Bentham Influence on the Law Posner

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BENTHAM S

INFLUENCE

ON THE

L W AND

ECONOMICS

MOVEMENT

Richard A. Posner*

I have been asked to discuss Bentham s influence on the important

modern movement in legal scholarship known as law and

economics , or, more descriptively, as the economic analysis

of

law. The topic is both narrow and difficult.

It

is narrow because it

concerns only a tiny slice

of

Bentham s vast influence on legal

thinking and practice.

1

It is difficult because the determination of

influence is difficult, especially when the span of time that must be

considered

is

great. The law and economics movement began

sometime between 1958 and 1973. The first date is the first year

that the

Journal

of

aw and Economics

was published, and the

second date is the date of publication of the first edition of my

book Economic Analysis of Law. Before the launching of the

Journal

of

Law and Economics,

the law and economics movement

could not have been said to exist; after my book was published, its

existence could not be denied, though it could be deplored. f one

This is the slightly revised text of my Presidential Address to the Bentham

Club of University College London, on 2 Mar. 1998. I thank Gary Becker and Eric

Posner for helpful discussions of

the topic, and Ronald Coase, Neil Duxbury, and

Peter Newman for helpful comments on a previous draft.

1

n

which see, e.g., George W. Keeton and Georg Schwarzenberger (eds.),

Jeremy Bentham

and

the Law: A Symposium (London, 1948); Gray

L.

Dorsey,

The Influence of Benthamism on Law Reform in England (1968) 13

St

Louis

University aw Journal

11; Peter J King,

Utilitarian Jurisprudence in America:

The Influence of Bentham

and

Austin on American Legal Thought in the

Nineteenth Century (New York, 1986) chs. 2-5. I have found only one previous

work on Bentham s relation to the law and economics movement: Alan Strowel,

Utilitarisme et approche economique dans la theorie du droit: autour de Bentham



426 Richard A Posner

year must be picked for the beginning of the movement, it would

be 1968,

and

for a reason that turns

out to

be connected, though

only loosely, with Bentham. And in 1968 Bentham

had

been dead

for 136 years.

I must distinguish between two meanings of influence . One,

which I will call inspiration , refers to the situation in which (if

we are speaking, as I shall be, of the influence of a person s ideas)

an idea held by one person, call him A , is picked up from A by B

and used by B. The important thing is that B in fact got the idea

from A rather

than

discovering it independently or borrowing it

from someone whose chain of title does not go back to A. The

second sense

of

influence , which I will call cause (though neces-

sary condition would be more precise), refers

to

the situation in

which B would not have used the idea if A had never held it. To

determine influence in this sense a counterfactual inquiry is neces-

sary; one must ask how would the world, and specifically how

would Bentham, have been different had A never existed or been

in a different line of work? B might have been inspired by A in the

sense of having got an idea from him, and yet it might be that if A

had

never lived B would have got the same idea from someone

else, who would have discovered or invented it had A never

existed discovered it later, but before B s time. The longer the

interval between A and B the likelier it is that someone else would

have thought of the same idea, in which event A could not be said

to have caused B to hold the idea B would have held it even if A

had never lived.

Inspiration is much more easily determined than causation.

t

does not involve speculation about counterfactuals, and can

usually be determined from records or statements by B or his

acquaintances or by the sort of internal evidence (striking similar-

ity inexplicable except on the hypothesis of copying) used in many

copyright cases to determine copying. Notice

that

causation

entails

influence if

the later

work

did

not

derive directly or indi-

rectly from the earlier, the earlier could not have caused the

later although influence does not entail causation, because I am

treating inspiration as a mode

of

influence, though often it will

have no causal efficacy.

In the case of Bentham, it would be extremely difficult

to

estab-



Bentham and aw and Economics

427

death. But I think he can be shown

to

be one of the inspirers. That

any rate

is

the dual thesis that I shall try

to

defend in this paper.

I may

not

assume, however,

that

all readers are familiar with

the law

and

economics movement. And so before turning directly

to the issue of Bentham s influence, let me describe it briefly.2

That

there is a relation between economics

and

law was, of

course, known (quite apart from Bentham) long before the 1960s.

