EQUALITY, ENTITLEMENT, AND EFFICIENCY: DWORKIN, NOZICK ... · EQUALITY, ENTITLEMENT, AND...

EQUALITY, ENTITLEMENT, AND EFFICIENCY:DWORKIN, NOZICK, POSNER, AND

IMPLICATIONS FOR LEGAL THEORY

Stephen O'Hanlon*

A bstract ...................................................... 3 1Introduction .................................................. 32

I. D w orkin ............................................. 37A. Law as Integrity .................................. 37B. Equality of Resources ............................. 45

II. Nozick and Libertarianism ............................ 52III. Law & Econom ics .................................... 65

A. Morality, Practicality, and Welfare ................. 67i. M orality ..................................... 67ii. Practicality ................................... 75iii. W elfare ...................................... 79

B. Wealth Maximization and Rational "Theory" .. ...... 83i. Wealth Maximization ......................... 84ii. Rational "Theory" .. ......................... 86

C. Distribution, Capture, and Marx .................. 91D . Efficiency Revisited ............................... 96

C onclusion ................................................... 99

ABSTRACT

This Article analyzes the legal theories of Ronald Dworkin, RobertNozick, and Richard A. Posner. The Article concludes that integrity, equal-ity, libertarianism, and efficiency are all important values that contribute tothe formulation of a compelling legal theory.

* Lecturer in Philosophy, Temple University. B.A., Trinity College Dublin; M. Phil., The

London School of Economics; J.D., Temple University, Beasley School of Law. The authorwishes to express his gratitude to Michael Libonati who oversaw the research and writing of thisArticle over the course of an academic year. In addition, the author thanks Richard Bradley atthe London School of Economics for supervising the author's thesis on Robert Nozick andproviding comments on much of the source material for the section on Nozick. The author alsowishes to thank David Hoffman for reading guidance in the field of law and economics. The

author thanks all those involved in the editing and production processes at the Cardozo PublicLaw, Policy and EthicsJournal. Chris Baker is also thanked for his encouragement and input. Asalways, the author wishes to express the utmost gratitude to Laura Lee Swan-O'Hanlon and

Julien O'Hanlon.

32 CARDOZO PUB. LAW, POLICY & ETHICS I

Part I assesses Dworkin's theories of law as integrity and of equality ofresources. With regard to Dworkin 's legal theory, this Article argues that ithas difficulties as a prescriptive theory to guide the decision-making processesof judges. The Article reasons, in addition, that the implementation ofDworkin 's political, egalitarian theory could lead to excessive interference inpeople's lives. Accordingly, Dworkin 's assumption that his theory of equalityof resources can always be assumed to be a morally superior theory toNozick's libertarianism is questioned.

Part II assesses Nozick's libertarian theory. This Article argues thatNozick's theory cannot consistently maintain strong libertarian conclusionsgiven the foundations on which Nozick's minimal state is built. Nozick hasnot done enough to counter the potential corrupting effects offlows of moneyinto the legal forum of his minimal state.

Part III assesses Posner's theory of law and economics. The goals ofefficiency and wealth maximization within the context of a legal system andsociety generally are assessed. While efficiency and wealth maximization arequestioned as unitary, overriding concepts, this Article accepts that such con-siderations cannot be ignored by moral, political, or legal theorists. TheArticle's conclusion suggests a possible basis for a future theory based onequality that will partially incorporate libertarian and efficiencyconsiderations.

INTRODUCTION

Ronald Dworkin's legal theory, simply put, stems from a beliefthat his idealized Judge Hercules will decide cases - common law, stat-ute-based, and constitutional - in an interpretive way that both respectsprecedent by best incorporating prior judicial history and provides thebest justification for that history in accordance with political morality.In doing so, legal decision making has what Dworkin calls integrity, andthereby legitimizes the coercive legal authority of the state. Dworkinprescribes legal decision making in this form for real-world judges.'While developing his theory of law as integrity, Dworkin rejects RichardA. Posner's wealth-maximizing "economic theory of law."2 Dworkin ar-gues that there are two possible egalitarian conceptions compatible withprivate ambition and public responsibility that can legitimately under-

1 See generally RONALD DWORIN, LAw's EMPIRE (1986) [hereinafter DWORKiN, LAw's

EMPIRE].

2 Id. at ch. 8.

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pin his legal theory.3 These two conceptions, which he notes differ infundamental ways, are his theory of equality of resources andlibertarianism.4

Robert Nozick's libertarian position holds that a state evolves froman anarchical state of nature without violating individuals' rights. Thisstate is a minimal state limited to protecting individuals' entitlements totheir holdings which they may acquire through just acquisition and justtransfer. Nozick contends that a more extensive state violates individu-als' entitlement rights and their negative right to non-interference, in-cluding state non-interference. The minimal state is limited toprotective functions and the oversight of Nozick's principle of rectifica-tion which remedies unjustly held holdings. However, the minimalstate will not tax and redistribute to provide for either general welfare oregalitarian positive rights. Nozick asserts that such taxation violatesmoral side constraints, which strictly limit means by which individualscan be coerced into giving up holdings to which they are entitled. Taxa-tion, beyond the limited taxation needed to fund the protective appara-tus of the minimal state, violates individual entitlement rights andamounts to constant interference in individuals' preeminent aims ofplanning their individual, meaningful lives.

Dworkin does not refute Nozick's libertarian theory, which is theonly libertarian theory that he considers, as a basis for law as integrity.Instead he states: "I shall not argue but only assume that equality ofresources is superior to the libertarian conception: it fits our legal andmoral practices no worse and is better in abstract moral theory."6 Theseassumptions may be true on certain occasions. Dworkin's resource-egal-

3 Id.4 Id. at 445 n.14 (citing only to Robert Nozick's conception of libertarianism).5 See Robert Nozick, Distributive Justice, 3 PHIL. & PUB. AFF. 45, 65-66 (Fall 1973); Rob-

ert Nozick, Coercion, in Philosophy, Science, and Method: Essays in Honor of Ernest Nagel

440, 441-45 (Sidney Morgenbesser, Patrick Suppes & Morton White eds., 1969); ROBERT

NozIcK, ANARCHY, STATE, AND UTOPIA 50 (1974) [hereinafter NOZICK, ASU] (explaining

that "a person's shaping his life in accordance with some plan is his way of giving meaning to his

life" and taxation to fund redistributive schemes hinders these plans because individual funds are

always susceptible to change depending on the tax and spend policies of the state). But see

ROBERT NOZICK, THE EXAMINED LIFE: PHILOSOPHICAL MEDITATIONS 17 (1989) (accepting

that his libertarian theory "now seems seriously inadequate to me").6 DWORKIN, LAW'S EMPIRE, supra note 1, at 301 (emphasis added). It seems that there are

three assumptions here - the stated assumption that Dworkin's equality of resources conception

is superior to Nozick's libertarian conception as well as two additional assumptions - that

Dworkin's theory fits our moral and legal practices no worse than Nozick's and that Dworkin'stheory is superior in abstract moral theory.

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34 CARDOZO PUB. LAW, POLICY & ETHICS J [

itarian political theory states that unequal talents are morally arbitraryand, as a result, redistribution is justified to compensate for outcomesthat result from unequal talent. However, he argues that people areresponsible for their life choices. People have different ambitions andtake different risks. Therefore, redistribution is not generally warranted,according to Dworkin, for unequal outcomes that result from differentlife choices as well as from risk aversion or risk acceptance. 7

It is, however, possible to imagine alternative situations whereDworkin's theory may not be superior, may be worse in legal and moralpractice, and may be inferior in abstract and non-abstract moral theory.This is a fascinating point at which Dworkin leaves his theory not fullydeveloped and rests on assumption because it is a point at which there isa large degree of intersection between many disciplines and conflictingtheories including political philosophy, ethics, legal philosophy, eco-nomics, egalitarianism, libertarianism, utilitarianism, and law and eco-nomics. This Article may be guilty of criticism that will be leveled atboth Dworkin and Nozick in that a new, fully developed theory will notbe formed and certain crucial matters will be left for future considera-tion. However, for now, I will briefly state my own position even if it isa position that requires development. Essentially, I believe that there isexcessive compartmentalization between disciplines and, also, withinthose who form certain "isms" or schools of thought within certain dis-ciplines. In this context, it is unhelpful to assume, as Dworkin does,that his theory of equality of resources is superior both as a conceptionof law to the economic interpretation of law and to libertarianism. Incertain circumstances, efficiency considerations associated with law andeconomics may be seen as a prerequisite to achieving certain levels ofwealth before egalitarian redistribution, even in the Dworkinian form,can occur. Competition and the prospect of unequal resources may beseen as an important motivational factor both for certain individualsand for society generally. However, the moral relativism, wealth max-imization, and laissez-faireism of Posner's theory of law and economicswill also fail in bringing about acceptable legal outcomes and fails toadequately address important moral considerations. This argument alsoaffects Nozick's ownership-focused, libertarian, entitlement theory. Lib-ertarianism can initially be interpreted as being political philosophy'sequivalent to laissez-faire economics. However, libertarianism is differ-

7 Ronald Dworkin, What is Equality? Part 2: Equality of Resources, 10 PHIL. & PUB. AFF.

283 (1981) [hereinafter Dworkin, What is Equality?].

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ent in that ownership will trump efficiency even if, in some circum-stances, rigid property rights may be inefficient.

This Article will argue that efficiency is not necessarily in conflictwith certain egalitarian rights. It will contend that efficiency cannot beignored when espousing egalitarian rights. This Article will questionDworkin's theory of resource egalitarianism because it may lead to theintolerable coercion and the kind of interference which Nozick's liberta-rianism decries. However, the practical application of Nozick's liberta-rian legal theory will also be criticized and the impact such a theory hason his minimal state will be assessed. This Article will scrutinize Pos-ner's assertion that wealth maximization should provide the sole basis onwhich to make legal decisions in society. However, the Article will con-clude by suggesting a basis for a pluralistic and pragmatic legal and po-litical theory that will take rights, coercion, and efficiency seriously.This theory will require further development but it will seek to considermatters that are often considered theoretical competitors whereas, in re-ality, all the considerations that will be addressed cannot be consideredin isolation. This does not mean that the theory that I seek to form thebasis of here will be without theoretical foundations. There will be the-oretical foundations, but they may not be unitary.

Part I will assess Dworkin's theories of law as integrity and ofequality of resources. With regard to Dworkin's legal theory, this Arti-cle will argue that it has difficulties as a prescriptive theory to guide thedecision-making processes of real judges. This occurs at both an institu-tional level, since judges must follow precedent, and at a justice/morallevel, since real-world judges have their own moral beliefs and do nothave the superhuman abilities of Dworkin's Judge Hercules. However, Iwill agree with Dworkin that there is something important about integ-rity in a legal system that seeks legitimization. Part I. B will assess theimplications of Dworkin's theory of equality of resources. It will brieflydiscuss Peter Westen's rejection of equality as an important concept. Iwill argue that the implementation of Dworkin's egalitarian theorycould amount to excessive interference in people's lives. In this context,I will question Dworkin's assumption that his theory of equality of re-sources can always be assumed to be a morally superior theory toNozick's libertarianism. I will also suggest that, while Dworkin hasgiven a good account of how equality can exist in the theoretical societythat he develops, he has not adequately justified equality as a normativeconcept.

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36 CARDOZO PUB. LAW, POLICY & ETHICS J.

Part II will assess Nozick's libertarian theory. This section will ar-gue that Nozick's theory cannot consistently maintain strong libertarianconclusions given the foundations on which Nozick's minimal state isbuilt. Putative imperfections in Nozick's legal system will be outlinedand may provide the basis for the legitimization of certain welfare rights.The equal protection for all, which justifies the establishment ofNozick's minimal state, can also lead to excessive legal claims in hisminimal state, thereby swelling the size of that state. Nozick has, inaddition, not done enough to counter potential corrupting effects offlows of money into the legal forum of his minimal state. While thisArticle questions the limited role of the state in Nozick's libertarianism,I will also agree with Nozick that there must come a time when excessivecoercive activity by the state becomes intolerable because it interferes totoo large a degree in people's lives. To round out the discussion onlibertarianism, this section will briefly consider the libertarian theoriesof the two leading legal academics in this area, Randy E. Barnett andRichard A. Epstein. However, the section will conclude that they donot fill the gaps in Nozick's theory and their theories may not even beconsistent with libertarianism.

Part III will assess Posner's theory of law and economics, the con-text in which Dworkin originally refutes both that theory and Nozick.It will assess the goal of efficiency and wealth maximization within thecontext of a legal system and society generally. Preliminary objectionsto the theory of law and economics will be developed by arguing thatthe theory places too little weight on moral considerations. In particu-lar, a detailed criticism will be provided of Posner's rejection of moraltheory as a basis for legal decision making. Juries and the public, it willbe argued, expect a legal system to be moral in some important ways inorder to justify its existence. There will be an account of the overlapbetween welfare theories that consider rights and rights theories basedon individuals' interests. In the end, however, it will be argued thatonly rights can counter unjust legal outcomes which welfarism alone isunable to deal with. Posner's theory of wealth maximization, contraryto his assertions, has failed to overcome utilitarian problems. Indeed,utilitarianism remains in the background throughout Posner's analysis.This section will also criticize Posner's rejection of behavioral econom-ics. It will be argued that a proper account of empirical data is essentialfor formulating economic theory. Such an account is fundamentallyimportant if an economic theory is (as Posner's is) normative and, there-

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fore, intended to guide legal decision making. Posner's failure to ac-count for distributional issues and powerful economic agents in marketeconomies will also be assessed.

While this Article will question efficiency and wealth maximizationas universal, overriding concepts, this Article will also accept that suchconsiderations cannot be ignored by moral, political, or legal theorists.The Article will conclude by suggesting a possible basis for a future the-ory based on equality that will partially incorporate libertarian and effi-ciency considerations. Areas for future research will be outlined at thatstage.

I. DWORKIN

A. Law as Integrity

Dworkin's legal theory holds that real-world judges "belong to dif-ferent and rival political traditions, and the cutting edge of differentjudges' interpretations will be honed by different ideologies." 8 He rec-ognizes the difference between law and justice.9 For Dworkin, law en-compasses a framework of legal precedent and institutions which makeup what he calls a "pre-interpretive structure," which judges somehowgenerally recognize."1 On the other hand, justice in the real world isindividualized "and anyone's conception of justice is his theory, imposedby his own personal convictions, of what these [moral and political]rights actually are."11 Dworkin then introduces his imaginary JudgeHercules who possesses "superhuman power and patience."12 JudgeHercules, being superhuman and having plenty of time to make deci-sions, is able to make "the best constructive interpretation of past legaldecisions, and law is therefore sensitive to justice .... This seems torefer to some higher-level, objective conception of justice that Herculescan conceptualize but that real-world judges cannot. Hercules decidescases interpretively, in compliance with Dworkin's conception of law asintegrity, in a way that respects precedent while incorporating politicalmorality. This provides the best justification for a legal system that is

8 DwoRKIN, LAW'S EMPIRE, supra note 1, at 88.

9 Id. at 97.10 Id. at 92.

11 Id. at 97 (emphasis added).12 Id. at 239.13 Id. at 262.

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"best sensitive to the great complexity of political virtues."14 Dworkinconcludes by prescribing that judges shoul decide cases, as far as possi-ble, in compliance with this theory, described as law as integrity.15

Before continuing to assess Dworkin's theory of equality of re-sources as a basis for his legal theory, this subsection will make someinitial preliminary criticisms of the legal theory itself. This subsectionwill conclude by accepting that integrity is an important concept in jus-tifying a legal theory. However, it will be left to a future occasion todetermine whether or not integrity is a distinct concept, as Dworkinstates, 6 or whether integrity is subsumed within other concepts such asjustice and fairness.

Brian Leiter posits an "Ought-Implies-Can-Constraint" uponDworkin's prescriptions as to what real judges should do. 17 Leiter con-cludes that "one thing judges cannot do is what Dworkin's Judge Her-cules does."' 8 There are two important instances of why the "Ought-Implies-Can-Constraint" creates problems for Dworkin as a commonlaw theorist.

Precedent, statutes, and a constitution limit what judges, especiallyjudges in lower courts, can do. Following a description of what hisidealized Judge Hercules does, Dworkin states that real-world judgesshould decide cases in an interpretive way that both respects precedent,by best explaining prior judicial history, and provides the best justifica-tion for that history in accordance with political morality. This givesreal-world judges a degree of discretion because, to a certain degree atleast, there are both nonlegal considerations' 9 and also interpretive legalconsiderations. Judges must decide cases in an interpretive way that, inaddition, best respects legal precedent.

14 Id. at 398.

15 Id. at 410-13.

16 Ronald Dworkin, Ronald Dworkin Replies: Reply to Geraldj Postema's Integrity: Justice in

Work Clothes, in DWORKIN AND His CRITICS WITH REPLIES BY DWORKIN 386, 386 (JustineBurley ed., 2004) [hereinafter Dworkin, Reply to Postema].

17 Brian Leiter, Naturalism in Legal Philosophy, STAN. ENCYCLOPEDIA OF PHIL., (Edward N.

Zalta ed., Fall 2008) (Aug. 29, 2008) available at http://plato.stanford.edu/entries/lawphil-natu-ralism/.

IS Id.

19 See Joseph Raz, Speaking with One Voice: On Dworkinian Integrity and Coherence, inDWORKIN AND His CRITICS WITH REPLIES BY DWORKIN 285, 287 (Justine Burley ed., 2004)[hereinafter Raz, Speaking with One Voice] (arguing that nonlegal considerations in Dworkin'stheory give judges discretion in legal decision making).

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Dworkin seems to prescribe his interpretive model for all decisionmakers in the judicial process. These decision makers, although notdiscussed in detail by Dworkin, include trial court judges, intermediateappellate court judges, and administrative and executive branch agenciescharged with implementing statutory texts. Precedential and statutoryconstraints are less controversial in the U.S. Supreme Court decisionswhich Dworkin mainly discusses. However, there are other circum-stances in which there is interpretive controversy relating to judicial pre-cedent, such as where there is some dispute as to the exact nature andextent of precedent, or where, for example, different circuit courts havefollowed Supreme Court edicts in divergent ways. In such a situation, adistrict court judge must engage in at least some interpretive legal analy-sis in deciding what really is the best way of explaining and respectingprior judicial history. It is worth noting that a degree of interpretationis involved since both the Supreme Court and the circuit court establishprecedent for the district court. As a result, there is a potential conflictand a degree of discretion for the district court judge when decidingcases.

This is not necessarily problematic for Dworkin because he canargue that it is overall precedent that the district court judge must assess.However, left to the district court judge, it is possible for such a judge toignore precedent of the court directly above or of the Supreme Court.This is not necessarily a problem for Judge Hercules, who has a superhu-man ability to interpret, but it is a problem for a real-world judge and itis a problem that Dworkin does not fully consider. Dworkin couldlikely bypass this consideration by stating that the district court judgeshould simply best follow precedent. Usually, in the real world, thiswould probably amount to the district court judge accepting her cir-cuit's interpretation of a U.S. Supreme Court edict. However, in Dwor-kin's theory it seems that the district court judge has greater discretionbecause she must best explain precedent and that best explanation doesnot necessarily have to follow the circuit court's interpretation of theSupreme Court's edicts. It is at least worth noting that legal discretionin this form of assessment is not uncontroversial and standards may beneeded to direct trial court judges in these sorts of circumstances toensure at least a degree of consistency in interpreting precedent. In ad-dition, this situation illustrates the means by which the "Ought-Implies-Can-Constraint" affects Dworkin's thesis. If ought implies can, then ina system in which there is a hierarchy of courts and the common law

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doctrine of precedent, the court on the bottom rung cannot do what itbelieves it ought to do without undermining fundamental principles ofthe common law system - stare decisis and hierarchy.2 °

Dworkin's view that judges should decide cases not only in a waythat respects precedent but also in a way that provides the best justifica-tion for that precedent in accordance with political morality is morecontroversial. This view is controversial on at least two fronts. Al-though Dworkin mainly considers appellate cases, his methods of judi-cial decision making are not restricted to appellate court judges. Thiswould allow lower court judges to, in effect, overrule higher court judg-ments if those judgments could not be best justified in accordance withpolitical morality. Even assuming that lower court judges are able tobest determine political morality, it seems that this goes beyond the roleof most judges in everyday trials. Lower court judges cannot routinelyignore precedent set by higher courts on the ground that such precedentis noncompliant with political morality. Such behavior, on the part of alower court judge, would likely lead to extreme censure by higher courtsand other branches of government. It would also be problematic forpractical justifications of the common law system, such as consistencyand efficiency. Again, if ought implies can and political morality con-flicts with stare decisis and a hierarchical court structure, bottom rungand intermediate level courts cannot always do what Dworkin believesthey ought to do if the common law system is to maintain the level ofprecedential stability and hierarchy on which the system is based. Addi-tionally, statutory and judicial precedents are not necessarily founded onpolitical morality. Certain rules of procedure, such as statutes of limita-tion, are not primarily in place because they support the highest form ofpolitical morality. They are in place to ensure efficiency in the judicialsystem. The ability of judges to reject such rules on the grounds thatthey do not conform to political morality would, therefore, seem odd.

