Chicago Law and Economics, as pioneered by Richard Posner and others, represents one of the most extensive and successful efforts to replace moral and political reasoning with economic calculation. I've written a couple of papers about what this tells us about the character and authority of the neoliberal state. One not insignificant element of Law and Economics is that it overlooks legal, moral and common sense views of 'right' and 'wrong', by focusing on a priori incentives and measured outcomes. In place of judicial neutrality, the supposed methodological neutrality of neo-classical economics ensures that fines and damages payments are fair.
This is all very well, but it's important to recognise what precisely is lost when the notion of justice is replaced with a calculus of cost/benefit and cause/effect. This news item about the $7.8bn BP settlement with Gulf of Mexico oil spill victims included one striking quote, from a recipient of damages:
Dean Blanchard, a leading shrimp producer from Grand Isle, Louisiana, before the spill, was adamant: payment would not be enough.
"I want my day in court," he said. "If they can get off with just paying the money – well, they've got plenty of money, they are not really going to learn a lesson.
"I'd like to make sure this never happens again. Somebody has got to hold BP's feet to the fire. They have just gotten away with throwing money at problems, but that doesnt get rid of the problems."
A perceived virtue of neo-classical economics, as a tool for public decision-making, is its simplicity. It credits all people, equally, with a capacity to pursue goals in a largely rational and self-interested fashion. But here we see an equally simple psychological portrait: 'I want my day in court', 'I'd like to make sure this never happens again' and 'somebody has got to hold BP's feet to the fire'. There is nothing legalistic, liberal or especially metaphysical about any of these claims. It's difficult to treat this as 'irrational', without at the same time holding to an eccentrically narrow definition of 'rationality'. But, in resolutely obvious terms, here we see a damning critique of the entire basis of neoliberal legitimacy, correctly understood.