Winter 1993 final exam (Economic Reasoning and the Law)
Top student answers

Note: These were among the best answers received under examination conditions. They are not model answers, in that they all contain extraneous material as well as omitting useful information. Some even reach incorrect conclusions. However, they all provide intelligent, organized, approaches to the questions.

Question 1: Top answer #1

The issue at the heart of this case is under what conditions should the law mandate that parties engage in life-saving activities absent a bargain or a preexisting duty . The problem can be analyzed from an economic perspective under either the model of cooperation or the model of externalities.

I. The Model of Cooperation

The problem under the model of cooperation is that high transaction costs make bargaining nearly impossible. From an ex-post (after the accident) standpoint, bargaining is difficult because of implementation costs and strategic behavior problems. First there is normally no opportunity to bargain. Bargaining is impeded because there often may not be time to construct a bargain and because the communications necessary to construct a bargain may be impossible. In Soldano there may hypothetically have been time for the parties to construct a bargain, but in other similar cases (for example the drowning man) there is no ability to communicate and certainly no time to bargain.

Second even if there were no implementation costs, there are serious strategic behavior problems. Like the situation of duress the rescuer exercises monopoly power over the victim and can extract a price that we would be reluctant to enforce.

These ex-post problems could be avoided if potential rescuers and potential victims were able to bargain in advance of accidents as to when there would be a duty to rescue. The problem is transaction costs again: it is nearly impossible to identify all potential rescuers in the world and bargain with them.

Courts can deal with this problem by constructing a hypothetical bargain. Clearly when one party is in serious danger and rescue can be accomplished safely and conveniently the benefits of rescue exceed its costs. Rescue would be a Kaldor-Hicks improvement. We assume that parties in the absence of transaction costs would make this kind of deal and thus courts can feel relatively confident in imposing this hypothetical bargain on them. This is what the court does in Soldano. If Soldano had the opportunity to bargain with the Saloon a Coasean bargain would have been accomplished, so the court can allocate the entitlement to be rescued in the manner that it would have been had bargaining actually occurred.

The statute is a proxy for this hypothetical bargain. The rationale behind the statute is that since we know that a bargain would be made then we should go ahead and mandate its results.

The statute creates a property right in the victim to be rescued. It departs from the model of cooperation, however, in that it sets up a property rule in form only. The potential rescuer easily can convert the property rule into a liability rule by failing to rescue. It is an unusual sort of liability rule in that it only imposes a $100 fine and the fine which is paid to the state not to the victim. If we ignore psychic benefits from rescuing someone, this means that only when the costs to the actor of rescue are less than $100 will rescue occur . These costs could include such things as the opportunity cost of activities foregone by engaging in rescue, physical danger from rescue, and any possibility of liability from rescue.

Under the model of cooperation the statute may be seen as a proxy for an agreement that the potential rescuer will rescue the victim any time the costs are less than $100 (or alternatively a standing offer of $100 for rescue). The problem is that it is unlikely that a hypothetical bargainer would set the bargain price at $100. If we imagine hypothetical bargainers in an ex-ante situation, we can assume that they would set the bargain price much higher than $100. In an ex-post situation the bargain would be even higher. By setting the fine at $100 too few rescues will take place. Rescues will not take place at some points where the benefits to the victim exceed the cost to the rescuer. The statute is inadequate because it does not mandate rescue to the extent that parties would through the bargaining process.

The statute also differs from the model of bargaining in that compensation is not actually paid. On efficiency grounds (without considering wealth effects or the scitovsky paradox) it doesn't matter that compensation is not actually paid. On fairness ground, however, we may want to mandate that compensation be paid. It seems unfair that the entire surplus from rescue goes to the victim who may be partially responsible for his accident while the rescuer gets none of the surplus.