So, the role Dworkin prescribes for judges is not uncontroversialwhen the judges are best interpreting precedent and is highly controver-sial when applying political morality to prior judicial decisions, statutes,and the Constitution. In many cases judges simply cannot do this, andeven if they could, it would seem to undermine foundations on whichthe common law system is built. Furthermore, there does not seem tobe any room within Dworkin's system of judicial decision making,which incorporates political morality, for deference to the decisions

20 The author is grateful to Michael Libonati for clarifying this point.

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made by other branches of government, and this seems to present nu-merous institutional and democratic issues which Dworkin fails to rec-ognize and account for.2 '

The "Ought-Implies-Can-Constraint" can be assessed further at amore theoretical level. Dworkin's argument can be laid out as follows:

(1) Real-world judges "belong to different and rival political tra-ditions, and the cutting edge of different judges' interpreta-tions will be honed by different ideologies." They thus havean individualized conception of justice.22

(2) Judge Hercules, being superhuman and having plenty of timeto make decisions, is able to make "the best constructive in-terpretation of past legal decisions, and law is therefore sensi-tive to justice ... 23

(3) Judges should decide cases, as far as possible, in the same waythat Hercules does, in compliance with law as integrity.24

Some judges may disagree with Dworkin as to (1) and argue thattheir judgments and interpretations are not honed by their associationwith different political traditions, but by some notion of neutralitywhen considering justice in the judicial context, which, in the commonlaw world, includes following precedent to a certain degree. So, (1)presumes, at a preinterpretive level, the manner in which judges ap-proach the law. It also assumes that judges will bring that presumptivepolitical bias to crucial cutting-edge decisions.25 While this may oftenbe true, it is problematic because it suggests political predispositionsamong judges who are the overseers of Dworkin's law as integrity. Thisis a significant practical consideration. However, it is also useful to con-centrate on the logical possibility of a system functioning in the wayDworkin describes and prescribes. (1) through (3) can also be stated asfollows:

21 See ROBERT ALEXY, A THEORY OF CONSTITUTIONAL RIGHTS 187-88 (Julian Rivers

trans., 2002) (avoiding, to some degree, the institutional and democratic difficulties faced byDworkin by allowing for certain forms of judicial deference to the legislative branch ofgovernment).

22 See supra note II and accompanying text.

23 See supra note 13 and accompanying text.

24 See supra note 15 and accompanying text.

25 Cf Richard Posner, The Anti-Hero, in THE NEW REPUBLIC (2003) (arguing, in a way that

would support Dworkin's conception of the politicization of the judiciary, that "the [U.S.]

[S]upreme [C]ourt is a political court . . .[even if the justices] have to be seen to be doing lawrather than doing politics").

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(1) Non-H can do j but not J.

(2) H can do J.

(3) Non-H should do J.

This creates numerous problems. It is here that the "Ought-Im-plies-Can-Constraint" has the greatest impact upon Dworkin's project.Given that judges do not have the superhuman capacities that Herculeshas to decide cases in a way that is consistent with best moral and politi-cal practice and that their own political leanings influence their deci-sion-making processes, it may not be reasonable to expect them tofollow Hercules' methodology for deciding cases. Real-world judgescannot be assumed to have any higher ability at (3) than they have at(1). Even assuming that they accept that they ought to follow JudgeHercules, there is little reason to suppose that they have any greaterability to follow a path that embraces an idealized form of law as integ-rity. As Learned Hand points out, judges are not trained in moral phi-losophy and, therefore, it cannot be expected that they will act inaccordance with objective "principles of morality" when they are decid-ing cases. 26 Dworkin could adopt a Kantian methodology to try to getaround the "Ought-Implies-Can-Constraint. "2 7 However, he wouldfirst have to recognize the problem that his theory of law as integritypresents. Acceptance of the pragmatic shortcomings of his theory maymake the whole Herculean task largely pointless so that many judgescould say that they do their best to decide cases in a way which bestconforms with institutional constraints, such as statute and precedent, aswell as some conception of fairness or integrity.28

26 LEARNED HAND, THE BILL OF RIGHTS 24 (1979).

27 Cf IMMANUEL KANT, RELIGION AND RATIONAL THEOLOGY 110 (Allen W. Wood &

George di Giovanni trans., 2001) (1786). Kant argues, controversially, that although God andmortality of the soul caniot be proven, metaphysically, they are conditions needed in order toprescribe and legitimize moral obligations. Kant argues that virtue is not always correlative withhappiness and so we must endorse God and immortality as a way of rewarding virtue in thehope of realizing the highest good, which is an imperfect justification for virtue, unlike the

categorical imperatives that do not need such antecedent, pragmatic justifications in order to

legitimize endorsement and prescription.28 See Stanley Fish, Still Wrong after All These Years, 6 L. & PHIL. 401, 414 (1987)

As an account of what legal actors do, 'law as integrity' is powerful and persuasive;lawyers and judges do in fact see the law as 'structured by a set of coherent principles'

which they feel obliged to take account of and extend. But, precisely because that iswhat they do by virtue of being judges and lawyers, it is pointless to enjoin them to do

it.

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Additionally, the contention Dworkin endorses - that even hardcases can be correctly decided - embodies, at least implicitly, that thereare not only right answers to legal problems but also that there are,almost by necessity, right answers to moral questions. This is becausemoral questions must be decided in some monistic manner in order tounderpin the endorsed theory that there are right answers to legalproblems. Joseph Raz argues that Dworkin's theory of law as integrity iscommitted to strong monism from the start.2 9 Raz argues that this cre-ates a coherence problem because individual courts have discretion inapplying nonlegal considerations.30 Dworkin responds by stating thathe is not a monist?3 However, Dworkin is a monist in the singularsense of believing that there are right answers to hard cases. This isproblematic for the reasons set out above. Even if Hercules can some-how find the right answers to close legal calls, it is not clear how real-world judges can do the same. Dworkin also has a problem in deter-mining when respect for precedent trumps moral authority, even if per-fectly ascertainable, for judges. Furthermore, Dworkin largely ignoresthe significant role that law, common and statutory, plays in influencingprivate decision making and the impact this likely has on judges' rulingswhen they are seen as creators of precedent.

It does not seem that Dworkin's theory, as it stands, can properlyexplain why there is a correct answer to Mills v. Wyman.32 In that case,a father sent a letter promising to pay the medical expenses for his sick,estranged son and subsequently reneged on that promise. The SupremeJudicial Court of Massachusetts held, in favor of the father, that a merepromise to pay cannot be enforced without consideration. 3 However,it is evident throughout the holding that Chief Justice Parker thoughtthat the father had a moral obligation to pay the medical expenses. Thiscase illustrates that there may not be right answers to hard cases, asDworkin contends.34 It also illustrates the institutional restraints that

29 Raz, Speaking with One Voice, supra note 19, at 285.30 Id. at 287.

31 Ronald Dworkin, Ronald Dworkin Replies: Reply to Joseph Raz 's Speaking with One Voice:

On Dworkinian Integrity and Coherence, in DWORKIN AND HIS CITICS WITH REPLIES BY

DwoRKIN 381 (Justine Burley ed., 2004).32 Mills v. Wyman, 20 Mass. (1 Pick.) 207 (1825).

33 Consideration, n. "Something of value (such as an act, a forbearance, or a return promise)received by a promisor from a promisee." BLACK'S LAW DICTIONARY 131 (2nd ed. 2001).

3,4 Dworkin has recently backed away from his "rights answers" claims. See Ronald Dwor-kin, Pragmatism and Law, in RONALD DwoRKIN, JUSTICE IN ROBES 1, 41 (2006) (claiming that

his "right answers" thesis is "very weak and commonsensical"). The thesis still exists, however,

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judges have on them. And, finally, it illustrates something else thatDworkin seems to overlook: Judges not only interpret precedent, theymake precedent. 35 So, even if Judge Hercules may feel compelled tofind against the father, he has to account, at least to a certain degree, forthe effects that his ruling will have in setting precedent for all futuredecisions of courts at the same level, courts at a lower level, and privatepersons in society. The effect of finding against the father in Millswould have been to undermine the consideration doctrine generally.Chief Justice Parker may have thought consideration should have beenabandoned to enforce the moral obligations of the father in that particu-lar case but he had also to be aware of the effect on the considerationdoctrine in the future and he may not have wanted to undermine thatdoctrine generally. Dworkin's theory seems unable to cope with thiscase, illustrating doubts as to the practicality of his monistic right an-swers conception in hard cases.

I do, however, believe that there is something about integrity thatshould underlie a legal system.36 This problem will be left largely forfuture research. As will be apparent in the discussion of Posner's eco-nomic interpretation of law in Part III, there are problems if law is usedsolely as an instrumentalist exercise to maximize future outcomes.There is likely something more to a legal system that must justify itscoercive power that goes beyond mere instrumentalism. A legal systemshould usually address cases that are before it and this is likely a keyaspect of integrity. Integrity may not be a value in itself, as Dworkincontends.37 However, even if it is subsumed within other values, such asfairness and due process, it has at least some initial coherence as a valuein a legal system because it involves something more than mere wealth-maximizing instrumentalism. But, it does not seem that integrity must

and even cases which Dworkin believes obviously have right answers are full of difficulties.Consequently, the analysis here is still relevant.

35 This may initially seem to go against the discussion in Part III of this Article where it is

argued against Posner's theory of law and economics that a legitimate theory should generallydecide cases on their merits and should not be concerned solely with future wealth maximiza-tion. However, the suggestion here is merely that the precedent-setting role of judges is some-thing which Dworkin needs to take into account. In any case, judicial precedent is somethingthat judges are familiar with but future wealth maximization is as unfamiliar as moral philoso-

phy, if not more so.36 See Gerald J. Postema, Integrity: Justice in Workclothes, in DWORKIN AND HIS CRITICS

WITH REPLIES BY DWORKIN 291, 291-318 (ustine Burley ed., 2004) (arguing that integrity is

an important value in law and in all other aspects of government).37 Dworkin, Reply to Postema, supra note 16, at 386.

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necessarily mean that there are right answers to hard legal decisions."Thus one may acknowledge a person to have integrity even though thatperson may hold importantly mistaken moral [or legal] views. '38 Thisconception of integrity should preclude excessive partisan political andeconomic interests from influencing the decision-making procedures ofa system of law.3 9 While Dworkin's legal theory, as it stands, may notfully illustrate the means by which real-world judges can decide cases ina unified manner and in accordance with integrity, integrity in a legalsystem is generally expected by citizens in some form, and that integrityis also likely to be one of the means by which the state and the legalapparatus of the state will be justified.

B. Equality of Resources

Dworkin's political theory of equality of resources distinguishes be-tween option luck, "which is a matter of how deliberate and calculatedgambles turn out . . . [and] brute luck [which] is a matter of how risksfall out that are not in that sense deliberate gambles . "...40 Optionluck and its associated differential outcomes for different persons is theresult of individual choice and, therefore, redistribution from those whodo better is not warranted. This assumes that people enter the marketor begin Dworkin's auction on equal terms.41 Dworkin argues that thepossibility of insurance provides a link between the two kinds of luck.Dworkin's theory would not provide redistribution from one person to

38 Damien Cox, Marguerite La Caze & Michael Levine, Integrity, STAN. ENCYCLOPEDIA OF

PHIL., (Edward N. Zalta ed., Fall 2008) (Apr. 9, 2001) available at http://plato.stanford.edu/entries/integrity/.

39 People and judges are likely capable of personal and impersonal reasoning. Cf THOMASNACEL, EQuAuTY AND PATIAI Y 64 (1991) ("The impersonal standpoint in each of us pro-duces, I shall claim, a powerful demand for universal impartiality and equality, while the per-sonal standpoint gives rise to individualistic motives and requirements which present obstacles tothe pursuit and realization of such ideals."). Further, judges ought to use this impersonal per-spective as much as possible when making legal decisions. This would require some form ofmonitoring. Perhaps critical legal studies academics have done some research along these lines orwill do so in the future. But, even if unfavorable results were produced regarding particularjudges, it is not certain what could be done especially for life-tenure judges. These kinds ofconsiderations go beyond the bounds of this Article but they are important to a legal system thatclaims to function with integrity. It would also be useful to be able to say somehow that pastlegal decisions were wrongly decided on the basis of integrity. Dworkin, it seems, cannot do thisto any great degree because judges in the past could have used "the best constructive interpreta-tion of past legal decisions, and law [was] therefore sensitive to justice . DwoRKIN, LAW'SEMPiRE, supra note 1, at 262.

40 Dworkin, What is Equality?, supra note 7, at 293.41 Id. at 289.

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46 CARDOZO PUB. LAW, POLICY & ETHICS [

another if one decided to purchase insurance against blindness and theother person did not, and both were blinded in the same accident.42

That would be option luck and warrants no corrective redistribution.However, brute luck, being born blind, for example, is uninsurable andDworkin argues that society should implement a scheme of compulsorytaxation to redistribute to the handicapped, on the assumption that thehandicapped would have purchased insurance at an average level had itbeen available to them. 3 Dworkin's use of a hypothetical insurancemarket also explains why, if individuals were unaware of how valuabletheir talents would be, they would be unwise to buy policies to insurethat they were in the category of people who are paid most for theirtalents. This is because:

[T]he cost of the premium will be extremely high .... It will ap-proach the value of the projected return if the risk eventuates. Sosomeone who buys this insurance faces an extremely high chance ofgaining very little. Suppose he loses, however; suppose he is one ofthose who does have the maximum earning power. He is now in amuch worse position than if he had never insured, because he mustnow work at close to his top earning capacity just to pay the highpremium for his insurance on which he collected nothing - just, thatis, to break even. He will be a slave to his maximum earning power.44

Dworkin endorses a taxation scheme that compensates for bruteluck or talent deficiencies from those who benefit from brute good luckor talent.4 5 Assuming people would have purchased insurance at an av-erage level, redistribution in the form of just taxation should take placeto compensate for the inability to earn certain levels of income wherethat inability is based on brute luck. Dworkin recognizes that it may bedifficult for an insurer to determine individuals' actual abilities. How-ever, he glosses over this problem by suggesting solutions within the co-insurance market and by placing the burden on the insured to provehow much ability or lack of ability they really have.4 6 The fair tax sys-tem, in the hypothetical insurance market, should shadow the average

42 Id at 296.43 Id. at 297.44 Id. at 319-20.45 Id. at 324.46 Id. at 325-26.

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premium as far as possible, but even Dworkin recognizes that in the realworld:

We might decide that a tax scheme so closely modeled on that marketis offensive to privacy, or too inefficient in other ways. We might de-cide, for these or other reasons, that a scheme that tied redistributionto actual earnings rather than to the ability to earn, for example, was abetter second-best approximation to the ideal of mimicking the insur-ance market than any other scheme we could develop.4 7

Dworkin's theory of equality of resources can be fairly and uncon-troversially summarized as follows:

(1) Equality of resources over overall lives is warranted.

(2) Redistribution should take place to compensate those whosuffer as a result of brute luck but not to compensate thosewho do comparatively worse as a result of option luck associ-ated with what they choose to do.

(3) A just taxation scheme will: (a) individually compensate peo-ple based on the average level of insurance that people gener-ally would have purchased in a hypothetical insurance marketif they did not know how valuable their talents would be eco-nomically in the real-world labor market; (b) individuallycompensate [people] based on brute luck being below the av-erage, but not for option luck being below the average, andthe tax scheme should somehow be able to assess if an indi-vidual is using his talents in a market inefficient way,48 or ifhe is simply not earning an average income due to his lack ofnatural talent.4 9

(4) However, where such a scheme of taxation interferes with pri-vacy, efficiency, or some other value, the state can use some

second-best approximation and redistribute based on actualearnings.50

47 Id. at 326 (emphasis added).48 This is a form of option luck because the individual may be choosing not to maximize the

market income that his talents can generate. Cf HERMtaN MELVILLE, BARTLEBY THE SCRfV-

ENER: A STORY OF WALL-STREET (1853) (a short story reciting details of the scrivener Bar-tieby's lack of motivation to work).

49 This is brute luck because it involves no individual choice.50 Note the considerable impact this has on brute luck, option luck, and other factors which

Dworkin considers such as motivation. This is because, given the acceptance of this second-best

approximation, an individual who rises above the average through productive option luck factors

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48 CARDOZO PUB. LAW, POLICY & ETHICS j [

Before turning to the main potential libertarian criticism of Dwor-kin's theory of equality of resources - that it would constitute excessivegovernmental interference in people's lives - it is necessary to considertwo arguments that question Dworkin's assumption of equality in (1).First, Jan Narveson argues that Dworkin's papers on equality do not domuch in the way of actually arguing for equality.51 This is particularlyperplexing for a libertarian like Narveson. Dworkin assumes that histheory of equality of resources is a morally superior basis for his systemof law as integrity.52 He then refers the reader to his famous paper onequality of resources where he once again fails to argue for equality butsays that, "the demands of equality (we assume in this essay) are prior toother desiderata .... , In that paper, he refers the reader to anotherpaper where he tells the reader that he deals in more detail with Nozick(whom he usually assumes away).5" However, in that other paper,Dworkin does not explicitly deal with Nozick in any detail and Dwor-kin contradicts himself by suggesting that in the real world, equalitycompetes with other values.55

Thus, equality in (1) is never fully explained. It is either assumedto have priority or it is posited amongst other values and equality is notexplained as a primary value amongst other values. This is troublesomefor a libertarian who sees equality in acquisition and transfer as impor-tant, but does not see any legitimacy in a theory, such as Dworkin's,that advocates redistribution to achieve egalitarian outcomes. Dworkinstands too easily accused of a common philosophical problem - onlybeing able to convince people who already agree with him, while need-lessly sending opponents on a wild goose chase in search of a strongdefense of equality in Dworkin's work.56

such as risk and hard work can still be taxed to redistribute to even the potentially extremelytalented who are below the average and choose not to work. In turn, this can lead to negativemotivational practices among those below the average to stay below the average in the expecta-tion that they will receive transfer payments.

51 Jan Narveson, On Dworkinian Equality, 1 Soc. PHIL. & POL'Y 1, 1-2 (Autumn 1983);

Jan Narveson, Reply to Dworkin, 1 Soc. PHIL. & POL'Y 41, 41 (Autumn 1983).52 DWORKIN, LAW's EMPIRE, supra note 1, at 301.53 Dworkin, What is Equality?, supra note 7, at 295 (emphasis added). See id. at 289

("Equality of resources supposes that the resources devoted to each person's life should be equal.")(emphasis added).

54 Ronald Dworkin, Comment on Narveson: In Defense of Equality, 1 Soc. PHIL. & POL'Y

24, 27-30 (Autumn 1983).55 Id. at 39.56 This may also frustrate egalitarians who want a more robust defense of egalitarianism and

may question the acceptability of Dworkin's nonoutcome egalitarian thesis.

