The term ‘positivism’ is used in the area to describe a range of universal specific methods that are exclusive to various disciplines. The so-called positivism in the segments of law and economics isn’t the same. What is more, its fundamental assumptions are completely different. We make sure to use the words ‘positive’ and ‘positivism’ in order to discuss the nature of law or a special method to study this law. Talking about the positive law means to describe the society legal rules just the way they are established, rather than we may think they are supposed to be. At the same time, legal positivism is also about the studying of the law of society that is scientific to some extent.
Legal positivism tends to be related to a set of theories that law comprises a range of rules that are generated by the sovereign, rather than from one of the higher places. For instance, a legal positivist is absolutely sure that law should be separated from what we call morals. However, some of the legal positivists make certain to treat moral statements as some special social conventions that may one day turn into the legal rules. The positivist, who is engaged in studying the society law, will most likely find it extremely important to study the society morals as well. However, he/she will deal with this study not in a normative, but in a scientific way.
Economists tend to make use of the term ‘positive’ in order to discuss economic analysis not as normative, but descriptive. According to the positive economic analysis, when there are some premises, A, B, some conclusion C will definitely pop up. For instance, a positive economic analysis proposition may be the following: ‘In case domestic manufacturing appears to be uncompetitive, certain quotas on overseas imports will result in higher prices.’
When the matter concerns positivism in law and economics, it is necessary to say that positive economic analysis of law always tends to identify a legal rule and later provides some descriptive statements regarding the possible economic effects of that very legal rule. For instance, the statement ‘predatory pricing anti-trust law forces some of the leading organizations to set inadequately high prices’ is related to the positivism in both segments – law and economics. First of all, one should distinguish the legal set of rules against the greedy pricing, a typical exercise in legal positivism methodology. Next step in such case is to identify the effect of the legal rules mentioned above on the organization’s incentive, as well as the follow-on effects on the locative efficiency, the economic positivism methodology application. This mixture of economic and law positivism can be also traced in the economic analysis of legal institutions like juridical opinion, legislative process, courts, as well as the rules of the civil procedure. In this case, the positivism law and economics researcher exert every effort to identify the range of institutional constraints regarding the legal making of the rules, as well as to generate an economic theory that gives an explanation for the effects of such constraints.