II. The Model of Externalities

A similar analysis occurs under the model of externalities. The inaction of the potential rescuer imposes an externality on the person in need of rescue (or we could say that the activity she is undertaking instead of rescue doesn't reflect its true social costs). Therefore we need a rule that will impose the externality. The statute can be seen as a Pigouvian tax of $100 for not engaging in rescue. The problem is that a $100 tax will ordinarily not be enough to fully internalize the externality . The result again will be that not enough rescue will take place under this regime.

III. Precautions

We should be concerned about the impact that the law will have on both activity levels and precautions. The statute, in effect, reduces the cost of dangerous activities. Since rescue is free to the rescued then people may overengage in dangerous activities. For example, in Soldano, the owner of the Happy Jack Saloon may have decided not to install a telephone in part on the assumption that in an emergency the Circle Inn would allow its phone to be used. But it may be more efficient for the Happy Jack owner to have the safety precaution of a telephone. A rule that mandates emergency phone use allows some businesses to free ride off of others and thus may cause certain activities to not reflect their true social costs (e.g. beer at Happy Jacks may be cheaper because the Circle Inn is subsidizing its emergency phone service).

This, however, should not ordinarily be a serious problem. People are unlikely to routinely put their lives in danger because of the high value that the people generally place on their own lives and uncertainty about rescue. A statute that makes rescue somewhat more likely, yet still highly uncertain, likely will not substantially change peoples levels of precautions. The statute may not provide enough incentives for the rescuer to take precautions once rescue has begun. It allows liability only for gross negligence thus providing the rescuer with no incentive not to be merely negligent once rescue has begun. Although problematic, this might be justified as a rough approximation for the result that people would reach in bargaining. We can imagine that people might be willing to hold the rescuer only liable for gross negligence in return for a lower bargain price ( or agree to redute the potential expected costs to the rescuer in order to encourage rnore rescues).


IV. Conclusion

Under either model the statute is better than no duty to rescue. But it fails in that it is not the result that a hypothetical bargainer would reach or alternatively in that it doesn't sufficiently internalize externalities.

The key problem is that damages are too low to provide correct incentives to rescue. Further the stipulation that rescue only need occur when it can be "rendered without danger or peril" means that many Kaldor-Hicks improving rescues won't take place, such as where a life could be saved with only minimal danger (or not life threatening danger) to the potential rescuer. A better solution would be a negligence-type rule that requires rescue any time that the costs exceed the benefits. Properly implemented, however, such a rule wouldn't actually require the person who failed to rescue to pay damages to the victim. In order to achieve double responsibility on the margin it would be better to have a much stricter criminal penalty where culpability was determined based upon an application of a Hand-type negligence test. Another, though less effective, way of partially accomplishing double responsibility on the margin would be take the victims comparative negligence into account when computing damages under a negligence-type rule. Either of these approaches would result in a rule that required rescue whenever benefits exceeded costs and still provided potential victims with additional incentives to take care. Such a rule would be harder to implement and may reduce certainty, but it could save lives and would be a Kaldor-Hicks improvement over the statutory rule.

This rule could be coupled with a distributional rule requiring the victim to pay some compensation to the rescuer or giving the rescuer a right to sue for the value of services rendered.

A combination of these two rules would result in a more efficient level of rescues, maintain incentives for potential victims to take precautions and arguably produce a more fair result. They can be justified under either the model of externalities or the model of cooperation.

The Soldano case presents the problem of how to get individuals to give low cost assistance to others when the latter
are in an emergency and in need of help. Because of the low cost of providing assistance (allowing a telephone call, in this case) and the possible large benefits of such actions, such as saving a life, economic analysis suggests that it will be efficient to allocate the resources required to provide assistance in those situations.

According to Coase, if there were no transaction costs, bargaining among the individuals involved in this case would lead to the efficient allocation, whether or not there is a tort duty to help. Without transaction costs, the victim could have negotiated with the bartender. Since his life is probably worth a lot more to Soldano than the use of the phone to the bartender,
Soldano would have compensated the latter for the call. In the case of the existence of a duty towards the victim, the bartender would have permitted the call, because his willingness to pay to forbid the call would not have matched the victim's asking price for the entitlement.

