Products Liability and Judicial Wealth Redistributions

Abstract

Rules which redistribute wealth make some people better off at the expense of other people; they improve the welfare of particular persons' by giving them money, goods, or services. Rules which are sometimes termed general encourage the performance of duties with which all must comply; they improve the general welfare by enabling activities to be carried on efficiently, safely, and predictably. Legal rules sometimes have both distributional and general effects. Thus reducing poverty, a distributional goal, may reduce crime, which would in turn facilitate commerce. And enforcing contracts, pursuant to the general rule requiring this, redistributes wealth in favor of prudent bargainers. I will characterize a legal rule as "distributional" if (i) it produces only distributional effects or (ii) is adopted because its distributional effects are sought. A rule is then "general" if (i) it produces no distributional effects or (ii) is adopted because its general welfare effects are sought.