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There's been a vogue lately, exemplified by John Rawls' influential A Theory of Justice (1971), for using economic concepts in theories of law and public policy. Here, Posner (Univ. of Chicago Law School) specifically attacks Rawls' school of thought, labeling it utilitarianism. This school argues that the essential measuring stick, in determining law and policy, should be that if someone advances, no one else is adversely affected. Posner objects on grounds of consistency and comprehensiveness, pointing out the difficulty of measuring the advances and setbacks. Instead he proposes a more classical economic model, based on wealth maximization. If we always and everywhere, he contends, seek to maximize wealth in the aggregate, we will have a sure yardstick, since such a theory depends upon consent; that is, the parties to an agreement or exchange enter into it because they both expect to gain. To make his theory stick, Posner goes back in time and tries to show that market behavior and wealth maximization as a theory of justice underlie primitive social relations and pre-date the emergence of the state. His test case here is the world of Homer--where, in The Iliad and The Odyssey, he professes to discern a society that functioned on the basis of exchange and reciprocity. To do this, however, he has to misconstrue the nature of gift-exchange in the Homeric world; that is, to see the gift relation as a market transaction, whereas the actual exchange was secondary to the social cohesion it propagated--and supply and demand played no role in determining the value of the objects exchanged. Posner's wish is to show that people got along without the state (and only needed it for defense when it did arise); he can thus view the legal system as a codification of customary practices that are essentially market practices. The whole theory, however, is built on a specious interpretation of custom as unchanging--in Posner's case, a specious, market-oriented interpretation. He goes on further to argue that privacy law can best be approached in terms of the cost that people are willing or unwilling to bear in order to obtain information; and this leads him into a detailed study of privacy laws to see what difference they make. (They make more sense in protecting people from government than in the private realm, he concludes.) The investigation ends with a discussion of discrimination, where Posner discovers--not surprisingly--that there is no economic sense to affirmative-action laws. Posner stands out for trying to ground the new cost/benefit approach to law in custom, and his blinkered failure to do so has its importance too.

Pub Date: June 1st, 1981
ISBN: 0674235266
Publisher: Harvard Univ. Press