Legal interpretation in the United States changed dramatically between 1930 and 1950. The Great Depression and World War II unleashed radical critique, particularly prior to the World War II. Legal realism proposed radical new methods of legal interpretation to try to meet the challenges of global depression and global war. The new legal methods proposed by realism at first seemed to indicate a new legal order. In fact, they only preserved the old order, protecting it from fundamental change. Thus, the same problem, cyclical economic downturn triggering war for resources and market share recurred in Vietnam. Just as the depression and world war triggered realism, so too did Vietnam spark the Critical Legal Studies movement. Once more, much radical discontent led nowhere. Yet again, economic downturn has triggered a war for resources and market-share--Iraq. New legal movements will arise out of this war too. If these movements are to be effective, the advocates must understand the efforts and errors of their predecessors. This essay presents a retrospective of past legal discourse intended to help contemporary scholars situate their ideas contextually as part of a recurring struggle.

Between 1930 and 1950, the United States underwent a major transformation. ¹ A fundamental--and undemocratic ²--redistribution of *654 power occurred. ³ However, the "judicial revolution," ⁴ which, at first, appeared to undercut the dominant old order, effectively worked to preserve that dominant system from a real revolution, and then was ultimately co-opted by that order. The co-optation was due to theoretical failure ⁵ and the practical reality of the reversal of America's fortunes between 1935 and 1945. ⁶ Thus, the supposed revolution affirmed the dominant paradigm even more effectively than the most reactionary could hope. The fake revolution ⁷ influenced so much of contemporary *655 legal theory that we must understand what happened in the past if we wish to influence contemporary legal thought.

The first stage of the judicial revolution began with the threat of the United States Supreme Court's disempowerment in the 1930s. ⁸ When the Court realized it was truly threatened by the President's New Deal, it abruptly and decisively aligned itself with the federal executive, ⁹ accepting the reforms as a necessary bulwark against outright communism or fascism. To justify its substantive realignment, the Court reoriented its jurisprudence, turning away from formalism and natural law by embracing positivism and legal realism. ¹⁰ The problem with this shift is that it makes law morally vacuous. ¹¹ Thus, Roosevelt's tactical victory in the 1930s resulted in the strategic defeat of his world-view by the 1980s. This tactical victory resulted from a jurisprudential reorientation allowing increased federalization of state power, ¹² especially during the war. ¹³ The strategic defeat resulted from relativism that ultimately deprived the left of its moral force, and privileged objective market arguments over supposedly subjective views of justice.

What did the federal executive, newly empowered at the expense of both the states and the Congress, do? In the face of the greatest depression in history, even the ultimate in capitalist regimes was forced to react with a statist response to the problems of economic dislocation. ¹⁴ Roosevelt created his "alphabet soup" ¹⁵ of administrative agencies to do something, anything, to end the depression and prepare for the coming world war. ¹⁶ The Social Security Administration, ¹⁷ the Federal Deposit *656 Insurance Corporation (FDIC), ¹⁸ the Works Progress Administration (WPA), ¹⁹ and the Tennessee Valley Authority (TVA) ²⁰ are just some examples of federal executive initiatives which would have been stricken by any prior court. Justifiably so, these programs were an unconstitutional extension of the executive power into the affairs of the legislature and of the federal power into fields reserved to the states. Thus, the real effect of the so-called revolution was the centralization of power in the hands of the federal executive, which was considered necessary to fight and to win the coming world war. Was it not obvious to the elites that the Great Depression would inevitably trigger a global war to destroy surplus production and employ the unemployed? It was obvious to the communists--for that is exactly what Marxism predicts ²¹: cyclical economic crashes "corrected"--by war.

