This article offers a feminist perspective on contract theories in law,economics and law-and-economics. It identifies masculine traits presentcontract theories in all three disciplines. It then describes andassesses some developments that appear to be ‘feminising’: Therecognition of the importance of social norms in contract theory andtheories of contract as relationship. The article's main claim is that amasculine model of decision-making persists even within the less overtlymasculine models of contract. The problem of sexually transmitted debtresulting from a surety contract is (...) analysed in detail as a specificexample supporting the article's general argument. The article concludesthat the way forward is to be found in a recognition of other ways ofmaking decisions. (shrink)
Growth of the private sector and privatization of state companies around the world have led to the emergence of various stock markets, some of which are depicted by insider trading. Law literature uses the arguments of unfairness, breach of fiduciary rights and damage to others to define and rule against insider trading. Economic literature can be used to interpret insider trading from other perspectives. This study argues that the question of insider trading in developing markets can be resolved by the (...) extent stock markets generate externalities and are public goods. It advocates structural changes in the developing markets and examines the conditions under which the Coase Theorem would work. (shrink)
Law, Economics, and Morality examines the possibility of combining economic methodology and deontological morality through explicit and direct incorporation of moral constraints into economic models. Economic analysis of law is a powerful analytical methodology. However, as a purely consequentialist approach, which determines the desirability of acts and rules solely by assessing the goodness of their outcomes, standard cost-benefit analysis (CBA) is normatively objectionable. Moderate deontology prioritizes such values as autonomy, basic liberties, truth-telling, and promise-keeping over the promotion of good (...) outcomes. It holds that there are constraints on promoting the good. Such constraints may be overridden only if enough good (or bad) is at stake. While moderate deontology conforms to prevailing moral intuitions and legal doctrines, it is arguably lacking in methodological rigor and precision. -/- Eyal Zamir and Barak Medina argue that the normative flaws of economic analysis can be rectified without relinquishing its methodological advantages and that moral constraints can be formalized so as to make their analysis more rigorous. They discuss various substantive and methodological choices involved in modeling deontological constraints. Zamir and Medina propose to determine the permissibility of any act or rule infringing a deontological constraint by means of mathematical threshold functions. Law, Economics, and Morality presents the general structure of threshold functions, analyzes their elements and addresses possible objections to this proposal. It then illustrates the implementation of constrained CBA in several legal fields, including contract law, freedom of speech, antidiscrimination law, the fight against terrorism, and legal paternalism. (shrink)
In "Behavioral Law and Economics: The Assault on Consent, Will, and Dignity," Mark D. White uses the moral philosophy of Immanuel Kant to examine the intersection of economics, psychology, and law known as "behavioral law and economics." Scholars in this relatively new field claim that, because of various cognitive biases and failures, people often make choices that are not in their own interests. The policy implications of this are that public and private organizations, such as the state (...) and employers, can and should design the presentation of options and default choices in order to "steer" people to the decision they would make, were they able to make choices in the absence of their cognitive biases and failures. Such policies are promoted under the name "libertarian paternalism," because choice is not blocked or co-opted, but simply "nudged." White argues that such manipulation of choice is impossible to conduct in people's true interests, and any other goal pursed by policymakers substitutes their own ends, however benevolent they may be, for people's true ends. Normatively, such manipulation should not be conducted because it fails to respect the dignity and autonomy of persons, what some hold to be the central idea in Kant's ethical system, and which serves to protect the individual from coercion, however subtle, from other persons or the state. (shrink)
The moral heart of normative law and economics is efficiency, especially dynamic efficiency that takes incentive effects into account. In the economic theory, justificatory argument is inherently at the institutional- or rule-level, not an the individual- or case-level. InMarkets, Morals, and the Law Jules Coleman argues against the efficiency theory on normative grounds. Although he strongly asserts the need to view law institutionally, he frequently grounds his criticisms of law and economics in arguments from little more than direct (...) moral intuition about individual cases. He evidently holds that consent provides a better normative basis for law than does efficiency and he uses consent arguments to attack recommendations from scholars in law and economics. His own chief contribution, however, is to law and economics rather than to any alternative theory. (shrink)
