| |
| META TOPICPARENT | name="FirstPaper%25" |
|---|
| |
<
< | Legal Argument as a Social Force: Capitalism and the Deterioration of Lockean Property Justifications | >
> | Demsetz and Bias | | | -- By AndrewHerink - 10 Feb 2008 | |
<
< | Cohen argues that law is a social force. Extrapolating this thesis, I posit that legal arguments are social forces and, specifically, that courts’ legal reasoning changes to justify economic relations. In this paper, I apply my theory to caselaw, showing that the growth of capitalism mutated the Lockean justification of property rights in Anglo-American courts. | >
> | In 1967, Harold Demsetz published an article in the American Economic Review, arguing that “new property rights” should arise “in response to the desires of the interacting persons for adjustment to new benefit-cost possibilities.” That is, Demsetz posits that property rights should be granted only when their benefit outweighs their cost. In evaluating the plausibility of this proposition, I apply it to a hypothetical: the Supreme Court of Miltonfriedmanville, under the guidance of Chief Justice Demsetz, has to decide whether it should grant plaintiff a property right in the use of his nickname (“Big Al”) against defendant, a budding restaurant franchise (“Big Al’s Tacos”). I find that if Demsetz’s utilitarian rule of property was made universal, it would promote a systematic bias towards judges’ experiences and values. | | | | |
<
< |
- This isn't a logical development: it's a shoehorn. You needn't have bothered claiming this had something to do with Felix Cohen, which in truth it doesn't. You wanted to present an idea generated by reading some cases in Property, which is a fine idea and didn't need to be connected to Felix Cohen to be worthwhile. The actual argument made about those cases stands or falls on its own, however, and by putting forward this off-kilter introduction, you make it more confusing for the reader to get what that argument is about. You could have said, for example, "I want to show how the labor theory of value declines in supposed importance in property cases as capital becomes more powerful over time and labor less so." That would have been clear, and would have let the reader know much more swiftly what is going on.
| >
> | Characterizations of the Costs and Benefits | | | | |
<
< | Early Cases: A Lockean Theory of Property | >
> | After reading the briefs on the “Big Al” case, Justice Demsetz starts to run his cost-benefit analysis. His first step is to characterize the benefits on both sides of the issue. No matter how he does so, I posit that his personal biases will skew the math. | | | | |
>
> | Situation One: Abstract Benefits versus Concrete Benefits
Demsetz realizes that if he grants the property right he could slow the economy, and that if he does not grant it he will deny the “Big Als” of the world a dignitary interest in keeping their nicknames unused by others. Many justices would term this an “easy call,” because Big Al’s dignitary interest is abstract, while the harm to the economy is concrete. Judges can and do make this choice, but it is not a purely utilitarian decision; it does not involve choosing “benefit X” over “benefit X-minus-Y.” The choice is instead one of prioritizing prevention of the concrete harm over prevention of the abstract one.
Only if a judge has identified with the abstract harm's emotional or mental consequence is he likely to make the opposite choice: picking the abstract benefit over the concrete benefit. Moreover, judges are predisposed to have such an identification only if they have experienced the harm firsthand. For example, a white judge is less likely than a black judge to give weight to the abstract harm felt from racial epithets, for he has never felt such a harm. Bias occurs on another level as well: the white judge is more likely than his black counterpart to give weight to abstract harms experienced in white communities, such as the loss of a sense of self-determination resulting from affirmative action. Thus, the experiences of judges bias them towards choosing only particular abstract benefits over concrete benefits. In turn, given the current ethnic and socioeconomic composition of the judiciary, Demsetz’s rule would create a systematic bias towards the interests of whites and the upper class. | | | | |
<
< | Pre-industrial courts employed traditional Lockean property theory, arguing that individual labor created property. In Keeble v. Hickering (1707), 11 East 574, defendant fired a gun, scattering ducks that had landed in plaintiff’s fowl trap. The court gave plaintiff title to these birds, for he had caught them using “his art” and “his skill.” Plaintiff’s labor created the property right. | >
> | Situation Two: Abstract Benefits versus Abstract Benefits | | | | |
<
< |
- This is in truth a much weaker claim than it looks. You don't mean "Pre-industrial courts employed a labor theory of value all the time"--you haven't read much in the English law before whenever "industrial" begins, so you can't say. As it happens, natural rights and labor theory of value are both entirely absent from the theory of property presented by pre-industrial English law from, say, 1066 to 1600. What you actually mean is "I have read a couple of pre-industrial English cases treating marginal kinds of property under unusual conditions that seem to make use of a labor theory of value but I can't tell whether that's common or uncommon."
