THIS PAPER IS THE CO-WINNER OF THE FRED BERGER PRIZE IN PHILOSOPHY OF LAW FOR THE 1999 AMERICAN PHILOSOPHICAL ASSOCIATION FOR THE BEST PUBLISHED PAPER IN THE PREVIOUS TWO YEARS. -/- The conflict between liberal legal theory and critical legal studies (CLS) is often framed as a matter of whether there is a theory of justice that the law should embody which all rational people could or must accept. In a divided society, the CLS critique of this view is overwhelming: (...) there is no such justice that can command universal assent. But the liberal critique of CLS, that it degenerates into an unpalatable moral relativism on which there is no non-arbitrary basis between a justice that underwrites forms of domination such as slavery and a justice that condemns such forms of domination is equally powerful and compelling. I show that there is a way to harmonize both views that is subject to empirical test. -/- First I show that the most widely accepted and influential formulation of liberal justice, John Rawls' Justice as Fairness, in. e.g, A Theory of Justice, cannot avoid the relativistic challenge because it would not be accepted, as a matter of sociological fact, by real people in a divided society once the "veil of Ignorance" is removed and real people step out from the Original Position. To put it differently, different reflective equilibria are inevitable in a divided society. Given the weight that Rawls properly puts on the realizability of a conception of justice and its stability in practice, this is a fatal objection. There can be no divided society that is "well ordered" in Rawls' sense, governed by a shared conception of justice and known to be so governed. -/- I then turn to the most powerful statement of the CLS view, Milton's Fisk's relativistic account in The State and Justice. For Fisk, justice is a compromise between what the dominant groups can compel and what the the subordinate groups will acquiesce to., There is no one such compromise in any given situation, so the account is in that sense relativistic, but more deeply, it is relativistic in that it offers no non-arbitrary, non-question begging way to choose between the official justice of, e.g., a slaveholding society and and the radical justice of the slaves, which has no place for slaveholders as a group or slavery as an institution.All that Fisk can offer is an arbitrary existential choice: I'm with the slaves. (Or the slaveowners.) Most of us would find this disconcerting or even unacceptable. -/- I show that Fisk's general sort of account can be modified to allow for an non-arbitrary choice. Given general facts about human nature, societies based on domination will produce resistance that over the long run will diminish or eliminate various forms of domination. Through a sort of ratchet effect, rights won will be hard if not impossible to reverse. Societies embodying forms of domination can therefore be compared on dimensions of stability: the more domination, the more resistance, and the less stability. Such societies are inferior on the dimension of justice to more emancipatory society on the terms of both kinds of justice, official and radical. -/- This is not question begging because regimes of domination incorporate stability no less than more emancipatory social orders. The choice between official justice embodying domination and radical justice that does not is not arbitrary because it is based on a shared commitment to long term stability. This offers an empirical test of which social orders are more justice, and a prediction that over time, domination will tend to decrease. (shrink)

In this Article, I propose a novel law and economics explanation of a deeply puzzling aspect of business organization in market economies. Why are virtually all firms organized as capital-managed and -owned (capitalist) enterprises rather than as labor-managed and -owned cooperatives? Over 150 years ago, J.S. Mill predicted that efficiency and other advantages would eventually make worker cooperatives predominant over capitalist firms. Mill was right about the advantages but wrong about the results. The standard explanation is that capitalist enterprise is (...) more efficient. Empirical research, however, overwhelmingly contradicts this. But employees almost never even attempt to organize worker cooperatives. I critique the explanations of the three leading analysts of the subject (N. Scott Arnold, Henry Hansmann, and Gregory Dow), all of whom offer are different transactions cost accounts, as logically defective and empirically inadequate. I then propose an explanation that has been oddly neglected in the literature, that the rarity of cooperatives is explained by the collective action problem identified by writers such as Mancur Olson. Labor management is a public good that generates the n-person prisoner’s dilemma which gives rational actors the incentive to create it in suboptimal (or no) amounts. I support this by reference to the empirical facts about the origin of existing cooperatives and show that this explanation requires no strong version of a questionable rational choice theory. This explanation is supplemented by the mere exposure or familiarity effect derived from social and cognitive psychology, which turns on the fact that labor managed firms are rare, in part because of the public goods problem, thus unfamiliar, which makes them less attractive and thus more likely to be rare. My account points advocates of labor management towards solutions such as institutional changes in incentives, which, however, themselves involve public goods issues. (shrink)

Debate about legal and policy reform has been haunted by a pernicious confusion about human nature, the idea that it is a set of rigid dispositions, today generally conceived as genetic, that is manifested the same way in all circumstances. Opponents of egalitarian alternatives argue that we cannot depart far from the status quo because human nature stands in the way. Advocates of such reforms too often deny the existence of human nature because, sharing this conception, they think it would (...) prevent changes they deem desirable. Both views rest on deep errors about what it is to have a nature and how genetics works. Human nature, like the nature of anything else, is a set of potentials to behave certain ways in given environments, not a nonsocial genetic something that inevitably produces the same result in any environment. To say that existing inequalities, are due to our genes, inalterable because heritable, ignores that genetic propensities may be differently manifested in different environments. Heritability has meaning only relative to an environment and a population and implies nothing about inevitability. A better sort of inegalitarian argument is that a proposed reform, given our nature, would be too costly even if possible. However, this sort of argument is too rarely supported by evidence and generally ignores the costs of existing inequalities. But egalitarians err in supposing that, if behavior is unconstrained by biology, the status quo is easily alterable. The environment may be extremely hard to change. Legal and policy debate should adopt a correct understanding of human nature as a set of propensities and ask of any proposed reform agreed to be otherwise desirable what and how alterable are its causes, genetic, environmental, or more accurately both. (shrink)