The 'Constitution of Man': Reflections on Human Nature from the Federalist Papers to Behavioral Law and Economics

Abstract

Studies of human nature in the context of legal policy tend to contrast the rational choice view against the more recent behavioral model of decisionmaking. This framework is misleading in that many of the latter school’s insights find expression in classical liberal literature such as The Federalist Papers that predates modern behavioral scholarship by centuries. These findings suggest an etiological rather than binary approach to framing the debate about human nature, an approach that seeks out the conceptual development from classical liberal to neoclassical economic to behavioral perspectives. Behavioral law and economics did not emerge sui generis as a novel counterpoint to the application of neoclassical economics to legal issues. Rather, classical liberal, neoclassical, and behavioral precepts about human nature form a unified whole, a narrative about our selves that has evolved over time. Both neoclassical and behavioral law and economic thinking related to specific policy design finds antecedents in The Federalist Papers discussion of human nature. The lodestar for our conception of human nature today should be the classical liberal perspective, because that is the basis upon which our Constitution was built and which endures as an accurate account of our nature. It may be common to think The Federalist Papers primarily concerns institutional design implicating public choice and political economy problems, and are therefore not relevant to the design of specific policies implicating individual biases and bounds. However, the conception of human nature that predicated the Constitution’s design has been largely vindicated by contemporary empirical investigations into individual psychology. Therefore, these founding era documents deserve renewed attention by students of human nature and by designers of specific government policies. Theories of human nature matter because law must incent and deter human behavior, and therefore must be based upon an accurate conception of the subject of the laws. The “constitution of man” elaborated in The Federalist Papers explains the need for and effectiveness of many of the architectural features of the United States Constitution, including separation of powers and other safeguards designed prevent abuse of government and to ensure excellence in government as near as humanly possible. The Federalist Papers also contains numerous examples of policy failure and explains them in terms of human nature. Therefore The Federalist Papers is not limited in focus to institutional design and the corresponding famous discussions of public choice and political economy problems that are quoted to every 1L. The text also includes substantial content relating to individual biases and cognitive bounds that are relevant to contemporary discussions of human nature and policy design. I draw the following concepts from The Federalist Papers’ remarkably insightful discussion of human nature: we are bounded (bounded rationality, will-power, self-interest, and ethicality); biased (availability bias, self-serving bias, confirmation bias, and optimism bias); bad betters (reactive devaluation, escalation of commitment, myopia, endowment effect, loss aversion, and prospect theory), and bad with others (collective action problems, rent seeking, free riding, groupthink, and holdouts). It is worthwhile to compare Founding-era conceptions of human nature with contemporary discussions if only to know whether they are still accurate. It appears they are.