Economic Rationality in Law and Economics Scholarship

Abstract

Judge Richard A. Posner - the doyen of the law and economics movement - is probably the leading proponent of the hypothesis that legal subjects act as if they were economically rational. Over the years, however, Posner's conception of rationality has devolved from end-means reasoning by a conscious individual human actor, to unconscious instinct which is, nevertheless, beneficial to an individual subject (animal or human) to the mechanistic reproductive activity of individual genes which may or may not be beneficial to either the organism of which the gene is a part - or even to the gene itself. Indeed, all that seems to be left of the "rational" component of Posnerian rationality might be the positive normative connotations of the term itself.

At the turn of the millennium the law and economics movement is over a quarter of a century old. It is time to unpack Posner's rational choice baggage to see what remains inside. Prof. Schroeder explicates the internal contradictions of Posner's account of rational choice theory and contrasts his attempt to bolster his theory through the adoption of arbitrary and ad hoc ancillary hypotheses with the methodology of social science. She challenges Posner's presentation of himself as a proponent of mainstream economic theory. In this Article, Prof. Schroeder contrasts Posner's conception of rational choice theory with those of a number of Nobel Prize laureates who accept some variation of the rationality postulate - Gary Becker, Ronald Coase, Paul Samuelson, George Stigler - as well as two who are critical of rational choice literature - Amartya Sen and Herbert Simon. She also tentatively offers some suggestions from Lacanian psychoanalytic philosophy as to the appeal of certain notions of "rationality."