The Evaluative Emptiness of the Economic Approach to Law
Law & economics traces its intellectual roots to the University of Chicago. That lineage still shapes how the field is understood. Chicago price theory—especially Gary Becker’s (1976) systematic application of maximization, equilibrium, and stable preferences across social life, and George Stigler’s (1992, p. 459) suggestion that “every durable social institution or practice is efficient, or it would not persist over time”—left a deep imprint.
It also left a durable misunderstanding.
Many assume economic analysis purports to prove that existing institutions are good, justified, or normatively desirable. That confusion surfaces most clearly in debates over Richard Posner’s wealth-maximization rule, among critics and supporters alike.
In policy discourse, “efficiency” often functions as an evaluative conclusion—a way to endorse current arrangements or to claim that legal and political disputes can be resolved by neutral technocratic criteria. Read that way, economic analysis looks like a theory of justification.
Within the economic framework, though, efficiency is evaluatively empty by design. It operates inside the model. It does not rank alternative social states, and it does not supply an independent moral criterion. Efficiency follows from the assumption of constrained maximization. It describes the internal coherence of a model, not the justice of an outcome.
Posner acknowledged that limit. He did not treat efficiency as self-justifying. Instead, he defended wealth maximization as an adjudicative decision rule grounded in liberal commitments—not as a claim that “efficiency” itself carries independent normative force.