Home -> Law Blog Directory -> Legal Commentary Blogs -> Balkinization

Legal Commentary

: Balkinization

More on Posner's Shift in Views

By Jack M. Balkin

A post last December asked whether Judge Richard Posner?s pronounced shift in economic views would also lead to in a change in his approach to law and economics. As the preeminent contemporary figure in law and economics, a comprehensive rethinking of the field by Posner would be significant.

His very public evolution in economic views continues in a recent piece in The New Republic: ?How I Became A Keynesian: Second Thoughts in The Middle of A Crisis.? His topic is macroeconomics, not law, but this passage bears on law and economics:

The dominant conception of economics today, and one that has guided my own academic work in the economics of law, is that economics is the study of rational choice. People are assumed to make rational decisions across the entire range of human choice, including but not limited to market transactions, by employing a form (usually truncated and informal) of cost-benefit analysis. The older view was that economics is the study of the economy, employing whatever assumptions seem realistic and whatever analytical methods come to hand. Keynes wanted to be realistic about decision-making rather than explore how far an economist could get by assuming that people really do base decisions on some approximation to cost-benefit analysis.

I will take the liberty of changing a few words in the last two sentences of this passage to draw out what might be the implications for law and economics:

?An alternative view is that legal scholarship is the study of law, employing whatever assumptions seem realistic and whatever analytical methods come to hand. Legal scholars want to be realistic about decision-making rather than explore how far economic analysis can get by assuming that people really do base decisions on some approximation to cost-benefit analysis.?

Is this a plausible extrapolation? (Posner's jurisprudence writings have gestured in this direction for some time, although when he wears his law and economics hat he usually does the same old stuff.) For decades, critics of law and economics have objected to its narrowness and thoroughly unrealistic assumptions (only partially ameliorated by the greater realism of behavioral law and economics). As a mode of analysis--as a thought experiment--it is undoubtedly useful. But anything more than that...What say you now, Judge Posner?

Full post as published by Balkinization on September 24, 2009 (boomark / email).