Economics and Law

I think the concepts behind economic analysis of law are sound. One of the key tenants of economics is efficiency, so it makes absolute sense to evaluate which legal rules are economically efficient and which ones aren’t.  As a society, we quite often evaluate laws purely based on how effective they are, or rather their ease of implementation. But, efficiency is a substantial matter because often times it correlates to money. There are two theories behind economics and law, the normative theory and the positive theory.  The positive theory of law stems from the idea that our current laws are, for the most part, already efficient. The normative theory of law posits that our law should be efficient, not that they necessarily are.

So, let us assume for a moment, that the normative theory is correct in saying that our laws are currently not as efficient as they could be. When analyzing law, economists are more than likely to turn their attention towards empirical (and often monetary) data. Where these theories run into problems though, is morality, or rather legislating morality. Currently, there several moral issues that our government has legislated, abortion, drug use, capital punishment. All of those issues can be argued on a purely moral level, and often times legislating or enforcing these laws isn’t efficient at all. Take for example the issue of legalizing marijuana use, many feel that this would save many millions of dollars in law enforcement expenses. But, if judged merely based on economics, the moral implications are ignored.

Because America has a deep moral vein running within itself, I would argue that sometimes efficiency in our legal system isn’t always the best idea. According to the American Religious Identification Survey, 73% of Americans claim they are Christians. As such, this vast majority of our population should certainly have strong inclinations when it comes to moral issues. And if legislators violate these inclinations in the name of efficiency, the majority of the population will be disgruntled. And that is never a good thing.