Abstract

Contemporary economic analysts of the law argue that certain legal institutions, such as contract law, ought to be designed to promote wealth maximization, while different legal institutions ought to seek to achieve non-wealth maximizing aims, such as distributive justice. In order to preserve the normative claim that the sole aim of any single legal institution should be the promotion of wealth maximization, economists rely on the “specialization principle”: each legal institution must be organized around a single normative criterion, partitioned from and without regard to the normative aims of other legal institutions. I argue that this idea of a strict normative division of labour between institutions is problematic. On any instrumentalist view, the normative justification of the ends of a particular legal institution cannot ignore the normative aims of the legal system of which it is a part. I develop this argument by critically examining the economic analyst’s claim that commercial contract law should be limited to helping firms maximize profit.