Limits To Law

Teaching Law & Econ this semester reminds me of the puzzling ways law and culture work to prevent law from applying to “personal” arenas. Yes, many reasons are offered to explain why law is or should be so limited, but taken as a whole the pattern suggests a more primal reluctance to let law and related formal institutions apply to “personal” areas.  For example, consider these rough legal trends (most trends have exceptions):

  1. Law enforces matching promises, but not a single lone promise.
  2. Blackmail law prevents monetary penalties on illicit secrets.
  3. Lawsuits compensate mainly for money, not pain & desire, losses.
  4. Torts compensate for non-contracted harms, but not benefits.
  5. Pollution laws weaker for households than firms.
  6. Discrimination laws only apply to employers, not employees.
  7. Discrimination laws apply only to jobs, not romance.
  8. Limited enforcement of the terms of wills over long timescales.
  9. Norms against explicit contracts in personal relations.
  10. Norms against “snitching” on crimes.
  11. Dislike gambling lawsuits to let law apply to small cases.
  12. More?

Did we inherit intuitions that different social mechanisms should apply at different social scales? For example, foragers had five social scales:

  1. Family – typically a man, woman, and kids
  2. Band – ten to forty folks who travel and sleep together
  3. Tribe – friendly nearby bands that meet & hear of often
  4. World – perhaps hostile strangers know little about

Foragers had different rules and mechanisms for these different scales.  For example, dominance was more acceptable within families than between the families of a band.  Bands had to come to consensus on more topics than did tribes.  One did not need to be fair to the world.

Farming introduced the village or town, akin to the tribe, the clan, an extended family that may include folks far away, nations as collections of tribe, and sometimes empires as collections of nations. Industry brought yet more units, such as cities, counties, states, etc.  So which forager social units do we see as most similar to our various modern units, and which ancient norms and methods do still think should apply to them?

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  • RJB

    Why look as far back to foraging for something more easily explained by the goals of maximizing objectivity and ease of administration, and minimizing intrusion.

    For example, demanding a plaintiff demonstrate matching promises and monetary damages is objective; stiffer enforcement and penalties for corporations (which each can pollute far more than even a large number of individuals) makes the law easy to administer (the “Willie Sutton” rule); most of the remaining demonstrate a reasonable reluctance to allow the brute force of law to intrude into the subtleties of personal relationships.

  • Stuart Armstrong

    I think your point that these issues fall under roughly the same category is much stronger than any point you made on the individually (eg blackmail). I think you’ve hit a nail on the head here.

    Of course, as a forager evolved human, I like the fact that laws don’t reach into these areas, of course 🙂

  • Salem

    But the ways in which laws apply to “personal” areas is very fluid, both across legal systems and across time. For example (1), the doctrine of consideration, is an artifact of the Common Law, but not all legal systems. For example, there are versions of Islamic law that do enforce lone promises. And even in Common Law systems, you’d have been on much firmer ground if you’d been writing this blog 400 years ago. It is now an accepted commonplace that the judge will look to find consideration.

    Or take “norms against explicit contracts in personal relations.” These norms are modern and Western. In a historical and cross-cultural context, you see that generally you do have explicit, and enforceable, contracts in personal relations – consider for example detailed marriage contracts, concepts such as dowry, suits for breach of promise, etc.

    If these were actually forager norms, we would expect them to be constant over time and culture. That they are not suggests an alternative explanation. I side with RJB, that you need to look at it from the perspective of administration of justice. Over history, laws are mostly imposed from the top down.

  • http://www.cawtech.freeserve.co.uk Alan Crowe

    I think that the current situation with employment law drops out of the collision between two separate issues.

    First there is the problem of organisations that are the only employer in that field. If you are a female rocket scientist and NASA decides that women cannot be rocket scientists that is a big problem. You can see why individuals would want laws to stop big employers, such as General Motors, from discriminating.

    What about smaller employers? It is common to have a size limit beneath which discrimination laws do not apply. Usually it is very low. You never find companies with 1000 employees being exempt because they recruit in a very competitive labour market such that unfair discrimination would hurt them much more than it would hurt the victim. So that is my second issue: why are size limits so low/not subject to competitive-market exceptions?

    I don’t understand the second issue. Is it regulatory capture, with big businesses ensuring that the limits are low to avoid being disadvantaged relative to medium sized competitors? Is it anti-market bias, with individuals not believing that a competitive labour market will protect them? Is it poverty of ambition, with most people never imagining being on the other side of the labour market, trying to sack an incompetent employee belonging to an ex-unfavoured minority.

  • Psychohistorian

    This is a bit of a stretch; enforcement explains virtually all of these. Some problems actually explain each other, at least partly, such as the norms against formal contracts in a family setting, combined with the law not enforcing unilateral promises.

    For most of these, any law would be both extremely expensive to enforce and, in many cases, not enforced very accurately. Imagine I go sing in a crowded square, along with a compatriot to serve everyone who hears me with notice that I’ve committed a beneficial tort. You’d end up with a tremendous waste of resources on a totally frivolous case. Also, creating recovery for unintentional benefits would often force people to avoid receiving benefits, which is not a desirable harm.

