Principles for a Free Society: Reconciling Individual Liberty With the Common Good

Overview

As government budgets come under political fire and free-market ideals spread, the legal and social principles of libertarian thought continue to grow in popularity and relevance. It is particularly timely, then, that Richard Epstein, one of our country’s most distinguished legal scholars, here sets out an authoritative set of principles that explains both the uses and the limits of government power. Blending his deep knowledge of classical political theory and legal history with modern economic thought, he ...

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Overview

As government budgets come under political fire and free-market ideals spread, the legal and social principles of libertarian thought continue to grow in popularity and relevance. It is particularly timely, then, that Richard Epstein, one of our country’s most distinguished legal scholars, here sets out an authoritative set of principles that explains both the uses and the limits of government power. Blending his deep knowledge of classical political theory and legal history with modern economic thought, he considers a wealth of timely topics: the use of norms and customs in setting legal rules; the appropriate spheres for both private and common property for such diverse resources as water and telecommunications; the dark side of altruism in driving collective behavior; and the relative merits of public and private assistance to the poor. Drawing on the work of multiple disciplines, Principles for a Free Society offers a thoroughly realized blueprint to guide us through political conflict in the troubled times ahead.

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Editorial Reviews

Paul Weissman
. . .[T]o be dazzled by Epstein is by no means necessarily to agree with him. For all its air of tough-minded realism, his free market theory is an essentially utopian construct. . . .[the book] will provoke passionate responses from many readers. . . . .even readers disposed to debate. . .will find themselves challenged by a powerful and original intellect.
New York Times Book Review
Publishers Weekly - Publisher's Weekly
A truism of academe is when faced with a dilemma, make a distinction. Epstein, professor of law at the University of Chicago and author of Mortal Peril: Our Inalienable Right to Health Care?, follows this advice in trying to reconcile individual liberty and the common good. In lucid, readable prose he argues that the two are compatible, provided that certain distinctions and qualifications are made. Epstein spends considerable time explicating the laissez-faire doctrine, insisting that it need not glorify the individual at the expense of society: when applied pragmatically rather than dogmatically, it maximizes the welfare of all. Epstein realizes, of course, that the Achilles heel of the free-market system is the inequitable distribution of wealth, but he believes that a "voluntary redistribution" will solve the problem, although "it will always leave some individuals short." Similarly, he says, it's "always painful to deny recovery for an individual in need" but we don't want a system that encourages self-destructive behavior. At this point one suspects that Epstein's book does not reconcile freedom and equality so much as champion laissez-faire capitalism with some limitations. One also wonders whether he shouldn't care more that Adam Smith's unseen hand can become the unseen foot, kicking those who are down. (Sept.)
Library Journal
As Epstein, the James Parker Hill Distinguished Service Professor of Law at the University of Chicago, correctly notes in his introduction, laissez-faire economics is one of the most frequently criticized theories ever proposed. But libertarianism, the subject of this book, is much more than laissez-faire economics. When coupled with the absolutism of individual rights and minimalist government, libertarianism produces a social Darwinist society. Epstein attempts to present a balanced explanation of libertarianism while still mightily defending its basic principles. Often criticized as unsympathetic to the common good, libertarianism as described here does have a more human face. Though he makes many questionable assumptions, Epstein should be commended for his clear discussion of the development of libertarianism's basic tenets. The result, while not an easy read, is worth the effort of anyone seeking to understand libertarianism and what it may offer America.--Thomas J. Baldino, Wilkes Univ., Wilkes-Barre, PA
Booknews
Epstein (law, U. of Chicago) defends the principles of limited government and argues that it can work to the advantage of almost all of society. He warns, however, that a careful dilution of pure laissez-faire policies is necessary to balance a powerful economic engine with individual liberty. He analyzes the interaction of law and social norms, and highlights a handful of restraints that he says provide a moral foundation to a resilient and adaptive capitalist system. Annotation c. Book News, Inc., Portland, OR (booknews.com)
Paul Weissman
. . .[T]o be dazzled by Epstein is by no means necessarily to agree with him. For all its air of tough-minded realism, his free market theory is an essentially utopian construct. . . .[the book] will provoke passionate responses from many readers. . . . .even readers disposed to debate. . .will find themselves challenged by a powerful and original intellect. -- New York Times Book Review
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Product Details

  • ISBN-13: 9780738200415
  • Publisher: Basic Books
  • Publication date: 10/18/1998
  • Pages: 384
  • Lexile: 1620L (what's this?)
  • Product dimensions: 6.38 (w) x 9.47 (h) x 1.19 (d)

Read an Excerpt

Chapter One

Natural Law: The Utilitarian Connection

My purpose in this volume is, after a fashion, to square a legal circle. From the earliest times, legal and political writers have worked hard to reconcile the demands for individual liberty with those for the common good. At one level, the cynical and weary among us could dismiss their project as an impossibility because scarcity precludes the simultaneous satisfaction of all desires, be they practical or conceptual. Since it is not possible to make all people happy all of the time, we should give up this misguided quest for some holy grail and settle for a less grandiose pragmatic shuffle.

    The task of legal theorizing is not, however, to satisfy all those demands simultaneously. Rather, it is to highlight the forces that could lead to a reconciliation of these two divergent imperatives, and to show why the forces that link individual liberty to the common good are far stronger than those that seemingly drive them apart.

    This self-appointed task flies in the face of the pervasive negativism of this postmodern age. Many writers despair that any comprehensive theory can organize the raw and resistant data of social experience. A deep strand of legal skepticism throws up its hands at principled solutions and, by default, gives the legislature free reign to define, and redefine, legal rights in accordance with the perceived demands of majority will. Yet too often this casual approach degenerates into an exercise to find ways whereby legislative powers can be used to advance the interests of one's own group, typically defined by race, sex, and ethnicity in this age of identity politics. But this type of skepticism sacrifices all hope for any systematic understanding of legal relationships. It also carries with it dangerous consequences. Once there is no sound view of right and wrong, it is easy to slip into the flame of mind that elevates one's own partisan cause to the exclusion of all other interests: after all, what is sacrificed if there are no sound principles of political or social organization?

