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Monday, March 03, 2014

Law and Economics: The Flow of Ideas is a Two-Way Street

Frank Pasquale

Raul Carrillo and Rohan Grey have recently argued that "law students need macroeconomics…and macroeconomics needs us"---and I couldn't agree more. They have launched several initiatives at Columbia to build on the excellent finance curriculum offered there:
As Professor Robert Jackson opined in The Modern Money Network’s recent seminar, “The way we talk about money systems in law school has been blocked in a way, because we’re not really honest with each other about the fact that our money system is a legal choice… We may have covered, in legal academia, microeconomics in reasonable depth, but we need to do much more work in macroeconomics.”

When we “do economics” in law school, we customarily confine it to the scale of individual entities, say, firm transactions in Contracts and Corporations. Broader discussion of political economy rarely creeps into the curriculum.... Whether you eventually practice or make policy, negotiate deals or craft legislation, every student can benefit from further integration of political economy into the curricula. This is why The Modern Money Network, a newly recognized student organization, exists. It is a transdisciplinary hub for learning about the interactions between money, finance, law, and the broader economy.
Carrillo has also observed that the Fed used to have far more input from attorneys, but has since become an intellectual monoculture of economists. That, too, has to change. We can only hope to reform the finance sector by addressing power dynamics among boards, CEOs, traders, and investors---the types of dynamics lawyers are expert at creating and manipulating. Moreover, attorneys need to understand the overall effect of finance on the broader economy, and not simply think of ourselves as mere hired guns for the highest bidders. I'll be closely following the work of Carrillo and Grey, and suggesting some fruitful directions for political economy and law.

They are also looking to spread their approach to other law schools---so try to contact them (@ramencents for Carrillo, @rohangrey for Grey) if you're interested. It's great to see the legacy of Robert Lee Hale endure at Columbia!

X-Posted: Concurring Opinions.

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