A. Biographical Background

Richard Allen Posner (b. 1939) joined the University of Chicago Law School’s faculty in 1969 at the suggestion of Aaron Director to work at the intersection of law and economics. Educated at Harvard Law School, Posner arrived at Chicago a promising young lawyer coming off a bright career in Washington, D.C. legal circles and a short stint at Stanford Law School (Domnarski 2016, 39–58). Posner’s experience in D.C. included time as a clerk to Supreme Court Associate Justice William Brennan, at the Federal Trade Commission (FTC), the Solicitor General’s Office, and as general counsel to the task force for the President’s Commission on Communications Policy (39–52). The questions of antitrust and regulation inherent in these roles first exposed Posner to the intersection of law and economics, giving rise to the fascination that would frame his career. It was also during this time that Posner would develop an interest in the principles of rational-choice price theory and markets central to the Chicago School of Economics (52; Mitchell 1989, 284; Mitchell 2013, 17–18). During his time at the President’s Commission on Communications Policy, Posner worked alongside price theorists and read the work of Chicago School-economist Ronald Coase, a pioneer of the economic analysis of the law. Posner’s early alignment with the normative prescriptions (namely, the promotion of competitive markets) of the Chicago School-economics he encountered at the Commission is apparent in the task force’s final report, which was largely written by Posner and called for deregulation and antitrust action in the telecommunications market.

In 1968, Posner accepted an associate professorship at Stanford Law School. His research and teaching there reflected the interest in law and economics he had developed while working in government. In particular, Posner wrote about the same antitrust and regulatory topics he encountered in D.C. (Domnarski 2016, 52–59). His work from the time reflects his observations and learnings working for the government, most notably his suspicion of government-regulated monopolies developed while at the President’s Commission on Communications (56). This work also brought Posner into contact with Chicago School-notables George Stigler and Aaron Director, at the time fellow Stanford faculty working in antitrust. Posner had an especially close working relationship to Director (55), who further sharpened Posner’s already Chicago School-influenced views on economics throughout his time at Stanford. Director was also instrumental in obtaining a full professorship for Posner at the University of Chicago Law School, which Posner accepted in 1969 (58–59).

After arriving in Chicago, Posner quickly began to push to expand the law and economics work being conducted at the University. Specifically, the application of microeconomic analytical tools and price theory to the law as pioneered by Ronald Coase, Gary Becker, and Yale’s Guido Calabresi. Within his first years at the university, Posner began advocating for the development of a joint law-and-economics degree and incorporating economic thinking in a range of classes he taught at the law school, including one titled “Economic Analysis of Law” (60–62). Posner would also continue to collaborate with and respond to the ideas of Coase, Stigler, Director, Becker, and other central figures of the Chicago School of Economics throughout his time at the University.

In 1973, just four years after accepting his position at the University of Chicago Law School, Richard Posner fundamentally transformed the study of law and economics with the publication of Economic Analysis of Law (Medema 2010b, 307). Posner intended his casebook to be used to instruct law students to apply microeconomic reasoning to almost every conceivable aspect of the United States legal system (Posner 1973, ix–xi; Medema 2010b, 307). Posner’s commentary explores topics as diverse as family law, constitutional law, contract law, criminal law, the legal process, and more, all using the tools of neoclassical microeconomics (306–309). While his approach was not without controversy at publication (Buchanan 1974), over time the application of economics to the law as performed by Posner would prove to have a lasting and transformative impact on legal thought.

Posner would continue to contribute to the economic analysis of the law through numerous books, articles, and revisions to his past work, as well as in his role as a circuit judge for the U.S. Seventh Court of Appeals (306). However, remarkably, the core of his theories has remained largely untouched since his original 1973 publication and is still recognizable in his later works (307). Posner’s writings would contribute greatly to the success of the economic analysis of law as a transformational movement in legal thought since the 1970s. In doing so, he would cement both himself and the University of Chicago at the center of that movement. His success has even transcended the narrow field of law and economics to the law more generally: A 2021 tabulation by Fred Shapiro found Posner held the record as the most cited legal scholar of all time with an astounding 48,852 citations (Shapiro 2021).

