Why Is Law Perverse?

In 2011, law prof Leo Katz published an interesting book, Why The Law is Perverse. Katz first lists many ways that the law is perverse, especially rulings that reject win-win (i.e., “Pareto improvement”) changes, wherein some gain and none lose. Then Katz attributes that perversity to Arrow’s voting impossibility theorem, which says that no rule for combining sincere votes from voters with transitive preferences will result in transitive group choices, given a few assumptions including “independence of irrelevant alternatives” (IIA). Katz says this it isn’t so much that we vote to pick laws, but that we typically “vote” on each legal choice by combining multiple relevant considerations re that choice. Thus legal choices often produce choice cycles, which we break by making arbitrary choices, which is why the law is and must remain perverse. And so we often arbitrarily choose to reject win-wins. 

I got my Ph.D. in formal political theory (from Caltech in ’97), and early in our curriculum we spent a big chuck of time on Arrow’s theorem. We learned that the simple method of a weighted average over individual utility functions does a fine job of combining individual preferences into a consistent group preference. Yes, this method violates IIA, but that just shows how misleading is IIA is as a requirement. One can in fact sensibly define group preferences, even if direct voting isn’t a good way to measure them. 

We also learned in this curriculum that while voting can produce unstable cycles in plausible real-world contexts (e.g. vote to “divide the dollar”), such instability doesn’t happen often in practice due to agenda control, insincere votes, vote trading, indirect representation, retrospective voting, and many other features of real voting systems. Democracy scholars do not just throw up their hand and say that democracy must remain perverse, but they instead note that it usually isn’t actually that perverse, and they search in the space of possible democratic mechanisms to find even more efficient outcomes, mechanisms that reject even fewer Pareto gains. 

Furthermore, almost everyone in every area of life uses multiple criteria to make most decisions. So this fact just can’t be used to explain why law seems more perverse than other life areas, which it does in fact seem to be. But the big advantage of Katz mistakenly thinking that he has an explanation for legal perversities is that this makes him actually willing to identify and enumerate them. And that is why I like his book.

For example:

• Law rejects many win-win changes, such as: let convicts volunteer for corporal punishment instead of jail, enforce specific promises for personal service, support tradable emissions, divide land property rights by time or in other ways, allow voluntary assumption of risk, allow sale of sex or body parts, allow prior consent to body invasion.

• Law is full of loopholes, where you can avoid the intent of particular laws via clever combinations of behaviors. As in asset protection, tax shelters, litigation-proofing, contrived defenses, and political asylum. 

• Law induces many intentional fouls, where one chooses to be punished for purposely violating one rule in order to make one less liable re another rule. Such as in crimes of mitigation, self-restraint, and price-of-admission.

• Law forces many continuous parameters to be treated as dichotomies, such as “time of death”.

• Law under-punishes, via degree of punishment differing lots from harm caused, refusing to at all punish some harms even when feasible, and offering “volume discounts” for added crimes,

While Katz’ invocation of Arrow’s theorem isn’t directly helpful to explain these, I do think it offer at least a metaphor for a relevant point: generically, thinking separately on different topics in different ways typically results in answers that are at least somewhat incoherent when they have overlapping applications. That is, given separately considered analyses, choices may have cycles, chances may fail to satisfy probability axioms, social deals may reject win-wins, and all these things may depend on how questions are framed. 

In most areas of our lives, we learn to look for such incoherence, and to adjust our choices/chances/deals to reduce such incoherence when we find it. In some areas, competitive pressures create stronger incentives to cut them, as competitors can exploit them to gain advantages over us. So the big question to ask is: why doesn’t this happen so much to cut incoherence in law, and thus leaving law relatively perverse?

After reading Katz’ book, and a half dozen reviews of it, my best guess explanation is this. Consumer choice pressures in law are weak, in that most of law’s customers have no choice but to use particular laws. Weak consumer choice pressures then induce a heavy reliance in law on common moral intuitions, as that is one of the few remaining strong forces available to shape law. But moral intuition evolution mostly happens vis cultural evolution, which is quite weak these days due to wealth and peace. And so our shared thinking about morals faces only weak pressures to cut incoherence.

The obvious fix here is: increase consumer pressure choices on law, as in the vision of “private law”. That is, make it easier for people to agree by contract to choose differing legal systems, with different approaches to tort, contract, property, and legal procedures.