When the economic theory of the last decades becomes a subject of reflection for historians of economic theory, a striking feature which they will have to explain is the demise of the disequilibrium concept. Previously, economists had no qualms concerning the view that the market or the economy was exhibiting disequilibria. Amongst many possible quotations, the following, drawn from Viner's well-known article on Marshall, illustrates that:

From its early origins to the present, the development of mainstream economic theory has taken a direction which has excluded the analysis of human needs as a basis for social policy. The problems associated with this orientation are increasingly recognized both by economists and non-economists. As Sen (1985) points out, it is indeed strange for a discipline concerned with the well-being of people to neglect the question of needs. Currently, some writers such as Doyal and Gough (1991), post-Keynesian economists such as Lavoie (1994), and those such as Davis and O'Boyle (1994) who work in the newly emerging school of social economics have begun to address the question of human needs, especially in relation to problems of policy assessment and evaluation. The approaches of some development economists who have dealt with similar issues were also instrumental in drawing attention to the significance of the long-neglected concept of needs (Stewart, 1985; Cole and Miles, 1984).

Modern law and economics received much of its impetus from Ronald Coase's analysis in ‘The Problem of Social Cost,’ and a goodly amount of that comes from the Coase theorem, which states that, absent transaction costs, externalities will be efficiently resolved through bargaining. The fact that the analysis that came to be codified in the Coase theorem was (intentionally) an exercise in pure fiction on Coase's part did not deter the erection of a substantial edifice of positive and normative analysis on this foundation, nor, for that matter, has subsequent elaboration of Coase's intent done anything to abate the interest in the theorem and its implications.

It is sometimes believed that technical apects of a theorem have little to do with the policy implications of the theorem. On the contrary, in this paper we argue that for the Coase Theorem, the technical details are very important in understanding the potential policy implications, since the two interact in a way that leads to a dilemma: a formally correct version of the theorem that yields the usual conclusions requires assumptions that are too restrictive to give the theorem much policy relevance. On the other hand, relaxing the assumptions of the theorem to be sufficiently plausible to be applicable in real world settings modifies the conclusions of the theorem.

In a published debate between Law and Economics avatar Judge Richard Posner and Professor Robin Malloy entitled ‘Is Law and Economics Moral?’, Malloy argued that the dominant methodology of Law and Economics (Posner's Chicago-style wealth maximization) is immoral. Malloy likened it to the Frankenstein Monster – an unholy, undead abomination that can go berserk despite its ostensibly benign provenience. Malloy claimed that wealth maximization applied to social discourse ‘reduces people to an human existence to imaginary variables for calculation’.