B. Posner’s Economic Perspective and the Chicago School of Economics

The brief biographical history of Posner provided above reveals his near-total immersion in Chicago School-economic thought at the time he wrote Economic Analysis of Law. The Chicago School has been commonly associated with two core tenets. First, the power of basic neoclassical price theory – the basic microeconomic concepts of marginal analysis and individual utility maximization under a rational-choice model – to explain the actions of rational agents. Second, and resulting from the first tenet, a strong emphasis on the ability of free and competitive markets to produce efficient outcomes (Brady 2010, 234–235; Mitchell 1989, 284; Mitchell 2013, 17–18). The Chicago School is thus also often associated with normative economic prescriptions aimed at promoting the existence and competitiveness of markets to achieve greater economic efficiency.

It should not be a surprise therefore that Posner, whose government work drew heavily from price theory and centered on the promotion of market competition, largely adopted the economic perspective of the Chicago School. Indeed, Chicago School-style price theory underpins Posner’s analysis of legal principles and actors throughout the entirety of Economic Analysis of Law (Medema 2010b, 307). Posner outlines these core assumptions in the first chapter, “The Economic Approach to Law.” For Posner, economics starts from the “assumption that man is a rational maximizer of his…‘self-interest’” (Posner 1973, 1). From this rational-choice starting point, Posner focuses on “three fundamental economic concepts” (Posner 1973, 1). First, “the inverse relation between price charged and quantity demanded” (Posner 1973, 1), or what is more commonly referred to as the Law of Demand. Second, the notion of opportunity costs, and their role in informing economic evaluation of cost (Posner 1973, 2–3). The third assumption, the assumed “tendency of resources to gravitate toward their highest valued uses if voluntary exchange is permitted” (Posner 1973, 4), reflects a Chicagoan emphasis on efficient allocation of markets. (In later editions, Posner would clarify that “voluntary exchange” in this definition means “a market” [Posner 1998, 11]).

Posner’s economic thinking is also reflected in the normative standard he assigns efficiency while analyzing the law (Posner 1973, 6; Medema 2010b, 308). When only economics is considered, Posner argues, achieving efficiency (or the allocation of resources such that their value is maximized) should be the goal laws and the legal system pursue on behalf of society. (Posner 1973, 4–6; Parisi 2004, 5–6; Medena 2010, 307–309). As Posner explains in the first edition of Economic Analysis of Law: “Since efficiency is a widely regarded value in our world of limited resources, a persuasive showing that one course of action is more efficient than the alternatives may be an important factor in shaping public choice” (Posner 1973, 6). Posner’s chief and lasting contribution to the economic analysis of the law, first outlined in Economic Analysis of Law, would be his broadly accepted conclusion that United States common law is systematically aligned with achieving this definition of efficiency.

However, this success was not a foregone conclusion. As Posner first began advocating the views that would become orthodoxy within the field, scholars such as Gordon Tullock of the Virginia School of Public Choice had already published work radically different in conclusions from that advanced by Posner.

A. Biographical Background

Much like Posner, Gordon Tullock (1922–2014) was not an economist by training. His only classroom experience in the subject was a one-semester course taught by famed University of Chicago economist Henry Simons while Tullock was studying to receive his J.D. at the University of Chicago (Rowley 2005, xiv). Simons’ instruction on price theory as well as his emphasis on Jeremy Bentham’s philosophy of utilitarianism would prove to be key in informing Tullock’s later work analyzing the law (Rowley 2005, xiv–xv). Despite the limits of his formal education in economics, Tullock’s inherent gift for the economic style of thinking earned him a reputation among his peers as a natural economist (Forte and Brady 2021, 109–110).

Unlike Posner, Tullock found little success practicing law. Following just five short months of work at a Chicago law firm, he pivoted dramatically to a career in the United States Foreign Service (Rowley and Houser 2012, 8–10). From 1948 to 1956, Tullock specialized in East Asian affairs, preparing analyses on the region for senior policy makers in Washington. Tullock often expressed frustration at the apparent lack of impact his analyses had on decisions made by political figures and higher-ups in government. He became broadly critical of the State Department as an institution, which he believed failed to make productive use of functionaries such as himself (10). It is perhaps no surprise then that among Tullock’s first projects after leaving the Foreign Service was a critical analysis of the incentives – most importantly career advancement – that determined behavior by rational actors within bureaucracies (12). (His manuscript on the topic would ultimately be published in 1965 as The Politics of Bureaucracy (12; Mueller 2012, 56)) Indeed, the remainder of Tullock’s career after his time in government would be spent analyzing public institutions from a rational-choice perspective (Mueller 2012).

