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The common law as central economic planning

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  • Peter Aranson

Abstract

Central economic planning traditionally has set goals and allocated resources by supplanting the price system with central direction. Planners engaged in industry-by-industry and firm-by-firm decision making, all to achieve predetermined targets. The neoclassical approach to law and economics posits that common law judges engage in a similar activity, in rendering decisions that maximize wealth. A significant feature of this approach is the placement of judges in the position of calculators of comparative values. Neither advocates of central planning nor those of judicial wealth maximizing address or solve the economic calculation problem. The various aspects of that problem hold two implications for common law judges. First, they cannot accomplish the tasks that the neoclassical approach sets out for them. Second, a recognition of the calculation problem leads to a rejection of balancing and the choice of rights-based, bright-line rules that return actual and potential litigants' decisions to the market. Copyright George Mason University 1992

Suggested Citation

  • Peter Aranson, 1992. "The common law as central economic planning," Constitutional Political Economy, Springer, vol. 3(3), pages 289-319, September.
  • Handle: RePEc:kap:copoec:v:3:y:1992:i:3:p:289-319
    DOI: 10.1007/BF02393138
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    References listed on IDEAS

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    1. Mario Rizzo, 1985. "Rules Versus Cost-Benefit Analysis in the Common Law," Cato Journal, Cato Journal, Cato Institute, vol. 4(3), pages 865-896, Winter.
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    Cited by:

    1. Giuseppe Dari-Mattiacci & Bruno Deffains, 2007. "Uncertainty of Law and the Legal Process," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(4), pages 627-656, December.
    2. Eckardt, Martina, 2004. "Evolutionary approaches to legal change," Thuenen-Series of Applied Economic Theory 47, University of Rostock, Institute of Economics.
    3. Barbara Luppi & Francesco Parisi, 2012. "Litigation and legal evolution: does procedure matter?," Public Choice, Springer, vol. 152(1), pages 181-201, July.
    4. Horwitz Steven, 1993. "Spontaneity and Design in the Evolution of Institutions: The Similarities of Money and Law," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 4(4), pages 1-18, December.
    5. Lukáš Nikodym & Tomáš Nikodym & Tereza Pušová, 2016. "The Mistaken Doctrine of Common Law: A Critique," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 3, pages 173-181, September.
    6. Boettke Peter J., 1994. "The Reform Trap In Economics And Politics In The Former Communist Economies," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 5(2-3), pages 1-28, June.

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