- Elgar original reference
Edited by John B. Davis and Wilfred Dolfsma
Chapter 32: Social Law and Economics and the Quest for Dignity and Rights
Mark D. White 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.1 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 utilitymaximizing 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 shall introduce the brief social economics literature discussing law and economics. In the second section, I shall 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 shall suggest several future areas of research in law and economics, such as including rights and dignity into the evaluative toolbox of...
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