However, the transaction costs are too high for the bargain to take place. There are too many parties, strangers to each other, to negotiate for the use of the phone or other low cost assistance. At the moment of need, communication might be difficult (e.g. a man getting hit in a bar negotiating through his aider with the bartender about the right price for the use of the phone) . The parties may also engage in costly strategic behavior (e.g. the delay by the bartender in making the phone call in order to get more money may lead to increasing blood loss from the wounded man waiting for help) .

The model of externalities seems more appropriate to describe this case. The victim wants the bartender's phone for his own interests; the bartender, in his own interest, doesn't want to be bothered. There no competitive markets to provide for the kind of transactions that would lead these parties to cooperate. Intervention is necessary to get the parties to act efficiently.

Imposing liability on the phone owner internalizes the large externality caused by the decision not to call. Liability would encourage helpers to "take precaution" by giving assistance, and this would be efficient because they are the cheapest cost-avoider. (However, it possible is that phone owners will disconnect their phone lines or have the phones installed in their most private offices in order to avoid the duty.) While theoretically victims might be more likely to engage in dangerous
behavior if they know they can make an emergency call, empirically it is less likely.

Providing emergency phone calls (like providing information) is a public good: the marginal cost of allowing one more call is very low. Because of this, calls (or other low cost assistance) are not provided in efficient quantities by the market. The Chicago school approach would be to provide an incentive to give low cost assistance. The Pigouvian approach would be to mandate it and penalize failure to act, like the Vermont statute.

To provide market incentives, instead of imposing liability on the phone owner if she does not help, the laws could impose liability on the victim for help provided. For example, if a phone owner allows an outsider to make an emergency call, she
might be entitled to recover certain amount of money from the person aided. This would create an expanding market for providing help in emergency situations. If the helper gave a victim a ride to the hospital, then he would be entitled to a bigger sum, and so on. This also will shift some of the surplus which the victim gets to the helper. While mandating assistance might be very efficient, the victim gets all the benefits from the transaction if the owner is not compensated.

However, the court decision was probably not motivated by efficiency concerns but rather by the idea that there are communitarian civic duties that should override individual freedom. The value for society of citizen participation in criminal enforcement and emergency situations is evidenced by the bills enacted by the legislature to encourage and indemnify such
actions. Responding to "current societal conditions" relating to crime, the court decided to expand the instances in which there is an affirmative duty to help. According to communitarians, the court decision, and the Vermont statute, puts a stigma placed on the selfish individual and emphasizes community values. Changing the law may also cause individuals to change their preferences to want to help.

While communitarians might approve of the Soldano decision and the Vermont legislature, they would oppose the market incentive approach. The paying-for-help scheme, in comparison with liability on the phone owner, deemphasizes community values and civic duties. It would lead to help, but for the wrong motivations. It puts a price on the value of saving a life. It favors the rich getting help over the poor. It creates perverse incentives for the helpers to encourage victims to be careless, or to encourage (to the legal extent) the increase of crimes which would create paying victims. It also allows an exit-- those who do not want to help, will not. (Although is possible to imagine a regulation which mandates assistance but requires compensation.) Another problem with a paying-for-help scheme is that it might lead to strategic behavior by the phone owner, while court decision minimizes strategic behavior.

In Soldano, the court limits the ruling to situations where the loss will be large ("...only if it were clearly conveyed that
there exists an imminent danger of physical harm") . This encourages the phone seeker to disclose important information
available only to him. The court also limits the ruling to situations where the cost of helping will be minimum (e.g. the
phone is in a public space; bartender need not make the call, just allow it) . While potential pareto improvements are possible in less extreme situations, the court limits liability to such cases where the possible gains from allowing emergency phone calls are the largest.

