Marciano, Alain

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An Introduction to Juergen Backhaus’s “Lawyers’
economics vs. economic analysis of law”
Alain Marciano
To cite this version:
Alain Marciano. An Introduction to Juergen Backhaus’s “Lawyers’ economics vs. economic analysis
of law”. Munich Social Science Review, 2018. ￿hal-02306870￿
1 
An introduction to 
Juergen Backhaus’s “Lawyers' economics vs. economic analysis of law” 
Alain Marciano 
MRE and University of Montpellier, Montpellier, France
1
 
Juergen Backhaus is undoubtedly one of the founders of law and economics in Europe 
(Josselin, Marciano and Ramello, 2016; Marciano and Ramello, 2019). Partly because of his 
editorial activities and, of course, because of his writings. Among the latter, one can count the 
article that is reproduced below, “Lawyers' economics vs. economic analysis of law”. 
Although it was published forty years ago in the Munich Social Science Review, the article 
should still be read by people interested in law and economics or economic analysis of law. 
Indeed, it provides a synthetic and critical presentation of “Chicago approach to law and 
economics” or “Chicago-type ‘analysis of law’” or “Chicago legal economic analysis”, 
emphasizing one of its most important, indeed central, aspect: efficiency and the role of the 
legal system in trying to promote it. 
 Actually, to be more precise, in his article, Backhaus only discussed one example 
given by one of the representatives of Chicago economic analysis of law – the evaluation of 
the compensation to be given to a truck-driver victim of an accident used by Richard Posner 
in his Economic Analysis of Law (1972b).
2
 
 Aware that he could have been blamed for “criticizing an entire approach by reference 
to a single author,” Backhaus defended himself by saying that Posner was “a leading as well 
as a representative scholar in the field of legal-economic analysis of the Chicago type.” Thus, 
he assumed that Chicago law and economics were perfectly represented by Posner’s work – 
that was certainly exact, even though one can say that Ronald Coase, another representative 
of Chicago law and economics, was already very different from Posner. Also, he explained 
                                                 
1 
Alain Marciano, University of Montpellier, Department of Economics, Montpellier, France. Email: 
alain.marciano@umontpellier.fr 
2 
Backhaus used the second edition of Posner’s book, published in 1977. 
2 
having chosen a “specific example” because his “paper [wa]s not intended to give complete 
critical assessment of Richard Posner’s economic analysis of law.” He was only targeting the 
idea that efficiency should not be used as “an important rationale of the law,” what he called 
“lawyers’ economics” – that is a way of envisaging economics as a means to ‘‘determine the 
proper content of legal rules and evaluate the performance of the legal system as a whole’’ 
(Ackerman, 1977: 11, quoted in Backhaus). 
 With regards to this latter point, Backhaus was too modest or too cautious. One easily 
understands that his criticism goes largely beyond the case of this sole example. The claim he 
was criticizing was that the legal system – courts, judges, juries – should use efficiency as a 
normative criterion, as a goal or an end; that the legal system should try to promote 
efficiency, that “the logic of the law is really economics” (Posner, 1975: 764). Or, that the 
law should mimic the market. That was precisely the cornerstone of Posner’s economic 
analysis of law – Backhaus noted it: “in Posner’s economic analysis of law … economic 
efficiency sometimes seems to be assumed to be the goal of the entire legal system.” And one 
can find it in his Economic Analysis of Law or in various articles published in the 1970s.
3
 
That was also the idea that Posner would push further under the form of wealth maximization 
(1979) and that would trigger a huge controversy – in particular with Ronald Dworkin 
(1980), Anthony Kronman (1980), and Guido Calabresi (1980). In other words, Backhaus 
had anticipated and made explicit what Posner would explicitly write one year later. His 
answer can also be said to have anticipated the criticisms made by others: efficiency – wealth 
– is not a value. 
 Indeed, Backhaus was one of the very firsts to claim that the law should not aim at 
promoting a Pareto efficient allocation of resources as the economy or markets do. The 
problem with this analysis, as Backhaus explained in his paper, is that it considers that 
efficiency should be the goal or end of the legal system as well as the end of the economy, 
and that forensic deliberations – such as made in courts – and economic negotiations – that 
took place in markets – were two different, alternative, means to reach this only goal. This, as 
Backhaus noted, “implies that at least in a theoretical sense the relationship between law and 
economics is one of substitutability.” Thus, in the case of the accident of the truck-driver, the 
                                                 
