Economic Rhetoric: Economics and Literature in Legal Analysis

Bar Ilan Law Studies, Vol. 18, p. 263, April 2009

21 Pages Posted: 23 Apr 2009

See all articles by Adi Ayal

Adi Ayal

Bar-Ilan University - Faculty of Law

Date Written: April, 19 2009


ATA v. Schwartz is a classic torts case in Israeli caselaw. It has a large-factory villian creating noise pollution, a lone neighbor turning to the courts for protection, and three judicial decisions upholding the citizen's right to close down the factory when the latter cannot meet the ordinance's standard. Furthermore, it is the first case the Israeli Supreme Court dealt with arguments explicitly based on Coase, Calabresi and Posner - utterly rejecting them. The case has been used to explain that 'Law and Economics' is not accepted Israeli law, and that tort law protects the weak (citizen) from the strong (factory).

In this paper I take issue with the standard view of the case, offering two opposing readings of the same text. The first reading shows us how efficiency was sacrificed for 'justice' and the narrative construct used by the Justice writing the majority opinion to do so. The second reading reverses the analysis - showing that the 'small vs. big' and anti-economic-analysis rhetoric masks a completely opposite result. The explicit rejection of economic analysis is shown to be slightly exaggerated, relative to the majority-writer's actual ruling (hint: the factory was not closed).

The singular case is used as a vehicle for a broader argument regarding the difficulty of finding 'the correct result', or 'what this means' about Law and Economics.

Note: Downloadable document is in Hebrew.

Keywords: Law and Economics, narrative, Law and Literature

JEL Classification: A12, K13, K32

Suggested Citation

Ayal, Adi, Economic Rhetoric: Economics and Literature in Legal Analysis (April, 19 2009). Bar Ilan Law Studies, Vol. 18, p. 263, April 2009, Available at SSRN:

Adi Ayal (Contact Author)

Bar-Ilan University - Faculty of Law ( email )

Faculty of Law
Ramat Gan, 52900


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