It should also be noted that claim (II) differs from claim V for similar reasons. Claim (II) indicates that efficiency is one of the legal bases. Many pieces of legislation should therefore be effective. Affirmation (V), on the other hand, only asserts that the law results from the selfish conduct of citizens and officials. This behavior does not necessarily lead to effective rules or institutions. Legal tender is anything that is recognized by law as a means of paying a public or private debt or fulfilling a financial obligation, including tax payments, contracts, and fines or damages. The national currency is legal tender in virtually all countries. A creditor is required by law to accept legal tender to repay a debt. Legal tender is determined by a law that determines the thing to be used as legal tender and the institution authorized to produce and deliver it to the public, such as the United States Department of the Treasury in the United States and the Royal Canadian Mint in Canada. On the other hand, the political economist generally denies that a purpose can be attributed to the one who proclaims a rule of law, especially because legal rules are not promulgated by a single person who has the power to unilaterally control the content of the rule. Certainly, legislators do not have a common goal from the perspective of political economy, and it should not be assumed or expected that a law maximizes social welfare. Legislation results from the interaction of interest groups that do not reflect all the interests of society. Even if the legislature reflected all the interests of society, not every interest has an equal (or proportionate) voice in the formulation of the law.
[7] Finally, even if each interest played a «proportionate» role in the formulation of the Statute, Arrow`s general possibility theorem teaches that aggregation of interests could still not produce a coherent objective. Political economy thus rejects the instruments of domination. Deontic critics also reject the instrumentalism of didactic analysis. Doctrinal analysis treats the law as a means to an end to bring about effective behavior. The value of legislation derives solely from the value of the objective pursued. From the deontic point of view, on the other hand, it is a question of establishing justice between the parties. In many cases, however, it is important to know who owns the law. Transaction costs are never zero, and if rights are misassigned, an expensive transaction is required to correct this misdistribution. If transaction costs are higher than the increase in value resulting from the transfer of the resource to the efficient owner, there may not be a corrective mechanism. This can happen in any type of economy. An extreme example is Russia, where the courts have not been able to provide clear definitions of property rights, and the people who control the companies are not necessarily the owners. That is, those who have control of a company cannot sell it and keep the product.
This creates incentives for inefficient use of assets, such as the sale of valuable raw materials at prices below the market price, with the product deposited outside the country. Under such circumstances, Coase`s theorem will not work and the correct definition of property rights will become important. In general, the experience of Russia and its former satellites has highlighted the importance of the legal system for the development of a market economy and thus demonstrated the importance of law and economics in influencing policy. Nevertheless, the economic analysis of law, or at least of its components, implicitly offers distinct, often radical, answers to questions in legal theory. In addition, some currents suggest a radically different perspective of law and legal theory. The following section describes the complex claims that emerge from the mass of economic analyses of law and identifies three projects that organize much of the work in this area. The following sections ask what perspective on the law these claims and projects offer implicitly or explicitly. The popularity of cross-border and online shopping is increasing the demand for more forms of money, such as popular cryptocurrency alternatives such as Bitcoin, which are recognized as legal tender.
However, given the official objections to such alternatives, except in a few minor cases, they may still be a few years away and are not legal tender in the United States or most other countries. There are many online services that accept cryptocurrencies, and this practice is completely legal. Due to their status as unofficial competitors with legal tender, cryptocurrencies are mainly limited to use in gray and black market activities or as speculative investments. Posner`s claim caused much controversy in the late 1970s and early 1980s. (See, for example, Symposium [1980].) Twenty years later, Kaplow and Shavell [2001] revived and revised Posner`s claim. The revision had two parts. First and foremost, they chose the welfare state in general and not cost-benefit analysis in particular as the normative basis for the decision. Animal welfare requires that the assessment depends solely on the welfare of the individual.
Cost-benefit analysis is therefore a form of animal welfare assessment; but Kaplow and Shavell`s reasoning allows them to avoid various criticisms of cost-benefit analysis. Second, Kaplow and Shavell do not primarily argue for a normative theory of jurisprudence. Rather, they argue that researchers` assessment of legal norms and institutions should focus on well-being. However, they suggest that, overall, judges have the same duty to evaluate as the external analyst.