Thus, after concluding his government service, Tullock decided to again pivot careers toward academia. Tullock’s academic career would begin in earnest when, in 1958, he joined the newly founded Thomas Jefferson Center for Studies in American Political Economy at the University of Virginia as its first post-doctoral fellow (Buchannan 1958, 8). The Thomas Jefferson Center had been established the previous year by James Buchanan and Warren Nutter, with the goal of advancing studies in classical political economy (Brady 2010, 244–245). Both University of Chicago-educated economists, Buchanan in particular was strongly influenced by the price theory and rational-choice models he learned while studying under Chicago School-economist Frank Knight. Once at the University of Virginia, Tullock would join Buchanan in collaborating on the application of rational choice models to public institutions and behavior, a field that has been termed “public choice theory” (234–245; Forte and Brady 2021, 111–113).

Buchanan and Tullock’s 1962 book, The Calculus of Consent, is often cited as one of the defining texts of public choice (Mueller 2012, 49–51). The Calculus of Consent employed rational choice modeling to explore optimal decision-making and institutional arrangements for self-interested actors in the context of constitutional democracy. Buchanan and Tullock’s writings on majority rule, voting rules, political logrolling and other topics in The Calculus of Consent would stimulate further rational choice analyses of public institutions and decision-making. Over the course of the 1960s and ‘70s, a unique style of public choice theory would begin to coalesce around a common set of themes and principles shared by Buchanan, Tullock, and other leading theorists with ties to the Thomas Jefferson Center: the so-called “Virginia School of Public Choice” had been born (Mitchell 1988, 106–107; Mitchell 2013, 3–6).

After the success of The Calculus of Consent, Tullock turned his rational choice analysis toward a wide variety of topics. These included the clearly political – bureaucracy, revolution, and federalism (Mueller 2012) – but also touched on topics such as the incentives faced by scientific researchers and the behavior of non-human species (Forte and Brady 2021, 119–125). Perhaps Tullock’s most famous economic innovation lies in the concept of rent-seeking. Rent-seeking, as defined by Tullock in 1967, refers to expenditures undertaken to capture wealth-redistributing transfer payments (Tullock 1967). While the possible existence of such payments had been understood previously, Tullock offered the first comprehensive exploration of rent-seeking behavior (Tollison 2012, 73–74). Tullock’s work on rent-seeking would come to have a profound impact on, and central role within, the Virginia School of Public Choice (Mitchell 2013, 9–12). It would also play a key role within his analysis of the law.

Tullock’s first systematic use of economics to examine the law as such is presented in his 1971 treatise The Logic of the Law (Forte and Brady 2021, 125–127). Published two years before Posner’s Economic Analysis of Law, The Logic of the Law constitutes Tullock’s attempt to find what he calls a “logical foundation for law and ethics’’ (Tullock 1971, 5) using the tools of economics. Unlike Economic Analysis of Law, Tullock’s book is less a wide-ranging examination of the law as applied to the numerous issues one might encounter in the courtroom than it is an analysis of the basic institutional structures and arrangements of the legal system, intermixed with decision-making principles on topics as broad as “Contract Enforcement” or “Accidents.” The result is an analysis of the United States legal system grounded in a rational choice framework (Tullock 1971, 10–11).

Despite the intense criticism The Logic of the Law met upon publication (Lowry et al. 1972), Tullock would continue to develop his economic theory of the law throughout the remainder of his career. His additional work on the subject includes a series of journal articles on the economic foundations for legal procedure (Rowley 2005, xv–xviii) and a 1997 monograph summarizing his evaluation of the United States common law system, The Case Against the Common Law (Rowley 2005, xviii). However, despite his active participation in the early development of the field and continued work on the subject, Tullock’s economic analysis of the law has had notably little influence. Certainly, Tullock’s work on the law has not been as widely embraced as that of Posner.

B. Tullock’s economic perspective and the Virginia School of Public Choice

It is impossible to explore the economic perspective of Gordon Tullock without also considering the Virginia School of Public Choice his theories helped found. The distinction between Virginian Public Choice and Chicago School Economics can, at first glance, appear vague due to the heavy influence Chicago School price theory and rational-choice modeling has had on the Virginia School (Brady 2010, 233–234; Mitchell 2013). However, there are several key distinctions between the two schools of thought. These, in turn, help inform the ways in which the economic perspective of Tullock is distinct from that of Posner.