"We are all legal realists now. Or are we?" ²³

The principle doctrinal maneuver needed to take the first step of the so-called "revolution" in judicial power ²⁴ was a rejection of legal formalism. ²⁵ Legal realism proposed that law is not what men in black robes say, but rather what happens in practice. ²⁶ Legal realism had, in fact, a fairly strong Marxist streak. ²⁷ It pointed out the vacuity of the statements of the ruling class ²⁸ and attributed psychological or class *658 based determinants ²⁹ to judicial decisions. Case method learning was no longer used to illustrate systemic coherence, but to illustrate internal contradictions in critique of the system. ³⁰ In place of the supposedly empty rationalizations ³¹ of the formalists, ³² legal realism proposed either--overtly--psychological critiques of the viewpoints of the ruling class or--almost always covertly--pointed and incisive critiques of the failures of the ruling class as a class. Lest we forget, the American ruling class in the 1930s presided over the unthinkable: starvation in America, ³³ the granary of the world! The obvious implication of the ruling class's failure was the necessity and desirability of radical transformation. ³⁴ These critiques were explicitly expressed by the legal realists ³⁵ and, more cogently but with less effect, by their successors in critical legal studies (the crits). ³⁶ After the war, the realists held state power by *659 compromising their pre-war radical principles. Their successors, the crits, never held state power--but, they also never compromised their principles.

Realism is a functionalist theory. ³⁷ According to functionalism, ideas and institutions form and are best understood as a function of their roles. ³⁸ Functionalism is true as far as it goes, but it does not go far enough. Realism was also a pragmatic theory, ³⁹ attempting to unify law and the other social sciences. ⁴⁰ Functionalism and pragmatism are two of the reasons realism was so easily co-opted into the system it had, apparently, so radically critiqued. A third reason for the rapid and complete co-optation of this once radical theory is that realism is a nuanced intermediate position that simultaneously reflects two complementary poles of legal thought--positivism and naturalism. ⁴¹ Realism has descriptive power that cuts both ways. So, these 1930s radicals became 1950s reactionaries; seize state power--and go on to lead America to wars for resources in Korea and Vietnam. Hardly a revolution. This is why the "new left" decisively rejected the "old left" (from 1930 to 1945) ⁴² and part of why it has not seized state power. Progressive state power, however, can and must be used to stop reactionary state power. The "new left" of 1968, entirely marginalized by the collapse of Soviet socialist imperialism in 1989 and by the 9/11 terrorist attacks, can be criticized for failing to take state power and failing to prevent wars like Iraq. The sin of the old left was compromise. The sin of the new left is impotence. Whatever sins the next left causes, it can and should, both see and avoid, the errors of its parents' and grandparents' generations. Those who forget history are condemned to repeat it. ⁴³

The principal target of legal realism was formalism--that universal ⁴⁴ centerpiece of modern American legal thought. ⁴⁵ Formalism as a talisman could include anything. ⁴⁶ In the strictest sense, it included the idea of platonic idealism. Platonic idealism is the idea that the world of things is a reflection of the world of ideas, that thoughts create reality and that reality is a reflection of rational forms (syn. archetypes; eidos) in the mind of God. When the law steps out of line with that rationality, natural forces will strike it down. ⁴⁷ Criticizing "formalism" is a way to attack the method of natural law theories ⁴⁸ without having to address the fact that there are compelling arguments for a qualified theory of natural law and natural justice. ⁴⁹ By focusing the debate not on positivism versus naturalism, but rather on formalism versus realism, the old left ignored the ultimate questions and set itself up for reactionary backlash.

*661 This, however, is not the only sense of "formalism." It can, among other things, be seen as a synonym for legalism, which is much more easily critiqued than theories of natural justice, and without the nagging question that positivism ⁵⁰ raises--if there are no theories of morality, how can there be any justice? ⁵¹ Indeed, post-modernism, ⁵² which grew from the same relativist roots as realism, is criticized and rejected ⁵³ for that same reason. ⁵⁴ Not only does post-modernism fail to tell us how to properly proceed with normative inferencing, it says normative arguments are impossible. So while it may allow us to ask pointed questions, post-modernism gives us no answers. Identity politics, individualist and subjectivist, doomed the new left to incoherence, both in theory and in practice.

Legalism, ⁵⁵ which the realists quite correctly criticized, is the rigid inflexible application of black letter law without regard to the practical consequences. Legalism was seen, only somewhat accurately, as one of the aggravating factors of the economic dislocation caused by the Great *662 Depression. Rather than call into question the capitalist system, the ruling class decided to deflect criticism toward the institutions that arise out of and administer capitalism. Administrative reforms ⁵⁶ prevented political revolution, as the judiciary ceded on issues preventing federalization of power. The attack on legalism was exaggerated to direct attention toward reformation of the system rather than its overthrow. Communists ⁵⁷ were not the only threat: populists, such as Huey Long-- who today would be considered fascist ⁵⁸--were probably the greater threat to the liberal republic.