But the relation was thought limited to the handful of legal fields,

mainly antitrust

and

public utility (or common carrier) regulation,

that dealt explicitly with competition

and

monopoly, which as

early as the 1930s were receiving the sustained

and

sophisticated

attention

of

leading English

and

American economists.

3

In retro

spect, an economic literature dealing with other fields of law,

notably Robert Hale s work on contract law, which also dates

from the 1930s, can be discerned. But even after the

Journal of

Law and Economics commenced publication, the law and

economics movement, if discernible

at

all, would have been asso

ciated primarily with problems of competition

and

monopoly,

with occasional forays into taxation (Henry Simons) and corpora

tions (Henry Manne), even patents (Arnold Plant).

t

was

not

until

1960, when Ronald Coase s article The Problem of Social Cost

was published,4 and

at

about the same time Guido Calabresi s

first article on torts, that an economic theory of the common law

could be glimpsed. When several years later Gary Becker

published his article Crime and Punishment: An Economic

Approach ,5 it began

to

seem that perhaps

no

field

of

law could

not be placed under the lens of economics with illuminating

results. And within a few more years papers on the economics

of

contract law, civil

and

criminal procedure, property, consumer

protection, and other areas new

to

economists

had

appeared

and

the rough shape

of

the mature field could be glimpsed. Later,

books

and

articles would extend the economic analysis of law into

such fields as employment, admiralty, intellectual property, family

2

See

also The Future of Law and Economics: Looking Forward (1997) 64

University

of

Chicago aw Review

1129 (round-table discussion);

and

my text

book-treatise,

Economic Analysis

of

Law

(5th edn., Cambridge, Mass., 1998).

3 Competition

and

monopoly had received the attention

of

economists since



4 8

Richard A Posner

law, legislation, environmental law, administrative law, conflict of

laws,

and

judicial

behaviour and

this

is

only a partial list. The

field has developed

to

the point where the dean of the Yale Law

School, a critic

of

the field, said recently: [t]he law and economics

movement was and continues to be

an

enormous enlivening force

in American legal thought and, I would say, today continues and

remains the single most influential jurisprudential school in this

country,.6

Economic analysis of law as it

now

exists, not only in the

United States

but

also in Europe, which has a flourishing law

and

economics association, has both positive (that is, descriptive) and

normative aspects.

t

tries to explain and predict the behaviour

of

participants in and persons regulated by the law.

t

also tries

to

improve law by pointing

out

respects in which existing or

proposed laws have unintended or undesirable consequences,

whether on economic efficiency, or

on

the distribution of income

and wealth, or

on

other values.

t

is

not merely an ivory-towered enterprise, at least in the

United States. There the law

and

economics movement is under

stood

to

have influenced legal reform in a number

of

important

areas, including antitrust, the regulation of public utilities and

common carriers, environmental regulation, the calculation of

damages in personal injury suits, the regulation of the securities

markets, the federal sentencing guidelines, the law governing

investment by pension funds and other trustees,

and

even the divi

sion of property

and

calculation of alimony in divorce cases. And

it has also been a significant factor in the deregulation movement

and in free-market ideology generally. Most major and many

minor law schools in the United States have one or two full-time

economists

on

their faculty; a number of law professors have

Ph.Ds in economics; there are six scholarly journals devoted

to

economic analysis of law, with a seventh on the way; the use of

economists as expert witnesses has become conventional in a

range of important fields; judicial opinions refer to economic

concepts

and

cite economic books and articles; and a number

of

federal judges, including a Justice of the Supreme

Court

(Stephen

Breyer), are alumni

of

the law

and

economics movement.

As

my



entham and

aw

and Economics

429

quotation from Dean Kronman suggests, economic analysis of law

is

generally considered the most significant development in legal

thought in the United States since legal realism petered

out

a half

century ago.

Most economic analysis consists of tracing

out

the conse-

quences of assuming

that

people are more or less rational in their

social activities. In the case

of

the activities

that

interest the law,

these people may be criminals or prosecutors or parties to acci-

dents

or

taxpayers

or

tax collectors

or

striking

workers-or

law

students. Students treat grades as prices, so

that

unless the univer-

sity administration intervenes, unpopular professors, in order to

keep up their enrolments, will sometimes compensate students for

the low perceived value

of

the course by giving them higher

grades, that is, by raising the price

that

the professor pays for the

student.

