Law and Surplus: Opportunities Missed

Abstract

Surplus is a ubiquitous feature of economic activity. The ubiquity of surplus challenges us to find fair and efficient ways to share resources. This is the surplus problem. This Article documents the miscues and mistaken assumptions that have left research on how legal rules can address the surplus problem woefully underexplored. Three missed opportunities are particularly noteworthy. First, scholars studying “rent-seeking” mistakenly limit their investigation of links between surplus and wasteful competition to situations involving grants of government privilege. Second, law and economics scholars incorrectly assume that a laissez-faire approach is presumptively the best way to address the surplus problem. Finally, consumer law scholars fail to recognize how central solving the surplus problem is to providing a sound economic justification for consumer protection law. Collectively, these case studies illustrate how law’s role in addressing the surplus problem has been shunted to the periphery of legal scholarship rather than placed at the center of legal discourse where it rightly belongs.

Keywords: economic justice, surplus, microeconomics, rent

JEL Classification: D00, D30, D63, K00