The critique of the legal realists, that the "old guard" judges ⁵⁹ were using rigid or manipulable ⁶⁰ formalism, ⁶¹ and unscientific "natural law," ⁶² had two effects. First, it allowed federalization of power through reinterpretation. Second, legal realism empowered judicial interpretations which permitted the New Deal, and in turn, preserved the capitalist system from both communism, e.g., the Communist Party, U.S.A., and fascism, such as Huey Long, both real risks in the 1930s. ⁶³

Just as critiques of positivism have--wrongly--conflated it with realism and formalism, ⁶⁴ realists have conflated natural law, natural jus[HD] *663 tice, and formalism. ⁶⁵ The critique of natural law as formalism allowed for a re-conceptualization of law's interpretation and a federalization of power. There are solid arguments, however, for scientific theories of natural law and natural justice. ⁶⁶ Moreover, positivism is amoral and did serve fascism in Europe. ⁶⁷

Yet, the methodological critiques of the old left legal realists were eventually shown to be inapposite because the realists did not inquire deeply enough into the sources and nature of power. The old left did not dare to reach the ugly conclusion that late capitalism regularly goes to war for resources, ⁶⁸ market-share, to keep Third World labor cheap, and to occupy and distract the unemployed. Not daring to reach those conclusions, they asked the wrong questions, focusing on futile reforms with the effect of paralyzing and anaesthetizing real resistance. They *664 saw the symptoms of pre-scientific theories of law, but did not see that those symptoms were only a possible and not a necessary outcome of normative legal theory. They were thus ousted by the New Left, but that ouster resulted in the New Right, seizing power by 1980 at the latest.

The new left's post-structuralism ⁶⁹ allowed it to question power and hierarchy, but did not allow it to present a cogent, broad, and united-front challenge to power and hierarchy, because mass movements were almost instantly atomized through post-modern individualism or deprived of normative impetus by relativism. Rather than uniting and fighting as a group, the crits splintered apart into feminists, critical race theorists, lat-crits, and even irrelevancies such as "law & literature." ⁷⁰

With the end of World War II, the overtly fascist powers, with the exception of Spain ⁷¹ and Argentina, ⁷² were defeated, which put positivism in a bad position. ⁷³ Positivism, which enabled the middle class to loyally and unquestioningly serve the interests of the élites as cogs in a Weberian bureaucracy ⁷⁴ of war, became an embarrassing liability to the victorious powers, but also served as a potential lever against the interests of the working class. Because the capitalist powers themselves had also rejected naturalist theories of law, ⁷⁵ it was not possible, or necessary, for them to perform a second about-face so quickly and reject the positivism, which had earlier justified and empowered the executive federalization of the American Constitution.

How was the vacuum created by the supposed death of naturalist *665 theories of the law and the failure of positivism to provide moral points of resistance within the formerly overtly fascist states filled? Given the global dominance of the United States, the covert Marxism of the legal realists was no longer apposite to the interests of any segment of the ruling class. A theory that had permitted the executive to aggrandize the power needed to prosecute a global war, now needed to adapt itself to permit that executive to dominate the globe: and it did so with an astonishing alacrity.

The first doctrinal move, which occurred in the 1950s, as the last of the die-hard crypto-Marxists failed or were isolated by McCarthyism, consisted in the elaboration of a doctrine of legal process ⁷⁶ in conjunction with interest balancing. ⁷⁷ Rather than rigidly adhering to supposedly useless ⁷⁸ and inflexible or manipulable ⁷⁹ rules of black letter law preordained by an archaic legislator, the lawyer and judge were seen as engaged in a cooperative task of elaborating standards and guides. ⁸⁰ The law consisted of competing interests, sometimes expressed as rights, sometimes as privileges, which needed to be balanced against each other. The task then was simply one of determining the correct "factors" to be balanced and the correct "weight" to be given to them, taking into account policy objectives. Thus, the bar could execute its functions efficiently, and ignore the uncomfortable pre-war question--how and why had capitalism failed catastrophically, necessitating a second global war in as many generations? That was the central question of the last century.

So, instead of challenging the system, the bench and bar became the technocrats servicing the machine. ⁸¹ The mechanization of the industrial age had created enormous wealth, at least to the first world. Mechanization would be applied to judging disputes via jurimetrics ⁸² -- *666 and then, to dropping napalm on poor, brown-skinned people.

