The Legal Analyst: A Toolkit for Thinking about the Law

The Legal Analyst: A Toolkit for Thinking about the Law

There are two kinds of knowledge law school teaches: legal rules on the one hand, and tools for thinking about legal problems on the other.

In The Legal Analyst, Ward Farnsworth brings together in one place all of the most powerful of those tools for thinking about law.From classic ideas in game theory such as the Prisoners Dilemma and the Stag Hunt to psychological principles such as hindsight bias and framing effects, from ideas in jurisprudence such as the slippery slope to more than two dozen other such principles, Farnsworths guide leads readers through the fascinating world of legal thought.

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Most lists of "What to Read the Summer Before Law School" are bullshit. They are better left to 2nd and 3rd year classes on legal theory or jurisprudence. Legal history Examples include Friedman's "A History of American Law" and usually some work on the history of the Supreme Court. If your school doesn't offer a class on legal history (as mine sadly doesn't), save it for sometime after your first year. Again, some of these books are really excellent, but they will NOT help prepare you for your first year. You need books that will help you make sense of the cases you'll be reading and concepts you'll be learning. Anyone who includes a novel on their list is not to be trusted because they are not serious about helping, you, the new law student. I have read John Delaney's "How To Do Your Best on Law School Exams" and can recommend it.

Upon receiving a letter of acceptance to Chicago Law School last winter, a friend of mine at Harvard Law wrote me an email recommending three books as absolute must-reads prior to beginning my 1L year: "The Bramble Bush" by Karl Llewellyn, "Getting to Maybe" by Richard Michael Fischl and Jeremy Paul, and "The Legal Analyst" by Ward Farnsworth. Each chapter spans only about 10 pages, and follows a fairly formulaic outline, beginning with the theory of the topic of interest and then providing several examples from real and imaginary disputes and settlements. A student of economics, for example, will find Farnsworths treatment of these issues (which comprises well over half of the book; a tip-of-the-hat to the dominance of the law & economics school) somewhat pedantic and basic.

MarginsLaws most often operate at the margins, thus by thinking in all-or-nothing terms many people fail to see the real argument; marginal deterrencescaling penalties so that there is always an incentive to behave better can provide benefits Single Ownera single owner is forced to internalize all the costs and thus makes decisions considering all of the repercussions, thus, thinking like a single owner makes sure that all these costs are considered Least cost avoiderdesign legal rules such that expenses should be born by the party that could avoid the cost most cheaply, this provides incentives for those who are best positioned to avoid the harm to take adequate precautions Administrative costssome legal rules, although theoretically sound, are too expensive to administer; only cost-justified legal rules should be adopted RentsRent-seekers wastefully compete for a prize, thus rent-seeking inherently does not create wealthit only seeks to distribute it; lobbyists are famously rent-seeking Coase Theoremin a world of no transaction costs, it doesnt matter who is assigned property rights because the rights will naturally flow to whoever values the property most; however because transaction costs matter legal rules should attempt to assign property rights to those who value them most to maximize efficiency AgencyAn agent lacks the proper incentives to always act in the interest of the principal; Legal rules can help align incentives between agent and principal Prisoners dilemmaeach individual has an incentive to defect; however in an optimal system they would agree to cooperate; law should try to incentivize this type of cooperation (e.g., bankruptcy laws preference period) Public goodsgoods that cannot be excluded from others; because people can not be excluded the incentive to create public goods may be too low because they cannot monetize their investment; norms can be used to encourage the development of public goods Stag HuntTerm derived from Rousseaus stag hunt; different from prisoners dilemma in that everyones best choice is to cooperate (not defect), however, if the other party defects then cooperation is the worst scenario (Nash equilibriumgiven what everyone else is doing none can do better by changing their choices); this is why redistributive tax policies are more popular than voluntarily writing checks to redistribute their own income to others ChickenBest case scenario is where one is a hawk and the other is a dove; each party would rather be a hawk than a dove; international politics are often games of chicken; may not be a single best solution to a game of chicken CascadesOften ideas (information cascades) gain acceptance even when the underlying rationale is weak due to cascade effects; this may be because certain ideas are simply more available Voting paradoxeswhen you have more than three in an election than it is often difficult to say much about peoples true preferences (Condorcet, impossibility theorem); the order in which people consider options may matter Suppressed Marketssome cultures consciously develop an anti-competitive atmosphere to gain social advantages; this comes with important costsit may allow an less productive person to receive more benefits than they deserve and vice versa Rules v. Perhaps there is good reason to have law on the books (create proper ex ante incentives) yet enforce a the law differently (allow for better ex post outcomes) Property/Liability RulesThe remedies for violation of property rules and liability rules differ. Chevron deference for agencies, sometimes the law uses the ambiguity of standards of proof to provide a guise of equal treatment Product Rulethe product rule assumes that events are independentthis is often not the case; in a multi-element tort the plaintiff need only establish that each element is more likely than not to have occurred; thus, there can be a conjunction paradox; but juries may not actually think in these terms Base ratenumbers need always be evaluated in context; need to understand the background rate to evaluate the new evidence Values and marketsMarkets are very useful for establishing an objective measure of value; in some circumstances, however, there is no market and thus it is very difficult to establish value; also markets say nothing about subjective value I thought that the book was good for a beginner like me to better understand the tools and principles that underlie many legal rules and decisions.

My main goal in teaching my introductory Economics class was to give students a good set of mental tools for understanding the world. I am very glad that law students are reading The Legal Analyst. The Legal Analyst is a very easy book to read, making it even better from a cost-benefit analysis standpoint. Anyone who has an interest in understanding how the world works, or becoming a more rational thinker, should read The Legal Analyst.

Paraphrasing part of the book's preface, the goal is to gather and clearly explain, with numerous examples, the most interesting ideas presented in law school. That said, I think this book is under-sold as specifically being for legal-minded people. The economic ideas give ways to think about how much things are worth (in a broad sense of the word), how people value them, and whose responsibility problems should be. It's really about concepts that show up everywhere, not just in law: concepts useful to anyone wanting to think about how the world works, why it works the way it does, and how to successfully navigate it.

The book outlined the major ideas in law and explained the many components of law. The three topics outlined gave the essential information to understand law and decisions in law. For those who actually like to read textbooks and absorb information, this book would be a good match.

He serves as Reporter for the American Law Institutes Restatement Third, Torts: Liability for Economic Harm.

  • English

  • Law

  • Rating: 4.20
  • Pages: 326
  • Publish Date: June 15th 2007 by University of Chicago Press
  • Isbn10: 0226238350
  • Isbn13: 9780226238357