Abstract: Economic systems produce wealth; law and economics analysts try to determine which laws are more likely to produce greater wealth and, sometimes, which will distribute that wealth acceptably. But for some economic systems, productive arrangements may generate political backlash, and this backlash could complicate the economic analysis. When the potential for wealth-decreasing political instability is high, basic efficiency analysis becomes harder than it would otherwise be. I explain several reasons why, for analyses of American institutions, this awareness of backlash has not been high, why this unawareness is sometimes justified, and when it might not be justified. Some of these reasons are rooted in American history and help to explain the American-centered nature of law economics. I first analyze the complications arising from backlash abstractly, showing how even a wealthy and Rawlsian fair society could deteriorate due to backlash, with markets sometimes unable to remedy the problem. Then I examine plausible foreign instances that fit the abstract model of wealth, fairness, and political backlash that lead to instability, turmoil, and, if not otherwise remedied, lower wealth. Finally I argue that even for the United States, some institutions that are hard to justify on normal efficiency grounds become understandable either as institutions that mitigated backlash or that resulted from backlash. Several American business laws, such as Glass-Steagall, Robinson-Patman, some anti takeover laws, and chapter 11 of the Bankruptcy Code could be seen as examples of backlash or means of avoiding more serious backlash. One could view banking law's fragmentation of finance (via the National Bank Act, the Glass-Steagall Act and related laws), and, say, America's old-style antitrust policy as politically 'efficient': each absorbed political backlash against large-scale enterprise with economically inefficient (but degradeable) structures that, although economically inefficient, did not destroy too much economic value directly and still preserved a core of competition and incentives. As later generations adjusted to large-scale enterprise, Glass-Steagall faded through regulatory reinterpretation, and the old-style antitrust came to be understood as inefficient (and ineffective), leading to its interpretive and enforcement demise. Economically inefficient rules first dampened political backlash, and then faded or reversed as the potential for backlash subsided. Several corporate structures, including anti-takeover laws and corporate reorganization, also fit the description.