Economics and the Law

Rating:
Summary: Excellent introduction to law and economics
Review: A nice piece of work. The authors undertake a difficult task: providing a readable introduction to the varied "law and economics" movement. The first chapter is one of the better narrative explications of the idea of efficiency that I have seen. It is followed by chapters on the various schools that make up the law and economics movement, each of which provides a good,brief intellectual history of the school and a helpful exposition of its content. For the undergraduate, this book is really a service since it also provides good follow up reading in the field. For the lawyer becoming interested in economics, this may well be the best place to start. Kudos to the authors and Princeton University Press: a clear and well-written book that serves an important purpose.

Rating:
Summary: Solid introductory exposition to a broad range of outlooks.
Review: Houman Shadab's review is right on the money -- including what's left _out_ of this otherwise excellent introductory work. Since I like Hayek, Barnett, and Rothbard, I find the omission disappointing -- but c'est la vie.

Anyway, if you're looking for a solid overview of the various schools of thought involving the relations between law and economics, this volume is a great place to start. (_Complete_ newcomers might also want to pick up Dennis Patterson's _Companion to Philosophy of Law and Legal Theory_, which includes a fine essay on "Law and Economics.")

One tremendous merit of the present volume is that it doesn't limit itself to the "Chicago school." The U of Chi crowd gets a single chapter, and the rest of the book is devoted to the other schools of thought Mr. Shadab has helpfully listed below. The resulting volume is therefore pretty comprehensive (with the exceptions already noted).

Readers interested in this topic may want to read Thomas Miceli's _Economics of the Law_ next. I don't personally favor the mathematical-models approach (for the usual Misesian/Rothbardian reasons) -- but Miceli's volume is a fine introduction to that approach and will afford the reader the opportunity to judge it on its merits.

Rating:
Summary: Solid introductory exposition to a broad range of outlooks.
Review: Houman Shadab's review is right on the money -- including what's left _out_ of this otherwise excellent introductory work. Since I like Hayek, Barnett, and Rothbard, I find the omission disappointing -- but c'est la vie.

Anyway, if you're looking for a solid overview of the various schools of thought involving the relations between law and economics, this volume is a great place to start. (_Complete_ newcomers might also want to pick up Dennis Patterson's _Companion to Philosophy of Law and Legal Theory_, which includes a fine essay on "Law and Economics.")

One tremendous merit of the present volume is that it doesn't limit itself to the "Chicago school." The U of Chi crowd gets a single chapter, and the rest of the book is devoted to the other schools of thought Mr. Shadab has helpfully listed below. The resulting volume is therefore pretty comprehensive (with the exceptions already noted).

Readers interested in this topic may want to read Thomas Miceli's _Economics of the Law_ next. I don't personally favor the mathematical-models approach (for the usual Misesian/Rothbardian reasons) -- but Miceli's volume is a fine introduction to that approach and will afford the reader the opportunity to judge it on its merits.

Rating:
Summary: Great Overview of Legal-Economic Thinking
Review: Mercuro and Medema (M&M) provide an excellent overview of all major schools of thought on the relationship between the law and the economy, and in so doing give the reader an good idea of 20th century legal thought in general. The book's main virtue is that the authors brilliantly break down the fundamental propositions of the different schools of thought, making the book serve as great reference and fertile ground for further research.

While "law and economics" is usually thought of to be a narrow subdiscipline within the field of law, consisting mainly of analyzing the impact on economic efficiency of various legal rules, M&M use "law and economics" in the broadest sense to not only include traditional Chicago School analysis, but also Public Choice, Institutional, Neo-Institutional, and Critical Legal Studies law and economics. In so doing, M&M allow the reader to be exposed to the wide range of scholarship dealing with law and economics, from the impact of special economic interests on legislation, to neo-Marxist accounts of how the legal "superstucture" affects the economic position of classes.

This book is an excellent primer for prospective law students, for law students themselves, for those studying political science or economics, and to the interested layman. Since the book does move along quite quickly, a background in law and/or economics would help one get the most of the book, but it is not necessary since M&M don't presuppose any background knowledge on the part of the reader.

My only real criticism of the book is that they do not include more of the rights-based and Austrian approaches to law and economics such as those of F.A. Hayek, Randy Barnett, and Murray Rothbard, a shortcoming they acknowledge in a footnote.

Rating:
Summary: a very good introduction
Review: The authors know what they are talking about. The book is a survey of the main strains of law and economics theories and approaches. It provides examples of each theory and that can be illuminating. However, more examples could have given a better sense to the differences across the several theories. The notes are well written and provide all you need for further reading.

Rating:
Summary: Useful introduction to an important field
Review: What is law & economics? It is the school of jurisprudence in which the tools of microeconomic analysis are used to study law. Those of us who practice economic analysis have a deceptively simple task. We translate some legal doctrine into economic terms. We then apply a few basic principles -- cost-benefit analysis, collective action theory, decision-making under uncertainty, risk aversion, and the like -- to the problem. Finally, we translate the result back into legal terms.

