Institutional Law and Economics: The Legal-Economic Nexus

Just a quick posting pointing to A. Allan Schmid's exit lecture in 2006 https://mediaspace.msu.edu/media/Allan+Schmid+lecture+mp4+48khz/1_74la8bt3/11980551

A. Allan Schmid was one of the co-founders of Institutional Law and Economics (ILE) from Michigan State University.  He took a balanced and pluralistic view of the value and importance of the various approaches and methodologies.  One of the key questions is the relationship between institutional economics and neoclassical (or so called orthodox) economics.  Schmid, as we will see, took a very balanced and nuanced view of this relationship.  This view helps set the stage for a more general exploration of institutional economics in future blog posts. His writing illustrates his nuanced view of these issues.  Schmid writes that "orthodox economics misses many issues of power" and "neoclassical economics has focused narrowly on that part of psychology that can be captured in the concepts of utility and preferences" (Schmid, pg. 3 and 4).  At the same time, Schmid is complimentary of some of the important advances in neoclassical and welfare economics, he wri...

Warren Samuels was a co-founder of the Institutional Law and Economics School of Thought from the Economics Department of Michigan State University. Occasionally, we will explore some key quotes or thoughts from Samuels across his long career to see how this school of thought formed and evolved over time. Writing in the Journal of Law and Economics in 1971, Samuels articulated that, "legal impact upon the private economic sphere and the economic use of government have not been the exception; rather then have been the regular and fundamental, perhaps daily pattern.  Both the market mechanism and the legal system, as well as the system of moral rules, are modes of social control and social change." Here we say that the analyst must consider how the two or three spheres of influence, economic, government and moral, are all part of the nature of social control.  Each sphere has its characteristics and ways of working and none of them should be privileged above the other.  T...

This new blog was started to think about ideas in the area of institutional law and economics.  We will be posing as often as possible as we explore ideas in the frame of reference created by A.Allan Schmid, Warren Samuels, Dan Bromley, David Schweikhardt and others from the Great Lakes tradition of Institutional economics. Here are some starting resources: https://msu.edu/user/schmid/instecon.htm https://www.tandfonline.com/doi/pdf/10.1080/00213624.2017.1368314 https://www.canr.msu.edu/people/schmid_a A few initial thoughts based on writings from Al Schmid and his first edition book, Property, Power and Public Choice published in 1978.  Lets start with a direct quote, "the system of analysis used here begins with the fact of human interdependence.  It is the public choice of property rights (institutions) that control and direct this interdependence and shape the opportunity sets of the interacting parties." In these two sentences, we can unpack a lot of inf...