State of the Debate: The Chicago Acid Bath


Richard Epstein, Forbidden Grounds: The Case Against Employment Discrimination Laws (Harvard University Press, 1992).

Richard Epstein, Mortal Peril: Our Inalienable Right to Health Care? (Addison Wesley Publishing, 1997).

Richard Epstein, Simple Rules for a Complex World (Harvard University Press, 1995).

Richard Epstein, Takings: Private Property and the Power of Eminent Domain (Harvard University Press, 1985).

Richard A. Posner, Law and Literature: A Misunderstood Relation (Harvard University Press, 1988).

Richard A. Posner, Overcoming Law (Harvard University Press, 1995).

Richard A. Posner, Sex and Reason (Harvard University Press, 1992).

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The past two decades have brought ever-louder assertions that government should take a back seat to free markets. A resurgent libertarianism increasingly shapes policy, jurisprudence, and public and private debate. Congressional Republicans have tried to ban environmental and safety regulations that cost more than the monetary value of their benefits, an effort requiring the gloomy exercise of pricing human life. A widespread effort to designate government regulation as "takings" of private property gained ground when the Supreme Court ordered South Carolina to compensate a landowner for the expected income he lost when a new law stopped him from building houses on fragile beachfront acreage. And commentators and politicians have stepped up attacks on affirmative action, welfare, and other government programs that come between individuals and the market.

Both popular and intellectual forces have been at work in this onslaught. Beginning in the 1970s, tax revolts, the movement toward deregulation and privatization, and the apparent failure of Keynesianism all contributed to the resurgence of the free market idea. New schools of thought arose to provide analytical power to the movement. Among the less appreciated of these influences is an interdisciplinary endeavor called "law and economics" that, at the extreme, suggests that law exists only to help the market on its way. A pair of prolific Chicagoans, Richard Epstein and Richard Posner, have become the chief promoters of this marriage of libertarianism and law.

Posner is a Reagan-appointed federal judge, lectures at the University of Chicago's law school, and has written more than 25 books on topics ranging from jurisprudence, through the intersection of law and literature, to sex, by way of ancient history and intellectual biography. Epstein has taught law at Chicago for a quarter of a century and complements Posner's enthusiastic dilettantism with professional obsession. His six books have been devoted to elaborating a libertarian interpretation of common law, the body of inherited, judge-made legal custom that sets the backdrop of contracts, torts, and property rights. Only in the past year has he broadened his scope in a volume on health care reform, organ sales, and assisted suicide. Both men are erudite, intelligent (Posner was first in his class at Harvard Law School), and readable, although Posner's prose is much more lively than Epstein's. Both fall into the pernicious class of interestingly—and influentially—wrong thinkers.


The law-and-economics movement that the two men have helped galvanize is part of an ambitious expansion of economics. For generations, economists defined themselves by their topic: They were the people who studied markets. Refusing to be fenced in, economists have more recently taken to styling their field "the science of rational choice." For economists, "rational" simply describes someone who pursues her aims in consistent and reasonably effective fashion, so economics ends up as the study of how people go after what they want. Because economists assume—not unreasonably—that people are always doing this, the revamped economics can analyze any human activity. The fruits of this expansion include public choice theory, a branch of political science that treats deliberation, legislation, and regulation as nothing but the result of groups' pursuit of their self-interest through government; reconstructions of history as a function of changing economic incentives; and analyses of courting and romance under the rubric of "the marriage market."

This impressive-sounding enterprise—shedding the light of reason on dark and muddy fields—is at base an exercise in tautology. Economists presume that everything people do reveals what they want, that is, where their interest lies. Therefore, any action whatsoever gets counted as pursuing whatever preference it seems to aim at; irrational action, like raw toast, is nonexistent by definition. The world as viewed by economics is Garrison Keillor's fictional Lake Wobegon, where all the children, besides being above average, are perfectly rational.

