Economic Consequences as Legal Values: An Inferentialist Approach

Normative economic analysis (of law) typically argues that norms are desirable because of their economic consequences. In this chapter we do three things: (1) discuss two limitations of this approach, (2) find the second of them particularly challenging and (3) offer legal inferentialism as an alternative (and better) approach. The first limitation is that consequentialist arguments can conflict with other arguments used in legal interpretive practice. To address it, it is sufficient to posit that, in case of conflict, the argument from economic consequences prevails. The second limitation moves from the question “Which economic consequences matter?” For example, are markets desirable because they maximize consumer or total welfare? Both maximands are used by economists. Given their preference for questions of fact and means over those of value and ends, economists with positive inclinations are not in an ideal position to solve disagreements of this sort. With legal inferentialism (i.e. an account of the inferential moves in legal argumentative practice), the value choices enshrined in legal reasoning allow selection of the economic consequences that matter from a legal point of view. For illustrative purposes, the chapter takes into account legal materials about the EU Unfair Contract Terms Directive.