The Necessity Of Defoundation

2.1. Historical Context (From Metaphysics to Pragmatism)

The most influential incarnation of the traditional metaphysical way of conceptualizing the law has been the idea of natural law. For over two thousand years this concept has played a central role in shaping Western legal thought and institutions. Even though the notion of natural law has undergone important changes, and various versions have coexisted over the centuries, their common ground, the assumption of an eternal and immutable justice supposed to be derived either from God (as pleaded by the Christian versions of St. Augustine and St. Thomas Aquinas) or from the nature of the universe (as argued later for instance by social contract mod-els5), remained largely unaltered. In other words, justice appeared as accessible exclusively through (God- or Nature-given) reason. In this sense, the concept of natural law can be seen as a metaphor of the principle of reason which, since Plato, has profoundly penetrated Western thought.

In all of the various versions of natural law theories, overarching first principles of justice were supposed to ground political and legal institutions. Law produced in the legislative and judiciary processes, i.e. positive law, was deemed morally acceptable only in so far as it reflected those first principles or foundations. Providing a transcendental grounding for basic civil rights, natural law theories thus sought to infer a standard by which the morality or justice of laws could be evaluated, and as a consequence, by which laws that violate fundamental individual rights (such as security, freedom and property) could be rejected.

A particularly consequential event in the evolution of the natural law tradition toward a first questioning of the foundational principles has probably been the separation of theology and law. This fundamental split (first seen in the medieval revolution of the interpreter in Roman law which occurred between the end of the 11th and the beginning of the 13th century) not only introduced into Western legal thought the idea of a possible deficiency of the divine foundation - God ceased to be considered as necessary to the legal function - but also, more importantly, opened the door to a malleability of the foundation.6 The secularized foundations became abstract, capable of integrating diverse contents. Ideas inherited by the enlightenment, such as inherent human dignity, inalienable human rights, autonomy or consensus can all be viewed as different contents or interpretations of the foundation. At the same time, they still incarnate the old belief in the existence of some universal, unchanging human nature or reason as a once-and-for-all foundation of law.

With the rise of legal positivism and its subsequent generalization, the natural law principles largely ceased to provide a theoretical foundation for the legal system. Nevertheless, positivists did not turn away from the question of foundations. If God was dead, as said Nietzsche, then a God-substitute had to be found. The struggle to identify a new foundation for judicial decision-making has remained one of the major preoccupations of positivists.7 Even if the modern discourse of legal positivism had a more scientific flavor than the premodern natural law approaches - the aim being to deduce objective legal principles from reality (legal cases), it remained, however, a fundamentally rationalist approach to law, relying (more than ever) on abstract reason or logic. In particular, the method of the legal science inspired by Langdell, which has strongly influenced the evolution of American common law after the Civil War, was profoundly Cartesian. The goal of this extreme version of legal formalism was to apply deductive reason in a quest to conceptualize a logically coherent system of legal principles and rules.8

An important implication of the malleability of the foundation (the fact that it could receive any content) has been the advent of the legal interpreters' "rational doubt of the foundation''9 itself. While this doubt has for a long time been directed merely against the content of the foundation (when appearing obsolete), it nowadays seems to affect its very principle or logic. Under the combined effects of the ascendancy of legal positivism and the rise of scientific and management ideals, the notion of "foundation" in legal thought is increasingly vacillating and is, nowadays, frequently replaced by the problematics of defoundation. The deep-seated metaphysical conceptions of justice are still being seriously challenged. As a consequence, some contemporary legal discourse is shifting from defoundationalism to anti-foundationalism that rejects any foundation of law.