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Second, in a related context, Peter Westen argues that the conceptof equality is circular and is fully subsumed in other concepts, such asjustice and fundamental rights.5 7 Thus, Westen argues that it is notequality per se that African Americans sought after the introduction ofthe Fourteenth Amendment. 58 They sought racial justice. Equality issubsumed within that concept. Indeed, it is not unreasonable to suggestthat, given history and what had happened to African Americans, it isjustifiable to afford them more than equality and still be within theremit of racial justice.59 This argument against equality as a meaningfulconcept is problematic for Dworkin because he argues that equality is afundamental concept. It is all the more troubling because, in reality,Dworkin accepts that there are other values that compete with equalitysuch as privacy and efficiency. Again, Dworkin must argue further as towhy equality is important and why it holds a primary position of impor-tance among the competing values that he recognizes.

Contrary to Westen's thesis, there seems to be something impor-tant about the notion of equality. It is important both as a comparativeconcept 60 and as a rhetorical concept. 6 Additionally, Westen arguesthat the prevalence given to arguments for equality distorts and under-mines the importance of other values such as fundamental rights andthat this arguably hinders the attainment of such rights.62 Calls forequality need not necessarily entail the consequence that Westen envis-ages. If someone has less of something, a claim for equality has logicalas well as practical importance even if one wants more than equality, asin claims for affirmative action. One may be in fact seeking some othervalue, such as justice. But, so long as one has less of something and thatdeficiency is unfair, unjust, or unjustified, a claim for equality has mean-ing in both a logical and rhetorical sense and, therefore, cannot be dis-missed even if its attainment can be subsumed under other labels.Furthermore, Westen does not fully justify his assertion that claims of

57 Peter Westen, The Empty Idea of Equality, 95 HARV. L. REv. 537, 547-65 (1982).58 Id. at 565.

59 This could be a way of interpreting affirmative action. Id. at 553-54. However, affirma-

tive action could also be seen as positive inequality in one sphere, mainly educational, in order to

compensate for inequalities in other spheres such as access to resources, political office, and so

on.60 Westen rejects this notion. Id. at 552-53.61 See Martin Luther King, Jr., Letter from Birmingham City Jail, in CIvIL DISOBEDIENCE IN

Focus 68, 68-84 (Hugo Adam Bedau ed., 1991) (1963) (King arguing for justice, equality, and

equal justice).62 Westen, supra note 57, at 585-86.

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equality stand in the way of other claims. Claims of equality are giventhe importance which Westen stipulates because if someone has less ofsomething, and that is unfair or unjustified, then that unequal standingis important logically and rhetorically even if the attainment of thatsomething results in the claim of equality being subsumed.

Finally, there is another sense in which equality is important. Thatis in the context of which Bernard Williams, deriving from Kant's sec-ond interpretation of his categorical imperative, posits the notion ofequal respect for persons.6 3 This is not to say that people are alwaysdeserving of equal respect; it is just to say that, at some basic level,equality is an important concept as it pertains to how people should betreated. Even when equality is subsumed within other values, that doesnot mean that it can always be deemed to be redundant. One could gofurther and question the importance that Westen attributes to equalityin hindering the attainment of other values. If other values subsumeequality, why for thousands of years have people not abandoned theconcept when it is subsumed within other values? Why, as Westen rec-ognizes, does equality continue to play such an important role in debatewhen its attainment is subsumed within other values?64

The remainder of this section will concentrate on Dworkin'sclaims summarized in (2) through (4) (above). In Law's Empire, Dwor-kin assumes that "equality of resources is superior to the libertarian con-ception: it fits our legal and moral practices no worse and is better inabstract moral theory. ''65 This assumption may have weight in somecircumstances; however, there are other circumstances where libertarian-ism may be morally superior to equality of resources, circumstanceswhich Dworkin himself recognizes under (4).

63 Bernard Williams, The Idea of Equality, in EQUALITY: SELECTED READINGS 91, 91-102

(Louis P. Pojman & Robert Westmoreland eds., 1997).64 Another preliminary response to Westen's theory is that it is likely unfalsifiable and, there-

fore, irrefutable. See LUDWIG FEUERBACH, LECTURES ON THE ESSENCE OF RELIGION vol. II,ch. 24(B) (Ralph Manheim trans., 1968) (1841) (arguing that unfalsifiable arguments are irrefu-table and, therefore, their validity is questionable). Much theoretical legal argument may beunfalsifiable in the sense that Feuerbach describes and, therefore, is metaphysical. However,there seems to me to be something particularly odd about Westen's thesis. One can imagine aperson demanding equality of something. Westen would respond that it is not really equalitythat person wants, it is that something or another thing of similar value. Once the person getsthat something, equality is subsumed within that something. Therefore, that something is re-dundant and is meaningless. But is it? Was it always? There is something strange about Wes-ten's argument. It may well be just too clever and a form of sophistry.

65 DWORKIN, LAW'S EMPIRE, supra note 1, at 301.

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Robert Nozick's conception of the Kantian injunction - that peo-ple should be treated as ends and not means - leads to the conclusionthat the state should not interfere in individuals' lives for redistributiveends. Kant's injunction is used by Nozick as the basis for formulatingside constraints which determine what cannot be done to persons. It isalso the main reason for believing that taxation and redistribution areunjust because, by taxing and redistributing, a more-than-minimal stateuses individuals as means to provide for state-determined ends. Taxa-tion also infringes upon people's ability to plan meaningful lives, ac-cording to Nozick, because if resources are continually up for grabs dueto taxation, people do not have the stability needed to plan meaningfullives.66 In (2) and (3), Dworkin justifies redistribution to compensatefor differences in brute luck such as birth handicaps and so on. Notonly is redistribution justified, but it must be carried out on an individ-ual basis to compensate people based on the average level of insurancethat people generally would have purchased in a hypothetical insurancemarket if they did not know how valuable their talents would be eco-nomically in the real-world labor market. In addition, individuals mustbe assessed individually to determine if they are due compensation basedon below average brute luck, but not for below average option luck. So,too, the tax scheme should somehow be able to assess if an individual isusing his talents in a market inefficient way or if he is simply not earn-ing an average income due to his lack of natural talent. The coerciveapparatus of the state must presumably undertake this sort of testingand redistribution. Although Nozick may have interpreted the Kantianinjunction in too narrow a fashion, there could be circumstances wherethe statist talent testing and individualized redistribution that Dworkinprescribes could constitute unbearable state interference in people'slives.67 This is the reason that, in practice, Dworkin says that privacyinterests - commensurate with normal libertarian considerations - cantrump his own theory of equality of resources ((4) above).

Dworkin needs to do more to justify equality. Given the preemi-nence that he attaches to the concept, he cannot rely on mere assump-tion. Equality is not a redundant notion even if, on occasion, it is

66 NOZICK, ASU, supra note 5, at 32.

67 Cf Kurt Vonnegut, Jr., Harrison Bergeron, in EQUALITY: SELECTED READINGS 315, 315-

18 (Louis P. Pojman & Robert Westmoreland eds., 1997) (a short story in which Vonnegut

depicts a nightmarish United States of the future where the state continuously interferes in

people's lives to assess talent and handicaps and ensure genuine equality).

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subsumed within other values. Without further development and moregrounding, Dworkin cannot assume that his theory of equality of re-sources is morally superior to libertarianism. There are imaginable cir-cumstances where equality of resources could amount to excessiveinterference in people's lives, and where it does, libertarianism may be amorally superior theory. As a consequence, Dworkin has failed to ade-quately establish his theory of equality of resources as a foundation forhis theory of law as integrity.

II. NOZICK AND LIBERTARIANISM

Given that Dworkin's theory of equality of resources cannot alwaysbe assumed to be a superior theory in abstract moral theory to libertari-anism, it is therefore useful to see if libertarianism can act as a legitimatetheory for a legal system.68 This section will primarily focus on RobertNozick's libertarian theory, as Dworkin does. However, Nozick's liber-tarianism will be rejected as the basis for a legal system because of likelyimperfections and various conflicts which his proposed legal system has

68 Libertarian themes are common in American legal reasoning. See, e.g., W. Va. State Bd.

of Educ. v. Barnette, 319 U.S. 624 (1943) (holding it unconstitutional on First Amendmentgrounds to force Jehovah Witness children to salute the flag); Lochner v. New York, 198 U.S. 45

(1905) (unconstitutional for a state to interfere in freedom to contract on the grounds that thatwould be excessive interference with the liberty of persons); Lawrence v. Texas, 539 U.S. 558

(2003) (unconstitutional under the Fourteenth Amendment to ban homosexual sex); Griswold

v. Connecticut, 381 U.S. 479 (1965) (Justice Douglas interpreting the Bill of Rights as restraints

on governmental interference in peoples' lives and interpreting the Ninth Amendment as a natu-

ral right restraint on repulsive governmental interference in people's lives). See also, e.g., Samuel

Warren & Louis D. Brandeis, The Right to Privacy, 4 HAv. L. REv. 193 (1890) (arguing for a

constitutional right to privacy); Randy E. Barnett, Justice Kennedy's Libertarian Revolution: Law-rence v. Texas, in CATO SUPREME COURT REvIEw 21, 2002-2003 (James L. Swanson ed., 2003)

(arguing that the Supreme Court, through Justice Kennedy, endorses libertarian moral reasoning

which manifests itself in a right to private, consensual homosexual sex); Randy E. Barnett, Fore-

word- Whats So WickedAbout Lochner?, 1 N.Y.U. J. L. & LIBERTY 325 (2006) (arguing that theSupreme Court decision that allowed bakers to decide their own working hours could be consid-

ered to be properly decided). But see, e.g., Marsh v. Alabama, 326 U.S. 501 (1946) (holding

that First Amendment rights trump property rights); Katko v. Briney, 183 N.W.2d 657 (Iowa

1971) (holding that a person's right to protect his property against trespassers does not give him

the right to use an automated spring gun); N.J. Coal. Against War in the Middle E. v. J.M.B.Realty Corp., 138 N.J. 326 (1994) (holding that protestors' rights to circulate petitions at ashopping mall trumped the right of the property owners to exclude); Shelley v. Kramer, 334

U.S. 1 (1948) (holding that African Americans cannot, under the Fourteenth Amendment, beexcluded from the house that they occupy because of private agreements among landowners

which excluded African Americans from their neighborhood); Korematsu v. United States, 323

U.S. 214 (1944) (holding it constitutional to intern Japanese Americans on the basis of spuriousmilitary information which stated that they were a threat to national security).

DWORKJN, NOZICK & POSNER

with libertarianism generally. This section will also provide introduc-tory comments on Randy E. Barnett and Richard A. Epstein, two emi-nent libertarian legal scholars. However, it will be argued that Barnettfails to overcome concerns that Nozick recognized if conflicting legalauthorities are accepted in a single society. Epstein's position, while in-teresting and potentially useful for a nonlibertarian, cannot consistentlybe deemed libertarian because he leaves the door open for a largeamount of nonlibertarian redistribution.

Nozick argues that the minimal state comes about through an "in-visible hand process" that does not violate anyone's rights. The minimalstate evolves through a multistage process. First, in the state of natureindividuals form "mutual protective associations" in order to protecttheir rights. They do this because other people's judgments when dis-putes occur are biased in their favor and because individuals, by them-selves, will lack power and will be unable to enforce their rights whenconfronted with strong people who disagree with them. Second, be-cause some people may not wish to take on the costs of protectingothers within their associations and because some are very good at pro-tecting, entrepreneurs interested in, and good at, protecting people form"commercial protection agencies." Third, there would be mergers, co-operation, and cost-saving agreements in geographic areas that wouldresult in the establishment of a dominant protection agency. Fourth,because the dominant protective agency does not have a monopoly overthe use of force and because it does not provide protection for all, itcannot be regarded as a state. But, being wary of loners using forcerecklessly against its clients, the dominant protective agency prohibitssuch use of force, becomes an adjudicator in disputes, monopolizes theuse of force, and, by so doing, becomes "an ultra-minimal state." Fifth,by not allowing loners to enforce their rights, the ultra-minimal stateinfringes upon the rights of loners or people unwilling or unable to paythe protective fees of the ultra-minimal state and such people must becompensated for this rights infringement. This compensation comes inthe form of protective services for those who do not pay for them and,as a result, the ultra-minimal state not only monopolizes the use of forcebut, in addition, provides protection for everyone and achieves Nozick'stwo conditions necessary for statehood - monopoly of force and univer-sal protection - and, in so doing, becomes a minimal state.69

69 NOZICK, ASU, supra note 5, at 10-28.

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However, no more extensive state than the minimal state can bejustified. The minimal state provides protection against force, theft, andso on but is not allowed to tax and redistribute to try to achieve govern-mental distributive patterns or end states. Such patterned or end-stateseeking projects will be futile anyway because they will be short-lived solong as people are free to exchange. 7

' The more-than-minimal state in-terferes with individuals' abilities to plan what, for them, are meaningfullives and thereby violates Nozickian side constraints which severely limitthe way in which individuals may be used as means for redistributiveends. 71 Nozick argues that so long as people are entitled to their hold-ings in accordance with his principles of acquisition 72 and transfer, thestate cannot violate people's entitlement rights by seizing those holdings.Nozick endorses a historical system of justice and reasons that individu-als are entitled to their holdings so long as they are held in accordancewith the following principles:

(1) A person who acquires a holding in accordance with the prin-ciple of justice in acquisition is entitled to that holding.

70 See id. at 160-61 (Nozick's famous Wilt Chamberlain argument which is not discussed in

this Article).71 Id. at 33. This formulation of side constraints and means-ends analysis is derived from

Nozick's interpretation of Kant's second categorical imperative. See IMMANUEL KANT,GROUNDWORK OF THE METAPHYSICS OF MORALS 96 (H.J. Patton trans., 1964) (1785) [here-inafter KANT, GROUNDWORK]. This Article will not criticize Nozick's adoption of Kant's cate-gorical imperative in any detail. However, it is likely that Nozick adopts Kant's imperative in

too narrow a manner.72 NOZICK, ASU, supra note 5, at 174-82. Nozick criticizes John Locke's proviso relating to

initial acquisition, which states that acquisition is justified so long as others are left no worse off

following acquisition. See JOHN LOCKE, Two TREATISES OF GOVERNMENT, THE SECOND

TREATISE chs. II, IV (Student Ed., Peter Laslett ed., 1988) (1690) (developing his proviso whichgenerally justifies property acquisition albeit with the constraint that enough and as good be leftover for others). Nevertheless, Nozick "assume[s] that any adequate theory of justice in acquisi-tion will contain a proviso similar to the weaker of the ones we have attributed to Locke."Nozick argues that there should be a baseline set that will fix the standard of living commensu-rate with the "no worse off" state of nature level of existence but he fails to do this. In the end,he modifies Locke slightly so as to likely allow more extensive acquisition with less considerationof the standard of living warranted for those who may find themselves worse off than they wouldhave been in the state of nature following the acquisition of others. Note, however, that there isa Lockean shadow which accounts for changing conditions of scarcity in society:

Thus a person may not appropriate the only water hole in a desert and charge what hewill. Nor may he charge what he will if he possesses one, and unfortunately it hap-pens that all the water holes in the desert dry up, except for his. This unfortunatecircumstance, admittedly no fault of his, brings into operation the Lockean provisoand limits his property rights.

NOZICK, ASU, supra note 5, at 180.

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(2) A person who acquires a holding in accordance with the prin-ciple of justice in transfer, from someone else entitled to theholding, is entitled to the holding.

(3) No one is entitled to a holding except by (repeated) applica-tions of 1 and 2.7

In addition, there is a principle of rectification that can be summa-rized as:

(4) Individuals are entitled to be compensated if they suffer as aresult of others not acting in accordance with the aboveprinciples.

Nozick's principle of rectification can be explained further. "Ideal-izing greatly," Nozick supposes that a principle of rectification along thefollowing lines will be arrived at:

This principle uses historical information about previous situationsand injustices done in them (as defined by the first two principles ofjustice and rights against interference), and information about the ac-tual course of events that flowed from these injustices, until the pre-sent, and it yields a description (or descriptions) of holdings in thesociety. The principle of rectification presumably will make use of itsbest estimate of subjunctive information about what would have oc-curred (or a probability distribution over what might have occurred,using the expected value) if the injustice had not taken place. If theactual description of holdings turns out not to be one of the descrip-tions yielded by the principle, then one of the descriptions yieldedmust be realized. 74

This section seeks to show first, that the historical principle of rec-tification is subject to likely imperfections that, in reality, may lead tothe justification of at least certain minimums in Nozick's state for suchthings as sustenance and opportunity, which will most likely be pro-vided by some form of welfare state. Second, this section will argue thatif there is no welfare state and all people are to be provided with thegenuine protection of the minimal state, which is a main justificatoryreason for moving from the ultra-minimal state to the minimal state,then the minimal state will have to attend to a slew of petty claims.Third, this section will contend that the legal apparatus of the minimalstate is subject to corruption if there is a market for legal representation

73 NOZICK, ASU, supra note 5, at 151.74 Id. at 152-53.

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and legal representation impacts upon the outcomes of legal disputes.Fourth, this section will reason that the benefits that the wealthy have inthe minimal state, including protection and ownership, mean that theyhave little legitimate grounds for complaint if the minimal state doesmore than provide them with protection. There will not be a detailedmoral criticism of Nozick's libertarianism. The primary aim here is toshow shortcomings in his legal theory. However, on occasion, views onthe shortcomings of the moral basis of Nozick's theory will be evident.

First, the implementation of Nozick's principle of rectification overhistory is likely to be extremely complex because in order to determinewhether an acquisition or transfer is just, one must go back in historyand examine that acquisition or transfer. If an acquisition or transfer isdeemed to be unjust, then one must rectify the unjust acquisition ortransfer itself and the subsequent chain of transfers that were affected bythe initial unjust acquisition or transfer. Once this is done, one mustcompensate the harmed party by giving him the resources that he wouldhave accumulated had the injustice not occurred. Such compensationshould be paid by the person that committed the unjust act.

There are a number of immediate difficulties to consider. The per-son who committed the unjust act may have squandered resourcesneeded to pay compensation. If one considers the accumulations of theguilty party to be adequate compensation for a particular victim whosuffered an injustice, this may be insufficient because the victim perhapscould have accumulated much more if he had not suffered an injusticein the first place. The "historical shadow" of the Lockean proviso 75 maycome into effect thereby rendering initial just acquisitions unjust, and soon. These considerations are extensive and Nozick's failure to considerthem given the importance of rectification in determining justice in ac-quisition, transfer, and entitlement has serious implications for his the-ory of justice in holdings. In order to illustrate the difficulties inherentin Nozick's principle of rectification, it is useful to consider a movieanalogy developed by Lawrence Davis:

Pretend that our lives are taking place in a movie projected on a screenwith many, many projections pointed at it. Project the movie we arein until a frame containing an injustice is projected. At that frame,turn off the present projector and turn on the projector containing themost likely movie of our lives up to this point with the injustice writ-

75 See supra note 72.

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ten out of the script. Run that projector, starting from the frame atwhich the first movie was stopped. Continue projecting until a framecontaining an injustice is projected, or until a frame depicting thepresent is projected. If a frame containing an injustice is projected,stop the projector and turn on the projector containing the most likelymovie of our lives up to that point, with the injustice written out ofthe script. Run this projector from the frame at which the other wasstopped. Continue in this way until a frame depicting the present isprojected. Stop the projector at that frame, make a list of who haswhat, and realize the distribution of goods in that list. Now a justdistribution has been arrived at and the effects of all previous injusticeshave been wiped out.76

Further implications of this analogy are that this process wouldhave to start all over again if a new injustice occurred or if a framedepicting an injustice was overlooked. Furthermore, over time, someactors may not exist and may not come into existence and this addscomplexity to the issues of who warrants compensation. The movieanalogy provides an illustration of the difficulties in determining pastinjustices, the effects of past injustices, and the correct compensatoryprocedures for rectifying such injustices. No doubt reality, with manyactors, lengthy history, and complicated compensation solutions, willinvolve much more complex required judgments than even the movieanalogy can allow us to imagine.

