Documente Academic
Documente Profesional
Documente Cultură
o f R ights
Why Liberty Depends on Taxes
STEPHEN HOLMES
AND CASS R. SUNSTEIN
To G e o f f r e y S t o n e
of
Holmes, Stephen, 1948The cost of rights : why liberty depends on taxes / Stephen Holmes and
Cass R. Sunstein.
p. cm.
Includes bibliographical references and index.
ISBN 0-393-04670-2
I. Civil rights United StatesCosts. 2. Finance, PublicUnited States.
3. Government spending policyUnited States. I. Sunstein, Cass R. II. Title.
JC599.U5 H55 1999
3 23'097 3 dc21
98-41491
CIP
ISBN 0-393-32033-2 pbk.
W. W. Norton & Company, Inc., 500 Fifth Avenue, New York, N.Y. 10110
www.wwnorton.com
W . W Norton & Company Ltd., 10 Coptic Street, London WC1A 1PU
1234567890
Introduction:
C o m m o n S e n se a b o u t R ig h ts
On
14
he
C o st
of
R ig h t s
ing his own business deserves to be left alone, and that the real
problem in the United States is the same one being recognized
all over the world: too much governm ent.1
Yet in W estham pton, on the spur o f the moment, public offi
cials were able to organize and direct a costly and collective
effort to defend private property, draw ing liberally on public
resources contributed by the citizenry at large, for the em er
gency rescue o f real estate owned by a relatively small number of
wealthy families.
There is nothing exceptional about this story. In 1 9 9 6 ,
American taxpayers devoted at least $ 1 1 .6 billion to protecting
private property by means o f disaster relief and disaster insur
ance.2 Every day, every hour, private catastrophes are averted or
mitigated by public expenditures that are sometimes large, even
m assive, but th at often go unrecognized. Am ericans sim ply
assume that our public officials national, state, and local w ill
routinely lay hold o f public resources and expend them to sal
vage, or boost the value of, private rights. Despite the undesir
ably high incidence o f crime in the United States, for instance,
a m ajority o f citizens feel relatively secure most o f the time, in
good measure due to the efforts o f the police, publicly salaried
protectors o f one o f our most basic liberties: personal or physi
cal security.3
P ublic support for the kind o f safety n et that benefited
the home owners o f Westhampton is broad and deep, but at the
same tim e, A m ericans seem easily to forget that individual
rights and freedoms depend fundam entally on vigorous state
action. W ith ou t effective government, American citizens would
not be able to enjoy their private property in the way they do.
Indeed, they would enjoy few or none o f their constitutionally
C o m m o n S e n se
about
R ig h t s
15
i property
16
he
C o st
of
R ig h t s
e f in in g
ig h t s
Com m on Sen se
about
R ig h ts
17
18
he
C o st
of
R ig h t s
C o m m o n S e n se
about
R ig h t s
19
1 off, such
20
he
C o st
of
R ig h t s
e f in in g
C o st s
C o m m o n S e n se
about
R ig h t s
21
property, are generally funded by taxes, not by fees.7 This allim portant fundint
22
he
C o st
of
R ig h t s
C o m m o n S e n se
about
R ig h t s
23
24
he
C o st
of
R ig h t s
hy
h is
o p ic
as
een
I gnored
C o m m o n S e n se
about
R ig h t s
25
1987 alone,
$120 m illion in tort expenses; in 1996,
$282 m illion .11 Understandably, every
26 S
T h e C o s t o f R ig h ts
large city in the country is tryin g to im plem ent tort liab ility
reform , for the rig h t o f individuals to sue m unicipal govern
ments is placing an increasingly intolerable drain on local bud
gets. W h y should judges, narrowly focused on the case before
them, have the power to decide that taxpayers money must be
spent on tort remedies rather than, for irtStance, on schoolbooks
or police or child nutrition programs?
Legal professionals understand perfectly well the budgetary
implications o f the right to sue local governments for damages.