In the Law and Economics literature optimizing techniques are used when a choice must be made between various legal constructions. Often, an aggregate or collective welfare measure is formulated and the legal rule is selected which generates through efficient individual behavior the aggregate welfare maximum. A problem emerges if an efficient and therefore rational decision is assumed both on the individual level and the aggregate level. The legal rules which play a part in forming the decision problem for the (...) individual efficient decision maker are treated in their turn as an efficient choice seen from the aggregate perspective. In what way then is the aggregate decision problem formulated? Again using the efficiency criterion? If we want to escape an infinite regress then we must include determining factors which cannot be proven efficient. (shrink)
This paper contrasts the value maximization norm of welfare economics that is central to law and economics in its prescriptive mode to the Aristotelian/Aquinian principles of Catholic social thought. The reluctance (or inability) of welfare economics and law and economics to make judgments about about utilities (or preferences) differs profoundly from the Catholic tradition (rooted in Aristotle as well as religious faith) of contemplation of the nature of the good. This paper also critiques the interesting argument (...) by Stephen Bainbridge that homo economicus bears a certain affinity to fallen man, and that law and economics thus provides appropriate rules for a fallen world. From a Catholic perspective, the social vision of neo-classical economics and its progeny (welfare economics and law and economics) rests on a concept of human autonomy and a utilitarian concept of pleasure inconsistent with the Aristotelian and Aquinean concept of virtue and the conception of civic happiness articulated by Antonio Genovesi and other Catholic economists. (shrink)
This book explores the making of health care rationing decisions through the analysis of three alternative decision makers: patients paying out of pocket; officials setting limits on treatments and coverage; and physicians at the bedside. Hall develops this analysis along three dimensions: political economics, ethics, and law. The economic dimension addresses the practical feasibility of each method. The ethical dimension discusses the moral aspects of these methods, while the legal dimension traces the most recent developments in jurisprudence and health (...) law. (shrink)
In Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298, the New South Wales Court of Appeal held that exemplary (or punitive) damages are not available for breach of fiduciary duty or other equitable obligation. The decision runs counter to authorities in Canada, New Zealand and some U.S. states. Punitive (exemplary) damages is a hotly debated topic in the United States and it has attracted considerable interest among law and economics scholars, particularly in the tort litigation context. This (...) article analyzes the Digital Pulse case from a law and economics perspective. Polinsky and Shavell (among others) argue that the function of punitive damages is to achieve optimal deterrence in cases where the probability that the plaintiff will discover and successfully litigate the defendant’s wrongdoing is less than 1. Given the high costs of monitoring fiduciary behaviour, it might be tempting to conclude that exemplary damages should be routinely awarded for breach of fiduciary obligation. The article explains why this view is wrong. On the other hand, given the availability of gains-based remedies (the account of profits and the like) for breach of fiduciary obligation, it might be tempting to conclude that exemplary damages are never justified in fiduciary cases. The article explains why this view is wrong too. The main conclusions are that: (1) exemplary damages should be available for breach of fiduciary duty and the like, but not as a matter of course; and (2) exemplary damages were probably not warranted in Digital Pulse itself. (shrink)
During the 2007–2008 global food crisis, the prices of primary foods, in particular, peaked. Subsequently, governments concerned about food security and investors keen to capitalize on profit-maximizing opportunities undertook large-scale land acquisitions (LASLA) in, predominantly, least developed countries (LDCs). Economically speaking, this market reaction is highly welcome, as it should (1) improve food security and lower prices through more efficient food production while (2) host countries benefit from development opportunities. However, our assessment of the debate on the issues indicates critical (...) voices in both the media and academic discourse. This article aims to provide a philosophical law and economics analysis. We draw on John Rawls’s Theory of Justice, focusing on Rawls’s background institutions for distributive justice (§43) to evaluate LASLA form an ethical angle. Approaching LASLA into Sub Saharan LDCs as a socio-economic reform redistributing land from the local population of LDCs to investors, we acknowledge that they bear a highly desirable potential. Often, though, they cannot be regarded as ethically correct in practice as the insignificant improvements for local populations and sometimes even human rights violations contradict Rawls’s principles of justice. Then investigating whether and how international law can help overcome the shortcomings, we conclude that even though respective mechanisms exist in the current state of international law, it is hardly possible that it will produce more just outcomes in the near future. (shrink)
This essay discusses the most recent manifestations of the debate of the law and literature movement. The essay traces the evolution of the Law and Literature schools and identifies some of their adherents and conclusions, shows how these schools have influenced the conceptual development and teaching of American law, presents connections between the Critical Legal Studies and Law and Economics movements in the U.S., and raises questions about the Law and Literature movement.
