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Law and the Market Order. An Austrian Critique of the Economic Analysis of Law

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  • Krecke Elisabeth

    (Université d’Aix-Marseille III)

Abstract

Larticle présente une étude critique des fondements méthodologiques de lanalyse économique du droit traditionnelle dans laquelle le droit est conçu comme le résultat optimal dune comparaison de coûts et davantages sociaux. Cette procédure judiciaire qui vise en fait à simuler des solutions de marché socialement efficientes présuppose inévitablement lomniscience du juge. Cependant dans le contexte de léquilibre général, lanalyse économique du droit traditionnelle na pas de raison dêtre, alors quelle savère impraticable dans le monde réel où elle serait pourtant nécessaire afin de résoudre des problèmes de coordination entre les individus. A cet égard la théorie économique de lEcole Autrichienne qui insiste sur les problèmes informationnels de la société et qui décrit le droit comme une procédure de coordination fondée sur des règles abstraites de juste conduite, semble fournir des fondements plus appropriés pour une approche économique du droit. Larticle utilise la méthodologie Autrichienne pour reconsidérer lanalyse économique du droit tout en insistant à la fois sur la dimension institutionnelle et la dimension éthique du droit. Le problème central est linterdépendance entre le droit et lordre de marché, mais il est analysé dans des termes fondamentalement différents de ceux de lanalyse traditionnelle.The paper presents a critical analysis of the methodological foundations of conventional law and economics, where law is generally described as the optimal outcome ot a judicial balancing of social costs and benefits. This law making procedure which aims at simulating socially efficient market outcomes inevitably presupposes Judges omniscience. Nevertheless, in this context of full coordination, this type of law has no raison dêtre, whereas it turns out to be infeasible in the real world where it would be necessary in order to solve information and coordination problems. In this respect, Austrian economic and legal theory which focuses on the knowledge problem of society and which describes law as a coordination procedure built on abstract rules of just conduct, seems to provide more appropriate foundations for an economic analysis of law. This paper uses the Austrian approach to reconsider economic analysis of law in a way that allows for both the institutional and the ethical dimensions of law. The central problem seems to lie in the interdependance of law and the ethical dimensions of law. The central problem seems to lie in the interdependancc of law and the market order but it is conceived in a very different way than it is in conventional analysis.

Suggested Citation

  • Krecke Elisabeth, 1996. "Law and the Market Order. An Austrian Critique of the Economic Analysis of Law," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 7(1), pages 1-21, March.
  • Handle: RePEc:bpj:jeehcn:v:7:y:1996:i:1:n:2
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    References listed on IDEAS

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    1. Demsetz, Harold, 1969. "Information and Efficiency: Another Viewpoint," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 1-22, April.
    2. Heiner, Ronald A, 1983. "The Origin of Predictable Behavior," American Economic Review, American Economic Association, vol. 73(4), pages 560-595, September.
    3. Posner, Richard A, 1987. "The Law and Economics Movement," American Economic Review, American Economic Association, vol. 77(2), pages 1-13, May.
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    Cited by:

    1. Walter Block & William Barnett, 2009. "Coase and Bertrand on lighthouses," Public Choice, Springer, vol. 140(1), pages 1-13, July.
    2. Michael Litschka & Kristoffel Grechenig, 2010. "Law by human intent or evolution? Some remarks on the Austrian school of economics’ role in the development of law and economics," European Journal of Law and Economics, Springer, vol. 29(1), pages 57-79, February.
    3. Simon Deakin & Stephen Pratten, 1999. "Reinventing the Market? Competition and Regulatory Change in Broadcasting," Working Papers wp134, Centre for Business Research, University of Cambridge.

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