Law and economics, consequentialism and legal pragmatism: the influence of Oliver Holmes Jr.

Abstract

This paper aims to present the similarities and differences between Posner's defense of Law and Economics (LAE) and Holmes' pragmatism. The investigation is centered in the arguments of economic consequences of judicial decisions. Law and Economics tend to emphasize these arguments as a determinant characterization of legal pragmatism. These arguments involve some dilemmas: Is it possible to eliminate a rule, or reinterpret it according to the effect of its application in practical life? May these economic consequences serve as argument for a replacement of traditional interpretation? To what extent can we rule out the law with arguments of consequence? Despite the influence, LAE has some important differences with respect Holmes' legal pragmatism. Posner's LAE involves the economic principle of wealth maximization and its relations with utilitarianism and economic liberalism. Consequentialism in Holmes, by contrast, is based on a teleological interpretation of existing rules. It is important that the judge does not decide based on a specific economic theory. Also, legal pragmatism does not advocate abandoning the tenets of positivism that form the basis for the rule of law. Holmes defends a judicial restraint. Accordingly, the argument of consequence must have previous limits in precedents and statutes. However, both legal pragmatism and LAE are connected by the idea that the adaptation of the law to a reasonable end can not be absent from the canons of interpretation and adjudication