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Design for Liberty

Design for Liberty: Private Property, Public Administration, and the Rule of Law

Richard A. Epstein
Copyright Date: 2011
Published by: Harvard University Press
Pages: 248
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  • Book Info
    Design for Liberty
    Book Description:

    The noted legal scholar Richard Epstein advocates a much smaller federal government, arguing that our over-regulated state gives too much discretion to regulators, which results in arbitrary, unfair decisions and other abuses. Epstein bases his classical liberalism on the twin pillars of the rule of law and of private contracts and property rights.

    eISBN: 978-0-674-06305-1
    Subjects: Law, Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-xii)
  4. Introduction: From Small to Large Government
    (pp. 1-9)

    Without question, the most profound domestic change in the United States from the beginning of the twentieth century through the present time has been the vast expansion of government under the influence of the progressive worldview that received its highest expression in President Franklin D. Roosevelt’s New Deal. Progressive thought was no small perturbation from the views of government that had previously defined the American legal tradition. Indeed, the progressive movement defined itself in opposition to once-dominant classical liberal theories of government that stressed the dominance of private property, individual liberty, and limited government.

    The first burst of progressive energy...

  5. 1 The Traditional Conception of the Rule of Law
    (pp. 10-30)

    The strongest social commitments to both the rule of law and private property long predate the rise of the modern democratic institutions that eventually gave birth to the administrative state. Analytically, the rule of law is, of course, a separate conception from the notions of private property and personal liberty. Nonetheless, there is sometimes a strong impulse on the part of many classical liberal writers to act as if there were some close analytical connection between them. That tie is made explicit when, for example, F. A. Hayek stresses that the requirements of the rule of law are satisfied when...

  6. 2 Reasonableness Standards and the Rule of Law
    (pp. 31-42)

    The previous chapter drew a sharp distinction between the discretion that public officials need to exercise in discharging their legal responsibilities and the hard edges of property rights. In that analysis, the entire effort was to banish the elements of reasonableness and good faith from the overall equation. As a general matter, this approach surely has to be too aggressive, for virtually every legal system must, at some point or another, incorporate these elements into its substantive rules. It would be unwise to assume that the mere mention of these open-ended terms necessarily renders a legal system noncompliant with the...

  7. 3 Where Natural Law and Utilitarianism Converge
    (pp. 43-54)

    The previous two chapters sought to integrate a number of themes about the relationship of rules to discretion in the administration of a sound legal system. We have already established conceptually how difficult it is to defend a content-free version of the rule of law, or indeed to banish notions of reasonableness or good faith from any legal system. Try as one may, sooner or later the inquiry requires articulation of a substantive theory that addresses three key issues: first, identifying the rights and duties of individuals; second, determining how those rights should be classified for the purposes of various...

  8. 4 Where Natural Law and Utilitarianism Diverge
    (pp. 55-65)

    In the previous chapter, I tried to identify the correlation between natural law and social welfare. But that coincidence does break down in some critical cases. To give but one example, let’s return to the amorphous category of contracts in restraint of trade. In this area, a natural-law theory based on libertarian principles has nothing to say about their distinctive character. It cannot isolate any relevant difference between cartels that fix prices, limit output, and divide territories, on the one hand, and predation on the other, where it is alleged (but rarely if ever proved) that one firm has lowered...

  9. 5 Property Rights in the Grand Social Scheme
    (pp. 66-76)

    The previous chapters have shown how even the thinnest conception of the rule of law helps to prevent the corruption that can result from the unlimited discretion of law enforcement officials. The basic protections of neutral judges, notice of charges, and an opportunity to be heard are minimum conditions for any sound legal system.

    But are they sufficient? Let us begin with one common source of uneasiness with a limited conception of the rule of law. Any possible gain from complying with these procedural safeguards is precarious because the noblest procedures can be placed in the service of the most...

  10. 6 The Bundle of Rights
    (pp. 77-96)

    The topic of this chapter is straightforward enough: What rights does a property owner enjoy against the rest of the world? One element, of course, is the right to exclude all other individuals from the ability to enter the owner’s property. Clearly if others can enter and take the property for their own use, all rights of any owner are gone. But the right to exclude is not the sole right associated with property ownership.

    A second stick in the bundle of rights, which is easy to forget, is the right to enter one’s own property. This is distinct from...

