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Eric Posner has written a thoughtful and provocative indictment of the modem economic analysis of contracts. His essay makes two central claims about the failings of scholars "to produce an 'economic theory.'" Specifically, Posner claims that the economic approach "does not explain the current system of contract law" and that it does not "provide a solid basis for criticizing and reforming contract law." In other words, Posner claims that modem scholarship fails as either a descriptive or a normative theory, in that it fails to give an account of what current law is or what efficient law should be.
The descriptive criticism deserves only brief comment. Although he claims that modem scholarship has failed to achieve "what its proponents set out as the measure of success," Posner sadly distorts reality by claiming that the leading scholars have been engaged in an attempt to use economic theory to predict the content of current legal rules. This is a straw man. Of course, decades ago this was the project of Richard Posner. But the thought that efficiency analysis would provide a mechanism to predict the details of current doctrine is a serious misreading of the aims of modem scholarship. Posner himself concedes that Steven Shavell, Charles Goetz, Robert Scott, Alan Schwartz, Richard Epstein, Alan Sykes, Michelle White, Richard Craswell, Avery Katz, Eric Rasmusen, and I have not been engaged in using efficiency analysis to predict the content of current law. Posner's essay would be much stronger if he jettisoned the descriptive criticism.
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