Hale, Robert Lee (1884–1969)

Robert Lee Hale was arguably the twentieth century's most radical legal-economic theorist. With a law degree [Page 686]from Harvard and a doctorate in economics from Columbia, Hale taught at the Columbia Law School for over thirty years. A legal realist, he went beyond analytical jurisprudence to the nature of judicial decision making, the economy as a system of power and mutual coercion, and the social creation of both economy and polity in the legal-economic nexus. Courts adopted his views on public utility regulation, especially his prudent investment approach to utility valuation and his conclusive demonstration of the circularity of the United States Supreme Court's early doctrine of a fair return on the value of property.

Hale's legal-economic theory emphasized several important ideas. First, systems of freedom are simultaneously systems of coercion. Emphasis on the former and obfuscation of the latter were due to selective perception abetted by an ideology promulgated by the powerful. Second, the economy is a system of power in which individuals participate in mutual coercion through the threat of withholding their purchases or hiring. Finally, opportunity sets exist from which individuals exercise volitional (as opposed to voluntary) choice.

Opportunity sets are governed by power—both legal rights and others' choices—and, in turn, they determine the structure of mutual coercion. Hale used the term coercion in a nonpejorative sense to indicate the impact of others' behavior and choices on one's opportunity set. Alpha's “freedom to” meant the negation of Beta's “freedom from.” Government, therefore, connotes all those with power, the capacity to coerce, and the ability to impose limits on others' opportunity sets. Government encompassed both public, or official, government and private government, especially concentrated corporate power.

The titles of some of Hale's works neatly convey his ideas: lawmaking by unofficial minorities; revision of the property concept; coercion and distribution in a supposedly noncoercive state; labor legislation as an enlargement of industrial liberty; force and the state, comparing political and economic compulsion; equivocal constitutional guarantees; bargaining, duress, and economic liberty; and freedom under law.

Hale was influenced by Wesley N. Hohfeld's (1879–1918) model of fundamental legal conceptions comprising jural opposites and correlatives that structured legal-economic actors' relations to each other. These pairs—including right and no-right, privilege and duty, power and disability, and immunity and liability—underlay Hale's account of relations between employees and employers and between individuals and the state. The state constituted the process through which relations of protection and exposure were developed. The operative, substantive meaning of such legal concepts as property and liberty was different at different times. Hale developed these ideas through deep analyses of various bodies of law.