As early as the end of the 19th century, when the recourse to both natural law and legal positivism was still considered self-evident, Nietzsche undertook a destructive attack on metaphysical claims about God, Nature or Reason as universal foundations of law. More importantly, he provided a plausible explanation of why metaphysical law was destined to lose its grounding. Nietzsche indeed anticipated a historically inescapable process in Western philosophy toward nihilism, an evolution which he described as the logical consequence of an error of reason which consists in attributing intrinsic values to things. This process is rooted, according to Nietzsche, in an artificial separation first posited by Plato, between experience and reason, the latter being given priority over the former. This separation between the physical and the metaphysical world has deeply conditioned Western legal thought up to the present day. Over time, as explains Nietzsche, some things have acquired the status of values-in-themselves, ideal values that are beyond the world of experience. According to Nietzsche (1888, reprint 1998, pp. 108-109), ''the 'highest concept', that is to say, the most general, the emptiest, the last cloudy streak of evaporating reality'' is placed ''at the beginning as the beginning''. In this process of mythification, some values have been claimed to be supreme or absolute (such as Justice, Truth, Causality, Liberty, Progress...). Not only is it impossible to derive these categories of reason from experience, but, as emphasized by Nietzsche, the whole of experience rather contradicts them (p. 110).10 Because it has confused the being (Sein) with its justification or foundation (Grund), Western thought has inevitably exposed itself to deception: the being annihilates itself precisely by transforming into value.11 Indeed, extreme overrating of things must one day lead to devaluation. Nihilism appears when the dominant values crumble and nothing is left.12 For Nietzsche, it was just a question of time before Western civilization, in which the quest for truth has been inculcated for so long, would end up using the weapon of truth against the value of Truth. No value could resist indefinitely to the suspicion that metaphysical reason has taught us.

This latent process of demoralization described by Nietzsche, profoundly affecting the literature, philosophy and politics of modern Europe, culminated in the late 19th century. The rise of massive industrialization and the dramatic progress of science indeed rendered more and more illusory the belief in supreme or absolute values. In legal thought, a crisis of foundations13 appeared with some delay, but with no less intensity, particularly in American jurisprudence. This occurred first under the influence of the philosophies of legal realism and pragmatism, incarnated by Holmes and Dewey among others, and much later, in the second half of the 20th century, by critical legal studies (Unger), deconstructivist skepticism (Fish), anti-foundationalism (Rorty) or new forms of legal pragmatism (Posner)-movements in which the deconstruction of the alleged metaphysical foundations of law has become an explicit concern. Today, the process of defoundation of the institutions of law has been launched and the systematic demythification of law has become a matter of priority in much of contemporary legal scholarship. The new, postmetaphysical viewpoint on law and law-related issues seems to be pragmatism: a practical or instrumental reason, interested in what works, what is useful, what produces the best consequences in the world of facts.

Heidegger, following Nietzsche's intuitions, anticipated this general evolution from metaphysics to pragmatism in Western thought - an evolution from a logic of ends to a logic of means. In an ever more rational, efficiency and progress-oriented system of means, there is no more room for ends. According to Heidegger, whoever adopts Plato's quest for values and principles higher than that of human existence will sooner or later wind up in pragmatism. To use Rorty's terms, the way from metaphysics to pragmatism is a descending escalator: once one has stepped onto it, one cannot get off before reaching the bottom. Starting with Plato, one will inevitably end up with Nietzsche, and even farther down, with Dewey.14

Contemporary pragmatists such as Rorty or Fish seem to agree with Heidegger's analysis that the evolution from metaphysics to pragmatism is inescapable, but unlike Heidegger, they generally consider this evolution as extremely satisfactory.15 Their position can be defined as what Nietzsche called "accomplished nihilism''. In this view, nihilism is seen not as a dead end, but rather as a liberating move, a real chance16 to escape from oppressing metaphysical values. This may be particularly the case for law.

