Thinking about our new book

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A Hohfeldian jural relations approach forces us to think differently about interdependence than in the standard neoclassical model.  Law is absent for the standard neoclassical model.  Some authors may state that there is an assumption that property rights exist or the rule of law is enforced but it is not explicitly in the model.  Interdependence in the neoclassical model comes from buying or selling power (market power if it exists).  Otherwise, the economics agents are assumed to be autonomous agents whom have a fixed set of preferences and a fixed budget or a fixed cost and production function in the case of a firm.

 

A Hohfeldian approach forces us to look a the specific, typically legal but could also be related to cultural, rules that exist and create or construct interdependence.  In other words, the legal piece rather than being a background assumption comes to the forefront as a an explicit part of the economic analysis.  This hohfeldian interdependence can be of a one to one nature (in personam) or of one agent to the whole world or much of the world anyway (in rem).  The construction of these legal dynamics forces whole different set of assessments and behaviors by the various agents.

 

Our approach has been fairly agnostic to this point as to which behavioral model should be used. We fully recognize that there are several competing models of human behavior in economics especially associated with the behavioral revolution.  The nature of how under a specific set of legal rules interacting with a specific set of behavioral models is important in understanding the resulting socioeconomic outcomes.  This is clearly an arena for future research and conceptual developments.

 

Our approach does recognize building on the work of our late mentor A. Allan Schmid that there are some forms of physical interdependence that matter besides legal interdependence.  These may be exist because of the nature of the biophysical environment or technology in place.  These factors co-exit and help shape the nature of the interdependence that an analyst needs to consider when examining a specific problem.  In this area, we are also inspired by the work of the late Nobel Laureate Elinor Ostrom.

 

Many future blog posts will focus on expanding this approach we have started in our new book:

 

https://legaleconomicnexus.blogspot.com/2022/03/announcing-legal-foundations-of-micro.html










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