The second and more important doctrinal move in the taming of legal realism as an instrumentality of the very capitalism, which it had only recently, if briefly, questioned, ⁸³ was the rise of economic analyses of the law. Legal process interest balancing is the root of law and economics: if there are no valid universal moral standards--a position with which I disagree--how are judges to determine the "weight" of the "factors" which they balance? The answers are simple: the use of "cost benefit analysis" or utilitarianism. ⁸⁴

The application of law and economics as a resolution to the problem of legal indeterminacy created by legal realism lends itself to criticism as an over-simplification; however, economic arguments can be a compelling legal rationale--especially in the face of supposed linguistic indeterminacy. It is not at all surprising, though rather disgusting, that the leading capitalist state equates justice with market transactions. ⁸⁵ The rise of law and economics seemed to seal the doom of the few remaining realist crypto-Marxists. Yet that did not happen. Instead, a new generation of critical scholars drew some lessons from realism and came back with radical critiques. Why?

The great flaw in combining legal process interest balancing with law and economics is the inability to comprehend that capitalism has predictable cyclical downturns that generate unemployment and result in war. ⁸⁶ Marxist legal perspectives in America would almost certainly have died a quiet shameful death were it not for the Vietnam War. The business élite expected Vietnam to be another World War II, or at worst *667 another Korea. The supposedly neutral theories either of "pure" positive law, such as Kelsen, ⁸⁷ or law and economics, ⁸⁸ or of legal process interest balancing ⁸⁹ found themselves confronted with legal challenges that they could not address or comprehend within their own terms. This was due largely to the advancement of the civil rights movement, ⁹⁰ the women's movement, and the anti-war movement. ⁹¹ Economically speaking, the Vietnam War was a marvelous profit making opportunity, as shown by trade union support for that war. ⁹² Yet global communication sparked mass protest, not only within the U.S., but also among its supposed allies. How could legal process ⁹³ or law and economics propose responses to the civil disobedience, ⁹⁴ protest marches, ⁹⁵ and assassinations ⁹⁶ that characterized America in the 1960s? They could not and did not. And thus, a second generation of realists, the critical legal studies movement, arose. ⁹⁷ The Marxist influence on critical legal studies is far more evident, and even occasionally overt, ⁹⁸ as compared to legal re- *668 alism. ⁹⁹ What follows is a discussion of how the challenges presented by critical legal studies influenced the doctrinal methods of legal process interest balancing. ¹⁰⁰

The principle method of legal process ¹⁰¹ is the balancing of competing interests of the plaintiff and the defendant, and possibly also of third parties. Balancing tests are generally proposed as the method of decision by realists because of the legal realists' rejection of binary ¹⁰² "bright-line" categorical analyses in favor of multivariate standards. ¹⁰³ However, the realist critique of bright-line rules was in fact overstated. Bright-line tests are at times ill-suited and at other times well-suited to achieve substantive justice. The realists' rejection of "bright-line" tests was ill-conceived. Likewise, balancing tests are at times ill-suited and at other times well-suited to achieve substantive justice. In other words, the pre-war realists overstated their critique of formalism, and the post war realists overstated the efficacy of the supposed remedy. ¹⁰⁴ The fact that the pre-war realists' epistemology led them to a well founded general methodological rejection of categorical analyses, which was usually correct, is not equivalent to finding the methodology proposed by the post-war realists, interest balancing tests, to be necessarily, or even generally, well-founded. Balancing tests, like bright-line categorical analy- *669 ses, depend on terminological certitude and empirical verifiability. The realists' critique was generally, though not universally, correct, but the solution that they offer is generally, but not universally, as open to critique as the supposed problem that they purport to solve.

Current legal epistemology incorrectly rejects "bright-line" categorical tests (e.g. A or not A) on the following grounds: While categorical analyses are unambiguous they are at best teleologically blind and at worst teleologically vicious. When teleologically vicious, formal manipulations are nothing more or less than the mask of class dominance. ¹⁰⁵ When teleologically blind formal manipulations ignore whether substantive outcomes are in fact just, and elevate the procedural form over the substantive result. The realists' conclusion is a methodological rejection of a categorical bright-line analysis in favor of "balancing tests." This rejection is ill-founded.