3
 From this perspective, one may be surprised by the fact that Backhaus did not chose to discuss other examples 
– and in particular the decision made by Judge Learned Hand (see Posner, 1972a). 
3 
efficient compensation should be determined by the Court as it would be determined on the 
market, that is if the driver had not been the victim of an accident. The role of the Court, of a 
judge or a jury, was to compute and calculate “the precise amount of compensations to be 
paid in this case to the truck-driver.” 
 To Backhaus, that view was wrong. These two procedures could and should not be 
put on the same footing, as if they were having the same role. The law and the economy 
complement each other. The role of forensic deliberations was not to do what markets would 
have done. It was not to decide on what was an efficient compensation. The “forensic 
procedures” – that take place in courts – “fulfill a pacifying social function.” And, in order to 
fulfill this function, “the forensic process has to generate a solution which appears to be just 
to those concerned and is acceptable to any citizen who might find himself potentially in the 
situation of one of the interested parties.” Or, as Backhaus wrote, its purpose was to decide 
what was a “fair and just” compensation.4 Once such a compensation has been decided, then, 
the economic part of the process could take place: that is, an efficient means to reach that 
“fair and just” compensation could be decided. In other words, efficiency was not a goal that 
should be pursued by the legal system; it was a means, a “technique” that could be used to 
reach a goal that had been decided elsewhere. This argument was particularly original. One 
should not forget that Backhaus was one of the firsts to make it. Publishing this article in the 
late 1970s was daring. Republishing – and reading – it today is important. 
References 
Ackerman, Bruce A. 1977. Private Property and the Constitution. New Haven: Yale 
University Press. 
Calabresi, Guido. 1980. “An Exchange – About Law and Economics: A Letter to Ronald 
Dworkin”, Hofstra Law Review, 8 (3), 553–562. 
Dworkin, Ronald. 1980. “Is Wealth a Value?” Journal of Legal Studies, 9, 191–226 
Josselin, Jean-Michel, Marciano, Alain, and Giovanni B. Ramello. 2016, “The Law, The 
Economy, The Polity. Jürgen Backhaus, A Thinker Outside the Box”, in Marciano, 
A., and G. B. Ramello (eds), Law and Economics in Europe and the U.S. The 
Legacy of Juergen Backhaus. Springer. 
Kronman, Anthony T. 1980. “Wealth Maximization as a Normative Principle”, Journal of 
Legal Studies, 9 (2), 227-242. 
                                                 
4
 Let us note insist that Backhaus’s claim was not normative. He did not say what “fair and just” meant. He 
seems to have favored a “contractarian” definition à la Buchanan (he cited him), that is, a solution is fair if it is 
accepted by the “individuals involved in the situation which poses the problem to be solved.” 
4 
Marciano, Alain and Giovanni B. Ramello. 2019 (forthcoming). “Juergen Backhaus”, in 
A. Marciano et G.B. Ramello (eds), Encyclopedia of Law and Economics, Springer. 
Posner, Richard A. 1972a. “A Theory of Negligence”, Journal of Legal Studies, 1(1), 29-
96. 
Posner, Richard A. 1972b. Economic Analysis of Law, Boston: Little, Brown. 
Posner, Richard A. 1975. ‘‘The Economic Approach to Law’’, Texas Law Review, 53 
(XX), 757–782. 
Posner, Richard A.  1979. “Utilitarianism, Economics, and Legal Theory”, Journal of 
Legal Studies, 8 (1), 103-140. 


An Introduction to Juergen Backhaus’s “Lawyers’ economics vs. economic analysis of law”

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An Introduction to Juergen Backhaus’s “Lawyers’ economics vs. economic analysis of law”

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