Sustainability, Distribution, and the Macroeconomic Analysis of Law

Abstract

Legal economic analysis has traditionally focused on the application of microeconomic theory to questions of legal import. Scholars have generally regarded macroeconomic effects of legal rules as lying beyond the purview of the legal decisiomnaker's jurisdiction. This Article argues that such exclusion of macroeconomic subject matter from legal analysis may rest on a scientifically erroneous view of - the economic process. The conventional understanding of the economic process presumes an unlimited supply of material inputs and an infinite natural capacity to absorb waste outputs. Fundamental scientific principles suggest that this understanding is flawed. The economic process must necessarily be limited in scale by the capacity of the ecological superstructure to sustain it. Thus, in addition td the efficient allocation of resources, legal economic analysis also should be concerned with the sustainable maintenance of scale. Consideration of scale effects by legal decisionmakers cannot be safely ignored in the way that distributive effects have been, given that no political mechanism analogous to the tax and transfer system exists to regulate the scale of the macroeconomy.