[Return to Table of Contents]

I. The Common Law Foundation: Overview

Richard Epstein, All Quiet on the Eastern Front, 58 U. Chi. L. Rev. 555 (1991). Professor Epstein maintains that "a few core principles are sufficient to organize our understanding of both private and public law." In this article, Epstein elaborates on this view by explaining that the traditional rules of property, contract, and tort law are based upon two assumptions which hold across a wide range of circumstances and cases. The two assumptions are: 1) resources are scarce, and 2) human behavior is usually self-interested. "On this view of the world," according to Epstein, "the central task is to figure out how sound legal institutions can harness that self-interest to produce desirable social outcomes." In this regard, "any legal system must discharge three distinct tasks. The first . . . is to determine an initial set of property rights from which subsequent bargains can go forward at reasonably low cost. The second mission is to insure that these entitlements once established are protected against various forms of theft-the office of the law of crime and tort. The third mission of the law is to facilitate the voluntary exchanges of property rights-the law of contracts." An interesting interview of Epstein appeared in the April 1995 issue of Reason magazine, available on-line at http://www.reasonmag.com/9504/epstein.apr.html.

Ronald Coase, The Problem of Social Cost, 3 J. L. & Econ. 1 (1960). Professor Coase, a British economist who has spent roughly half of his professional career at the University of Chicago Law School, received the Nobel Prize in economics in 1991 for his contributions to the economic analysis of law and legal institutions. His 1960 article has been cited more often in the law review literature than any other article ever written, and can be said to be the founding document of the "law and economics" movement. The article raises a number of questions that even the astute student will have difficulty answering in the first instance, and to which he will return again and again. To what extent does the law affect human behavior? To what extent can we expect people to "contract around"-and thus circumvent-legal rules they do not wish to follow? To what extent do the costs of transacting with one another deter the successful negotiation of private agreements? Coase's analysis-labeled by others the "Coase Theorem"-is the cornerstone of the economic analysis of law. It is also somewhat counterintuitive. Do not be discouraged if you fail to grasp the importance of the article on your first reading (it is very unlikely that you will). Since the Coase Theorem turns up repeatedly throughout the law school curriculum, you will have ample opportunity to become familiar with it. In time, you should find that the article is the gateway to the field of "law and economics." For an interview of Coase, see the January 1997 issue of Reason magazine, available on-line at http://www.reasonmag.com/9701/int.coase.html.

Frederic Bastiat, The Law (Foundation for Economic Education ed. 1950). In his brief but powerful book, first published as a pamphlet in 1850, Bastiat lamented the decline of the rule of law in France. Instead of defending property rights, Bastiat argues, French law had become an instrument of "legal plunder" in which "the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong." Bastiat identified "tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, [and] free credit" as forms of "legal plunder." For Bastiat, traditional concepts of property, contract, and tort law were vitally important in the safeguarding of human freedom. The Law -- Available on-line at http://www.constitution.org/law/bastiat.htm and at http://www.jim.com/jamesd/bastiat.htm.

J.H. Baker, An Introduction to English Legal History (4th ed., 2005). A very readable introduction to the history of the common law by a British law professor.

Arthur R. Hogue, The Origins of the Common Law (1966, 1985). Another good introductory text, by an American author.

Internet resources: Humorist P.J. O'Rourke is a deft critic of meddling government and defender of freedom. We recommend two of his speeches available on-line: "The Liberty Manifesto" (1993), http://www.cato.org/speeches/sp-orourke.html, and "Closing the Wealth Gap" (1997), http://www.cato.org/speeches/sp-pjo061897.html.

Last updated December 2010

[Return to Table of Contents]