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The Economics of Justice
Richard A. Posner is probably the leading scholar in the rapidly growing field of the economics of law; he is also an extremely lucid writer. In this book, he applies economic theory to four areas of interest to students of social and legal the theory of justice, primitive and ancient social and legal institutions, the law and economics of privacy and reputation, and the law and economics of racial discrimination.
The book is designed to display the power of economics to organize and illuminate diverse fields in the study of nonmarket behavior and institutions. A central theme is the importance of uncertainty to an understanding of social and legal institutions. Another major theme is that the logic of the law, in many ways but not all, appears to be an economic that judges, for example, in interpreting the common law, act as if they were trying to maximize economic welfare.
Part I examines the deficiencies of utilitarianism as both a positive and a normative basis of understanding law, ethics, and social institutions, and suggests in its place the economist’s concept of “wealth maximization.”
Part II, an examination of the social and legal institutions of archaic societies, notably that of ancient Greece and primitive societies, argues that economic analysis holds the key to understanding such diverse features of these societies as reciprocal gift-giving, blood guilt, marriage customs, liability rules, and the prestige accorded to generosity. Many topics relevant to modern social and philosophical debate, including the origin of the state and the retributive theory of punishment, are addressed.
Parts III and IV deal with more contemporary social and jurisprudential questions. Part III is an economic analysis of privacy and the statutory and common law rules that protect privacy and related interests―rules that include the tort law of privacy, assault and battery, and defamation. Finally, Part IV examines, again from an economic standpoint, the controversial areas of racial and sexual discrimination, with special reference to affirmative action. Both Part III and Part IV develop as a sub-theme the issue of proper standards of constitutional adjudication by the Supreme Court.
The book is designed to display the power of economics to organize and illuminate diverse fields in the study of nonmarket behavior and institutions. A central theme is the importance of uncertainty to an understanding of social and legal institutions. Another major theme is that the logic of the law, in many ways but not all, appears to be an economic that judges, for example, in interpreting the common law, act as if they were trying to maximize economic welfare.
Part I examines the deficiencies of utilitarianism as both a positive and a normative basis of understanding law, ethics, and social institutions, and suggests in its place the economist’s concept of “wealth maximization.”
Part II, an examination of the social and legal institutions of archaic societies, notably that of ancient Greece and primitive societies, argues that economic analysis holds the key to understanding such diverse features of these societies as reciprocal gift-giving, blood guilt, marriage customs, liability rules, and the prestige accorded to generosity. Many topics relevant to modern social and philosophical debate, including the origin of the state and the retributive theory of punishment, are addressed.
Parts III and IV deal with more contemporary social and jurisprudential questions. Part III is an economic analysis of privacy and the statutory and common law rules that protect privacy and related interests―rules that include the tort law of privacy, assault and battery, and defamation. Finally, Part IV examines, again from an economic standpoint, the controversial areas of racial and sexual discrimination, with special reference to affirmative action. Both Part III and Part IV develop as a sub-theme the issue of proper standards of constitutional adjudication by the Supreme Court.
431 pages, Paperback
First published January 1, 1981
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Displaying 1 - 7 of 7 reviews
August 7, 2022
An interesting roadmap towards the privatization of the law and a sequel the the economics of the law. The chapter on utilitarianism and Bentham is most interesting, followed by an excursions into the economics of anthropology and primitive societies' rationale for pre-state customs and systems of justice.
January 22, 2008
Entertaining and readable introduction to the libertarian economic worldview. I disagree with many of Posner's conclusions, but his writing and command of legal history make the disagreements well worth having.
December 30, 2024
If you are looking to read a book by Richard Posner, don’t start with this one. This book is just a series of scantily connected essays threaded together by a little to a lot of economic reasoning in each depending on which essay it is. By themselves, each essay is fascinating—you’ll certainly learn something surprising with each one. But I struggle to understand why they were all collected in a book like this.
Judging simply by the title of the book “The Economics of Justice” and by Posner’s reputation as the neigh genius 7th Circuit Judge/UChicago Professor who stood astride the law & economics movement like a bespectacled economic Colossus of Rhodes, I was under the impression this book would, well, use economics to explain how the pursuit of justice was guided by invisible market forces to reach efficient laws at equilibrium, whose price, borne by the consumer (those who the law restricts) was brought down to the law’s marginal cost on society (derived by a balancing of the costs and benefits of having the law). Or something like that type of analysis.
