Afterword: Knowledge and Answers

Abstract

All very well, but can you prove it? If you do not have conclusive proof, we shall go on as before. Edmund Burke would have approved the sentiment. Many lawyers and legal academics share it. They point out that economists often disagree, that economic methods rarely produce eternal verities or even demonstrably right answers.' As Mark Kelman observes in this Symposium, economic inquiry presupposes some set of entitlements, institutional arrangements, and rules for trading. There is very little in Kelman's critique-except its conclusion-to which Adam Smith would have taken exception. The author of The Theory of Moral Sentiments did not think that economics was, should, or could be determinate or valuefree.2 Yet there is a curious inversion of argument at work. Burke questioned the invocation of abstractions and ideals to upset the collective wisdom of political society. Economic analysis of law by and large seeks not to upset but to understand the legal system and the activities that the system regulates. Economists, like anthropologists, suspect that any arrangement that persists for many years among many people must be doing something good. Why else does it survive? Regularities of all sorts-the basic rules of negligence, the doctrine of consideration, the practice of tie-in sales-rest on something more significant than passing fancy or mistake. What do these doctrines and business practices do? These are the questions with which economic analysis starts. The observation that economic analysis cannot answer these questions with certainty does not lead to the conclusion that lawyers and judges are free to upset the practices based on intuition and political philosophy. The invocation of philosophic ideals as grounds of change was the target of Burke's original criticism. Economic analysis has supplied a new name-the Nirvana Fallacy, the belief that if a given practice is costly or imperfect then some alternative must be better-for a very old idea. It is always well to improve the state of economic knowledge; it is always necessary