As mentioned, public choice as a field is concerned with the application of rational choice modeling to the behavior of actors in the context of politics and public institutions (Mitchell 1989; Brady 2010, 233). The Virginia School of Public Choice is defined in large part by an inherent skepticism in the efficiency of public institutions and political markets (Mitchell 2013, 4–17). Virginia theorists argue that political markets are distinct from private markets – and that their unique characteristics render them inefficient (Brady 2010, 233–234; Parisi 2004, 11). This inefficiency is purported to be a result of the incentives faced by rational individuals in political contexts to shape and manipulate institutions for their benefit (Brady 2010, 233–234). Virginians are also concerned with the tendency for actors to engage in inefficient rent-seeking behavior to secure transfer payments from public figures (Tullock 1971, 11–12).

While the inefficiency of political markets is all but doctrine to Virginia School theorists, this is simply not the case for the Chicago School of Economics (Mitchell 1989, 290). One of the main tenets of the Chicago School of economics is the inherent ability of markets to coordinate the behavior of individuals in an optimal, efficient way (Brady 2010, 234–235). This remains true for political markets in Chicago analysis. Many Chicago School theorists go so far as to argue that an inefficient political market is inherently contradictory (Mitchell 2013, 17–19). If a more efficient option was possible, they argue, then it would exist. While early Chicago thought in particular acknowledged the existence and negative consequences of rent seeking behavior (which Gary Becker treated as a corollary to market-failures in private exchange (22)), this does not feature nearly as prominently within Chicago analyses as compared to Virginia. Indeed, the greatest concern for Chicago theorists examining questions of political economy is in public interference in the operation of private markets.

Given the central role Tullock played in the formation of the Virginia School of Public Choice, his economic perspective stands out as a typical example of Virginian thought. Tullock’s beliefs are informed to a large extent by his belief in a rational-choice model of human behavior and the essentials of price theory (Forte and Brady 2021, 109–110). Moreover, a key throughline of Tullock’s writings – starting from his disillusioned departure from government service – is the inefficiency of public institutions and the incentives faced by those in the public sphere. This skepticism toward and willingness to critique government institutions is apparent in Tullock’s evaluation of the common law legal system as broadly inefficient.

Since Tullock was the leading proponent of the modern concept of rent-seeking, it should perhaps come as no surprise that the topic also features heavily within his work. Rent-seeking behavior such as lobbying by interest groups or donations to political campaigns, which both influence public policy and therefore the distribution of transfer payments, creates a social cost according to Tullock (Tollison 2012, 73–74). The social costs of such rent-seeking, and the effect rent-seeking has on the behavior of political actors, inform a significant part of Tullock’s analysis of the law as well (Tullock 1997, 431). (Posner, it should be noted, was aware of the theory of rent-seeking and contributed to discussions of the concept as regards regulation and monopolies by 1975 [Posner 1975; Tollison 2012, 75–76]). However, the notion of rent-seeking does not feature as prominently in Posner’s analysis of the law as it does in Tullock’s. At the very least, Posner does not apply rent-seeking theory to the same areas of the law as Tullock. This informs a significant area of divergence between their theories, as will be seen.)

Tullock also treats efficiency as the central measure by which the law and legal system should be measured. In slight contrast to Posner, it should be noted, Tullock is interested in strictly utilitarian measures of efficiency, rather than the maximization of social value (or wealth) as a proxy for utility (Forte and Brady 2021, 109–110; Tullock 2005, 381). This is another throughline in Tullock’s work. A common question explored by Tullock from The Calculus of Consent on is what design of public institutions is most aligned with achieving societal utility maximization. Thus, in this sense, Tullock’s economic analysis of the law stands as an extension of his previous work. In approaching this question in The Logic of the Law, Tullock utilizes the theories of public choice, utility maximization by rational actors, and welfare economics defined as the economics of socially optimal exchanges and changes in distribution (Tullock 1971, 11–13). It is with this economic perspective in mind that we turn now to the divergent analyses of Posner and Tullock.

A. Procedural Efficiency

A key reason why Posner and Tullock arrive at different conclusions regarding the efficiency of the common law is their different assessment of the efficiency of the legal procedures associated with the common law. Posner contends that adversarial procedure – wherein lawyers of opposing sides each search for evidence and present this evidence before a judge or jury – is most consistent with his definition of economic efficiency (Posner 1973, 321–322; Posner 1999, 1479, 1488). Tullock argues the opposite. He writes in The Logic of the Law that the adversarial procedure is inferior compared to the inquisitorial method often employed in European civil law systems (Tullock 1971, 91–93).