This tautology comes into its own in moving from individual choices to whole economies. On this level, every bargain struck in a free market must advance the interests of both participants; if not, the losing party wouldn't make the deal. A perfectly free market makes available every possible deal and so advances everyone's interest in the greatest measure possible. The economists refer to this state as "efficient." Any interference in markets blocks or redirects some choices that people would have made in an unregulated economy, and so reduces efficiency and overall well-being. Anyone who buys into the initial definitions already has one shoulder on the mat when he subsequently tries to make a case for government regulation; it's hard to argue with a straight face for instituting inefficiency and cutting back on well-being.

For its part in all this, law and economics has two branches, one descriptive, the other prescriptive. The first applies principles of rational choice to litigation in proposing that common law supports efficient markets. The reason is that rational people have incentives to challenge rules that limit their buying and selling, redistribute wealth away from them, or otherwise inhibit their part in overall efficiency. So, the economists reason, laws that limit free exchange attract legal challenges, while principles that facilitate exchange go unchallenged and come to define precedent. This hypothesis has led to a generation of empirical work, much of it spurious—for the equation can always be modified to rescue the premise. The Journal of Law and Economics, founded in 1958, has grown from another obscure academic journal to the flagship of a movement. Today, most major law schools have centers or programs devoted to law and economics, typically funded lavishly by conservative foundations. The dean of the Yale Law School, Anthony Kronman, has called the movement the most powerful influence in the last 20 years of legal scholarship. The empirical results of all this effort are mixed, suggesting that contract and tort law do sometimes encourage economic efficiency.

The prescriptive branch, proposing that law should be crafted to uphold markets, is where Epstein and Posner have made their mark. This branch sprouted partly in ironic response to the failures of its descriptive counterpart. When judges and juries persisted in awarding "irrationally" large sums to tort plaintiffs, upholding economic regulation, and so on, the more dogmatic figures in law and economics set aside their "whatever is, is rational" principle and attempted to dictate proper rationality by reeducating Congress and the courts. This reeducation has revolved around a simple proposal. Because money follows and facilitates free exchanges, wealth is a fair proxy for satisfied preferences, and so also for well-being. So, to maximize well-being, society should aim to produce as much wealth as possible. The free market, just as it maximizes free exchanges, is the most efficient way of generating wealth. Therefore, law should advance the free market, laying down a libertarian system of strong individual rights and minimal state powers. In other words, law should bring about efficiency. (Market failure, a well-accepted concession by mainstream neoclassical economic theory, is nowhere to be seen.)

This view has several sources in legal scholarship and practice. Before the judicial reform of the New Deal era, the Supreme Court routinely read the Fourteenth Amendment's guarantee of due process as making private contracts sacrosanct. This stance was exemplified in Lochner v. New York, in which the Court struck down a law limiting the capping of workers' weekly hours. Epstein, who likes to describe himself as "declaring the New Deal unconstitutional," praises Lochner as a paragon of good judicial policy. Somewhat later, the great conservative judge Learned Hand proposed that liability in tort cases should be decided by asking whether the cost of preventing the harm at issue, multiplied by the likelihood of that harm's having taken place, was greater than the cost of the harm to the victim. Although less sweeping than Lochner-era jurisprudence, this principle strikes Epstein and Posner as a giant first step in applying economic analysis to law.

If there is a founding idea of modern law and economics, though, it is the Coase Theorem, so named for Ronald Coase, who advanced it more than a decade before Posner and Epstein became prominent. Coase proposed that the old idea that regulation should simply bar certain people from harming certain others was naive and—surprise—inefficient. In a world with no transaction costs and perfect information, individuals would rationally bargain their way to the optimal outcome. But as Coase himself recognized in his later writings, there is no such world.

