MORTON J. HORWITZ
THE RISE AND EARLY PROGRESSIVE CRITIQUE OF OBJECTIVE CAUSATION
WHEN the first-year law student is taught to distinguish sharply between "actual" or "but for" causation and "proximate" or "legal" cause, the student is learning a system that did not crystallize until the 1920s. Before the successful attack of Legal Realism on the objectivity of causation, judges and lawyers thought in terms only of "actual" causes, of "chains of causation," which could be "broken" by "intervening" or "supervening" events. This historical essay is about how this paradigm of objective causation, and the related conceptualization of the "objective" will of the parties in contract law, came into being and was challenged during the late nineteenth century. It starts with freedom of contract and the rise of laissez-faire economics.
The decision of the United States Supreme Court in Lochner v. New York ( 1905),1 which struck down a maximum hours law for bakers as an unconstitutional interference with freedom of contract, expressed above all the post--Civil War triumph of laissez-faire principles in political economy and of the view that "that government is best which governs least." Closely connected to the laissez-faire position was a view of the market as a self-executing system that justly distributed rewards through voluntary agreement among individuals. The institution of contract thus represented the legal expression of free market principles, and every interference with the contract system--such as regulation of the terms and conditions of a labor contract--was treated as an attack on the very idea of the market as a natural and neutral institution for distributing rewards.2