They also know that taxpayer money can be saved by openly or
surreptitiously cu rtailing other sorts o f rights. The taxpayers
interest in lower taxes can be accommodated, for instance, by de
funding defense services for the poor.12
Public savings can be achieved just as effectively by tighten
ing standing requirements for civil actions (by curtailing classi
cal rights), as by tig h ten in g elig ib ility requirem ents for food
stamps (by curtailing welfare rights). W hen judges hold pretrial
conferences to encourage out-of-court settlem ents in order to
reduce delay and congestion in court, they im plicitly acknowl
edge that tim e is money more specifically, that court tim e js
taxpayers money. U n d er the due process clause, governm ent
agencies must provide some sort o f hearing in connection with
taking away a persons lib erty or property (including d riv e rs
licenses and welfare benefits), but courts rou tin ely take bud
getary expenses into account when deciding how elaborate a
hearing to hold. In 1 9 7 6 , discussing the procedural safeguards
required by a due process guarantee, the Supreme Court said that
the Governments interest, and hence that of the public, in
conserving scarce fiscal and administrative resources is a fac-
C o m m o n S e n se
about
R ig h t s
27
28
he
C o st
of
ig h t s
this book. But why should cost consciousness diminish our com
m itm ent to the protection o f basic rights? To ask what rights
cost, first o f all, is not to ask what they are worth. If we could
establish to the last penny what it would cost to enforce, say,
the right o f equal access to justice in a given budgetary year, we
would still not know how much we, as a nation, should spend on
it. That is a question for political and moral evaluation, and it
cannot be settled by accounting alone.
Such considerations are u n likely to assuage liberal appre
hensions, however, given the current and apparently bipartisan
crusade to cut public expenditures. Fearing that short-sighted
voters may respond all too eagerly to we cannot afford it argu
ments put forward by conservatives, liberals may worry, reason
ably enough, that cost-benefit analysis w ill be misused by
powerful private interests. They may fear that inevitable disclo
sures o f waste, inefficiencies, and cost overruns while good in
p rin cip le w ill even tually lead to a fu rth er slashing o f bud
getary allocations for the protection o f even our most precious
rights. This fear is not w holly unjustifiable. But its appropri
ateness depends a good deal on what cost-benefit analysis actu
ally entails.
Conservative anxieties are equally acute, but assume a d if
C o m m o n S en se
about
R ig h t s
29
30
he
C o st
of
R ig h t s
the meager inform ation at his or her disposal (for inform ation
too has costs) and his or her im m unity to electoral accountabil
ity, reasonably and responsibly decide about an optimal allocaj tion o f scarce public resources? A judge may compel a street to
remain open for expressive activity or a prison to improve liv
ing conditions for prisoners, but can that judge be sure that the
m oney he or she com m andeers for such ends w ould not have
been used more effectively by inoculating gh etto children
against diphtheria?
This dilem m a does not affect judges alone. Take civil liber
ties litigators: because they conceive o f rights as weapons w ith
which to confront and attack government, they may be uncom
fortable w ith an inquiry into the budgetary cost o f rights that
focuses attention on a very sim ple and concrete way in which
rights are creatures o f governm ent. G enerally speaking, the
| costliness o f rights protection explodes a powerful illusion about
the relationship between law and politics. If rights depend in
practice on the going rate o f taxation, then does not the rule of
law hinge upon the vagaries o f political choice? A nd is it not
demeaning to understand rights, which after all protect human
d ig n ity, as grants awarded by the public pow er (even if the
power in question is democratically accountable)? As guardians
o f priceless values, m ust not judges, especially, rise above the
daily compromises o f power-wielders and nower-seekers?
W hatever the merits o f the should m Uiis case, it has little
relevance to what is. To imagine that American law is or can
be untouched by the tradeoffs familiar to public finance can only
blind us to the p olitical realities o f rights protection. For the
cost o f rights implies, painfully but realistically, that the p oliti
cal branches, which extract and re-allocate public resources, sub-
C o m m o n S e n se
about
R ig h t s
31
~~
questions, not just about how much various rights actually cost,
but also about who decides how to allocate our scarce public
resources for the protection o f w hich righ ts, and for whom .
W h at principles are comm only invoked to guide these alloca
tions? And can those principles be defended?