Coase's disciples proposed a portentous moral shift. According to the traditional view, law bars people from harming others, a complex task caught up with old and powerful ideas of personal responsibility and public obligation. On the new view, law simply arranges harms to make them as close as possible to the distribution that the market itself would set. Law trades its old role, translating morality into institutions, for the new one of shaping institutions to the tautological authority of efficiency. This is the idea that Posner and Epstein have elaborated with tireless imagination. Their principle of wealth-maximization (Epstein insists on the vaguer "well-being," but his conclusions are not interestingly different from Posner's) elevates the economists' picture of efficiency into the goal of law.

Both thinkers want to keep law away from debates over the distribution of wealth. As Posner puts it, the wealth-maximization principle "solves [these questions] automatically" by leaving them to the market. This abstention reflects not only the notion that redistribution interferes with efficiency, but a deeper idea that people are deserving only insofar as they provide goods and services that others will buy, and so increase the sum of satisfied preferences. Epstein banks on this idea when, for instance, he dismisses an imagined egalitarian health care system, sniffing, "the most productive members of society would have to queue up with the least productive." The tautological view that every free action is rational, having sanctioned the market as the key to well-being, concludes by declaring that people are worth exactly as much as they can earn. On the individual level as for the whole economy, an uninteresting description has become an uncompromising prescription.

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Epstein's elaborate treatments of common-law questions are more concerned with basic legal forms than Posner's far-ranging musings, and so provide the clearest picture of the law-and- economics position. In his first four books, Epstein takes up the structure of product liability law, takings requirements, employment law, and the "unconstitutional conditions" principle that bars the state from certain kinds of social and economic fav oritism. In 1995 he published Simple Rules for a Complex World, which rehearses and updates his major themes and provides a succinct introduction to his views. Overall, his work exemplifies how law and economics draws out radical prescription from a rather impoverished description.

Epstein's books consistently begin by detailing the "simple rules" that should make the world go 'round. Their central thrust is to facilitate free markets while restraining the state's capacity to redistribute wealth or impose costs on individuals. This drive to restriction emerges because Epstein sees most government spending as on the order of sugar beet subsidies—a transfer of wealth from one group of citizens to another, with no overall benefit. The result is not mere reallocation, but overall loss, because the interest groups that influence government shift the cost of something they want—whether subsidies, insurance, or secure scaffolding—onto another group, either employers or taxpayers at large. Because the people who want this spending do not pay for themselves, the discipline of the market is absent, and they will press for spending whose cost is greater than its actual benefit. The result is inefficient spending and reduced social wealth.

Guided by this concern, the rules define property rights, secure the freedom to enter into private contracts, define guidelines for the transfer of property, and ensure compensation when property is damaged or violated. Government enforces the rules by establishing courts and exercising police power. Through eminent domain, the state can also buy property that is required for essential public projects but must pay fair market price. These powers do not permit the state to redistribute private wealth, and put sharp limits on its right to claim wealth for itself. State action beyond basic rule enforcement is permissible only if it increases well-being—and Epstein presumes that this is very rarely true. Epstein's work is a long and tortuous elaboration on these principles.

Applied to the law, the simple rules generate some striking proposals. In Forbidden Grounds, Epstein suggests that banning racial discrimination by employers both violates the autonomy of contractors to weigh whatever considerations they wish and generates a tangle of expensive litigation. Moreover, any antidiscrimination law redistributes some opportunity and wealth to the protected population from other individuals. Instead, he argues, we should permit such discrimination and let those who are willing to hire qualified minorities reap the benefits.

In Takings, a 1985 book, Epstein suggests that every government restriction on the use of private property should count as an appropriation and be compensated at market rates. He makes an exception for restricting pollution that would damage others' property; in this case, the state merely acts on behalf of the many injured persons who would otherwise sue to end the pollution. Otherwise, from zoning laws to wetlands protection, any mandate that restricts private economic activity must include full compensation to those whose activity is restricted. As Epstein puts it, every regulation must pay its own way or else represent an uncompensated redistribution of wealth and liberty from the property owner to whoever benefits from the regulation. This is in sharp contrast to current takings law, which generally requires compensation only when government acquires land outright.

