Design for Liberty: Private Property, Public Administration, and the Rule of Law
Richard A. Epstein
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Following a vast expansion in the twentieth century, government is beginning to creak at the joints under its enormous weight. The signs are clear: a bloated civil service, low approval ratings for Congress and the President, increasing federal-state conflict, rampant distrust of politicians and government officials, record state deficits, and major unrest among public employees.
In this compact, clearly written book, the noted legal scholar Richard Epstein advocates a much smaller federal government, arguing that our over-regulated state allows too much discretion on the part of regulators, which results in arbitrary, unfair decisions, rent-seeking, and other abuses. Epstein bases his classical liberalism on the twin pillars of the rule of law and of private contracts and property rights—an overarching structure that allows private property to keep its form regardless of changes in population, tastes, technology, and wealth. This structure also makes possible a restrained public administration to implement limited objectives. Government continues to play a key role as night-watchman, but with the added flexibility in revenues and expenditures to attend to national defense and infrastructure formation.
Although no legal system can eliminate the need for discretion in the management of both private and public affairs, predictable laws can cabin the zone of discretion and permit arbitrary decisions to be challenged. Joining a set of strong property rights with sound but limited public administration could strengthen the rule of law, with its virtues of neutrality, generality, clarity, consistency, and forward-lookingness, and reverse the contempt and cynicism that have overcome us.
system, even if it does supply the neat type of on/off switch that is appropriate for a system of tort liability. At this point, there is no reason to sacÂ�riÂ�fice all the rule-Â�of-Â� law concerns with uniformity and administratability by retreating to the contours of a general negligence system. The correct nonmarket way to attack this probÂ�lem is to rely on explicit regulatory standards, known in advance, to again furnish the clear line between innocent and culpable conduct that any system
property, in an effort to show how these relatively simple rules work, and how they make it more possible for public institutions to adhere to rule-Â�of-Â�law values, chiefly by controlling the levels of poÂ�litÂ�iÂ�cal discretion. ChapterÂ€6 carries this inÂ�quiry forward, with a more detailed examination of each of the three major sticks in the bundle of rights—possession, use, and disposition. ChapterÂ€7 then examines how the constitutional limitations on the power of eminent domain dovetail
(1979),7 the Supreme Court, without using the phrase “unconstitutional conditions,” held that the United States could not prevent boats docked at a private marina from entering public waters when the marina refused to allow free entry to all boats into its private waters. Rightly or otherwise, the owner of land could keep the world from parking in his driveway. Nor could California insist that all private carriers that used its highways had to accept regulation as common carriers, when the state
system of the United States—oversight extending not only to the large banks, but also to a bewildering vaÂ�riÂ� etyÂ€of nonbank fiÂ�nanÂ�cial institutions—insurance companies and hedge funds, for example—that are said in some way to pose a “systematic risk” to the soundness of the overall banking system. The goal is to make sure that no single institution is “too big to fail,” and that no government funds will have to be committed to future bailouts.5 One possible way to achieve much of these
of factors relating to leÂ�verÂ�age (i.e., equity-Â�to-Â�debt ratios,Â€which are not easy to calculate when there are multiple tiers of capÂ� ital), off-Â�balance-Â�sheet fiÂ�nancÂ�ing, and a meta-Â�factor which includes “any other risk-Â�related factors that the [FSOC] deems appropriate”—which is to say, any factor at all. The degrees of freedom that are allowed to this body are sufÂ�fiÂ�ciently great that it would be hard to find any decision that counts as right or wrong at all. There is an