Finally, the simple insight that rights have costs points the
way toward an appreciation o f the inevitability o f government
and o f the various good things that governm ent does, many of
which are taken so much for granted that, to the casual observer,
they do not appear to involve governm ent at all. A ttention to
the public costs o f individual rights can shed new light upon old
questions such as the appropriate dimensions o f the regulatorywelfare state and the relationship between modern government
and classical liberal rights. Public policy decisions should not be
made on the basis o f som ejm aginary hostility between freedom
and the tax-collector, for if these two were genuinely at odds,
all o f our basic liberties would be candidates for abolition.
Chapter One
A ll R ig h t s A r e P o s it iv e
36
>
T h e C o s t o f R ig h t s
A l l R jg h T5 A re P o s it iv e
he
u t il it y
of
37
ic h o t o m y
38
he
C o st
of
R ig h t s
A l l R ig h t s A re P o s it iv e
>
39
receive counseling about birth control, and the right to use con
traceptives?
T his ram shackle inventory of only some of the everyday
righ ts of ordinary Am ericans suggests the m agn itu de of the
challenge facing anyone who wants to map the sprawling terrain
of our individual liberties. Even if we set aside archaic-sound
ing anom alies, such as the right of rebellion," we w ill have a
tough tim e organizing into two m utually exclusive and jointly
exhaustive groups the swarm of claim s and counterclaims that
help structure the com m onplace expectations and routine
behavior of U.S. citizens today.
T
he
ure
of
ic h o t o m y
40
T h e C o s t o f R ig h ts
A ll
R ig h ts
A re
P o s it iv e
41
42
T h e C o s t o f R ig h ts
A l l R ig h t s A r e P o s itiv e
>
43
he
o st
of
e m e d ie s
44
'
hf .
C o st
of
R ig h t s
interference
,,yVw sim p iy a
A l l R ig h t s A r e P o s it iv e
'
45
46
>
he
C o st
of
R ig h t s
A l l R ig h t s A r e P o s it iv e
>
47
48
>
T h e C o s t o f R ig h t s
Chapter Two
T he N e c e ssit y of
G overnment P erformance
he id ea t h a t r ig h t s a r e e sse n t ia l l y a im e d
"against" gov
50
T h e C o s t o f R ig h t s
T h e N e c e s s it y o f G o v e r n m e n t P e r f o r m a n c e
51
How
E x c e p tio n a l A re C o n s t it u t io n a l R ig h ts ?
But are not private-law rights (such as the right to sue for breach
of contract) quite unlike constitutional rights (such as freedom
of speech)? It makes little sense to distinguish between proper
52
T h e C o s t o f R ig h t s
T h e N e c e s s it y o f G o v e r n m e n t P e r f o r m a n c e
53
54
-<
T he C o st o f R ig h t s
T h e N e c e s s it y o f G o v e r n m e n t P e r f o r m a n c e
ig h t s
a n d
55
o w e rs
56
T h e C o s t o f R ig h t s
T h e N e c e s s it y o f G o v e r n m e n t P e r f o r m a n c e
57
58
->
T h e C o s t o f R ig h t s
Chapter Three
No P
c c o r d in g
r o p e r t y w ith o vt
to the
r it ish ph ilo so ph e r
TaA/VTIOIV
eremy
en th am
"property and law are born together and die together. Before
the laws there was no property; take away the laws, all property
ceases."1 Every first-year law student learns that private proper
ty is not an object" or a "thing" but a complex bundle of rights.
Property is a legally constructed social relation, a cluster of leg
islatively and judicially created and judicially enforceable rules
of access and exclusion. W ithout government, capable of laying
down and enforcing com pliance w ith such rules, there would
be no rig h t to use, enjoy, destroy, or dispose of the thin gs we
own. T his is obviously true for righ ts to in tan gib le property
(such as bank accounts, stocks, or tradem arks), for the right to
such property cannot be asserted by taking physical possession,
only by an action at law. But it is equally true of tangible prop
erty. If the w ielders of the police power are not on your side,
you w ill not successfully assert your right" to enter your own
home and make use of its contents. Property rights are mean
ingful only if public authorities use coercion co exclude nonown
ers, who, in the absence of law, m ight well trespass on property
that owners wish to m aintain as an inviolable sanctuary. More
over, to the extent that markets presuppose a reliable system of
recordation, protecting title from never-ending challenge, prop
erty rights sim ultan eo usly presuppose the existence of many
60
T h e C o st o f R ig h t s
No
P r o p e r t y w it h o u t T a x a t io n
61
and publicly financed war on those who offend against the rights
of owners.
