Today, we want to share and summarize an Economist article named “How Chicago school economists reshaped American justice” published in the Economist. You can find the general discussions and critical points below.
Fifty years ago, a federal judge, Richard Posner, published his article “Economic Analysis of Law”, the work was mostly inspired by a group of economists from Chicago school, some of those was Gary Becker, Ronald Coase and Milton Friedman. In this sense, the law and economics movement emerged and thanks to that movement, courts became more reasoned and rigorous. After its emergence, every legal action was questioned in the context of incentives of actors and the changes these produced. In his study (Crime and punishment: an economic approach) Becker stated that harsh sentences reduce the criminal activity just like high prices cut the demand.
Although the law and economist movement attracted little attention from the academia in that particular period of time. Posner’s book was the first driver of Law and Economics movement to become mainstream, while Manne Economics Institute for Federal Judges was regarded as the second driver behind popularity of Law and Economics movement. It is necessary to mention that Friedman and Paul Samuelson, both were Nobel Prize winners were among the designers of the course.
According to figures shared in the article, Manne course had huge impact on odds incarceration. The details can be seen in the graph.
Moreover, in a study published by Elliot Ash of ETH Zurich, Daniel Chen of Princeton University and Suresh Naidu of Columbia University in the Quarterly Journal of Economics, examined the impact and reached similar outputs shared in the graph above. In fact, authors focused on comparing the decision taken by Manne alumni before and after their participation in the programme. An AI based approach called “Word embedding” used to evaluate the language in judges’ approach and behavior. According to findings, federal judges, who attended to the course, were more likely to use words like efficiency and market, whereas the were less likely to use words like discharged or revoke. Similarly, Manne alumni tend to be more conservative on antitrust and other economic cases %30 more often in the cases after they participated in the course. Furthermore, %5 increase in prison sentences imposed and %25 increase in the length of the sentences were observed in judges’ cases after the course.
In conclusion, a group of academicians from Chicago school and judges affected by the school reshaped American justice. Although it has been 50 years since its emergence, the law and economics approach continues to be prominent in antitrust and economic cases.
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