Law and Surplus: Opportunities Missed
56 Pages Posted: 9 Nov 2018 Last revised: 10 Nov 2018
Date Written: November 9, 2018
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. The law can and should play a central role in addressing the surplus problem. This article documents the miscues and mistaken assumptions that have left this topic woefully underexplored in legal scholarship.
I identify and consider in detail here three important missed opportunities. First, scholars studying “rent-seeking,” such as Gordon Tullock, identify competition for surplus as a significant source of economic waste, but then fail to explore the broader ramifications of their insight. Second, law and economics scholars, such as Omri Ben-Shahar, presume that markets will provide the best solution to the surplus problem based on faulty assumptions that do not withstand careful scrutiny. Finally, consumer law scholars, such as Oren Bar-Gill, mistakenly rely on familiar market failure arguments to justify laws designed to protect consumers, rather than address the surplus problem that should be central to their analysis.
Collectively, these three missed opportunities 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
Suggested Citation: Suggested Citation