1. Legal Systems Very Different
The Idea
All societies face about the same problems
They solve them in an interesting variety of different ways
And they are all grownups
So try to make sense of how each legal system worked
Some of the systems
Imperial China: 2000 years
Periclean Athens: The Legal System of a Mad Economist
Saga Period Iceland: Kill someone, his relatives sue you
Islamic Law: Separation of law and state
Jewish law: When God is the legislator, what if He gets it wrong?
18th Century England: Our legal system without police or public prosecutors
Romani: The rest of the human race as environment, not people
Amish: Anarchists. Very rule centered anarchists.
Pirate ships as democracies
In defense of prison gangs

2. Imperial China: I As viewed from above, a pure criminal legal system
As viewed from below, tort law masquerading as criminal law
In addition to important stuff, there are minor matters
Loans, land, marriage, and inheritance.
I charge you with not paying back the loan
The magistrate schedules a court date, comments on the case
I then bargain with you, you pay back the loan
We humbly ask the magistrate to cancel the court date
The magistrate, being a busy man, agrees
If we don’t reach agreement, the trial is held, the magistrate tells you to pay
If you do, he generously cancels the punishment for your offense

3. Imperial China: II Law and the extended family What is going on?
All relatives are senior or junior to each other, and within some degree of relationship
Any offense by senior or junior, the penalty is scaled down
By junior to senior, the penalty is scaled up
Accusing a senior relative within two degrees of a crime is a criminal offense
Even if he is guilty
What is going on?
They are ruling several hundred million people with a tiny bureaucracy
Part of the trick is to subcontract the job to other authority structures
Of which the extended family is the most important
So the rules reinforce that authority structure
The ability to report crimes by seniors would give juniors power over them
So is blocked

4. Imperial China III: The Examination System
Officials are selected by a ferociously competitive examination system
The exam was testing things mostly irrelevant to the job
Knowledge of the Confucian classics and historical literature
Calligraphy and ability to write poetry and essays in a particular style
Why have the smartest people spend a decade or two studying this stuff?
A test of IQ and willingness to work hard?
Indoctrination
Is our emphasis on a college education a modern equivalent?

5. Periclean Athens Athenian democracy The Athenian population
All officials, except generals, were chosen by lot
A government of amateurs
The Athenian population
Perhaps half were slaves
Some more were metics—resident aliens, often for many generations
The rest were citizens
The court system
Trial by very large juries
Privately prosecuted
What was the incentive to prosecute?
For the equivalent of criminal law, a successful prosecutor usually got a cut of the fine
For the equivalent of a tort prosecution, as in our system the winner collected a damage payment

6. Periclean Athens: Solving Problems
How do you prevent abusive prosecution for the fine or damage payment?
Criminal: If less than 20% of the jury voted for conviction, prosecutor was fined
Civil: If the defendant won, the prosecutor owed him damages–1/6th the claim
The penalty for theft was twice the value of the goods stolen
An obvious opportunity to plant goods while searching
You could search someone’s house for your stolen goods
But had to do it naked
We have a similar issue when cops search for drugs. …
Production of public goods
If you were one of the richest Athenians, every other year you had to produce one
Two ways of getting out of it
Show that you are doing one this year or did last year
Show that there is someone not doing one this year or last who is richer than you are
Without IRS or accountants, how do I prove you are richer than I am?
I offer to exchange everything I own for everything you own

7. Saga Period Iceland
In the 10th century, Harald Haarfagr unifies Norway under his rule
Lots of people who don’t like it emigrate to Iceland, recently discovered
Set up a legal system based on the Norwegian, with one thing left out
The king
There was a legislature, a court system, but no executive arm of government
All offenses were treated as torts, privately prosecuted for a damage payment
Verdicts were privately enforced
The sagas are histories and historical novels
Written more than seven hundred years ago
From a population of about fifty thousand at the far edge of the world
Ten or more of which are currently in print in English translation

