POSNER, RICHARD
(1939–)

Richard Allen Posner, legal academic and federal court judge, was born in 1939 in New York. He was educated at Yale and Harvard Law School and has taught at the University of Chicago for many years. He was appointed to the federal appellate bench in 1981 and served as the chief judge of his court from 1993 to 2000. He is a leading advocate of the economic analysis of law and, by his own description, a legal pragmatist.

Economics of Law

Posner has argued that the various doctrines of the common law can best be explained as wealth maximizing. To say that a transaction or institution is wealth maximizing is to say that it creates more wealth than alternative possible transactions or institutions. Wealth, in this usage, is the value that goods have in the hands of their owners, and the value that a thing will have in the hands of a particular person is, qualifications aside, the amount that that person is willing to pay for it. Thus, the goal of wealth maximization is reached when goods are placed in the hands of those who would be willing to pay the most for them. An example of a wealth-maximizing rule, according to Posner, is the negligence rule in tort law: Under the rule of negligence, properly understood, injurers are liable for the losses they cause only when they could have taken precautions that would have prevented the accidents for less than the expected cost (that is, the cost discounted by the likelihood) of the accidents themselves. If prospective injurers take precautions when and only when it would be cost effective to do so—which the rule of negligence gives them an incentive to do—then the cost of accidents overall will tend to be minimized and the wealth of society will tend to be maximized.

Similarly, but more controversially, Posner has offered an economic explanation of the criminal law. Its major function, according to Posner, is to prevent people from bypassing the market system of voluntary exchange. When goods are exchanged voluntarily, as in a sale, wealth is increased since parties necessarily value what they have received in an exchange more highly than what they traded for it. When the market is bypassed, as in theft, there is no guarantee that the stolen good is valued more highly by the thief than by its owner. Similarly, Posner has argued (thereby creating a great deal of controversy) that one of the things wrong with rape is that it bypasses the marriage and sex market so that wealth tends to be decreased. For Posner this is one of the virtues of wealth maximization over utilitarianism: Wealth maximization can explain why rape is always a crime whereas he believes that utilitarianism would have to condone rape if the enjoyment of the rapist were greater than the pain and unhappiness caused to the victim.

Even if the common law does promote the maximization of wealth, the question remains whether it should. Posner believes that wealth maximization is an ethically attractive guide not only for the common law but for social institutions generally. A system that maximized wealth overall would maximize everyone's chance for a higher income and thus would elicit nearly universal consent ex ante —though Posner's consenting parties would not have to do so in ignorance of their personal attributes. All persons would know of their own productive capacity—the extent to which they can benefit others—so they would know approximately how they would do under wealth-maximizing laws. It is only the unproductive who would not consent: They would be less well off under a wealth-maximizing system.

Legal Pragmatism

Posner believes that philosophical pragmatism is largely irrelevant to the law. By contrast, he believes that what he calls everyday pragmatism has a great deal to say. The everyday pragmatist—for example, the pragmatic judge—is an instrumentalist in law as in other things. Pragmatic judges are not bound by some conception of the law as an immutable body of rules but rather use their office to try to achieve reasonable resolutions to legal disputes. They reject moral, legal, and political theory (including constitutional theory) as guides to decision making. They are not bound by precedent, but neither are they bound to ignore it. Wise judges realize the virtues of following precedent—the value of certainty in law, the importance of the reliance interest, the wisdom that inheres in some of the common law—but they are free to ignore it when they can do more good by ignoring it. When pragmatic judges must look beyond the law to settle legal disputes, as they often must, they will find no help in academic moral theory. They must rely on common sense and economics and other sciences, as well as on values that are widely shared.

Although Posner's pragmatic judges are free to follow precedent or not, as they see fit, Posner counsels restraint in constitutional adjudication, placing himself among those judges and theorists that belong to what he calls the outrage school: The problem is that most judges are lacking the factual knowledge and expertise in social science that would justify them in striking down legislation. Hence, judges should only declare legislation unconstitutional when it stirs a strongly negative reaction in them. When in the future judges do in fact have a better grasp of social science and the factual underpinnings of the various areas of law, the need for law itself as we understand it will begin to disappear—the supersession thesis. Antitrust law and administrative law are two areas of American law that illustrate the thesis: "It is fair to say that at the beginning of its second century antitrust law has become a branch of applied economics" (Posner 1999, p. 229).

Posner calls himself a moral relativist. He believes that there is no rational road to agreement with those of fundamentally different moral beliefs and—what is now largely uncontroversial—that there is no way to reach certainty in moral matters. It follows, he believes, that we cannot call the actions of someone in another culture immoral unless we add by our lights, though he does not explain what the difference is between saying that something is immoral and saying that it is immoral by our lights.

See also Ethics and Economics; Philosophy of Law.

Bibliography

works by posner

"Utilitarianism, Economics, and Legal Theory." Journal of Legal Studies 8 (1979): 103.

"The Ethical and Political Basis of the Efficiency Norm in Common Law Adjudication." Hofstra Law Review 8 (1980): 487.

Problems of Jurisprudence. Cambridge, MA: Harvard University Press, 1990.

Overcoming Law. Cambridge, MA: Harvard University Press, 1995.

Problematics of Moral and Legal Theory. Cambridge, MA: Harvard University Press, 1999.

Frontiers of Legal Theory. Cambridge, MA: Harvard University Press, 2001.

Michael Louis Corrado (2005)