(FORTUNE Magazine) – A new movement that seeks to change the way people think about law has emerged in the past decade. Called critical legal studies, it goes to the core of the controversy over judicial activism. These days conservatives often criticize judges for trying to make law rather than simply apply it. Those involved in the new movement deny that it's possible simply to apply the law. They insist that whenever judges make legal decisions they choose among alternative possible results. Making such a choice requires courts to select among different sets of values and ways to organize society. In some contexts, the political nature of judicial decision-making is obvious to everyone. The debate over the constitutional status of abortion, for example, is plainly connected with the current political struggle between those who support the right to life and those who are pro-choice. In deciding the constitutional issue, the Supreme Court cannot avoid choosing one of these positions over the other. Another example is the current controversy over the definition of racial discrimination in the job market. Employment discrimination can be defined narrowly to prohibit only employer action that is intentionally motivated by racial bias, but it also can be defined broadly to prohibit any systematic exclusion of blacks or other minorities from parts of the job market, whether or not the exclusion is intentional. The choice between these positions is a political one, and any choice the courts make involves judicial activism. Either judicial result would be an intervention in social life. What is not so obvious is that even an interpretation of the rules of contract and property law involves a political choice. With corporate legal expenses mounting and litigation a national pastime, understanding what this means for the world of everyday business has significance far beyond the classroom. CONSIDER in some depth, for example, the legal issues raised by employment- at-will contracts. Most American workers -- including many executives -- have employment contracts that don't specify how long their jobs will last or the reasons for which they might be fired. The extent of their job security depends on how these contracts are interpreted. Many nonlawyers expect the law to have a ready answer to this kind of issue. They think that law is a cut-and-dried body of rules that lawyers either know or can easily look up. Many people seem to think, for example, that because employees can quit their jobs at any time, they can also be fired at any time for any reason. Lawyers these days, in fact, rarely offer such a definitive description of the law. The difficulty in specifying the precise legal status of employees- at-will illustrates why. Over the past 25 years, courts have carved a number of exceptions into the freewheeling notion that employees can be fired for any reason. Employers have been held liable, for example, for attempting to fire employees who refused to perjure themselves before a legislative hearing, who blew the whistle about illegal conduct by their employers, and who filed workers' compensation claims. One way to sum up these recent cases is to say that employees can now recover damages from their employer if they are fired for reasons that undermine an important public policy. But what counts as such a policy? One court has decided that it does not violate an important public policy to fire an employee for reporting to company (rather than public) officials that his supervisor is taking bribes. Another court has decided that it does not violate an important public policy to fire an employee who refused to reduce staffing in a hospital's intensive care unit on the grounds that it would endanger patients' lives. On the other hand, a third court has decided that firing an employee for refusing to date her foreman did violate ''the best interest of the economic system or the public good.'' No wonder there's confusion about the law. For decades legal scholars have devoted a vast amount of energy trying to make sense of conflicting decisions such as these. Over the past ten years, an increasing number of them have argued that the conflicts can best be understood in political terms. Called critical legal scholars -- or simply ''crits'' -- they contend that the decisions conflict with one another because they are based on different, and controversial, moral and political ideals. Lawyers cannot give a simple answer to a question, the crits say, because the legal system, like our society at large, cannot reconcile the contradictory instincts people feel when they confront social problems. Rather than deciding which of these conflicting instincts to honor, the law embraces them all. LOOKING AT the employment-at-will issue in this way points up something important about the judicial activism many conservatives find so abhorrent. The courts' acceptance for many years of the extensive employer power over employees reflected the conventional conservative idea that employers are entitled to run their business as they see fit. The more recent decisions limiting employers' power, by contrast, have been justified by conventional liberal arguments emphasizing the unfairness of arbitrary employer power over employees and the inefficiencies that result when people work under the threat of losing their jobs without adequate justification. Conservatives often treat these recent decisions as classic instances of liberal judges making law rather than following it. But the conservative interpretation of employment-at-will itself became part of the law only through judicial activism. The conservative version of employment-at-will was first articulated by courts only in the late 19th century, and it replaced an earlier rule providing that employment contracts that were silent as to the length of the term of employment were presumed to last for a year. Modern courts have changed existing law no more than did the 19th-century courts in their own time. Some legal experts are currently seeking to create an even more extensive limitation on employer power. They have suggested, for example, that in the absence of an agreement to the contrary, all employees are entitled to at least some defensible explanation before they can be dismissed from their jobs. Others have argued that employees ought at least to have adequate notice before they can be fired. One way to implement this requirement would be to reintroduce the presumption that employment contracts are meant to last for a year. It is important to recognize that both these interpretations of employment-at-will are as legally defensible today as the earlier positions were when adopted. There is, in short, no neutral basis on which to choose the proper legal interpretation of employment-at-will. Each interpretation represents a political choice about the proper nature of the employment relationship in the United States. None can be justified by reference to statute. Congress or state legislatures could decide the issue, but they haven't. Yet choosing among these different positions is of great significance to the American work force. According to one study, as many as one million employees-at-will are fired in the U.S. each year, and more than 150,000 of them would not have lost their jobs had the law required that they could be fired only for good cause. Crits contend that it obscures the nature of a judicial decision when courts and commentators present the legal issue as if it were an objective, or even relatively objective, matter of legal reasoning rather than a political choice. This does not mean that crits think that legal decision-making is simply subjective -- that judges decide cases in any way they want. + Judges, the crits point out, go to great lengths to deny, even to themselves, the extent to which they make law rather than simply apply it. They consider employer power over employees not a matter of choice but a natural and necessary implication of modern workplace organization. They discount the influence of their moral and political views on their decisions by treating their own understanding of the employment relationship as common sense. They think of themselves as constrained by their professional role and by their understanding of legal precedent. For reasons such as these, they are very unlikely to experience their decision-making as a personal political decision. The political choices involved in selecting legal rules, in other words, are largely made unselfconsciously. Those who are engaged in critical legal studies have employed a wide variety of methods -- such as feminist theory, literary theory, political theory, and social theory -- to expose the nature of the choices being made and to subject them to debate. Judges, the crits say, can learn to recognize the contestable nature of their own views of the world -- and can learn to transform them - only if they become aware of the limits and political implications of their own imagination. A critical analysis of law is designed to identify these limits and implications and to describe the alternative moral and political values, also embraced by the legal system, that permit legal problems to be solved in alternative ways. NOT SURPRISINGLY, the introduction of this kind of critical approach into American law schools has been controversial. Some scholars fear that teaching law students the political and moral basis of legal argument will engender cynicism about law and legal institutions and, as a result, will undermine belief in the rule of law. But law students, like many others in our society, are already far too cynical about the legal system. The task of legal education is to overcome this cynicism, and that can't be done by relying on the fantasy that law is -- or could be made to be -- objective. A more promising approach, the crits suggest, is to demonstrate the stakes involved in the selection of legal rules. By understanding law in terms of its controversial and creative nature, future lawyers and judges can become aware of, and learn to take responsibility for, the positions they adopt on matters of social policy. Moreover, the American people generally can begin to understand that legal solutions to social problems are always provisional and contestable, never natural or necessary. Those who benefit by an existing legal rule are entitled to their privileged position only so long as it is justifiable.