Wednesday, April 22, 2009

The first in a series about developments of law and economics in Europe

Recent developments of law and economics in Switzerland

by Professor Anne van Aaken, University of St. Gallen

Switzerland has been one of the countries in Europe where Law & Economics was taught at Master level in the universities already in the 1980ties, mostly in the economics departments (e.g. Bern and Fribourg). But Switzerland was also early in establishing courses in Law & Economics for both, Economics and Law doctoral students from Switzerland. Those so-called Gerzensee Courses, organized by Gerard Hertig from the Federal Technical Institute in Zürich (ETHZ), are given by renowned Law & Economics scholars, mostly from the US.
Ever more, Law & Economics is taught also in the Law Schools, e.g. Luzerne, University of Zürich, University of Basel (see e.g. the Zaeslin program: and ETHZ, all of them offer courses in Law & Economics. The Law School of the University of St. Gallen has established an entire Bachelor and Master in Law & Economics ( This program is – as concerns the early integration of Law and Economics in the curriculum (partly also business administration) – unique in Switzerland and to my knowledge in Europe. The first Master students graduated in 2007 and were highly appreciated in the job market, be it with internationally working law firms, be it with accountancy or consultancy firms. Furthermore, there are regular Lecture Series in Law & Economics, taking place in Zürich, organized by the ETHZ, the University of Zürich, the University of St. Gallen and recently joined by the University of Lucerne (

Ever more students also write their doctoral theses in the field of Law & Economics in St. Gallen, but not only there. St. Gallen University, together with ETHZ is cooperating with the Amsterdam Center for Law and Economics and the Law School of Haifa University for the informal exchange possibility open for doctoral students in the field of Law & Economics, so called “LEx” ( Until now, the Swiss Courts have not openly used Law & Economics arguments (different from e.g. the German Federal Constitutional Court in 2006), but consequentialist arguments may be found also here.
As a personal impression, I find that the communication is getting easier between lawyers and economists, although it clearly remains far behind the level of communication and mutual acceptance in the United States. But depending on the area of law (e.g. competition law, corporate law, international law, legal theory) and the area of economics (institutional economics, behavioral economics, microeconomics with game theory) in which people are trained and practice, communication is taking place and can be very fruitful, certainly in academia as well as in practice. In short: although slowly, Law & Economics in Switzerland is becoming more mainstream, also in the law faculties and communication between lawyers and economists as well as business is becoming easier.

A new series of postings about the development of law and economics in Europe

Law and economics is developing and taking hold in most European countries and it is interesting to follow the developments. It is also worthwhile I think, for there are probably many ways in which developments in one country can be an inspiration in another, e.g. in terms of the development of courses, or in the form of new modes of collaboration between lawyers and economists. I believe there is also untapped potential for collaboraton, e.g. in the development of phd courses.
Thus, I have asked some of the law and economics scholars associated with EALE to give an account of recent developments in their country. I plan to ask several others in the coming weeks. I asked if they would report on e.g. `how many phds are attracted to the subject, whether courses in law and economics are becoming more widespread, whether law and economics has an impact on the law, and whether the conversation with lawyers is becoming easier or more productive.´
The first account is contributed by Professor Anne van Aaken, University of St.Gallen, who will describe some of the recent developments in Switzerland.

Wednesday, April 8, 2009

Guest posting by Alon Harel

Should We Balance Security and Liberty? Skeptical Reflections on the Economic Analysis of Terrorism

Alon Harel, Professor of Law, Hebrew University

Economic analysis of law has penetrated every area of law. Most recently economists have started exploring the area of terrorism and its impact on civil rights. A characteristic example is Richard Posner recent book entitled: Not a Suicide Pact: The Constitution in Times of Emergency. In this book Posner develops his vision concerning the protection of civil rights in times of emergency. The vision which Posner articulates with respect to constitutional interpretation of civil rights is a pragmatic, common-sense vision. Posner believes that liberty is important; security is also important and judges ought to be guided by the perceived practical consequences of their decisions with respect to both values. Consequently constitutional law in Posner's view is fluid and responsive to changing circumstances. It is this pragmatic vision which guides Posner in his discussion of torture, the limitations of freedom of speech, the regulation of electronic searches etc.

The most powerful metaphor used by Posner is the metaphor of balancing conflicting considerations. In Posner's view the interpretation of constitutional texts is free of legalistic constraints. Supreme Court Justices make decisions in much the same way as other Americans do by balancing the anticipated consequences of alternative outcomes and picking the one that creates the great preponderance of good over bad effects. He continues and speaks of the need to restrike the balance between the interest in liberty from government restraint or interference and the interest in public safety, in recognition of the grave threat that terrorism poses to the nation's security. This comment examines critically the use of balancing in judicial reasoning concerning the protection of civil rights. My challenge to balancing understood as a method of judicial reasoning is divided into two. First I show that balancing is not a useful tool and second I establish that it is likely to be a biased or a distorted.