Categorical analyses require an exact methodology, i.e. terminological and empirical certitude, and strict application of formal logic. Since the realist so-called revolution of the 1930s linguistic determinacy and propositional logic are criticized and generally rejected in American jurisprudence, wrongly, as rigid formalism. The realists' rejection of formal logic is overly-simplistic: they ignore that formal logic and empiricism are perfectly compatible as methodological tools in the search for truth. If balancing tests, favored by the teleological interpretation realism prescribes, can be evaluated and determined according to objective empirical evidence, then so too can "bright-line" categorical analyses. There is no empirical difference between determining the "weight" of a "factor" in a multi-variant balancing test, and determining whether a "bright-line" "threshold" is met. At the empirical level, the realist argument that flexible "balancing tests" are better than "formalist," "bright-line tests," is not necessarily true. Thus, the realist critique is overly-simplistic.

The realist critique of logic also goes too far. Realists argue that formal logic is at least abused if not misused. ¹⁰⁶ Of course logic can be *670 abused, however, the realists appear to ignore that formal logic is only contingently and not necessarily manipulable. ¹⁰⁷ The manipulability of formal logic is contingent upon a combination of terminological inexactitude and dishonesty: it is not inevitable. If all formal logic were merely a manipulation designed to mask the raw exercise of power, then no logical argument would be admissible. That is, of course, a nihilist position. That premise, however--that logical argument is merely a mask for the exercise of raw power--is self-contradictory. It leads to a conclusion that voids most nihilist discourse. And it is also empirically untrue: even tyrannies seek to justify their exercise of power, ¹⁰⁸ and in some cases the justification is valid. Just as no regime is entirely just, no regime is entirely unjust.

The above described logical contradiction defuses most nihilist discourse-- whether such discourse is presented as legal realism or post modernism. ¹⁰⁹ Many post-modernists raise irrationalist ¹¹⁰ arguments similar to that of the realists': Members of both schools of thought assert *671 that there is no truth or that all truth is relative or inter-subjective. ¹¹¹

That position leads, however, to the self-defeating conclusion that one must reject logical argument! The contradiction in either case--legal realism or post modernism ¹¹²--is that using logic to argue that one cannot or should not use logic, is illogical. If "there is no truth," or if "all truth is relative," then these statements are logically empty of meaning. The antinomic conclusion is the inevitable conclusion that most postmodern and realist epistemology must lead to, if we take their assertions of truth nihilism or relativism seriously, and not as a mere sensationalist foil for a healthy truth skepticism, which they generally are.

Although this position of realists and post-modernists taken to its logical conclusion does in fact lead to an impermissible contradiction, ¹¹³ a qualified realism is admissible. The statement "The abuse of formal logic leads to some injustice" is perfectly admissible i.e. that statement is formally valid--and is in fact empirically true and possibly even necessarily true. The statement "The use of formal logic always leads to injustice" is, empirically untrue and logically antinomos. The first statement, a qualified realism, is admissible and does not overstate the realist critique. The second is not: it goes too far. Truth skeptics and realists have some points--logic can be, and sometimes is, manipulated. But truth skeptics and realists should be careful not to take their points too far lest their nihilism also destroy their own discourse, via the antinomy described. That destruction necessarily occurs whenever realists or post modernists assert a truth statement purporting to negate the existence of truth statements--for example, when they attempt to simultaneously assert that "all moral values are relative" or that "no truth exists." Those two statements are in fact logically incompatible. They cannot be asserted simultaneously in logical discourse. They are antinomos--the former heterologically the latter autologically. This leads to the conclusion that the linguistic indeterminacy ¹¹⁴ and supposed flaws of formalism *672 which led to the replacement of "bright-line" categorical tests by interest balancing tests were not as grave as realism proposes. Thus, realism is an imperfect solution to an ill-defined problem: interest balancing is just as manipulable ¹¹⁵ as "bright-line" categorical hermeneutics. What factors are chosen? What weight are the factors given? How is that weight measured?

