Mirror of Justice

A blog dedicated to the development of Catholic legal theory.

Monday, May 22, 2017

Natural Law, Welfare Economics, and Administrative Law: Comments on Helmholz

Lumen Christi recently hosted an excellent event on Richard Helmholz's most recent book, "Natural Law in Court." In addition to Helmholz, the other panelists were Michael Moreland (moderating) and Jeff Pojanowski.

I post here the written version of my comments on the book in raw, unedited form. Lumen Christi will also release a video of the event. The written comments do not include my sense (delivered orally) that the book accomplishes the near-impossible by presenting the caselaw of late-medieval Piedmont, for example, in a way that is elegant and readable, indeed absorbing.

Pojanowski, in a tweet the morning of the event, and without having seen my remarks, teased that I would offer a natural-law defense of the administrative state. If I am to be condemned in any event, I might as well be hanged for the full sheep, and I think I'll take the lamb as well.


Dick Helmholz says that "insofar as this book has a unifying theme," it is that "practical limitations repeatedly stood in the way of natural law's dictates." What exactly are these "practical limitations"? Dick clearly sees them as extrinsic to the natural law, and variously refers to them as "practical," "pragmatic," having to do with "consequences," resting on "public utility" or the "good of the community" and so forth. It is not wholly clear in what sense they are supposed to be an antonym of the natural law.

I want to suggest a somewhat different way of thinking about this, which is that the "practical" limitations Dick refers to are themselves solidly grounded in and indeed part of the natural law. If that is right then Dick has, perhaps surprisingly, undersold the natural law with this thesis. That is, the legal arguments he codes as practical limitations of the natural law are themselves a working-out of commitments within the natural-law tradition. The claims of lawmaking in the service of overall public utility themselves have unimpeachable natural law credentials. Indeed, at the end I will venture to suggest that something like judicial deference to the reasoned policy choices of lawmakers is itself an entailment of natural law theory.

Let me offer two ways of cashing out the suggestion that these practical limitations are themselves part of the natural law. The first way sounds in welfare economics, the second way sounds in (what we would today call) administrative law.

As to welfare economics, in many of the cases Helmholz discusses, the courts applying "practical reasoning" are reaching results, and indeed offering arguments, that can be understood comfortably in welfare-economic terms. Welfare economics is, of course, a moral theory, one that rests upon simple axioms claimed to be accessible to the natural reason of all.

Let me give one example of such an axiom: the Pareto principle, which in its weakest form says (I will simplify for present purposes) that a policy or legal rule improves upon the status quo ante if and only if it makes at least one person better off, and no one worse off. There are odd and rather contrived cases in which the principle may not hold, but there are also odd and rather contrived cases in which lying seems like a great idea. In the normal central cases, natural reason suggests that lying is a bad idea and also suggests that weak Pareto is almost necessarily correct.

A standard example of the importance of the Pareto principle involves the usury laws Dick discusses throughout. In one example, courts upheld an Italian statute allowing moderate rates of interest on a loan. As Bentham would later argue, such a rule makes both borrower and lender better off, if the alternative is not a zero-interest loan, but no loan at all. Indeed risky borrowers with little capital are most advantaged by allowing a positive rate of interest on loans. If we stipulate no third-party effects from a commercial transaction between these two parties, then - as Bentham argued - the transactors are better off and no one is worse off. Pareto.

Now there might in fact be third-party effects, and there is a kind of standard conversation to have about what theory of value to plug into the Pareto principle - what exactly do we mean by "better off"? - but the principle in itself is entirely agnostic as among theories of value; it doesn't necessarily presuppose or require, for example, a subjective and hedonic theory of value, although it is frequently discussed as though it does. In any event, my point is different. I don't care whether the laws allowing interest were in fact justifiable on Pareto grounds.

My suggestion rather is that courts allowing such laws, out of concern for the welfare of parties, were doing natural law squarely as it has been understood in the tradition. The Pareto principle, when adopted by a judge or other official as a criterion of social choice, is almost literally "law," at least in Aquinas' sense, because it is an "ordinance of reason for the common good." Where the principle is satisfied, the common good is necessarily enhanced. It is natural law because, again in Aquinas' words, "the first principle of the natural law is that good should be done and pursued, and evil avoided" and the principle aims to do just that.

In other cases, of course, the Pareto Principle doesn't hold. A nice example from Dick's book is the case of the ducal decree of Piedmont that made a city responsible for the losses suffered by a monastery within the city limits. In this sort of case, the losses will fall somewhere, so it is impossible to make someone better off without making someone else worse off.

Here I come to my second perspective. For these difficult cases, Dick gives us, what I can only call, at the risk of some anachronism, an administrative-law approach. That is, a running theme of the book is that in hard cases of this sort, where there is no escape from conflicting claims, courts imposed upon the relevant non-judicial actors a different sort of natural-law obligation sounding in procedural terms: an obligation to offer reasoned justifications for policy making, with a view to the common good. That is, as I read Dick, courts required nonjudicial actors to articulate some reasoned basis for their policy choices, one justified by reference to some rational conception of the common good.

In the case of the Piedmontese monastery, although the city argued that it was contrary to the natural law to hold them liable without fault, the lawyers defending the ducal decree carried the day by arguing, in Dick's words, that the natural law prohibition "applied only to statutes enacted without a good reason. This decree was not one of those." The reason given was that where no actual wrongdoer could be identified, to give the monastery no compensation at all would allow crime to go unredressed. Is that last argument a natural-law argument or a "pragmatic" argument? It seems impossible to put it only in one category or the other. As with the hypostatic union of the divine and human natures in Christ, it is both fully the one and fully the other. In that sense, I think Dick may be undercounting the natural-law arguments in the cases and even understating the influence of natural law.

Finally, although this is not explicit in Dick's text, and I would like to hear his thoughts on it, one gets the sense that courts might uphold the actions of lawmakers in such cases even if the reasoned justification advanced by the lawmakers was not necessarily the same one that the courts would have adopted if forced to make all decisions themselves. Here we have something like "deference" to nonjudicial actors, avant la lettre.

This shouldn't surprise us; I think deference of a sort is built right into the heart of natural law theory. The idea of the determinatio rests on the thought that ordinances of reason for the common good may be underspecified, such that there are multiple reasonable ways of carrying natural-law obligations into execution. Suppose a city, or a noble, has a natural-law obligation to provide a hospital for the poor in the territory. But there are many reasonable ways of carrying out this reasoned purpose to promote the common good, and if they are sensible courts will not interfere with any choice within the realm of the reasonable. As John Finnis puts it:

"A determinatio, if it is just and fit to be authoritative, must have a rational connection to principles of practical reasonableness. But that rational connection is like an architect’s decisions about dimensions; they must be rationally connected to the terms of the commission but these terms, while excluding various options, leave many options entirely open .... [such that] the choice is entirely free."

When lawmakers make choices of this sort -- what I have elsewhere called "rationally arbitrary" choices -- they are completing and fulfilling the natural law project, not overriding it with extrinsic "pragmatic" considerations. Indeed, I would be prepared to argue, but on a different occasion, that when lawmakers exercise this sovereign prerogative of reasoned-but-arbitrary free choice, they most nearly resemble God the Creator.


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