Takings exception.

• Author: Chapman, Steve

Richard A. Epstein, the James Parker Hall Distinguished Service Professor of Law at the University of Chicago, is one of the most provocative, controversial, and influential legal theorists in the country. His three best-known books, Takings: Private Property and the Power of Eminent Domain (1985), Forbidden Grounds: The Case Against Employment Discrimination Laws (1992), and Bargaining with the State (1993), are powerful contributions to the theory of limited state powers.

"I took some pride in the fact that [Sen.] Joe Biden (D-Del.) held a copy of Takings up to a hapless Clarence Thomas back in 1991 and said that anyone who believes what's in this book is certifiably unqualified to sit in on the Supreme Court. That's a compliment of sorts," says Epstein. "But I took even more pride in the fact that, during the Breyer hearings, there were no such theatrics, even as the nominee was constantly questioned on whether he agreed with the Epstein position on deregulation as if that position could not be held by responsible people."

Epstein's work is characterized by a relentless and rigorous use of reason. While developing a position on a given issue, he is constantly searching for an argument that fully accounts for the facts at hand and all possible rebuttals. "My attitude is talk is cheap, so let's debate," says Epstein, whose newest book, Simple Rules for a Complex World, was just published by Harvard University Press. "When I'm confident I'm right, I want people to disagree with me out of hand. Otherwise, I run the risk of a kind of complacency which can lead to the loss of a cutting edge. I'm perfectly used to living in a world in which most people disagree."

Chicago Tribune columnist Steve Chapman interviewed Epstein at his University of Chicago office.

Reason: How did you get acquainted with libertarian ideas?

Epstein: My intellectual style has always been that of a contrarian. I think that if there's a position everybody thinks is right and is happy with, then they're probably wrong. And the reason they are probably wrong is that they spend too much time on self-congratulation instead of attacking each other.

I studied law in England. The great advantage of English law schools, at least in the 1960s, was that they left you alone. I didn't have teachers who told me what to think. The English system was to read a bunch of stuff and then talk to a tutor for an hour and then read another bunch of stuff and then talk again with the tutor for another hour. The only direction I got was being told to read the 19th-century judicial opinions.

These 19th-century guys were all high-powered intellectuals who had strong libertarian views. So I read a huge amount of things which resonated with my own maverick instincts. By the time I came back to Yale and I heard what the dominant collective sentiment was circa 1966, I knew that I had gone off on a very different path.

The experience of being wayward and independent allowed me to dip into a set of sources that few American students read. I think the most important thing about my career was that I was not socialized early on to the dominant views.

Reason: Despite your libertarian leanings, you feel that pure libertarianism isn't quite up to explaining the way the world works. What do you see as its shortcomings?

Epstein: There is the kind of libertarian universe in which every individual has property rights in his or her own name, and all individuals have the exclusive right to use and dispose of their possessions - land, capital, so forth. Coordinated behavior takes place only through voluntary exchanges. That's a pretty austere world. Among other things, it precludes any government interference to prevent the premature exhaustion of common and pooled resources. And it prohibits any government system of mandatory taxation for any purpose whatsoever because it would be a forced exaction.

On the opposite extreme, there is a system in which you say the state can take from A and give to B because it wants to make B better off. It's quite willing to make A worse off to do so. That looks to most people like theft mediated by legislative behavior.

The traditional accounts of laissez faire and the welfare state have basically said that those are the only two viable alternatives that somebody can describe. And since it's perfectly clear to most people that we cannot have a world with zero taxation, zero police force, and so on, they feel we have to accept the world in which there is extensive government regulation and massive amounts of redistribution through taxation and other systems of social control.

What I said in Takings is, No, there's a tertium quid, a third alternative that allows government regulation and taxation to be used to overcome the holdout problems, the public goods problems, the coordination problems. But the quid pro quo is that if you want to use these coercive powers, you have to provide benefits to the individuals who have been coerced that leave them at least as well off as they were before the coercion takes place.

You can't ridicule this theory the same way that you can a naive version of laissez faire. You can no longer argue that you can't have any state at all. You can no longer argue that public rivers are going to be destroyed by pollution. You can no longer argue that it's impossible to extract oil and gas from underneath the earth in any kind of a sensible fashion. You can no longer argue that it's impossible to have a decent bankruptcy law.

Essentially the point that I'm trying to make in Takings - and I come back to it again in Bargaining with the State - is that you can have a world with forced exchanges without having a world of rampant redistribution, that you can abandon laissez faire without falling into the lap of the New Deal. A well-ordered theory of taxation is supposed to accomplish that. It doesn't do it perfectly, but it gets damn close to it with flat taxes relative to progressive taxes.

Another way to put this is to ask, How are political decisions made? The libertarian world is one which requires the unanimous consent of all individuals in order to reach a political decision. We know that in the old days of the Polish parliament, which required unanimous votes, they often got unanimity by taking the lone dissenter and throwing him out the window. On the other hand, rampant majoritarianism means that 51 percent can indeed confiscate the wealth of all 49 percent, which is what you get under the New Deal.

What the eminent domain compromise says that makes me a moderate is that we will allow the majority to have its way so long as it's willing to buy off its dissenters at a fair valuation. We can bring ourselves to a position in which we stop anybody from being made worse off by virtue of collective impositions.

Reason: Takings has significantly influenced the way the courts interpret the...