• Video

Does a Student Need Math to Understand Law and Economics?

Economic analysis in law doesn't require advanced mathematics to be effective. Judge Douglas Ginsburg shares personal insights from studying under Ronald Coase, who famously rejected mathematical papers in his journal. Using the intriguing example of why blackmail is illegal, Judge Ginsburg demonstrates how economic concepts can solve legal puzzles without complex formulas. Particularly reassuring for 'math-phobic' law students and those interested in the intersection of economics and law. https://youtube.com/watch?v=AgoMvfdgbK8

Transcript

Economics itself has, over the last several decades, become increasingly quantified. And indeed, a lot of economic scholarship now is basically mathematical. The journals are full of articles that one couldn't read without a very thorough knowledge of calculus and progression and so on. But that is not essential and sometimes not even useful for economic analysis of law. Ronald Coase, the founding editor of the Journal of Law and Economics, about 1958 or so, would not publish an article that had mathematics in it. He was of the view, and he said it (I was his student) he said, “If the author can't explain it adequately in English, he probably doesn't know what he's talking about.” Now, that was a rigid view. I think now even the Journal of Law and Economics occasionally publishes some things with mathematics in them. But that's not the essence of the enterprise. It does make it possible, however, to do empirical work. And that has an advantage for those people who have the mathematical tools. They can do empirical work that does add to our body of knowledge about what is actually happening out there, what the laws are causing or changing laws are causing. If it becomes more formalized, as it does even in a first level course in economic analysis then it empowers the students to do something more sophisticated. Again, without being highly technical. There are always law students who are math-a-phobic, of course. In fact, law schools are full of students who are either afraid of blood or afraid of mathematics. It's really not a concern that they should have about how much mathematics is involved, because there's no calculus required in order to do entry level reading and even writing in economic analysis of law. Sometimes there is no mathematics at all. The very first article I wrote in the field was on blackmail. Addressing a question of why is it that I can do something without penalty, it's perfectly lawful, but I cannot demand money from somebody for not doing it. Somebody who would be embarrassed. I could, without defaming a person, say something, write something, publish something, very derogatory, but truthful. I could alternatively go to them and say, give me money and I won't publish it. And the latter is unlawful. And I proposed a transaction cost analysis for why this was unlawful. Because it would give an incentive for people to spend resources digging up dirt, only to then rebury it. So there would be no net social gain, there would be a loss in terms of the transaction costs associated with digging it up and then approaching the potential victim. And that would be a cost without a benefit. We wouldn't have even the benefit of the revelation of the information about somebody. It's addressing a legal quandary and trying to figure out what's going on.

Related Content