Fuzzy Logic

Principles for a Free Society: Reconciling Individual Liberty with the Common Good, by Richard Epstein, Reading, Mass.: Perseus Books, 368 pages, $27.50

These days, fashionable environmentalists sound like neoclassical economists. They chatter about the need to "internalize externalities," pressing for eco-taxes on greenhouse gases, sulfur dioxide emissions, wasteful packaging, noise, fumes, mine tailings, chemical consumption, and any other perceived "bad" that captures their attention. This notion of externalities as a form of "market failure" opens up endless possibilities for state intervention.

The possibilities are endless because, as Richard Epstein observes in his latest book, Principles for a Free Society, "every action, every transaction has innumerable consequences--positive and negative--that spill over to other people." Leaves from one person's tree fall onto another's yard; a car door slams across the road, jolting someone from his midday reverie; a plane flies 30,000 feet overhead, leaving an unnatural scratch upon the sky; neon pink trim around the windows of a house offends a neighbor's sense of aesthetics and propriety.

Many staunch champions of property rights and market institutions have inadvertently aided and abetted this undisciplined demand to internalize externalities. They have done so by confidently asserting two absolute principles: the "do no harm" principle and the right to private property. Like their counterparts in the modern environmental movement, they have reduced complex matters of human interaction to bumper-sticker phrases. Under this absolutism, writes Epstein, all manner of "harms"--from the neighbor's falling leaves to slamming car doors--"cry out for relief."

Epstein, the James Parker Hall Distinguished Service Professor of Law at the University of Chicago, sets out to peel off the bumper sticker and replace it with a more nuanced depiction of classical liberalism, one that resurrects some ideas well understood and studied by Scottish philosopher David Hume, utilitarians like Jeremy Bentham, students of spontaneous order like F.A. Hayek, and contemporary social theorists like Robert Ellickson. He attempts to reinvigorate the political theory of laissez faire "not by restating its narrow anti-fraud conception, but by expanding it to accommodate hold-out and coordination problems."

Principles for a Free Society is a frustrating but, in the end, captivating book. Epstein aims, I think, for a nonacademic though erudite audience. The book has too few references and too little thoroughness in argumentation to satisfy academics. Yet it is much too densely written, with too few concrete examples and too little explication of the many court cases it cites, to appeal to the armchair political philosopher.

Epstein's intended audience is unclear in another way. Sometimes he seems to be arguing primarily with those he calls "libertarian absolutists." At other times, he seems to be speaking to modern critics of laissez faire in an attempt to convince them that libertarian philosophy is robust, practical, and desirable.

That philosophy, in Epstein's version, acknowledges that not all human action springs from economic self-interest. It accounts for problems of coordination and "holdout" threats of noncooperation. It makes a place for social norms and custom alongside economic institutions. Its remedies for harmful human action span a continuum from social opprobrium to coercive restrictions.

This is an admirable agenda. But I fear that Epstein tries to do so much that his effort will go right over the heads of most readers yet fall short of the careful argumentation necessary to really intrigue his fellow scholars.

Still, for the determined reader, Principles for a Free Society is chock-full of insights and wisdom. In discussing social norms, the concepts of harm and benefit, remedies for harm, and ideas of property, Epstein weaves together two primary tasks. First, he attempts to bridge the gulf between those who argue for private property, individual rights, and freedom of contract from a "natural law" perspective and those who advance these ideas from a more utilitarian perspective. Second, he explores ideas of property, contract, harm and benefit principles, and remedies against harm "at the margin,"--those blurry realms where boundaries are fuzzy, coordination and holdout problems are great, and Adam Smith's "invisible hand" is weak.

Epstein considers himself a consequentialist: Put simply, private property, individual rights, and freedom of contract are desirable because they enhance human well-being. Ideas of individual liberty are, he writes, "best understood not as an effort to glorify the individual at the expense of society, but as the embodiment of principles that, when consistently applied, will work to the advantage of all (or almost all) members of society simultaneously." He rejects as "obscure and occult" efforts to find individual rights "out there like a rock or stone."

This rejection of natural law theory will not sit well with many of those whom Epstein calls libertarian absolutists. Without claims to some natural right to property and individual liberty, the propensity to slide down a slippery slope to endless state intervention seems hard to resist. This is the fundamental worry that some modern classical liberal philosophers have about the works of Hume and Hayek.

Like Epstein, Hume and Hayek make an organic, "ground up," experiential case for liberty rather than one premised on some set of eternal, a priori natural laws intrinsic to humanity. Roughly speaking, they tend to argue that what works is what's good. This view is not as relativist as it might at first seem, since they anchor their measure of the good in the individual. They see values as springing from individuals rather than residing in some "public good" that is more than the sum of individual yearnings. Still, scholars who celebrate the works of Hume and Hayek have spent a good deal of time trying to square the consequentialist tone of their work with a more definitive (absolutist) protection of individual rights and private property.

Natural law theorists and absolutist libertarians will no doubt have the same complaints about Epstein's book. In acknowledging hold-out and coordination problems in particular circumstances, such as some pollution problems, he opens the door to the use of eminent domain or government intervention. If pollution is discharged, the costs to any individual neighbor of seeking an injunction may be greater than the benefits to that individual, even though total benefits to all neighbors may well exceed the costs of bringing a court action. Epstein writes, "while in principle it is possible to pool expenses to obtain that injunction, the familiar litany of coordination and holdout problems will likely scuttle that enterprise before it bears fruit." In this instance, Epstein concludes, "the state may assume a useful role in coordinating relief from threatened harms. Epstein also accepts denial of remedy when the harm is small but the public gain in denying a remedy is great: He gives the example of airplane overflight, where acquiring permission from every affected property owner would be prohibitively expensive, largely because holdout problems are substantial, yet harms to individual property owners are tiny.

But the strength of Epstein's book is precisely its recognition of nuance, semipermeable boundaries, and complexity in human affairs. He prods, pricks, and pushes the advocate of individual rights to think about what this might mean in real situations.

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