    The contract issue is pretty simple. If my uncle’s promise to give me ten grand on my birthday were legally binding, he probably just wouldn’t make the promise and would wait to just give me the money. We both benefit from him being able to announce the promise beforehand, and the enforcement is principally extra-legal. Bringing the law into this area would not be helpful.

    Can you imagine what the courts would end up dealing with if we could sue people for improper discrimination in romance? Or if employers could sue people for refusing job offers? Either of these would force people to take substantial measures to avoid liability that would be extremely detrimental to how we want the economy to run. People would have to pretty much avoid the light of day, lest they be sued for turning down romantic advances. Prospective employees would have to negotiate contracts in order to receive an offer to work, or else would only be able to apply for one job at a time.

    This seems like another case of RH’s deliberately ignoring obvious explanations in favor of some pet theory. I must say, though, other recent posts have often been of very high quality.

  • http://entitledtoanopinion.wordpress.com TGGP

    Roger Ellickson’s “Order Without Law” is great on the resistance to the use of formal/law contracts instead of informal norms and the logic of why people might not make use of law.

    Alan Crowe, you seem to be conflating the issues of bigness with monopsony (the latter of which which GM is not an example of). A small company can be a monopsony, depending on the niche.

    • http://entitledtoanopinion.wordpress.com TGGP

      Doh, it’s Robert Ellickson, not Roger.

  • Mario

    My first thought in looking at that list was school bullying, which has usually been dealt with as an internal matter to the school rather than a police matter, as if school grounds are a no-man’s land where things like assault cease to be crimes.

    The easy answer, though, isn’t that we judge things by ancient social norms, but that we recognize and legitimize power structures at different levels (including informal ones such as head of household, just as much as federal/state/local) and each authority is wary about encroaching on the turf of another until a failure on that level becomes too large to ignore. Find out why the Feds don’t enforce traffic laws and you’ll have the answer for all of the others.

  • josh

    Are you qualified to teach a class about law? I always got the feeling you were more of a generalist. Do you know a lot about legal history?

  • Karl Hallowell

    Imagine I go sing in a crowded square, along with a compatriot to serve everyone who hears me with notice that I’ve committed a beneficial tort. You’d end up with a tremendous waste of resources on a totally frivolous case. Also, creating recovery for unintentional benefits would often force people to avoid receiving benefits, which is not a desirable harm.

    It also wrests control from the subjects of the beneficial tort. What’s happening here is that we have a positive externality and the tort creates compensation for the externality. What happens if I’m the recipient of a positive externality with value beyond my ability to pay? For example, suppose aliens come to Earth and make everyone healthy, young, and immortal without asking. Then they demand suitable payment. How much is that worth (actually Robin might have that somewhere in his writings)? Can I afford to pay for the value I just received? By not having benefit torts, we prevent this sort of abuse from happening.

    I guess gifts are another example of this. Gifts don’t carry an expectation of repayment.

    Moving on, a number of these others probably happen due to the presence of human deception. I can fake emotional or mental harm. Intangibles are easy to fake. It’s much harder to fake physical harm. I don’t pretend to understand tort law, but I do think there are mechanisms for assigning damages from intangible harm, maybe if the jury decides that a “reasonable person” would suffer intangible harm under the circumstances or the victim can show physical manifestations of their intangible harm (medically demonstrated inability to sleep at night or testimony from an expert witness that saw self-harming behavior consistent with the claim of intangible harm).

    Small groups are generally less regulated than large groups because they can’t muster the expertise or resources to comply. I doubt 1 in 100 households could actually deal with OSHA regulations on child labor, for example. Businesses also have the profit motive to consider. There are both greater resources for compliance and greater incentive to engage in behavior which the regulation is meant to curb.

    Enforcement of wills over long timeframes is an interesting situation. I think that’s more due to the fact that the main party interested in furthering the conditions of the will is dead and cannot independently contest any abuse or exploitation of the terms of the will.

    Imagine, if you will, that the US decided to dissolve itself and put some of the assets towards a large scale purpose (a will for a whole country). Now imagine that it is 250 years later and every single person who was alive at the time, and all of their children, are dead. Who will advocate the will be carried through as intended? How do we preserve the purpose of the will in such circumstances?

    My view is that this isn’t a matter of social organization, but rather how long a contract survives the death of its originator (which can be a person or a country). Currently, it’s only as long as the executors choose to follow the terms of the contract and society chooses to enforce the terms. In a century, we might be able to create AI-based executors who can carry wills through to the heat death of the universe. That’s a rather scary thought, isn’t it?

  • Jordan

    Blackmail law seeks to nullify any incentive for a person B to keep person A’s illicit secret just between themselves. As a consequence, it (hopefully) promotes monetary penalties on illicit behaviors which would otherwise remain secret. So that one in particular I would strike from the list.

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