In his classic monograph, The Death of Contract, Grant Gilmore argued that Christopher Columbus Langdell, Oliver Wendell Holmes, and Samuel Williston trumped up the legal credentials for their classical bargain theory of contract law. Gilmore's analysis has been subjected to extensive criticism, but its specific, sustained, and fundamental charge that the bargain theory was based on a fraudulent misrepresentation of precedential authority has never been questioned. In this Essay, I argue that Gilmore's case against the classical theorists rests on the (...) suppressed premise that the precedential authority of cases resides in the express judicial reasoning used to decide them. In contrast, I argue that the classical theorists implicitly presuppose that the precedential authority of cases consists in the best theory that explains their outcomes, even if that theory is inconsistent with the case's express judicial reasoning. The classical view of precedential authority completely defuses Gilmore's charge of fraud. In Gilmore's view, merely demonstrating the inconsistency between the proposition for which the classical theorists cited a case and the express reasoning in that case suffices as proof of misrepresentation. But in the classical theorists' view, the express reasoning in a case is simply a theory of its precedential authority, which, like any theory, can be wrong. Thus, the classical theorists simply reject Gilmore's claim that a case cannot properly be cited for a proposition inconsistent with its express reasoning. The real dispute, then, between Gilmore and the classical theorists is over the nature of precedential authority and not the content of contract law. Having reframed the classic death-of-contract debate, I then trace these competing conceptions of precedential authority through the major schools of contemporary contract theory. I argue that a contract theory's embrace of one view instead of the other can be explained by the relative priority it accords to each of the two components in a conception of adjudicative legitimacy. A conception of adjudicative legitimacy consists in a theory of what it means for a decision to be based on law and a theory of what is required for law to be justified. I explain why theories according priority to the former tend to subscribe to the precedents-as-outcomes view, while theories according priority to the latter tend to favor the express reasoning view. The Essay concludes by arguing that the economic analysis of contract law subscribes to the precedents-as-outcomes view and therefore is the contemporary jurisprudential successor to the late nineteenth-century classical theorists. (shrink)
Cost-benefit analysis is a widely used governmental evaluation tool, though academics remain skeptical. This volume gathers prominent contributors from law, economics, and philosophy for discussion of cost-benefit analysis, specifically its moral foundations, applications and limitations. This new scholarly debate includes not only economists, but also contributors from philosophy, cognitive psychology, legal studies, and public policy who can further illuminate the justification and moral implications of this method and specify alternative measures. These articles originally appeared in the Journal of Legal (...) Studies. Contributors: - Matthew D. Adler - Gary S. Becker - John Broome - Robert H. Frank - Robert W. Hahn - Lewis A. Kornhauser - Martha C. Nussbaum - Eric A. Posner - Richard A. Posner - Henry S. Richardson - Amartya Sen - Cass R. Sunstein - W. Kip Viscusi. (shrink)
The references to "Chicago" (meaning, of course, the University of Chicago) Schools of economics and history of religion, and the quotation of Allan Bloom, who may be considered to belong to a Chicago school of philosophy, may suggest a general endorsement of "Chicago" ideas. This is not the case.
Providing another key contribution to the immensely popular field of law and economics, this book, written by the doyen of the history of economic thought in the US, explores the dynamic relationship between economics, law and polity. Combining a selection of old and new essays by Warren J. Samuels that chart a number of key themes, it provides an important commentary on the development of an academic field and demonstrates how policy is structured and manipulated by human social (...) construction. The areas covered include: the role of manufactured belief power the nature and sources of rights the construction of markets by firms and governments and the problem of continuity and change in the form of the question of the selectively defined status quo and its status the absolutist character of government, rights, markets and legal principles and the accepted ideational structure of law. The Legal-Economic Nexus is an essential read both economists and legal professionals as well as those researching the history of economic thought and the social construction of law. (shrink)
This collection of essays by one of America's leading legal theorists is unique in its scope: it shows how traditional problems of philosophy can be understood more clearly when considered in terms of law, economics, and political science.
Re-framing discussion of the question, “What is law?“ in terms of the contexts in which the whole question makes sense allows us to see that jurisprudence is about boundary disputes concerning law – that is about what should count as law – and about responses to attacks on the value of law. Concern for these two issues constitutes the boundary challenge perspective. The boundary challenge perspective not only allows us fully to escape essentialism about law, it also provides us with (...) a better understanding of the relationship between the activity of discussing what should count as law and the activity of specifying the law in particular circumstances. The boundary challenge perspective provides a better explanation of that relationship than positivism or natural law. It allows discussion of change and resistance to change without significantly weakening the distinction between “is” and “ought”. It might also form the basis for further historical and sociological studies of law. (shrink)
In your simulation you will devise measures to try to relieve the severity of the current global recession and speed the re-emergence of global growth. Each of you will be assigned the identity of an actual person with a specific institutional role. You will be required to undertake web-based research on that person, that person’s institution, and the utility function the person would be expected to behave in accordance with, given their role.
The changing situation in South Africa and Eastern Europe prompts Charles Villa-Vicencio to investigate the implications of transforming liberation theology into a theology of reconstruction and nation-building. Such a transformation, he argues, requires theology to become an unambiguously interdisciplinary study. This book explores the encounter between theology, on the one hand, and constitutional writing, law-making, human rights, economics, and the freedom of conscience on the other. Placing his discussion in the context of the South African struggle, the author compares (...) this situation to that in Eastern Europe, and the challenge of what is happening in these situations is identified for contexts where "the empire has not yet crumbled.". (shrink)
Richard A. Posner's two books on the financial crisis focus on possible macroeconomic (Keynesian) causes of it, neglecting legal causes that would have had only microeconomic effects, yet could have been responsible for the crisis. Specifically, Posner accepts too readily the conventional wisdom that banks? leverage levels, hence their capital cushions, were deregulated; this ignores Basel I, Basel II, and the Recourse rule, which internationally and (in the last case) in the United States minutely regulated not only leverage levels but (...) the composition of banks? assets. These regulations penalized banks for making business loans in comparison to mortgage loans, and it further penalized them for keeping mortgage loans rather than selling them for securitization and then buying back the ?senior? tranches of the resulting mortgage-backed securities. These regulations may explain the overconcentration of mortgage risk in the banks, and thus the financial crisis. (shrink)