    Often the same impulse toward legislative dominance comes from the opposite impulse: a strong absolutist sense of right and wrong smothers any dissent and demands that a given legal system regulate every aspect of human life. The upshot of this resurgent fundamentalism is a dogmatism that does quite well for those in power, but less well for those who are only limited partners in this new collective enterprise.

    The twin impulses of skepticism and dogmatism, then, easily lead to the special pleading that is the most insistent enemy of a free society. The only way to buck that trend is to resort to a strategy that gives a very different twist to skepticism and dogmatism. The one sure dogma--that human knowledge and human plans are inevitably limited--leads to a principled skepticism about putting first our own personal and group interests. Accordingly, a sound legal order is one that responds to the fragility of knowledge by giving no one absolute control and power. It seeks the dispersion of power across individuals and social groups.

    Yet even this note of caution leaves much work to be done. The celebration of individual rights and the decentralization of social power does not explain how these twin objectives should be achieved. There is still an enormous amount of work to be done to articulate and defend the best comprehensive theory that achieves these ends. Unfortunately, however, legal and political thinkers who have confronted this problem have exhibited little or no consensus about the proper form for any satisfactory legal theory. Indeed, generally speaking, contemporary thinking typically divides legal theories into two separate philosophical camps, each with its own obscure name: deontological or consequentialist.

    A deontological theory stresses that the right and wrong in an individual case depends on what people did in some particular context. It seeks to isolate individual transactions from their larger social setting. It focuses on antecedents, not on consequences. This approach is closely associated with the natural law tradition, both of John Locke and Sir William Blackstone in the seventeenth and eighteenth centuries, and of modern times. The opposite trend in legal thought looks to the consequences of actions and rules, not to their antecedents. These consequentialist theories may be conveniently, if inexactly, grouped as utilitarian. The natural lawyers had a much stronger intuitive sense of the role and place of individual liberty in ordinary life and political affairs. The consequentialists are much more concerned with economic progress and social welfare than with any conception of individual freedom, which they sometimes regard as naive, simplistic or even quaint. The intellectual divide between these two schools is strong, and bodes ill for any effort at their substantive reunification.

    I aim to maneuver between the alternative risks of dogmatism and skepticism. My hope is to harmonize our intuitive respect for the past with our need to shape and control our future. In this opening chapter, I take the first step in that direction by demonstrating the eerie congruence between natural law and utilitarian theories on some of the key building blocks of our own legal tradition: liberty, property, family, and custom. All of these principles seek to create separate spheres of individual control. None seeks to demand uniformity to some single conception of the good. In subsequent chapters, I will then push the connections between the individual and the common good in both private and public law settings, where the private law setting deals with legal disputes between ordinary individuals, and the public law setting with the relationship between the individual and the state.

    To turn to my immediate topic, the points of opposition between natural right and utilitarian theories have been so often rehearsed that it is here necessary only to summarize the relevant differences briefly. Natural rights theories regard themselves as theories of individual entitlement, not of social good. In general they seek to articulate the permanent and immutable truths of any legal order that they believe to be good in all societies over all times. In dealing with the basic relationships between individuals, they stress the importance of individual liberty and personal autonomy and defiantly pit these against any supposed measure of social welfare. In dealing with the proper resolution of concrete legal disputes, their emphasis on the justice of the individual case, the intimate connection between the doer and the sufferer of harm, makes them overtly anti-instrumental in orientation. They disavow the idea that the social consequences of any legal rule could justify its adoption or rejection, and thereby reject any abstract measure of social welfare. Taken to their logical extreme, these natural law theories have--or, at least, ought to have--as their central maxim, fiat justitia ruat coelum (let justice be done though the heavens may fall). If consequences never count in deciding the rights and wrongs of individual actions, then disastrous consequences cannot count either.

    Natural rights theories have long been popular in our culture. In the seventeenth century, Richard Hooker, whose work much influenced Locke, captured the matter well: "Law rational therefore, which men commonly used to call the law of nature, meaning thereby the law which human nature knoweth itself in reason universally bound unto, which also for that cause may be termed most fitly the law of reason." The instinctive appeal of Lockean thought was its insistence that all individuals are free, equal, and independent in the state of nature, "wherein all the power and jurisdiction is reciprocal, no one having more than another." In the eighteenth century, Jefferson appealed to "nature and nature's law" in the Declaration of Independence. Charles Murray, in his recent defense of libertarian thought, self-consciously hearkens back to that tradition: "Freedom is first of all our birthright." Yet today's technical exposition of natural rights theories often avoids such simple pronouncements of faith and instead employs a terminology that, to put the matter charitably, tends to border upon the obscure or occult. Some special thing, property, quality, or attribute is all too often "immanent" or "inherent" in something else.

    There is some method to this madness. Although natural lawyers recognize the difference between analytical and empirical truths, they often strive to identify a grand set of necessary empirical truths about human nature that are not made, but rather are discovered through some combination of introspection, observation, and rational discourse. The synthetic a priori of Kant holds that certain nonlogical truths are nonetheless true by some human necessity. For lawyers in the natural law tradition that category is hardly empty. The contingent and variegated elements of human life and experience are subordinated to those elements that are perceived as permanent, general, and inescapable, if not divinely revealed. These lawyers view with suspicion the study of differences in culture and laws, first made popular in 1748 by Montesquieu in his Spirit of the Laws, because of its implicit attack on the universality of the legal order whose basic intellectual substrate spans the generations and crosses the seas.

    Notwithstanding the breadth of their claims, natural lawyers--at least, academic natural lawyers today--are often defensive, almost apologetic, about what they do. While they pride themselves in a program that is abstract, ambitious, austere, and rigorous, they recognize that they are the devoted champions of a minority outlook. To them, modern legal and ethical thinking is dominated by a dreaded reliance on conceptions of social welfare, cost-benefit calculations, realism, pragmatism, instrumentalism, and central planning--all suggesting that individuals are concerned more about short-term gratification than about the illumination of the major structures of legal thought. But even with their isolation from the mainstream, natural rights thinkers persevere, stoically confident that with suitable explication their necessary truths about human and legal relations may perhaps in time become our conventional truths as well.

