Leiden Law Blog

Economic arguments and legal methodology

Posted on by Ruben Zandvliet in Public Law
Economic arguments and legal methodology

In my last blog I argued that social policies are increasingly justified by economic arguments. The European Commission, for example, proposed a quota for women on corporate boards "because it is good for the economic performance of corporations" instead of "because the status quo is unjust." The normative framework is not social justice but economic efficiency. My point is not that social values and economic arguments clash in general, and I do not argue that economics does not involve social values. But what I did stress is that when there are situations in which an argumentative clash would be warranted, the tendency (at least amongst politicians and policy makers) is to avoid it. I consider this to be a bad development, and it is a task of legal scholars to examine the relative value of different arguments that inform the making and interpretation of law.

Economics is getting increasingly important in academic legal scholarship. This is partly due to the problem of defining a legal methodology, which justifies the study of law as an autonomous discipline. The traditional way of doctrinal legal research is being criticized, and making space for external perspectives on law, of which the economic perspective is one of the most dominant. According to Thomas Ulen: 'legal scholarship is on the verge of a dramatically different manner of doing routine legal investigation. Put in a nutshell, that change is to make law much like other disciplines in the university that believe themselves to be practicing 'science' (...).' The problem is not that economics plays a role in legal research, but rather that legal research increasingly replaces its idiosyncratic method with a rehash of other disciplines. Legal scholars thus run the risk of making the same mistakes that politicians make, by obfuscating instead of discussing conflicts between legal and economic arguments.

It is therefore necessary to discuss two questions more explicitly. First, what role should economic analysis play in legal research? And second, what are the respective roles of lawyers and economists?

Professor Jan Smits (Maastricht University) who recently published The Mind and Method of the Legal Academic, describes law as 'the science of competing arguments.' According to Smits, legal science should be 'an argumentative discipline in which the various arguments in favour of, or against, certain rules or outcomes should be identified and thought through.' He further asserts that: 'A universal legal science seeks convergence at this level of argumentation. Subsequently, it is left to a specific normative framework (...) to decide which argument should prevail."

Following Smits' characterization of legal scholarship, economics should inform the legal debate, and describe, explain and predict the effects of actual or proposed legal rules. It may develop a non-legal theory of human rights, or sketch the dilemmas regarding the fulfilment of social and economic rights as Joop de Kort did in his blog post. But in the end, economics is supplemental to, and not a replacement for, the legal discipline. This is both true on the level of argumentation and the normative framework against which to assess the relative value of arguments. According to Anne van Aaken, Professor of law & economics at St. Gallen who writes about the role of economics in international law: "There is no superiority of either lawyers or economists; both have different core competences. (...) Both sides need to be aware of their strengths but also of their limits. And they should have at least a basic understanding of what the other discipline is about. From the legal perspective, social science insights are needed not only for treaty making but also for treaty interpretation. Nevertheless, the ultimate decision on where and when to use social science, rests with the lawyers."

Methodological soul-searching should not lead legal scholars to becoming ‘light’ economists. Instead we should rethink the role of social sciences in our own discipline.

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