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Richard Posner’s Law and Economics in Action

Richard Posner receiving the accolades of the Neoliberals of the Federalist Society.

Richard Posner is a major force in the law and economics movement, which attempts to apply the methods of economics to the analysis of laws and regulations. He is also a judge on the Seventh Circuit Court of Appeals, which gives him the means to impose his ideas on the real world. I’m not quite sure what the “methods” of economics are, and certainly there is little in real world outcomes to show the value of economics. Still, Posner soldiers on. This is from his 1985 article in the Columbia Law Review, An Economic Theory of the Criminal Law:

My analysis can be summarized in the following propositions:

1. The major function of criminal law in a capitalist society is to prevent people from bypassing the system of voluntary, compensated exchange-the “market,” explicit or implicit-in situations where, because transaction costs are low, the market is a more efficient method of allocating resources than forced exchange. Market bypassing in such situations is inefficient — in the sense in which economists equate efficiency with wealth maximization — no matter how much utility it may confer on the offender. … (P. 1195, footnote omitted)

Posner really is using the “methods” of economics to explain criminal law. There is a market for something, and criminal law can be understood as the coercive methods used to ensure participation in those markets, says Posner. I leave it to the reader to apply that idea to rape and arson.

In a 2007 case, Crawford v. Marion County Election Board, Posner upheld an Indiana statute requiring photo ID as a condition to voting. He claims that he is to decide on the constitutionality of this law by examining the benefits and burdens of the law. He says that there are no plaintiffs in the case who won’t vote because they don’t have the proper ID. This is crucial because:

The fewer people harmed by a law, the less total harm there is to balance against whatever benefits the law might confer.

Voting is all about costs and benefits. He asserts that the purpose of the Indiana law is to reduce voting fraud. He tells us that the lower court rejected the evidence of the costs and burdens on prospective voters as “… ‘totally unreliable’ because of a number of methodological flaws …”, without examining the evidence himself. He admits that there is no evidence of voting fraud either, but that doesn’t matter because it’s hard to detect. So there you are. Neither side has any evidence, so the State wins.

That seems pretty much like applying the methods of economics to law, doesn’t it? We accept the assertions of the powerful as true and beneficent, and we reject the arguments of the weak as “unreliable”. So, the powerful win, which is about the only accurate and universal prediction of economics.

A deeper look reveals a deeper flaw. According to Posner, the benefits of voting are “elusive”. That’s because rational agents constantly seeking utility maximization, the only form humans take in neoliberal economics, wouldn’t bother voting. He has no concept of duties that responsible people might feel to exercise their right to self-government, because no economist has found any maximization there. He places no value on civic interest and involvement or parental guidance and training or any other value, because these are outside economics. On his own terms, any effort to make it more difficult to vote would reduce the likelihood of voting, and thus would constitute an impermissible burden. But Posner didn’t think of that.

What makes this 2007 case interesting today is a recent interview Posner gave to The Huffington Post, described here. Posner wrote in his book Reflections on Judging that he was perhaps wrong in this decision. He blames the lawyers for not putting on better evidence, and perhaps, he says, the dissenting judge, Terence Evans, was right. The dissenting opinion had no trouble understanding what was at stake:

Let’s not beat around the bush: The Indiana voter photo ID law is a not-too thinly-veiled attempt to discourage election-day turnout by certain folks believed to skew Democratic.

Evans says that there is no evidence of voter fraud in the record. There is evidence that there have never been any prosecutions for voter fraud in Indiana, and that studies show little or no evidence of voter fraud nationwide.

If that’s the case, where is the justification for this law? Is it wise to use a sledgehammer to hit either a real or imaginary fly on a glass coffee table? I think not.

Posner wanted the lawyers to put up other evidence about the impact of these laws, but the evidence even by 2007 was clear that the sole purpose of these laws, supported by neoliberals through ALEC and other groups, is to suppress voting by populations likely to reject their policies. And to drive the point home, Evans points out that Posner doesn’t even understand the lives of the people affected.

Now I certainly agree with my brother Posner that “it is exceedingly difficult to maneuver in today’s America without a photo ID.” But Indiana’s law mostly affects those who, for various reasons, lack any real maneuverability at all.

Compare Posner to Judge Jed Rakoff, who spent a big part of his early life in the courtroom instead of a University of Chicago classroom. The American Bar Association Journal has a long article on Rakoff and his theory of judging. Talking about the sentencing guidelines, Rakoff says: “Perhaps the most fundamental flaw is the notion that the complexity of human character and conduct can be rationally reduced to some arithmetic formula.”

From the pit of the law and economics movement, Posner rejects this description. He’d rather talk about utility maximization than human beings, about which he apparently knows nothing useful.

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I read a lot of books.