    Utilitarianism, for its part, exudes confidence and makes light of what it regards as the exaggerated pretensions of natural law theories. Jeremy Bentham, for example, regarded himself as the mortal adversary of Blackstone, so much so that in his view natural law was not only "nonsense, but nonsense on stilts"--a derisive phrase calculated to capture the ungainliness of natural law. The philosophical hostility so often expressed toward natural law begins with the obvious point that it is odd to "find" law "out there" like a rock or a stone, or even as a necessary constituent of a human relationship. Laws are something made by human beings for their own governance. The survival of past societies has depended heavily upon their choice of laws, just as our survival and prosperity is heavily dependent upon the choices, often conscious and deliberate, that we make today. Utilitarianism is thus concerned not only with general principles of right and wrong, but also with historical context and institutional arrangements. Law is more than what is written in the statute books.

    Utilitarianism also rejects the intuitionism to which natural lawyers gravitate. In examining the complex of legal and social institutions that surrounds the law as such, modern consequentialist theories place heavy emphasis upon the maximization of some social good. The choice of happiness, utility, or wealth raises important controversies within the consequentialist school, but these divisions pale in comparison to the starker opposition with classical theories of natural law and natural right. If the classical philosophy of Plato, Aristotle, Aquinas, and Locke lies at the root of natural law, then utilitarianism depends on the skepticism of David Hume, the economics of Adam Smith, the indefatigable curiosity of Jeremy Bentham, or the social-cost calculations of Ronald Coase.

    This thumbnail sketch deliberately ignores or downplays important differences that surface within both the natural law and the utilitarian camps. A preoccupation with these internal differences has the unfortunate tendency to obscure some of the larger truths about the relationships between these two schools in Western, and certainly Anglo-American, thought. The key point is that, however much the two schools differ in methodology and approach, they exhibit a high correlation on results. Both theories find a large place for institutions of private property; both are concerned with the control of aggression and the keeping of promises. It is an intellectual challenge to dwell on the precise differences between Locke and Hume, or between Blackstone and Bentham. But for all their differences, they are all--when compared with the Marxists, socialists, communitarians, republicans, and feminists of our time--peas from the same pod.

    I believe that this correspondence in outcomes between the classical utilitarians and their natural law rivals is not simply a matter of coincidence, much less of chance. Rather, it rests on a deep, if unacknowledged, convergence between two theories that all too often spend their time making war on each other. Some sense of that convergence was fairly evident in the works of the earlier natural law writers, many of whom were happy to refer to general utilitarian arguments in the course of their writings. To the classical natural law thinker, only the will of God could give certain rules the force of law, but it was the manifest utility of those laws that certified God's wisdom on earth for ordinary men. Today's more tempered time is far more suspicious of these theistic foundations. Even so, this rejection of theistic foundations of law does not require, or lead to, a rejection of the substantive rules themselves. Rather, utility is promoted from being a mere expression of God's will to being an independent, self-sufficient criterion of the soundness of particular rules.

    The classical natural law writers consistently showed their willingness to rest their conclusion on both pegs simultaneously. Blackstone could first write that God "has graciously reduced the rule of obedience to one paternal precept, `that man should pursue his own true and substantial happiness.' This is the foundation of what we call ethics, or natural law." He then carried out this theme when he first referred to property "as the immediate gift of the creator" only to justify the creation of private property by a set of arguments that possess great force independent of their theistic origins. Private property serves several ends simultaneously. It is a way to establish separate domains between individuals that allows them to live side by side in peace. It is an indispensable counterweight to the concentration of sovereign power, and thus limits the reach of political orthodoxies of all stripes and persuasions. In addition, private property works as a spur to economic production by guaranteeing to workers the fruits of their own labors. People want "habitations for shelter and safety, and raiment for warmth and decency. But no man would be at the trouble to provide either, so long as he had only the usufructuary property in them, which was to cease the instant that he quitted possession; if, as soon as he walked out of his tent, or pulled off his garment, the next stranger who came by would have a right to inhabit the one, and to wear the other." Blackstone wrote with a clarity that modern scholars would do well to emulate.

    Easy as the convergence between classical natural law and modern utilitarianism may have seemed, it disappeared in our own time. Today natural law methodology, with its heavy overdose of intuition and revelation, has all but sunk bneneath the battering it has received from thinkers schooled in the utilitarian tradition. My basic thesis is, however, that natural law thinking developed an acute and sound appreciation of the basic rights that any utilitarian would, on reflection, want to adopt in his society.

    The first step in the reconciliaton of the two traditions is to focus on some of their major battlegrounds and show how utilitarian principle, broadly conceived, supports--even dictates--many of the categorical conclusions that natural rights thinkers took for granted. I first examine the question of whether the social and legal relations between persons are permanent, depending on the common features of mankind, or changeable, turning in some decisive fashion on the peculiar features of each separate culture. Thereafter I focus on one specific problem of recurrent importance: the duty to assist strangers as it stands in opposition to the duty to provide support within families. Next I explore the implications of these two approaches for some of the fundamental building blocks of any legal system: the place of individual autonomy, the origin of property in first possession, and the role of custom as an independent source of law, relied upon by the authoritative state powers, both legislative and judicial.

PERMANENCE AND CHANGE

The natural law program holds that permanence of certain critical elements permits, and perhaps requires, the emergence of some general legal principles. In the second century, Gaius began his Institutes (the standard introductory treatise for students of Roman law) with a statement of the basic position.

Every people that is governed by statutes and customs observes partly its own peculiar law and partly the common law of all mankind. The law which a people establishes for itself is peculiar to it, and is called ius civile (civil law) as being the special law of that ciuitas (State), while the law that natural reason establishes among all mankind is followed by all peoples alike, and is called ius gentium (law of nations, or law of the world) as being the law observed by all mankind.

    In the sixth century, Justinian took the point a step further by asserting that "[t]he law of nature is that which she has taught all animals; a law not peculiar to the human race, but shared by all living creatures, whether denizens of the air, the dry land, or sea." The Roman devotion to natural law was not some idle chatter, let alone an excuse for the exercise of sovereign power. Quite the opposite: indeed, many of the rules that concern us today, such as those that regulate the acquisition and transfer of property (by capture and transfer, respectively) were regarded as "natural modes" and constant across all cultures. The local variation in private institutions does not deal with the question of whether it is a good idea to have private ownership or to enforce contracts: rather the question is this: What kinds of formality--writings, seals, oaths, witnesses, ceremonies--are needed to effectuate certain kinds of transaction--such as sales, loans, and gifts--that in some form or other must take place in all societies regardless of their variations in norms and practices? Thus it is clear that those topics which lie at the heart of the Roman system under the head of natural law retain their relevance, and often their validity, in modern legal systems as well.

