Edited by Jennifer H. Arlen
Chapter 6: Fault lines in the positive economic analysis of tort law
Economists routinely engage in positive analysis to identify the efficiency properties of a practice without expressly taking any position on the normative question of whether the practice should be conducted in an efficient manner. Economists confidently do so, as Milton Friedman observed in his famous essay on this methodological approach, simply because “[t]he conclusions of positive economics seem to be, and are, immediately relevant to important normative problems, to questions of what ought to be done and how any given goal can be attained” (ibid.). Friedman was discussing problems of “economic policy,” illustrated by the issue of minimum-wage legislation (ibid., 5). Regard less of one’s position on what the minimum wage ought to be, no one seriously doubts that this matter of economic policy depends on the costs of regulation, such as increases in the unemployment rate. Merely identifying those costs and any resultant in efficiencies enables an economist to make an important contribution to wage-regulation policy without adopting any normative position about the matter.
You are not authenticated to view the full text of this chapter or article.