David H um e, the Scottish philosopher, liked to point out
that private property is a monopoly granted and m aintained by
public authority at the p u b lics expense. As the English jurist
W illiam Blackstone, following Hume, also explained, proper
ty is a political establishm ent.2 In draw ing attention to the
relation between property and law which is to say, between
property and government Bentham was m aking the very same
point. The private sphere of property relations takes its present
form thanks to the political organization of society. Private prop
erty depends for its very existence on the quality of public insti
tutions and on state action, in clu d in g credib le threats of
prosecution and civil action.
W hat needs to be added to these observations is the correla
tive proposition that property rights depend on a state that is
w illin g to tax and spend. Property rights are costly to enforce.
To identify the precise monetary sum devoted to the protection
of property rights, of course, raises difficult issues of accounting.
But this much is clear: a state that could not, under specified
conditions, take private assets could not protect them effec
tively, either. The security of acquisition s and transactions
depend, in a rudim entary sense, on the governm ents ab ility to
extract resources from private citizens and apply them to pub
lic purposes. On balance, property righ ts m ay even place a
charge upon the public treasury that vies w ith the burden of
our massive entitlem ent programs.
None of this denies that protection of property rights can be
a valuable investment that increases aggregate wealth over time.
On the contrary, the extraction and redistribution of resources
62
'
T he C o st o f R ig h t s
No
P r o p e r t y w it h o u t T a x a t io n
63
64
T h e C o s t o f R ig h t s
No
P r o p e r t y w it h o u t T a x a t io n
>
65
66
T h e C o s t o f R ig h ts
No
P r o p e r t y w it h o u t T a x a t io n
67
68
T h e C o s t o f R ig h t s
No
P r o p e r t y w it h o u t T a x a t io n
69
70
>
T h e C o st o f R ig h t s
No
P r o p e r t y w it h o u t T a x a t io n
71
72
>
T h e C o s t o f R ig h t s
No
P r o p e r t y w it h o u t T a x a t io n
>
73
74
T h e C o s t o f R ig h t s
thing the buyer needs to know. That is one reason why the riskaverse fear com m ercial exchanges as possible scams, why they
clin g to suppliers they know personally rather than shopping
around for bargains. Public officials can discourage this kind of
clinging, promote market ordering, and discourage swindlers by
in surin g again st any dam age arisin g from the asym m etry of
inform ation between buyers and sellers. To help consumers
make rational choices about where to obtain credit, for instance,
the Consumer Credit Protection Act forces any organization that
extends credit to disclose its finance charges and annual per
centage rate. Ju st so, consumers benefit from competitive mar
kets in restaurants because, as voters and taxpayers, they have
created and funded sanitation boards that allow them to range
adventurously beyond a restricted circle of personally known and
crusted establishm ents. The enforcement of disclosure rules or
antifraud statutes is no less a taxpayer-funded spur to market
behavior than government inspection of food handlers.
The appropriate level of federal spending and governm ent
o versight w ill rem ain controversial. N othing said above is
intended as a defense of any particular program; some existing
programs should undoubtedly be scaled down. W hat cannot be
denied is that enforceable antifraud legislatio n is a common
good, em bodying biblically sim ple moral principles (keep your
promises, tell the truth, cheating is wrong). Moreover, the ben
efits of antifraud law cannot be captured by a few but are d if
fused w id ely throughout society. It is a p ub lic service,
co llectively provided, and serving to reduce transaction costs
and promote a free-wheeling atmosphere of buying and selling
chat would be very u n lik ely to arise if "caveat em ptor!" were
the sole rule.
No
P r o p e r t y w it h o u t T a x a t io n
75
76
T h e C o s t o f R ig h t s
Chapter Four
W atch do g s M is t B e P aid
In 1992, t h e
a d m in ist r a t io n of ju st ic e
78
>
T h e C o st o f R ig h t s
W a t c h d o g s M u s t B e P a id
79
80
T h e C o s t o f R ig h t s
W a t c h d o g s M u s t B e P a id
>
81
82
>
T h e C o s t o f R ig h t s
W a t c h d o g s M u s t B e P a id
83