    Why is it, then, that the obvious differences in social circumstances and local conventions do not upset the natural lawyer's claim for the universality of his preferred legal rules? Why is the word nature chosen to counter some perceived threat of particularization? On this recurrent theme, a small dose of literalism goes a long way. The obvious source of human needs and desires is not culture, but human nature. What is distinctively human depends not on how persons are socialized in this or that particular environment, but on the common set of biological imperatives that has shaped the evolution of all individuals--and, indeed, of entire populations--over time. It is possible to identify these natural needs, desires, and inclinations, without retreating to a high level of abstraction or to any artificial linguistic convention. All individuals must ingest the amino acids necessary to construct the proteins necessary for life. All individuals need a caloric intake above the minimum required to sustain basic life functions. Pregnant women must carry their infants to term, and parents must raise them until they reach the stage of reproductive maturity. All individuals need protection against cold and heat, and against disease and predation. Any social order that ignores these imperatives pays a high price, perhaps the ultimate price of extinction. The biological anchor weighs heavily on the degrees of freedom found in feasible social organizations.

    Back of the battle for survival lies the looming threat of scarcity. There is never enough to go around, so conflict within groups and across groups is an inescapable part of human existence. It is, moreover, a condition that calls forth its own type of human personality. Hume talked about a human condition that blends individual self-interest with confined generosity: "`tis only from the selfishness and confin'd generosity of men, along with the scanty provision nature has made for his wants, that justice derives its origin." Although Hume treated this generalization more as a wise observation, and less as the consequence of any general theory, the logic of evolution suggests otherwise. Where resources are scarce, disinterested generosity is not a viable strategy for survival. The organism that unilaterally divides its possessions with others cannot thereby force others to divide their possessions with it. Over time, greedy organisms that retain all of what they produce, and grab some of what others have produced, will fare better in competition with those more generous organisms that retain only a fraction of their output. As the process continues, the pure altruist keeps a smaller and smaller share of the world's stock, until the retained share is insufficient to allow the survival or reproduction of its own kind.

    On this score, Justinian was right, before his time, to stress the common traits of man and animals. These evolutionary pressures did not surface first in human beings. Rather, they are the driving force behind the evolution for all forms of life. Whatever the manifest difference in structure, tastes, and appearances, self-interest deserves its special status as nature's universal constant. Only the most naive form of human exceptionalism could lead us to believe that forces that operate on all living creatures, from single-cell organisms to primates, cease as if by magic to exert their influence on human beings. Traits that natural selection has molded for eons do not disappear without a trace; the opposite holds true. Self-interest looks to be the nearest thing to a universal imperative, one that instructs all individuals how to manage their initial endowments, depending on variations in their external environment. Self-interest is not some abstract reason that lies behind the Darwinian theory of natural selection. Rather, it is the necessary behavioral consequence of the prolonged and remorseless operation of that mechanism. Darwin's choice of the word natural is no verbal happenstance. The term hints at some tight connection between natural selection and natural law, and also reminds us that no central purpose directs or informs the process of evolution in accordance with some divine, or other, plan. The whole picture is a composite mosaic in which each organism has control over only a very small piece. There is no master or central plan. There is only the conflict, coordination, and overlap of small and separate plans, each held by individual organisms. What happens to the whole is a complex aggregation of the fates of its constituent parts.

    This argument is perfectly general in form, and in no way depends upon the particular manifestations of human conduct in any specific culture. It is not bound to time or to place. It satisfies the stringent conditions of universalization that natural lawyers set for their own task. But what utilitarian could reject it as the basis of his own calculations? At a descriptive level, these theories explain how individuals maximize their welfare under conditions of scarcity and uncertainty. The biology to which the natural lawyer so frequently resorts throws him thus into the deadly embrace of maximization theories that are the hallmark of utilitarian thought.

    This theory of individual self-interest is not only a theory of conflict and competition; it is one of cooperation as well. The organism that goes it alone has no allies to fall back upon when things go bad, and is blocked from engaging in any projects that require the coordination of two or more actors. The logic of self-interest does not, cannot, ignore the gains from cooperation in order to maximize only those gains from competition and aggression. With any foresight into future events, self-interest encourages voluntary arrangements with some organisms, and recognizes that although the upside of conflict promises great gains, its downside also holds the possibility of devastating losses. Voluntary arrangements sidestep these perils, and therefore can be stable over the long run without external enforcement if each party to them knows (in that peculiar biological sense of "as if") that the gains from a short-term defection are dwarfed by those from a continued long-term relationship. Given this pattern of long-term relationships, many instances of "altruism" are "reciprocal altruism" (see chapter 5)--which are not altruism at all. An isolated act of generosity is sometimes better understood as self-interested behavior embedded in a large network of reciprocal interactions which gain stability precisely because they work to the long-term mutual advantage of all parties. We have here the basis of tort (preventing aggression) and contract (enforcing voluntary agreements), which both fit well within the theory of how individuals maximize their own self-interest.

    At this point, however, one must be take into account the counterexamples to the theory of individual self-interest: that is, the countless parents who have sacrificed themselves for their children, and even the individuals who have acted to their own detriment in order to advance the interests of strangers. These indeed exemplify the confined generosity Hume referred to as softening the hard edges of remorseless self-interest. How does a natural law theory deal with these two cases: benevolence to strangers, and ties within the family?

BENEVOLENCE TOWARD STRANGERS

The self-interest model cannot account for cases of genuine heroism toward strangers--save by elaborate and contrived extensions about what self-interest means. In part heroic behavior seems attributable to the capacity for conscious reflection, which humans have in far greater abundance than do other organisms. Whether in the form of personal risk or charitable contributions, the willingness to forgo benefits to one's own self serves as the foundation for much good in society. The legal system, however, does not have to trouble itself unduly with actions of benevolence: if it does not prohibit them, then they will continue to occur, and thus mediate the conflicts of interest that might otherwise divide individuals or groups.

