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Jeremy Bearer-Friend, Ari Glogower, Ariel Jurow Kleiman & Clinton G. Wallace, Taxation and Law and Political Economy, 83 Ohio St. L.J. 471 (2022).

Do the goals of fairness, equity, social justice, or other explicitly normative approaches to analyzing law and policy have any place at all in modern scholarship? Some scholars, especially those who approach the world from an orthodox economic viewpoint, have tended to reject categorically the very idea that such concepts should supplant their purportedly hard-headed analysis–an analysis that they hold out as being superior to supposedly “soft,” “sentimental,” “moralistic,” or “subjective” anti-orthodox approaches. Increasingly, however, equity-based analysis has at least been permitted as a component of most legal scholarly discussions. That itself is progress.

Even so, there continues to be a presumed distinction between self-styled “objective” approaches and the approaches of those who focus on inequality, domination, and other such fundamental questions of social justice. The familiar “equity-efficiency tradeoff” encapsulates this tension, the notion being that there are two distinct analytical categories that are not merely separate but in opposition to each other–-that is, the tradeoff says that we must sacrifice some efficiency if we desire greater equity, or instead that we must agree to doom more people to poverty if we seek to maximize efficiency. But is there a better approach? Happily yes, as Taxation and Law and Political Economy, by Professors Bearer-Friend, Glogower, Jurow Kleiman, and Wallace, clearly suggests.

The article outlines these familiar ideas and then takes some serious steps toward considering the strong conclusion that the efficiency concept is analytically incoherent. And although they stop short of embracing that idea fully, their new article admirably lays the groundwork for future scholarship (perhaps to be written by those authors themselves, individually or in various combinations) finally to embrace the conclusion that efficiency analysis is logically vacant. Their article does so many things well that I can hardly disparage them for not going as far as I think they should, especially because they go out of their way to be careful and modest in their conclusions.

The somewhat ungrammatical title of their article is a result of the authors’ engagement with a scholarly movement known as “Law and Political Economy” (LPE), which the authors rightly believe could be enhanced by including justice-based arguments drawn from legal tax scholarship. Hence the two “ands,” adding tax to an existing “and” canon.

The authors note (P. 527) that LPE scholars have argued that “market-centric analytic modes of legal thought dominant in recent decades have been inadequate to” the task of addressing the many crises facing the world today. Meanwhile, “tax scholarship has continuously engaged with the role of economic difference in the law,” which means that “LPE’s success in reorienting legal though [sic] will depend in part on its engagement with questions of tax and fiscal policy.” (P. 528.) Conversely, they argue that “[t]ax scholarship can benefit from LPE’s … skepticism of analysis premised on an autonomous market and that prioritizes efficiency and neutrality.” (Id.) It is that latter point–supposed market neutrality–that is the Achilles Heel of orthodox analyses and is thus the key to making progress toward the authors’ goals.

At times, the article is suitably bold, for example, arguing in conclusion that “[l]egal reforms that respond adequately to the current moment will require innovative and radical thinking.” Does this article do that, that is, does it engage in innovative and radical thinking? Innovative, yes. Radical, however, is more of a work in progress. Notably, the article’s only other uses of the word “radical” are in two footnotes (citing other other authors’ uses of that word) and twice above the line to describe other scholars’ proposals to impose unusually high tax rates on the rich. There are plenty of synonyms, of course, but the larger point is that the essence of the authors’ conclusions is somewhat disappointingly cautious.

Perhaps I am being unfair, however, as I am constructively critiquing an especially fine piece of work written by four academics, not all of whom yet have tenure. Were I their mentor, I would have agreed that caution is the order of the day. Beyond that, however, it is possible to read their analysis as an everything-short-of-saying-so invitation to others to draw the obvious conclusion that efficiency and neutrality are (and always have been) intellectual dead ends. Indeed, I think that that is the fairest way to read what they are doing in this article, because they so clearly expose what is wrong with the efficiency/neutrality orthodox approach. Importantly, Section III.B.2, “The Private Market as a Public Creation,” points to the breakthrough book by Liam Murphy and Thomas Nagel, The Myth of Ownership, which demonstrated that the notion of an autonomous economic market existing logically prior to law (and thus government) is incoherent.

After all, as the authors point out, “the tax system, like other areas of law, results from politically contingent policy choices, rather than the objective application of neutral or objective theoretical principles.” (P. 528.) Even so, their very next paragraph seems to back away from the obvious concluding step, instead offering what could amount to a balancing test: “This approach would recognize the value of efficiency-based frames, albeit when properly contextualized and subordinated to the supervening values that the LPE reorientation prioritizes.” (Id.)

But I use the phrase “seems to back away” here because, in light of the analysis in the article, being “properly contextualized and subordinated” to LPE’s rejection of market idolatry necessarily means doing what Murphy and Nagel and others (including me, in much of my own work) have done. That is, subordinating an efficiency-based frame is necessarily to reject efficiency as a primary guide to analysis. We can no longer view legal or policy analysis as either/or matters–the hoary efficiency/equity tradeoff–or even both/and approaches. Instead, it is at most a two-step hierarchical process: (1) identify our values and goals, and only then (2) decide how to achieve those goals in a way that upholds and advances them without causing ancillary effects that we view as unnecessary and undesirable.

For example, if we want to reduce inequality by imposing wealth taxes, we can dispense with the standard objection (“But that will be inefficient, because wealth is a legal right!”) and instead point out that the new legal rights that redistributive taxation will create are no less legitimate than those that they supplant. Instead, we proceed as the authors suggest. Step 1: Redistribute wealth to achieve goals of justice and equity; then Step 2: Choose the method of wealth distribution that improves the largest number of people’s lives.

In the end, this article constitutes an important step forward, arguing at the very least that the old orthodox approach that treats markets as autonomous and logically prior to law is no longer tenable (and, I would add, never was) and at most that what we used to think of as a co-equal goal of policy analysis–efficiency–is merely a secondary matter of choosing the most useful means to reach our chosen ends. I might even call that radical.

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Cite as: Neil H. Buchanan, Bringing Law and Policy Back from the Black Hole of Efficiency-Based Analysis: Another Important Step Toward Refocusing on Justice, JOTWELL (July 12, 2022) (reviewing Jeremy Bearer-Friend, Ari Glogower, Ariel Jurow Kleiman & Clinton G. Wallace, Taxation and Law and Political Economy, 83 Ohio St. L.J. 471 (2022)),