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Valuing Modern Contract Scholarship |
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Ian Ayres [View as PDF]
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112 Yale L.J. 881 (2003)
In sum, Posner has leveled three different criticisms at the modern economic analysis of contracts: a descriptive critique that the scholarship fails to describe or predict the content of current law, a normative critique that the scholarship fails to "provide a solid basis for criticizing and reforming contract law," and an implicit evolutionary critique that the scholarship has run out of things to say. Posner's descriptive critique is misplaced. Modern scholarship has never been about trying to describe or predict current law. His normative critique is overblown. While Posner is correct that much of the modern scholarship is based on stylized models with results that turn on particular parameter values, he underappreciates the normative importance of "possibility" theorems. Modern scholarship has contributed by showing that the accepted determinacy of prior normative analysis is unsustainable. Moreover, the factors identified by modern literature have generated affirmative policy proposals (such as extending the Hadley foreseeability limitation to seller's lost-profit damages).
But Posner's evolutionary critique may stand on a stronger footing. All valuable schools of inquiry at some point in time tend to reach diminishing marginal returns. The economic analysis of tort law, for example, is widely conceded to have reached a point of "maturity" where it is difficult to find basic untheorized questions for study. And maybe--despite my arguments about opt-out rules--the same is taking place, or about to take place, with regard to the economics of contracts. I join Posner in welcoming and predicting a shift from the theoretical to the empirical.
But instead of debating the future, it's better for us to wait and see. Methodology pieces like this also are subject to the very criticisms that Posner levels at modern scholarship--they don't predict current law, they don't provide a basis for critiquing current law, and they quickly play themselves out.
A few years back, Posner and I participated in a Wisconsin Law Review symposium comparing economic and sociological approaches to law. Posner wisely eschewed writing an ungrounded piece on methodology and instead published what to my mind was the most valuable contribution of the symposium--an analysis of gratuitous contracts. In contrast, I dyspeptically complained about the limited value of publishing method pieces, stating that "I generally believe that ungrounded discussions of methodology are not useful. I don't 'do' method--or at least I don't do method well. . . . Better to have scholars from different disciplines attack a particular problem, and then assess which methodology produces the best purchase."
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