Posnerian law and economics on the bench (original) (raw)

1984, International Review of Law and Economics

has been one of the most productive and influential scholars working in the field of law and economics. Indeed, the prolific and wide ranging nature of his writings, the vigor with which he has advanced his particular approach and its supporting arguments, together with the absorbing quality of that approach, have in combination resulted in his having set the agenda for much of the scholarship-research and argument-during the last decade. l In fact, much of the work in the field of law and economics represents footnotes to and arguments over his approach and its many applications. Posner's approach to law and economics contains both a positive and a normative argument. In his positive writings, Posner argues that wealth maximization can be used to explain and describe the development and the evolution of the common law. Normatively, Posner argues that wealth maximization is a desirable, and feasible, principle for use in developing law and rights. In short, wealth maximization both is the explanation of law and rights and ought to be the basis for the development of law and rights. Such a summary perhaps states Posner's argument more baldly and less subtly than it warrants, but it does accord with his own characterization9 and it does represent what researchers in the field understand him basically to be saying.3 Although Posner's approach and specific arguments have been subjected to substantial and perhaps devastating criticism, it remains important, for reasons beyond the insights which it has provided to the particular areas of law on which he has written. Certainly Posner's work has underscored, perhaps with a vengeance and clearly with candor, the fact that both common and statute law have promoted the transformation of the legal foundations of the economy from a post-feudal to a capitalist or market economy, from one in which landed property (law, power and orientation) dominates to one in which nonlanded property dominates, and from one in which status unabashedly dominates to one in which contractual market relationships and transactions dominate (however much such may reflect and give effect to underlying power structures).4As such, legal institutions are not given immutably by nature but are themselves a response to economic needs and flexible in response to changes in those needs. Thus, law is neither absolute, nor exogenous, nor given, but a *Both authors acknowledge the assistance of Douglas Anderson and thank Professor Charles K. Rowley, Judge Richard A. Posner, and two anonymous reviewers for helpful comments.