During the Weimar Republic Fraenkel was a member of the social democrats and one of the few jurists who held socialist opinions. According to some historians in the 1930s he was designated to be Attorney General of a possible social-democratic German government. In 1939 he immigrated to the United States where he began to develop his respect for the politics of that country, especially its pluralism and its checks and balances.
After studying American law Fraenkel lectured at the New School for Social Research . In 1941 he published The Dual State in which he analysed the political system of the Nazi state. For Fraenkel it was a "normative state" (Normenstaat) which secured the continuation of capitalist society for those Germans not threatened by Nazism coexisted alongside a "prerogative state" (Maßnahmenstaat) that used legal sanctions as well as brutal violence against people considered to be enemies of Nazism and Nazi Germany.
From 1945 on Fraenkel was an adviser to the American government but was soon dissatisfied with their policy of occupation in Korea. For the United Nations he was supposed to be one of the people to prepare free elections in Korea, but the Korean War made the elections impossible and forced Fraenkel to leave the country.
In 1951 Fraenkel returned to Germany. He became a lecturer at the Deutsche Hochschule für Politik (German University for Politics) in Berlin and later a professor at the Freie Universität Berlin. He considered his writings to be normative, his concept of pluralism was meant to criticize the existing political system. Those among his students who were active in the 1968 movement, however, saw his American-influenced theories as defending monopolistic capitalism. He died in Berlin.