I said that the tracing

out

of consequences

is

subtle as well as

simple, and here is an example. A spendthrift clause is a very

common, indeed standard (in the United States

at

any rate), provi-

sion in a trust whereby the trustee is forbidden to

payout

any of

the money

or

other property in the trust to the creditors

of

the

trust s beneficiaries. The law will enforce such a restriction, yet it

has seemed to many students of the law a fraud

on

creditors; for

the trust beneficiary, assuming

that

his whole wealth

is

in the

spendthrift trust, can borrow all he wants, spend what he

borrows, and not be forced to repay the lenders. But if one thinks

about this for a moment, one will be driven to the opposite

conclusion-that

provided the provision preventing creditors

from reaching into the trust is

not

concealed, a spendthrift trust

limits borrowing by the trust beneficiary, because he cannot offer

security to the lender. And the next step in the analysis

is

to see

how increasing the rights of debtors in bankruptcy, far from caus-

ing an avalanche of reckless borrowing, could reduce the amount

of

borrowing, and so the incidence

of

bankruptcy, by causing

lenders to make smaller loans to risky borrowers. o lenders may

oppose easy bankruptcy,

not

because they fear there will be more

defaults, but because they fear a reduction in the demand for

loans.

To

see this, imagine

how

many,

or

rather how few, loans

there would

be

i

borrowers had no obligation to repay. Notice




right, as under ancient

Roman

law,

to

carve up a defaulting

borrower into as many pieces as there were creditors, most people

would be afraid to borrow. This discussion will help you

to

under

stand why in Chicago loan sharks break the legs

of

defaulting

borrowers but do not kill them.

Much economic analysis of law is, despite the reputation

of

economics for being jargonized and mathematized, quite simple,

though the simplicity is deceptive; the simple can be subtle. Most

consists of simply tracing out the consequences of assuming that

people are more

or

less rational in all the decisions they make,

whether as criminals or prosecutors or parties to accidents or

taxpayers

or tax

collectors

or

striking workers.

t

is

true

that

many

of these decisions are made under conditions of uncertainty. But

economists have devoted a good deal of attention

to

decision under

uncertainty. An important example of a law-related decision under

uncertainty is deciding how much care to take

to

avoid an accident.

Assume that the accident will occur with probability P, and that if it

does occur it will impose a cost that I will call L for loss; and

assume further that eliminating the possibility of such an accident

would impose

on

the potential injurer a cost

that

I will call B (for

burden). Then it

is

easily seen that the cost of avoiding the accident

will be less

than

the expected accident cost (or benefit

of

avoiding

the accident) if B is smaller than L discounted (multiplied) by P

or

B<PL and if this condition is satisfied then the potential injurer can

be said to be negligent if he fails

to

take the precaution. This is the

negligence formula of Judge Learned Hand, announced in a judicial

opinion in 1945 but not recognized as an economic formula for

determining negligence until many years later.

t is

a simple formula,

but its elaboration and application to specific doctrines in the law of

torts have generated an immense and illuminating literature.

With this severely truncated sketch

of

the law and economics

movement as background, I complete my preliminaries and move

at once

to

the issue of Bentham s influence

on

the movement,

beginning first with the inspirational aspect

of

influence. Here the

clearest example, it might seem, would be presented by Gary

Becker s 1968 crime paper,? which has turned out to be a fount

of



Bentham and Law and Economics

431

economic writing on crime and its control. Becker s paper

contains several citations to the discussion of the economics of

crime and punishment in Bentham s

Introduction to the Principles

o

Morals and Legislation

8

Bentham had made a number

of

important economic points in the

Introduction:

a person commits

a crime only if the pleasure he anticipates from the crime exceeds

the anticipated pain, or in other words only if the expected benefit

exceeds the expected cost; to deter crime, therefore, the punish

ment must impose sufficient pain that, when added to any other

pain anticipated by the criminal, it will exceed the pleasure

th t he

anticipates from the crime; punishment greater th n this should

not

be imposed, because the result would be to create pain (to the

undeterrable criminal) not offset by pleasure (benefits) to the

potential victims of crime;9 the schedule of punishments must be

calibrated in such a way th t if the criminal has a choice

of

crimes,

he commits the least serious; fines are a better method of punish

ment th n imprisonment, because they confer a benefit as well as

impose a detriment; the less likely the criminal

is

to

e

caught, the

heavier the punishment must be, to maintain n expected cost

great enough to deter.

