Berkeley Program in Law and Economics

Holmes commended scholars to analyze law from the viewpoint of a "bad man." If Holmes had in mind everyday wrongdoing, and not a lofty evil, then he prescribed the research strategy of law and economics. The virtuous prefer good, villains prefer bad, and rational actors in economics prefer themselves. Instead of obeying or disobeying the law for its own sake, the rational actor in economics treats law as an obstacle or an instrument, not a value. The success of the economic analysis of law proves the fruitfulness of this research strategy. Instead of praise, however, this paper offers critique and extension. As the social complexity that law regulates increases, economists typically prescribe decentralization. Decentralized law works best when spontaneous obedience and private enforcement supplement state coercion. Internalized morality prompts spontaneous obedience and perfects private enforcement. Thus minimizing state coercion maximizes reliance upon internalized morality. Developing a theory of morality to anchor decentralized law requires extending models beyond the bad man. This paper develops two fundamental ideas of morality: self-control and self-improvement. I will explain how law harnesses and strengthens self-control, and also how the law changes people by creating opportunities for self-improvement.