The recent news that Court of Appeals Judge Richard Posner had decided to retire, effective immediately, sparked a fulsome round of encomiums regarding both Judge Posner’s service during the more than three decades he served on the Seventh Circuit bench and, a bit more tentatively, his impact on the law itself. There could be as little doubt about the latter as the former. The avatar of the law and economics school of legal thinking, Judge Posner’s critique of various venerable theories under antitrust law in particular was, and is, noteworthy. From the start, he challenged on economic grounds an earlier orthodoxy on such topics as resale price maintenance and boycotts, often causing the U.S. Supreme Court itself to change its thinking in the face of arguments better rooted in sound economic analysis. For that reason, the antitrust laws are now better directed to ensuring that business activity continues and is regulated in accordance with the needs of genuine competition, rather than abstract and even just plain wrong legal theorizing.
Less certain has been the permanence and goodness of Judge Posner’s effect on matters outside the antitrust statutes. Here the benefits of an economic analysis of the law are less certain. It is hardly a new idea that humans are rational animals who can and should be encouraged by the law to act in a fashion that makes good economic sense. So Professor (later Justice) Oliver Wendell Holmes, 100 years before Judge Posner, argued persuasively in his Origins of the Common Law that contracts should always be viewed as solely a rational choice between performance and damages. Whether the efficiency this approach brings to contractual analysis is the best for society’s moral underpinnings is now seldom debated, though far from clear. Thus, contemporary jurists, following a century of precedent, insist upon Holmes’s principle, disregarding formally the idea that who acted honorably should be the measure of anything in an ordinary contract breach. But they, and juries alike, often silently make their decisions based on who the “good guy” is.
So too the idea that such matters as punishment or tort law or other legal issues that Judge Posner trained his piercing intellect upon should be reconfigured on purely rational or economic terms is sometimes problematic. Such a conclusion is often undermined by our moral notions and ways of doing. To paraphrase Shakespeare, “the truth hath better deeds than words to grace it.” We show in our actions, contrary to our stated views, that matters of efficiency or efficacy are not our sole concerns. Our legal system has a way of circumventing such ideas, even if the words do have a way of having their impact, as indeed Judge Posner’s have as well.
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