This narrow holding limits the impositions of duties on individuals against their consent. Traditional individualistic ideals have limited the duty to give assistance in the common law and have been the basis for the liberal critique to using economic
analysis in law. The liberals would criticize the imposition of the duty to help because it overrides the consent of the possible helpers, using them as means for the interests of others. This is the kind of policy decisions that Dworkin would leave for the legislatures to decide, where the political process would allow public participation. The Vermont statute is more acceptable to the liberal critique because it was the outcome of a pluralistic political process.

It could be argued that the court holding is the kind of the decision that individuals would consent to ex-ante both because it would lead to social wealth maximization and because it would improve the welfare to the ones in the worse position. However, in the liberal view, hypothetical consent is not true consent. Soldano limits liability to public establishments, in part because they are usually covered by insurance. Public businesses are the least-cost insurer in this case. While moral hazard is not likely a problem with the victims requesting the call, it is for the behavior of the employees and owners of the establishment. The insurance company could force the owner to take care by declining to provide insurance for these cases, but the employee has no incentive to provide help because she will not be responsible for breaching the duty to aid. On the other hand, the employer could fire her. Making a business liable, instead of individuals, also softens the liberal critique about restricting individuals.

I have assumed so far that the imposition of the duty would lead to efficient allocation, but the implementation of such
duties by the courts might lead to high transaction cost which could outweigh the gains. The Soldano court tries to avoid that by limiting the holding to very narrow circumstances. However, because the court showed willingness to expand the duty to assist, the decision might increase the number of suits based on that duty but on different facts.

The Vermont statute, in comparison, is very general and it does not provide much guidance to the kind of situations addressed by the statute. Neither the people not the courts know what to expect. The fine is small and not likely be enforced actively by the state, but if the Vermont courts use the statute to define a duty owed in tort cases, it could increase litigation, and therefore costs (in detection, court time, lawyers' fees, etc.) . However, if not used and enforced, by the state or private parties, the statute will not encourage efficiency.

Economic analysis can be carried to the extreme by proposing market-driven solutions for any type of problem. Controversial proposals such as allowing the sale of babies and of internal organs, or letting criminals pay large fines instead of serving time in prison, have created controversy about using economic analysis in the development of law. The proposals mentioned above often ignore the fact that community feelings about those issues are driven by more than concern over efficient allocation of resources. In the case of babies, concern for the welfare of children and society's high regard for family relations override interest in efficiency. In criminal law, the purpose of punishment is not only deterrence, but also retribution and incapacitation.

In Tales of the Market-Driven Crimes, Ruben Bolling ridicules the use of economic approach in law, criticizing the
assumptions underlying market economics. The Tales makes fun of the Chicago school economics approach of providing a market solution for everything. If the problem is how to control homicide, then the efficient solution is to provide a market for the control.

Life in the cartoon works like the market model (and vice versa, Bolling might add) . The characters make rational choices. Martin Ryder is in total control of his fear and of his instinct to shoot the thief, because he knows that he can sell the homicide. Since he would prefer the money than to kill the thief, he is acting rationally by selling his justifiable homicide instead of shooting. On the other side, Sluggo understands that he can not kill his victim without a right and he can wait until
he can negotiate with someone.

Such rational behavior is probably grounded on perfect information. Ryder knows that the trespasser is a thief (and not a kid who jumped over the fence to play with his dog, for example), and Sluggo knows that the price he would pay Ryder is
less than his expected loss should he decide, irrationally, not to buy a homicide before killing his victim. Sluggo and Ryder would be admirable experimental subjects for Hoffman and Spitzer, but most other homicide sellers would shoot hysterically or let the thief escape, while most gangsters would be getting paid, not paying, for a murder. Bolling's point is that people do not act like economists expect them to act.

