Posners Philosophy

Rubin asserts that Posners significant and desirable postulation with regard to economics and law is the fact that common law derives efficacy economically (Rubin 1999). However, there are no mechanisms to exemplify this putative efficiency of common law. Posners assumption is based on the hypothesis which propagates that judges in set judicial systems achieve the ability to satisfy concerned parties in lawful affairs by making efficient decisions and as such, they are restricted so that other criteria on which to base arrival at decisions are few. Models of law that are ideally evolutionary were formulated so as to avail other criteria for decision making in lawful matters and as such derive the said efficiency. Worth noting is the fact that these models are alongside proof of efficacy and as such, useful in most instances, have not achieved the intended goal. In fact, there now are evolutionary models of legal matters that are primarily driven by the need for change whose inspiration is lawyers rent seeking ultimately resulting into inefficiency in judges decisions. There also is another trend that characterizes legal affairs and economics-judges interactions-which portray the nature of such interactions that primarily indicates there inability to yield consistent results. According to Rubin, Posner sums up the foregoing discussion by observing that at the core of economic assessment of the legal system is a mystery which is also an embarrassment. This dilemma that Posners contention arises, poses the question of explaining behavior that is inherent in the judicial systems in economic terms. We will now review Rubins paper under the lens of Posners postulations whereupon there are two issues. Firstly, is his purport of the economic efficiency of common law, secondly, its nature and thirdly is its purpose.

The first issue that Rubin raises is the efficiency of common law which he argues that is the basic question of law and economics. He points out Posners argument that posits common law to be efficient. Rubin contends that the difficulty that arises with regard to this efficiency of common law that Posner argues is that the conclusion that regards the efficacy of a given rule or law relies on transactions that have estimated costs of all sorts. Rubin poses the question that if in fact Posners intuition about relative magnitudes is not right then it follows that doctrines which he claims to be efficient may not be so. Rubin notes that a significant portion of literature in economics and law is constituted by attempts to assess given legal doctrines and as such, analyze their efficiency. This model of assessment varies fundamentally from Posners concept of efficiency of the common law with regard to other economics faculties. Market competition, is propagated and the process is shown to lead to efficient outcomes. Economists, according to Rubin, do not generally assess consumers so as to find out whether they are equating ratios of marginal utilities to prices or firms to assess whether they charge marginal cost. Contrastingly, the process according to Rubin, which derives the consequent process that derives outcomes, is what results into efficiency. As a result of this reason, many economists are not comfortable with arguments of efficiency with regard to law and economics. Despite this fact, by virtue of the fact that this is the ideal standard in economics and law, any assessment of any given law bodys efficiency, according to Rubin can be regarded as evidence against or for Posners assumption. As such, if a given law is found to come about as in-efficient, whereupon it yields reform proposals, it is regarded as evidence against Posners assumption.

    The second Issue that Rubin Puts across with regard to Posners argument is the concept of utility maximization (Posner 1992). Rubin postulates that Posner argued that judges in the judicial system were insulated from factors that were primarily personal as well as interest groups in addition to other pressures and as such, the only factor with regard to decision that remained was the issue of efficiency. The other candidate in the register of the judges decision criterion was income redistribution which the judges did not have the tools to address. Rubin observes that Posners explanation was and still is not appalling to economists as it ultimately depends on the tastes of the judiciary for efficiency whereupon economists opt not to exemplify behavior on such basis.
The basis of analysis between Rubin and Posners views with regard to the issue of economics and law finds ground in the two legal professionals nature of the knowledge and ideally its place in the arrival of legal decisions. The fundamental in Posners economic assessment of the law is the fact that judges always do, and as such can and should always employ principles in economics in deriving conclusions in legal decisions, moreover, in improving the law. This issue regards Rubins assertion where he postulated that if in fact Posners intuition about relative magnitudes is not right then it follows those doctrines which he claims to be efficient may not be so. These doctrines that Rubin discounts are the economic processes which offer the basis for judges in decision making. To Posner, embedded in these analyses is the principle hypothesis with regard to judges ability to assemble and analyze the necessary knowledge for them to understand the repercussions of their made rulings which have both the effect and objective of enhancing efficiency of the law. In Posners perspective, in the event that a judge gives out hisher ruling, such a judge must always consider the future consequences of that ruling. The perception of judges as makers of rules yields the question of how judges make decisions on which rules are efficient. Posner thus discounts Rubins disregard of economics in legal decisions when he states that the economic theory with regard to law presumes that there exists machinery which ascertains the existence of necessary facts for correct application of the law (Posner 2003). 

The second issue that arises in Rubins essay worth analyzing across the fundamental concept that was propounded by Posner regards the purpose of the law.  Posner exhorted judges to make decisions in cases with the objective of furthering an external standard of value for instance, maximization of wealth. His view of rule selection was ideally at the judges level that chose between alternative individual rules. Elevation of a given rule bound the judges opting for that rule though it was only to the level that the judges felt that it was necessary for adherence to the set precedence. Ideally what a judge ought to adhere to which meant the precedence that on overall, enticed him in his choice, as such, came about as the most efficient rule. In Posners case a typical case would be Hadley v. Baxendale the famous case that explicated the limitation for recovery in a law suit concerning lost profits. In the scenario of Hadley, X contracted with Y to derive a good or service whereupon when executed with adherence to set contract terms, large profits would be yielded. Y is not aware of the lost profits that X might encounter in the event that he breaches his contract with X.  X thus is not successful in making profitable returns he had prior forecast in his union with Y. X goes ahead and files a lawsuit against Y for failure to make profitable returns resulting from Ys contractual breach. The question that the judge is faced with is if X is in a position to recover lost profits or merely the unrealized profits from Ys inability to perform. To Posner, A judge with such a question before himher will primarily base hisher decision on what is better individual rule. This is the essence of criterion in Posners assertions, an aspect that Rubin discounts its existence.

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