Richard A. Posner on the Social Cost of Lawyers
Several studies have found that the more lawyers a nation has, other things being equal, the lower its rate of economic growth. Good news for England? Not really. Among their many other weaknesses, the studies ignore the contributions that lawyers make to non-market output—and non-market output is a form of ‘economic’ output as economists use the term, so it should not be ignored even by economists. The authors assume that the major activity of lawyers is the unproductive redistribution of wealth. But consider: the regulation of pollution is a lawyer-intensive activity the principal outputs of which—clean air and clear water—are not included in conventional measures of economic output. Deterring police brutality is another non-market good that lawyers play a significant role in producing. Likewise the deterrence of invasions of personal privacy. Furthermore, the provision of legal remedies is equivalent to giving the population potentially valuable options to invoke those remedies should the need arise. The options are separate from their exercise. People who never in their lives bring a lawsuit may nevertheless derive value from knowing that, should their legal rights ever be invaded, they will be able to find a lawyer and get into court without too much delay and with a fair chance of winning, just as people derive utility from having fire insurance who never have a fire. Granted, the threat of legal liability, a kind of negative option, or tax, is also greater, the easier it is to bring a lawsuit; and who knows how the two option values net out? All I claim is that the proposition that increasing the number of lawyers reduces a nation’s economic growth, like the parallel proposition no longer fashionable among economists that advertising is socially wasteful because it is redistributive, has not been proved.
(Richard A. Posner, Law and Legal Theory in England and America [Oxford: Clarendon Press, 1996], 92-3 [footnotes omitted])