8. Islamic Law Separation of law and state Mufti and Kadi
The law is deduced by scholars from the Koran and Hadith
Like our system, with court precedents replaced by law review articles
Hadith are accounts of things said or done by Mohammed and his companions
Each comes with an isnad, a chain of transmitters
The strength of a hadith depends on the reputation of the transmitters
And the number of separate chains supporting the same hadith.
In Sunni Islam there are four schools of law, mutually orthodox
Mufti and Kadi
A mufti is a jurisconsult, someone who gives advisory opinions on the law (fatwas)
A Kadi is a judge, appointed by the ruler, who tries an actual case

9. Hadd Law Legal rules with fixed penalty based mostly on the Koran
Five offenses. All require two eye witnesses, except that …
For Zina, intercourse with someone neither your spouse nor concubine
Proof requires four eyewitnesses to the same act of intercourse
The penalty for those who have previously had licit intercourse is stoning to death
False accusation of Zina
Theft
Penalty is having your right hand cut off
But there are a lot of conditions that have to be met for the hadd offense of theft
Drinking wine
Highway robbery (includes breaking into a house with people put in fear)

10. Other Parts of the Law Tazir Jinayat: Killing or injuring someone
Penalty set by the judge at or below the hadd penalty
Weaker requirements of evidence
Jinayat: Killing or injuring someone
Treated as an offense against the victim or his heirs
For first degree murder
Heirs can insist on retaliation
Or accept diya, blood money payment
For lesser versions of killing, only diya
In addition, killer must free a believing slave or fast for two months
Other non-fiqh courts
There are a variety of other courts set up by the ruler
Theoretically in the spirit of, but not bound by, koranic law

11. Jewish Parallels Not surprisingly, a lot of similarity
According to Torah, the disobedient son is to be stoned
But rabbinic scholars read into the text so many conditions
That it is argued that it never has happened or will happen
Both systems face the same problems
When God is the legislator, how do you resolve disagreements
Initially, the Great Sanhedrin could resolve disputes by majority vote
When that no longer existed, whatever authorities were accepted—reputation, like the mufti
For a while, the heads of the Babylonian academies
Later scholars such as Maimonides
Communal authorities claimed some power to legislate, like the non-fiqh courts
When God gets it wrong, how do you fix the error?
Interpret around things you don’t like
Or find excuses for additional legislation outside the religious law
Consider the parallels with U.S. constitutional law

12. Eighteenth Century England
Our legal system, without police or public prosecutors
All crimes, except actually against the state (counterfeiting), privately prosecuted
Any Englishman can prosecute any crime
Usually the victim
And essentially all serious crimes were capital
But only a minority of those convicted of such crimes were hanged
Puzzles
Why bear the cost of prosecution? Unlike tort, you don’t collect damages
One incentive in some cases was a reward
Another was private deterrence
Members of a society for the prosecution of felons chipped in annual fees to pay for prosecution
And the membership list was published in the newspaper for the felons to read
Another was getting paid to drop the case
Why make all offenses capital
Why pardon a majority of those convicted—usually conditional pardons
For answers read the chapter in my (webbed) book draft

13. The Crime/Tort Puzzle
We have two legal systems to do essentially the same job
You do something bad, the legal system intervenes, something bad happens to you
A reason not to do bad things
One, tort, treats offenses as offenses against the victim
The victim is in charge of discovering the offender and prosecuting him
The victim can drop charges
The usual punishment is a payment to the victim
One, criminal, treats offenses as offenses against the state
State actors discover and prosecute the offender
If there is a fine it goes to the state
More commonly there is a punishment such as imprisonment
This raises three questions
Is there a good reason to have both? Would we be better off with only one?
Is there a good reason to sort offenses as we do?
Is there a good reason to bundle legal rules as we do?
One collection of rules for tort
A different collection for crime

