Law as Public Capital

Law as Public Capital

Man makes laws; in this respect he differs from other animals. He chooses deliberately to impose constraints on his own behavior; he distinguishes between rational planning and response to stimuli. Self-imposed law in an isolated individual setting is wholly distinct, however, from agreed-on law in a social setting, in an interaction with other persons. In the latter, the individual accepts defined constraints on his own behavior, not because his own well-being would be privately enhanced by such constraints but in exchange for favors that take the form of acceptance of like behavioral constraints by other parties in contract. That is to say, the individual does not enter into social contract for the purpose of imposing constraints on himself; he could always accomplish this by more effective means. He enters into agreements with others to secure the benefits of behavioral limitation on their part. The individual will find his own adherence to law unprofitable except insofar as this is directly related to others’ behavior. This constraint on his own liberty is the cost side of the contract. Rationality precepts, strictly interpreted, suggest efforts toward maximizing “law-abiding”by others and toward minimizing “law-abiding”by the party in question. Law is simply a reciprocal relationship among parties, an embodiment of contract. It is voluntaristic in a sense analogous to any contractual relationship; parties agree on the whole set of terms. This does not imply that unilateral adherence to these terms in the absence of effective enforcement is utility-maximizing. Each party has an incentive to violate the contract, to violate law, if he can predict that his own behavior will exert no influence on the behavior of others. A person has little private-personal incentive to adhere to the terms of a pure “external”contract, except insofar as this represents required “payment”for reciprocal action offered by contractual partners. Law-abiding by a single party, treated independently, exerts a pure external economy on other parties.

Buchanan, James M. The Limits of Liberty: Between Anarchy and Leviathan. Indianapolis, IN: Liberty Fund, Inc. 1999. Library of Economics and Liberty [Online] available from https://www.econlib.org/library/Buchanan/buchCv7c7.html; accessed 26 July 2012; Internet

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