The part Coase would love about the cartoon is the way in which the market-driven crime program has managed to control transaction costs. While the parties probably have to pay a fee to Crime-Brokers for matching them up, there were no communication problems, hardly any delay, and no strategic behavior from Ryder trying to taking advantage of Sluggo when he is desperately seeking a legal homicide. Without Crime-Brokers, Ryder would have had to search around the dark alleys of the bad part of town for a buyer, haggle over the price and wait until the attorneys approve the contracts. In the meanwhile, it would have cost money to keep the thief in custody while the bargain took place.

This caricature of the market approach ridicules the reliance of model on the rational individual, perfect information. and
stable preferences. The most poignant critique of the cartoon is the indifference among individual preferences. Economic analysis backs out of the discussion of what wants and desire society should encourage. Immorality is simply defined (by Posner) as inefficiency.

In contrast, the communitarian, the paternalistic and the Critical Legal Studies critiques all allude to the importance of laws in shaping choices. Allowing certain activity implies societal sanctioning of the activity, while criminalization carries societal stigma which may discourage it despite any efficiency considerations. For example, while the welfare of society may improve with the legalization of drugs (due to the decrease of resources allocated to enforcement, decrease in drug-related crime, increase in the consumer surplus of drug users), there is strong community feeling that society should not condone the use of drugs. Some people who would use drugs if they were legal, do not use them just because they are illegal. In the case of environmental law, opponents of the market approach fear that allowing polluters to buy the right to pollute will dissipate the stigma against polluting. Pollution allowances would create the image of a right to pollute.

In addition, communitarians fear the commodification of goods and services currently not marketed. In the cartoon, the value of the life of the victim becomes merely what Ryder and Sluggo negotiate for it. The values of babies may become what adoptive parents are willing to pay for them, and the value of clean air becomes whatever price we charge the polluters. When assigning a price to these unique "goods", they lose the increased value that personal feelings give them, and they lose value for becoming
available when before they were exclusive. Babies are extremely valuable in part because you cannot buy them, and in part because families attach personal feelings to particular babies. Lives lose value if they can be sold, as Afro-American lives lost value when they could be sold and bought as slaves. It can be argued that Afro-Americans are still suffering from the loss in value of their lives caused by slavery, as evidenced by lower wages, and lower property values in black neighborhoods. This implies that if we as a society regret the commodification of a current non-marketable goods, removing it from the market will not reverse all the consequences of commodification.

The one market failure of the murder program is the negative and positive externalities imposed on the thief and Sluggo's
victim. The thief benefitted from this program, because it decreases the cost of his stealing activities. Therefore he will steal more. While the sale of justifiable homicides might increase crime control, it may also increase robbery.

The loser in this situation is the victim. This program might lead to an increase in murders of innocent people who suffer the distribution losses of this efficient scheme. Economic analysis does not consider the distribution of the gains and losses of the efficient outcome. Despite Posner's attempts in explaining ex-ante consent, he is not very successful in explaining how the losers would consent. While his explanation is more likely if the losses of potential pareto improvements were distributed randomly, his allocation of resources based on willingness to pay will condemn the losers of an initial allocation to almost always lose, because they would not be able to match the willingness to pay of the initial winners.

Economic analysis by itself will not give policy answers to many societal problems, because society is willing to give up some resources to preserve certain values. Nevertheless society's resources are limited. Economic analysis can help us choose the most effective ways for achieving our goals. It also forces decision-makers to be aware of the reasons why they choose or refuse an alternative solution. The reasons why we do not choose to eliminate or control all activities that cause pollution is because the economic consequences would be overwhelming. To a certain point policymakers are making benefit-cost analysis when they decide that we cannot afford some or another program. It makes better policy if the decision-makers are aware of the economic consequences of their decisions and can consciously compared the results of different choices.

In the case of criminal enforcement, some may argue that this is not different from saying that we are willing to tolerate
certain amount of crime for efficiency's sake, and that such statement undermines the educational function of the criminal law.
Criminal activity is particular in that society's goal is to have no crime, while we do want some amount of industrial activity,
even if it creates pollution. This is a distinction which the cartoon fails to make. In addition, while the ultimate goal may be no criminal activity, at this point we have to decide how to control crime most effectively with the resources we have, even if within the constraint of certain societal values and norms.

