Positivism and the Separation of Law and Economics

The modem field of law and economics – that is, the application of economic analysis to legal subjects other than trade and business regulation – is now over thirty years old, but it remains controversial in the legal academy and, to a lesser extent, in the profession at large. Since its beginnings in the early 1960s, the economic approach has provoked substantial opposition and antagonism. The sources of this resistance, however, are a matter of dispute. Many economists and economically influenced lawyers attribute it to more traditional lawyers\u27 reluctance to learn a new and unfamiliar set of concepts and techniques. Critics of the economic approach offer a variety of other explanations. Some are skeptical of the utility of abstract theoretical modeling in the social sciences, others object to economics\u27 central behavioral assumption of rational choice, still others criticize economics\u27 supposed libertarian politics and ideological allegiance to laissez-faire. The explanation that has attracted the most attention by far is economics\u27 commitment to the efficiency criterion: proponents of the economic approach tend to argue that more traditional lawyers have not paid enough attention to efficiency, and its detractors tend to argue that economics inappropriately focuses on efficiency to the exclusion of other normative considerations. All these explanations, however, are too narrow. As with any conflict between rival disciplines, the underlying division between law and economics is methodological and cultural. The two fields use different rhetorics, different styles of discourse, different epistemologies, and different literary forms in developing and articulating their respective accounts of the world. Resistance to interdisciplinary exchange between lawyers and economists comes partly from the fact that neither group wishes to give up its own culture in favor of the other\u27s.5 It also comes, however, from the two sides\u27 failure to understand each other\u27s cultural practices in full context