Value and Exchange in Law and Economics: Buchanan Versus Posner

Abstract

Meir Kohn's Exchange and Value claims that economics can be characterised around two opposed paradigms, the exchange and the value paradigms. In this paper, we apply this dichotomy to characterise the analyses proposed by economists in the field known as "law and economics". We compare and contrasts the perspectives proposed by two prominent scholars - James Buchanan and Richard Posner - and argue that they respectively represent the exchange and the value paradigm in law and economics. More precisely, we show that Buchanan sticks to a definition of economics based on the exchange paradigm, and this leads him to define law and economics in a rather specific, different, narrower than Posner's way to define law and economics - a definition that corresponds to a conception of economics based on the value paradigm.

Keywords: Political economy, law and economics, economic analysis of law, subject matter, Buchanan, Posner, exchange, value

JEL Classification: B31, B25, B41