Notice that I am discussing the use of economic analysis in the context of developing policy or laws. Posner would argue that judges are best suited for using economic analysis due to their neutrality and lack of influence by the political process.
The Crits have challenged the idea of judges as neutral entities, and of economic analysis as a neutral science. The liberals have criticized the idea that judges should be making those kinds of policy decisions. In the legislature, different opinions on the priorities for policymaking can be heard, while the court is limited to the case before it. The political process provides for the consent of the governed, consent which the court is lacking While it can be argued that the legislators are interested parties that will bias the laws in their favors, the judges themselves are not free of bias, in addition of being removed from public discourse.

"Tales of Market-Driven Crimes" presents an amusing parody of the application of economics to the field of law, and highlights some of the criticisms that are leveled at those who would use economics to analyze legal rules. One problem with this critique, though, is that it takes aim at only one economic model. Both of the examples in the comic strip -- a market in property rights to emit air pollution and a market in property rights to commit homicide -- are based on the model of cooperation. As discussed in the first question, this model holds that as long as well protected property rights are allocated by the government, private parties can negotiate to an efficient outcome. But as also noted above, even within the economic approach, the model of cooperation is not always appropriate for identifying practical and efficient solutions to legal problems.

That is not to say, however, that the model of cooperation is totally inappropriate in the context of air pollution regulation. Liability rules and Pigouvian taxes, justified by the model of externalities, do exist in the area of environmental law , and they are working to force polluters to internalize the costs of pollution. But within the context of socially sanctioned pollution, allocating alienable property rights to pollute represents a reasonable attempt to reach an efficient outcome. The number of affected parties is small -licensed polluters and the EPA. Given self-monitoring and regulatory monitoring, relatively full information is available to the parties. Finally, a competitive market for pollution rights has been established. These factors indicate a situation suitable for application of the model of cooperation to address externalities, since transaction costs are relatively unimportant

"Tales" distorts economic analysis of the law by comparing a case where the model of cooperation is appropriate, with one where it is not. The comic strip is premised on the assumption that not all homicide is legal -- if it were, a "justifiable homicide" would be worthless. This must mean that the rules as to what constitutes justifiable homicide remain the same, thus anyone who feels free enough to hold a criminal at bay while they attempt to trade their "right to kill" to some third party, is not really in possession of justifiable homicide, which requires fear of imminent death or serious bodily harm. Furthermore, the mere fact that society has seen fit to establish certain rights for individuals, such as liberty or self-defense, does not logically require that society also make such rights transferable. In the absence of an alienable property right, the model of cooperation is not only inappropriate, it is nonsensical.

Furthermore, if the proper economic model had been employed, "Ryder's World" would not have been created. A legal rule can only be truly efficient if it adequately accounts for externalities. A system of property rights in "justifiable homicide" creates some huge externalities. First and foremost, it ignores the value of the gangster's victim's life. His interests are totally absent from any cost-benefit analysis carried out by the parties to the transaction. Second, it ignores society's interests in apprehending and punishing the burglar. A proper analysis under the model of externalities would include these factors, and probably conclude that direct regulation by the state is appropriate under the circumstances.

Another objection, is that the application of economic analysis to criminal law, as evidenced by the final line — "Another happy outcome, when crimes are market-driven!" — is totally misrepresented. Becker's primary observation with respect to crime is that crimes are only committed when the benefits of crime exceed the costs. Neither he, nor any other economist we read, suggested that crime should be more lucrative, or that fencing stolen goods should be legalized so that a more efficient market in such goods could be realized. Economists merely note that criminals, like all other human beings, change their behavior in accordance with incentives and disincentives, only some of which are financial. Furthermore, Posner and others have concentrated on how to increase the costs of crime to criminals -- by increasing the severity and or likelihood of punishment -- in order to reduce the costs of crime for victims and society . To say that crime is driven by forces amenable to "market" analysis is not to endorse legalizing currently criminal behavior in order to create a "market" for such behavior.

