What sanctions should the law inflict on those who break their contracts? Would it matter if more severe sanctions were likely to cause prices to rise? What if most contracting parties prefer higher sanctions and higher prices, or what if they prefer lower sanctions and lower prices? And whatever the answer to these questions might be, why do economists and philosophers think about these issues so differently?
Of course, when I speak of “economists” I mean something closer to “most economists, though not necessarily all of them; and including the many lawyers (like me) who do not have advanced degrees but who use economics in their scholarship.” An analogous but even broader qualification should be presumed whenever I speak of “philosophers.” Indeed, on the issues I discuss here, many philosophers of a utilitarian or welfarist persuasion will be closer in spirit to my “economists” than they will be to other professional philosophers. So, too, will contractualist philosophers such as T.M. Scanlon. . .