To What Extent Should We Enrich Law and Economics? On Calabresi and his Future of Law and Economics

Abstract

AbstractIn this paper, I argue that the “expanded” economic theory advocated in Calabresi’s book “The Future of Law and Economics” could be interpreted in at least three different ways, all of which are compatible. First, Calabresi’s book could be interpreted as an attempt to incentivize lawyer-economists to explore laws and regulations from different angles or perspectives rather than merely apply neoclassical theories. Second, it could be considered an attempt to justify the introduction of the notion of moral costs into law and economics to better explain some legal realities. Third, it could be considered an attempt to advocate, in a more normative way, the need to incorporate moral costs into real world analysis to better improve upon decision making.This paper will address and discuss each of these possible interpretations. It will be clear that, from an epistemological point of view, if the first interpretation might be more widely accepted because it is less controversial, the second and third interpretations remain more problematic. Admittedly, the concept of moral costs could obscure and even distort our understanding of some legal realities. Moreover, the introduction of such costs for decision making is raising questions which cannot be answered through economic theory alone.