Law as Industrial Policy : Economic Analysis of Law in a New Key

If justice be the end of law, ask on. How we pose normative legal questions "limits and disposes the way in which any answer -right or wrong-may be given." Economic analysis of law has firmly established itself as a controversial but respected neorealist approach to legal criticism. Ever since the 1960 publication of Ronald Coase's pathblazing article, The Problem of Social Cost, conventional law-and-economics literature has evaluated legal rules according to a microeconomic criterion called "efficiency." Within the law-and-economics scholarship wealth maximization as such is an uncontroversial legal prescription; the real dispute pits advocates of KaldorHicks efficiency against champions of Pareto efficiency. When prescriptive combatants understand that they are fighting over the morality of potentially uncompensated wealth transfers, they are likelier to agree on the principal descriptive task in economic analysis of law. Like unimpressed fast food consumers, many legal scholars now begin their missions by asking, "Where's the wealth?" Overtly economic analysis of law begins, in a word, when we ask "the efficiency question."