Despite flaws in the relativists' positions, their arguments are so successful that contemporary axiology generally limits itself to market values and ignores "subjective" moral values. Contemporary legal epistemology is at least skeptical toward the existence of truth and rejects the existence or at least the cognizance of objective moral values. ¹¹⁶ Thus, economic analyses are ascendant because they can claim scientific objectivity and legitimacy; economic arguments are, or at least appear to be, empirically quantifiable, therefore verifiable, and thus objective. Legal realism, searching to attain substantive justice, has given judges the necessary tools to allow the deployment of their subjective will ¹¹⁷--without, however, any moral telos to guide that will. ¹¹⁸ So the realist critique, which is ultimately a critique of formalism's supposedly absent teleology, falls apart for lack of foundation. The teleological critique of formalism presented by realism depends upon an axiology which realism helped destroy. If all moral values are merely subjective then only economic values are scientifically objective--quantifiable and verifiable. Thus the judicial willpower realism unleashes is now exercised to serve the interests of the wealthy. If "no truth exists" or "all values are relative"--illogical statements which are, however, in vogue because they are shocking, sensational and their less extreme versions can be well founded--then economic empiricism is the only remaining scientific ar- *673 gument. That explains the contemporary ascendancy of economic analyses.

Rather than arguing within the presumption that economic value is the only value or the only objective value, methodological critiques of balancing tests would best question the epistemology upon which balancing tests, such as fair use, are founded. An epistemological critique of the realists and post modernists is possible because truth negationist epistemology is incorrect. True statements do in fact exist. It is true that not all arguments are verifiable, and that not all arguments are falsifiable. It is also true, however, that some arguments may be verified, or at least falsified, and that not all arguments which are falsifiable necessarily imply a verifiable contrary position. Having established the objectivity of its epistemological foundations, the best critiques will then attack the methodology of balancing tests. First, question the (pseudo) empirical foundations of balancing tests generally. The questions, "which factors are chosen" ¹¹⁹ and "what weight are they given," ¹²⁰ are almost always determined by judicial willpower--which negates the supposed objectivity of "value free" empiricism. Next, the critique should point out that balancing tests are as vague and manipulable ¹²¹ as categorical analyses--and possibly more so--after all there are more terms to play with. Finally, the critique should point out that not all goods are fungible nor do they all have markets. Some goods really are irreplaceable, others have too few buyers and sellers to create a market, and, of course, not all actors are economically rational maximizing profits. Then too, transaction costs and externalities can undermine markets. All present good reasons to forget economic analysis as the panacea to legal indeterminacy.

Despite these possible attacks, balancing tests can be epistemologically and methodologically speaking, well-founded. The realists' epistemology can be defended, though only in a qualified manner: (1) Though truth negationism is inadmissible truth skepticism is permissible; (2) The realists' methodology, balancing tests, is no more, or less, objective than categorical bright-line analyses; (3) The realists' methodology is not capricious, or no more capricious than categorical analyses, if grounded upon data that is quantifiable and verifiable, which economic values are. But in practice, judges usually do not quantify interests numerically. Rather, judges merely state that one interest is greater than another. By consciously enumerating chosen factors, explaining whose interests are chosen and how those interests are weighted, bal[HD] *674 ancing tests can be rescued from the very indeterminacy the legal realists criticize.

The so-called revolution of the 1930s, brought about by the judiciary, did not in fact lead to fundamental change in the United States. Rather, it presented the illusion of change; this illusion had the effect of sustaining the power structure of the United States in the time of its greatest crisis averting revolution and coup d'état. ¹²² Following the Second World War the formerly radical lawyers of the 1930s suddenly became the administrators of the global empire. Their ideas never really recovered any radical impetus. Thus, realism never completely replaced formalism, luckily, because formal logic is the foundation of the rule of law. The realists' critical ideas, however, never truly developed further. The economic analysis of law arose, in part, because of the epistemological failings of realism. Critical legal studies, stemming from the war in Vietnam and attendant domestic unrest, ¹²³ starts from some of realism's propositions, follows them more consequently to logical conclusions. Postmodernism, in contrast, merely questions everything and provides no answers. ¹²⁴ But critical legal studies never took state power.

We are now living through a third war and crisis, the so-called War on Terror. Just as realism and critical legal studies ¹²⁵ were born out of economic and military crises, I expect the so-called War on Terror to spark serious dissent, including legal dissent. This article exposed some of the intellectual history of critical legal thinking in order to help that process. It is only by understanding different viewpoints that we can obtain the best understanding.