The Limits on the Protection of Property

[I don't think this segment needs updating although I am happy to be persuaded otherwise. Please feel free to contribute ideas for updating either in the body of the part or open them up for discussion on the discussion page.] The realists in American legal history (circa 1890–1930) were scholars who (in part) emphasized the role of the state in what was called “private law.”¹ At the time they wrote, it was the “private” in private law that got all the emphasis. Forgotten was the “law,” as if “property” and “contract” existed independent of the state.

The realists’ aim was to undermine this view. Contract and property law, they argued, was law that gave private parties power.² If you breach a contract with me, I can have the court order the sheriff to force you to pay; the contract gives me access to the state power of the sheriff. If your contract with your employer says that it may dismiss you for being late, then the police can be called in to eject you if you refuse to leave. If your lease forbids you to have cats, then the landlord can use the power of the courts to evict you if you do not get rid of the cats. These are all instances where contract and property, however grounded in private action, give a private person an entitlement to the state.

No doubt this power is justified in many cases; to call it “law” is not to call it unjust. The greatest prosperity in history has been created by a system in which private parties can order their lives freely through contract and property. But whether justified in the main or not, the realists argued that the contours of this “law” should be architected to benefit society.³

This is not communism. It is not an attack on private property. It is not to say that the state creates wealth. Put your Ayn Rand away. These are claims about the relationship between private law and public law, and they should be uncontroversial.

Private law creates private rights to the extent that these private rights serve some collective good. If a private right is harmful to a collective good, then the state has no reason to create it. The state’s interests are general, not particular. It has a reason to create rights when those rights serve a common, rather than particular, end.

The institution of private property is an application of this point. The state has an interest in defining rights to private property because private property helps produce a general, and powerful, prosperity. It is a system for ordering economic relations that greatly benefits all members of society. No other system that we have yet devised better orders economic relations. No other system, some believe, could.⁴

But even with ordinary property—your car, or your house—property rights are never absolute. There is no property that does not have to yield at some point to the interests of the state. Your land may be taken to build a highway, your car seized to carry an accident victim to the hospital, your driveway crossed by the postman, your house inspected by health inspectors. In countless ways, the system of property we call “private property” is a system that balances exclusive control by the individual against certain common state ends. When the latter conflict with the former, it is the former that yields.

This balance, the realists argued, is a feature of all property. But it is an especially important feature of intellectual property. The balance of rights with intellectual property differs from the balance with ordinary real or personal property. “Information,” as Boyle puts it, “is different.”⁵ And a very obvious feature of intellectual property shows why.

When property law gives me the exclusive right to use my house, there’s a very good reason for it. If you used my house while I did, I would have less to use. When the law gives me an exclusive right to my apple, that too makes sense. If you eat my apple, then I cannot. Your use of my property ordinarily interferes with my use of my property. Your consumption reduces mine.

Footnotes

¹ See American Legal Realism, edited by William W. Fisher III et al. (New York: Oxford University Press, 1993), 98–129; John Henry Schlegel, American Legal Realism and Empirical Social Science (Chapel Hill: University of North Carolina Press, 1995). For a nice modern example of the same analysis, see Keith Aoki, “(Intellectual) Property and Sovereignty: Notes Toward a Cultural Geography of Authorship,” Stanford Law Review 48 (1996): 1293. Edit Delete

² See Fried, The Progressive Assault on Laissez-Faire, 1–28; see also Joel P. Trachtman (“The International Economic Law Revolution,” University of Pennsylvania Journal of International Economic Law 17 [1996]: 33, 34), who notes that many realists and critical legal theorists have asserted that “private law” is an oxymoron. Edit Delete

³ Judges have also made this argument; see Lochner v New York, 198 US 45, 74 (1905) (Justice Oliver Wendell Holmes Jr. dissenting). Edit Delete

⁴ This is the epistemological limitation discussed in much of Friedrich A. von Hayek’s work; see, for example, Law, Legislation, and Liberty, vol. 2 (Chicago: University of Chicago Press, 1978). Edit Delete

⁵ Boyle, Shamans, Software, and Spleens, 174. Edit Delete