Sizing up Private Law

Abstract

Functional and interpretive theories of private law appear to differ greatly. For functionalists, an external theory should capture real-world results in terms of efficiency, distributive justice, or some other functional criterion, leaving the morally-infused concepts immanent in the law as an intermediate epiphenomenon. Functionalists tend to downplay the role of concepts and doctrines, especially those couched in the moral terms used by participants in the legal system – legislators, judges, and laypeople. By contrast, the interpretivist seeks first and foremost to be true to the moral self-understanding of the law, which necessarily includes the concepts and rules of private law as expressed by those inhabiting the law.

In this paper, we argue that the conflict between external and internal perspectives in private law is misunderstood – and is both exaggerated and underplayed. Both external and internal perspectives pay too little attention to how the “micro” level of individual, even bilateral, interaction relates to the “macro” level of society and the law as a whole. We will show that both perspectives overlook the resources they could employ to explain how the micro and macro are connected: in their different ways, external and internal perspectives do not draw out the connection between local simplicity and generalization. In a nutshell, both perspectives could converge on a picture of private law in which locally simple structures of bilateral rights and duties scale up to produce more complex structures at the level of society.

We suggest that functionalists should take seriously the moral norms that are immanent in private law – these norms are central to the functioning of private law as a system. Without these modular components, private law can be intractably complex. Accordingly, we propose an inclusive functionalism, one that takes these moral norms at face value. These moral norms perform a crucial function of managing the otherwise intractable complexity of the interactions between parties governed by private law. We also propose an inclusive interpretivism, which is more open to functional considerations involving simplicity. Private law must avoid intractable complexity if it is to function properly, and this calls for a simplicity criterion: interpretivists should look for moral norms that are both simple and generalizable.

Once theorists recognize this point of convergence – on norms that are simple and generalizable – it becomes clearer what is at stake in private law disputes. Resolving private law’s conceptual structure at the middle level leaves open foundational questions. What grounds private law? Distributive justice, efficiency, or perhaps a mix of other values? Likewise, we can now better assess interactions between systemic, society-level goals and micro- or mid-level considerations. Should contract law be adjusted so that it has different distributive effects? Should property law be reformed so that it responds differently to fairness concerns, or to human flourishing? These and other questions can only be assessed properly once we have taken into account the way that private law operates as a system.

Keywords: Private Law, Functionalism, Interpretivism, Complexity, Modularity, Law and Economics, Legal Theory

JEL Classification: K10, K11, K12, K13