path is the interdisciplinary model in some new variation that addresses the instabilities inherent in law schools staffed by those trained in other disciplines.
A second path is the mutlidisciplinary model. One way of thinking about multidisciplinarity is by looking to political science. Poltitical scientists who develop formal models are trained in political science models: there are is "Positive Political Theory" or "Formal Political Science" and not "Political Science and Economics." Graduate students are trained in the basics of the major methodologies, including political theory, institutionalism, positive political theory, and so forth. They then specialize in one of the methodological approaches within political science. If law ere to follow this path, it would require the creation of multidisciplinary PhD programs in law that introduced future legal academics to empirical legal studies, positive legal theory, formal legal models, normative legal theory, advanced doctrinal methods, and so forth.
A third path leads back to the professional school model, with all of the attendant advantages and disadvantages of the academic-lawyer generalist, whose only rigorous skill sets are case crunching, code crunching, and clause crunching. Such generalists translate the work of other disciplines (sometimes with egregious errors), but they do not generate new interdisciplinary knowledge. If this path is taken, then interdisciplinarity will gradually fade into the background, with legal philosophers, empiricists, and economists slowly disappearing from legal academia as they migrate to other departments or retire.
Read Wright! Great post.