Commentary Magazine


Simple Rules for a Complex World, by Richard A. Epstein

The Birth of Common Sense?

Simple Rules for a Complex World.
by Richard A. Epstein.
Harvard. 361 pp. $35.00.

There is no dearth these days of books and articles decrying the overwhelming complexity of our legal system, and if the success of Philip K. Howard’s The Death of Common Sense is any indication, there is also a large measure of agreement that we suffer from too many rules and regulations. Yet what we can do about the situation is another matter altogether; as Marc M. Arkin noted in her review of The Death of Common Sense in the July COMMENTARY, Howard’s solution—to write better laws and enforce them more sensibly—is no solution at all if we are being asked to entrust the job of cleaning up the mess to the very people who created it.

By contrast, the noted legal scholar Richard Epstein believes we must reduce the very scope of law; in essence, we must disabuse ourselves of the notion—central to the liberal ideal of the benignly guiding state—that regulation can provide us with all or most of the answers to our social and economic problems.

Epstein is what one might call a modified libertarian: he takes to heart the maxim that government governs best when it governs least—when it allows as much scope as is prudent to the private sphere of consensual, voluntary transactions. Governing well means permitting the existence of a forum—a market—in which people can seek out for themselves the best ways to satisfy their needs and desires. Still, in a world in which the scope of law and regulation is reduced and that of voluntary transactions enlarged, law retains its place. And that is the main purpose of this book: to outline those simple rules of law that should remain in a (hypothetical) regime of limited government.

Ten years ago, Epstein published his first book, Takings, an attack on the Supreme Court’s application of the “takings” clause of the Fifth Amendment, which is supposed to guarantee that if the government uses its power to take away your property, it must give you “just compensation.” There he persuasively argued that the Court had so misconstrued the clause as to disallow compensation in a vast number of cases in which regulations impinged on property rights.

After Takings, Epstein went beyond constitutional issues to consider, generally, why government intervention in areas of private rights is so often wrong-headed. In Forbidden Grounds (1992), he launched a frontal assault on employment-discrimination laws. These laws, he argued, create perverse incentives which actually keep minorities and women out of work; or they enforce quota-based hiring which prevents an employer from exercising his right to make rational, job-related discriminations in hiring and firing. For Epstein, in order to protect against chimerical harms, these laws impose staggering administrative and litigation costs on the whole society.

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In his newest book, Epstein has synthesized his various themes into a grand summa, grounded in a philosophy that partakes of at least some of the virtues of classical liberalism: that is, it combines a realistic view of the limits of our nature with a spirit of worldly improvement. He emphasizes repeatedly that all we can really expect from the law—and more fundamentally from any system for distributing scarce resources—is an approximation to ideal social welfare, not the vision of perfect justice by which we have allowed ourselves to be seduced. What he promises from his rules is imperfect justice: the best we can do, and the most we can afford.

Epstein’s early work was in the common-law tradition—the body of judge-made rules that accumulated over several centuries of English and American jurisprudence. He feels that we have much to learn from the old common-law judges, even though, or perhaps because, their world was a much simpler one than ours. That world was harsher in certain respects, demanding of individuals and society a degree of self-reliance we would find it hard to imagine—let alone reproduce—today. Nonetheless, Epstein thinks the intuitive wisdom of the common law is more important than ever in our age of complexity.

His main idea is that the scope of government should be limited to preventing the use of force or fraud to coerce one-sided transactional benefits; but he allows—contrary to strict libertarianism—that government is also needed for the occasional administering of common resources where unbridled self-interest would lead to losses of social welfare. The basic conception is not new, but the systematic and often ingenious way in which Epstein shows how these principles can replace most of today’s regulations is truly impressive.

He argues, to begin with, that a few simple rules culled from the common law would help set us straight. The most important of these rules are autonomy, first possession, and consensual exchange (or freedom of contract). The principle of autonomy posits that each individual owns himself and can be bought and sold by no one—except that one is free to sell one’s services. The concept of first possession is rooted in John Locke’s first principle of property—that a man can own that portion of the earth which he appropriates (and mixes with his own labor)—and also in the common-law rule that the first to take possession of property is its owner. These two rules are but the enabling conditions for the third, namely, voluntary, free exchange—the whole basis of the market system.

