The colour of the judge's eyes: Efficiency as a criterion for the legislature and for the courts

Should courts adjudicate to promote efficiency in the economy, or should courts be content to apply the law as they find it? The literature of law and economics has much to say about how to identify efficiency in the construction of the law, but little to say about whose business it is to promote efficiency in the law, in so far as efficiency is warranted. It is argued in this paper that efficiency belongs to the legislature and that adjudication for efficiency by the courts is self-defeating. "It is strange that a doctrine as faulty as that developed by Pigou should have been so influential, although part of its success has probably been due to the lack of clarity in the exposition. Not being clear, it was never clearly wrong. Curiously enough, this obscurity in the source has not prevented the emergence of a fairly well defined oral tradition''.