Legal Paternalism : Economic Analysis Subject to Deontological Constraints

This is a chapter of our book titled Law, Economics, and Morality (OUP, 2010), in which we propose to integrate threshold deontological constraints (and options) with cost-benefit analysis, thus combining economic methodology with moderate (threshold) deontological morality. This chapter analyzes legal paternalism in its various manifestations. It first argues that normative economics does not entail principled anti-paternalism. In fact, the consequentialist nature of standard welfare economics — namely the absence of constraints on promoting good outcomes — opens the door to limiting people’s freedom with a view to promoting their own good. Economists ordinarily object to paternalism, but rather than pointing to the intrinsic value of freedom, they base their anti-paternalistic stance on various secondary considerations, thus missing the real dilemmas inherent in paternalism. Adding deontological constraints to the analysis better captures the pertinent issues, and provides more accurate yardsticks with which to evaluate paternalistic legal norms and explain existing ones. The chapter constructs formal models to evaluate the desirability of paternalistic legal norms from both economic and moderate deontological perspectives