(If

C

is

the social cost

of

a crime, P the

probability the criminal will

e

caught, and S the sentence if he

is

caught, then, as a first approximation, C should equal P times S

(C=PS). Hence

i

C is unchanged and P falls, S must

e

increased

to maintain the desired equality.)

These points constitute the essential elements

of the economic

theory of crime and punishment as revived by Becker. Becker and

his successors added a great deal, but the core

is

clearly and

comprehensively stated in Bentham s

Introduction

Even though

Bentham was a famous economist and the economic character of

his analysis of crime and punishment

is

unmistakable despite the

slightly archaic vocabulary, and even though Bentham s theory

has influenced the design

of

the criminal justice system in England

8 (1780, expanded edn. 1789). Becker also cites Sutherland s treatise on crim

inology, which contains a few references to Bentham, but credits Beccaria with

having made the principal contribution

of

this doctrine [utilitarianism] to penol

ogy : Edwin H. Sutherland, Principles o Criminology (5th ed., revised by Donald

R. Cressey, Chicago, Ill., 1955), 52.

9 Bentham recognized the vengeful pleasure

th t

punishment can produce,



432 Richard A

osner

and the United States, no economist before Becker, so far as I have

been able to determine,

had

expounded an economic theory of

crime and crime control. But I have it on good

authority namely

from Becker

himself that

when he began thinking

about

the

economics of crime, he was unaware of Bentham s discussion of it.

He became aware of that discussion while he was working on his

article,

but

he no longer remembers whether any of the points in

the article were suggested to him by it, although a few of the cita-

tions to Bentham in it suggest

that

they may have been.

10

o

this

turns out to be an uncertain case of Bentham s having influenced

by inspiration the economic analysis of law.

Consequently

t

is

an

even more doubtful case for arguing

that

Bentham was a cause of that analysis. For even if Becker had been

inspired by Bentham, it is possible that if Bentham

had

written

nothing

about

crime, or, for that matter, if Bentham

had

never

been born, some other economist before Becker would have

invented the economic theory of crime in essentially the same form

as

Bentham.

He

was not, after all, the inventor of utilitarianism;

and in retrospect, at least, crime seems a natural field for the

application of utilitarian

ideas in

fact, Bentham s predecessor,

Beccaria, an earlier utilitarian,

had

discussed crime in utilitarian

terms, although much less systematically than Bentham.

Yet if an economic theory of crime was somehow in the air in

the latter part of the eighteenth century, it

is

remarkable that

almost two centuries passed before another economist picked up

on it.

o

there

is

just a chance that if Bentham had never lived, the

economic theory of crime would have had to wait a few more

years to become a part

of

modern law and economics. But it is a

small chance, since Becker s economic theory of crime appears to

be largely an independent discovery rather

than

a case of copying.

Bentham did not, so far as I

am

able to discover (though I will

not

pretend to be

an

expert on Bentham s voluminous and still

not

easily accessible corpus of writings), write on other areas

of

law

from

an

economic standpoint. The qualification

is

vital, since he

wrote extensively on other areas of law besides crime, notably

evidence, not to mention his unpublished advocacy of the repeal

of the sodomy laws. But it is only with respect

to

the criminal law

that

he formulated an economic theory. I suspect the reason was



Bentham and

aw and

Economics

433

that he was extremely interested in issues of social and political

governance, and the criminal law is an important

part

of

that

governance. I do

not

think he realized

that

tort, contract, and

property law are also important parts

of

the social fabric. He may

have been blinded to this by his antipathy to the common law,

which he seems to have thought served no function other than to

enrich lawyers. Curiously, though, when he wrote, the criminal

law was largely a body of common law as well.

