Abstract
There exists a distinction between ‘law and economics’ and the ‘economic analysis of law’. The former, corresponding to Coase’s approach, consists in taking legal rules into account insofar as they influence economic activities. The latter, associated to Posner’s name, consists in using economics to analyze legal problems. Methodologically speaking, if one admits that the economic analysis of law consists in using economic tools to analyze legal problems, Calabresi’s own work must be classified as such. However, Calabresi has always insisted that his own approach differs from Posner’s economic analysis of law. In this paper, we take the opportunity of Calabresi’s new book—The Future of Law and Economics—to revisit Calabresi’s approach to law and economics. In his book, Calabresi explains that the economic analysis of law is unsatisfactory because economics is too narrow. He insists on the need to amplify economic analysis by: first, adopting a more realistic approach à la Coase; second, taking merit goods into account; and third, including individuals’ propensity to be altruistic. We analyze these three aspects and show that it leads to a certain ambiguity in terms of the distinction between ‘law and economics’ and the ‘economic analysis of law’.
Similar content being viewed by others
Notes
From this perspective, his definition of what a lawyer-economist is differs from the one given by Backhaus (2017).
On Coase, the lighthouse and market failure, see Candela and Geloso (2018).
It is worth noting that this has also been the critique to the blind support for property rights that has occurred almost everywhere in last decades and especially in the case of intellectual property rights.
For an overview on merit goods see Kirchgässner (2017).
This is also a problem Buchanan encountered and discussed. To him, a legal structure is the consequence, the product, of the attempts made by the individuals to solve their problems. The law is, in Buchanan's views, the consequence or the outcome of the collective actions undertaken in the past by the individuals to deal with the interdependencies, externalities that could not be internalized on markets. They can be viewed as the product of a unanimous agreement.
References
Backhaus, J. G. (2017). Lawyers’ economics versus economic analysis of law: a critique of professor Posner’s “economic” approach to law by reference to a case concerning damages for loss of earning capacity. European Journal of Law and Economics, 43, 517–534.
Buchanan, J. M. (1959). Positive economics, welfare economics, and political economy. Journal of Law and Economics, 2(Oct), 124–138.
Calabresi, G., & Bobbit, P. (1978). Tragic choices. New York: Norton and Co.
Calabresi, G. (2016). The future of law and economics. Yale University Press.
Calabresi, G., & Melamed, A. D. (1978). Property rules, liability rules, and inalienability: One view of the cathedral. Harvard Law Review, 85(6), 1089–1128.
Candela, R. A., & Geloso, V. J. (2018). The lightship in economics. Public Choice, 176(3–4), 479–506.
Coase, R. H. (1974). Te Lighthouse in Economics. Journal of Legal Studies, 17(2), 357–376.
Coase, R. H. (1978). Economics and contiguous discipline. Journal of Legal Studies, 7(2), 201–211.
Coase, R. H. (1992). The institutional structure of production. American Economic Review, 82, 713–719.
Coase, R. H. (1996). Law and economics and A. W. Brian Simpson. Journal of Legal Studies, 25(1), 103–119.
Coase, R. H. (1998). The new institutional economics. American Economic Review, 88, 72–74.
Epstein, R. A., Becker, G. S., Coase, R. H., Miller, M. H., & Posner, R. A. (1997). The roundtable discussion. University of Chicago Law Review, 64(4), 1132–1165.
Harnay, S., & Marciano, A. (2009). Posner, economics and the law: From ‘law and economics’ to an economic analysis of law. Journal of the History of Economic Thought, 31(2), 215–232.
Hyde, L. (1983). The gift. NY: Vintage Press.
Kirchgässner, G. (2017). Soft paternalism, merit goods and normative individualism. European Journal of Law and Economics, 43, 125–152.
Kornhauser, L. (2011). The economic analysis of law, Stanford Encyclopedia of Philosophy Archive. http://plato.stanford.edu/archives/spr2014/entries/legal-econanalysis/. Accessed 6 June 2019.
Leeson, P. T. (2019). Do we need behavioral economics to explain law?. European Journal of Law and Economics (this issue)
Marciano, A. (2012). Guido Calabresi’s economic analysis of law, Coase and the Coase theorem. International Review of Law and Economics, 32, 110–118.
Marciano, A. (2016). Economic analysis of law. In A. Marciano & G. Ramello (Eds.), Encyclopedia of law and economics. New York, NY: Springer. https://doi.org/10.1007/978-1-4614-7883-6_598-1.
Marciano, A. (2018). Ronald H. Coase (1910–2013). In R. A. Cord (Ed.), The Palgrave companion to LSE economics (pp. 555–579). Palgrave.
Marciano, A., & Ramello, G. B. (2014). Consent, choice and Guido Calabresi’s heterodox economic analysis of law. Law and Contemporary Problems, 77(2), 97–116.
Marciano, A., & Ramello, G. B. (2018). Calabresi: Heterodox economic analysis of law. In A. Marciano & G. Ramello (Eds.), Encyclopedia of law and economics. New York, NY: Springer. https://doi.org/10.1007/978-1-4614-7883-6_726-1.
Musgrave, R. A. (1957). A multiple theory of budget determination. FinanzArchiv, New Series, 25(1), 33–43.
Musgrave, R. A. (1959). The theory of public finance. New York, NY: McGraw-Hill.
Posner, R. A. (1975). The economic approach to law. Texas Law Review, 53(XX), 757–782.
Radin, M. (2001). Contested commodities. Cambridge, MA: Harvard University Press.
Zamir, E. (2017). Tastes, values, and the future of law and economics. Jerusalem Review of Legal Studies, 16, 101–123.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Marciano, A., Battista Ramello, G. Law, economics and Calabresi on the future of law and economics. Eur J Law Econ 48, 65–76 (2019). https://doi.org/10.1007/s10657-019-09619-4
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10657-019-09619-4
Keywords
- Buchanan
- Calabresi
- Coase
- Posner
- Economic analysis of law
- Law and economics
- Merit goods
- Altruism
- Political economy