Simplicity and Complexity in Law and in Markets

Abstract

Richard Epstein’s Simple Rules for a Complex World is true to its title and to the author’s demonstrated genius over a long career. It is a libertarian-oriented enterprise in that it requires the reader to share in the belief that government programs are often wasteful and subject to unattractive interest group pressures and corrupt bureaucracies. More generally, Simple Rules is framed against a background in which the reader must share the libertarian view that individuals can and should be trusted to look after themselves and to make their own choices. Epstein likes “simple” rules; these include strict liability, a flat tax, fee simple, and so forth. He argues that more complexity invites errors and corruption, and arguments for complexity undervalue individuals’ ability to bargain and otherwise fend for themselves. People know what is good for them far more than lawmakers. Anyone who does not share these fundamental views might be frustrated when reading this important book, unless perhaps the belief in redistribution and market failures is so great that one is willing to set aside the enormous costs of government failure. In any event, an insightful and friendly (and terrific) critique of the book has already been written by John Harrison, who thinks of Epstein’s book as a myth: What role should law play if the world were as Epstein (and perhaps Harrison and others among us) wishes it to be? As such, this Essay is neither a review nor a reaction, but instead offers the following two ideas that are stimulated by the book.