Indeed, this is what you get with a few of the essays: the one justifying wealth maximization as the target to resolve conflicts where the transaction costs were too high such that it would be infeasible to aim at simply lubricating mutually beneficial exchange through private transactions as the law’s purpose is in contract law, where the parties can easily bargain with each other. In tort law, for example, where the transaction costs are too high for parties to transact with each other before the accident, the judge should use the hypothetical market, which will yield the rule that ends up maximizing wealth—thus the common law is efficient. Or there are also the essays detailing the efficiency of customs in ancient societies, customs we see today as absurd, such as excessive gift giving, witch hunting, superstition, vengeance and retaliation, etc, back then were efficient reactions to the contingencies of the time—high information costs, little to no privacy, a night watchman state (or even less). These were brilliant essays fitting the topic. Then there are others. Fascinating but perhaps better suited to a legal history book, such as his essay fleshing out the drama between Bentham and Blackstone. And at the end, he gives a rundown of current privacy and discrimination laws and how they are inefficient or could be made more efficient. Interesting, mildly economic, but not what I wanted out of this book.
TLDR: some of the essays were worth six stars, others, worth one simply because they aren’t what I expected when I bought the book.
Judging simply by the title of the book “The Economics of Justice” and by Posner’s reputation as the neigh genius 7th Circuit Judge/UChicago Professor who stood astride the law & economics movement like a bespectacled economic Colossus of Rhodes, I was under the impression this book would, well, use economics to explain how the pursuit of justice was guided by invisible market forces to reach efficient laws at equilibrium, whose price, borne by the consumer (those who the law restricts) was brought down to the law’s marginal cost on society (derived by a balancing of the costs and benefits of having the law). Or something like that type of analysis.
Indeed, this is what you get with a few of the essays: the one justifying wealth maximization as the target to resolve conflicts where the transaction costs were too high such that it would be infeasible to aim at simply lubricating mutually beneficial exchange through private transactions as the law’s purpose is in contract law, where the parties can easily bargain with each other. In tort law, for example, where the transaction costs are too high for parties to transact with each other before the accident, the judge should use the hypothetical market, which will yield the rule that ends up maximizing wealth—thus the common law is efficient. Or there are also the essays detailing the efficiency of customs in ancient societies, customs we see today as absurd, such as excessive gift giving, witch hunting, superstition, vengeance and retaliation, etc, back then were efficient reactions to the contingencies of the time—high information costs, little to no privacy, a night watchman state (or even less). These were brilliant essays fitting the topic. Then there are others. Fascinating but perhaps better suited to a legal history book, such as his essay fleshing out the drama between Bentham and Blackstone. And at the end, he gives a rundown of current privacy and discrimination laws and how they are inefficient or could be made more efficient. Interesting, mildly economic, but not what I wanted out of this book.
TLDR: some of the essays were worth six stars, others, worth one simply because they aren’t what I expected when I bought the book.
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March 15, 2021need to come back for privacy section
December 5, 2016
Buku yang sangat menarik dengan atmosfir libertarianism. Ada yang paling menarik, yaitu soal, kalau meminjam istilah Keynes, animal spirit. Posner menohok rationality ekonomi dengan tantangan-tantangan perilaku irasional homo economicus yang sudah lama mewujud dalam sejarah, yaitu diskriminasi ras.
Ia mengurai dan membentangnya mulai dari jaman Romawi sampai sekarang (setidaknya sampai buku itu ditulis). Ia lalu mengatakan, dan berpendapat, bahwa ekonomi adalah adjustment dari irasionalitas homo ekonomikus itu. Itulah sebab kenapa terdapat fenomena di mana hakim-hakim memutus perkara berdasarkan efisiensi dan wealth maximization.
Namun, apakah hukum memang didesain untuk hal demikian? Tidak selalu! berpikirlah lokal dan refleksikan dengan hukum di jurisdiksi kita. Ikuti alur bagaimana negara dibentuk, oleh sebab apa. Jawabannya tidak seuniversal yang kuduga. Hukum tidak melulu subsistem dari logika ekonomi.
Entah kenapa kupikir sedikit banyak..pemikiran Posner ini Coasian.
Ia mengurai dan membentangnya mulai dari jaman Romawi sampai sekarang (setidaknya sampai buku itu ditulis). Ia lalu mengatakan, dan berpendapat, bahwa ekonomi adalah adjustment dari irasionalitas homo ekonomikus itu. Itulah sebab kenapa terdapat fenomena di mana hakim-hakim memutus perkara berdasarkan efisiensi dan wealth maximization.
Namun, apakah hukum memang didesain untuk hal demikian? Tidak selalu! berpikirlah lokal dan refleksikan dengan hukum di jurisdiksi kita. Ikuti alur bagaimana negara dibentuk, oleh sebab apa. Jawabannya tidak seuniversal yang kuduga. Hukum tidak melulu subsistem dari logika ekonomi.
Entah kenapa kupikir sedikit banyak..pemikiran Posner ini Coasian.
July 28, 2012
Instead of focusing on the chapters on the wealth-maximizing principle - interesting as the may be - I in particular like those on primitive law, which to some extent foreshadow the work of Douglass North.
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September 23, 2010The Economics of Justice by Richard A. Posner (1981)
Displaying 1 - 7 of 7 reviews