For much of the 19th Century, legal formalism held sway both in the US and in Germany. The law was seen as a more or less autonomous, inward-looking, quasi-scientific endeavor. Normativity was ensured by a consistent internal point of view. The doctrinal ideal was coherence of each normative claim with all other parts of the system. To be sure, there were significant differences. US formalism never subscribed to quite the same rigor in its pursuit of internal non-contradiction, and it did not make (the received) Roman Law methodology the gold standard for proper syllogistic, analytical legal reasoning. Also, and maybe more importantly, the US legal elite comprised foremost of judges, whereas the German legal elite was firmly in the hand of professors. Lastly, the general philosophical climate was different. German legal philosophy was dominated by the teachings of Kant, Fichte, and Hegel, who despite their significant differences, can safely be described as non-consequentialists. (Kant, of course, made significant practical allowances for consequentialism. However, he rejected Glückseligkeitslehre as a foundation for moral theory. Similarly, consequentialist considerations play a role in Hegel’s philosophy of right. However, the source of normativity lies in a theory of recognition, not in a forward-looking balancing of benefits and burdens.) In contrast, the intellectual climate in the US was influenced much more significantly by Bentham’s and Mill’s utilitarianism.

Today, law & economics has become an indispensable part of legal scholarship in the US, whereas in Germany and other European countries (including the UK), law & economics is a rather specialized discipline situated outside the legal discourse proper. More broadly, legal scholarship in the US is dominated by an external or policy point of view, in which the law is the object of study, undertaken from an economic, sociological, psychological, etc. point of view. In contrast, most European scholarship — with the exception of legal history — proceeds from an internal point of view, that is, accepting of law’s normative constraints. E.g., in the US we would ask: “Is a strict liability rule efficient?” In Germany one would ask: “Given that we have strict liability rule for situation X, how can we explain a negligence standard for a related situation Y?” The assumption is that there must be an explanation within the legal system as it is. “Because folks exposed to Y had the better lobbyists,” is not an acceptable answer, it is irrelevant to the task of the lawyer and legal scholar. In the US, from an external point of view, that answer is perfectly fine (and more often than not correct).

Why have US and German legal scholarship (and, as a result, legal practice, as every antitrust lawyer who has dealt with both US and German courts and agencies will confirm) proceeded on such different tracks? In a recent, highly readable and thoroughly researched paper “The Transatlantic Divergence in Legal Thought: American Law and Economics vs. German Doctrinalism,” Kristoffel Grechenig and Martin Gelter argue that a pivotal moment in the history of legal thought came in the inter-war period, when legal realism destroyed the intellectual foundations of formalism in the US. Meanwhile in Germany and Austria, the Free Law School, whose program was similar to that of the early realists, never achieved the same level of success. Among the reasons for the demise of the Free Law School were:

• The thoroughly anti-consequentialist bent of German legal philosophy
• The concept of law as a pure, normative discipline (Kelsen)
• A legal elite comprised of professors (with much to lose), as opposed to judges
• Economic turmoil, hyper-inflation, and increasing political radicalism in Germany after WWI, culminating in the Machtergreifung of 1933. The Nazis immediately suspended many of the Free Law School luminaries (e.g., Hermann Kantorowicz).

To that list I would add:

• Judicial review of legislation by the Supreme Court, transforming what would otherwise have been a “great debate” in the legislature into a legal dispute between the executive and the legislative branch, e.g., during Roosevelt’s first term.
• A culture of signed, judicial opinions and dissents, which made the influence of personality on decision-making (and thus the indeterminacy of the law) immediately visible. Taft, Holmes, Brandeis, Cardozo, McReynolds, etc. were household names not only in the legal but also in the political and public discourse. Newspapers wrote op-eds about the “Four Horsemen” and the “Three Musketeers.” In contrast German opinions are issued as consensus decisions, that is, “decisions of the court,” not of individual judges. As a rhetorical device, this aggregation stresses the institutional aspect and permitted the illusion of legal determinacy to survive.

Grechenig’s and Gelter’s paper provides a detailed and convincing, comparative history of legal realism and law & economics as its foremost modern-day heir. Anyone interested in what really lies behind much of the transatlantic divide can hardly do better than download Grechning’s and Gelter’s paper, along with Brian Leiter’s account of American Legal Realism. My own views regarding a contemporary version of formalism are here.

Technorati Tags: antitrust, germany, comparative law

Comment feed: RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.