An Austrian approach to law and economics, with special reference to superstition

This paper has two purposes. First, it considers what the components of an “Austrian” law and economics might consist of. I argue that Ronald Coase’s conception of law and economics precludes the economic analysis of legal institutions and, in particular, the beliefs that support them. In doing so, Coase’s conception precludes an Austrian law and economics. In contrast, Richard Posner’s conception of law and economics makes such analysis the core of its study. In doing so, Posner’s conception provides a productive foundation for an Austrian law and economics. Second, to illustrate what some aspects of an Austrian law and economics might look like in practice, I consider several examples of the economic analysis of beliefs of import for the law. I focus on objectively false beliefs, or superstitions, and argue that some such beliefs are socially productive. Copyright Springer Science+Business Media, LLC 2012