Economic analysis of conspiracy law

Note: This is my 12th blog post in a multi-part series on conspiracy theories

In this post I will expand on Richard Posner’s economic analysis of conspiracy law on pp. 230-231 of his magnum opus: Economic Analysis of Law (7th edition, 2003). (Full disclosure: along with Milton Friedman and Ronald Coase, Dick Posner, pictured below during his heyday at the University of Chicago, is one of my intellectual heroes.) In summary, Posner identifies three key features of conspiracy law from a “law & economics” perspective:

1. Criminal conspiracies are more dangerous than one-man crimes. Why? Because, according to Posner, conspirators are able to specialize and take advantage of the division of labor–“e.g. posting one man as a sentinel, another to drive the getaway car, another to fence the stolen goods, etc.” (As an aside, the same thing could also be said of civil conspiracies, such as agreements to commit fraud. In both cases, the division of labor and specialization of nefarious tasks among the conspirators make it more likely that the conspiracy will succeed.) This Posnerian insight about the dangers of conspiracies, dangers due to the efficiencies resulting from the division of labor, might explain the special place that conspiracy theories have in popular culture, why such myths are able to capture the public’s imagination.

2. “Conspiracy” is a separate crime. That is, from a purely legal perspective, a conspiracy to commit a criminal act generates criminal liability whether the conspiracy succeeds or not. For Posner, the rationale for this special treatment of conspiracies–i.e. the fact that a conspiracy is a separate offense regardless of whether the conspiracy succeeds–is based on point #1 above: the conclusion that conspiracies are more dangerous than one-man crimes. Again, this Posnerian insight might explain why conspiracy theories are so popular. Even if a particular conspiracy is unlikely to succeed–indeed, even if the conspiracy is entirely fictional–the possibility that a private plan or hidden agreement might exist might be especially alarming to many people. Just as no one likes it when others about you are talking behind your back, no one likes it when some group of individuals are secretly scheming to accomplish some illegitimate end.

3. Posner also mentions that some of the most serious crimes, like the crime of insurrection, can only be committed by conspiracies. Consider the January 6 Capitol Hill riot, for example. On January 6, 2021, thousands of angry Trump supporters marched up to the main U.S. Capitol Building in Washington, D.C., where the Congress was in the process of certifying the Electoral College results of the 2020 presidential contest. Many of the protestors apparently sincerely believed that the 2020 election had been stolen from President Trump, and several hundred protestors stormed the west side of the capitol building and interrupted the counting of the Electoral College votes for several hours. Had the protestors (conspirators?) succeeded in stopping the Electoral College vote count, they might have prevented a peaceful transition of power from Donald J. Trump to Joe Biden.

In other words, we should take conspiracy theories seriously! But how should we respond to conspiracy theorists? Alas, support for the “marketplace of ideas” model of free speech is starting to erode among many legal scholars and other public intellectuals. Worse yet, the “solutions” being proposed by these scholars and intellectuals are far worse than the dangers of conspiracy thinking. In my next few posts I will do three things: I will summarize these proposed solutions and explain why they are bad; I will defend the “marketplace of ideas” metaphor; and I will conclude by proposing my own solution to conspiracy thinking: the creation of a prediction market in conspiracy theories!

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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