The social foundations of the economic approach to law

Law and Economics Movement can be defined as the application of economic theory -especially microeconomics and some basic concepts of welfare economics- to examine the structure, formation, functions and impacts of the law and legal institutions. The Movement has become a new legal paradigm that has nearly equal strength with natural law theory and legal positivism. It is also separated into several schools of thought along 20th century: Chicago School, Virginia School, Institutionalism, Behavioral Law and Economics, New Institutional School, Yale (New Haven) School, and Austrian Law and Economics etc. This study describes the jurisprudential niche occupied by Law and Economics Movement and identifies its philosophical and sociological aspects by focusing on mainly three prominent schools of thought: Chicago School, Austrian School and Virginia School. To some, Chicago School is synonymous with law and economics because of its great contributions on the disciplinary integration of law and economics. So this approach has generally mentioned as the mainstream. Virginia and Austrian approaches have been in close intellectual contacts with Chicago School in spite of some epistemological and methodological differences. Mainstream Chicagoan approach has also been usually described as a positivistic and also a-sociological viewpoint in connection with its neoclassical characteristics. This study includes an endeavour to unveil its connections with social theory in the light of a Neo-Austrian thinker Friedrich A. Von Hayek's ideas on spontanous order and private law society (privatrechtsgesellschaft), Virginia school's theories on social choice and interest groups, neoliberal social projections and some other postmodern discussions like risk society and ecological jurisprudence.