Search Results

This chapter examines how economics treats—and should treat—tastes and values. It first considers those tastes, values, and resulting costs that many economists seem to ignore, or treat as irrational or not worth paying attention to, while also insisting that economics has nothing to say as to the validity and merit of tastes and values. It then analyzes the nature of this paradoxical attitude before outlining some reasons for what economic theory is in fact doing when it accepts some tastes, values, and costs, and rejects others. It also looks at some costs and values whose setting aside seems to be completely unjustified and goes on to focus on the economic analysis of law conclusion that a society's treatment of some merit goods is irrational or is Pareto violative. The chapter concludes by assessing the external moral costs of the commodification and commandification of some goods and of wealth distribution-dependent transactions in other goods.

This chapter argues that economists are very well suited to examine and elucidate the consequences of some tastes and values. Contrary to economists' traditional claim that they have nothing to say on the matter of tastes and values, it asserts that economics can tell lawmakers a great deal about what value changes can properly be viewed as desirable. With a minimum of assumptions of a sort that are standard in economic theory, economists can guide lawmakers in crafting laws that further the creation of some values and deter others. Both legal scholars and lawmakers would benefit by determining which subsidiary values would help or would hinder the joint maximization of the fundamental values of the relevant society. The chapter cites the prevalence and treatment of altruism, of merit goods, and of the law of torts and eminent domain as evidence that current economic theory cannot adequately explain existing legal institutions in any given society.

This introductory chapter explains the difference between law and economics, identified with John Stuart Mill, and the economic analysis of law, exemplified by Jeremy Bentham. It presents examples of recent scholarship of both fields and where they fit historically and considers why legal scholars have a particularly important role to play in law and economics, and especially in its future. This discussion serves as an introduction to the rest of the chapters which form the core of this book. It uses a law and economics approach to discuss the role of the lawyer, merit goods, and the perdurance and proper analysis of altruism and of not-for-profit institutions. It also examines what the use of the liability rule tells us about the relationship between markets and command, what economics often says about the validity of various tastes and values, and what economics can say about the shaping of tastes and values.

This chapter examines whether altruistic behavior or beneficence is an efficient way of producing a good such as medical care or education, and whether not-for-profit institutions deliver a particular good or service as cheaply as self-interested ones. The notion that self-interest gets us what we want more cheaply presents us with a typical law and economics problem. If self-interest is more effective at producing the goods we want, the question is why there is so much altruism, so much beneficence, and so many not-for-profit structures in the world. This chapter considers altruism and beneficence in relation to tastes and values from an economic perspective. It also discusses the implications of treating altruism, beneficence, and not-for-profit institutions as ends rather than means. Finally, it explores what kinds of modified command and markets are most effective in optimizing the production of goods of this sort.