Discussing private property, Epstein notes that custom, tradition, and common law have allowed for occasional violations of its sanctity--and rightly so, he argues. He offers the example of the "necessity principle," which allows the unauthorized use of another's property in cases of emergency: a ship at sea in a severe storm docking at someone else's pier without permission (and with no requirement to pay for the privilege). His arguments do not constitute an open-ended justification for expropriation; he notes that the docking privilege ends once the storm is over.
Epstein also points out that defining who owns what is not at all straightforward, showing the limits of John Locke's "mixing of labor" theory as well as the limits of "first acquisition" theories. Does a landowner with an opening to a cave own the entire cave, even those portions under someone else's property? Does the owner possess just that portion under his own land? How does "mixing of labor" to develop the cave change, if at all, the allocation of property in the cave? Epstein describes court cases in which just these questions resulted in decades-long disputes that no mere appeal to either a "do no harm" principle or a "right to property" principle could resolve.
It is Epstein's discussions of fuzzy boundaries, harms, and remedies that I found most interesting, perhaps because they are issues that I often contemplate in the realm of environmental policy. Epstein argues for jettisoning the notion of completely rigid boundaries.
On the one hand, he notes, a legal system premised on internalizing all spillover effects would be enormously costly (and unpleasant). He writes that it would be "too burdensome to champion a system in which every individual action has to be justified to every other person"-- which is, in effect, what would result from demanding that all spillover effects be accounted for.
We tolerate accidental contact in a crowded mall, or the neighbor's slamming car door, or an occasional barking dog (maybe). We do so under a sort of "live and let live" attitude that recognizes, first, that these interactions among neighbors and within communities are usually reciprocal and, second, that they generally do not have very serious consequences. Social norms and customs handle these circumstances well without the intervention of laws, including laws to more clearly define boundaries and rights.
On the other hand, Epstein, in what seems like a subtle chastising of some property rights zealots, argues that it is "not costless to ignore spillover effects and to proceed as though the only gains and losses that count are those that are naturally borne by the actor himself." The "I can do anything I want with my property" mindset often seems to assume that the only thing that counts as a trespass or nuisance is a physical invasion of another's property. Not so, says Epstein; the trick is to figure out which of these invasions really matter and what sort of remedy is appropriate in each case.
This is where Epstein's book becomes truly fascinating. Any number of remedies for harms exist, from what Epstein calls "self-help" in which an individual, claiming harm, unilaterally acts to recover his property, to court damages, injunctions, and specific performance requirements. He distinguishes between a "property rule," which essentially requires restitution of the property in question and a ceasing of the harm, and a "liability rule," which provides compensation for damages. He rejects the absolutist notion that a strict property rule should always prevail and that the very idea of a forced transfer is contrary to individual liberty. "That heroic stance," he writes, "fails...in functional terms because it assumes, without contextual examination, that an absolute rule of property protection will always outperform the more nuanced protection of a liability rule."
Epstein does believe the presumption ought to be in favor of a strict property rule. If someone encroaches on a neighbor's property, building a structure one inch over the boundary, for example, the rule ought to require removal and restoration of the plaintiff's full property. Such a rule discourages intentional encroachment and encourages attention to detail. But Epstein cites cases (such as airplane overflight) where the externality risk is minuscule and the holdout risk (in this case, the risk that someone would demand near-extortionate payments before agreeing to the overflight) is large. In such instances, the law developed to minimize the holdout problem rather than avoid the extremely small externality.
Of course, a different way of viewing the overflight case would be to argue that a strict property rule should remain intact but that showing harm requires more than pointing to a spillover effect. As Epstein himself acknowledges, a strict property rule requires a showing that a trespass or nuisance has in fact occurred before a remedy can be provided. Depending upon how property rights and harm are defined, an airplane overflight may not amount to either.
The interesting point here is that either way of viewing the overflight issue--as a choice between a property rule and a liability rule, or as a conundrum regarding whether a boundary has been crossed and a harm has occurred--confirms Epstein's basic argument that an absolutist approach cannot resolve all real-world problems. Choices of legal rules involve not just facts but concepts that involve value judgments.
Those who worry about preserving liberty, private property, and freedom of contract can take heart that Epstein offers useful arguments on behalf of these concepts as centerpieces of his political vision. But he also offers, to those who recognize the omnipresence of fuzzy boundaries, shared spaces, and coordination problems, a broad-brush look at these issues and the ways in which social norms, economic practice, and legal institutions might (and often do) work out a balance between individual liberty and human cooperation.
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