Is Quasi-Contract Really Dead?

Another book I have recently finished is the second edition of Peter Birks' Unjust Enrichment, which he completed just before he died. Professor Birks made a late conversion to what is now the Canadian approach to non-consent non-wrong based private causes of action -- namely, that we should treat every transaction in which D benefits and P loses as presumptively reversible to the lesser of the benefit or loss. Contract, gift and statutory transfer are all just exceptions to the borader rule. That is a departure from how the common law traditionally dealt with the same issues by presuming gains/losses fall where they lay, but using defined categories of "monies mistakenly paid and recieved", practical compulsion and so on to provide for exceptional reversal. Birks is also "Canadian" in separating out gain-based remedies that do not require any corresponding loss from the law of unjust enrichment.

In one respect, Birks is triumphalist about the success of civilian-style unjust enrichment. He says no one will ever again write a book entitled "Quasi-Contract" because liability for benefits provided under mistake, compulsion, necessity and so on has been completely liberated from implied contract theories.

I wonder. It seems to me that there are a number of reasons non-consent non-wrong based liability will always be closely tied to contract:

*We are always going to let defendants get out if the matter was something the parties could have contracted about. If I mow your lawn before I negotiate a price, you are never going to have to pay unless there was some good reason we couldn't agree to an express contract.

*Unless the benefit the defendant received was cash, we are always going to have to value it somehow, and the only way to do that is to think what would have been agreed to. That inevitably brings the implied or hypothetical contract back in.

*Contract law itself will always have to deal with implied or hypothetical bargains, as well as express ones. Think about any real contractual dispute. If the parties expressly agreed who was going to take on the risk or cost at issue, then you wouldn't expect litigation, other than merely for enforcement. If there is serious litigation, that is because the parties intentions are in doubt, and the judge/arbitrator is always going to be reasoning abut what they "would have" done if they had turned their mind to the eventuality. So inside every express contract is a million implied or hypothetical contracts. And the law of what we do when there is no contract at all should develop alongside what we do when there is a contract but it doesn't deal with the subject matter of litigation.

So Birks' triumphalism is premature. Implied/hypothetical contracts are as hard to banish from practical litigation as from political theory.

Self-Demonization

I don't want to give the impression that Zizek is an idiot. This is pretty sharp, for example:

The politically correct version enacts a weird reversal of racist hatred of Otherness -- it stages a kind of mockingly Hegelian negation/sublation of openly racist dismissal and hatred of the Other, of the perception of the Other as the Enemy which poses a threat to our way of life. In the PC vision, the Other's violence against us, deplorable and cruel as it may be, is always a reaction against the "original sin" of our (white man's imperialist, colonialist, cetc.) rejection and oppression of Otherness. We, white men, are responsible and guilty, the Other just reacts as a victim; we are to be condemned, the Other is to be understood; ours is a domain of morals (moral condemnation), whilst that of others involves sociology (social explanation). It is, of course, easy to discern how, beneath the mask of extreme self-humiliation and self-blame, such a stance of true ethical masochism repeats racism in its very form: although negative, the proverbial "white man's burden" is still here -- we, white men, are the subjects of History, whilst others ultimately react to our (mis)deeds. In other words, it is as if the true message of PC moralistic self-blame is: if we can no longer be the model of democracy and civilization for the rest of the world, we can at least be the model of Evil.

Epstein's Takings (3)

Epstein's foray into political theory at the beginning of his book ends badly. There is nothing appealing about the principle "From each according to his ability to each according to how well he would do in the general prison population." So why did his book cause such a stir? What is there in it that those outside the libertarian ghetto are required to take seriously?

Epstein's great achievement arises out of his ability to use the master's tools to dismantle the master's house (or at least pay the previous owner for it). Epstein takes the intellectual basis for the decline in constitutional respect for property rights in the Progressive Era and the New Deal -- what we could call the "modernist" view of property -- and turns it into a sweeping takings doctrine far more extensive than a conservative, formalist nineteenth century judge would have imagined.

Naively, we tend to think of property as things or land. We may know that there is a species of "intellectual property", but it doesn't quite seem real, which may be why there are far fewer social sanctions for ignoring it. Locke and Blackstone had a more sophisticated view, but they emphasized the naturalness and unity of property. The acquisition, use and disposition of property is pre-political and distinct from coercion. The question of what rights property gives is logically prior to the remedies that the legal system might provide when those rights are violated. Locke and Blackston'es view is a natural fit both with the naive views of non-lawyers and with classical liberalism/libertarianism.

The modernist "bundle-of-sticks" view, on the other hand, was developed by people who thought nineteenth century liberalism was holding back progress. Painting with a broad brush, it holds:

*Remedies define entitlements. In other words, having a property right just is being able to go to court and get an injunction or damages in certain circumstances. As a result, property rights cannot be contrasted with state coercion -- they just are (regularized) state coercion. The distinction between private law and public law breaks down.

*Relatedly, tort and criminal law don't protect things because they are property -- they are property because tort and criminal law protect them. It isn't a trespass because it is an invasion or a nuisance because it is an interference: it's an invasion because it's a trespass and an interference because it's a nuisance.