According to Posner, the adversarial system is efficient as a result of the incentive structure it creates for self-interested, rational parties and their counsel. Consistent with his deep-seated belief in the efficiency of competitive markets, Posner sees the competitive nature of the adversarial system as creating market-like incentives for the involved parties (Posner 1973, 321–322). This encourages the litigants to supply the socially desirable (i.e., efficient) amount of evidence. Posner outlines much of this argument in a 1999 article titled “An Economic Approach to the Law of Evidence,” which discusses in greater clarity the theory of procedure he first raised in Economic Analysis of Law:

Because trial lawyers are compensated directly or indirectly on the basis of success at trial, their incentive to develop evidence favorable to their client and to find the flaws in the opponent’s evidence is very great and, if it is a big money case, their resources for obtaining and contesting evidence will be ample. If the size of the stakes in a case is at least a rough proxy for the social costs of an inaccurate decision, there will be at least a rough alignment between the amount of search that is actually conducted and the amount that is socially optimal. (Posner 1999, 1488)

The amount of evidence provided also depends on the relative “closeness” of a given case. Lawyers will search for additional information so long as the marginal benefit conferred to their side by said evidence outweighs the cost (Posner 1999, 1488–1489). When the outcome of a case is not close, the benefit of additional evidence decreases. Parties adjust their search effort accordingly, limiting unnecessary search costs. Furthermore, the side whose case is more strongly aligned with the facts will have a lower cost of gathering evidence. That party will therefore be able to provide the court with more evidence that favors their case, increasing the probability of a decision that resembles the true state of facts (Posner 1973, 321; Posner 1999, 1493). The same logic applies to the amount of money litigants are willing to spend on hiring counsel, as they will only be incentivized to spend as long as doing so would help to maximize their expected value in litigation (Posner 1973, 321).

Posner compares this adversarial system with that of the inquisitorial procedural style, wherein a single judge collects and evaluates the evidence. Consistent with his Chicago School-views, Posner contends that as “the market is a more efficient producer of most goods than the government” (Posner 1999, 1492) the inherently bureaucratic nature of the inquisitorial system would make it substantially less effective at producing evidence than an adversarial system with market-like incentives (Posner 1973, 321).

Posner also argues that jury trials, which are a feature of many injury cases and criminal cases under the United States’ adversarial system, tend toward efficiency. He believes this is due to the relatively large number of jurors who are involved in jury trials. Having 12 impartial individuals, working together with a judge, transforms the jury, again, into a form of “market” (Posner 1973, 353). Random deviations from rational decision-making by single jurors have a more limited effect on the court’s decision as their opinion can be swayed or blocked by their peers. He compares this to the potentially large effects of such irrational deviation by judges (Posner 1999, 1493–1494).

To the Virginia School-minded Gordon Tullock, however, common law procedure creates a system that is anything but the efficient market outlined by Posner. Tullock more than adequately explains his assessment of Posner’s argument in The Case Against the Common Law using his rent-seeking framework:

In his zeal to liken the common law system to a private market, Posner oversteps the mark. The common law system is not a private marketplace. It is a socialistic bureaucracy in which attorneys essentially lobby government officials – judges and juries – much in the same way special interest groups lobby the legislature. The greater the rents at stake in action, the more lavish will be the outlay of resources on attorney-lobbyists and expert witness-lobbyists whose prime goal is to tilt the judgment… (Tullock 1997, 450)

In direct contrast with Posner, Tullock believes the inquisitorial method of legal procedure used in civil law systems offers a superior alternative to the adversarial system. More specifically, he advocates adopting “some variation of the Napoleonic Code” (Tullock 1997, 449). His reasoning is as follows: First, as Tullock contends in the quote above, the adversarial system used in the United States is largely inefficient because of the heavy reliance on lawyers, whom he classifies as rent-seekers aiming to swing the adversarial system of procedure and evidentiary rules in favor of their clients regardless of the true facts of a case (Tullock 1971, 91–92). This, he says, greatly increases the costs associated with the legal system and so decreases its efficiency (Tullock 1997, 450–451). This effect is then amplified as all parties in a case rush to outspend and outcompete one another in achieving their desired results. Tullock argues that, in contrast, the judges of an inquisitorial system are incentivized to reach the truth through their inquiries at the least cost possible (Tullock 1971, 92–93).