    We must not, however, overestimate the frequency and importance of these benevolent events relative to the threat to social order that the prosaic forms of self-interest pose. The easy praising of benevolence has no costless obverse in respect to controlling against harms inflicted on strangers. Quite the opposite: public and private resources do have to be committed to such control, and social obligations have to be structured to limit the risk of unbridled self-interest threatening the welfare of all individuals. It would be a mistake, for example, to organize a tax system around a norm of voluntary compliance simply because many people make extensive charitable contributions. The natural lawyer therefore need not trouble himself unduly with these counterexamples to unremitting individual self-interest. So long as they occur with modest frequency in different societies, rules can be fashioned that allow but do not compel altruistic behavior to go forward, and these rules will tend to serve desirable utilitarian ends. If the very worst we think about all people is not always true, then there is a cushion of safety from which we all benefit.

SHARING WITHIN THE FAMILY

The postulate of individual self-interest is also unsuccessful in explaining the complex transactions within the family. Parents routinely make enormous investments in their children in the present; and their willingness to do this is not easily explained by treating that investment as though it were "really" the front end of a voluntary exchange, with return performance due from the child at some later date. The most stylized of facts about family relationships falsify so radical a redescription of a common social practice. In order for this model to work, each side would have to receive, at the time of the exchange, assets of greater value than it gave. But simultaneous exchanges are not possible in a world of intergenerational obligations. Any such return care (by implicit agreement, "if and when I reach an old age," say) can usually be provided only in the distant future, if at all. The risk of nonperformance, given imperfect enforcement, is high; and the present discounted value of any return performance is trivial, especially with children born of older parents. Investment in children is a poor form of old-age insurance. (The perfect egotist is well advised to avoid children and to set up an annuity whose income provides, on a contract basis, pension and health-care benefits for his old age.) Yet parents continue to make enormous sacrifices to have and to raise children. To make matters worse, parents often face anguished choices about allocating special care--both during life and after their death--to children with severe handicaps, sickness, disability, and retardation, making a mockery of any effort to conjure up some implicit contract of exchange across the generations. On occasion, baser commercial motives enter into family affairs, as children come of age and become partners in the family firm. So the full range of familial behavior seriously challenges the uncompromising theory of individual self-interest.

    These objections to modeling the family as a market in miniature do not undermine natural law theory by showing that there are no constants of human behavior. Rather, they reinforce the model by requiring us to recognize the interdependent utility functions ("my happiness depends on yours") within families that are themselves the result of constant biological interaction. Throughout nature, the care that primates, and other animals as well, give to their youngsters cannot be explained by any theory of individual self-interest. But it can be explained by invoking the idea of inclusive fitness, whereby what is maximized is the welfare of genes, not of individuals as such. By virtue of this theory, each person takes into account the welfare of others, discounted to reflect their fraction of common genes. In the normal situation, each parent treats the welfare of the child as though it were one half of its own, that of a grandchild as though it were one fourth and so on. Under this theory, what is maximized is the expected value of the total genotype, so that each parent will trade off one unit of cost to himself for two units of benefit to the offspring even if there is no prospect of return benefit under some implicit contract. In the early stages of child rearing, small inputs from the parent generate large benefits to the child, so the amount of caring behavior is great.

    The same marginal tradeoffs, moreover, are applicable to both fathers and mothers, although parents of both sexes do not invest the same amount in parental care. Breast feeding is but the most conspicuous illustration of an asymmetry in cost between mother and father. The mother is often in a better position to provide effective, low-cost care for an infant, so the theory suggests that she will provide more care than the father even though their degree of genetic relatedness is the same. Given the difference in initial endowments, the unified theory of inclusive fitness predicts differential involvement for males and females. Similarly, the theory also explains why the parental care from both mothers and fathers diminishes as a child gets older. The child's benefits from parental care are reduced as the child can do more for himself, and continued care to living children also reduces their parents' opportunities to have further children.

    The existence of children, moreover, increases the gains from cooperation between parents, who are, after all, unrelated. The children in effect serve as "hostages" to guard against any intrigue between the parents, because any harm that one parent inflicts upon another necessarily reduces the prospect of the offspring's flourishing in its maturity. Emotions are not outside the realm of biological influence, but are heavily dependent on it: the love and affection that binds parents together improves the long-term fitness of both, given their common stake in the future. Played out in nature, genetic egotism, coupled with reciprocal altruism, translates into an ongoing generosity that typically characterizes relations within the family.

    There are, of course, variations within the overall pattern. As external environments change, the return on parental investment in children changes as well, making for different levels of family intimacy across cultures and generations. But these variations should all conform to a system in which at the margin one unit of parental expenditure yields two units of benefit to the child. This relationship is determined not solely by the basic interdependent utility function, but also by other natural individual endowments and by external factors. Whatever these differences in level of parental support, it is highly unlikely that even today parents regard other people's children as just like their own--hence, the enormous pains and cost that people are prepared to take in order to have a baby via a surrogate mother instead of through ordinary adoption.

    The biological components of the model should drive the economics, rather than the other way around. The errors that can occur from ignoring these constraints are, I believe, well illustrated by Gary Becker's ingenious "rotten-kid" theorem. In the Becker model, children are constrained to act altruistically toward each other not because they care for each other, but only because the parents care for both children and threaten to withhold benefits from children who do not act altruistically toward their siblings. In theory, these parental constraints will break down if the gains from one sibling's misbehavior toward another exceed the benefits that the parents are able to withhold from the offending sibling. Nor can the model explain why siblings often retain a distinctive closeness even after they have reached their maturity and after their parents have died. The connection here is quite strong, and the best accounts of the evolution of both the business partnership and the small-size state stress the importance of the kinship relationship even after the death of the parents.

