PETER GERHART AND CONTEMPORARY PROPERTY THEORY.

• Author: Fagundes, Dave
• Position: Tribute to Professor Peter M. Gerhart

CONTENTS INTRODUCTION I. AN INCREDIBLY BRIEF SKETCH OF CONTEMPORARY PROPERTY THEORY A. Law & Economics and Property B. Progressive Property II. PETER GERHART AND CONTEMPORARY PROPERTY THEORY A. Gerhart's Property and Social Morality B. Gerhart v. L&E C. Gerhart v. Progressive Property CONCLUSION Introduction

Over the course of his decades as a law professor, Peter Gerhart produced a stellar body of work that upended academic trends in a number of ways. In an age when academics burrow into ever-smaller niche areas they claim as specialized fiefdoms, Peter's writing spanned fields as disparate as torts, contracts, and property. While most scholarship emphasizes depth over breadth, Peter went broad, engaging some of the most important and fundamental questions about the law.

These features characterize all of Peter's work but are best reflected in his recent trilogy of monographs that constructs a unified theory of several different areas of law: Tort Law and Social Morality (2010), Property Law and Social Morality (2014), and Contract Law and Social Morality (2021). Toward the end of his career, when many other professors would be enjoying retirement, Peter raised his game and produced perhaps his most memorable work. These three volumes reach across--and call into question the coherence of--major fields of law. They introduce novel ways of thinking about the relationship between the blackletter law of these fields and social mores. And they propound a humane vision of the law that provides an aspirational guidepost for scholars and judges to use in thinking about the development of each of these fields.

In this short essay honoring Peter's legacy to the legal academy, I seek to make a modest contribution with respect to one of these books. (1) Much warranted praise has been heaped on Property Law and Social Morality, including by me. (2) Here, I make a different move, instead showing how Peter's insights in this volume link into debates in property law more generally, and in particular the tension between scholarship in the tradition of neoclassical economics and its progressive counterpart. Peter's work has more in common with the latter than the former, though it bears a number of distinctive features that promise to enhance the progressive vision of ownership advanced by writers in this school of thought. That Peter's work on property falls cleanly into neither dominant school of thought epitomizes his independence and creativity as a scholar.

This Essay proceeds in three parts. First, I quickly summarize the dyad that characterizes most contemporary property scholarship, one side inflected by law and economics, the other by what has become known as progressive property. Second, I examine how Peter's views expressed in Property Law and Social Morality fit into this dyad and show, in particular, how those views contrast with and complement each of them. Finally, I conclude on a personal note, reflecting on my fondness and admiration for Peter as a colleague, mentor, and friend.

1. AN INCREDIBLY BRIEF SKETCH OF CONTEMPORARY PROPERTY THEORY

   Volumes have been written on the varieties of contemporary property theory. (3) In Part I, I offer a satellite-level overview of two main strains of such theory, which I'll refer to as law and economics ("L&E") and progressive property. This in turn will enable me to situate Peter's work in the context of these theories in Part II.

   1. Law & Economics and Property

      The later-20th century saw the core principles of neoclassical economics pervade legal scholarship to such a degree that the principles of L&E have become a default way for many scholars (and judges and lawyers) to think about the law and the world. (4) L&E is a welfarist theory in that it holds that decisions should be made not by reference to rights, but to outcomes. (5) It is conversant with Bentham's utilitarianism in that it seeks to maximize net social welfare. When considering various decisions, Bentham or an adherent of L&E would agree that the best decision is the one that creates the best on-balance outcome, as measured by some uniform criterion such as "utility." (6)

      In terms of property, L&E frames the core challenge as seeking to maximize the social welfare generated by land and chattels--i.e., to manage those resources in the most efficient way possible. (7) This challenge is best framed by considering Hardin's familiar "tragedy of the commons." (8) Imagine land that is open for all to use. Assume--as L&E does--that those who seek to use it want to extract the most possible value from it, regardless of the interests of others. Assume further that any one individual's use will exclude another's (i.e., that uses of the resource are "rivalrous"). So framed, the outcome is obvious: people will compete chaotically with one another to use as much of the resource as they can, as quickly as they can, until there's nothing left. The inefficiencies of such a scenario are also obvious: people will extract excessively, the chaos created will be damaging, and the resource will be quickly depleted.

      While one could imagine state management as a solution to the tragedy of the commons, L&E proponents spurn such an approach. Government, in their view, is invariably an imperfect predictor of the optimal allocation of resources. (9) Far better is to rely on people themselves to allocate property efficiently. After all, private individuals themselves know their own desires better than any agent or proxy, so their decisions will operate as revealed preferences for the best way to organize resources. And a system of private property that grants owners the rights to use, exclude, and transfer enables individuals to reflect these preferences with the state in the background as an enforcer rather than in the foreground as an allocator. (10) If Alice has a pasture and others want to graze their sheep there, Alice can leverage her right to exclude to keep them out, thereby forestalling overexploitation concerns. If Alice then wants to build a house on her pasture, she's free to realize that desire thanks to the right to use. And if it turns out that Alice values her land less than Bo, Bo will be willing to pay an amount Alice finds attractive to acquire the farm himself, allowing Alice to internalize the value of the work she did to improve her land. (11)

      This turbo-sketch leaves much out but does frame three major commitments of L&E for property.

      First, this framework centers the concerns, decisions, and interests of individual owners, as opposed to non-owners or the community in general. And L&E imagines these owners to be rational actors who have concern only for their own interests and perfect information about the implications of their decisions with respect to their resources. (12)

      Second, L&E is a monist theory. It seeks to evaluate the costs and benefits of all property-related decisions along a single metric. Because it's difficult to find one metric that can capture all the costs and benefits of a given decision, L&E typically defaults to using wealth as a proxy for welfare, hence welfare-maximization often bleeds into wealth-maximization as the lodestar criterion. (13)

      Third, L&E tends to favor strong owners' rights. This is not because of a stated normative precommitment in favor of owners, but rather an implication of the belief that private parties are better at achieving allocative efficiency than the state. When owners' rights are at their zenith, the theory goes, then owners can best exercise the kind of decision-making that reveals their preferences, rather than having the state override their judgment with public-oriented exceptions. (14)

   2. Progressive Property

      L&E's growing influence as a conceptual framework during the later 1900s did not go unchallenged. Many scholars simply wrote in a different vein, propounding ways to think about property that did not embrace the tenets of neoclassical economics. (15) By the early 2000s, though, several of these writers began to assemble their efforts into a project rooted in the shared features of their work. This counterweight to L&E arose largely as a response to the pervasiveness of economic approaches to property and cast itself as "progressive property." (16) As with any academic movement, it belies quick summary, but I summarize a non-exclusive list of three of its core commitments below, each of which I array against its L&E counterpart.

      First, while the protagonist of the L&E story is the rational-actor property owner, progressive property takes a wider lens. It acknowledges, as any perspective on property must, the importance of owners, but attends also to property's roles in creating community as well as wealth. (17) While L&E tends to regard property as socially valuable because it confers on owners the prerogative to "exit" (i.e., subtract themselves from public life and the influence of states), progressives emphasize the capacity of property to facilitate "entrance" (i.e., property's capacity to shape community life and bring people...