Law & economics unquestionably is the most successful form of intellectual arbitrage in the history of jurisprudence. Why? Traditional forms of legal scholarship were mostly backward looking. One reasoned from old precedents to decide a present case, seemingly without much concern (at least explicitly) for the effect today's decision would have a future behavior. Yet, law is necessarily forward looking. To be sure, a major function of our legal system is to resolve present disputes, but law's main job is to regulate future behavior. The law & economics movement succeeded because it recognized that judges cannot administer justice solely retrospectively. They must also consider what rules their decisions will create to guide the behavior of other actors in the future. Even more important, however, law & economics gives judges systematic mechanisms for predicting how rules will affect behavior.

Mercuro and Medema's text offers a comprehensive overview of law & economics. Unlike many texts, it is not limited to the Chicago School (as exemplified by such stalwarts as Manne, Easterbrook, and Posner). They also describe the New Haven school (classically exemplified by Calabresi), the public choice theory of Arrow, Buchanan, and others, as well as both the traditional and new institutional economics. By reminding us that law & economics is not a homogeneous field, and providing a fair commentary on each of the major traditions within the larger discipline, they offer an excellent introduction to this important area of jurisprudence.

One nice touch, which makes the text useful for a wide audience, is that it does not assume familiarity with either economics or law. The introduction offers a brief historical overview of basic jurisprudence, as well as an appendix explaining basic economic principles. Consequently, the book will serve well the interests both of lawyers who need to brush up on economics and economists interested in law.

Criticisms that led me to subtract one star: There is little in the way of critical evaluative judgment. Indeed, Mercuro and Medema disavow any effort at criticism. As a result, the reader is left to his own devices. Second, I am not persuaded by Mercuro and Medema's decision to include a rather lengthy chapter on critical legal studies. Criticism of law & economics has been a major project of CLS scholars, but CLS scholarship has had no influence of any significance on any of the dominant strains of law & economics thinking. In this case, moreover, the failure to exercise critical evaluative judgment means that the generalist reader may have difficulty assessing the (bogus) claims made by CLS. In general, while maintaining facial neutrality on their own part, Mercuro and Medema give far more attention to CLS and Marxist critiques of law & economics than they do to conservative critiques thereof or to law & economics criticisms of CLS.

Rating:
Summary: Useful introduction to an important field
Review: What is law & economics? It is the school of jurisprudence in which the tools of microeconomic analysis are used to study law. Those of us who practice economic analysis have a deceptively simple task. We translate some legal doctrine into economic terms. We then apply a few basic principles -- cost-benefit analysis, collective action theory, decision-making under uncertainty, risk aversion, and the like -- to the problem. Finally, we translate the result back into legal terms.

Law & economics unquestionably is the most successful form of intellectual arbitrage in the history of jurisprudence. Why? Traditional forms of legal scholarship were mostly backward looking. One reasoned from old precedents to decide a present case, seemingly without much concern (at least explicitly) for the effect today's decision would have a future behavior. Yet, law is necessarily forward looking. To be sure, a major function of our legal system is to resolve present disputes, but law's main job is to regulate future behavior. The law & economics movement succeeded because it recognized that judges cannot administer justice solely retrospectively. They must also consider what rules their decisions will create to guide the behavior of other actors in the future. Even more important, however, law & economics gives judges systematic mechanisms for predicting how rules will affect behavior.

Mercuro and Medema's text offers a comprehensive overview of law & economics. Unlike many texts, it is not limited to the Chicago School (as exemplified by such stalwarts as Manne, Easterbrook, and Posner). They also describe the New Haven school (classically exemplified by Calabresi), the public choice theory of Arrow, Buchanan, and others, as well as both the traditional and new institutional economics. By reminding us that law & economics is not a homogeneous field, and providing a fair commentary on each of the major traditions within the larger discipline, they offer an excellent introduction to this important area of jurisprudence.

One nice touch, which makes the text useful for a wide audience, is that it does not assume familiarity with either economics or law. The introduction offers a brief historical overview of basic jurisprudence, as well as an appendix explaining basic economic principles. Consequently, the book will serve well the interests both of lawyers who need to brush up on economics and economists interested in law.

Criticisms that led me to subtract one star: There is little in the way of critical evaluative judgment. Indeed, Mercuro and Medema disavow any effort at criticism. As a result, the reader is left to his own devices. Second, I am not persuaded by Mercuro and Medema's decision to include a rather lengthy chapter on critical legal studies. Criticism of law & economics has been a major project of CLS scholars, but CLS scholarship has had no influence of any significance on any of the dominant strains of law & economics thinking. In this case, moreover, the failure to exercise critical evaluative judgment means that the generalist reader may have difficulty assessing the (bogus) claims made by CLS. In general, while maintaining facial neutrality on their own part, Mercuro and Medema give far more attention to CLS and Marxist critiques of law & economics than they do to conservative critiques thereof or to law & economics criticisms of CLS.