In Simple Rules, Epstein proposes a twofold approach to redistribution that is more elaborate but no more subtle. The background of the proposal appears to be a recognition that, when redistribution cannot be slain in every corner, it can at least be comprehensively discouraged. First, all spending that governments require should be financed by general revenue: no mandates on employers, and no special taxes, for instance, on cigarettes to fund health education. Second, general revenue should be funded through a flat percentage tax on income, sales, and property. This way, every expenditure that flows from a government action will be directly funded, in small part, by every citizen. There will be as little cost shifting as possible, because each person will shoulder a fraction of every cost. The political decision to support an expenditure will reflect this personal financial obligation.

Epstein's proposals amount to a complete recasting of the relationship between government and the market. In effect, he portrays government as an illegitimate market, where groups chase self-interest through legislation and regulation. His answer to this bastardy is to bring government completely under the discipline of the legitimate market. When Epstein's reforms are tallied, the result is that government becomes just another player in the market, one more contractor required to make full payment for any inconvenience that it imposes on others. These inconveniences, recall, include minimum-wage and family leave laws, basic protection from racial discrimination, wetlands protection, and progressive taxation. Some of the most familiar features of our social landscape would disappear or become dishearteningly expensive in Epstein's system.

Of course, that is precisely Epstein's point. He believes that regulation and reform are dishearteningly expensive, and that we keep up our good cheer about them only by obscuring their price through unfunded mandates, special taxes, and soggy liberal bonhomie. His recasting is meant to be a revelation of our real situation, and his proposals the only proper response to that situation. For this to be plausible, Epstein's outlook must be accurate in several respects that he does not bother to establish.

First, government must really be an illegitimate market, a vast bazaar of self-interested bargaining with other people's money. This is true in some measure, of course, such as certain crop subsidies and corporate giveaways; it is likely to be the more so in the degree that Epstein's simple rules govern campaign finance. However, the bare fact that we can distinguish these cases from, say, Medicare and the National Parks system suggests that there are times when government works for the common good.

Even when government serves the public, it may do so less efficiently than the free market could. In keeping with the founding tautology of law and economics, Epstein tenaciously assumes that this is always true. The test of that assumption is also the test of free market dogma. In Epstein's latest book, Mortal Peril, the assumption fails. The book's central argument is that providing unlimited, free care invites people to demand much more treatment than they would if they were paying their way. As a result, we sink massive amounts of money into marginally useful procedures and futile, exorbitantly costly efforts in the final days of terminally ill patients. Although overdrawn, Epstein's point is both sound and important: We have resisted asking hard questions about whether we can afford the care we provide, and, paying the world's highest share of gross domestic product for our medical system, we should admit that an answer to those questions is falling due.

Epstein's clear gaze blurs, though, when he turns to particulars. He presents free, unlimited care as an ideal of utopian statists rather than noting that it is a feature of both public programs and various forms of private insurance. For him, private markets automatically ration care efficiently, providing it only to those who are willing (and able) to pay for it out of their own pockets; in a private system, only care that is likely to do some good will be purchased. Comparing presumedly efficient private care with an imagined public system, Epstein asserts casually that government "chews up huge portions of its revenues in administrative expenses and loses another significant proportion to fraud and abuse at every level of its operation."

Approaching the problem through caricature might be halfway pardonable if health care were a new issue, and no concrete information existed to guide inquiry. Of course, far from being a dreamer's scheme, state-administered, universal care exists in every other industrialized nation except South Africa. None of those nations spends anything approaching the amount on health services that we do. Although some, like Great Britain, have produced notable disappointments, polls of most countries' citizens show considerably greater satisfaction with their systems than we enjoy from ours. Life-expectancy figures back up those citizens' judgments. As for administrative costs, much-maligned Canada devotes a far smaller proportion of its health care spending to bureaucratic overhead than does the United States. Epstein acknowledges none of this, avoiding the inconvenience of fact for the pleasure of unfounded intuition.