Second, Tullock is also a strong critic of the common law rules of evidence, which exclude evidence of a prohibitive nature that would otherwise be allowed in Continental legal systems (Tullock 1971, 93–97). Finally, Tullock is highly distrustful of juries, which he perceives as uneducated and ill-qualified compared to judges (Tullock 1971, 88–89). Tullock argues that the jury selection process is distorted by private incentives to avoid jury duty and by the parties’ incentives to manipulate jury selection. As a result, the average juror lacks the information necessary to render accurate decisions (Tullock 1997, 427–429). The result, according to Tullock, is unreliable juries that decrease the rate of correct (efficient) rulings and encourage the high-cost process of appeal (Tullock 1997, 427–429). Tullock believes that judges, by virtue of their education and experience, are less susceptible to deception than juries and arrive at the truth more often (Tullock 1971, 88–89).

As evidence for the inquisitorial system’s relative superiority, Tullock points out that many cases in the United States are de facto evaluated using an inquisitorial approach via the process of private arbitration (Tullock 1997, 454). Such arbitration proceedings, he says, amount to a private-sector recreation of the inquisitorial process. This occurs because of actors’ preference for what Tullock considers a more efficient, lower-cost system. He predicts that as rational actors continue to select the more efficient of the two systems out of their self-interest, the private arbitration market “is set fair to supersede the common law system” (Tullock 1997, 454–455).

Posner, it should be noted, directly engaged with Tullock’s criticisms of the common law system of procedure – indeed, one of the only times he would ever explicitly address the claims advanced by Tullock (Posner 1988). He decries what he calls Tullock’s “[s]tatist thinking” (31) in calling for movement away from jury trials and the adoption of an inquisitorial system of procedure. Posner contends that the concentration of judicial power in the hands of judges, instead of juries and trial lawyers, shifts the legal system from a competitive marketplace where litigants “bear the costs and benefits” (31) of trial while persuading a panel of decision-makers, to a bureaucratic process driven by poorly incentivized and fallible judges (31–32). Posner expresses surprise that Tullock arrives at this particular conclusion. He notes apparent inconsistencies between the support for checks and balances and distrust of the public sector Tullock expresses in The Calculus of Consent and other writings, and the support for expanding state power expressed in Tullock’s analysis of the judiciary (30–31). This paper will later revisit this critique of Tullock’s work in discussing the relative success of the two theorists.

B. Legal Rulemaking

Perhaps more central to the question of whether the common law is efficient, however, is whether the common law system of rulemaking tends to produce economically efficient rules. The answer to this question is heavily dependent on the interpretation of the role of judges in the common law system, as legal rulemaking in common law systems is driven in large part by judicial decisions. Posner posits first that judges do reach efficient decisions due to the impersonal nature in which they settle cases (Posner 1973, 325–326). He argues that these decisions then transform into legal precedents that are followed when they produce efficient results and are changed when they cease to do so (Posner 1973, 351–352).

Since judges are bound by ethics codes and have no personal or financial stake in a given case, they therefore turn to ethical and social values to make their decisions according to Posner. Or, rather, legal principles informed by these values. Posner believes that the values society upholds are rooted in, and on the whole achieve, economic efficiency as a response to the inherent scarcity of resources (Posner 1973, 99–100). Posner, ever the Chicago School-economist, turns to a market analogy to make his point: that “the invisible hand of the market has its counterpart in the aloof disinterest of the judge” (Posner 1973, 322). Disinterested judges take the information given to them through the efficient evidentiary process discussed above and assign resources through their rulings near exactly like market processes would (Posner 1973, 322). That is to say, in an economically efficient manner.

Posner proposes that the common law system of precedent helps ensure that these efficient decisions turn into efficient rules (Posner 1973, 351–352). Efficient common law rulings will be replicated through repeated judicial rulings, resulting in the creation of rules and precedents that are themselves efficient. Such precedent is not worth litigating so long as the precedent remains efficient, due to the judicial principle of stare decisis. If it is efficient, the evidence will not be strong enough to overturn the rule. Implicitly, if a rule were inefficient, litigants would also be incentivized to bear the cost of court proceedings necessary to see the rule overturned – a point Posner makes explicit in later editions of Economic Analysis of Law (Posner 1998, 596). Per Posner, judicial precedent also has the added benefit of injecting predictability into the legal system, helping parties accurately weigh the costs and benefits of litigation (Posner 1973, 352).

