Knowledge And Decisions

The twentieth century has seen a definite trend toward third-party economic decision making, under a variety of political or ideological banners, and in many different economic forms. Sometimes it has imposed decision making as regards a given kind of economic transaction, as in rent control or minimum wage laws. Sometimes it has been a more arbitrary attempt to control prices in general, or to regulate particular industries such as transportation or communication. In some countries, it has gone as far as attempting to control the whole economy.

The results of modern “planning” have followed a pattern seen centuries ago in different circumstances and with entirely different ideologies and rhetoric. The results of comprehensive “planning” in colonial Georgia parallel the results of Soviet planning, just as various modern schemes of price control have produced results virtually identical to those produced by price control in Hammurabi’s Code or in the Roman Empire under the Emperor Diocletian.¹⁴⁵ There is a special irony in this, for much of modern “planning” emphasizes its revolutionary newness — implying, presumably, some exemption from being tested by old-fashioned analytic methods or judged by old-fashioned moral standards. In fact nothing is older than the idea that human wisdom is concentrated in a select few (present party always included), who must impose it on the ignorant many. Repeated attempts to apply this doctrine rigorously, in a wide range of historical settings, suggests that it is less likely to survive as an hypothesis than as an axiom or an ideology.

Chapter 9 Trends in Law

Legal institutions in the United States are anchored in a Constitution that is nearly two hundred years old, and which has changed relatively little in its basic philosophy in that time. Most of the later amendments follow the spirit of the original document and its Bill of Rights. Yet despite this, American legal institutions have undergone a revolution within the past generation — a revolution which coincided not only in time, but also in spirit and direction, with changes in economic and political institutions. The centralization of decision making is a pattern that runs through landmark court cases, ranging from antitrust to civil liberties to racial policy to the reapportionment of state legislatures. The net result of these legal developments has been an enlargement of the powers of courts and administrative agencies — institutions least subject to feedback from the public, and therefore most susceptible to continuing on a given course, once captured by an idea or a clique. This represents an historic shift in both the location of decision making and in the mode of decision making. Decisions once weighed in an incremental and fungible medium like emotions or money, with low-cost knowledge readily conducted through informal mechanisms, are increasingly weighed in the medium of articulation, in more categorical terms, and with higher costs of transmitting knowledge through rules of evidence documentable to third parties. The predilections or susceptibilities of those third parties also become more important than was ever contemplated for a constitutional or a democratic society.

Along with historic changes within the law has come an enormous expansion of the sheer numbers of lawyers, judges, and cases. The number of lawyers and judges per capita increased by 50 percent from 1970 to 1977.¹ California alone has a larger judicial system than any nation besides the United States.²

The quantitative and qualitative aspects of trends in the law are not independent of one another. As courts have expanded the kinds of questions they would adjudicate — including the internal rules of voluntary organizations, and the restructuring of political entities — more and more people have sought to win in court what they could not achieve in other institutions, or have appealed trial results on more and more tenuous grounds. A 1977 survey reported: “Appellate judges estimate that 80 percent of all appeals are frivolous.”³ The cost of all this is not simply the salaries of judges and lawyers. As in other areas, the real costs are the foregone alternatives — notably speedy trials to clear the innocent and convict the guilty, so that the public is not prey to criminals walking the streets while legal processes drag on. In civil cases, the costs of delay are obvious in cases with large economic resources idled by legal uncertainties, but they are no less real in cases where child custody or other emotionally-devastating matters drag on. In short, there is a social trade-off between the costs and the benefits of increased litigation or increasingly elaborate litigation. The institutional question is, how are these social costs and benefits conveyed to the individual decision makers: the parties, the lawyers, and the judges?