Next, Epstein considers alternative rules, which he proceeds to show are too costly to administer, lack payoff, or lead to bad incentives. Thus, he contrasts the rule of self-ownership, or autonomy, with two other (diametrically opposed) possibilities: a situation in which someone else has title, so to speak, to another person’s body—the situation of slavery; and a situation in which society as a whole has interests in one’s talents and human capital—a view Epstein associates in particular with the philosopher John Rawls. Dispensing with arguments grounded in moral considerations, Epstein points in the first case to the tremendous, crippling inefficiency of a legal regime that would depend on identifying proper title to any person’s productivity; in the second case, he points to the impossibility of determining collective entitlement to a person’s productivity. His conclusion? Autonomy is the most efficient rule.

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Epstein’s style of thinking, characteristic of what has come to be called the law-and-economics school, may not be to everyone’s taste, but once he gets to the heart of his demonstration—showing the bad effects of the rules in place now—the consistency of his logical scheme becomes more apparent. Epstein is in his element in describing the complete hash of efficiency that has been produced by the disregard of simple principles.

Freedom of contract, in particular, has been in a prolonged period of retrenchment, as we can see in areas as diverse as product liability and employment law. In the former, the welter of regulations and the climate of opinion they foster have led to a massive expansion of litigation with no overall decline in accident rates. In the area of employment, the old common-law rule of “contract at will”—you can be fired without cause just as you can quit without liability—has been put out to pasture by both anti-discrimination laws and the creeping doctrine of “just cause” in judicial rulings. The result has been a mushrooming body of law that has proved to be an awful drag on the economy; in the meantime, the workplace has become not a better but a more forbidding and less satisfying place for workers and managers alike.

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One cannot do justice here to the wealth of intriguing, well-reasoned arguments in this book. (It must also be noted that although Epstein is a lucid writer, and although this is his most accessible book, he is also an exacting thinker, one who does not cozy up to the reader with lively anecdotes, and who can therefore seem merely dry and abstract.) For all his cleverness, however, and his undoubted moral seriousness, Epstein is ultimately caught up in a paradox that he does not or cannot resolve.

The paradox, in brief, is this: Epstein emphasizes, rightly, the limitations of any legal regime when it comes to creating human happiness; but he also thinks his simple rules, by allowing people to make their own choices, will actually make the world better. One can entirely agree with him that paring back our regime of rules and regulations will prove a boon to common sense. But it is quite a leap of faith to believe that if we follow Epstein’s simple rules, society’s ills will be cured. What we are really dealing with at bottom are matters of individual and social character—and these are not easily amenable to rational calculation.

Epstein, to his credit, addresses this concern in his final chapter, where he takes up the “Challenges to Simple Rules.” An objection he faces down is that his legalisms are devoid of any positive sense of virtue. As Epstein himself eloquently puts the case against his view:

There has been very little talk in this book of compassion, of courage, of honesty, perseverance, integrity, loyalty, or any of the other personal characteristics that lend distinction and form to individual lives. You would deliver a feeble eulogy if all you said was that the deceased won over the admiration of a large circle of friends by avoiding criminal misconduct and by honoring contracts. Praise requires more than compliance with the minimal requirements of the law. People are often tested by a conflict between loyalty and self-interest, and it takes moral courage and moral wisdom to do the right thing. We honor people for what they do beyond the law, not for what they do in order to avoid the sting of legal sanction.

Well put—but what is the answer to this objection? For Epstein, simply clearing the way for rational, autonomous agents to act freely is the greatest gift the law can confer, while a “second tier of social norms” defines what the community as a whole finds worthy or, on the other hand, meretricious. But there is something missing here. Other than through its sanctions, the law, for Epstein, plays no role in educating people about what society should value. It seems unlikely that our Founders would have seen anything comforting in a system of laws disconnected from the civic virtues that should inform both the structure of a benign, democratic state and the spirit of the people so governed.

Epstein thinks with the long view of a utilitarian technocrat, and his sensible and often brilliantly argued vision of a just and productive society is also a vision of a society that would fail to inspire loyalty. With the changed climate of political opinion in this country, Epstein’s view of limited government is getting the kind of respectful hearing that few would have dreamed possible ten years ago, when his first book appeared. That is all to the good. But without a moral commitment to a social ideal grander than rational self-interest, political experiments in rolling back the liberal, regulatory state are likely to be short-lived.

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