  11. 7 Eminent Domain
    (pp. 97-119)

    This analysis of property rights and the rule of law has thus far established how substance and procedure work together toward a common end. In order to further the analysis, however, we must explain how the conscious use of coercive state power, so critical in the creation of roads and other forms of social infrastructure, can be exercised in a fashion consistent with the rule of law. The need for the use of state power arises, of course, in many recurrent contexts, in which voluntary efforts are likely to fail. The key variable here is often a simple matter of...

  12. 8 Liberty Interests
    (pp. 120-130)

    The same sharp contrast can be drawn between classical liberal and progressive attitudes toward economic liberties. The older model of labor contracts allowed parties to construct their own deals, so that the public force was concentrated on the interpretation and enforcement of their agreements, not on imposing new terms and conditions on all private deals within a given class. In line with that attitude, freedom of contract was the maxim, with respect to both the choice of contracting parties and the choice of contractual terms. There were, of course, exceptions to this rule, but they comported with the modern approach...

  13. 9 Positive-Sum Projects
    (pp. 131-140)

    The accounts of both private property and liberty of contract in their separate ways have as their minimum condition blocking forms of government action that shrink the overall size of the pie. Toward that end, it becomes appropriate to strike down legislation that prevents the gains from trade in consensual arrangements. Likewise, in connection with the operation of state coercion, the initial function of the system invokes a strong just-compensation principle to block negative-sum projects that should not be undertaken in the first place. If the winners cannot pay off the losers and come out ahead, they will abandon their...

  14. 10 Redistribution Last
    (pp. 141-148)

    The overall substantive picture of the classical liberal view is still incomplete, because it has thus far omitted discussion of one central practice of the modern welfare state: redistribution of wealth to offset disadvantages from birth, ill fortune, or social position. Within the classical liberal framework, the case for redistribution, at least through voluntary transfers, rests on overtly welfarist grounds. It is widely (and correctly) assumed that individuals derive diminishing marginal utility from additional units of wealth. Some equalization of wealth therefore should, all else being equal, increase the overall levels of social utility from the same amount of wealth....

  15. 11 The Rule of Law Diminished
    (pp. 149-163)

    Thus far, I have explained how classical liberal principles link the rule of law and the system of private property into a harmonious whole. In addition, I have sought to explain why the alternative progressive synthesis necessarily introduces new levels of discretion for public officials in applying the substantive law. At this point, we must circle back to see how these modern transformations of the rules of property and contract have placed undue pressure on the rule of law. These changes, moreover, have also placed great responsibilities on public administration that force it to make far more painful choices. The...

  16. 12 Retroactivity
    (pp. 164-171)

    Retroactive legislation poses yet another challenge to the rule of law. Such laws are routinely denounced under classical liberal theories because of their interference with settled expectations on which private citizens have a right to rely. Indeed, within that intellectual framework, there is little if any need to pass those laws in the first place. The basic framework of property, contract, and tort law is stable over a wide range of social circumstances. The need to adapt these systems to new technologies can usually be done by a simple extension of standard principles, without upsetting the previous set of rules.¹...

  17. 13 Modern Applications: Financial Reform and Health Care
    (pp. 172-189)

    The previous chapters showed how the extension of the administrative power of the state has placed greater pressure on the procedural values associated with the rule of law. These vices are all-too-present in the two major legislative achievements of the first two years of the Obama administration, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act),¹ and the Patient Protection and Affordable Care Act (ACA),² which reshapes the provision of health care in the United States. Both of these statutes represent a level of regulatory ambition that far exceeds in scope and complexity any New Deal...

  18. 14 Final Reflections
    (pp. 190-192)

    The purpose of this volume has been to pursue the interaction of three elements: private property, public administration, and the rule of law. Any viable legal system needs to have all three, and must therefore work out ways to distribute responsibilities between public and private actors. When it comes to making such choices, it is worth remembering that in most instances, private parties do not have anything approaching a monopoly position, and thus are at least somewhat constrained in how they behave by the presence of strong competitive forces. Governments have a monopoly of force within their jurisdictions, and thus...

  19. Notes
    (pp. 195-214)
  20. Index of Cases
    (pp. 215-220)
  21. General Index
    (pp. 221-234)