Front Page Titles (by Subject) Horwitz: Law and Economic Interests - Literature of Liberty, April/June 1979, vol. 2, No. 2
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Horwitz: Law and Economic Interests - Leonard P. Liggio, Literature of Liberty, April/June 1979, vol. 2, No. 2 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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Horwitz: Law and Economic Interests
Book Review of Morton J. Horwitz's The Transformation of American Law, 1780–1860. Wisconsin Law Review 4 (1977): 1253–1276.
Although interest groups shape the law to achieve their parochial goals, law itself helps shape the contours of society. The “Wisconsin School” of American legal historiography contends that the evolution of private law in America was related to the efforts of middle-class capitalists to utilize law to accelerate economic development. The Wisconsin School has emphasized economic issues and their relationship to legal doctrines and institutions, and has minimized jurisprudential, societal, political, and ideological themes in American legal history. Horwitz, who embraces the approach of the Wisconsin School to legal history, presents a basic theme: at the close of the American Revolution, the common law reflected precommercial, antidevelopmental values; during the next eighty years, a major transformation of the legal system took place which “enabled emergent entrepreneurial and commercial groups to win a disproportionate share of the wealth and power in American society. . . at the expense of farmers, workers, consumers, and other less powerful groups. . . .”
Horwitz carefully details the process by which nineteenth-century judges revamped property law doctrines to eliminate the agrarian, antidevelopmental bias which characterized the older common law. In general, a new theory of property gained acceptance, with similar results across the board: “. . . the idea of property underwent a fundamental transformation—from a static agrarian conception entitling an owner to undisturbed enjoyment, to a dynamic, instrumental, and more abstract view of property that emphasized the newly paramount virtues of productive use and development.”
The author feels that, contrary to Horwitz's assumption that economic motivations explain judicial behavior, history is not that neat. Rigid use of an economic model ignores the complexities of the real world such as the autonomy of ideas, the influences of institutional structures, and historical accident. In effect, Horwitz pursues a conspiracy theory of history, maintaining that the transformed character of the legal system did not result from a social consensus for development. Smith points out that there was no necessary causal relationship between the profiting of entrepreneurs from economic development and an alleged “worse off” status of other groups. Furthermore, there is some evidence that those burdened by the transformation of the legal system—“farmers, workers, consumers, poor whites”—enjoyed corresponding benefits from the new economic prosperity with the rising standard of living in the interim between the Revolution and the Civil War.
According to Horwitz, the emerging capitalist class had largely completed reorienting American law to serve its interests by around 1850. Once the legal system had adopted rules favorable to business and commerce, business groups sought to disguise the recent origins and biases of the new system and prevent further judicial innovations which might be redistributive. Consequently, the application of laissez-faire decision making came to dominate post-Civil War law. A basic theme was that judges were not considered lawmakers, but supposedly only applied uniform legislatively-decreed rules, policy was for the legislatures and not the courts. Smith questions the premise that the successful entrepreneurial groups somehow persuaded judges to swap an instrumental for a formal conception of law, having earlier adopted an instrumental view for the benefit of these groups. To Smith, the primary cause of the shift toward legal formalism in the later part of the nineteenth century was the emergence of the ideal of law as a science.
Republican ideology—the complex intellectual seedbed of much of the political, legal, economic, social, cultural, religious, and moral controversies during the upheavals of the seventeenth and eighteenth century revolutions—addressed the pressing question of social and political stability: why do republics rise or fall? In their analyses of the waxing and waning of various forms of government, Plato and Aristotle had discerned a cycle of corruption: kingship—or the rule of one—devolves into its corrupt variant of tyranny; next, aristocracy—the rule of the noble few—ousts tyranny but in turn becomes morally corrupted into a base oligarchy; next, democracy (or polity)—the rule of the many—replaces oligarchy, only to be corrupted and degenerate into mob rule and so inevitably lead to a renewal of this vicious cycle.
Polybius, a Greek historian of the second century B.C. assimilated and transformed this rather pessimistic cyclical analysis to his own purposes in explaining the spectacular rise of the Roman Republic to imperial power and apparent stability. In Book 6 of his Histories, Polybius attributes Rome's republican stability to its constitution, an ideal mixed or balanced constitution, which combined the right proportions of regal, aristocratic, and democratic principles to create harmony and escape the cycle of growth and decay. Later the Roman writer Cicero took over the Polybius notions of political cycles and the mixed constitution in his De Re Public and passed on these influential ideas to later European republicans.
Recently, the works of J. G. A. Pocock (most notably The Machiavellian Moment: Florentine Political Thought and the Atlantic Republican Tradition, Princeton: Princeton University Press, 1975; and the essay “Civic Humanism and Its Role in Anglo-American Thought,” in Politics, Language and Time, New York: Atheneum, 1973) has made a strong case for the role of such Florentine Renaissance historians as Machiavelli and Guicciardini in resurrecting and reinterpreting the ideals of the classical republic. Central to this Florentine interpretation was the view that republics seeking to overcome the problems of time, corruption, and instability needed recourse to “virtue” and “civic humanism.” Civic humanism refers to a style of thought that contends that an individual's moral development and self-fulfillment “is possible only when the individual acts as a citizen, that is as a conscious and autonomous participant of an autonomous decision-taking political community, the polis or republic.” Civic humanist interpretations of republican ideology stressed virtue and the avoidance of corruption as the moral and material basis of social and individual life. Such republican virtue and independence from corruption (by government or other factions) required that each citizen be economically independent of others by possessing nonalienable free-holding property in a basically agrarian society. This ideal harks back to the economically independent and virtuous Roman citizen-farmer, who in time of crisis would join the citizen militia in defense of the Common Wealth.
Pocock sees this civic humanist interpretation of republican ideology as powerfully influential in Puritan England and Revolutionary America. He pits the civic humanist conception of property and political power or agrarian virtue against the emergent values of Lockean individualism and commercial society. In effect, an ongoing tension or clash develops between two paradigms of power and property relationships: the more conservative and stabilizing attitude of the classical civic humanist tradition and the more liberal, destabilizing attitude of the commercial, bourgeois, or market orientation. Other issues, strands, and interpretations of republican ideology will be found in the following summaries together with the two Joyce Appleby summaries in the “Economic Schools and Analysis” section.