CHICAGO SCHOOL
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 argu-
ment 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 land-
scape.
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 mem-
ber, 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 eco-
nomic 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 con-
tention that markets could take care of them-
selves 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 sev-
eral Chicago school members to the federal
bench: Posner in 1981 to the Seventh Circuit,
Winter in 1982 to the Second Circuit, and East-
erbrook in 1985 to the Seventh Circuit. Bork, a
judge on the U.S. Court of Appeals for the Dis-
trict of Columbia Circuit, was nominated to the
U.S. Supreme Court in 1987. However, wide-
spread 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.
FURTHER READINGS
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).
