Crimes and Transactions

Abstract

Professor Finkelstein's paper focuses on perhaps the most basic question one could ask about the criminal law: What explains the existence of the criminal category, as distinct from other kinds of mischief? Assuming that society has good reason to deter mischievous conduct or to sanction those responsible for it, we might still ask why either goal should require a distinctively criminal category. The problem was brought to contemporary prominence by Robert Nozick, who, in Anarchy, State and Utopia,1 asked: Why not simply compensate? If we begin with the (contestable) premise that every kind of wrong that we might want to deter or to sanction consists in a rights violation, then the question is, why don't we simply have a scheme in which those who are the victims of rights violations secure compensation from those who have wronged them? In the language of the law, why not torts alone? While a variety of plausible responses have been offered (beginning with Nozick's own), the question poses a particularly acute challenge for those who defend an economic analysis of the law. Since they seek to explain the law in terms of a relatively narrow range of concepts, these theorists find their explanatory resources correspondingly limited; they cannot avail themselves of the most familiar philosophical solutions. Roughly, they have proposed the following sort of account. We begin with a system of property rights or entitlements; the justification for having any such set of entitlements is to be conceived of in economic terms. For example, ownership encourages investment and reduces uncertainty; for those and other reasons, ownership is wealth enhancing or productive. The degree to which a system of property ownership can be efficient is limited, however, since having a right to something does not yet permit one to alienate it. Without the right to alienate, individuals may be unable to make mutually advantageous-and therefore efficient-exchanges. Thus, it is desirable (in economic terms) to supplement the scheme of initial