Given the likely imperfections associated with such a system, itmay be morally necessary to provide all individuals with at least suste-nance and opportunity, which are not guaranteed in Nozick's minimalstate. This is because there are likely injustices that have occurred, thathave not been recognized, as well as inadequate compensations that mayhave had effects not just on individuals, but even on large groups andpotentially all of society. The implication is that, given an undevel-oped 77 and likely imperfect system of rectification that is needed to le-gitimize acquisition, transfer, and holdings, it is unwarranted to allow(perhaps many) individuals to go unnourished and uneducated just be-cause generally strong conclusions have been made regarding historical

76 Lawrence Davis, Nozick's Entitlement Theory, in READING NoZICK: CRITICAL STUDIES

ON NOZICK's ANARCHY, STATE, AND UTOPIA 344, 348-49 (Jeffrey Paul ed., 1982).77 NOZICK, ASU, supra note 5, at 152-53.

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58 CARDOZO PUB. LAW, POLICY 6- ETHICS J [Vol. 8:31

entitlement without fully legitimizing the very principles on which enti-tlement is founded.78

Second, added to this difficulty is the likelihood that the legal sys-tem in Nozick's minimal state is susceptible to extensive manipulationbecause, provided there is a market for legal representation, those withresources can (and potentially have great motivation to) purchase legalrepresentation when confronted with accusations concerning the justiceof their holdings. Central to the progression from the ultra-minimal tothe minimal state, for Nozick, is that all (including those unable to af-ford it) will be provided with the protective apparatus of the minimalstate. This protection must encompass the ability of all, including thepoor, to contest injustices and seek rectification. 79 Such rectificationand resultant compensation may be a life and death matter for a poorperson who does not have the means of sustenance. The ability of therich to provide themselves with legal representation while the poor maybe unable to afford any representation means that, when there are recti-fication cases raised, the poor will be more likely to lose, provided thatlegal representation has an effect on the outcomes of legal cases.80 Thisis likely to result in nonrectified unjust acquisitions and transfers withthe consequence that some wealthy people will be able to hold on to

78 Nozick recognizes this problem, to a degree, and sanctions Rawlsian redistribution when

we "are lacking much historical information." NozcK, ASU, supra note 5, at 234. For thedevelopment of Rawls's difference principle of redistribution, see JOHN RAwLs, A THEORY OF

JUSTICE 83, 151, 285 (1971) [hereinafter RAWLS, A THEORY OF JUSTICE]. However, there maybe more than Rawlsian redistribution, which primarily helps the worse-off, warranted, and, evenif there is historical information, effects of past injustices and remedial compensations may bevery difficult to assess. This is telling. Just as Dworkin, in effect, throws his theory of equality

of resources into doubt when he accepts that considerations such as privacy and efficiency maytrump equality in real life, Nozick is recognizing likely imperfections in his legal theory and hasto resort to (conditional) acceptance of his chief rival's egalitarian theory.

79 Cf Williams, supra note 63, at 98 (arguing that in many societies formal legal equality isof limited importance where legal representation in needed to enforce such formal equality); KaiNielsen, Radical Welfare Egalitarianism, in EQUALITY: SELECTED READINGS 204, 205 (Louis P.

Pojman & Robert Westmoreland eds., 1997) (arguing that formal equality is necessary for legalequality but "not nearly sufficient").

80 Cf Peter Arenella, People v. Simpson: Perspectives on the Implications for the Criminal Justice

System, 69 S. CAL. L. REv. 1233, 1234 (1996)Lawyers control adversarial trials. They decide what evidence to present and how tomassage it into a story of guilt, innocence, or reasonable doubt. In such a lawyer-dominated system, the trial's outcome may hinge on which side has the superior re-sources to pay for the best investigators, experts, and counsel. Money can have agreater impact on the verdict than the 'facts' because it dictates how those 'facts' are

transformed into legally admissible and persuasive evidence.


holdings that they are not entitled to, while some poor people may beforced to perish, even though they were entitled to holdings, becausethey were unable to afford legal representation and the means ofrectification.

Indeed some poor people may, in many cases, be deterred fromseeking rectification because they will be aware that when they confronta wealthier person, with the ability to purchase legal representation, theywill likely lose irrespective of the merits of their case. The undevelopednature of the principle of rectification may allow Nozick to respond tothis criticism by suggesting that the protection of the minimal statewould ensure the provision of legal representation for the poor. This isa possibility but, given Nozick's insistence that individuals should beallowed to dispose of their resources as they please, he is unlikely to beable to limit legal expenditure so the wealthy can always purchase morerepresentation than the state allocates and, therefore, use their (possiblyunjustly held) resources to tilt legal verdicts in their favor.

Third, the rectification principle may lead to excessive legal claimsin the minimal state. In the absence of any welfare system, the claims ofthe poor become potentially life and death matters and the minimalstate cannot just dismiss claims for the sake of expediency if it is toprovide the universal protection on which its very justification is based.So, legal questions that would be unlikely to come to court in most real-world courts may have to be considered, and considered immediately sothat people do not die, when individuals' entitlements to a loaf of bread,a pint of water, and so on, are contested. The failure of the minimalstate to address such claims is likely to lead to large amounts of lawless-ness because the hungry have not only Hobbesian rights to protectthemselves against death, they have Nozickian state of nature rights toexact compensation if the minimal state fails them by affording theminadequate or unfair protection procedures. 81 However, if the minimalstate is to properly address such concerns, which it must do if it is toretain its legitimacy, it will see a bloating in its size either because itallows equal access to rectification entailing a ballooning court system orbecause it grants certain welfare levels for expediency's sake so as to

81 But see AMARTYA SEN, IDENTITY AND VIOLENCE: THE ILLUSION OF DESTINY 143

(2006) (arguing that the very poor may not disobey the law and revolt because "a starvingwretch can be too frail and too dejected to fight and battle, and even to protest and holler. It is

thus not surprising that often enough intense and widespread suffering and misery have beenaccompanied by unusual peace and silence").

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avoid a ballooning court system. But, alas for Nozick, such redistribu-tion to ensure certain welfare levels will lead to something beyond hisminimal state.

Fourth, the existence of the state gives the wealthy their ownershipin property and protects that ownership. If the wealthy accept the exis-tence of the government for reasons of protection, they are likely, ifconsistent, compelled to accept other limited governmental functions.This is because the existence of the government is what gives the wealthytheir possessions and it will most likely be the case that, even given someredistributive taxation, "they are bound to the 'commonwealth' bychains of gold they should be happy to leave in place."18 2 Indeed, thewealthy will likely demand more than the protection that a minimalstate would offer. This would lead to an expansion of the minimal stateto sustain them in their comfort. And, if they accept the expansion ofthe minimal state for that end, it would be inconsistent and morallyquestionable8 3 not to allow at least some role to help the very poor intheir misery. A Norberto Bobbio dialectic is illuminating in thiscontext:

[T]he citizen who through active participation always asks for greaterprotection from the state through the request for protection strength-ens the state which the citizen wants to control but which ends upbecoming his or her master.84

It is almost a necessary truth that the wealthy in the minimal statewill demand more protection because they have more to protect. Bob-bio refers to demanding in the sense of actual participation in the politi-cal process through such mechanisms, one would imagine, as runningfor office, lobbying, and so on. Demanding more protection sees thesize of the minimal state expand, even if the wealthy do not usually wantto see the state expand for nonprotective purposes such as redistributivetaxation to help the needy. There is both dialectic and an inconsistencyhere. Given the possibility of the wealthy to successfully demand more

82 Michael Davis, Nozick's Argument for the Legitimacy of the Welfare State, in EQUALITY AND

LIBERTY: ANALYZING RAWLS AND NOZICK 276, 293 (J. Angelo Corlett ed., 1991).83 See KANT, GROUNDWORK, supra note 71, at 88 ("Act only on that maxim through which

you can at the same time will that it should become a universal law." This is the first formula-tion of his categorical imperative).

84 NORBERTO BOBBIO, DEMOCRACY AND DICTATORSHIP: THE NATURE AND LIMITS OF

STATE POWER 42-43 (Peter Kennealy trans., 1989).

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protection, it may be possible for the poor to expand the scope of pro-tection available to them and argue that state provision of certain life-sustaining goods for those unable to provide for themselves should con-stitute a form of protection in the expanded sense of the notion.85

Furthermore, a continuing acceptance of Nozick's interpretation ofthe Lockean Proviso has serious implications for libertarianism.86 Gil-lian Brock argues this point forcefully:

[B]ecause restraints on initial acquisition permanently track propertyrights, no account of property rights, more generally, that had anypretensions to defensibility could allow some to have unconditionalrights to property in cases where others' survival is not only endan-gered, but rendered impossible .... Clearly then, the libertarian the-sis that any redistribution to meet needs is unjust, is false.Redistribution to help those in need is not necessarily unjust. Quitethe contrary: it is frequently a necessary condition for our retainingany defensible property rights at all.87

As it stands, Nozick's legal theory cannot be accepted because it isundeveloped and prone to imperfections that undermine his libertariantheory. Those imperfections, accompanied by a likely burgeoning legalsystem in his minimal state, may provide necessary backdoor legitimiza-tion of certain welfare levels, resulting in a minimal state that no longerremains minimal in the sense that Nozick envisioned. Additionally, re-quests for greater protection, the state's protection of the wealthy, moralconsideration of how the very poor as humans can be treated, and aproper interpretation of Nozick's proviso on acquisition may lead to an

85 Cf David Wood, Nozick' Justification of the Minimal State, 88 ETHICs 260, 262 (April

1978). Wood argues that the compensation associated with the transition from the ultra-mini-mal state can be seen as buying off those people who cannot afford or do not want the protec-tion of the minimal state. The poor and go-it-alone anarchists could argue that they are owedfurther compensation for laying down arms and not enforcing rights in a biased manner againstmembers of the dominant protective agency. They may get more than just protection by enforc-ing rights in such a way and may not be compelled to accept only the protection of the minimalstate; they may demand more with the consequence that the minimal state could become amore-than-minimal state. One can legitimately suggest that if loners and poor nonmembers"have such nuisance power, why should they not bargain for more than protection?"

86 1 argued this point myself in some detail in my M. Phil. thesis, Sustenance, Opportunity,

and the Minimal State: Learning from Nozick's Libertarianism (2006) (unpublished, The LondonSchool of Economics). However, because this Article does not deal with this matter in detail,Gillian Brock's eloquent explanation is preferable.

87 Gillian Brock, Is Redistribution to Help the Needy Unjust?, 55 ANALYsIS 50, 57-58 (January

1995).

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expansion of the minimal state. Nozick could provide arguments tocope with these assessments because his principle of rectification re-mained undeveloped. However, to do so he would have to abandonmuch of the rhetoric, at least, of his minimal state libertarianism.

Before finishing this section, two further libertarian theorists willbe considered and some initial criticisms will be outlined. Randy E.Barnett argues that Nozick has not justified the establishment of thestate. 88 Like Nozick, Barnett asserts that liberty, in the sense of nonin-terference by the state, is essential to promote "human flourishing. ' 89

However, unlike Nozick, who argues that the state has a monopoly overthe use of force and, therefore, has a monopoly over the legal system inthe state, Barnett argues that "a polycentric legal order can contain mul-tiple legal systems without a hierarchical government to oversee the in-teraction of these legal systems."9 ' Barnett is correct that Nozick hasdifficulty justifying the existence of his state once that state evolvesthrough the multistage invisible hand process from anarchy to the mini-mal state, especially because the real state only protects "procedural"rights. Accordingly, Nozick must argue further that something thatevolves through the invisible hand process and does not violate rights isitself just.91 The state requires further assessment based on the way inwhich it implements Nozickian rights once the minimal state has comeinto being.92 However, because of lingering Hobbesian sentiments, thepracticality of a truly polycentric legal order is doubtful, especially whenthere are conflicts between legal orders. 93 Libertarianism generally is a

88 Randy E. Barnett, Whither Anarchy? Has Robert Nozick Justified the State?, I J. OF LIBER-

TARIAN STUD. 15, 21 (1977).89 Randy E. Barnett & Douglas B. Rasmussen, The Right to Liberty in a Good Society, 69

FoRDHAM L. REv. 1603, 1606-11 (2001). Rasmussen is noted as coauthor but the main body

of the text will attribute the arguments to Barnett only.90 Id. at 1611.

91 See Charles Sayward & Wayne Wasserman, Has Nozick Justified the State?, in EQUALITY

AND LIBERTY: ANALYZING RAWLS AND NOZICK 261, 267 (J. Angelo Corlett ed., 1991) (arguingthat just because a state evolves from a state of nature without violating rights does not meanthat the state itself does not violate rights).

92 Ellen Frankel Paul, The Time-Frame Theory of Government Legitimacy, in READING

NoziCK: CRITICAL STUDIES ON NoziCK's ANARCHY, STATE, AND UTOPIA 270, 348-49 (JeffreyPaul ed., 1982).

93 See generally THOMAS HOBBE, LEVIATHAN pt. 2 (J. C. A. Gaskin, ed., 1996) (1651)

(arguing that a single strong sovereign is required for stability and to ensure that there is not acontinual struggle for power among different self-interested individuals and alliances of individ-uals). There is a degree of dual-sovereignty in the U.S. and the European Court of HumanRights sits alongside sovereign legal systems in the E.U. but in those cases there is a largely

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statist theory, albeit minimal statist. Barnett describes himself as a liber-tarian, but his stance seems inconsistent with libertarianism. If he is alibertarian, he must ask himself why a polycentric legal order couldwork but individual enforcement of rights could not work in Nozick'sstate of nature. However, this only results in Barnett having to answerhis own question before he asks it of others. Thus, whither anarchy?

Richard A. Epstein, another libertarian legal academic, attempts toresolve the problem of the failure of Nozick's theory to provide for pub-lic goods. 94 Epstein contends that Nozick is wrong to look only at theburdens and never at the benefits of enforced taxation. In order to solvethe public goods problem, Epstein endorses

some Rousseauian notion that individuals may be forced to be free...to allow them to move to higher levels of utility (albeit with lowerlevels of political freedom) than they could achieve through voluntarytransactions in light of the well-known coordination problems thatarise in the provision of public goods . . . . Clearly the domain offorced exchanges should not be infinite .... 9'

Epstein seeks to soften the blow by endorsing a "flat or proportion-ate tax, whose form eliminates partisan battles over the steepness of anyprogressive tax."96 The main basis for Epstein's so-called forced ex-changes is that they provide a Pareto optimal improvement. 97 Like Bar-nett, Epstein considers himself a libertarian. And like Barnett, hisviewpoints, while attractive to nonlibertarians, are seemingly inconsis-tent with libertarianism. The domain of forced exchanges, for Epstein,

accepted hierarchical structure which, I believe, is different to what Barnett is suggesting. Heseems to endorse a step back from the minimal state to mutual protection associations. Market

compensatory systems and other devices could be developed that may be able to make suchschemes at least theoretically possible but one always has to beware of Hobbes' views in thiscontext.

94 Richard A. Epstein, One Step Beyond Nozick " Minimal State: The Role of Forced Exchangesin Political Theory, in NATURAL RiGHTS LIBERALISM FROM LOCKE TO NOZICK: ESSAYS IN

HONOR OF ROBERT NOZICK 286, 293 (Ellen Frankel Paul, Fred D. Miller, Jr. & Jeffery Pauleds., 2005).

95 Epstein, supra note 94, at 293.96 Id. at 295.

97 Id. at 312. See also THE NEW PALGRAVE DICTIONARY OF ECONOMICS AND THE LAW 5-9 (Peter Newman ed., 1998) (giving a detailed account of Pareto Optimality, which is simply asituation which exists when economic resources and output in an economy have been allocatedin such a way that no one can be made better off without sacrificing the well-being of at leastone person).

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cannot be infinite and should provide a Pareto optimal improvement.This leaves an enormous door open for redistributionist programs, suchas a universal education provision,98 universal healthcare provision,99 ef-ficiency wage effect arguments for minimum wage legislation and in-creases, 100 and so on. Prospective Pareto advancement arguments canalways be made to promote redistribution; they would go along the linesof arguing that the scrooge capitalist would always do better if he wouldpay more taxes or wages so that his workers could be efficient because ofeducation, healthcare, and decent wages. However, the key argumentthat underlies libertarianism is that people cannot be used as means topromote ends that they are unwilling, absent forced transactions, tocontribute to. So, like Barnett, Epstein cannot endorse the argumentsthat he endorses without being inconsistent. His assertion that taxshould be flat or proportionate also has little appeal. For the poor, a flattax may not be possible and even a proportionate tax for the very poor isunappealing when they have more pressing concerns than public goods,such as finding food. It is also likely that the wealthy will be unim-pressed, since they will still feel the sting of taxation and its effects ontheir life plans. They will have to contribute significant amounts to pub-lic goods fundraising if it is to be effective, because the poor will havefew, if any, funds to contribute.

As it stands, Nozick's theory cannot provide a basis for a legal sys-tem. It is prone to imperfection, exploitation, and inefficiency. Barnettand Epstein have done little to make libertarianism more appealing and,by accepting Pareto advancement as a justification for forced taxation,Epstein may have, in effect, abandoned libertarianism and accepted atheory that bears significant resemblance to the economic theory of law.

98 See BULY A. CARDAK, Education Choice, Neoclassical Growth, and Class Structure, 56 Ox-

FORD ECON. PAPERS 643, 643-44 (2004) (arguing that universal public education offers steady

superior state human capital which presumably could enhance societal wealth and other factorsthat contribute to Pareto advancements).

99 See Madison Powers & Ruth Faden, Inequalities in Health, Inequalities in Health Care:

Four Generations of Discussion about Justice and Cost-Effectiveness Analysis, 10 KENNEDY INST.

ETHICS J. 109, 111 (2000) (arguing that universal healthcare provision leads to Pareto advance-ments in society).

100 See George Stigler, The Economics ofMinimum Wage Legislation, 36 Am. ECON. REv. 358,

360 (1946) (discussing efficiency wage effects where employers achieve efficiency effects by in-creasing workers' wages).

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DWORKIN, NOZICK, 6- POSNER

III. LAw & ECONOMICS

The theory of law and economics can be surveyed by assessing sev-eral arguments of Richard A. Posner and developments in the theoryrelated to Posner. Posner discusses the differing values that differentindividuals associate with different objects.1 ' Because people attachdifferent values to things and therefore derive different utility from dif-ferent things, Posner rejects the normal utility maximizing theory un-derlying Pareto optimality which accounts for an upward shift in welfareor utility in society."0 2 Posner argues that because one is never certain ofthe disutility caused to nonbeneficiaries following a move to a Pareto-superior level, one cannot be sure that that new level is actually supe-rior.'0 3 Posner believes that this difficulty and other difficulties associ-ated with computing total welfare mean instead that the more tangiblegoal of wealth maximization should be prescribed. 10 4 Posner endorsesthis wealth-maximizing aim as the efficient and proper way that judgesshould decide common law cases. 10 5 As such, the role of law and eco-nomics is to provide a basis for legal decision making, which maximizeswealth, based on the assumption that "man is a rational maximizer ofhis ends in life, his satisfactions - what we shall call his 'self-inter-

101 RicHARD A. POSNER, ECONOMIC ANALYSIS OF LAW 130 (4th ed. 1992) [hereinafter

POSNER, ECONOMIC ANALYSIS OF LAW].

102 Richard A. Posner, The Ethical and Political Basis of the Efficiency Norm in Common Law

Adjudication, 8 HOFSTRA L. REv. 487, 491 (1979-1980) [hereinafter Posner, Ethical and Politi-

cal Basis].103 Id.