*While it is perfectly possible for rights of possesion, use and disposition (the ability to sell or give) to belong to a single person, there is no necessity that this be so. Use and disposition rights can be limited and/or divided.

*Contrary to Locke, there is no natural mode of property acquisition. If property is transferred, then it must be in accordance with the rights of disposition that the transferor held (which have already been said to be conventional and mutable). And if property is originally acquired, it must be in accordance with some pre-existing rule. First possession isn't the only such rule.

In general, this modernist conception was used to break down classical liberal ideas and institutions. If both public law and private law are coercive, then the only issue seems to be what will provide the best result for the public as a whole.

Epstein takes ahold of this modernist conception and uses it to reestablish a strict classical liberalism. If property is a bundle, then the removal of any stick becomes a taking. There is no principled difference betwen a tax, a zoning by-law, a change in tort law rules and the occupation of a lot for a post office. If the legislature says that farmland can no longer be developed as anything else, the state now has a restrictive covenant that a neighbour would have to pay for. The value of mere regulation may be less, but it may not.

Moreover, Epstein justifies this rule in consequentialist terms. As David Suzuki will tell you, the way to get firms to respect the environment is to make them pay for environmental harm. If they do that, they will have to internalize the otherwise external environmental costs in their own decision making. Epstein's point is that the same goes for governments. If they don't have to (somehow) compensate those affected by their decisions, their incentives will be all screwed up. Something with overall negative consequences will make sense to the government so long as the losers have less political clout than the winners.

Epstein has no trouble showing the coherence of his approach and the intrinsic difficulties of traditional attempts to make distinctions between "mere" regulation and true takings. The problem is that his approach seems to go too far, and potentially make even positive-sum governmental activity impossible. My next post will try to evaluate how he addresses this.

Epstein's Takings (2)

Takings mostly sets out Epstein's alternative constitutional property rights doctrine, but it starts and ends with more philosophical musings. The worst part (unfortuantely) is right at the beginning. Epstein identifies what I would consider the least.persuasive.normative.principle ever.

Following Hobbes and Locke, he says the state is justified because -- without it -- we would be in a state of war-of-all-against-all. We're better off in a regime of civil peace. Nothing new there. Epstein gets original when he claims that the surplus caused by going from anarchy to order should be distribute proportionately to the holdings people would have under anarchy:

What can the state demand of the individual citizen whom it both governs and represents? The simplest way to present the problem is to draw two pies...

The first of these pies represents the situation in a world without effecitve government control. Each individual is endowed (according to the natural rights tradition) with certain individual rights. Yet the value of these rights in a state of nature is low because some individuals continually try to take that which by right belongs to others...

The larger pie indicates the gains that are possible from poltical orgainzation. The outer ring represents the total social gains, while the divided lines indicate the proportion of the gain received by each individual member. The implicit normative limit upon the use of political power is that it should preserve the relative entitlements among the members of the group, both in the formation of the social order and in its operation.

In other words if the ratio of the value of a person's entitlements under political organization to the value of their entitlements under a Hobbesian state of nature should be constant. The better off you would do in civil disorder, the better off you should do in a world with government.

There are multiple objections to this principle. It wouldn't be true of a libertarian night watchman state, since that kind of state would put a premium on entrepenurial talent, as opposed to the ability to use weaponry and motivate teenage thugs, which would be more useful in civil disorder. Not that this is an objection to the night watchman state -- the principle itself is just nuts.

If Epstein's book stayed this silly, it wouldn't be worth reviewing. But when Epstein turns to legal doctrine, he grabs ahold of a crucial difficulty with the post-New Deal understanding of property rights...

A Belated Review of Epstein's Takings (1)

A couple months ago, I decided to order Richard Epstein's Takings: Private Property and the Power of Eminent Domain, possibly the most important libertarian work of legal theory of the last twenty-five years. Epstein meditates on the Fifth Amendment's "nor shall private property be taken for public use, without just compensation" (the "takings clause"). He rejects the limited reading that American courts (including conservative judges like Rehnquist and Scalia) have given to this clause since the New Deal. In the end, he decides that the US Constitution prohibits most of what the government currently does, including progressive taxation and welfare, although he allows for a bigger role than more stringent libertarians might.

Unfortunately, the radical conclusions may have had counter-productive effects on the protection of property rights. Behind every leftist attack on the legal dimensions of NAFTA and other investment treaties, or on the entrenchment of property rights, and behind a lot of judicial nervousness, is the feeling that if property rights are real, Epstein's conclusions might follow. During his confirmation hearings and before "Long Dong Silver," Jospeh Biden tried to get Clarence Thomas to renounce any support of Epstein's book. One of the criticisms levelled at Janice Rogers Brown when she was considered for a nomination to the federal judiciary by Bush was that she had cited Epstein favourably in a case -- even though she cited him for examples of non-takings, which is rhetorically equivalent to citing Catherine Mackinnon for pickup lines that aren't sexual harrassment.

I am going to break up this review into a number of posts. The next one will explain Epstein's system and why it is (somewhat) redundant.