Richard PosnerWhat is Law and Economics Today?

Richard Posner, What is Law and Economics Today? An American View, in: Nobel (Hrsg.), New Frontiers of Law and Economics, First International Scientific Conference on Law and Economics at the University of St. Gallen, Zürich 2006, S. 89 ff.

Background

Richard A. Posner has long been puzzled by his irritating observation that it was not the economists trained in the economic discipline of law and economics who wrote new laws on the economy, acted as judges on corporate affairs or wrote contracts. It is therefore better to turn to the future lawyers and judges for sharing management and economic insights, instead of offering Law and Economics courses to economists. Posner was therefore very pleased that the First International Conference on Law and Economics at the University of St. Gallen set out to do just this. He has been asked to discuss the Law and Economics movement from an American standpoint. The conference focused on the Law and Economics scientific movement, its current research topics and the ensuing practical impact in the field. Eminent speakers shared their views with each other with ample opportunity to hold thoughtful and stimulating discussions.

Summary

The text included here is a speech given by Prof. Dr. Richard Posner at the University of  St. Gallen in Switzerland in 2005, which dealt with the following questions: “What is Law and Economics today? What are the current research topics in Law and Economics? What are the practical implications of Law and Economics research?”. Prof. Posner responds to these questions from an American (Law and Economics) point of view.

At the outset, Prof. Posner discusses the important steps taken that led to a break from the traditional way of thinking; he then designates the authors involved therein. He describes the old and new economic theory; with regard to the latter, the theory of rational choice is much more essential than the economic system itself.

According to Prof. Posner, economics and law are considerably isomorphic. He argues with different examples that illustrate a parallel structure, and he states that both are concerned with the allocation of scarce resources, although they utilize a quite different vocabulary and (often) different tools.

Prof. Posner sees the economic analysis of law as a tool that helps to compare legal institutions; to place law in the system of social control (custom, morality, reputation and emotion); to explain the behaviour of judges; to contribute to the improvement of law (i.e., economics-guided reform of laws and legal institutions); and to support the organizational economics of legal institutions (such as, e.g., tribunals) and law firms.

Text

You can find a scan (PDF) of the original text here: Posner Richard – What is Law and Economics Today