| >
> | Alternatively, let us assume that Demsetz characterizes the harm of granting the property right as undermining free speech. Now, he has to weigh two abstract benefits (free speech and dignitary rights in nicknames). In such situations, the aforementioned systematic bias towards judges' own experiences will prevail again. Cases will arise in which judges identify with neither abstract harm, but nonetheless, in the aggregate, Demsetz’s rule will yield a bias towards judicial experience in this situation as well. | | | | |
<
< | The Lockean argument continued to hold weight in the early years of industrial capitalism. In Eads v. Brazelton (1861), 22 Ark. 499, plaintiff discovered a sunken ship and put a buoy above the wreckage to claim its lead. The court ruled that, even though “he had the intention of possessing,” plaintiff had not established a property right because he had not made “persistent efforts directed to raising the lead.” Again, individual labor created property. In Weatherbee v. Green (1871), 22 Mich. 31, plaintiff made barrel-hoops from wood that he had accidentally appropriated. The court stated that “when the right to the improved article is [at] issue, the question, how much the […] labor of each has contributed to make it what it is, must always be of first importance.” The court equated the extent of one’s labor with the strength of one’s property right.
- This argument really means "I could have cited similar cases decided the other way on similar facts but these allow me to continue to maintain an argument concerning 'industrial capitalism' despite being (again) marginal cases on non-industrial subjects; I have no idea whether they are common, though I have a hunch that Arkansas decisions from the early 1860s probably don't reflect the ethos of industrial capitalism." Your treatment of the issue in Weatherbee v. Green would surprise the judge who decided it. But there's an excellent case about horse shit in Stamford, Connecticut, in 1883 that goes your way. Unfortunately, a case deciding ownership of horse shit on the basis of a labor theory of value isn't exactly about "industrial capitalism" either. Except I suppose, to the horse.
Capitalism Rises, and Lockean Notions Fall
Capitalism is seemingly inconsistent with the notion that individual effort produces property. That notion implies that proletarians, not capitalists, should control products. As capitalism grew, political theorists aligned the status quo with Lockeanism by positing that workers sold their property for wages. The courts took a different route, arguing that corporate effort (not individual labor) created property rights. In International News Service v. Associated Press (1918), 248 U.S. 215, the court held that AP deserved a property in the news it published because AP “as the result of organization and the expenditure of labor, skill, and money” had discovered the information. The AP court converted the Lockean concept to a capitalist-friendly form; the justices still employed the word “labor” to justify the property right, but the term no longer represented individual effort. Instead, the court defined “labor” as a profit-gaining resource (like skill and money) utilized by the corporation.
AP emblematized ?? a general trend towards corporatizing %RED?? Lockean theory. Adept lawyers exploited this change. In Tribune Co. v. Oak Leaves Broadcasting, Inc. (1926), 68 Cong. Rec. 215, WGN attempted to gain title over a radio wavelength. Counsel argued that "by usage of a particular wave length for a considerable length of time and by reason of the expenditure of a considerable amount of money in developing its broadcast station," WGN had acquired title to the wavelength. Predictably, the court gave WGN a property right.
- And Congress, not being in on the joke, took it away again in 1927?
Further Derivations from the Lockean View
By placing a utilitarian condition on the newfound rule that corporate effort created a property right, later cases strayed farther from the Lockean notion of property. Such a utilitarian condition, which protects only “productive” types of effort, reinforces capitalism. In Cable Vision, Inc. v. KUTV, Inc. (1964), 335 F.2d 348, the court reasoned that a corporation “reaping where it has not sown” should not be held to have violated a property right unless the right promotes “the public interest.” Similarly, in RCA Mfg. Co. v. Whiteman (1940), 114 F.2d 86, the court stated that AP “cannot be used as a cover to prevent competitors from ever appropriating the results of the industry, skill, and expense of others.” Instead, the court argued that only products of “labor and ingenuity” that “inure […] to the public benefit” are property. Fittingly, the opinion’s concept of the public benefit was strongly capitalistic: the court stated that commercial products were protected, but ideas were generally not. Thus, as the twentieth century elapsed, courts added a capitalistic utilitarian qualification to the corporate property right.
