666 Theoretical Inquiries in Lan Vol.4659 C. The A-Historical Nature of Law and economics From its inception, Chicago law and economics involved the application of neo-classical tools, which reached a powerful phase in the 1950s and 1960s in the Chicago School of Economics. Neo-classical economics at Chicago University was remarkably a-historical. The detachment of economics from change over real time, and thus from history, began with the marginalist revolution and Marshal, continued with Keynes, and culminated in Chicago in the 1950s 12 For economics, the 1950s was a decade of high theory. It was one of markets, allocation, and equilibrium; of abstraction and deduction; of marginalism and incremental change; of optimization and mathematization It was one in which the basic assumptions of neo-classical theory still held strong. This decade was a low point in economic theory in terms of in history and change over real time. Theory was mainly static, not dynar Insofar as dynamic elements played a role in economic theory, they reflected in shifts of curves, moves from point to point along curves, or leaps from one equilibrium to the next, over a single time period. Time was not discussed in terms of months or years or decades; the flow of time was not treated differently for different historical eras. Not only was change over time neglected, but there was also a perception that the past of any given system had no bearing on its present and certainly not on its future Since any given current regime of functions, allocations, and equilibria is not burdened by its past, it can serve as a good starting point for future predictions. An economic theoretician thus did not have to reconstruct the passage of time, as did historians-and some sociologists, anthropologists, political scientists, lawyers, literary critics, and philosophers. Imagining change was confined to the two-dimensional classroom world of blackboard curves and to figures in books. This static state of economic theory thus hindered the development of a history-conscious law and economics This was the economic theory applied in the late 1960s and early 1970 by richard Posner and his colleagues at the University of Chicago Law School. By that point, law and economics had acquired all its familiar characteristics: reliance on the neo-classical assumption that individuals are rational maximizers; equating change in legal rules with change in 12 For a recent account of this process, see Graeme Donald Snooks, The Lost Dimension: Limitations of the Timeless Economics, in Historical Analysis in Economics 41( Graeme Donald Snooks ed, 1993). For a more detailed discussion, Ron Harris, The Encounters of Legal History and Economic History, 21 Law Hist.Rev.297(2003)666 Theoretical Inquiries in Law [Vol. 4:659 C. The A-Historical Nature of Law and Economics From its inception, Chicago law and economics involved the application of neo-classical tools, which reached a powerful phase in the 1950s and 1960s in the Chicago School of Economics. Neo-classical economics at Chicago University was remarkably a-historical. The detachment of economics from change over real time, and thus from history, began with the marginalist revolution and Marshal, continued with Keynes, and culminated in Chicago in the 1950s.12 For economics, the 1950s was a decade of high theory. It was one of markets, allocation, and equilibrium; of abstraction and deduction; of marginalism and incremental change; of optimization and mathematization. It was one in which the basic assumptions of neo-classical theory still held strong. This decade was a low point in economic theory in terms of interest in history and change over real time. Theory was mainly static, not dynamic. Insofar as dynamic elements played a role in economic theory, they were reflected in shifts of curves, moves from point to point along curves, or leaps from one equilibrium to the next, over a single time period. Time was not discussed in terms of months or years or decades; the flow of time was not treated differently for different historical eras. Not only was change over time neglected, but there was also a perception that the past of any given system had no bearing on its present and certainly not on its future. Since any given current regime of functions, allocations, and equilibria is not burdened by its past, it can serve as a good starting point for future predictions. An economic theoretician thus did not have to reconstruct the passage of time, as did historians — and some sociologists, anthropologists, political scientists, lawyers, literary critics, and philosophers. Imagining change was confined to the two-dimensional classroom world of blackboard curves and to figures in books. This static state of economic theory thus hindered the development of a history-conscious law and economics. This was the economic theory applied in the late 1960s and early 1970s by Richard Posner and his colleagues at the University of Chicago Law School. By that point, law and economics had acquired all its familiar characteristics: reliance on the neo-classical assumption that individuals are rational maximizers; equating change in legal rules with change in 12 For a recent account of this process, see Graeme Donald Snooks, The Lost Dimension: Limitations of the Timeless Economics, in Historical Analysis in Economics 41 (Graeme Donald Snooks ed., 1993). For a more detailed discussion, see Ron Harris, The Encounters of Legal History and Economic History, 21 Law & Hist. Rev. 297 (2003)