Just because he confined his economic approach (so far as law

was concerned) to criminal law, it does

not

follow

that

his influ

ence on the economic analysis of law is necessarily confined to the

area

of

crime (where

that

influence may, in fact, as I have just

suggested, have been slight). I think, and shall now try to show,

that his utilitarian theory may have had an important influence on

the law and economics movement quite apart from any specific

applications

of

utilitarianism by him to law, and

that

even his

non-economic writing on law may have influenced the movement.

An initial distinction should

be

made between utilitarianism as a

description of human behaviour and utilitarianism as an ethical

theory. Bentham

is

better known for the latter than for the former,

but this may

be

cause for regret. Bentham, as I said earlier, was not

the first utilitarian. Utilitarian ideas go back to Aristotle, and utili

tarianism as a fundamental ethical principle had been clearly enun

ciated in the eighteenth century, before Bentham wrote, by

Hutcheson, Beccaria, Helvetius, Priestley, Godwin, and others-

and, indeed, by Beccaria in virtually the same words as Bentham-

the greatest happiness of the greatest number 11 What sets

Bentham apart, what makes him the real father

of

utilitarianism,

is

the tenacity, even vociferousness, of his insistence on the universal-

ity of utility calculations in human decisions.

As

he

put

it on the

very first page of the Introduction to the Principles of Morals and

Legislation [nlature has placed mankind under the governance of

two sovereign masters, pain and pleasure They govern

us

in all

we do, in all we say, in all we think. Another name for pain, as I

have said, is cost; and for pleasure, benefit; so Bentham is claiming

11 See H. L A

Hart,

Bentham

and

Beccaria , in H. L A Hart, Essays on

Bentham: Studies in Jurisprudence and Political Theory (Oxford, 1982), 40.




that all people, all the time, in all their activities, base their action

(and words, and thoughts)

on

co.st-benefit analysis. Bentham spent

much of his life reiterating, elaborating, and instantiating this claim.

This claim could be thought the foundation

of

the economics of

non-market behaviour, which is to say the investigation by econo

mists of behaviour that occurs other than in explicit markets. A

good deal of the economic analysis of law

is

an application of those

economics, because law

is

primarily a non-market institution and

one that regulates non-market as well as market

behaviour the

behaviour of criminals, prosecutors, accident victims, divorcing

couples, testators, polluters, religious believers, and so forth, as well

as

businessmen, workers, and consumers engaged in their conven

tional activities (an important qualification, since businessmen, for

example, can be polluters or criminals as well as buyers and sellers).

Without economics of non-market behaviour, the scope of

economic analysis of law would be where it was in the 1950s,

limited to the analysis

of

the legal regulation

of

explicit markets.

Bentham may be taken to have invented non-market economics.

His invention, however, lay fallow for almost as long as his theory

of crime and punishment. The explanation belongs

to

the sociology

of science. That is, it has to do with why scientists are interested in

one set of problems rather than another, and specifically with why

nineteenth-century economists, and economists in the first half of the

twentieth-century as well, took virtually no professional interest in

such social phenomena as crime, litigation, the household, discrimi

nation, accidents, and rules of law. An important exception

is

the

interest taken by A.

C

Pigou and Frank Knight in externalities, of

which accidents to strangers

is

a form and one brushed by Pigou.)

Maybe they felt they had their hands full trying to understand the

market economy, or maybe they felt they lacked good tools, and a

metric comparable to money, for studying non-market phenomena;

there are economists who believe this to this day. At all events, until

Gary Becker s Ph.D dissertation in the 1950s, the subject of which

was the economics of racial discrimination, the promise of

Bentham s claim for the universality of the economic model of

human behaviour had been essentially ignored.

12

12

For a striking example, see T. W. Hutchison, Bentham as an Economist,



Bentham and

Law

and Economics

435

Again I have it from Becker

that

he was not consciously follow

ing in Bentham s footsteps. He identified Bentham with the

normative thesis that there is a moral duty to maximize the great

est happiness

of

the greatest number rather than with the positive

thesis that people act so as to maximize their own utility. Utility

maximization had, however, long been a fundamental principle

of

economics, and though its origins in Bentham had largely been

forgotten (probably because it did not become useful to econo

mists until some fifty years after Bentham s death

13

),

he can claim

credit for having planted the idea.