Tullock, by contrast, believes the common law rule-making process to be grossly inefficient (Tullock 1971, 207; 1997, 431). Tullock argues that for an extended period during the nineteenth century, the United States common law system did achieve economic efficiency. However, during the twentieth century, this system began to break down in the face of increased rent-seeking behaviors. In his words:

The benign nineteenth-century influence of utilitarian philosophy has been swept away dramatically during the twentieth century under the influence of socialist ideology combined with pervasive legal rent-seeking. The consequence is a late-twentieth-century common law that is scarcely recognizable as a descendant of its classical predecessor. Judges have found it possible to change legal rules to benefit favored special interest groups…and they have done so with a vengeance. (Tullock 1997, 431)

What Tullock sees as the strengthening of stare decisis during the twentieth century increased judges’ discretion in rulemaking (Tullock 1971, 207). This, in turn, increases opportunities for rent-seeking behavior. Interest groups seek to assert pressure via lobbying and donations on the largely political process of appointing judges. They do this to ensure that appointed judges align with their political ideology (Tullock 1997, 415). As judges cannot be easily removed and cannot be punished through mechanisms such as pay cuts, Tullock notes that judges have almost unlimited discretion in their judicial decision-making (Tullock 1997, 419). Thus, these politically motivated judges will choose to create judicial rules that align with their self-interests (and the interest of the rent-seekers who got them appointed) and not economic efficiency per se. (It should be noted that this author is unaware of any direct response from Posner to Tullock’s claims regarding the inefficiency of judicial decision-making; however, Posner’s support for judicial decision-making remains consistent through his later writings (Posner 1998, 595–596)).

In sum, Tullock treats the common law system of the twentieth century as a political market (Zywicki 2008, 47–49); as such, the same issues of rent-seeking and inefficient rule-making apply as other Virginia theorists argue they would in more conventional political markets. Tullock’s overall perspective of the common law is perhaps best summarized through the following quote in The Case Against the Common Law, beginning with a direct swipe at Posner:

[T]he invisible hand of the market does not have its counterpart in the disinterest of the judge. Rather, its counterpart is the visible boot of the politically active judge and the bony knees and elbows of the semi-blindfolded, intellectually lame jury…In consequence, the American legal system at best is extremely capricious, and at worst is a random lottery. It would be much more cost-effective, in such circumstances, to decide outcomes by flipping a coin or rolling a die…. (Tullock 1997, 451)

Such a statement stands in stark contrast to the core of Posner’s analysis.

A. Posner’s Credibility in the Law

One possible explanation for Posner’s greater acceptance is that his status as a legal insider better positioned him to generate support for his ideas (Goetz 1987, 172–175). The development of the economic analysis of the law and its transformation into a movement would be driven, in large part, by its acceptance within the legal community. Thus, while economic reasoning lies at the heart of the law and economics movement, the phenomenon is (in its most mainstream form) most properly conceived of as an economic revolution within the legal field, rather than a fascination with legal questions in the field of economics. Posner, entering academia after a highly successful legal career, was well-suited to persuade fellow lawyers of the virtues of economics. His bona fides signaled someone at the height of the legal profession: Editor-in-Chief of Harvard Law Review; Supreme Court clerk; prominent attorney at the FTC, Solicitor General’s Office, and a Presidential Commission (Domnarski 2016, 29–59).

Posner’s legal experience not only gave him credibility within a tight and somewhat insular legal community, but also prepared him to make his arguments in a way that would be more likely to convince his fellow lawyers (Goetz 1987, 172–175). Economic Analysis of Law is styled like a classic legal casebook, filled with thorough references to case law, suggested further readings in the law, and legal problems for readers to work through. Posner, as a lawyer writing for an audience of lawyers, conveys unfamiliar economic reasoning through language and examples familiar to those without an economic background. Further, his choice to produce a casebook further aided in the adoption of his ideas. Economic Analysis of Law, as both the first comprehensive work applying economics to the law and the first casebook on the subject, would be used to instruct law students at universities around the country in the economic analysis of the law (Posner 1973 x). This ensured that Posner’s conclusions on the efficiency of the common law would be spread widely,

Tullock, on the other hand, was clearly more inclined to the field of economics than to the law (Goetz 1987, 172–175). His legal credentials, five months at a small law firm (Rowley and Houser 2012, 8), are decidedly less than sterling when compared to those of Posner. Moreover, Tullock, unlike Posner, was not writing as part of the faculty of a law school, but rather a legal outsider in a program studying political economy. Further, whereas Economic Analysis of Law was written to be familiar to law students studying legal texts, The Logic of the Law reads like a work of economic analysis. Tullock makes liberal use of equations and mathematics rarely seen in Economic Analysis of Law, and relies more on illustrative anecdotes than case law. Moreover, Tullock’s concern with the legal system as a whole, rather than specific questions of case law, likely hindered the reception of his work within a profession that places a premium on applied knowledge (Goetz 1987, 172–175).

