The Neglect of Rights in Law and Economics
-Mark D White
The economic approach to law is by any measure the most successful application of the principles of economics to a field outside its traditional focus on markets and their effects on individuals and society. In the half century since the seminal contributions of scholars such as Gary Becker and Richard Posner, economics has influenced the development of law in terms of both statutes and judicial decisions, and has become a thriving field of scholarship in both law schools and economics departments around the world, with numerous volumes and journals (such as this one) published every year.
However, the way that law and economics has developed as a field has troublesome implications for the view of the law it promotes, as well as the policy and legal recommendations it makes. Specifically, law and economics inherited the utilitarian foundations of neoclassical economics and brought them into the study of law itself, to the exclusion of its traditional basis in rights and justice. This influence was hardly resisted: As George Fletcher explains, “the devotee of [law and economics] writes in a long line of theorists who think that all legal institutions should serve the interests of society,” transitioning from a focus on individual rights to a theory of legal intervention that permits the periodic redefinition of property rights for the sake of a collective vision of efficiency
A theory of individual supremacy ends up as a philosophy of group supremacy. This is a remarkable metamorphosis. Any theory that can successfully obfuscate the difference between individual sovereignty in the market and the dominance of group interests in coercive decision making will surely gain a large number of followers.
As Fletcher indicates, the willing adoption of economic principles on the part of legal scholars implied the gradual removal of the concept of rights from the vocabulary, resulting in a picture of the law that no longer grants individuals a sphere of liberty from which they are protected from welfarist dictates, and renders the individual merely a source of utility who contributes to the whole and therefore is subject to policies and laws designed to maximize that sum total.
In this essay, the author details the background of the utilitarian foundations of law and economics and detail the implications of the neglect of rights resulting from it. The author also explores its ramifications for the way law-and-economics scholars analyze various legal concepts, focusing on the absence of wrongdoing from the field’s analysis of harm as well as the failure to consider the existence of rights that can justify it. He concludes with a cautionary note about the continued neglect of rights in the economic analysis of the law, and suggest initial steps to improve it, ensuring that economic principles can usefully contribute to the study of law at the same time that rights of individuals are acknowledged and respected.
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