Only ifthis intuition is correct could we say that the law providesnon-prudential reasons for action.Claims (IV) and (V) assert that individuals respond to legal rules inan economic way. It requires much elaboration.Economic theorists offer a highly abstract account of individualdecision making. They groundtheir theory of judicial independence in the interests of legislators.The interests of legislators within extant legislative institutionsmay not coincide with the interests of the constitutionaldesigner.Third, and related, judges usually face severe constraints in the setof legal rules they may consider in any adjudication. Posner, Richard Allen "[A] pragmatic approach [to lawisone] that is practical and instrumental rather than essentialist—interested in what works and what is useful rather than in what 'really' is.I t is therefore forward-looking, valuing continuity with the past only so far as such continuity can help us cope with problems of the present and the future." Judges in common lawcountries have generally not been trained systematically in economicsand statistics, two disciplines necessary (but not sufficient) for thedetermination of social welfare under alternative legal rules.Philosophers, however, have not addressed this question. Politicalphilosophers have examined this issue in their study of distributivejustice.
How can we understand or rationalize herchoice?A tax on sulfur dioxide emissions above 75 parts per billion per hour,by contrast, provides the firm with only a first-order reason foraction. Or she might choose tofu because she isbudget-constrained and tofu is cheaper than meat. An institutional structure is adecision-making protocol that specifies procedures relevant to theresolution of one or more of the problems of adaptation, detection,application, and sanction.
In these schemes, an individualvotes for a party rather than an individual candidate that hasendorsed a specific program. Freddie has two concerns: he wants the largest piece ofcake available and he wants to conform to the social norm “nevertake the largest piece”. For a practicing lawyer, thesequestions have an obvious answer: analyze the outcomes or reasoning ofthe cases in the jurisdiction the law of which applies to the dispute.On this account, we would have a doctrinal analysis of, say, thecontract law of New Jersey or the libel law of Montana. Thattradition extends to the policy analysis branch of economic analysisof law. That is, the agent eitherprefers A to B, prefers B to A, or is indifferent between A and B.Some, but not all, relations are complete.
The early debates conflated theories of adjudication with thevalue of legality; subsequent debates have largely concerned theoriesof private law rather than of law generally. The reasoning ofwhich opinions do the critics analyze? In the latter case, privatecitizens identify violations of the standard; in the former,government officials police the regulated conduct. I argue first that economic analysis oflaw is not committed to any specific doctrinal concept. I then consider why philosophers of law and lawyersgenerally might think that law provides non-prudential reasons foraction.We may follow Hart in elaborating the second dimension of themechanism of internal bureaucratic control. One might then consider the obligations underwhich the agent finds herself as among the agent’s competing“ends”. Ronald Coase [1960] andGuido Calabresi [1961] are generally identified as the seminalarticles but Commons [1924] and Hale [1952] among others had broughteconomic thinking to the study of law in the 1910s and 1920s.Call an ordering that incorporates every consideration that the agentviews as relevant to her decision “an extended preferenceordering”. In an exchange economy, a competitive equilibriumthat results from an initial, equal allocation of resources is bothPareto efficient and envy-free because each individual has the sameset of options available to her. In these situations, the agent, facing a set offeasible options, first eliminates those acts that are normativelyprohibited.