B. Tullock’s Inconsistencies

The limited popularity of Tullock’s writings was not only driven by his idiosyncratic style and relative lack of legal credentials. Another explanation for the relative lack of acceptance given to Tullock’s work on the law is the presence of inconsistencies within his analysis, as discussed earlier in the context of Posner’s rebuttal to Tullock’s analyses of the law (Posner 1988). This critique is most evident when taken in consideration with Tullock’s other work. For example, Tullock writes extensively in The Politics of Bureaucracy about the tendency for the incentives of bureaucrats to be misaligned with the public interest (Mueller 2012, 56). Yet Tullock’s expressed preference for an inquisitorial system of procedure would rely heavily on bureaucrats to exercise supposedly neutral powers in the public interest. It is somewhat shocking, then, that he prefers an expansion of bureaucratic power to competition between parties, given his general preference for competition in other contexts (Goetz 1987, 176–177).

A further inconsistency in Tullock’s analysis lies in the implications of his assessment of judicial rulemaking in favor of a civil system. Civil law legal systems, the “Napoleonic Code” favored by Tullock, rely on legislature-produced law codes. Tullock, in his original work on rent-seeking, expresses a deep suspicion in legislatures as vulnerable to rent-seeking behavior (Tullock 1967). With little explanation, however, Tullock seems more than willing to transfer legal rulemaking power from rent-seeking vulnerable judges to the more vulnerable (and vastly powerful) legislature (Zywicki 2008, 48). Tullock’s critique of judges in the context of judicial rulemaking is also in tension with his conclusions regarding inquisitorial procedure and jury trials, which involve placing more authority in the hands of judges he later decries as vulnerable to rent-seeking.

It is for these reasons that Tullock’s analyses of the law appear to have confused many of his Virginia School fellow-travelers (Goetz 1987; Parisi, Luppi, and Guerra 2016). For example, Charles Rowley, a fellow Virginia Public Choice theorist, disagrees with Tullock’s conclusion that the common law system is inefficient. Rowley expressed at least partial agreement with Posner’s view of common law efficiency in areas such as contract law, owing to the importance of common law contract enforcement precedent in reducing transaction costs (Rowley and Brough 1987; Parisi, Luppi, and Guerra 2016, 52–53). Todd Zywicki, a current legal scholar holding views aligned with the Virginia School of Public Choice, has also expressed some criticisms of Tullock’s arguments regarding the common law (Zywicki 2008). Zywicki argues that the adversarial system of procedure could potentially raise the accuracy of legal rulings through its incentive structure in contrast with Tullock (Zywicki 2008, 44–46). Zywicki also strongly disagrees with Tullock on the subject of judicial rulemaking. Zywicki believes that Tullock’s favoring of civil law, and therefore statutory rulemaking, over the common law process of rulemaking is inconsistent with Tullock’s criticisms of legislative rulemaking in his other works (Zywicki 2008, 48–49). Zywicki states that Tullock’s critique in this regard “is not as thoroughly developed as his critique of the adversary system.” (Żywicki 2008, 48–49).

C. Relation to the Status Quo of the Law

A final possible reason why Posner’s argument for the efficiency of the common law has been dominant in comparison to Tullock is in the nature of their respective conclusions. Posner’s conclusion, that the United States system of common law is fundamentally efficient, largely refrains from significant critiques of the legal system (Goetz 1987, 174). On the other hand, Tullock’s assessment of the common law as inefficient and in need of comprehensive reform presents a broad critique on the law as an institution (173). It is not surprising then that Posner’s conclusion is the one that has been accepted by a legal establishment that benefits from preserving the legal system as it stands (173–174). It is similarly unsurprising that Posner is often cited in judicial opinions, while Tullock’s work is not. (Voigt 2017, 35–36). That Tullock’s preference for abolishing the adversarial system has not been accepted by trial lawyers, or that his critiques of rent-seeking behavior in judicial rulemaking has not been embraced by judges, are almost self-evident. When taken into consideration with his status as a legal outsider relative to Posner – itself perhaps explaining in part the extent to which each scholar critiques the legal establishment – and apparent inconsistencies present in his analysis of the law, a clearer picture begins to emerge regarding the reticence of the legal profession and academia to embrace the conclusions of Gordon Tullock.