The above weaknesses aside, some common critiques of the economic approach underlie this story . First, it illustrates the basic liberal critique that economics treats humans as means instead of ends. In Martin Ryder's world it does not matter who is killed (ends), as long as an authorized "right to kill" is obtained (means). This state of affairs is anathema to liberal critics, since they believe that individual rights, such as the rights of the mobster's victim in "Tales," should be protected whether it is efficient to do so or not. A more important objection, voiced by Dworkin, is to the use of efficiency as a legal norm in any event. Posner extends Rawls' theory of ex ante hypothetical consent to justify use of efficiency as a legal norm. The argument is that before the events that transpired in "Tales," all parties would have agreed that they would be better off in a world where "justifiable homicide" is an alienable property right. Put in those terms, hypothetical consent would seem unlikely, since it would amount to consenting to being murdered if someone was willing to pay the going rate. However, even if hypothetical consent was plausible, Dworkin claims that it is irrelevant, because only true consent is meaningful when individual rights are at stake.

A second critique lurking in the background of this comic strip is the communitarian critique. Communitarians object to the normative individualism that underlies economic theory . They believe that by deferring to personal preferences, such as those of Martin Ryder and the gangsters, society relinquishes its proper role of identifying and enforcing moral values. They further believe that allowing the rhetoric of market analysis to seep into the law gives it moral force, that use of such rhetoric in the legal context will lead to alienation and commodification with regard to values that should be held sacred, and that this in turn will lead to "Ryder's World." The ultimate point of the communitarian critique is that the relentless advance of economic analysis into the legal realm will lead people to prefer a world where there is an explicit price on life, and that human societies are better off when that price remains implicit.

However, this forecast seems belied by the facts which motivated this piece in the first place. According to communitarians, economic analysis of legal issues will inexorably lead to creation of market-based solutions to social problems. In the case of air pollution this is partially true. So far, so good. They then assert that creation of a market automatically devalues the object of the market in the hearts and minds of the public. This is manifestly untrue with regard to pollution. Public awareness and concern for the environment have probably never been higher in the U .S. Furthermore, direct environmental regulation has never been tougher, and will probably become even tougher in the near future. If anything, creating a market for rights to pollute will further raise public awareness of the exact extent and location of pollution in our society , and allow people to focus on truly significant environmental matters. In economic terms, the environmental debate will become more informationally efficient.

Elements of the critical legal studies critique can also be discerned. CLS scholars maintain that social life is inherently political and conflictual. They also hold that the market is not a neutral forum for execution of privately bargained for transactions, but a type of political forum where competing interests clash. In the context of "Ryder's World," important social/political interests are at stake, that should not be left to private parties to decide. The conflict between Ryder and the burglar, if not resolved in a self-defense shoot-out, should be resolved by public authorities. Whatever the goals of criminal justice in society -- e.g., retribution, deterrence, etc. -- the state is the only appropriate arbiter. The gangster and his victim provide an even clearer example of a situation where society claims an overriding interest in relations between private parties. Society cannot relinquish its role of protecting citizens from one another, because that is one of the primary roles human societies are constituted to perform. Allowing people to kill on the basis of a privately determined price is clearly an abdication of uniquely social authority .

In the context of air pollution regulation, important social political interests are also at stake, but it is not as clear that all aspects of such regulation must remain in the public domain. The critical difference between air pollution and homicide is that society has an interest in controlling the general parameters of air pollution -- tons per day per air quality region -- but not each individual act of pollution. Society is interested in controlling every act of homicide, though. So it may be appropriate to leave the exact allocation of air pollution to private market forces to decide, as long as society retains its role of determining the general allocation and limits of such pollution, while inappropriate for homicide to be allocated by anyone but the state.