Defining the Economic Pie, Not Dividing or Maximizing it
Critical Analysis of Law: An International and Interdisciplinary Law Review, Univ. of Toronto, Special Issue on New Economic Analysis of Law, Frank Pasquale, ed., 2018 Forthcoming
20 Pages Posted: 26 Jan 2018
Date Written: December 1, 2017
This essay challenges the question that drives much of legal analysis: whether to maximize or divide the “economic pie.” Regardless of the answer, this question skews legal analysis and rests on dubious economics. This framing binary inherently presents economic maximizing as the presumptive norm, represented as superior to socioeconomic distribution in both spatial and temporal dimensions. By definition, economic “maximizing” stands larger in scope and first in order. The essay first critiques the idea that legal analysis can aim to make the economy bigger without engaging contested questions of value and politics, showing how this misleading separation of quantity from quality closes off rigorous thinking about legal institutions and processes vital to meaningful economic prosperity. Second, the essay challenges the binary’s sequential presentation of social justice as “redistribution” occurring after an imagined step of economic maximizing. That sequence sets up a narrative that distorts and narrows our vision of both the causes of and solutions to problems of inequality and other social and environmental issues. Instead, law and economic analysis should focus on how law should define the “economic pie,” recognizing that moral and political questions of justice are fundamentally inseparable from questions of economic gain.
Keywords: law and economics; jurisprudence, critical legal studies, redistribution, social justice, legal theory, inequality, cost-benefit analysis, socioeconomics, political economy and the law, welfare economics
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