Social Law and Economics and the Quest for Dignity and Rights

Abstract

The economic approach to law, otherwise known as "law and economics," is by many measures the most successful instance of economic imperialism, the application of economic principles to an "outside" field. However, law and economics is very closely tied to traditional, neoclassical economics, both in terms of its consequentialist standard of efficiency, embodied (variously) in Pareto optimality and Kaldor-Hicks efficiency, and its utility-maximizing economic agent, his choices completely determined by his preferences and constraints. But most social economists take issue with these foundational concepts, both of which reflect a basic ignorance of, or negligence to consider, the humanity and dignity of the persons economists purport to be modeling. This leads neoclassical economists to consider well-being to be just the sum of utilities, with no regard for how those utilities were obtained or their distribution, and to treat the individual as just a cog in the legal machine to be manipulated by policy as a means to furthering the end of efficiency. In the first section of this chapter, I introduce the brief social economics literature discussing law and economics. In the second section, I outline several key issues of interest to social economists regarding law and economics, focusing on the consequentialist foundations of the field and the resulting ignorance of fundamental human rights and dignity therein. Finally, I suggest several future areas of research in a social economics of crime, such as including rights and dignity into the evaluative toolbox of law and economics, and incorporating moral motivation and true agency into the models of individual decision-making used in law and economics.