Wary Of Law

The Securities and Exchange Commission knew that Texas-based financier R. Allen Stanford was probably running a Ponzi scheme 12 years before it halted the fraud. … Top officials in the agency’s Fort Worth office favored pursuing as many simple cases as possible rather than taking on more challenging ones like that presented by Stanford. The internal report also raised questions about a former head of enforcement in Fort Worth, Spencer Barasch, who played a “significant role in multiple decisions over the years to quash investigations of Stanford,” but then “sought to represent Stanford on three separate occasions after he left the Commission.” (more)

A few days ago I listed some examples, mostly on police and soldier brutality, suggesting we don’t seem serious about enforcing many laws; we seem to like having law enforcement organizations respond to informal social pressure about which laws to enforce how vigorously on whom.  We seem to prefer everyone being guilty of something, giving police the power to arrest whomever they want.

Even more than via independent government agencies, the obvious way to ensure laws are enforced is to empower everyone to enforce them.  Civil lawsuits, especially class action or with whistle-blower rewards, give everyone an incentive to discover and discourage violations.  But we mostly seem wary of private law, preferring centrally-enforced criminal law for most “important” topics.  In fact, we go out of our way to prevent natural private punishment of lying.

Yet we do allow private, and hence reliable, enforcement of some laws.  What distinguishes the laws we want reliably enforced, from the laws we prefer central elites have discretion to enforce when and where they like?

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  • david

    The flaw lies in your original analysis of ‘private law’; blackmail is not equivalent to whistleblowing and most people do not agree with your analysis or your conclusion to begin with.

    So of course most people support private enforcement of some laws and oppose other. Some reasons were described in the comments to your previous ‘In Praise of Blackmail’ post; you seem absolutely certain that none of them had a point; why is that so? Likewise, I found some of the objections to your list of anecdotes persuasive.

    (If it helps, here is one possible argument: that we only endorse private enforcement when it is perceived to be selflessly done. When the whistleblower demands a reward for said whistleblowing we then turn against him.)

  • slantendicular

    I am a Canadian law student. I don’t know about US law. In Canada, anybody can enforce even our criminal laws through the laying of what are called private informations. An individual can sue someone else for everything from fraud to murder. The only difference here is that the state has more resources to investigate and prosecute. Is the system different in the US?

    • Joe

      Thanks for bringing this up. I think the term “private prosecution” is the more relevant; a “private information” is a legal document issued at the initiation of such a prosecution. Interestingly almost all prosecutions in England were at least formally private through to the 19th century. More information re: the Canadian case can be found here.

      • Bruce Benson discusses away from the private orientation of law enforcement to “the King’s peace” subsuming what we now call “criminal law”.

        When Hanson refers to “private enforcement”, does he mean torts?

  • Psychohistorian

    “We seem to prefer everyone being guilty of something, giving police the power to arrest whomever they want.”

    This conclusions presupposes that every law in a Republic is expressly endorsed by the people. This is rather emphatically not the case. Because elections operate in a binary, win-lose manner, there is significant latitude for politicians to arrange for subtler points of law to favor certain groups. When those groups, like police and the military (or, for that matter, teachers and prison guards) also exercise disproportionate influence on elected officials – if you want to be mayor, you don’t want the police opposed to you – the wiggle room politicians have in writing laws tends to favor them.

    In other words, your conclusion that “we” endorse particular styles of punishment and reward in this context is simply unjustified. It would be accurate to say that “we” are ignorant and/or indifferent to these laws to some extent, but to say that “we” actually endorse them is absurd.

    Indeed, one could argue that one of the major problems with developing democracies is that their politicians do not have any cultural restriction on how they use such powers. While there is obviously corruption and waste in developed nations, in developing nations, because (1) there’s little anti-corruption culture and (2) their political opponents would be just as bad, little fine-tuned laws (like tax law) can be woefully inefficient.

    • Vladimir M.


      This conclusions [that we prefer everyone being guilty of something, giving police the power to arrest whomever they want] presupposes that every law in a Republic is expressly endorsed by the people. This is rather emphatically not the case. […] It would be accurate to say that “we” are ignorant and/or indifferent to these laws to some extent, but to say that “we” actually endorse them is absurd.

      But if over-criminalization isn’t popular, then why is a criminal record still universally seen as a horrible mark of villainy and dishonor? If people don’t broadly endorse the present criminal system, why do they automatically fear and ostracize anyone condemned by it, practically without exception?

      On further thought, it’s interesting that people don’t automatically condemn and despise those who have suffered punishment in the hands of foreign regimes that happen to be perceived as “undemocratic” — typically, they’ll be judged by the exact nature of their case. However, someone with a rap sheet from the U.S. or any other nation that enjoys the general recognition of being “democratic” will almost invariably get such treatment, no matter what the details; exceptions are very few and far between. This suggests that as long as a government has an adequate “democratic” reputation, there’s a popular consensus that its criminal law has a strong moral force (presumably justified by democratically expressed popular consent in the folk poli-sci).