Both contempt for government and reverence for markets, then, make dubious starting points. Either is enough to stir doubt in the soundness of the law-and-economics edifice. There is a deeper assumption, though, that Posner and Epstein share. Their argument gains considerable plausibility from a single proposal: If we could enjoy more well-being than we have now, maintaining laws that thwart that possibility is perverse. To accept this idea, we must first accept that the very idea of maximizing overall well-being makes sense. This must mean that, for practical purposes, we can measure everything that we value on a single scale. We must be able to attach price tags, all in the same currency, to vacation homes, health care, family pleasures, the satisfaction of doing good, the good of achieving a just society, and the worth of a human life.

This is not an insane idea. We choose every day between working overtime or spending an evening with family, between buying new clothes and contributing to a charity. We balance these satisfactions in ways that seem to provide a good fit overall. Why not put all our satisfactions on a single scale, however approximate, and try to enjoy as many as possible?


The answer is that, in fact, we don't value all of our commitments in anything like the same way, and suggesting that we do is dangerously distortive. To understand this, it is particularly instructive to survey Posner's excursions into noneconomic areas. Posner's intellect is, if not exactly promiscuous, at least uncommonly gregarious, and observing him as he mingles is a fine way to grasp the strengths and limits of economic analysis.

First, one must give Posner his due. He is not only learned and prolific but, what is another thing entirely, enjoys an exceptionally keen mind. Where Epstein can come across as cramped and obsessive, Posner's roving, penetrating curiosity makes him consistently engaging and usefully challenging. In Law and Literature, he shows himself a better reader of fiction than many professional critics, demolishing fashionable scholar Jacob Weisberg's overreading of Billy Budd and evincing keen insight into Kafka. Overcoming Law shows off his masterful sparring technique, as he catches radical legal scholars at their silliest and points out just how little their philosophical and literary cleverness typically has to do with law. Few of us would not benefit from having to argue our ideas with him.

However, Posner's intelligence is at the service of a desiccated outlook. He carries some very particular ideas of what we can know and why we should wish to know it. He believes that the only kind of knowledge we can have is "scientific," that is, made up of general rules that enable us to predict and control specific events, and defines "control over the social and natural environment" as "the major project" of our inquiries. So, although he admires the aesthetic accomplishments of art and literature, he believes that morality, for instance, is a tangled mass of taboos that offers us no possibility of increased insight. Even our century's rejection of Nazism, he suggests, came about not because of that doctrine's moral horror, but because it generated "predictions" about the military inferiority of Slavs and of mixed nations like the United States "that turned out to be false. . . . [T]heir falsification by the course and outcome of the war, rather than the revelation of the Nazis' cruelty . . . dished Nazism as a popular ideology." In this skeptical spirit, Posner repeatedly describes his task as "providing an acid bath" that washes away ethical taboos and shows human behavior in its elemental, economic character.

For Posner is convinced that economics, as the study of rational choice, is a science able to illuminate all human behavior. In discounting taboo and elevating rational self-interest, he comes up with some remarkable descriptions of our activities. This is nowhere so true as in Sex and Reason, where he describes all areas of sexuality as essentially appetitive, and so measurable in the same terms as other appetites. For instance, prostitution is a "substitute good" for marriage. Although we imagine that one is "mercenary" while the other involves reciprocal love, "The difference is not fundamental. In . . . marriage, the participants can compensate each other for services performed by performing reciprocal services, so they need not bother with pricing each service." Prostitution is the same deal, but a spot transaction that requires the shorthand of cash. In the same vein, he proposes that "the average forcible rapist is in effect a sex thief," operating without a contract and so violating the efficient exchange of satisfactions. The desire for rape is, as Posner writes, "for the most part quite normal," but law should discourage it because its one-sidedness fosters an inefficient rearrangement of goods and services.