    Becker's stylized economic model also shows the limited effectiveness of threats when some, but not all, parties to a social setting are altruistic to each other. In contrast, the biological models predict stronger loyalty between siblings because each has a stake in the welfare of the other--a state that survives the absence of any parental enforcement. Conflicts of interest persist between siblings nonetheless, when the cost to the one sibling exceeds half the benefits conferred on the other sibling. Thus, if one sibling can perform an act that costs itself 5 and yields a benefit of 8 to its fellow sibling, the narrow calculus of evolution suggests that his action will go unperformed even though the increased value to the pair is 3. The one sibling, registering only half the gains conferred on the other, will not, as a rational agent, perform an act that costs it 5 and yields it only 4 in benefits. Such conflicts are in principle no different from ones between parent and child--but the effects of the latter are softened because the repeated interactions within the close-knit settings of a family offset the short-term imbalances of discrete transactions (see also the discussion of custom later in this chapter). As for the relative power of the two models, under the Becker model, killing one sibling is far more likely to produce a private gain for the other (assuming the parents have no other child to aid) than under the biological models. With Becker, the death of the sibling could increase the welfare of the survivor, but will generally decrease it under the biological models, a result in line with popular experience.

    Certain biological constants, thus, lie at the root of family behavior, and demarcate the zone of voluntary market exchange from that of the non-price, nonexchange economy of the family. Every legal system must draw some distinction between those within the family and those outsiders who deal with the family at--to use the instructive legal phrase--"arm's length" The strongest counterexample to individual self-interest only confirms the importance of common practices, albeit with different intensities across times and across cultures.

    The wise utilitarian interested in some form of social welfare will not ignore these broad facts. Instead, he will try to minimize the pressures on legal enforcement in setting the rules of social organization. His rules will therefore follow the basic pattern of natural obligation as it is perceived to arise within families. To transform inclination into duty is, after a fashion, to derive an "is" from an "ought." So understood, there is no Humean gap, only some good common sense of the sort congenial to Hume's own utilitarian biases. The utilitarian's major premise is that one tries to organize social arrangements to best serve the individuals that compose them. The system of parental obligations of nurture, guidance, protection, and support, championed by the natural lawyer--reduces the costs of raising the young because it takes advantage of natural inclination to provide the assistance that the law would otherwise have to compel. Taken in the aggregate, the system thus generates high levels of care at relatively low costs. Could one imagine the cost of any system that uniformly took children from their parents at birth and assigned their upbringing to a stranger? It is no accident that the attack on the family takes place in authoritarian systems that can brook no counterweight either to the greater central power of the state, or to the conception of the common good that all its citizens are obliged to accept. On matters of the family, the natural law theorist fares, then, quite well by utilitarian standards. Long after these natural law theories were propounded, we can identify good empirical reasons to believe in the set of external constants that generate the need for some constant social response.

INDIVIDUAL AUTONOMY

The congruence between natural law rules and utilitarian dictates extends beyond the family to other areas. As the focus moves from the family to the "public" realm, the assumption of individual autonomy gains in importance until it lies at the root of huge portions of legal and political theory. Stated in its most naive form, the claim for autonomy is each person's claim to both own and govern his own body or self and the labor either generates. The standard natural law argument for autonomy is intuitive: people who enjoy control of their own persons have a right to retain control of themselves when they enter into political and social arrangements. The counter-argument is that the possession of natural talents is in some measure a question of individual luck, which cannot serve as the principled basis for distributing entitlements across individuals. Given this concern, it is often proposed that natural talents be socialized for the benefit of all, as all persons have an equal claim to these endowments by virtue of their common humanity. The argument itself can be given not only an egalitarian, but a utilitarian, twist by the observation that two common features of all human beings (the natural law style of argument again) are, first, a diminishing marginal utility of wealth and, second, a general aversion toward risk. These two features, taken together, imply that the shift of at least some units of resources from rich to poor satisfies some utilitarian mandate.

    The utilitarian argument, however, is incomplete if it looks only at the state of affairs desired in the end, independent of the large costs necessary to obtain it. When each individual is regarded (subject to the family obligations discussed above) as the owner of his own labor, there is no need for any routine coerced transaction whereby the natural talents possessed by one person are removed to a person who is, to some unspecified extent, now entitled to their use or benefit. Instead, there is a single owner of each bit of human talent, who is then in a position to use it in transactions that benefit not only himself but all others with whom he does business. The system operates in a decentralized fashion because the cost for acquiring property rights in human labor is essentially zero. In addition, there is no need to enter into any complex system of recordation of deeds (such as that used to establish title in real estate) to explain whom X must deal with in order to obtain the benefits of Y's talents. The answer is always Y.

    The rule of self-ownership also commends itself on utilitarian grounds. Its great advantage lies in its tendency to preserve the total stock of natural talents which would otherwise be dissipated in the political struggle of some groups and individuals to obtain supremacy over others. Slavery represents the most obvious systemic rejection of the principle of self-ownership; and the testimony to its overall inconvenience is that it rarely, if ever, is brought about by agreement. Its origins lie in capture and conquest, both of which aid the victor but ignore the preferences of the vanquished. Individual self-ownership, subject only to obligations within the family, is surely a better mode of social organization: connections between private persons can be made by contract, which works to mutual benefit, rather than by coercion, which does not.

    The only other competitor to a rule of self-ownership is a system that confers, as it were, on each person a partial interest in the labor and output of all other persons. That complex network of human cross-ownership cannot be achieved without an extensive system of redistributive taxation and regulation (that is, coercion that gives the fruit of every A's talents to B through Z). Such a system reduces the incentive to engage in productive labor, is expensive to administer, and often produces in individual cases results at cross-purposes with its ultimate objectives. The constant exhortation of the obligation to share does not, by words alone, abolish the fact of individual self-interest, suitably qualified by the principle of inclusive fitness. So this new framework of interlacing rights gives each (self-interested) person an incentive to impose a greater share of obligations upon his rivals than he bears for himself. In some worlds at least, it is far better to receive than to give.

    It is risky to oversell the virtues of autonomy, for in the end it is not the only source of individual obligation. Nonetheless, even for involuntary exchanges, self-ownership serves as an indispensable baseline for measuring which exchanges are for the common good (that is, those from which all persons gain) and those that are not. The objection that the self-ownership theory is philosophically naive and incomplete holds good only against a traditional natural lawyer's philosophical argument that individual autonomy is a "necessary" truth, like those of logic or at least those of physics. That claim will have no power against the more modest functional defense, which relies only on the most general features of human conduct. So long as there are motivational and transactional barriers to an ideal world, we must learn to live in the world of the second-best. Accordingly, we should tolerate the so-called moral weaknesses of this rule, given the inability of anyone to formulate a workable alternative system of property rights in persons. When suitably fleshed out, utilitarian arguments better explain this portion of natural rights than does natural rights theory itself.