14

But before Becker, economists generally assumed, though

usually implicitly rather

than

explicitly,

that

people maximized

utility only in economic markets. The handful of economists who

claimed in the spirit of Bentham that utility maximization was a

universal feature

of

human

psychology-of whom

the outstanding

example is Wicksteed-did not cite Bentham for this proposi

tion,15 and, more important, did very little with his insight into

the possibility

of

applying economics to non-market behaviour.

16

Becker s manifesto on behalf of non-market economics does

mention Bentham, along with Adam Smith and Karl

Marx,

as

precursors,17 but criticizes Bentham for having been primarily a

reformer and having failed to develop a theory

of actual human

13 George J. Stigler, The Adoption of the Marginal Utility

Theory ,

in

G. J. Stigler, The Economist

s

Preacher and Other Essays (Oxford, 1982), 72,

76.

14

Ibid., 78.

15 See Philip H. Wicksteed, The Common Sense of Political Economy (Lionel

Robbins (ed.), (first published in 1910), London, 1935), i, ch.

1 As

Robbins points

out in his introduction, Wicksteed insist[edl that there can

be

no logical dividing

line between the operations of the market and other forms or rational action (p.

xxii). Yet Robbins does

not

attribute this idea

of

Wicksteed s

to

Bentham;

nor

does

he cite Bentham in the book in which he expounded his own, equally broad

conception of economics: Lord Robbins, n Essay on the Nature and Significance

of

Economic Science

(3rd edn., London, 1984 . Not much significance can be

assigned

to

Wicksteed s failure

to

cite Bentham, however, as he cited hardly

anyone, except Jevons once.

16 Although ch. 1 of The Common Sense of Political Economy contains a

lengthy discussion of household production.

17

See

Gary

S.

Becker,

The Economic Approach to Human Behavior,

ch. 1

(1976), reprinted in The Essence of Becker, n. 7 above,

at

7-8, 15, n. 13. He also



436

Richard A Posner

behavior with many testable implications J8 And here we can see

another reason why Bentham s contributions

to

economics have

frequently been overlooked. He does not have a clear identity as

an economist.

19

His importance as a philosopher and reformer has

tended

to

overshadow his economic work. Of course, Adam Smith

was also a famous philosopher as well as an economist, but Smith

wrote a treatise

on

economics,

and

Bentham did not.

Still, if the idea of utility maximization as a fundamental

feature (whatever its precise scope) of human psychology can be

traced to Bentham, as I believe it can be, then the economics of

non-market behaviour the branch

of

economics that takes this

idea most

seriously can

be said

to

have been influenced by

Bentham. And, to repeat, without the economics of non-market

behaviour, the scope of the economic analysis of law would be

greatly contracted. But again this is influence in the sense of inspi

ration.

t

is unlikely that if Bentham

had

never lived, utility maxi

mization would never have been discovered

or

applied

to

non-market behaviour, for remember that we are talking

about

a

lag of almost two centuries between the Introduction and Becker,

and

that

the concept of utility and the philosophy

of

utilitarianism

both predate Bentham.

Two more routes of influence between Bentham and the law

and economics movement remain to be traced. The first goes

through welfare economics

and

the second through legal realism.

The idea not that maximizing utility is what people in fact

do

but

that it is what people, and governments, should

do that

utility

somehow aggregated across persons (in some versions, across all

sentient beings) should be the guide to moral

and

legal duty is

the foundation of economics viewed as a normative discipline.

