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The Limits of Utilitarianism

16 Pages Posted: 12 Jan 2006 Last revised: 31 Mar 2009

Reza Dibadj

University of San Francisco - School of Law


Professor Steven Shavell's Foundations of Economic Analysis of Law offers a monumental overview of the application of economics to law. This book review analyzes the strengths and occasional limitations of Shavell's book, and proceeds in three parts. Part I provides a brief survey of the contents of the book; Part II highlights the book's significant strengths; and Part III provides an assessment of the book.

On the positive side, Shavell has written a lucid text that is accessible yet does not shy away from masterful exposition of complex topics such as externalities, informational asymmetries, and the divergence between private and social welfare. The review's critique, however, focuses on the notion that Shavell unnecessarily cabins welfare economics within a neoclassical and utilitarian box. In placing too much faith in the ability of the tax and transfer system to achieve distributional goals, and in eschewing deontological concerns, he too often ends up resorting to wealth maximization - ironically, the very method he chastises conventional law and economics scholars for adopting.

In the end, Professor Shavell treats readers to an immensely informative, enjoyable, and thought-provoking book. However, had the book not remained wedded to the limits of neoclassicism and utilitarianism it would be even better.

Keywords: welfare economics, social welfare, law and economics

JEL Classification: D60, D61, D63, K00

Suggested Citation

Dibadj, Reza, The Limits of Utilitarianism. Nevada Law Journal, Vol. 6, p. 201, 2005. Available at SSRN:

Reza Dibadj (Contact Author)

University of San Francisco - School of Law ( email )

2130 Fulton Street
San Francisco, CA 94117
United States
415-422-5253 (Phone)

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