The most fundamental difficulty in using balancing is that balancing-based reasoning is simply not a helpful method of reasoning when the balancing is conducted between notions as vague as security and liberty. To see why, think of a transaction between a buyer and a seller of 2 kg of vegetables. What makes this transaction possible in the market is the fact that neither the seller nor the buyer determines what the weight of the vegetables is. The weight of the weights placed on the scale is agreed by both the seller and the buyer to be the measure on the basis of which the weight of the vegetables is determined.

Assume that instead of using one set of weights the seller and the buyer bring their own weights to the shop and each one of them insists on using her own weights. Such a scenario would undermine the very concept of weighting. Similarly in our context -- the context of the alleged metaphorical weighting of security and liberty -- there is no agreement as to what the value of security is and what the value of liberty is. Perhaps each judge could conduct balancing on his own on the basis of her own weights. But such balancing could achieve very little. The decision would be controversial not because some judges balance while others do not but because the weight they give to conflicting considerations are different and, furthermore, no legitimacy could be generated on the basis of such a subjective process of balancing. What can the metaphor of weighting or balancing achieve if each participant in the dispute brings their own weights to the table? To illustrate this claim, think of both civil libertarians and ardent advocates of security. Posner reiterates again and again that civil libertarians are rights fundamentalists because they fail to balance rights against other considerations. But, at least some civil libertarians ought not to be blamed for failing to weigh the pros and cons of their position. Instead it is more accurate to interpret them as saying that they bring their own weights to the court or to the political discourse and their own weights suggest that liberty is in most cases much more important than security.

Balancing however is not only futile but also dangerous. It is dangerous because of two reasons. First the balancing fails to acknowledge that many of the values protected by rights are socially constructed through a long and vulnerable process of trial and error. The erosion of rights during times of emergency erodes the sensitivities and understandings of their importance and value. Second the use of balancing channels us towards certain considerations which are more easily measurable and quantified. Thus, ironically, it is the process of balancing itself which disrupts the possibility of conducting a genuinely balanced discourse concerning the protection of civil rights at a time of emergency.

To establish the first claim think of the process by which individuals acquire sophisticated tastes with respect to literature, theatre, wine or fine food etc. An individual who wishes to acquire such tastes ought to consume these goods even when she is disinclined to consume them. This is because it is the very consumption of these goods that generates the sensibilities necessary for enjoying these goods.

Many rights are similar to such goods in that benefitting from them requires the inculcation of certain sensibilities. Privacy is perhaps a primary example. Privacy is a prime example of a right that can be appreciated only in environments or societies which have a tradition of respecting it. Once rights are eroded judges (as well as citizens) lose the very capacity to value the right because the sensitivities required for appreciating its value are lost. In fact we can hardly make reasoned judgments as to what sensitivities have already been lost (or have never been acquired) due to the erosion of the protection of rights.

Let me turn attention to a second concern namely the concern that the metaphor of balancing is tilted towards certain considerations at the expense of others. To do so, think of what considerations are more likely to be put on a scale. It seems much easier to put on the scales measurable considerations such as perceived probabilities of terrorist activities, number of expected lives and expected damage to property than to put on the scale intangible costs such as the costs of the erosion of values, the deterioration of solidarity and other expressive and communicative considerations. This is not because the latter considerations are less important but only because they are less amenable to being measured and weighted.

Theoretically these intangible considerations could be put on a scale and be given a dollar amount representing their importance but practically they seem so indeterminate and vague that the concept of balancing seems to be inapplicable to them. What I am arguing therefore is that the metaphor of balancing is not as innocent and neutral. It seems to tilt the balance in favor of considerations which are more tangible than others because the latter could be more easily put on a scale. This observation could of course work either in favor or against security. Intuitively I believe that the considerations protected and promoted by human rights are most typically less tangible and measurable than the considerations favoring security. Security speaks of number of human lives and dollar amounts of property. Human rights speak of autonomy and dignity. Posnerian scales are likely therefore to be distorted scales; they are likely to fail in fully appreciating the significance of the concerns favoring the protection of rights.

Some advocates of balancing may accuse me of being a hopelessly softy leftist romanticist or perhaps as an enemy of numbers or rationality. Let me defend myself by establishing a coalition with a man who could not but be described as a man of numbers measures and rationality -- Albert Einstein -- who is reputed to have said: "Not everything that can be counted counts, and not everything that counts can be counted". My concerns with the method of balancing are simply a less successful and lucid articulation of Einstein's important observation.

This is a shortened version of a Book Review of Richard Posner Not a Suicide Pact: The Constitution in a Time of National Emergency (forthcoming in Israel L. Rev. 2010)