      • Bock

        This is a good point. Why, for instance, is someone with a criminal record for illegal drug use ostracized, when we all know that the majority has engaged in illegal drug use at one time or another? It is as if the conviction, not the crime, signals that something is wrong with the individual.

      • Violet

        Because it is a signal for low status.

  • EGL

    What about the hypothesis that we want an efficient level of enforcement and that the inconsistencies you cite are the market’s discovering the right level? For example, videocameras in patrol cars seem to be effective at reducing the number of claims of police misconduct, but their cost keeps many jurisdictions from installing them. (I must be reading too many econ blogs…)

  • Jess Riedel

    How can you equate blackmail with privatized punishment of lying? First, lying isn’t illegal, so it seems society *doesn’t* want to punish all cover-ups, just underlying crimes. Second, the degree punishment would have almost nothing to do with the severity of the crime, but rather would depend on the status of the accused and their wealth, etc.

  • Grant

    “We seem to prefer everyone being guilty of something, giving police the power to arrest whomever they want.”

    Couldn’t there be other factors at work here? It seems very likely that our excess of laws (in the US) is a result of out political processes without conscious direction; products of human action but not necessarily human design. For reasons that aren’t clear to me it seems very hard for democracies to repeal old, unused or just plain bad laws. Is there a public choice explanation for this, or is it just status quo bias?

    But if over-criminalization isn’t popular, then why is a criminal record still universally seen as a horrible mark of villainy and dishonor?

    Because its easy to claim higher status than a criminal? It may be rational to support the branding of a single person evil (in order to claim higher status than that person) while at the same time opposing the over-use of that brand (after all, you may be its next victim).

  • Simetrical

    Part of this might be an artifact of our legal system. The Constitution gives defendants in criminal cases a lot of rights to deter frivolous government prosecution, but it doesn’t offer the same rights in civil cases. Civil suits are therefore more likely to result in unjust convictions.

    (Also less likely to result in unjust exonerations, but we fear those less when it comes to the government. The government is presumed to have a large starting advantage in prosecutions because of its ability to coordinate, and the benefits given to defendants are supposed to help cancel that out — although they don’t fully do so.)

    If we could have private prosecutions that follow the same procedure as public ones — e.g., requirement for indictment, proof beyond a reasonable doubt, the prosecution paying the legal fees for poor defendants — that would be useful. Perhaps the restrictions on the plaintiff should be somewhat harsher than on the government, to compensate for somewhat greater possibility of malice. Require them to be specially licensed, and to win a certain percentage of their cases to retain their license, and to not be immune to suit for frivolous prosecutions, and so on.

  • EJR

    I think EGL generally has the most useful approach: encouraging an efficient level of enforcement.

    I tried thinking of what types of offenses can be prosecuted by the state but not by a private individual. Most crimes have a tort analogue. But many regulatory violations (i.e., law-breaking that merely results in a fine, rather than imprisonment) do not have an accompanying tort, i.e., speeding, pollution/littering which does not measurably affect private property, violations of building or health codes which do not result in measurable harm to individuals.

    What prevents individuals from “enforcing” these regulations through torts is the doctrine of standing: one cannot sue unless one has suffered an actual injury caused by the injurer and redressable by the courts. Seems that standing equips courts with a tool for policing the boundary-line between what is privately enforceable and what’s not. This, in turn, encourages courts to guard against overdeterrence or rent-seeking among private would-be enforcers.

    Thus, which laws are enforceable by both states and individuals and which laws are enforceable by the state alone depends on what courts (or legislatures) are willing to recognize as a cognizable injury.

    The examples of police brutality seem to me to raise a separate but related issue: the scope of sovereign immunity and its impact on optimal enforcement. Legislatively created standing to sue under 42 USC 1983, which reduces the scope of immunity, suggests that there’s been a shift in the optimal level of state enforcement of laws. In short, we’re less concerned with overdeterrence now than we used to be, perhaps because our valuation of injuries has increased.

  • tom

    Class actions are a good example of private law on a large scale. One problem of many is that only one group can run a class so you end up with competing groups trying to be appointed the private civil prosecutor representing between hundreds and millions of people’s claims. I’m not sure if that’s what you’re thinking of–people competing for a court to appoint them as a private prosecutor on behalf of a group–or if you are thinking hundreds of thousands of self-appointed prosecutors and a need for each accused to respond fully to each one. Either way it’s absolutely not obvious that private law enforcement is a solution outside of business transactions where arbitration has long been used between parties.

    On the general question of the power of elites, I think it’s better that you’re not focusing on the ground level enforcement agents as being elites. The main area where discretion gives the elites power that people cannot understand is the Goldman Sachs area–prosecution of complex financial crimes. It’s not rape, robbery, marijuana, cocaine, heroin, street crime, dui. In those cases, people can understand what government is doing and what it is and is not choosing to go after.

  • Proper Dave

    Yet we do allow private, and hence reliable, enfor

    This is snicker worthy… About as reliable as “self-regulation”.

  • Lord

    This example seems inappropriate. What reward is there for someone exposing a ponzi scheme? What reward is there when there is no money to be had? On the other hand, one can get an inkling of them by watching incoming spam.