Simple Rules of a Complex World.

• Author: Boudreaux, Donald J.

Despite a title that might lead readers only vaguely aware of Richard Epstein's scholarship to expect a law-and-economics version of Robert Fulghum's All I Really Need to Know I Learned in Kindergarten, Epstein's Simple Rules for a Complex Worm is no simple book content to dispense truisms that warm the hearts of Chicago-oriented economists and legal scholars. Instead, it is a magnificent book. Nearly every page bursts with profound insights, all pointing plainly in the direction of limited government. Quite sincerely, I cannot imagine any careful reader coming away from this book unconvinced that at least his larger theme is correct. (Being already sympathetic to arguments for limited government no doubt enfeebles my imagination on this score. In fact, Epstein's book has not enlisted every reader to the cause of limited government (see, for example, Feldman [2]). But I think that were I a fan of active government before reading Simple Rules, I would not now be.)

The title of the book reveals Epstein's Big Theme: the greater the complexity of society, the greater the need for simple legal rules. Recognizing that this theme is counter-intuitive, Epstein argues his case masterfully. He argues it from the "top-down" - making a theoretical case for the virtues of simple legal rules in societies marked by an extensive division of labor - and from the "bottom-up" - using one specific example after another of how simpler rules would improve upon the operation of complex modern American regulations that almost certainly have gone awry by any plausible social calculus. Employment law, corporate law, products-liability law, and environmental law are only some of the specific bodies of law - each treated in its own chapter - used by Epstein to make his case for simple rules.

What are simple rules? Answering this question occasions one of the few instances in which Epstein is unnecessarily opaque. He says, straightforwardly enough, that a rule is simpler "the cheaper the cost of compliance" [p. 25]. But further reading reveals that low compliance cost is only half of the story. The other half of the full definition of simple rules is that courts and government agencies not encounter overly high costs of administering these rules [pp. 30-36]. Simplicity of rules may not be sufficient for a free and prosperous society (a simple rule can be sinister) but simplicity certainly is necessary (a complex rule is almost sure to be harmful).

An example of a...