Post by Patrick Goold
In the most recent HLS Private Law Workshop, Professor Eric Claeys presented a chapter of his forthcoming monograph, Natural Law, Natural Rights, and the Foundations of American Property Law. This monograph presents a natural law theory of American property law. The monograph argues that individuals have pre-political rights to use tangible resources in ways that promote human flourishing. Contemporary property doctrine embodies this logic and, in form and substance, upholds those rights.
The chapter Claeys presented discussed and responded to criticisms of common law property doctrine frequently made by law and economics scholars. Economists, starting with Ronald Coase, tend to view property law as an instrument for settling disputes about incompatible uses of resources (what Claeys labels the “incompatible use framework” of property). When a rancher’s cattle strays onto a farmer’s wheat fields, or a railroad emits sparks onto a farmer’s hay bales, a Coasian treats the respective parties’ “rights” as the conclusion of, rather than a component of, its analysis.
As Coase acknowledged, this is not how courts have historically resolved such disputes. Rather than resolving the case before them based on transaction-cost analysis, courts tend to ask a series of conceptual questions, including: did the plaintiff have a right to prevent the defendant’s behavior? did the defendant’s actions cause the plaintiffs loss? and, did the plaintiff suffer cognizable harm? Coase and his progeny have viewed such reasoning with skepticism. At the root of this skepticism is the belief that the core concepts, such as “right”, “harm” and “causation,” lack substance and therefore, on their own, cannot tell a judge how to resolve disputes. To use a well-worn example, Coase argued that “causation” is reciprocal; that is, when a railroad’s sparks burn down a nearby farmer’s hay bales, both the railroad and the farmer are “causes” of the loss because both could have taken measures to prevent it. Accordingly asking whether the defendant’s actions “caused” the plaintiff’s harm is not a cogent way to decide who ought to win in property litigation.
Claeys offers two responses. First, he maintains that common law property doctrine, and reasoning therefrom, is more rational and coherent than some economic analysts portray. According to Claeys, skeptics assume and criticize conceptions of “right,” “harm,” and “causation” that differ significantly from those actually found in common law doctrine. Once we get a clearer understanding of how these concepts work in practice, they are revealed as more concrete and determinate than the skeptics suppose. For example, the “causation” inquiry takes place within—is but one part of—a broader normative framework. The question is not whether X has acted in such a way as to make it more expensive or impossible for Y to act in the manner in which Y desires. It is whether X has acted so as to cause Y a “harm”—i.e., a violation of Y’s rights. When a railroad emits sparks and the farmer’s hay bales burn down, the farmer has not “caused” this harm, because her act of placing the hay bales within proximity to the railroad (while still inside the boundaries of her land) was within her rights. Thus “causation” is not reciprocal, but far more unidirectional than Coase suggested, and can be used as a foundation for judgments.
Second, Claeys disputes economic analysis of law as a normative matter. On a practical level, aggregate preference maximization is hardly a more determinate form of reasoning than that typically adopted by courts. In order to use such a framework, courts would require significant information about transaction costs and the values different actor place on different uses of property. As this information is rarely accessible, the framework is often unhelpful. And, on a more philosophical level, aggregate welfare maximization fails to justify a judge coercing a losing party to pay the plaintiff a remedy. If a court forces individuals to act against their will, then the judge must be able to justify this coercion at least partly by reference to the parties’ individual interests, and not to social welfare more broadly, in order for coercion to be a legitimate exercise of authority.