Concrete examples of the economic analysis of law
In their historical narratives and their commentaries on current events, Marx and Engels occasionally drew attention to these general considerations, in a way that bears more than a passing resemblance to present-day law and economics.
Early social institutions were of special interest for Engels. ‘At a certain, very primitive stage of the development of society’, he wrote in 1873, ‘the need arises to bring under a common rule the daily recurring acts of production, distribution and exchange of products, to see to it that the individual subordinates himself to the common conditions of production and exchange. This rule, which at first is custom, soon becomes law, (Engels, 1872-73, p. 380). As he later detailed in The Origin of the Family, Private Property and the State (1884), communal property right was one such adaptation to relative scarcity, as was the practice of ‘group marriage’, whereby each member of a community was guaranteed conjugal rights to every other member of the opposite sex. Engels saw this mating rule as an innovation unique to man among the higher mammals, which typically practised monogamy or polygamy. It stemmed, he reasoned, from the human animal’s relative defencelessness in the isolated state, and the consequent incentive to exploit economies of scale in organized militancy. But this latter could only be sustained if male jealousy were held firmly in check (as it conspicuously was not in animal hordes during the mating season); by formally countermanding the male’s instinctive urge for exclusive sexual possession, group marriage served that goal admirably (ibid., p. 145).As early man evolved out of the hunter-gatherer economy with the domestication of animals and plants, new legal practices were drawn in train. Private property began to displace common ownership, as resources grew scarcer and were invested with more human labour.
Private property in human beings - slavery - emerged at this juncture as well. In the hunter-gatherer economy, human labour had yielded no surplus over the costs of its own maintenance: thus ‘outsiders’ were either assimilated as colleagues or else simply killed. But ‘with the introduction of cattle breeding, of metalworking, of weaving and, finally, of field cultivation, this changed.... The family did not multiply as rapidly as the cattle. More people were required to mind them; the captives taken in war were useful for just this purpose, and, furthermore, they could be bred like cattle themselves’. Still another innovation was patriarchy. Since men had traditionally been the family hunters, domestic livestock naturally fell to their purview; moreover, as their musculature lent itself relatively well to the heavier agricultural tasks, they began to displace women in the production of vegetable foodstuffs as well. The upshot was that most of the new sources of wealth accrued to men, and their new-found economic leverage was readily converted into legal authority over womenfolk. The law of monogamy, for example, appeared at this juncture, primarily as a means to compel female fidelity and thus facilitate inheritance of property through the male line. Monogamy was ‘based on the supremacy of the man; its express aim is the procreation of children of undisputed paternity, this paternity being required in order that these children may in due time inherit their father’s wealth as his natural heirs.... It was the first form of the family based not on natural but on economic conditions, namely, on the victory of private property over original, naturally developed, common ownership’. Last but not least, these economic transformations issued also in the first appearance of the matrix of rules known as the state. On the one hand, the increasing division of labour gave rise to an incipient structure of economic classes, which undermined traditional government by consensus. On the other hand, the growing stock of wealth posed an incentive for intercommunal predation. Thus emerged the state, as an organ of internal administration, of collective defence and of organized aggression (ibid., pp. 162-73, 263-72; see also Marx, 1972). Henceforth the logic of public choice - where economic interests vie in the political arena for favourable legislation - would structure law’s historical development.The long transition to capitalism threw up further evidence of the economic logic of law. The revival and elaboration of civil law in the high Middle Ages stemmed, like its Roman exemplar, out of just such a process as we have been describing, developing ‘simultaneously with private property out of the disintegration of the natural community’ (Marx and Engels, 184546, pp. 90-92, 343). The revival of intra-European trade and the expansion of contact with the wider world impelled the European elite to accumulate lucre rather than social status and court retainers, thus producing a new economic class, the bourgeoisie, which pressed for a distinctive legislative agenda. The English Statute of Labourers of 1349, which imposed ceilings on wage rates, Marx linked to the Black Death which, by curtailing the supply of labour, threatened the dominant classes with a redistribution of income towards the nascent proletariat (Marx, 1867, ch. 10, sec. 5). Subsequent laws prohibiting vagrancy were born of the same redistributive intent, as were all parliamentary acts promoting the enclosure and clearance of common land. Royal legislative prerogatives posed some inertial resistance to capitalist enclosure, but to little effect in the long run: ultimately, ‘the law itself becomes now the instrument of the theft of the people’s land’ (ibid., ch. 26).