Posner's more exceptionable passages come in the course of a general account of historical and contemporary patterns of marriage, promiscuity, homosexuality, and other practices as functions of the changing relation between the "costs" and "benefits" of each. From this account, Posner hopes to derive an acid strong enough to bring us around to a "morally indifferent view of sex" that would place its satisfactions alongside those of, say, eating. He is surely right that, say, improved contraception has made premarital sex less risky, and thus has increased rates of early intercourse. Yet Posner's Procrustean stretching and nipping of our sexual practice to a single calculation misses something: We do not understand our own sexual decisions as functions of cost-benefit analysis. Instead, everyone understands that the difference between marriage and prostitution, between rape and consensual intercourse, marks a difference in the sort of person he will be, the way he will value others, and the kind of relations he will cultivate. Moreover, few of us have difficulty concluding which is the better choice. We understand elementally that the only sex that approaches moral indifference is the kind that Philip Roth describes in Portnoy's Complaint: masturbating with a slab of liver from the neighborhood butcher's shop.


These somewhat lurid examples highlight what Posner's intellectual temperament overlooks. With his emphasis on prediction and control, his dismissal of morality, and his insistence that people are always out to maximize their satisfactions, Posner pays a great deal of attention to how we get what we want, but none at all to our deliberation over what we should want and pursue. The broader structure of law and economics shows the same imbalance. By putting all our satisfactions on one scale and assuming that we aim for the greatest sum of satisfactions, Posner and Epstein set aside the possibility that our deliberation and action have other aims than the maximization of utility in the crude Benthamite sense and the experience that markets sometimes fail in such realms as health and education and even in the most utilitarian pursuits, such as finance.

In fact, our real social and economic decisions, personal and collective, are as unrecognizable in Posner's and Epstein's pictures as are our sexual choices. Contrary to the Chicagoans' central assumption, we value different things in ways so distinct that running them together is a severe distortion. For instance, we find a different kind of value in a car than in a marriage. If asked how much we value the car, we might offer the price we would accept for it as a fair approximation. Assessing the marriage in dollar amounts, though, would strike us as indecent, or, at best, greatly confused. Anyone who tried to put a price tag on a marriage would show us that he didn't understand the point of marriage. We might feel the same about someone who wanted to trade off basic civil-rights laws for fractions of a percentage of GDP growth. This is true not just because we put an exceptionally high value on certain relationships and on racial equality, but because we value those things differently from possessions.

For this reason, when we choose among various courses of action, we always consider several kinds of value, each with its own imperatives. We do think narrowly about our own pleasure and more broadly about our own satisfactions. We also weigh the demands of our friendships, our families, and our communities. We think about more general principles of right and wrong, of what we owe other people and what sort of nation we want to inhabit. And we draw all of these together in asking ourselves what sort of individuals we want to be—not just which preferences we have now, but which commitments we wish to honor and cultivate to become the people we think it best to be. These diverse considerations complement, inhibit, and exclude each other in complex ways, and cannot begin to fit onto a single scale of satisfactions or well-being. Either we are always trying to "maximize" many, often inconsistent values or, more plausibly, the metaphor is just wrong, and we are not trying to maximize at all. Rather, perhaps, we are trying to live well, or just to be good. Using collective wealth as a proxy for these efforts does grave violence to them.

The same goes for nations. We do not have, and are unlikely ever to have, a set of aims so unitary that we can go blithely about maximizing them. Pretending that GDP can stand stead for our diverse and conflicting aims is a distortion, not a solution. Some of us are committed to prosperity, to political and economic equality, to environmental preservation, to reweaving the country's moral fabric, to scores of other ends. None of us ignores his own comfort. Still, at our best, many of us place an idea of economic justice much richer than Posner's and Epstein's high among our considerations. The laws that emerge from our divisions could not but honor as many conflicting aims as we hold and defend. Despite the familiar adage that one should not want to watch either sausage or laws being made, we should not imagine that our messy melange could be replaced by a morally indifferent slab of liver.