FIRST POSSESSION

Similar arguments carry over to the theory of first possession, the dominant rule for the acquisition of property in land for both Locke and Blackstone in the natural law tradition, and for Hume and Bentham in the utilitarian. Here, too, the natural law influence is powerful, as the rule of first possession is often described as one that gives title by way of "natural occupation." The standard natural law accounts seek to justify this principle of natural occupation by reference to an idea of individual desert, which in turn rests on the labor theory of value. For Locke, the theory reads--at least, at first glance--as though it were one of desert because of his constant insistence that the great part of the value of any land taken from the commons by first occupancy is attributable to the labor invested in that land. One key passage reads as follows:

He that is nourished by the Acorns he pickt up under an Oak, or the Apples he gathered from the Trees in the wood, has certainly appropriated them to himself. No Body can deny but the nourishment is his. I ask then, When did they begin to be his? When he digested? Or when he ate? Or when he boiled? Or when he brought them home? Or when he pickt them up? And 'tis plain, if the first gathering made them not his, nothing else could. That labour put a distinction between them and common. That added something to them more than Nature, the common mother of all, had done; and so they became his private right. And will anyone say he had no right to those Acorns or Apples he thus appropriated, because he had not the consent of all Mankind to make them his? Was it a Robbery thus to assume to himself what belonged to all in Common? If such a consent as that was necessary, Man had starved, notwithstanding the Plenty God had given him.

    One strength of this labor theory of value is that it posits that all individuals own their own labor; otherwise, how could they be entitled to mix it with some unowned thing? But the labor theory of value runs into difficulties even if that point is accepted. Thus, one recurrent criticism of Locke is that his theory at best accounts for why the first possessor or occupier should have a lien for his labor expended, but not receive outright ownership of the land or thing in question. Locke tried to duck this difficulty by choosing an example that almost made the problem disappear--ownership of the uncleared and rocky fields of his day--answering that 99 percent of the value in the land was attributable to the labor added to it. This is in essence a de minimis answer designed to silence anyone who would dispute the title of the laborer. But it does not deal with the discovery of vast quantities of cheap oil located beneath the lands of some lucky sheik or cattle rancher. Locke's own example did not allow him to bridge rigorously the small, but theoretically significant gap that remains. Ninety-nine percent is not 100 percent: What should be done with the unearned increment, however small, that nature has supplied? The gap between 100 percent and 99 percent keeps its importance because it separates the universe of determinate solutions from that of probabilistic calculation.

    Lodged against an intuitive natural rights theory, these objections have conclusive force, but not so against utilitarian rejoinders. Initially, there are strong utilitarian justifications for individual self-ownership in the original position; so the Lockean solution cannot be attacked on the ground that the first possessor has no valid claim to his own labor or talents. Similarly, there are functional explanations to justify giving a thing's first possessor outright ownership of it. To hold that the labor theory of value accounts only for a lien, but not full ownership, gives rise to the identical problem in respect to individual self-ownership: Who gets the difference between the total value of the thing, and that portion of value attributable to the labor of the first possessor? To treat that increment as a common-pool asset necessarily imposes extensive administrative costs: first, to measure the size of the increment in each case; and, then, to assign its value to all other persons, none of whom have any specific claim to the thing in question. (Locke is right that the first possessor is different from the others: they have to displace someone in possession, while he does not.) In some cases, the unearned equity of the first possessor may be large but, at the margin, will tend toward zero. Taken over the full range of cases, assessments and reassignments necessarily reduce the total value of the stock in question, and quickly undermine the willingness of individuals to incur the costs of discovery and appropriation in the first instance. It is also possible that the costs of finding the line between total value and the lien for labor exceeds the total value of the "equity" in the thing that the public is said to hold as of right.

    In the end, therefore, the strongest justification for the strict rule that first possession yields complete ownership, not the lien for labor, is not one of individual desert. It is one of modest prudence. It is therefore more congenial to Hume, who defended the rule for the boost it gives the "stability of possession" over external objects. In the long run, we are all better off if the surplus in things remains well defined with a single owner, than if each and every owner surrenders some of what he has acquired in exchange for the right to some portion of the surplus of lands acquired by others. The first-possession rule leaves each thing with a determinate owner, who is then capable of entering into voluntary transactions over the thing with other persons. These transactions are facilitated, as Locke rightly noted, by the existence of both money and durable goods, which render unnecessary any limitation on how much one person can acquire on his own account? A simple functionalism thus explains the appeal of the rule.

    In response, it might be suggested that the best way to avoid the apportionment problems is to reject flatly the proposition that any person should have the right to mix his individual labor with external things in some social commons: no person can add his labor to things that are in common ownership. At this point, the rebuttal again takes on a utilitarian cast. Locke himself was aware of the enormous bargaining problems that exist if unanimous consent should be required to determine what particular things should be used by what persons. The last sentence from paragraph 28 of the Second Treatise, with its pointed reference to starvation, hammers home the point. Bargaining would inevitably break down if the consent of all individuals were necessary for the consumption of any portion of the commons. A system of first possession allows all to survive, and hence makes the lot of all participants superior to the alternative of mutually assured destruction. Now the ultimate justification for Locke is no longer desert theory, but simple necessity. Blackstone himself echoed exactly the same line when he said bluntly, "Necessity begat property." Consent is not required to establish property rights because the great number of parties makes it unworkable. When necessity, not consent, becomes the origin of property, then we have a melding of a utilitarian system, with a social contract theory.

    Now we come to the question, what is acquired by first possession? Here, in a manner congenial with the broad claims of the natural lawyers, all systems of private law have roughly the same contours. The basic conception of property gives to its owner the exclusive right to the possession, use, and disposition of the land in perpetuity. One standard objection to the Lockean theory is that, at most, it explains the pride of place given the first possessor without explaining why that owner receives the robust bundle of rights routinely conferred upon him by well-developed legal systems (at least, in their private law guise). Yet the functional explanation for that result follows from the utilitarian considerations set out above: it is very costly for a social system to create partial bundles of rights in discrete things. If initial capture leaves some elements of value unaccounted for, then some additional method must be found to assign whatever resources the original appropriation left hanging.

