The Magazine


Richard Epstein's Version of Laissez Faire

Jan 18, 1999, Vol. 4, No. 17 • By JEREMY RABKIN
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Richard Epstein, one of the great legal scholars of his generation, describes Principles for a Free Society: Reconciling Individual Liberty with the Common Good, as a defense of "laissez faire." It certainly offers many illuminating and compelling analyses of particular legal issues, but as a summation of his overall outlooks, the book does not add up to a satisfactory scheme for "reconciling individual liberty with the common good," as the subtitle promises.

The problem is not that the book departs sharply from Epstein's past work. In fact, as he explains in the preface, the book was originally conceived to collect previously published essays and articles. And yet, in its finished from, the book proves far more ambitious than Epstein's earlier works.

In a dozen previous books, Richard Epstein has tended to focus on Particular questions of public Policy: discrimination law in his 1992 Forbidden Grounds and the over-regulation of health care in his 1997 Mortal Peril. He did make a more general case for eschewing complex schemes of regulation in his 1995 Simple Rules for a Complex World, but the argument was weighted toward practical effects. In his 1985 Takings: Private Property and the Power of Eminent Domain, Epstein argued for a far-reaching understanding of a particular constitutional guarantee, but his case was still rooted in the "takings" clause of the Constitution. In his new book, Epstein purports to give the most general overview of his position. But, rather than adding more force to his arguments, this broader work highlights the limitations of his approach.

The limitations derive from the distinctive angle with which this particular law professor views the world. Epstein is hardly unusual nowadays, even in the legal academy, for rising to the defense of free markets. But he is not simply another follower of the "Law and Economics" movement associated with Judge Richard Posner (who was Epstein's Colleague at the University of Chicago in the 1970s). The Law and Economics movement focuses on how legal norms can promote economic efficiency, while Epstein links economics to questions of justice. Among his first important scholarly works was a series of articles -- published, in fact, as an exchange with Posner -- on whether tort pleadings can really be conceived in purely procedural terms, without reference to the justice of the individual claims.

Epstein comes to debates on larger constitutional issues from a perspective he developed in his work on private law claims. (He is the editor of one of the most widely used textbooks on the law of torts.) At the core of his scholarly project is his effort to clear away decades of leagl-realist confusions and restore the prestige of nineteenth-century case law on basic legal principles. In many chapters of this books, as in his previous work, he delights in showing that a Latin maxim from Justinian is vindicated in the ruling of a nineteenth-century English or American court and that the result reflects a powerful legal logic. He argues that traditional rules regarding contract and property follow from powerful intuitions about the human incentives needed to maintain stable and workable system of cooperation and exchange.

Epstein's version of laissez faire does not celebrate the heroic individual, in the manner of Any Rand. On the contrary, he is concerned with how society and its various components adapt to changing conditions. He how interesting things to say about the usefulness of custom and the importance of social norms in encouraging cooperative behavior. One of his arguments in that the heavy hand of law often displaces the more flexible bargaining that takes place where loss of reputation is the main sanction (as in bargaining between landlords and tenants or between employers and employees).

At the same time, Epstein is not determined to restrain the law within formalistic limits, in the manner of Friedrich Hayek. In some ways Epstein is quite open to variations on his basic formulas. He has an interesting chapter or why common property (as in shared pasture land) works well in some circumstances. Another chapter argues that in some circumstances, the legal system must allow special claims again common carriers (such as railroads or phone lines). His general approach is to show that variations from the usual rules can be justified by particular circumstances. He explains why it is sensible to attribute ownership of an entire cave to the owner of the land at the cave's mouth, rather than forcing courts to sort out the conflicting claims of all those with land above the cave. He argues, then, for practical or utilitarian adjustments to the otherwise expected rights of owners, when he cost of enforcing the usual array of rights seems disproportionate.