Contemporary legislative debates too were interpreted in the light of economic interest and public choice. The passage of the 1815 Corn Laws demonstrated, according to Marx, how ‘landlords everywhere exert considerable, and in England even overwhelming, influence on legislation, [and] are able to exploit this situation for the purpose of victimising the entire class of tenants’ (Marx, 1894, ch.
37). But the victory of a declining class could only be pyrrhic: the industrial and commercial middle class of Britain understood that the Corn Laws raised their wage bill and made British exports less competitive, and so made its repeal a central legislative goal of the 1840s. Repeal was achieved precociously via an alliance with the working class, the bourgeoisie offering provisional support for the Factory Acts in exchange for proletarian support (Engels, 1845c, pp. 657-61). Those Factory Acts were themselves ‘not at all the products of Parliamentary fancy. They developed gradually out of circumstances as natural laws of the modern mode of production. Their formulation, official recognition, and proclamation by the State, were the result of a long struggle of classes’ (Marx, 1867, ch. 10, sec. 6). The economic logic of factory legislation was twofold. On the one hand, by hampering the sweated-labour practices of traditional workshops, they served the interest of the rising industrial bourgeoisie by speeding the consolidation of production in modern, capital-intensive factories (ibid., ch. 15). On the other hand, some regulations were pushed through parliament by the factory system’s enemies. The Ten Hours’ Bill of 1847, for example, was championed by a coalition including not only workers, but also aristocrats and those sectors of the bourgeoisie hostile to the factory owners. Even so, the Ten Hours’ Bill could become law only with the acquiescence of the dominant social element, at a peculiar economic conjuncture: it was passedat a moment of neither prosperity nor crisis, in one of those in-between periods in which industry is still labouring sufficiently under the consequences of over-production to be able to set only a part of its resources in motion, in which the manufacturers themselves therefore do not allow full-time working. At such a juncture, when the Ten Hours’ Bill limited competition among the manufacturers themselves, and only at such a juncture, could it be tolerated.
(Engels, 1850, p. 296)In a different vein, Engels used the principle of rational self-interest to argue that proposed regulations of interest rates would be largely self-defeating: faced with legally capped interest rates, financiers would (i) continue to lend at usurious rates, but only to persons too downtrodden to bring them to book for it, and/or (ii) divert a large part of their capital to equity investments. Either way, the benefits of regulation would not accrue to the parties intended (Engels, 1872-73, pp. 317-37).
One last point of affinity between Marx and Engels and contemporary law and economics is in the treatment of criminal behaviour. ‘Like law,’ they wrote, ‘so crime, i.e. the struggle of the isolated individual against the predominant relations, is not the result of pure arbitrariness. On the contrary, it depends on the same conditions as that domination’ (1845-46, p. 330). Specifically, Engels argued that the calculus of crime was sensitive especially to the life-chances attendant upon a life of obedience. ‘If the influences demoralising to the working-man act more powerfully, more concentratedly than usual, he becomes an offender as certainly as water abandons the fluid for the vaporous state at 80 degrees’ (Engels, 1845a, p. 425). As a result, ‘crimes of passion are becoming fewer and fewer in comparison with calculated crimes, crimes of interest’ (Engels, 1845b, pp. 248-9). The statistical regularity of crime
proves that crime, too, is governed by competition; that society creates a demand for crime which is met by a corresponding supply; that the gap created by the arrest, transportation or execution of a certain number is at once filled by others, just as every gap in population is at once filled by new arrivals; in other words, that crime presses on the means of punishment just as the people press on the means of employment. (Engels, 1843, p. 442)