richard posner and economic analysis of law and spring guns and law and economics

In these pages I rarely tip my hand as to which theories I "buy" and which I "reject." In general I believe that almost every theory of law presented has something to be said for it. Indeed, I think that "law and economics," a movement in law flowing out of the "Chicago School" of Economics in the late 1960s and finding first systematic expression in Richard Posner's 1972 Economic Analysis of Law has many good things that can be said about it. I will say one or two in this essay. My overall perspective, however, is that law and economics is more a game of words and definitions whose basic principle is fundamentally unclear. Because of this fundamental unclarity in principle one, I cannot possibly adopt "L & E" as an overarching theory of law, despite being impressed by some of Posner's work, especially his seminal 1971 essay "Killing or Wounding to Protect a Property Interest" (14 Jouranl of Law and Economics 201). This essay will express what I think is good about the movement before turning to the impenetrability and even misleading nature of the language of the movement.

Killing or Wounding

Posner burst on the scene with this well-reasoned and insightful article in 1971. He took up the problem of the "spring gun": a device set up to discharge its "load" on an intruder when a device was tripped. Thus a spring gun could mildly injure or even kill. Under what circumstances did the law of torts permit such defensive mechanisms? Posner reviews the law of torts as manifest in the Restatement before giving a six-fold "rule" which he suggested not only would make sense of the cases but would deal with the physical and economic realities of burglary and protection of one's personal and real property. His contention, that judges had unwittingly been doing "economic" analysis of the problem for at least a century, is more than plausible. Application of an economic understanding to this aspect of tort law (i.e., what is the approach that can help us minimize societal costs?) may help clarify what our real values are (e.g., lack of concern for a person's "criminal act" in trespass in the analysis may actually be helpful, since ultimately if the intruder is injured the society ends up paying for his hospital bills/unemployment bills anyway) and the underlying nature of the offense.

Posner's Economic Analysis and the Law

The next year he came out with a textbook in which he purported to extend the economic analysis of law to major categories of legal study: contracts, property, crimes and torts, antitrust, labor law, public utility law, corporations and the tax structure. I haven't read the entire book and don't plan to do so. An early unsympathetic reviewer, Professor Arthur Allen Neff, said that the book had "an aura of repetitive relentlessness" as Posner mowed through legal categories with his regnant principle ("the theoretical and empirical methods of economics to illuminate a variety of issues and problems in the law," ix) in making his case. While not disagreeing with the point that legal analysis might be aided at times by some basic economic reasoning, I decided to read the first page and see what I came up with. Here are the results.

Psoner begins with an explanation of what economics tries to do. "It explores and tests the implications of the assumption that man is a rational maximizer of his ends in life, his satisfactions--what we shall call his 'self-interest'" (1). This phrase: humans as "rational maximizers of their self-interest," then becomes the intellectual chain saw with which he slices through all the areas of law. But he never defines what he means by this, even though someone, someplace ought to have tried to define the terms. Because he doesn't define his terms, he leaves it up to the reader to "fill in" the definitional gap he creates. Let me try to do that.

Humans as Rational Maximizers of Self-Interest

First, I am not sure what "rational" means. I think this word is probably one of the most overused words in law and the social sciences, and therefore is a sort of "throw away" word, meaning nothing. Or, on the other hand, it can be used as a sort of "power" term, a term to bludgeon people into submission or, at least, to cower them into silence. For who could disagree with the contention that humans were rational creatures? But what does it mean? If it means that we use our minds or consciously make decisions before we act, then it usually is true that we are rational creatures. We often just don't jump off cliffs because we see someone else do it. But here is where Holmes helps us. Recall that in "The Path of the Law," he explored what it meant that the development of law was or was not a product of "logic." He denied that it was. But, before he denied that it was, he, of course, had to admit that every product of thought had a certain 'logic' to it. But only in the broadest, and least meaningful, sense could the development of law be said to be a "logical" endeavor. Thus, he concludes that the development of law owes more to chance or social policy than to "logic." So, here. We can agree that humans are "rational," if it means that their minds somehow enter into their decisions. But, I don't think that is what Posner means. I think he is trying to suggest a much more deliberative use of the term. But, if he does so, I think he is wrong. And, if he does so, I wish he would have said so.

Self-Interest

Humans are called "rational maximziers of their own self-interest." He takes pains to differentiate self-interest from selfishness. Indeed, as he says, "the welfare of other people may be a part of one's satisfactions" (1). But my problem with this definition is slightly different than my difficulty with "rational." Here he gives a term that can be assigned to anything you do. Your "self-interest" can be (and probably is, though he never tells us) whatever you choose. But, that is the point. Does he mean "self-interest" in an objective way--that we actually pursue strategies that maximize our self-interest? Or is he defining self-interest as something akin to breathing--such that even the taking of a breath would be so defined? Is he trying to say that we think we do things for our benefit as we act? And, what is the maximization of our interest, by the way? Is it to be measured in those actions that promote our fame? fortune? sexiness? Or, as I suppose, can it mean anything and is it, by definition, whatever we pursue?

Conclusion

I think the term rational is a hopelessly useless term, unless you define it clearly and in such a way that it doesn't represent everything or anything we do. And the notion of self-interest is likewise useless, unless we are more precise in what we mean. On the one hand, anything I do, because I do it, can be defined as an attempt to maximize my "self-interest." But, my acquaintance with the disciplines of psychology and sociology, as well as my having lived and listened to the intimate details of many people's lives, where "self-destructive" behavior and "bad choices" is so much a part of their (and my) lives, makes me wonder what Posner could possibly mean that our choices maximize our "self-interest." If he jumps in and says, "Well, I am using it in an economic sense," then be clear on what you mean. Indeed, I think that that is a sort of chicken's way to retreat, actually, and I don't know if he would maintain this position.

In any case, I have the feeling that this kind of economic terminology serves more to try to gain a high moral or intellectual ground than really to communicate an idea. Thus, while I can applaud the results of his careful analysis of one problem in law--the problem of spring guns--I am hesitant to "buy" his larger system. I just don't understand it. And he doesn't help by not defining his terms and by using words that are seemingly, to me at least, counterintuitive. Holmes said, in "The Path of the Law," that the future of law belonged to the statistician and the person knowledgeable in economics. I don't doubt that. Because economics deals with money, people are drawn to the discussion of it, thinking that even if they don't know what is going on, they might pick up some of the dough that is being talked about. But, as for me, it is a field cloaked in relative darkness--principally because I don't understand the first words that come out of Posner's mouth.

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