Positivism in Law & Economics

Abstract

The term "positivism" does not describe a universal scientific methodology, but rather a variety of methods that are unique to different disciplines. Positivism in law and in economics are not the same, for the concerns of the two disciplines and their underlying assumptions are different. In addition, the activities of selecting relevant concerns and of identifying appropriate assumptions are, in both economics and law, purely normative. In this Article, the author argues that the unconstrained application of economic positivism to legal analysis produces an impoverished view of the goals of law for a number of reasons. First, identifying the state of affairs that maximizes wealth, or allocative efficiency, is a normative, rather than positive, endeavor. Second, the economic concept of wealth maximization, or allocative efficiency, fails to captures all that the legislative policymaker has in mind when she speaks of the welfare, or "wellbeing," of individuals in the legal community. The author asserts that alternative measures of welfare are equally scientific within their respective disciplines and are better at accounting for the legal policymaker's appropriate concerns. The author examines one example-the notion that welfare (efficiency) and equity must be traded against each other-and concludes that strict economic analysis is both normative and impoverished. The author argues that under alternative, equally "positive," conceptions of welfare, an increase in equity may imply an increase in welfare.