Utility Yields Property?
The courts’ next step may be to abandon any form of Lockean justification for property. Such a purely utilitarian property theory would reinforce capitalism better than its predecessors, for it would eliminate the notion that individual rights, at times, trump productivity. Although a wholly utilitarian theory of property has not yet taken over Anglo-American courts, such a theory has prevailed in academia. In 1967, Harold Demsetz published an article in the American Economic Review, arguing that “new property rights” arise “in response to the desires of the interacting persons for adjustment to new benefit-cost possibilities.” In other words, property rights only materialize when their social benefit outweighs their detriment.
This "Law and Economics" property theory has begun to permeate the courts. In a dissent in White v. Samsung Electronics America, Inc. (1992), 989 F.2d 1512, Judge Kozinski argued that by giving plaintiff “an exclusive right to anything that reminds the viewer of her” the court discouraged potential “future creators” of advertisements. Kozinski noted that he would have refused granting a property right to plaintiff on the grounds that such a right was socially detrimental.
- Not even Alex Kozinski, absurd egotist that he is, would take as evidence of something "permeating the courts" that he shot it off once in a dissent. Your standard for what constitutes evidence--that someone said it on more than one occasion (possibly two occasions) after the onset of the Industrial Revolution--is really just a little too low, even for use in the history of ideas.
| >
> | Situation Three: Concrete Benefits versus Concrete Benefits
Now let us posit, alternatively, that Demsetz determines that the cost of not granting the property right is wasted fuel. People are told to meet at “Big Al’s” (or another nickname) and some incorrectly show up at the business instead of their friend's house. Those who do so in their cars waste gas. Now, Demsetz has two seemingly concrete harms to weigh: lost natural resources and the drag on the economy.
In this situation, the first problem is one that Jerome Frank identifies: it is impossible to accurately predict the results of a given holding, for the real world is too complicated and fluid. Yet, even if we assume that Judge Demsetz can determine exactly how much fuel will be wasted and precisely how much the GDP will fall, he still has to determine the relative values of “x” (fuel lost) and “y” (decline in GDP). At this level of specificity, these values tend to be matters of public debate. Those on the left assign a higher value to fuel loss than those on the right; the opposite is true for loss in GDP. Granted, some cases present more quantifiable choices at this level. Yet, in many cases, judges who follow Demsetz's rule have to take a side in contentious policy debates, and they are likely to do so based on their own, predominantly white and upper class, values.
Thus whether judges characterize the harms as abstract or concrete (or even if they put both characterizations on each side of the equation), Demsetz’s rule will yield a systematic, aggregate bias towards judges’ experience and values | | |
Conclusions | |
<
< | The above development not only conforms with Cohen’s legal hypotheses; it aligns with Marxist theory. For the Marxist, law is simply part of the superstructure that the capitalist base creates. Perhaps, another scholar could review law in communist countries to see if the base-superstructure theory applies as aptly there.
- This is not how legal history is done. In fact, this is pretty much "how not to do it," a work in the genre "cartoon of Horwitz." But it has ambition, industry, and (unfortunately) pomposity to spare. While it would take years of effort and more than ordinary talent to nail down capably even a corner of your argument, if you can get down off the high horse long enough to read the tracks to find which way the quarry actually went, you'll make one hell of a hunt out of it before you're through.
| | | \ No newline at end of file | |
>
> | In the final analysis, I am probably too critical of Demsetz; judicial bias will likely creep into property, and all law, no matter what rule governs. Thus our first response to such bias should not be to change the law's substance. We must instead affect its processes. Procedurally, the best way to eliminate judicial bias is to change the predominantly white and upper class makeup of our courts. If we can make the composition of our courts representative of society as a whole, the problem of judicial bias will become the advantage of judicial democracy. |
|