The Irrelevance of Law
Order Without Law, by Robert C. Ellickson, Cambridge, Mass.: Harvard University Press, 302 pages, $39.95
Robert Ellickson, a law professor at Yale, has written a book demonstrating the irrelevance of law to many of the issues it is supposed to deal with and explaining the institutions that substitute for it. It is a book that both libertarians and students of the law should find interesting.
The book starts with a story and a county. The story is Ronald Coase's parable of the farmer and the rancher, one of the best-known brief arguments in the literature of law and economics. The county is Shasta County, a largely rural patch of Northern California.
Coase asked how the behavior of a farmer and a neighboring rancher would be affected by the legal rules they lived under. Would a legal regime in which the rancher was legally responsible for damage done by his cattle result in fewer strays and less damage than a legal regime in which it was up to the farmer to fence the cattle out or take the damage? His conclusion, one of the first statements of what came to be called the Coase Theorem, was that as long as the parties could readily bargain with each other over their actions, the legal rule would affect the pattern of side payments—who had to pay what to whom—but not the use of the land.
Shasta County is a patchwork of open and closed range, designed by the accidents of history to test Coase's conclusion. In open range the legal rule is that the farmer is responsible for fencing out straying cattle, while in closed range the rule is that the rancher is responsible for fencing his cattle in. Allowing for the fact that real legal rules are somewhat more complicated than academic parables, the situation corresponds almost exactly to Coase's hypothetical.
Ellickson studied what actually happened in Shasta County with regard to straying cattle, land use, fence building, and a variety of related issues, using interviews, aerial photographs, and searches of the relevant records. The area studied included both closed and open range; the period studied included one successful and one unsuccessful attempt to persuade the Board of Supervisors to convert territory from open to closed range.
Ellickson's conclusion is surprising and interesting. Coase was correct in predicting that land use would be unaffected by the legal rule. He was incorrect in predicting that side payments would be affected. Ellickson's conclusion is that the legal rule about who was liable for straying cattle had no effect at all on the behavior of ranchers and farmers insofar as it involved cattle straying onto the farmers' land. Most of his book is an attempt to explain that result and apply it to a wide range of other circumstances.
What Ellickson discovered was that interactions between neighbors with regard to straying cattle and many other things were controlled not by law but by a system of norms, a private law code having no connection to courts, legislatures, or any other agency of state power. When a rancher was informed that one of his animals was trespassing, he was expected to apologize, retrieve the animal, and take reasonable precautions to keep it from happening again. If significant damage had been done, the rancher was expected to make up for the damage—in one case by helping replant a damaged plot of tomatoes.
The system was self-enforcing. If a rancher consistently let his animals stray, or failed to offer to make up for significant damages, the victim would respond by initiating true negative gossip—spreading the word that that particular rancher was not behaving in a proper, neighborly way. If that failed to work, straying animals could be transported far from the victim's (and rancher's) property—imposing significant costs on the rancher, who had to retrieve them. In extreme cases, trespassing animals might even be deliberately injured. The one thing good neighbors almost never did, even under quite severe provocation, was go to court.
Having explained the working of this particular part of Shasta County norms, Ellickson then tries to explain the occasional political struggles over proposals to convert areas from open to closed range—a change in a set of legal rules that, by his account, nobody pays any attention to. He next explores the role of similar sets of norms in settings ranging from whalers in the 19th century to professors photocopying each other's articles—in cheerful violation of the copyright laws—in the present. Finally, he spends the second half of the book sketching out a general theory of norms.
Ellickson's central thesis is a simple one: that close-knit groups tend to develop efficient norms, sets of rules that maximize the welfare of the members of the group. He concludes that while formal law is important and useful in human affairs, it is less important and less useful than generally believed. In a wide variety of situations, people not only succeed in resolving their conflicts without recourse to law, they do it by mechanisms that work considerably better than the legal system.
One important issue Ellickson does not explore is where such norms come from and why they tend to be efficient. Well-designed rules suggest a designer, but while deliberate design may explain some systems of religious norms, it has little relevance to norms that apply to straying cattle and fence building in Shasta County or the resolution of conflicting claims to dead whales.
The obvious alternative to deliberate planning is evolution. Perhaps, over time, societies with better norms conquer, absorb, or are imitated by societies with worse norms, producing a world of well-designed societies. The problem with that explanation is that such a process should take centuries, if not millennia—which does not fit the facts as Ellickson reports them. Whaling norms, for example, seem to have adjusted rapidly to changes in the species being hunted.
Perhaps the explanation is evolution, but evolution involving much smaller and more fluid groups than entire societies. Consider a norm, such as honesty, that can be profitably followed by small groups within a society, applicable only within the group. Groups with efficient norms will prosper and grow by recruitment. Others will imitate them. Groups with similar norms will tend to fuse, in order to obtain the same benefit on a larger scale. If one system of norms works better than its competitors, it will eventually spread through the entire society. When circumstances change and new problems arise, the process can repeat itself on a smaller scale, generating modified norms to deal with the new problems.
This conjecture about how norms arise and change suggests a prediction: Even if a norm is efficient, it will not arise if its benefits depend on everyone following it. Consider the whaling norms that Ellickson discusses. It is in the interest of any pair of captains to agree in advance to an efficient rule for dealing with whales that one ship harpoons and another one brings in, just as it is in the interest of a pair of individuals to agree to be honest with each other.
But a rule for holding down the total number of whales killed so as to preserve the population of whales is useful only if everyone follows it. The former type of norm existed, the latter did not—with the result that 19th-century whalers did an efficient job of hunting one species after another to near extinction.
As this example suggests, Ellickson's account of norms does not provide a complete solution to the anarchist's problem of how to maintain order without law. It does suggest an attractive solution to a large part of the problem—and one that can be observed working in a wide range of real-world settings.
David Friedman is the Olin Fellow in Law and Economics at the University of Chicago Law School.
This article originally appeared in print under the headline "The Irrelevance of Law".