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Legal realism posits that the law cannot be fully understood without considering the broader social and economic context in which it operates. This perspective suggests that legal decisions are influenced not just by statutes or established legal principles, but also by the real-world circumstances surrounding a case, including societal norms, values, and the implications of legal rulings on the community.

By advocating this viewpoint, legal realism recognizes that judges do not operate in a vacuum; instead, they are part of a dynamic social system where factors such as economic conditions, social justice, and public policy considerations significantly shape the interpretation and application of law. This approach encourages a more holistic understanding of legal outcomes, reflecting the complexities of human behavior and societal needs.

In contrast, the other options reflect a more rigid interpretation of law that does not align with the principles of legal realism. For example, arguing that law should be the sole factor, that judges should only focus on legislative texts, or claiming that law is irrelevant fails to acknowledge the importance of context in legal reasoning and decision-making.