Whatever Happened to Law and Economics?

Abstract

This contribution to the Maryland symposium honoring Guido Calabresi and 'The Cost of Accidents' takes a semi-friendly outsider's look at how one extraordinarily successful jurisprudential movement developed over the last generation. During the last thirty-five years, law and economics has been simultaneously deteriorating and thriving: Most of its core neoclassical particulars - among them rational choice, wealth maximization, faith in markets, and a claim to science - have been shaken profoundly, but at the same time its attention to a Kaldor-Hicks style bottom line ("welfare") and its inclination to give forward-looking advice to the government have won over almost everyone in legal-academic and policy communities, to the point that it is now hard to say where this field ends and others begin. Against this backdrop of failure and success, Guido Calabresi's 1970 classic can be reread for guidance about the future of law and economics.

Keywords: Law and economics, welfare economics, wealth maximization, behavioral, Kaldor-Hicks, Calabresi, Posner

JEL Classification: A11, A12, A14, K1, K00, K10, Z10