In the light of this idea of the historical destiny of nihilism, economic science appears as an indispensable tool in the service of pragmatism that is progressively invading all aspects of social life. It would then just be a question of time before economic methodology would be applied also to legal issues. The emergence of the law-and-economics movement in the seventies, under the initiative of Judge Posner (following Coase, Becker and Calabresi), not only seems to confirm this conjecture, but also appears to be its most extreme illustration: the study of law here becomes a prominent domain for the application of economic science.17

2.2. Law as Economic Science

One of the central arguments made early on in the economic analysis of law18 was precisely that over time, common law judges have developed an intuitive sense of economics by seeking, more often implicitly than explicitly,19 to arrange legal rules so as to maximize social efficiency. This assumption was based on the empirical observation that numerous legal doctrines conform to simple, informal, yet very useful economic models.20 The first versions of this early, and essentially descriptive, theory of law almost unanimously concluded that the common law is globally efficient, or at least tends toward efficiency: for instance, Rubin (1977), in a well-known model, asserted that the common law process constantly replaces inefficient rules by efficient rules.21 According to this latter interpretation, judges do not even have to care for efficiency: it is the behavior of litigants that creates a systematic tendency for the law to evolve toward efficient rules.

More generally, the purpose of the efficiency theory of law is to use standard microeconomic tools in order to explain and predict the logic of legal decision-making as well as the reactions of those governed by law to legal rules and institutions. Three propositions have to be distinguished: (A) that legal rules can be analyzed in terms of their efficiency; (B) that it is desirable for legal rules to be efficient; (C) that the common law evolves (or has evolved) toward more efficient legal rules.

More or less complex economic models were developed to illustrate the mechanisms by which the law encourages individuals to adopt efficient behavior, for instance by requiring the taking of adequate precautions to avoid disputes or accidents. Reforms of what the law should mandate in different situations are eventually suggested. In case an accident occurs, judicial decisions should, according to this more prescriptive perspective, aim at minimizing the sum of prevention, accident and administrative costs. Therefore, liability ought to be placed on the party that could have avoided the accident at least cost. This could be the victim as well as the potential injurer. The aim is to make people respond ex ante to a given legal rule, rather than to compensate victims. This means getting the potential future injurers (and the potential future victims as well) to incorporate or to internalize the price of failing to take adequate precautions.22 In the cases in which law-and-economics advocates a compensation of victims, it is in fact a punishment imposed on negligent defendants rather than a duty to compensate. In this approach, deterrence appears to be a fundamental tactic for legal policy. Coleman (1987, pp. 457) expressed this idea very clearly when he asserted that "the duty of negligent defendants to compensate their victim is not a question of justice or morality, but a question of utility, and in a larger sense, of deterrence".

Strongly influenced by the pragmatic spirit of utilitarianism, law-and-economics has thus developed an instrumental view of law based on principles like the "cheaper cost avoider", the "highest value user" or the "social wealth maximizer". The ultimate goal is to transform law into a science with its own methodology. Built on a balancing of social costs and benefits, law-making in this approach is a matter of calculation, management and optimization. It would not be an exaggeration to assert that in this perspective, law is economics.

The contrast with traditional legal scholarship, in which concepts like justice, fairness or equity play a prominent role, is immense. The law-and-economics movement is indeed deeply skeptical toward such principles, its purpose being to develop a scientific and anti-dogmatic approach to law. Ethics and morality are considered as subjective, rhetorical and arbitrary matters and, according to law-and-economics, there is no scope for them neither in economics, nor in law. Any concept that cannot be quantified, formalized or objectively defined is described as a suspect, futile and unusable value. Justice is supposed to be such a concept. Considered as an intuitive and irrational principle, justice is rejected23 as being a useless device for legal practice as well as for the scientific inquiry into the law.24 The only adequate criterion of justice appears to be efficiency. For instance, for Posner, in a world of scarcity, the worst injustice is the waste of resources. In this perspective, a fair or just legal system is one that deliberately promotes gains in social welfare.25

The argument generally advanced to justify this deconstruction26 of justice and its replacement by the wealth maximization principle is that economic efficiency is an operational or workable criterion, and therefore particularly useful for understanding the functioning and evaluating the soundness of legal decision-making. That this criterion is derived from economics and not at all from the law is not a preoccupation in this perspective and hence does not call for any deeper argumentation. What is of interest is simply to see whether and how legal decision-makers use this criterion to rationalize the production of law.