104 Id. This is the concept of Kaldor-Hicks Optimality or Potential Pareto Superiority used

to overcome normal Pareto advancement problems that Posner discusses. Cf Palsgraf v. LongIsland R.R. Co., 248 N.Y. 339, 162 N.E. 99 (1928) (discussing the concept of maximizing

welfare in society).105 Posner, Ethical and Political Basis, supra note 102, at 502-03. Posner also justifies his

wealth-maximization theory not only by its prima facie relationship to simplified utilitarianism

but also by what he says "economists call ex ante compensation." Id. at 492. This argument isdifficult to understand. It is along the lines of: by taking risk, we accept the prospect of loss andtherefore consent to that loss. This can be aggregated, according to Posner's belief. Thus, ifsociety's wealth is maximized, we consent to that maximization in the hope that we will be partof that wealth increase even if we are not. Posner analogizes this to the purchase of lotterytickets. The concept is undeveloped and unclear. However, on its face, it seems dubious, espe-cially if certain individuals do not consent to a certain risk and do not necessarily benefit fromthe resultant outcome. See Ronald Dworkin, Why Efficiency? A Response to Professors Calabresiand Posner, 8 HOSTRA L. REV. 563, 574-78 (1979-1980) (rejecting Posner's ex ante compensa-tion argument). This section will not discuss this concept of ex ante compensation as an ad hocjustification for wealth maximization further.

20091


est. ' ' 0 6 In addition, Posner rejects moral theory as a basis for legaltheory.10 7 Posner directs his primary hostility towards academic moral-ists in the U.S. and concludes both that morality is local and that differ-ent metaethical viewpoints as to what is moral illustrate that morality isrelative in nature.1 °8 As such, moral theory cannot provide an objectivefoundation for legal theory.10 9

This final section assesses three broad important areas common inthe vast literature on law and economics. First, this section will discussmorality and its foundational basis for legal theory. This section willargue that Posner's rejection of morality, based on his account of moralrelativism, is far too quick and fundamentally flawed. Also, this sectionwill account for practical considerations in legal theory and argue thatpeople expect a legal theory to have at least some moral foundations. Assuch, the economic theory of law is vulnerable to many of the criticismsthat Posner and others level at those who see moral theory as an impor-tant factor in legal decision making. This vulnerability is apparent be-cause Posner's theory may also be unrealistic and not practical. Thediscussion of morality will be rounded out by assessing the renewed fo-cus on welfare maximization theory, which accepts limited forms ofrights. Such analyses will be compared to legal theory which argues thatrights are interests that people have and, as such, should generally berespected. This section concludes by arguing that in certain situations,rights are an essential component of a legitimate legal system.

Second, this section will account for the economic theory of law aspart of economic theory in general. In addition, this section will arguethat Posner's wealth-maximizing theory, which he seems to be in theprocess of abandoning as a normative theory to guide legal decisionmaking,110 begs numerous questions and fails to solve many of the diffi-

106 POSNER, ECONOMIC ANALYSIS OF LAW, supra note 101, at 3.107 See generally Richard A. Posner, The Problematics of Moral and Legal Theory, 111 H R. L.

REV. 1637 (1998) [hereinafter Posner, Problematics] (Posner expressing his "visceral dislike" ofmoral theory and rejecting moral theory as a basis for legal decision making).

108 Id. at 1656-57.

109 Id. at 1709.

110 See id. at 1670 (stating that economists "often under the guise of utilitarianism, [argue]

that the goal of a society should be to maximize average or total utility, or wealth, or equality as ameans toward maximizing utility, or freedom, or some combination of these goods. These aredoomed efforts") (emphasis added). It would seem that for Posner wealth maximization can stillbe endorsed as a pragmatic fall-back position because of the failure of other normative theories'ability to be universally applied. Therefore, aspects of his wealth maximization theory as a basisfor legal adjudication remain worthy of analysis.

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DWORKIN, NOZICK, 6- POSNER

culties that he associates with welfare maximizing economic theories.This section will assess the implications of Posner's rationality-based ec-onomics when compared with behavioral economics as part of a widereconomic theory. This section will argue that there are problems associ-ated with the methodology of classic law and economics and that theseproblems may be better assessed by abandoning Posner's entrenched ac-count of "theory."

Third, this section will account for distributional problems whichaffect both Posner's theory of law and economics and economics gener-ally. It will discuss the concept of capture, according to which powerfuleconomic agents in society exert control over government and govern-ment agencies. This section will also question ownership assumptions,implicit but unaccounted for, in law and economics. The realism asso-ciated with certain judges as guardians of efficiency will be examined aswill their failure to fully account for efficiency in a broader contextwhen it fails to suit their ends. Marxian implications of the economictheory of law will be briefly considered.

Finally, this section will reexamine the role of efficiency in politicaland legal theory. The section will argue that efficiency needs to be con-sidered and often has implicit importance to theorists who fail to explic-itly account for efficiency in their broader theories.

A. Morality, Practicality, and Welfare

i. Morality

Posner argues that "moral theory does not provide a solid basis formoral judgments, let alone legal ones."11 Consequently, moral philoso-phers lack "the tools for resolving moral disagreement. They cannothelp judges. Judges will have to look elsewhere . "..."112 Essentially, theexistence of so much disagreement among both moral philosophers anddifferent people around the world is sufficient proof for Posner that mo-rality is relative.1 13 Nevertheless, Posner asserts, somewhat confusingly,that he is "not a moral skeptic, that is, one who believes that moral truthis unknowable." '14 He argues that the classics of moral philosophy "arevaluable. But they do not contain answers to, or methods for answer-

111 Id. at 1638.112 Id. at 1709.113 Id. at 1641-42.

114 Id. at 1642.

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ing, contemporary moral questions."1"5 He announces that "there is nogood evidence that moral philosophers or their students behave moremorally than other members of the educated class .... ,"116 However,Posner does see a role for moral philosophers - they can somehow workon the Posnerian premise that "the most important function of moraltheory may be to dispel errors in moral reasoning."1 '1 7

Posner argues that slavery and racial segregation cannot be termedimmoral.1"8 Instead, slavery was abolished, according to Posner, "be-cause we no longer have an economy in which slavery would be produc-tive . . "19 Posner contends that the U.S. Supreme Court in Brown v.Board of Education120 sought to end school segregation not because seg-regation was immoral but because "education is terribly important topeople in the modern world and that psychologists had found that seg-regation impaired the self-esteem and educational success of blacks." 121

Furthermore, Posner states that "there is no moral progress." 122 Heargues that the genocidal policies of Hitler, Stalin, and Pol Pot were notadaptive to the needs of their societies and are, therefore, justifiably con-demned.1 23 On the other hand, Posner argues that the "genocidal poli-cies that the United States pursued against the American Indians wereadaptive and so receive less criticism, especially as we are the benefi-ciaries of such policies.1' 24 This leads Posner to conclude: "Had Hitleror Stalin succeeded in their projects, our moral beliefs would probablybe different (we would go around saying things like 'You can't make anomelette without breaking eggs'); and they failed not because theprojects were immoral, but because the projects were unsound."1 25

Posner's paper is so full of holes that it was easy for his rival, Ron-ald Dworkin, to swat it away. 12 6 It is not difficult for Dworkin to con-

115 Id. at 1672.116 Id. at 1682.117 Id. at 1648.118 Id. at 1679, 1703-04.119 Id. at 1679.120 Brown v. Bd. of Educ., 347 U.S. 483 (1954).121 Posner, Problematics, supra note 107, at 1703-04.

122 Id. at 1653.123 Id. at 1652.124 Id.125 Id. at 1654.126 See Ronald Dworkin, Darwin's New Bulldog, in RONALD DWORKIN, JUSTICE IN ROBES

75, 75-104 (2006) [hereinafter Dworkin, Darwin's New Bulldog] (providing a detailed critiqueof Posner's arguments).

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clude that "Posner is himself ruled by an inarticulate, subterranean,unattractive moral faith." 127 Dworkin calls this moral faith "Darwinianpragmatism." 128 Dworkin's accusation is not unfounded, but Posner'sbeliefs are hardly subterranean. There is hardly a page in The Problemat-ics of Moral and Legal Theory129 where Posner does not make at least animplicit reference to evolution, biology, survival, Nietzsche, and OliverWendell Holmes. 130 Dworkin is correct to point out that "judges facemoral issues, and railing at moral theory can't change those issues intomathematical or scientific ones."' 131

This subsection assesses in more detail, however, Posner's claimfrom perceived differences in morality that morality is fully relative toeach individual situation. Internal inconsistencies in Posner's theorywill be pointed out. Several issues regarding his "Darwinian pragma-tism" will also be assessed. There will then be a discussion of somepractical issues in legal decision-making procedures. Finally, this sub-section will assess the present state of play with regard to rights-basedversus welfare-based theories of morality and the way in which suchtheories are approaching overlapping consensus among legal scholars.

Posner's "strong thesis" of moral relativism holds that "moral the-ory does not provide a solid basis for moral judgments." 132 In addition,because there is so much disagreement about what is moral, Posner as-serts that "morality is local. There are no interesting moral univer-

127 Id. at 94.

128 Id. at 92.129 Posner, Problematics, supra note 107.

130 See JEFFREY ROSEN, THE SUPREME COURT: THE PERSONALITIES AND RIVALRIES THAT

DEFINED AMERICA 89-90 (2006)

Holmes took from the [Civil War] battlefield a Darwinian affinity for natural selec-tion, and insisted that the common law . . . reflected, like all law, the will of forcesthat were dominant at any point in history. Law, therefore, was both a cause and aneffect of natural selection. Holmes insisted that power and class prejudice, not ab-stract principles of natural justice or previous legal precedents, determined legal devel-opment, and "the prophecies of what courts will do in fact, and nothing morepretentious, are what I mean by law."

Id. (quoting Oliver Wendell Homes, Jr., The Path of the Law, 10 HARv. L. REv. 457, 461(1897)).

131 Dworkin, Darwin's New Bulldog, supra note 126, at 88. See id. at 103 ("Posner's settled

recommendation is a formula not for pragmatic decision but for a parody of pragmatism, likeasking a doctor to choose between alternate medicines for a patient by comparing their price,availability, and ease of administration without asking which will cure and which will killhim.").

132 Posner, Problematics, supra note 107, at 1639.

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sals."' 133 A critic could easily seize upon this statement and argue thatthis is fine. If morality is local, there is still a local morality. If there is alocal morality, then it must be to some extent agreed upon. As such,there is no reason to reject local morality as a basis for local legal prac-tice. This is problematic for Posner because he states that he is "not amoral skeptic"'134 despite what many of his arguments could lead hisreader to believe. Thus, if there is local morality and legal questionsraise moral issues, as surely they sometimes do, then the reader is uncer-tain as to why Posner embarks upon his project to refute academic mor-alism for which he expresses "visceral dislike."1 35 Indeed, if academicmoralists, such as John Rawls, were to accept that their projects werelocal rather than trying to solve universal ethical issues, it would seemthat they would be able to sidestep much, if not all, of Posner's visceralcritique. I3 And Posner's arguments directed at academic moralists areall the more confusing because he says that just as the function of phi-losophy generally is to dispel philosophical errors, so the purpose ofmoral philosophy should also be to dispel errors in moral reasoning. 137

It would seem that, despite his dislike of academic moralists, Posner hasleft open a vast terrain in which such people can continue to practice

133 Id. at 1640.134 Id. at 1643.

135 Id. at 1640.

136 See John Rawls, Kantian Constructivism in Moral Theory, 77J. PHIL. 515, 518-19 (1980)

[W]e are not trying to find a conception of justice suitable for all societies regardless

of their particular social or historical circumstances .... We look to ourselves and to

our future, and reflect upon our disputes since, let's say, the Declaration of Indepen-

dence. How far the conclusions we reach are of interest in a wider context is a sepa-

rate question .... What justifies a conception of justice is not its being true to an

order antecedent to and given to us, but its congruence with our deeper understand-

ing of ourselves and our aspirations, and our realization that, given our history and thetraditions embedded in our public life, it is the most reasonable doctrine for us.

Id. But see Jeremy Waldron, The Cosmopolitan Alternative, 25 U. MICH. J.L. REFORM 751, 775(1991-1992)

There are reasons why Rawls's work was and is studied in New Zealand and in Britain

as well as in Cambridge, Massachusetts, why it has been translated into French and

Italian, why it is discussed in Athens and Delhi, Warsaw and Singapore. It is not that

these societies are particularly interested in the dilemmas of American community. It

is rather that all advanced societies share certain general problems about property,

freedom, welfare, and equality, and they are aware of sharing these problems.

Id.137 Posner, Problematics, supra note 107, at 1648.


moralism in "a comfortable bourgeois life, with maybe a touch of thebohemian."

1 38

The purpose of this section is not solely to defend moral philoso-phers. However, Posner has failed to land any kind of knockout blow.The more interesting question is whether Posner is correct in going fromthe metaethical claim that people have different ethical beliefs to theconclusion that there are no moral truths or best moral practices in theway that there are scientific truths.1 39 In this respect, Posner's argu-ments fail. The simple response to Posner is as follows:

(1) "[S]ome of the striking differences in moral belief across soci-eties may not be rooted in differences in fundamental valuesbut in the fact that these values may have to be implementedin different ways given the varying conditions that obtainacross societies." 140

(2) "[There are] special difficulties [including inter alia self-inter-est and the complexity of human nature] of acquiring knowl-edge of subjects that pertain to moral knowledge."' 4 ' Theseproblems may not exist to the same degree in scientificinquiry.

(3) "The simple fact of diversity in belief is no disproof of thepossibility that there are some beliefs better to have thanothers because they are truer or more justified than therest .... The mere existence of deep and wide disagreementsin ethics, therefore, does not disprove the possibility thatmoral judgments can be objectively correct or incorrect aboutcertain facts. Moral relativists must chart some other morecomplicated path from the existence of diversity to the con-clusion that there is no single true or most justifiedmorality."' 42

138 Id. at 1688.139 This issue is important because (a degree of) moral relativism (and skepticism) forms the

basis of many legal theories such as positivism and pragmatism, as well as the economic theoryof law. As such, the current analysis could have some applicability to theories beyond those ofPosner.

140 David Wong, Relativism, in COMPANION TO ETHICS 442, 444-45 (Peter Singer ed.,

1993).141 Id. at 444.142 Id. at 444-45. In the end, Wong accepts a moderate form of relativism based on per-

ceived ethical divergence in different parts of the world. However, this may not be relativismbut a form of pluralism. There can be first order ethical claims such as a right to life once aliveand assuming that one is innocent of any crime. These first order claims can be universal and,

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Differences in condition and the complexity of human nature mayaccount for diversity in morality. The metaethical observation thatthere is diversity does not, by itself, mean that there is no better generalmorality. Wong gives two illustrative examples. He argues that in asociety where there is a shortage of men (because men are killing eachother in warfare), polygamy may be required, even if people generallybelieve that monogamous marriage is morally preferable.' 4 3 Moralitydoes not have to take a fixed rigid universal form, as Posner assumes,and can be altered to cope with societal change. In this regard, moralitycan be seen as being able to cope with Posner's Darwinian notions with-out contradiction. Similarly:

If half the world still believed that the sun, the moon, and the planetsrevolved around the earth that would be no disproof of the possibilityof a unique truth about the structure of the universe. Diversity inbelief, after all, may result from varying degrees of wisdom. Or it maybe that different people have their own perspectives of the truth, eachperspective being distorted in its own way.' 44

The fact that there are different moral rules does not mean thatthere are not better moral rules. Rules may need to be changed to copewith particular circumstances and there may also be questions as tostages of development of society and persistent traditions, which remaindespite being, in some important sense, wrong. In the end, Posnerbacks into moral assertions although he cloaks them in different lan-guage. He would outlaw suttee because it is disgusting.1 45 Thus,"squeamishness is an important factor in morality."' 4 6 Posner also ar-gues that when genocide is not adaptive (Hitler's and Stalin's, for exam-ple), it is more worthy of criticism, whereas when genocide is adaptive(Native Americans), it is worthy of less criticism.14 7 But this implies a

where particular cultures do not follow them, we can claim that practices to the contrary areimmoral. On the other hand, there are second order moral claims and these claims may bepluralistic in nature. This does not mean that they are relativistic but merely practiced in differ-

ent ways in different cultures. So long as these practices are not harmful in an illiberal sense,they should be tolerated. Consequently, tolerance for nonharmful practices becomes a value in

itself. This point was initially suggested in a slightly modified form by Chaim Gans.143 Id. at 445.144 Id. at 444.145 Posner, Problematics, supra note 107, at 1644.146 Id. at 1676.147 Id. at 1652.

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moral judgment - genocide is less justifiable when it is not adaptive. Inaddition, if morality is truly relative, Hitler could make an argumentthat his killing of the Jews was adaptive'48 and there would seem to bevery little that Posner could do to counter those arguments.

In a similar vein, Posner's arguments regarding racial segregation inschools also fail. Posner contends that the U.S. Supreme Court inBrown v. Board of Education 49 sought to end school segregation notbecause segregation was immoral but because the Court reasoned that"education is terribly important to people in the modern world and thatpsychologists had found that segregation impaired the self-esteem andeducational success of blacks."15 But, this argument alone cannot ac-count for an end to segregation unless there is some implied moralism,even if not stated explicitly by the Court. "Education is terribly impor-tant" may have been empirically true, but to get to "blacks are entitledto equal education" requires a moral step. That step is that "blacksought to have equal education." Likewise, the empirical observationthat blacks lacked self-esteem and were comparatively unsuccessful ineducation cannot, by itself, form the basis for an end to segregation. Tocomplete the loop, one must accept or argue that there is somethingwrong with this state of affairs that requires remedy.

Posner also claims that "there is no good evidence that moral phi-losophers or their students behave more morally than other members ofthe educated class .... ,"51 This uncited statement typifies Posner'smuddled logic. He argues that there "are no interesting moral univer-sals." '152 Thus, it is difficult to see how he can make any statementregarding whether or not moral philosophers act more or less morallythan others without either assuming some form of morality or begging amultitude of questions. It seems that Posner's critique of morality, al-though forceful in rhetoric, does not get off the starting blocks as a truerejection of moral theory. As such, it cannot help legal theory because

148 He could, for example, argue that Jews were taking German jobs and crowding out non-

Jewish Germans in particular sectors of the economy. I don't for a moment mean to justifyHitler. I merely wish to show that Posner has no effective way of criticizing any genocide unlesshe accepts some form of moralism.

149 Brown v. Bd. of Educ., 347 U.S. 483 (1954).

150 Posner, Problematics, supra note 107, at 1703-04.

151 Id. at 1682.

152 Id. at 1640.

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lawyers and judges face moral questions at certain times. 5 3 Posnerseems to have accepted that his wealth maximization theory to guidelegal adjudication is flawed. 154 Morality also cannot help judges, ac-cording Posner.155 He thus seems to have reached some form of stronglegal positivism based on social Darwinism. By itself, Posner's legal the-ory (or what's left of it) could justify almost any form of strong-armauthoritarianism. This cannot justify legal obligation. Thus:

What is surely needed in order to make men clear sighted ... is thatthey should preserve the sense that the certification of something aslegally valid is not conclusive on the question of obedience, and that,however great the aura of majesty or authority which the official sys-tem may have, its demands must in the end be submitted to a moralscrutiny.'

156

Finally, Posner also faces the most problematic critique of relativ-ism because his relativism is normative. He argues that moral philoso-phers "cannot help judges. Judges will have to look elsewhere."1 57 Thisstatement leads to two problems. First, moral argument could just bean aspect of social Darwinism cloaked in the guise of moralism. I donot believe that it is, but if it were, Posner could have no basis for re-jecting moralism. Indeed, moralism in its present form should be ableto criticize norms in society when they are unjust. This is probably whyPosner reserves his harshest venom for academic moralists, because theymay somehow thwart a Darwinian tendency towards some kind of ac-cepted power-based moralism useful for Posnerian society. Second, Pos-ner's relativism is in a strong sense normative. His argument is thatmoralism cannot help judges and judges "will have to look else-where." '158 But why should judges look elsewhere if they are happy andbelieve in moralism? Posner's argument must be construed as norma-tive. He is arguing that judges should look elsewhere. Posner believesthat "the most important function of moral theory may be to dispel

153 Lawyers, for example, have a code of ethics that they are required to follow. Wealth

maximization is of no help here and may be counterproductive. Posner's wealth maximization isfor legal decision makers but if lawyers are required to act ethically, why shouldn't other legalactors be expected to do the same?154 Posner, Problematics, supra note 107, at 1670.155 Id. at 1709.156 H.L.A. HART, THE CONCEPT OF LAW 206 (1961) (emphasis added).157 Posner, Problematics, supra note 107, at 1709.158 Id.