Utilitarianism, although it continues

to

have distinguished defend

ers among economists, such as John Harsanyi, has taken

hard

knocks lately,

and

not only from philosophers. Some economic

analysts of law, myself included, believe that utilitarianism has a

number of serious weaknesses, and that a better goal for law

economically conceived is the maximization of wealth defined as

18

At 8. For a similar criticism

of

Bentham for having over-emphasized reform

at the expense of positive analysis, see Richard A. Posner, The Economics

o



Bentham and aw and Economics

437

the sum of consumer and producer surplus in all market and non

market activities. But these are details. The important point

is

that

Bentham can be considered, along with Smith, who was, however,

more ambivalent about the ethical significance of economics, the

founder of normative economics. This

is

true I think even though

so influential an early welfare economist as Pigou did not cite

Bentham and used the term total welfare rather than utility,20

citing Sidgwick,21 whose utilitarianism can, however,

be

traced to

Bentham. And because the law

is

inveterately normative-because

law professors, judges, and practitioners are all looking for

grounds for evaluating actions and proposing reforms-the fact

that

economics have a normative dimension was of great impor

tance in the reception of economics into legal thinking. But once

again while the inspirational influence of Bentham seems undeni

able, the causal influence

is

altogether less clear. Even if Bentham

had

not lived, there

is

a substantial likelihood that a normative

version of economics oriented toward utility maximization would

have emerged in the almost century and a half between his death

and the birth of the law and economics movement.

Last to

be

considered

is

the influence

of

Bentham on law and

economics via legal realism. Legal realism is an instantiation of

one side of an age-old jurisprudential debate. Bentham is

an influ

ential earlier instantiation; but the debate

is

fully discernible as

early as Plato s dialogue Gorgias, where Socrates equates the

rhetoricians whom today we would call lawyers with the lowest

form of sophist and demagogue. Much later, in the reign of James

I in the seventeenth century, the debate would be carried on

between Chief Justice Coke and James, the former extolling the

artificial reason of the law , or what today would be called legal

reasoning, and James wondering why the law should be the

preserve of a guild of obscuranist quibblers. Toward the end of

the eighteenth century the debate resumed, with Blackstone taking

Coke s place and Bentham James s. Although Blackstone was not

the shameless apologist for the professional status quo that

Bentham depicted him as in A Fragment on Government 1776),

he did praise the common law and emphasize the importance of

legal rights. Bentham, in contrast, thought the common law a



438

Richard A Posner

hopeless muddle, good only for keeping lawyers in fees, and he

thought rights talk nonsensical. But he did not just say these

things; he tried to reconstruct the law, proposing for example

that

the common law be replaced by a simple, readily understandable

code that would largely dispense with the need for lawyers.

He

wanted law to be rebuilt on a scientific basis shaped by the

Greatest Happiness principle, and the traditions and usages of

traditional law discarded.

He

was the great debunker of law, and his numerous followers

in England, and fewer but still influential followers in America,22

including the designer of the first great American law code, David

Dudley Field,

who

drafted a code of procedure for

New

York

State, kept the Benthamite flame of legal reform lit. Without

Benthamite legal scepticism, it

is hard

to imagine Oliver Wendell

Holmes writing what turned

out

to be the manifesto of legal real-

ism his

1897

essay The Path of the Law . And without Holmes s

involuntary sponsorship it is a little

hard

to imagine legal realism

obtaining quite the hold over the legal imagination that it did in

the 1930s complete with a zeal for codification that reached its

zenith in the promulgation

of

the Uniform Commercial Code. And

without legal realism it

is

hard to imagine Guido Calabresi

embarking on his project of rethinking the law of torts in light of

economics. His first article on torts thanks Fleming James and

Fowler Harper, two leading legal realist torts scholars, and though

there is an element of piety toward one s elders in this reference, it

is

also apparent that Calabresi, a product of the Yale Law School,

the bastion of legal realism and still identified with it when

Calabresi started teaching there in the late 1950s, was saturated

with the realist spirit.

The path is indirect, even circuitous, and the issue

of

causal

influence

is

once again indeterminate. And yet it does seem to lead

without breaks from Bentham to Calabresi, who was, of course,

one of the principal founders of the modern law and economics

movement.

To

summarize, I do

not

think it

is

possible to show

that had

Bentham

not

lived the law and economics movement would have

been delayed

or

different. But I think it

is

highly likely

that



entham and aw and Economics

439

Bentham

had

an important though indirect influence on the

movement in two distinct ways. First he pointed the way toward

using economic thinking normatively

and

this was very important

to

the movement. Secondly he is an ancestor

of

legal realism

and

realism particularly through Calabresi was important in the

creation of the movement. n both counts Bentham can rightly

be described as

an important influence on law

and

economics.



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