Each political choice is in part a choice about the sort of nation we will be. We do not need to hold a romantic view of democracy to believe this: Collective choice is not infallible, only necessary. The consequence of ignoring necessity is confusion at best and disaster at worst. This is why government stands outside of, and comes before, the market, and why Epstein's proposal to make government just another contractor is mistaken. In the market, when we can pay for it, we get what we want. In politics we decide what we want and, for better or worse, what we are. By harnessing politics to wealth alone, Epstein and Posner would foreclose our most important questions. This is as important as the fact that their answers would foreclose the prospects of countless people.

It is tempting to charge Posner and Epstein with being the last ideological idolaters, willing to run roughshod over individual lives to realize some abstract greater good. Alleged to be the root of political excesses from the French Revolution to Mao's China, this impulse has recently become a fashionable whipping boy for everyone from skeptical conservatives to postmodern leftists, and has always earned the scorn of thoughtful liberals. Undoubtedly, Epstein's and Posner's aptness to ignore myriad injustices along the road to wealth-maximization has some of this flavor. However, ideological idolatry was always the vocational risk of dreamers who aimed to bring about salvation on earth; the extent of their brutality matched the sublimity of their dreams. By contrast, what is most striking in Posner and Epstein is the philistine cynicism with which they view their fellows. They would genuinely welcome a politics that permits no distinction between humane workplaces and sweatshops, that shrugs before great gaps between rich and poor, and that puts health care on exactly the same moral level as vacation homes. They do not hesitate to term the desire for rape "quite normal" or seriously propose that marriage and prostitution are analogous enterprises. And by turning these attitudes into political proposals, they invite us all to the same judgments. The political philosopher Leo Strauss once observed of thinkers like John Locke and Adam Smith, who took men more or less as they found them, that they "built low, but on solid ground." Epstein and Posner have ventured considerably lower, and have built upon a swamp. We would do well not to join them there.


None of this is to say that law and economics can make no contributions to public policy and democratic deliberation. In many areas, we know exactly what we want, and have thought too little about whether our present laws help us to attain it. For instance, environmental regulation has begun to benefit from approaches that set limits on pollution, then permit industries to decide who among them will reduce pollution by the necessary amount and by what means. This approach spurs innovation and encourages those who can least expensively control pollution to do so. This might be thought of as a responsible application of the Coase Theorem. Everyone benefits.

By the same token, understanding the efficacy of regulations governing health and safety can contribute a great deal to policy design. Knowing that one area of regulation costs $4 million per life saved while another saves a life for every $50,000 spent is genuinely useful. We do not need to pretend that the value of a life can be captured in either figure in order to see that we should concentrate limited funds on the second area. This points to a key distinction: We can employ economic analysis without pretending that it describes all values accurately.

Prosperity itself, what Posner terms wealth-maximization, is for obvious reasons a major goal of most democratic polities. A nation need not adopt Epstein's counsel of subservience to the market to see that analyzing the economic effects of laws can advance this goal. However, when we make this judgment we should bear in mind that our evaluation runs in reverse of Epstein's and Posner's. We pursue wealth-maximization, sometimes, because it aids our goal of providing a decent living for all and increasing the choices we enjoy. We do not treat those aims as functions of wealth-maximization.

We can learn from law and economics, then, but we should select our lessons carefully. Economic analysis is useful when one remembers what its practitioners sometimes forget: Our ends are many, and choosing among them is an incessant task. We do not seek only to predict and control. We also contemplate, deliberate, and, we genuinely believe, sometimes grow wiser about our ends. Democratic governance is one way that we carry out this reflection, and the market only one means to realizing our aims. We have good reasons for not lingering long in Posner's acid bath.

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