14. Should We Abolish the Criminal Law?
Imagine a pure tort system
Problems
The victim may not have the resources to prosecute.
Some offenses cause diffuse injury
For both, the Icelandic solution: Make tort claims marketable
The poor victim sells his claim to a firm with resources to enforce it
Replace class actions with someone buying up many small claims and then litigating
Besides which, most crimes mostly injure the victim
Offenders may be judgement proof
One could have legal rules making that less likely
The state could pay the fine and imprison the offender—still mostly tort
Potential victims could commit in advance to buy deterrence, as in 18th c. England
A sticker on your door
”The resident is a customer of Sure-Death Incorporated private prosecution agency”
But that doesn’t work for victim anonymous offenses—pick pocketing, mugging
The fine for a crime is both the punishment for the criminal and the reward for the victim
We want the optimal probability/punishment pair
But setting the punishment sets the probability, since it determines the payoff to catching him
We cannot separately control two functions with one variable
The fancy solution, using profit maximization for an additional constraint, is an article on my web page
The simple answer is that the identical problem exists for ordinary tort law

15. Sorting Offenses Do we allocate offenses correctly to the two system?
Tort law for offenses where we know who did it
Landes/Posner argument
That eliminates the probability/punishment problem for catching the offender
But the chance of winning a tort suit depends on how much you are willing to spend
Which depends on how large the damages are
Which gets us back to the probability/punishment problem.
Judgement proof argument
If it is hard to catch the offender, we need a big fine to provide adequate deterrence
Which the offender may not be able to pay
And catching him is expensive, so we also need a big fine to make it worth doing
On the other hand, torts are more likely than crimes to be anonymous victim
You don’t know who you are likely to run into
Or who your pet lion will maul
And the torts we see litigated are the ones easy to detect
Because it isn’t worth litigating the rest
With no probability multiplier for damages
Which may be a way of avoiding an incentive for fraudulent prosecution

16. Bundling Legal Rules
The same person controls prosecution and collects fines
That makes sense, since otherwise the controller takes a bribe to drop the case
But it creates an opportunity for fraudulent prosecution
In both tort law and criminal law—consider civil forfeiture
In 18th century England, rewards for private prosecution created fraud
More efficient punishments go with a lower standard of proof
Makes sense, since errors have lower social cost, but …
An efficient punishment is an incentive for fraudulent prosecution
Which is easier with a lower standard of proof

17. Burglary, Traffic Accidents, and Incentives
Treating something as a tort reduces the victim’s incentive to avoid it
Since the loss is at least partly, perhaps entirely, compensated
“Hit me—I need the money”
So where the act creates a net cost, make it a crime instead
For instance traffic accidents
Where something is a transfer
If the victim is fully compensated, no need for an incentive for him to prevent it
It will only happen when the gain to the offender is greater than the cost
So burglary should be a tort
The point being that we are optimizing on many margins
And picking one lets you argue for a conclusion, ignoring the others
Which means that whatever the rule, you may be able to “prove” it is efficient

18. Is the Common Law Efficient?

19. The a priori case—should we expect it to be?
Argument for judges doing it deliberately
Increasing the size of the pie is the one good thing judges can do, so they try to do it
But that assumes they know enough economics
To realize they cannot redistribute in their preferred direction
And enough to know what rules are efficient
And ignores the fact that, unlike firms, they don’t get feedback from their mistakes
And it assumes they are not aiming at justice instead
Perhaps they are, and there is some reason why what is efficient is seen as just?
Invisible hand argument
If the law is inefficient, parties have an incentive to try to work around it
Or to litigate in the hope of changing it
Eventually the law changes
But changing the law faces a public good problem
If beneficiaries of an inefficient legal rule are a concentrated interest group
And losers dispersed interest group
The beneficiaries may raise more to litigate for it than the losers to litigate against
Consider, for instance, an agency litigating for rules it likes against dispersed losers