    Consider one alternative: Suppose that taking possession of a thing gave right to possession only so long as actual possession of the thing were maintained. It would then follow that no farmer could leave his fields untended and go to market. Blackstone saw the point clearly, as did Bentham. The purpose of a legal rule is to allow the right to possession to continue even when the fact of possession is no longer indubitable, unless and until the owner has decided to abandon the thing. Legal protection is thus a cheap substitute for the active defense and patrol of property, which is why theories of possession from Roman law to the present have always stressed the acquisition and loss of possession without troubling to give a precise definition of the term possession itself.

    The proposition that possession is the root of title is not a necessary truth but is heavily culture bound. In nomadic hunter-gatherer cultures, the first-possession rule applies with great power to personal property, but not to land. So long as individuals make no fixed investments in particular plots of real estate, small tribes and bands will just move through open territories instead of settling them. The costs of setting and enforcing boundaries are too high relative to the benefits they generate. But agriculture requires clearing land, an investment that the farmer can recover only over many years of successful cultivation. Change the use of land, and gains from privatization increase. It is no accident that the classical maxim warned, and promised, that "you shall reap only where you sow." Any other rule creates a fatal mismatch between investment and return: what self-interested person will labor so that only strangers may profit?

    The interplay between natural law and utilitarian concerns operates throughout this transformation. Thus the standard rule that possession generates ownership of an indefinite duration eliminates the awkward problem of deciding who owns the land in question after the death of the original possessor. Instead of having to reopen the ownership question at his death or that of his descendants, the present owner can develop the property in full, secure in the knowledge that the gains from improvement can be captured either by sale or by consuming the proceeds thereof, if desired, during life. The longer time horizon thus allows for intelligent planning that could not take place when the labor in question created improvements whose benefit could be captured by others. The danger of taking from A and giving to B is not confined to a world in which all transfers are simultaneous; it can also arise in a world in which investments today are not protected against expropriation tomorrow.

    The first-possession rule thus has powerful functional justifications that cut across societies. The basic problems of incentives, allocation, and administrative costs that it addresses are more or less constant across different cultures, so we should expect the rule to be relatively robust--as it has been. Nonetheless, certain variations have to be taken into account as well. Thus, once first possession becomes the rule of acquisition, we have a powerful need to know when each claim of possession is perfected, and thus to develop subordinate rules to implement the central rule of acquisition. At this level, we should expect a certain diversity in the customary or statutory practices. In rocky New England soil, it may be sensible to mark the edges of one's property by stones collected from it; while in heavy forests, territories can be marked by nicks in trees. In other cases, claims offices and recordation systems may be used to establish both the scope and the priority of claims, whether to land or minerals. But these subordinate conventions do not undermine the universality of a first-possession rule; they only illustrate the myriad ways of its implementation. And the uniform principle championed by the earlier natural lawyers persists: that system of identification will be used that is the clearest and whose implementation is not too costly.

    The first-possession rule is also supple enough to work in tandem with the rules that govern families and business associations. If A obtains possession of an unowned tract of land, he may do so not solely on his own account but rather as head of his family, clan, or tribe. If several persons combine to take possession of some unowned property, the property taken will be divided in accordance with the terms of their joint venture. Once it has excluded outsiders, the rule of first possession therefore dovetails neatly into the more complex rules of family and business associations, becoming widely adaptable to different forms of social organization. Thus, the rule is by no means merely some ancient survival of atomistic individualism.

    The origin of property, then, is rooted in social necessity, given the practical impossibility of reaching any broad compact over the distribution of natural things. But universal necessity need not dictate the internal operation of the system. The transactional difficulties are radically reduced once individual titles are established by first possession; within this changed environment, consent now becomes the appropriate method for exchange. Since only two parties need be involved in order to transfer property rights, the bargaining range will be small in light of the large number of potential suppliers of standard commodities like acorns and apples. The natural lawyers understood that the general rules for transferring title should have a consensual basis, even though the rules of acquisition do not. Accordingly, they included in their basic rules the principles for contract, especially as a mode for transferring ownership of things already reduced to ownership by first possession. Though not couched in terms of market efficiency, their rules surely facilitated and fostered market institutions, rather than catered to any protective, mercantilist, or guild mentality.

CUSTOM AS A SOURCE OF LAW

The use of custom--the implicit norms that grow up within a community--is yet another point where there is a powerful, if unappreciated, convergence between natural law theories and utilitarianism. Within the natural law tradition, custom has long been a significant source of substantive legal rules. Operationally, one could not observe the divine hand at work; and historically, there was little understanding of the biological imperatives that work in cross-cultural settings. Even so, the fact that certain legal rules or conventions were followed in large numbers of different societies made it more likely that these norms and practices had the force of law. Admittedly, the chain of inference is faulty if adherence to custom is treated as a universal imperative, without further qualification or caution. Slavery was a common practice in many ancient cultures that regarded themselves as civilized, and conquest was generally regarded as an appropriate way to acquire slaves--as an act of mercy toward those whom the conqueror could otherwise kill with impunity. It is hard to offer any normative defense of those practices today, and we should all be better off if we do not try.

    A single counterexample to a general rule does not, however, necessarily lead to its rejection; principled qualification may well turn out to be the better alternative. Custom should not be regarded as dispositive with respect to those persons who are strangers to the group that has generated a particular norm: conquest is a norm t

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Table of Contents

Preface
Introduction: Reinvigorating Laissez-Faire 1
1 Natural Law: The Utilitarian Connection 9
2 Social Norms versus Legal Commands 41
3 Harm: The Gateway to Liability 71
4 The Benefit Principle 105
5 Altruism: Its Uses and Limits 133
6 Forfeiture: The Flip Side of Rights 159
7 Boundaries: Firm and Fuzzy 187
8 From Rights to Remedies 215
9 Common Property 251
10 Common Carriers 279
Epilogue: A Return to Fundamentals 319
Endnotes 325
Table of Cases 349
Index 355
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