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errors in moral reasoning."1 59 Posner's extreme normative relativism iseasily dispelled using moral reasoning:

The most extreme possible position for the normative relativist is thatno-one should ever pass judgment on others with substantially differ-ent values, or try to make them conform to one's own values. Such adefinition of normative relativism ...is an indefensible position. Itrequires self-condemnation by those who act according to it. If I passjudgment on those who pass judgment, I must condemn myself. I amtrying to impose a value... on everyone, when not everyone has thatvalue, but this is not what I am supposed to being doing under ...relativism. 160

Posner's rejection of morality is self-contradictory and begs multi-ple questions. It has large holes that are vulnerable to criticism. In theend, his criticism of morality and argument that morality has no basis inlegal theory fail because judges face moral questions. Law itself cannotbe justified without some recourse to morality even if that morality isthat we are self-interested and require law only so that we can act as acommunity of mutually disinterested Posnerian maximizers.

ii. Practicality

People in society have notions of fairness which they associate withmorality and people expect the legal system to follow these norms. 61

Posner argues that "no one is going to surrender his moral intuitions tomoral theory; nor should he." 162 The point here is that even if socialnorms are misconceived, they still exist. As such, they cannot be ig-nored in a practical legal theory. Accordingly, law and economics, par-ticularly in the Posnerian form, cannot prescribe an economic theory oflaw without considering the acceptability of such a theory in society. Todo so would require (or force) people to surrender moral intuitions,which Posner believes no one should do. 163

159 Id. at 1648.160 Wong, supra note 140, at 447.161 See Louis Kaplow & Steven Shavell, Fairness Versus Welfare, 114 HARv. L. REv. 961,

1022-23 (2001) (arguing that there are social norms of fairness which people employ to assesslegal rules). Although the authors argue that fairness should be subordinate to welfare and thiscan be done by allowing a welfare preference for fairness, this does not affect the current analysis.

162 Posner, Problematics, supra note 107, at 1673.163 This subsection will revert to an assessment of Posnerian wealth maximization theory at

this stage because, although he may not fully accept such a theory anymore, it is all there is to

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The implication is that Posnerian legal theory, which seeks only tomaximize wealth, is unlikely to be palatable for most people in societywho have some social norm of fairness and morality.'64 To throw upone's hands at morality because it is too complex, cannot be fully ac-counted for, or because universal answers are not easily available, is toalso abandon much of the intuitive and commonly held notions thatpeople believe are in some sense right. Law and economics theorists'reluctance to fully address morality is likely to mean that such theoristslargely fail to provide the justification for an acceptable theoretical legalframework or the practical implementation thereof. Thus:

[T]he view of rationality [legal] economists - utility theory [or wealth-maximization theory] - may not even be compatible with moral be-havior, and it does not provide a rich enough picture of individualchoice to permit one to discuss the character, causes, and conse-quences of moral behavior. Of course [legal] economists need notaspire to provide a general theory of human action. Yet they shouldnot shrug their shoulders at the difficulties in meshing moral behaviorwith economic rationality. For it seems that moral behavior may haveimportant consequences for economic outcomes, and the propagationof [wealth-maximization and] utility theory has moral implications. 165

It seems that Posner shrugs his shoulders at moral theory becauseof problems associated with moral relativism. He then shrugs his shoul-ders at utilitarianism because one cannot account for the utility lossessuffered by relative utility losers following Pareto advancements. Theoutcome of this double imperfection is a wealth-maximizing theory thatgoes against intuition, many generally held moral beliefs in society, andacademic moral theories. As such, Posner's theory alone cannot provide

work with and any new theory that Posner develops is likely to still have a strong economiccomponent and, therefore, much of the criticism directed towards Posner here will likely still be

applicable.164 See DWORKIN, LAW'S EMPIRE, supra note 1, at 286-88 (arguing that a wealth maximiza-

tion theory effectively legitimizes a rich man forcibly taking a book from a poor man if the richman values the book at $11 and the poor man only values it at $5 because society's wealth is

maximized when the book is in the rich man's hands). An advocate of the economic theory oflaw could argue that Dworkin's criticism is crude because it would be inefficient generally tosanction widespread theft. However, this response still misses the point. Constraints upon theuse of force and theft likely have justification beyond the potential wealth maximization benefits

that such constraints are likely to bring about.165 Daniel M. Hausman & Michael S. McPherson, Taking Ethics Seriously: Economics and

Contemporary Moral Philosophy, 31 J. ECON. LITERATURE 671, 688-89 (June 1993).

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a legitimate basis for a theory of law and social policy, and his subse-quent ad hoc arguments do not resolve this problem. This is in largepart because people in society and the politicians that represent themhave values that require attention beyond the language of economic the-ory. Thus, in order to make economics or law and economics relevantto such social agents, it is necessary to address these concerns, even ifone believes that such concerns are unwise.166 Posner needs to accountfor moral norms where they do not comply with wealth maximization,but he fails to do this. 167 Consequently, Posner is vulnerable to practicalcriticism of his theory.

When politicians and non-economists think about problems of wel-fare, they employ concepts that do not easily translate into the lan-guage of standard economic theory . . . . Notions of fairness,opportunity, freedom, and rights are arguably of more importance inpolicy making than are concerns about moving up their given prefer-ence rankings. Insofar as economists want to assist in the formulationof policy toward such ends, they must link economic theory to suchconcerns. Doing so requires understanding what these vague thingsare that people apparently value so much.' 6 8

This is particularly illustrated in civil disputes where adversarialparties pay their own expenses to have a particular matter adjudicated,not to have some economic lord announce a decision that may havelittle to do with the actual claim, but may promote future wealth max-imization. People expect a legal system to right particular wrongs, notalways to look to aggregate efficiency in an economy, and they are justi-fied in holding such a position because otherwise the notion of an ad-versarial system makes little sense. Posner's theory also likely goes

166 See Kaplow & Shavell, supra note 161, at 1029, 1038. The authors accept that

social norms may well have an evolutionary basis, in which case their attractiveness isinstinctive and likely to be resistant to challenge . . . [but that] the very purpose ofacademic discourse - and a central obligation of those designing and reforming thelegal system - to go beyond the relatively reflexive responses of ordinary individuals,so that we can identify when our instincts and our intuitions about what is the bestpolicy lead us astray.

Id.167 See Posner, Ethical and Political Basis, supra note 102, at 488 (assuming consensus for a

wealth maximization theory of common law and, therefore, failing to account for what peopleactually desire).

168 Hausman & McPherson, supra note 165, at 676.

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beyond the legitimate bounds of what legal decision makers are entitledto do.' 6 9

In addition, just as real-world judges are not moral philosophers, 17

real-world judges are not economists. Even if they are given extra train-ing, 17 1 it is unlikely that they will produce the forward-looking out-comes that are necessary to legitimize a theory that has wealthmaximization as its only basis. This often defaults to a further level ofimperfection: judges who claim to be acting under the economic theoryof law often favor the corporation over the individual. 172 This, in turn,results in legal outcomes that are often unfair to the individual and pro-vide a defacto subsidy for corporations, corporations that may fail in theordinary market were they not sheltered from liability by company-friendly judges and subject to the kind of full liability compensationwhich Nozick endorses.

Juries also play roles in common law cases. Juries probably haveeven less economic expertise than judges. However, even if juries wereprovided with economic training or provided with supposed good eco-nomic advice by judges, there is intuitive and empirical evidence that

169 See Jules L. Coleman, Efficiency, Utility, and Wealth Maximization, 8 HOFSTRA L. REV.

509, 550 (1979-1980)

The question is whether judges have the authority to seize upon a private dispute

framed by and in terms of the respective litigant's interest as an opportunity to pro-mote desirable social policies, for example, efficiency and distributional justice. The

alternative and I believe common sense view is that the responsibility of a judge is to

determine which of the litigants in a dispute has the relevant legal right.

Id.170 See Posner, Problematics, supra note 107, at 1639 ("Moral theory is not something that

judges are, or can be, made comfortable with or good at.").

171 Judges, particularly high-ranking judges, attend conferences where they are given such

training. Legal economists talk about such training with great enthusiasm. However, such

training may not be effective. It may be useful to know more as the whole process sounds

slightly secretive. And, economic training or no economic training, one must realistically ac-

count for judges' other loyalties such as, inter alia, political loyalties.172 See, e.g., Judge Frank H. Easterbrook's opinions in ProCD, Inc. v. Zeidenberg, 86 F.3d

1447 (7th Cir. 1996) (holding that a corporation's shrinkwrap license contained inside asoftware box constitutes a binding contract on a consumer); Hill v. Gateway 2000, 105 F.3d

1147 (7th Cir. 1997) (holding that when a consumer buys a computer by telephone the contractcontained in the box in which the computer arrives and which limits return to within thirty days

is binding). But see Frank H. Easterbrook, Symposium on the Seventh Circuit as a Commercial

Court: Afierword: On Being a Commercial Court, 65 CHI.-KENT L. REv. 877, 881 n. 6 (1989)[hereinafter Easterbrook, Symposium] ("Economic analysts favor deregulation .... low tariffs

and abolition of other import controls, and espouse other policies that many corporate managers

find unpalatable. It is hard to describe this agenda as one for apologists of Big Business.").


juries do not accept the economic theory of law.1 73 They rightly thinkthat there is more to law than economics so that commonsense notionsof fairness, justice, and integrity reenter the legal system. The point isthat even if the economic theory of law is accepted, juries will likelynullify judgments where they simply cannot agree with future wealthmaximization as the only basis of a legal system. And, they are likely tobe justified in holding such notions.

Posner's wealth-maximizing theory fails to properly account for so-cial norms and what people expect of a legal system. Economic analysisalone does not account for people's notions of fairness and other values.As such, economic analysis cannot, without further development, pro-vide a basis for a legal system based solely on the Posnerian principle ofpotential wealth maximization. It may be beyond the bounds of anadversarial system and the role of judges in such a system to decide casesin such a way so as to maximize aggregate societal wealth. In addition,it may not be practical to expect judges or juries to always be willing orable to maximize aggregate societal wealth. This does not mean thatefficiency considerations are unimportant in society or a legal system. Itsimply means that wealth maximization cannot provide a practical justi-fication for anything like current legal systems and people's expectationsof such systems.

iii. Welfare

Given that wealth maximization is unlikely to be morally or practi-cally tenable as a basis for a legal system, this subsection briefly discussesthe reemergence of welfare arguments in law and economic theory.This subsection contrasts such arguments with rights arguments basedon human interests. In the end, it will be argued that there is a largeamount of overlap. Although this subsection concludes that in certainconditions stronger rights arguments seem to make sense, the overlap intheories will likely provide a legitimate functional basis for a legal systemin many circumstances.

Given that wealth maximization alone has proven to be an incom-plete theory upon which to fully base all legal analysis, certain writershave either stressed fairness or rights as part of a welfare theory that can

173 See David A. Hoffman & Michael P. O'Shea, Can Law and Economics Be Both Practical

and Principled? 53 ALA. L. REv. 335, 388-99 (2002) (discussing empirical evidence of tenden-cies toward jury nullification if jury members are given instructions that comply with economictheory but do not comport with jury members' sense of fairness).

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be used to support legal decision making. 17 On the other side of thecoin is the argument that people have rights if an aspect of a person'swell-being (or his interest) has sufficient reason for holding another per-son under some obligation to observe those rights. 175 This does notmean that these views are consistent. On the contrary, there are situa-tions where they can clash. However, clashes are only likely to occur incomplex circumstances. On the whole, a welfare-based theory whichrespects rights can work in a similar fashion to a rights-based theory thatconsiders rights to be based on interests rather than natural rights suchas those discussed under the Nozickian conception of rights as sideconstraints.1

76

Law is a complex subject. There are various disciplines within thesubject and areas which require ongoing analysis. Accordingly, it maynot be problematic to consider welfare and efficiency and associatedcost-benefit analyses in many areas of legal and political policy. 177 How-ever, rights are likely needed in such areas as criminal and constitutionallaw where people's crucial freedoms are at stake. As such, the usualarguments criticizing utilitarianism's ability to justify almost any kind oftreatment of innocent people so long as aggregate welfare is somehowadvanced must be considered. 178 Thus, utilitarians must answer the

174 See, e.g., Kaplow & Shavell, supra note 161, at 1088-89 ("[O]ne would expect notions offairness [and rights] - to serve as a proxy for the identification of legal rules that promoteindividuals' well-being. [We also note that this proxy characteristic of notions of fairness helps

to further explain their appeal.] ... [But] notions of fairness will tend to be only rough guides

and thus inferior to a direct welfare economic inquiry into how legal rules affect individuals' wellbeing."); MATTHEW D. ADLER & ERIC A. POSNER, NEW FOUNDATIONS OF COST-BENEFIT

ANALYSIS 26 (2006) (arguing for a moral position called weak welfarism which says "that overallwelfare has moral relevance but that other considerations, such as distributive or rights-based

considerations, may have moral relevance as well").175 See Joseph Raz, On the Nature of Rights, 372 MIND 194, 195 (1984) ("Definition: 'x has a

right' if and only if x can have rights, and other things being equal, an aspect of x's well-being[his interest] is a sufficient reason for holding some other person(s) to be under a duty.").

176 See supra note 71 and accompanying text.177 Antitrust comes to mind as an area where societal welfare seems to have more prevalence

than individual rights. But, moral issues such as exploitation and extracting excessive profits arestill vitally important to antitrust theory.

178 See RAwLs, A THEORY OF JUSTICE, supra note 78, at 29-30[Ultilitarianism is not individualistic, at least when arrived at by the more naturalcourse of reflection, in that, by conflating all systems of desires, it applies to societythe principle of choice for one man. And thus we see that the second contrast isrelated to the first, since it is this conflation, and the principle based upon it, which

subjects the rights secured by justice to the calculus of social interests.Id. But see PETER SINGER, PRACTICAL ETHICS 14 (1993) ("If we are to be persuaded that weshould go beyond utilitarianism and accept non-utilitarian moral rules or ideals, we need to be


"scapegoat objection" which, unless they accept some form of rights,they are unlikely to be able to do. The scapegoat objection shows how"utilitarianism will permit enormous injustice in the name of generalhappiness." 179 The scapegoat objection states that utilitarianism can al-low for the punishment of the innocent so long as society has generalsatisfaction because it assumes that the police have caught the culprit ofa particular gruesome crime.180 The oft-discussed law school responsesare that punishment in the form of imprisonment has such negativeutility that it cannot be justified, that there are no real utility benefits inseeing the innocent punished when the guilty are at large, and so on.However, these arguments in favor of utilitarianism beg the questionand it may be more reasonable to guarantee individuals, as best as possi-ble, rights against such things as punishment of the innocent, casualtorture, and so on. In such circumstances, people have a right not to besubjected to this kind of treatment. 1"

Advocates of the economic theory of law argue that rights costmoney.'82 Accordingly, some such advocates question rights and theirability to trump welfare considerations. 183 Welfare analysis has a role toplay in political and legal theory. However, like wealth maximization,welfare alone cannot properly deal with certain legal considerations.The problem can be discussed in the usual theoretical fashion. How-ever, the following holding serves to illustrate where the divergence inwelfare and rights theory is most exemplified. The "Birmingham six"had been convicted of murder following the bombing of public housesin Birmingham, England. The six men attempted to bring a civil suitagainst the police for injuries sustained while in custody, and theyclaimed that confessions had been coerced by the police using violence.Lord Denning, in his judgment in the English Court of Appeals in1980, confronted the question of whether the case against the police

provided with good reasons for taking this further step. Until such reasons are produced, we

have some grounds for remaining utilitarians.").179 JONATHAN WOLFF, AN INTRODUCTION TO POLITICAL PHILOSOPHY 57 (1996).

180 Id. at 57-58.181 For a discussion of the circumstances where rights ought to trump utility, see generally

RONALD DWORKIN, TAKING RIGHTS SERIOUSLY (1977).182 See STEPHEN HOLMES & CASS R. SUNSTEIN, THE COST OF RIGHTS: WHY LIBERTY

DEPENDS ON TAxES 44 (1999) ("All rights are costly because all rights presuppose taxpayer-

funding of effective supervisory machinery for monitoring and enforcement."). One should

note that the authors are not complaining about this issue. One should note also that welfare

maximization, cost-benefit analyses, and so on also cost money.183 Kaplow & Shavell, supra note 161.

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should have been allowed to go to trial. The civil trial would have re-sulted in recognition of the illegitimacy of the police methods and, inturn, could have formed the basis of a review of the criminal convic-tions. Lord Denning reasoned as follows:

If the six men fail, it will mean that much time and money will havebeen expended by many people for no good purpose. If the six menwin, it will mean that the police were guilty of perjury, that they wereguilty of violence or threats, that the confessions were involuntary andwere improperly admitted in evidence and that the convictions wereerroneous. That would mean that the Home Secretary would eitherhave to recommend they be pardoned or he would have to remit thecase to the Court of Appeal. That is such an appalling vista that everysensible person in the land would say: It cannot be right these actionsshould go any further.184

Denning subsequently admitted that his reasoning was flawed, andthe men were released eleven years later in 1991 following a successfulappeal. This is a real example of where the theories discussed here -wealth maximization and welfare maximization - encounter difficultiesthat seem to go against intuitive accounts of what justice is and shouldbe, if it is assumed, of course, that the subsequent successful appeal wasproperly decided. Legal academics often speak of how students learnthe law at law school and come to refine their views about what thecourts should do and the difference between what morality and law re-quire. Thus, Posner argues that "a big part of legal education consists ofshowing students how to skirt those pitfalls." 185 However, intuitionsthat hold that the innocent should not be punished have merit andshould not be abandoned.

It seems that rights are the only way of going toward ensuring thatthe innocent are not punished, that torture without hope of any usefulinformation should not occur, and so on. Posner's wealth maximizationtheory cannot, by itself, deal with the errors in Lord Denning's reason-ing. It is difficult to imagine that a theory which allows aggregate oraverage welfare considerations to trump rights can cope with Denning's

184 Mcllkenny v. Chief Constable of the W. Midlands, 2 W.L.R. 689, 706 (1980).185 Posner, Problematics, supra note 107, at 1695.

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arguments without begging the question.1 86 There may, however, besome way that utilitarian theory can solve this problem in the future.

However, for now, this subsection has argued that Posner's criti-cism of moral theory is deeply flawed and provides no grounds for re-jecting moral theory or moral theory associated with legal adjudication.Several issues have been discussed where it may be unrealistic for advo-cates of law and economics to fail to fully consider people's moral expec-tations of what a legal system should do. The prescribed role ofeconomic judges in an adversarial system has been questioned. Finally,although it has been accepted that welfare and cost-benefit analysisshould play a role in legal and social policy, this subsection argued thatrecourse to utility alone cannot legitimize a legal system in truly difficultcases where people's freedom is at stake. In such circumstances, someform of rights theory is the only way to ensure just outcomes and a legaltheory which does not take such considerations seriously is unlikely tobe practical or to justify the coercive apparatus of the state.

B. Wealth Maximization and Rational "Theory"

This subsection will assess two more economic aspects of Posner'swealth maximization theory. First, some additional problems withwealth maximization will be assessed. Wealth maximization was initiallyaccepted by Posner in order to overcome utilitarian difficulties associ-ated with, inter alia, the average and total utility problem and intraper-sonal utility comparison problems. 187 Instead, wealth maximizationequates efficiency maximization with the more tangible unit of measure-ment - dollars.1 88 This subsection argues that Posner's theory relies onthe price system. As such, it faces several theoretical problems that willbe pointed to, including some need to rely on utility. Second, this sub-section assesses some of the assumptions underlying Posner's "theoreti-cal" assumptions that people are wealth maximizers. The basis ofPosner's hostility towards behavioral economics will be questioned. Pos-net's failure to fully account for legal costs in litigation will also bebriefly considered.