With respect to the question of the relation of theory to praxis, law-and-economics can be considered as a form of logical positivism or empiricism, demanding the verifiability of theory by the empirical world. The very project of law-and-economics, understanding how courts work and what is the impact of law on individual behavior, makes it appear, at least at first sight, as an approach whose primary focus is on the world of facts, rather than on abstract principles. Studying the logic of legal behavior, law-and-economics looked for a theory that was consistent with their empirical finding of a tendency of law toward efficiency. The traditional rational choice model (a central pivot of microeconomics) appeared to be most appropriate, in so far as it offered a theoretical outlook on human conduct eventually allowing economists to predict how legal actors are likely to behave. In this respect, the economic analysis of law, or at least its descriptive version, clearly belongs to the tradition of scientific realism. The purpose is to provide a scientific account of the behavioral regularities that underlie the law's rules and institutions.

In the rational choice model, human behavior is described as rational in the sense of maximizing stable and clearly defined economic objectives under given constraints. In law-and-economics, the rationality assumption intervenes at two levels. On one hand, it refers to the legal system (for instance judges who are supposed to apply or create legal rules) and on the other hand, it applies to those governed by law. When faced with a choice among potential alternative actions, individuals are supposed to choose the alternative with the highest payoff, given their preferences and the constraints they face. Law is viewed as one of the constraints entering into their calculus. The distinctive characteristic of the efficiency theory of law is the assumption that there exists a coherent and objectively verifiable link between legal rules and their impact on individual action, and that it is therefore possible to create a logically coherent system of law by designing rules so that they reflect an objective efficiency criterion (such as social wealth maximization).

The economic model of legal decision-making is supposed to be essentially for social policy use, its vocation being to determine a hypothetical optimal outcome which should be applied to the suboptimal real world situation. Legal decision-making is thus described as the intervention of an external authority in a free but defective market-an intervention that is considered indispensable in order to achieve social efficiency. In a world without transaction costs, this optimal resource allocation would be achieved by the market process.27 In cases where prohibitive transaction costs entail a market failure, for instance when conflicting parties are unable to negotiate a mutually satisfactory outcome, the legal system is supposed to replace the market, by simulating the state of affairs that would have been the outcome, had free bargaining been possible. This would definitely not be an easy task for legal authorities. The cognitive capacities required for optimal legal decision-making are, in most situations, incompatible with the all-too-human reality of the legal profession.

While the scientific methods and standards of economic analysis of law became more and more sophisticated, a growing divergence appeared between the ever more technical language used by the theorists in order to formalize the process of legal decision-making and the argumentative techniques used by legal actors in their everyday decisions. At this point, the acknowledgment of the world of facts by the theory becomes equivocal. The way mainstream analysis proceeds makes clear that formal implications are increasingly given priority over pragmatic, real world considerations. Law becomes a matter of pure logic in this perspective of market simulation. It is defined in an abstract setting by mathematical relations between economic variables. In the economic analysis of law, law becomes a simulacrum of the ideal competitive market.

This evolution is an important shift away from the pragmatism and realism characterizing the initial spirit of the law-and-economics project. It can even be seen as a step toward a new kind of legal formalism. The lawyer-economists have become rationalists, relying predominantly (if not exclusively) on reason. As regretted by Posner (1995, 2), the economic analysis of law has ended up replacing legal conceptualism (against which it had originally been a revolt) with economic conceptualism. Legal outcomes are evaluated by their conformity not with some overarching legal concepts (as is the case in legal formalism) but with the not less abstract and artificial principles of economic science. It has become an approach that avoids the world of experience just as much as did legal formalism. This may explain why law-and-economics is sometimes titled the "new Langdellism''.28

Today the question of the methods and definition of the objectives of the theory remains more than ever an important issue. A real Methodenstreit has appeared between those who want to develop and improve the usage of ever more sophisticated mathematical tools in order to rationally systematize law and those who, on the contrary, want law-and-economics to provide useful (and therefore necessarily accessible) instruments for guiding judges and lawyers in their daily decision-making.29 The actual evolution of the literature shows that the mainstream of the economic analysis of law increasingly falls into the first category, giving priority to formalism (or rationalism) over the development of a practical device for law-making (pragmatism).30

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