LAW AND ECONOMIC DEVELOPMENT: JUDGES AND PRIVATE LAW

I. Introduction: From status to contract; community to society; popular sanctions to legal coercion--explain the process or transformation: the growth of intangible property; long-distance transactions and impersonal relations (give examples)--the problem and reality as faced by courts and judges: how to protect individuals against wrongs, society against harm, and yet still promote economic development through the profit mechanism. (Footnote on development of a federal common law of commercial relations.)

1. Traditional Notions or concepts:--conveyance of tangible property rights (mostly land) and assumption of fair-value exchanges.

2. The New Economics vs. Traditional Values:--Future gains, speculative instincts, and imperfect knowledge--think of two of the cases reported in your documents book: 1) the exchange of farm land for town lots in Newburgh, NY (Orange County) and why the courts find for the defendant; 2) Seixas, the case of the wood that turns out to be other than bargained for, and again why the defendant is exonerated (himself bilked by the original supplier).

3. The New Principles of Contract Law:--Free Will and Caveat Emptor, plus the existence of consideration--Is the seller or conveyor in a contractual arrangement thus freed of all responsibility or possible fault? Also consider the above principles in relationship to John Marshall, the Constitution's contract clause, and the sanctity of such agreements as expressed in the Dartmouth College Case (1819) and even earlier in Fletcher v. Peck, concerning the Georgia legislature, corruption, and land grants in Alabama.

1. Traditional Riparian Rights vs. the New Economics:--dams, millraces, fish runs, and agrarian vs. commercial\industrial rights--the struggle in New England between the old and the new and its resolution--basis for evolving common law of water rights: welfare of the community or commonwealth, and how to determine it. The distributional costs and benefits of economic development.

2. Common Law Adaptation in the Arid West:--original use, claims, and property rights vs. actual location re. sources of water.

1. Traditional English Society and Absolute Liability:--a society of family, neighbors, and other dependents; lines of authority, responsibility, and even cause appear relatively clear. Also not all disputes or damages need go through formal legal process because of familial and communal alternative resolution or reparation mechanisms.

2. The New Capitalist Society and a Host of Ills:--(employer-employee relations will be treated in a subsequent lecture)--urban congestion; steam power and the new machinery; impersonal relations and blurred lines of responsibility--thus the new principles of what becomes known as tort law: fault and negligence; will and responsibility--the way the principles are illustrated in your documents book: Why is the grain mill operator liable or negligent at law, but the dog-fight mediator and the New York Central RR are faultless or innocent? Much harm, no fault, because no negligence and no penalty--Back to the future with the current Republican tort reform plan: fault may cause economic damage and hence require financial awards for such damage but no money for pain and suffering--hence what happens in the case of maimed retirees and murdered children--a return to the 19th century principle of "wrongful death"; a great loss but no one left to be compensated.

V. Conclusion: Fostering a Capitalist Economy--whether by releasing creative energy in service to the community or by liberating markets in the interest of capitalists--a law based on free will and the liberty to act, but what of wage workers, slaves, and others in truly dependent categories.