186 Cf. JOHN RAwLS, LECTURES ON THE HISTORY OF POLITICAL PHILOSOPHY 267-69 (Sa-

muel Freeman, ed. 2007) (discussing overlap between John Stuart Mill's utilitarianism and rightstheory but also questioning the possibility of strong rights protection if Mill is to maintain hisposition that he is a utilitarian).

187 Richard A. Posner, Utilitarianism, Economics, and Legal Theory, 8 J. LEGAL STUD. 103,

111- 19 (1980) [hereinafter Posner, Utilitarianism].188 Posner, Ethical and Political Basis, supra note 102, at 491.

20091

84 CARDOZO PUB. LAW, POLICY & ETHICS J V

i. Wealth Maximization

The previous subsection concluded that Posner's rejection of moraltheory and his endorsement of wealth maximization may lead to diffi-culties in justifying a legal system and in the practical implementation ofa legal system. Wealth maximization will now be assessed on its ownterms, that is, as the basis of a realistic framework for efficiency. Posnerbelieves that wealth maximization solves difficulties associated with utili-tarianism, is preferable to any other theory, and thus advances wealthmaximization as the best normative theory of law.'8 9 The theory statesthat legal decision makers, but particularly common law decision mak-ers, should seek to maximize societal wealth when they are making legaldecisions.' 9" Posner's wealth maximization theory holds that wealthmaximization leads to optimal efficiency. He defines wealth as:

[T]he value in dollars or dollar equivalents ... of everything in soci-ety. It is measured by what people are willing to pay for something or,if they already own it, what they demand in money to give it up. Theonly kind of preference that counts in a system of wealth maximiza-tion is thus one that is backed up by money - in other words, that isregistered in a market.' 9 '

There are certain implications of Posner's reliance on the price sys-tem and the implications of such reliance for wealth maximization the-ory and the implications for wealth maximization as a supposedlypreferable theory to utilitarianism.' 92 Consider two parties to a legalaction, A and B. They have a dispute which occurs at t i. They gobefore Judge, J, at time, t. According to Posner's theory, J must make alegal decision at time, t2, so as to maximize the aggregate wealth of soci-ety by making a common law judicial decision that will guide precedentand affect other rational actors in the world at t3, t 4 , t5 , and so on. And,this judgment will remain wealth-maximizing until another case comesalong at t 8 and, for some reason, it may be necessary to change the

189 Posner, Utilitarianism, supra note 187, at 103-04. Posner may be in the process of aban-

doning this theory. However, because he has not supplied readers with an alternative and be-cause there are doubtless remaining advocates of the theory, it is worthy of some further

assessment.190 Posner, Ethical and Political Basis, supra note 102, at 487.

191 Posner, Utilitarianism, supra note 187, at 119.192 See Coleman, supra note 169, at 520-34 (illustrating many conceptual flaws in wealth

maximization theory).

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initial decision at t2 either because J made a mistake or because condi-tions in society that contribute towards wealth maximization havechanged.

Now overlooking four important initial criticisms - that the judg-ment at t2 may have little to do with the amount in dispute at t4 , thatthe judge may not be able or allowed to make a decision of the kinddescribed at t2, that other individuals in society may not rationally takeaccount of the legal decision at t2, and that the legal decision itself mayactually create other effects in society besides the intended effect - itseems that Posner's theory, which relies on the price system, begs severalquestions. Rather than having supplanted utility theory with a new andimproved theory, utility theory always lurks in the background andmust do so because the price system does not exist by itself. The pricesystem is a construct of how society expresses its utility for goods andservices. This may seem attractive to Posner. But it is really the begin-ning of problems. For one thing, J at t2 is supposed to make a decisionthat maximizes wealth. Let's say at t2, there is a good, g, that is veryscarce in society. Its price is high because supply is low, and becausesupply is low, it is considered to be a treasured good so that people'sdemand for the good is high. Also because it is a rare good, there is acertain amount of prestige associated with g, and people who have gderive high utility for g and people who do not have g have a high utilitypreference for having g.

Let's say the legal decision at t2 involves g. Let's say A has a patentfor g. A limits supply and the market expresses demand for g as above.B can also produce g and wants J to allow him to market g. J followsPosner and wishes to maximize wealth in society. J sees that g is valuedat price, P. He reasons that more of g will increase wealth in society andso he allows B to market g. B floods the market for g. Aggregate Pgcrashes. The market for g is now worth much less than it was at t2 . J isconfused and wants to know what happened.

It seems obvious that the price for a product is not something thatbears some all-encompassing value. Posner could assume that prices arefixed but that would make his theory so unrealistic that it could not inany way form the basis of real-world decision making. That is supposedto be one of the attractions of Posner's theory over utilitarianism - Pos-ner's theory is supposedly simpler and avoids the complexities of utilita-rianism. But if his theory fixes prices and requires judges to maximizewealth on such a basis, then it is almost meaningless and cannot realisti-

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cally guide legal decision making in a way that can maximize wealth in amarket economy. Posner would likely reply that this criticism is flawedand that, of course, judges need to account for market supply and de-mand for specific goods and services. However, such a reply would beoverly simplistic. Like price, supply and demand are not stand aloneconcepts. They reflect people's utility preferences for certain goods andservices. Judicial wealth maximization is a forward-looking concept.Thus, judges have no way of deciding what maximizes wealth unlessthey can foresee the future prices of products that are affected by theirlegal decision making. They can only do this by assessing people's de-mand for future products. In turn, they can only realistically assess fu-ture demand for products by assessing future utility for products.Therefore, wealth maximization based on price never gets away fromutility and the total and average utility problems and intrapersonal util-ity problems are always lurking in the background of Posner's theory.193

ii. Rational "Theory"

Over the past decade or so, law and economics has latched on to adebate that has engulfed mainstream economic theory for the last severaldecades. The debate centers around rational choice economics on theone hand'94 and behavioral economics on the other.' 9 This subsection

193 Posner's theory has other difficulties. It requires a market for everything in order to give it

legal value. It may not be efficient because short-term wealth maximization may lead to a lack

of saving which may affect long-term wealth maximization, and it fails to recognize that pricealone is not a value but a reflection of other interests and, as such, cannot by itself justify a legalsystem. See generally id. (extensively and successfully critiquing Posnerian wealth maximization).

194 See, e.g., MILTON FRIEDMAN, EssAYs IN POSITIVE EcONOMics 27 (1953) (arguing that

assumptions on the rationality of man as a rational agent "can be used to get some indirect

evidence on the acceptability of the [economic] hypothesis in so far as the assumptions can

themselves be regarded as implications of the hypothesis, and hence their conformity with reality

as a failure of some implications to be contradicted"); Richard A. Posner, Rational Choice, Behav-ioral Economics, and the Law, 50 STAN. L. REV. 1551, 1551-52, 1559-60 (1998) [hereinafter

Posner, Rational Choice] (arguing that choice need not be conscious and, therefore, "[r]ars are at

least as rational as human beings," that behavioral economics is "economics minus the assump-tion that people are rational maximizers of their satisfactions," and that behavioral economics is

not sufficiently theoretical because it confuses "explanation and prediction"); Richard A. Posner,

Ronald Coase and Methodology, 7 J. ECON. PERSPECTIVES 195, 205-09 [hereinafter Posner, Ron-ald Coase and Methodology] (criticizing Ronald Coase's use of empirical data in the formulationof economic conclusions and deeming such methodology "antitheoretical"); Gregory Mitchell,Taking Behavioralism Too Seriously? The Unwarranted Pessimism of the New Behavioral Analysis ofLaw, 43 WM. & MARY L. REV. 1907, 2020-21 (2002) (arguing that psychological tests show

that behavioral theory's objections to rationality are excessive and that behavioral theorists "failto specify the boundary conditions on their empirical claims and instead settle for overly broad

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2009] DWORKIN, NOZICK, & POSNER

will not enter this debate in any great detail. Instead, it will assess Pos-ner's view that (legal) economists are guilty of flawed methodology ifthey engage in empirical analysis in order to formulate their theories.This subsection will criticize Posner's arguments as attempting to beoverly faithful to the Chicago School. While the type of theory thatPosner refers to may be justified in developing positive economic mod-els, empirical observations become more compelling when oneprescribes a normative economic theory such as Posner's.' 96 Conse-quently, Posner's views in this area require modification.

Posner argues that economic reasoning should be theoretical in thesense that it requires assumption which can then be applied to legal

generalizations about nonrationality to compete with the economic theorists' overly broad gener-alizations about rationality").

195 See, e.g., Amartya K. Sen, Rational Fools: A Critique of the Behavioral Foundations of Eco-

nomic Theory, 6 PHIL. & PUB. AFF. 317, 336 (1977) ("The purely economic man is indeed closeto being a social moron. Economic theory has been much preoccupied with this rational fooldecked in the glory of his one all-purpose preference ordering. To make room for the differentconcepts related to his behavior we need a more elaborate structure."); HERBERT A. SIMON,

REASON IN HUMAN AFFAIRS 5-6 (1983)

Reasoning processes take symbolic inputs and deliver symbolic outputs. The initialoutputs are axioms, themselves not derived by logic but simply induced from empiri-cal observations, or even more simply posited. Moreover, the processes that producethe transformations of inputs to outputs (rules of inference) are also introduced by fiatand are not the products of reason. Axioms and inference rules together constitutethe fulcrum on which the lever of reasoning rests; but the particular structure of that

fulcrum cannot be justified by the methods of reasoning. For an attempt at such ajustification would involve us in an infinite regress of logics, each as arbitrary in itsfoundations as the preceding one.

Id; RONALD COASE, THE FIRM, THE MARKET, AND THE LAW 5 (1988)

[W]hatever makes men choose as they do, we must be content with the knowledgethat for groups of human beings, in almost all circumstances, a higher [relative] pricefor anything will lead to a reduction in the amount demanded .... The generaliza-tion of such knowledge constitutes price theory. It does not seem to me to require usto assume that men are rational utility [or wealth] maximizers. On the other hand, itdoes not tell us why people choose as they do.

Id.; Christine Jolls, Cass R. Sunstein & Richard Thaler, A Behavioral Approach to Law andEconomics, 50 STAN. L. REv. 1471, 1471 (1998) (arguing that empirical evidence "gives muchreason to doubt" the assumptions of neoclassical economics and traditional law and economics

theory); Jeanne L. Schroeder, The Economics of Race and Gender: Rationality in Law and Econom-ics Scholarship, 79 OR. L. REV. 147, 249-52 (2000) (arguing that Posner's rational choice theoryis flawed because it treats wealth as an end rather than a means and suggesting that a theory thatis to assess economic decision making must consider psychoanalytic theory such as that of Jac-

ques Lacan).196 See Posner, Ethical and Political Basis, supra note 102, at 488 (introducing his wealth

maximization theory as a normative theory). The author is grateful to Michael Libonati forproviding the initial idea for this analysis.

88 CARD OZO PUB. LAW, POLICY & ETHICS J.

decision making.1 97 He argues that his rational economic theory restson assumption of what a rational man would do in a given situation.198

Posner criticizes what he terms "behavioral man" because he "is a com-pound of rational and nonrational capacities and impulses. He mightdo anything. [Behaviorists] have neither a causal account of behavioralman, nor a model of his decisional structure."' 99 Posner's conclusionagainst behaviorists is the same as his critique of economists, such asCoase, who Posner labels as institutionalists because they study the insti-tutions of a market economy. Thus:

[T]he new institutionalists, like their predecessors the old institution-alists, think of institutions in a grittier sense. They study not "themarket," but the concrete institutions that enable markets to work -for example, the rules of the Chicago Board of Trade; or long-termcontracts in the uranium industry; or how public utilities set rates; orthe terms on which diamonds are offered to dealers; or the commonlaw system of property rights in animals . . . . Intensive scrutiny ofparticular institutions implies in turn an emphasis on the casestudy . 20

Thus, the argument against behaviorists and institutionalists is thesame - they study man and institutions on a case-by-case basis and,therefore, have no basis on which to form a theory of man generally orthe overall market.2"1 Posner's arguments seemingly come loosely fromthe doyen of the Chicago School, Milton Friedman. Thus, Friedmanargues in the context of positive economics2 2 that,

[T]he relevant question to ask about the "assumptions" of a theory isnot whether they are descriptively "realistic," for they never are, but

197 Posner, Rational Choice, supra note 194, at 1559-60.198 Id. at 1559.

199 Id.200 Richard A. Posner, The New Institutional Economics Meets Law and Economics, 149 J.

INST. & THEORETICAL ECON. 73, 76 (1993).201 See Posner, Ronald Coase and Methodology, supra note 194, at 205 (criticizing Coase's

methodology for being antitheoretical by focusing on empirical data and attributing it to Coase's"methodological Englishness." "Hostility to theory is a bright thread in the carpet of English

thought .... I am thinking here of the common sense, empiricist, anti-theoretical tradition inEnglish philosophy that runs from Samuel Johnson and Locke and Hume to Moore, Ayer, andJ.L. Austin."). Perhaps Posner is much closer to this "Englishness" than he is willing to admit.This may be especially so given his hostility towards moral theory.

202 See FRIEDMAN, supra note 194, at 3 ("Positive economics is in principle independent ofany particular ethical position or normative judgments.").

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whether they are sufficiently good approximations for the purpose inhand. And this question can be answered only by seeing whether thetheory works, which means whether it yields sufficiently accurate pre-dictions . . . . [Empirical] criticism . . . is largely beside the pointunless supplemented by evidence that a hypothesis differing in oneway or another of these respects from the theory being criticized yieldsbetter predictions .... 203

It seems that Friedman is saying that his theory cannot be criticizedon the basis of its assumptions alone if the assumptions prove not to befully realistic in the real world. What is important is that his assump-

tions, such as regarding man as a rational utility maximizer, are suffi-ciently close so as to allow his hypotheses to be "confirmed" byexperience. 2

" But nowhere does Friedman say that empirical observa-tions are antitheoretical, as Posner does. To the contrary, he states that"empirical evidence is vital . . . in constructing hypotheses ' 20 5 and one

reason that a "theory does not work ... [is] because its assumptions are

false."2 o6

Accordingly, Posner's antitheoretical charges against behaviorists,

institutionalists, and Coase are unfounded if it is reasoned that thesepeople simply wish to get better assumptions before developing theories.

Thus:

In Coase's [and many economic behaviorists'] research strategy, therole of case study is to serve as an indispensable element in the processof abstraction whereby adequate abstract notions are pursued .... Itis most intriguing to observe that it is Posner's view that is closer to"methodological Englishness" in this respect. Posner is content withtheories that predict well without describing correctly the mechanismsthat generate the phenomena predicted .... The Coasean [and beha-viorist] view of theory as a penetrating account of "how the worldworks" gives theory a powerful role and an irreducible status, whilePosner's instrumentalist conception downplays theory and gives it justa timetable status . . . it is Posner who is closer to the kind of anti-

203 Id. at 14, 30.

204 The author is grateful to David Hoffman for this point.

205 FRIEDMAN, supra note 194, at 11.206 Id. at 18.

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theoretical empiricism that he wrongly attributes to Coase [andbehaviorists]. 207

Posner's account of methodology simply does not hold up to eventhe most basic analysis. It is particularly problematic because Posner,unlike Friedman in the above discussion, states that his wealth max-imization theory is not simply a positive economic theory, but a norma-tive theory.20 8 As such, he is endorsing it not simply as a model foracademic proof, but as a model that ought to be accepted in real-worldlegal decision making. Given the multitude of effects his theory couldhave (and most likely has had) on people, behavioral accounts of wherehis theory and underlying assumptions are flawed warrant particularscrutiny.

Finally, empirical evidence is needed to reach crucial conclusionsthat Posner arrives at, and empirical justification is required to maintainthose positions. For example, Posner has argued against per se rules209

in antitrust law because he believes that in certain cases per se rules maygo against certain companies that may actually be increasing effi-ciency." t He, therefore, argues against a per se rule against restricteddistribution that was imposed in Doctor Miles Medical Co. v. John D.Park & Sons, Co.211 But it seems that Posner misses the point and hecannot prove his point without recourse to empirical evidence. Per serules may injure certain companies in antitrust law if they are not actingnefariously and may actually be adding to aggregate efficiency. How-ever, per se rules give companies clear-line rules to follow and avoidlengthy legal adjudication which can lead to extensive punitive and liti-gation costs.2 12 The simple point is that Posner cannot simply say thatan individual company was not acting inefficiently and, therefore, a perse rule should not have been applied to that individual company.

207 Uskali Mdki, Against Posner against Coase against Theory, 22 CAMBRIDGE J. ECON. 587,

590-92 (1998).208 See Posner, Ethical and Political Basis, supra note 102, at 488 (introducing his wealth

maximization theory as a normative theory).209 Simply put, a per se rule states that all behavior that conforms to a certain paradigm is

illegal and cannot be excused by recourse to argument such as efficiency-based arguments.210 Richard A. Posner, Antitrust Policy and the Supreme Court: An Analysis of the Restricted

Distribution, Horizontal, Merger and Potential Competition Decisions, 75 COLUM. L. REv. 282,

298 (1975).211 Doctor Miles Med. Co. v. John D. Park & Sons, Co., 220 U.S. 373 (1911).

212 See generally Robert Pitofsky, Why Dr. Miles Was Right, 8 REG. 27 (1984) (arguing that

per se rules can be efficient because, inter alia, they keep down litigation costs).

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DWORIN, NOZICK & POSNER

Rather, Posner must show why a per se rule should not be generallyapplied. To do so, he must account for all costs associated with antitrustlitigation. He cannot do this by resorting to economic theory regardingthe efficient microeconomic functioning of an individual firm. Heneeds to assess all of the relevant cost information and he can only dothis with empirical study.

This subsection has argued that rather than doing away with reli-ance on utility theory, utility considerations lurk behind Posner's wealthmaximization theory at every stage. Posner's wealth maximization solu-tion to overcome utility considerations is overly simplistic. As such, itcannot, by itself, justify legal decision-making procedures. Posner's ar-guments against behavioral economics also derive from a misconceivedloyalty to the Chicago School of economic theory. Empirical observa-tion is essential to theory and, without a sufficient empirical basis, Pos-ner has little justification for prescribing his wealth maximization theoryand for criticizing effective legal rules.

C. Distribution, Capture, and Marx

This final subsection on law and economics will contend that Pos-ner's wealth maximization theory fails to account for wealth distributionand assumes a just distribution of initial resources. This subsection willargue that powerful economic agents exert control over important politi-cal institutions in society and that the economic theory of law generallyfails to account for this capture and its efficiency effects in society. Fi-nally, Posnerian law and economic theory may fall prey to Marxian criti-cism of economic theory generally. Such criticism accuses economictheorists of being apologists for the market economy without considera-tion of broader effects. The role of such economic theorists is confinedto making clever arguments in favor of something that, when properlyassessed, may be in need of further justification and reformulation.

Posner believes that if a society maximizes wealth it will "producean ethically attractive combination of happiness, of rights (to liberty andproperty), and of sharing with the less fortunate members of society. '

"213

However, there is no obligation to share in Posner's wealth-maximizingsociety. In addition, wealth maximization need not provide for any so-cial minimum or welfare system. So long as aggregate wealth in societyis maximized, there is no reason to even consider those at the very bot-

213 Posner, Ethical and Political Basis, supra note 102, at 102 (citing Richard A. Posner, Utili-

tarianism, Economics, and Legal Theory, 9 J. LEGAL STUD. 191 (1980)).