20. The Case from the Evidence
Property rules vs liability rules
The legal system mostly gets that right, but …
Mostly doing it the other way is not just inefficient but obviously unworkable
Dent someone’s car, go to jail?
Steal someone’s car, pay rental for the time you had it?
Other general patterns seem to fit the theory
The right to grow crops on land is bundled with the right to walk on it
I no longer own my property up to the heavens
Tort law as a Pigouvian tax
Negligence as a solution to the joint causation problem
Posner offers various detailed rules that he argues fit

21. The Case Against
Organ sales are illegal (is that common law or statutory law?)
There are potential rent seeking problems, but
Requiring good chain of title should deal with them
No freedom of contract for product liability
Or breach—penalty clauses are not enforceable
Although a penalty clause is just a voluntarily agreed to property rule
And property rules are part of common law
The common law treats the value of life as zero in tortious death cases
Since your claim dies with you
So an inefficiently low incentive not to take risks with other people’s lives
Tort claims are not marketable. If they were
That would solve the problem of not being able to afford a lawyer
And of not knowing what lawyer would do a good job
And provide a superior substitute for class actions

22. The Case for Ignorance Economic arguments are complicated
My crime/tort chapter ran the argument through seven rounds
This is why you could have a pure tort system
This is why it wouldn’t work
This is how that problem would be dealt with
This …
Once you know the legal rule, you can usually find some argument that it is efficient
Coming to the nuisance
A good rule, because it is cheaper to move a housing development or pig farm before it is built
A bad rule, because my pig farm gives me control over land that will later be wanted for housing
So I have a rent seeking argument to build the pig farm now where you will want to build housing later
The Himalayan photographer and the Eggshell Skull
The economic logic of two problems is the same
The legal answer is different
And each time Posner concludes that the legal answer is correct
But the issue Posner raised has been very productive
The question “what legal rules is efficient”
Provides a way of unifying our understanding of the law
Seeing connections across fields otherwise not obvious

23. Alternative Solutions to the Problem of Law
Feud Law: Decentralized and privately enforced
Dictatorship: Someone tells everyone what to do and makes them do it
Decentralized decisions under state enforced legal rules
Our system, which you have been studying
And most of this book is about

24. Feud Law Law by private violence and threats of violence: Feud systems
If you wrong me I threaten to harm you unless you compensate me
A form of decentralized private law enforcement
To work, it needs to solve four problems
My threat is more believable if you really did wrong me: Right makes might
In Iceland, the court system
Among the Romanichal, a small community, my friends only support me if they think I am justified
I have an incentive to carry out my threat, even if doing so is costly
Internal incentives, feelings of vengefulness—a hardwired commitment strategy
External incentives—status and reputation
There is some way in which people with few resources get their rights enforced
In the Icelandic case, transferable tort claims
In Somalia, membership in a diya paying group
There is a mechanism for terminating feud
The system is historically common, may underlie most legal systems
And arguably exists informally in modern societies

25. Dictatorship The direct centralized solution Problems
The dictator doesn’t know enough to find the best solution
Because the information is decentralized—you know your tastes and abilities
And because it is too much information for any person or computer to handle
Think about all the little things you know about things relevant to solving it
Including everything you do
East Germany supposedly used half the population to spy on all the population
And that would have reported a tiny fraction of the information about each person
All of which he knows and can act on
The dictator has to make you do things
I can move my arm by willing it
You can move my arm only by more indirect and costly mechanisms
So your controlling me is more costly than me controlling me
What incentive does the dictator have to serve us instead of himself?

26. Our System in Brief Property Contract Tort and crime
We need a definition of who owns what and what he owns
We need ways of establishing that for newly created property
We need ways of settling disputes over that and enforcing the result
Contract
We need ways of moving ownership to the person who values it most
We need rules for determining when a contract exists and what it implies
Tort and crime
We need ways of making it not in people interest to violate the legal rules
Which requires mechanisms for prosecuting and punishing those who do
And ways of settling disagreements over whether rules were violated
And what the consequences should be