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tom. Indeed, given Posner's encouragement of wealth attainment andantipathy towards any kind of moral obligation whatsoever, "it is hardto see how we will avoid ending up with something like a barely regu-lated free market economy with rather haphazard voluntary philan-thropy: nineteenth century capitalism. ' 21

, Posner may be perfectlyhappy with this. Indeed much of his academic heritage comes from thisera. However, the present poverty in this country and elsewhere de-prives people of opportunity. Such a state of affairs will likely be thesame or worse in a true Posnerian state. Over the long run, this maylead to efficiency problems as well if there is an unproductive workforce.Posner may be able to adapt his theory to deal with such issues from anefficiency point of view. However, the main point is moral - peopleshould not generally be deprived of basic social goods even if deprivingthem of such goods maximizes aggregate societal wealth. Posner's as-sumption that wealth maximization will lead to charitable contributionto help the needy has little basis and seems to be just a way of avoidingjustified criticism. In the end, he shows his true colors:

[H]istory, experience, and honest introspection (if that's possible)teach us that the vast majority of us are unwilling to pay a high pricein selfish joys and comforts forgone to be good. We are reluctant topay any price to be good. We can avoid paying any price, withoutsuffering any pangs of conscience - we can have our cake and eat it -by denying that morality requires us to change our behavior.215

Just as Posner makes a halfhearted attempt to appease egalitarians,he also tries to argue that his theory supports libertarianism.2" 6 He ar-gues that through his wealth maximization theory, we are led, "in themanner of Nozick and Epstein, to an ethical defense of market transac-tions that is unrelated to their effect in promoting efficiency . . .,.Once again, Posner is far too quick. Libertarianism is based on a systemof justified entitlement. Posner's system does not account for any kindof justified ownership. Thus, he endorses a theory of society that takesneither equality nor entitlement seriously. He is guilty of assuming a

214 Jonathan Wolff, Robert Nozick, Libertarianism, and Utopia, CRITIQUES OF LIBERTARIAN-

ISM, (last updated Oct. 25, 2007) available at http://world.std.com/-mhuben/wolff_2.html(criticizing Nozick's reliance on charity to solve problems of poverty).

215 Posner, Problematics, supra note 107, at 1666.216 Posner, Ethical and Political Basis, supra note 102, at 490.217 Id.

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justified historical background to implement his theory whereas no suchbackground may exist. Thus:

Most economists [including Posner] don't seem to have or to feel theneed for any knowledge of their content, or in the reality of theirsupposed inner responsiveness to the ideas of property or contract.They appear as a neutral background in everyone's interest (effi-ciency), that is constantly threatened by the more partial, political,interest-group-based or ideological based initiatives of legislatures.218

Indeed, while legal economists such as Posner criticize moral de-mands of the poor, they fail to take account of powerful economicagents and the effect that such agents have on political and legal institu-tions in society. Posner criticizes sociologists for taking power effectsinto consideration in their theories because, he argues, power is "diffi-cult to operationalize. '21 9 But, powerful economic agents do influencethe legal and political apparatuses of the state. They contribute to polit-ical campaigns, try to get employees or loyal people to sit on politicalcommittees and regulatory agencies, they fund studies beneficial to theirinterests to try and influence policy, and so on. These actors do this notto promote aggregate efficiency but to promote their own individualefficiency and the two may only collide coincidentally. Thus:

Market actors will exert power - whether or not they are aware of it -because of the situational pressures of the market. If profit can bemade by influencing the situation, we predict that it will be. Marketcompetitors will, to survive in the long run, "discover" precisely whichsituational manipulations most efficiently influence us and how. Mar-ket actors who fail to manipulate situational variables effectively willsooner or later be supplanted by those who do.22 °

Posner's failure to account for such power occurrences and theireffects may affect his theory of efficient wealth maximization in thelong-term. In addition, it is unreasonable to criticize moral theorists forarguing for ends that may produce inefficient outcomes, while at the

218 Duncan Kennedy, The Role of Law in Economic Thought: Essays on the Fetishism of Com-

modities, 34 AM. U. L. REv. 939, 964 (1985).219 Richard A. Posner, The Sociology of the Sociology of Law: A Viewfrom Economics, 2 EUR. J.

L. & ECON. 265, 272 (1995).220 Jon Hanson & David Yosifon, The Situation: An Introduction to the Situational Character,

Critical Realism, Power Economics, and Deep Capture, 152 U. PA. L. REv. 129, 198 (2003).

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94 CARD OZO PUB. LAW, POLICY & ETHICS J.

same time turning a blind eye to inefficiencies that are produced bymarket, political, and legal manipulation carried out by powerful eco-nomic actors. But this is not a new criticism.

Economists historically have defended the market warts and all.They fail to account for negative market outcomes, and have oftenblamed negative outcomes on interference with the market. Law andeconomics is no different. It supports conservative market policies andchastises social welfare initiatives that interfere with the market or thelegal system. Thus:

[R] uling political groups produce and retain the doctrines of commonlaw that serve them best. In an important sense, the Posnerian schoolalready admits this: they point out that a politically effective groupresorts to statute law when it is dissatisfied with the common law.This is surely the equivalent to saying that, when the common law isleft alone, it is because it serves the politically effective group withoutstatutory modification or because it lacks an influential opponent.22

Similarly, it is hardly surprising that Posner and other adherents tothe law and economics movement have been appointed to federal judi-cial positions. They were appointed not because the economic theory oflaw is in any way radical, but because it fits nicely with political conser-vatism. Where efficiency and "Big Business" collide, this is all too oftenoverlooked.222 Historically, economists have often supported the bour-geois market economy, even when such support had zero ethical senseand minimal economic support.22 3 Posner criticizes academic moralphilosophers for having little knowledge of the real world and little abil-ity to form sound policy opinions.224 But Posner's allegations can alsobe directed towards academic economists. Posner may be correct thatmoral philosophers can be unusually left-wing. But, academic econo-

221 George J. Stigler, Law or Economics?, 35 J.L. & ECON. 455, 460 (1992) [hereinafter

Stigler, Law or Economics?].222 But see Easterbrook, Symposium, supra note 172, at 881 n.6 ("Economic analysts favor

deregulation . . . low tariffs and abolition of other import controls, and espouse other policiesthat many corporate managers find unpalatable. It is hard to describe this agenda as one forapologists of Big Business."). It would be interesting to carry out a study to see the actual

application of Easterbrook's "economic analysis."223 See KARL MARX, CAPITAL, ch. 9, § 3 (Ben Fowkes trans., 1983) (1867) (Marx famously

refuting Nassau Senior's "last hour" which stated that the length of the working day could not

be shortened because factory owners extracted most of their profits in the last hour of theworking day).

224 Posner, Problematics, supra note 107, at 1670-71.

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mists often have theories that go far beyond anything that is generallyaccepted in society.225 These kinds of right-wing, free market theoriesare undemocratic and unrealistic, as much as they are questionable froma moral standpoint. Where, as in Posner's case, they are also inconsis-tent on their own terms, they have no business meddling in systems ofjustice. Posner and his followers need not be guilty of malicious hypoc-risy or nefarious intent. They may simply be inculcated in a conserva-tive system of law, legal academia, and economic academia. They arealso a part of the ruling class and, as such, may engage in a great deal ofself-deception in order to excuse their participation in a system thatoversees great iniquities and does not fear increasing such iniquities inthe name of wealth maximization. Thus:

[T]he capacity of self-deception of an exploitative ruling class wouldbe said by Marx to be practically infinite: The long-term nonmoralinterests of a typical member of such a class often sharply conflict withthe moral principles which he puts forward without hypocrisy; andwhen this conflict obtains, no reasoning from those moral principlescan, in a typical case, dissuade an exploiter from doing what his non-moral interests demand.226

However, whether or not protagonists of the economic theory oflaw are fully conscious of the effects and inconsistencies of their theo-ries, this Article has sought to show that their theories are deeply flawedand cannot, by themselves, form the basis of a legitimate legal system.

This section, thus far, has criticized law and economic theory. Ithas been argued that such a theory fails to properly account for moralityand may be impractical. Scholars have reasoned that, where welfaretrumps rights, as is the case with most law and economic theory, there ispotential for unjust outcomes that need to be accounted for. This sec-tion defended the proposition that Posnerian wealth maximization the-ory never sheds the problems associated with its utilitarian heritage, andthat behavioral considerations can enhance the study of economic the-ory and thereby contribute in a more meaningful way to legal theory.Finally, Posner fails to account for distributional, entitlement, and eco-

225 See Hausman & McPherson, supra note 165, at 676 ("When politicians and non-econo-

mists think about problems of welfare, they employ concepts that do not easily translate into the

language of standard economic theory.").226 Richard W. Miller, Rawls and Marxism, in READING RAwLs: CRITICAL STUDIES ON

RAWLs' "A THEORY OF JUSTICE" 208, 218 (Norman Daniels ed., 1989).

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nomic power considerations that negate the potential for any justifiedpractical application of his theory and exemplify inconsistencies inmainstream law and economic theory.

D. Efficiency Revisited

The economic theory of law, at least in its Posnerian form, doesnot provide a basis for a realistic theory of law. However, economicefficiency in a legal system and in society generally cannot be ignored.22 7

The concept of excessive legal claims that are necessitated in Nozick'ssystem was already discussed where all have an equal right to rectifica-tion. In order to avoid inefficiency and the swelling of the legal systemin Nozick's minimal state, certain levels of resources should be affordedto all individuals. Many egalitarians ignore efficiency and, therefore,subject their theories to inconsistency or impracticability. Certain advo-cates of redistribution go beyond Rawls's difference principle 2 8 and thevarying possibilities of unequal outcome in Dworkin's theory of equalityof resources and seek greater or total equality of outcomes. However,these redistributionists, broadly assessed, seem to accept inequality upuntil society has obtained a certain level of wealth. Only then do theyseek out a much greater or total equality. Baruch Brody argues thateveryone in society deserves: (1) state of nature levels of subsistence,and, (2) more in wealthier countries, where the benefits of the transitionfrom the state of nature are more apparent, and the poor should also beallowed to share in these benefits.229

In describing Rawls's egalitarianism as "a crass apology for thebourgeois order," Kai Nielsen replaces Rawls's difference principle withhis own principle of distributive justice, which states:

After provisions are made for common social (community) values, forcapital overhead to preserve the society's productive capacity and al-

227 See Stigler, Law or Economics?, supra note 221, at 463 ("[Elconomics has always been part

of every legal system . . . [but noting poignantly] that there are lawyers with sophisticatedknowledge of economics . .. (but one suspects that economists would count fewer such lawyers

than the lawyers do).").228 RAwLs, A THEORY OF JUSTICE, supra note 78, at 60 ("[E]conomic inequalities ... are to

[be to] the greatest benefit of the least advantaged.").229 Baruch Brody, Redistribution Without Egalitarianism, 1 Soc. PHIL. & POL'Y 71, 87 (Au-

tumn 1983). Although Brody's argument is not justified as egalitarian in that egalitarianismdoes not form the underlying justification for redistribution, it is egalitarian in an outcome sensein that if redistribution does take place there will be greater equality. Even though I am pointingto a potential problem in Brody's theory, I broadly agree with him in (2).

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lowances are made for differing unmanipulated needs and preferences,the income and wealth (the common stock of means) is to be so di-vided that each person will have a right to an equal share. The neces-sary burden requisite to enhance well being are also to be equallyshared, subject, of course, to limitations by differing abilities and dif-ferent situations (natural environment not class position).2 31

Both Brody and Nielsen seem to implicitly accept that certainlevels of material wealth must be in place before more equality or anequal share is granted. This may be a necessary condition if one acceptsHarry Frankfurt's argument that prescriptions of equality, irrespective ofcondition, have morally questionable results. Frankfurt asks his readerto

suppose that there is enough of a certain resource (e.g., food ormedicine) to enable some but not all members of a population tosurvive. Let us say that the size of the population is ten, that a personneeds at least five units of the resource in question to live, and thatforty units are available. If any members of this population are tosurvive, some must have more than others. An equal distribution,which gives each person four units, leads to the worst possible out-come: viz., everyone dies. Surely in this case it would be morally gro-tesque to insist upon equality!2 3 1

Thus, the egalitarian is left with two initial problems: (1) equalitycannot be a universally prescribable right/value, and, (2) the egalitariancannot ignore efficiency because efficient production will likely beneeded before an equal or more equal share can practically material-ize. 2

32 The initial point here is that Nielsen's slogan - "Better a greaterequality in self-respect than more goods ' 23 3 - where he equates greaterself-respect with an equal share, cannot, even on Nielsen's terms, be auniversal slogan because of the concerns put forward by Frankfurt. Thisis especially problematic if one accepts the capitalist mode of production

230 Nielsen, supra note 79, at 213-14.231 Harry Frankfurt, Equality as a Moral Ideal, in EQUALITY: SELECTED READINGS 261, 266

(Louis P. Pojman & Robert Westmoreland eds., 1997).232 This analysis applies to normal capitalist forms of production but also more communitar-

ian forms of production as well. This bypasses considerations of incentives and motivation that

may be considered "a result of capitalist history." See G.A. COHEN, IF YOU'RE AN EGALITA-

RAsN, How COME YOU'RE So RICH? 120 (2000) (arguing that people's thoughts about marketsare shaped by actual market history and that there may be better alternatives).

233 Nielsen, supra note 79, at 212.

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as a means of attaining levels of resources needed to bring about anequal or a near equal share. If one does accept (even a limited form of)capitalism as a way to attain the levels of resources needed to enact egali-tarian redistribution, and agrees that capitalist inequality has been im-portant in attaining sufficient resources, then one is left with theconsiderable problem that inequality may be needed to maintain suffi-cient levels of resources to enable redistributive schemes. This wouldseem to create an impasse for the equal share egalitarian who decriesefficiency as some lesser value.

It is not difficult to abstract further and argue that certain levels ofwealth will likely be needed before a legal system can be so extensive asto search for justice, fair compensation, or integrity without considera-tion of the needs of people generally in society. We saw this to be prob-lematic for Nozick's libertarianism, where the absence of some kind ofsafety net welfare state and the requirement that people be equally pro-tected by the state may lead to a swelling of the minimal state becauseentitlements to even small bundles of goods become extremely impor-tant to people on the breadline.2 34 Dworkin also cannot go so far as toargue that his legal system or theory of equality of resources always su-persede efficiency considerations. Although Dworkin is not an equalshare egalitarian, in the sense described by Nielsen, he does sanctionextensive state action to compensate for unequal brute talent.235 It is atleast imaginable that some of the efficiency considerations mentionedwith regard to Nielsen, Brody, and Frankfurt, could also apply to Dwor-kin's theory of equality of resources. This may be one reason whyDworkin recognizes that efficiency considerations may trump his theoryof equality of resources. With regard to his theory of legal integrity,Dworkin's legal system is also likely to be subject to time limitationsand will likely require minimum levels of financial disputes in civil casesin order to ensure that the court system is not overburdened. It mayalso have to address some wealth-maximization functioning, providedthat society is doing very badly and needs judicial decision making thatcan promote wealth maximization and efficiency, rather than solely fo-cusing on bringing about legal outcomes that comport only with Dwor-kin's notion of integrity.

234 See generally supra Part II.235 See generally supra Part I. B.

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CONCLUSION

It is not impossible to abstract further and believe that the veryexistence of a legal system, at least for civil cases that involve property ordamages, is itself secondary to the existence of certain things, such asprotected property and goods, or currency meant to redress damages.236

However, this analysis would likely require an analysis of the goings-onin a state of nature, real or imaginary, a subject which is well beyond thescope of this Article. For now, it is necessary to make some brief con-clusions regarding what has been learned from this Article and to out-line paths for future research.

In Part I. A, Dworkin's theory of law as integrity was deemed to beproblematic because he prescribes a legal decision making process forreal-world judges that those judges will not likely be able to adhere to.This means that Dworkin needs to fully consider institutional restraintson judges and their actual ability to act in the nonpartisan, moral waythat he requires of them. Nevertheless, Part I. A concluded by recogniz-ing that integrity likely has an important role to play in a legal system,but that that concept needs further assessment to determine whether itis a value in itself or part of other values commonly attributed to a legalsystem such as justice, fairness, due process, and so on.

In Part I. B, it was stated that Dworkin largely assumes equality.Peter Westen was discussed in the context of his questioning of the im-portance of equality. He argues that it is subsumed within other con-cepts. Nevertheless, this subsection reasoned that when people have lessof certain things than others, equality is an important concept, at leastlogically and rhetorically. Dworkin cannot always assume that his the-ory is morally superior to libertarianism. Dworkin, himself, recognizesthat privacy can trump equality, and the reason it can is that excessivestate interference in people's lives, compliant with Dworkin's theory ofequality of resources, could become intolerable and even morally infer-ior to libertarianism.

In Part II, however, it was argued that Nozick's libertarianism, as itstands, cannot provide the basis for a legal system while staying true toits minimal statism. This is because his system of rectification and com-pensation is subject to imperfection and manipulation. Additionally,the minimal state will swell greatly if all legal claims are heard, an out-

236 Cf DAVID GAUTHIER, MORALS BY AGREEMENT (1986) (explaining the evolution of po-

litical society through utility maximizing behavior).

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come which is necessary if all individuals are given the equal right torectification to which they are entitled in Nozick's theory. Accordingly,efficiency considerations may have to be considered before a fully legiti-mized entitlement-based legal system can be implemented in practice.

In Part III, it was argued that the economic theory of law, exempli-fied by Posner, fails to properly account for morality and may be im-practical. There is potential for unjust outcomes that need to beaccounted for where systems of welfare override individual rights. Pos-nerian wealth maximization theory is, in this context, vulnerable to crit-icisms leveled at classical utility theory because Posner's never reallyabandons utilitarianism in a meaningful way. Behavioral considerationscan enhance the study of economic theory and, therefore, can serve asthe basis of a more realistic economic theory to supplement legal theory.It was argued further that Posner fails to account for distributional is-sues, entitlement issues, and the effects of powerful economic actors in amarket economy. However, egalitarians and law as integrity advocatescan also not ignore wealth and efficiency considerations without result-ing in morally questionable outcomes.

So where does this leave us? I believe that a proper legal systemand society in general must consider all of the four values that have beenbroadly outlined in this Article, namely, integrity, equality, liberty inthe form of noninterference, and efficiency. While there may be situa-tions where it is not possible, society should aspire to provide all citizenswith at least sustenance, education, and equality before the law. Theseprinciples remain undefined here, but they could potentially be consis-tent with the four values discussed in this Article. To incorporate theseprinciples into the four values discussed would go far beyond the limitsof this Article. However, for now, if I have been successful, this Articlehas shown certain difficulties in adopting unitary values common inlegal and political philosophy and that the values discussed are not iso-latable but often contingent upon one another. This Article is not argu-ing for a moral, legal, and political vacuum. On the contrary,sustenance, education, and equality before the law are fundamental con-siderations that should usually be afforded to all individuals by the stateif certain individuals are unable to provide for themselves. Sustenance,education, and equality before the law can largely be compatible withthe four values - integrity, equality, liberty in the form of noninterfer-

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ence, and efficiency - discussed in this Article.237 The details of thatcompatibility will have to be left for another time. This theory, by defi-nition, will be pluralistic, 238 and in certain situations, may be theoreti-cally imperfect and require pragmatic justification. It may requireinterdisciplinary assessment at various levels, particularly to determinethe means by which ends that will be advocated can be achieved. How-ever, the fact that the theory is pluralistic and may require some prag-matic justification does not itself present any insurmountabledifficulties, especially if it can overcome the extensive problems of thetheories discussed in this Article.

237 Cf Andrew Williams, Liberty, Equality, and Property, in THE OXFORD HANDBOOK OF

POLITICAL THEORY 488, 504 (John S. Dryzek, Bonnie Honig & Anne Phillips eds., 2006)(arguing for what he terms a "sufficientarian theory," which accounts for aspects of libertarian-ism, egalitarianism, and free markets).

238 Cf Michael Walzer, Justice Here and Now, in JUSTICE AND EQUALITY HERE AND Now

141, 142-44 (F.S. Lucash ed., 1982) (arguing for pluralistic political theory to address inequalityin society); MICHAEL WALZER, SPHERES OF JUSTICE: A DEFENSE OF PLURALISM AND EQUALITY

15 (1983) (arguing for an egalitarian theory based on moral pluralism).

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