prior probability

Djibouti, a small country nestled between Eritrea and Somalia on the horn of Africa, was granted independence from France on this day (June 27, 1977). I wonder, however, if the people of Djibouti would have been better off if their country had instead become an overseas region of France, like the island of Martinique. See, for example, this recent human rights report via reliefweb.

Alternative Title: Review of Chapter 10 of Law and the Invisible Hand

Nine chapters down (1-9); three to go (10-12). Among other things, the antepenultimate chapter (Ch. 10) of Robin Paul Malloy’s Law and the Invisible Hand identifies an enormous blind spot in Adam Smith’s theory of political economy: where do new ideas come from? Alas, there are no inventors or entrepreneurs in Smith’s writings. Inventors and entrepreneurs, however, are essential for prosperity and economic growth; without them, we wouldn’t have new products and services or new technologies. In a word, without new ideas, we wouldn’t have progress.

In fairness to Adam Smith, most mainstream economists and legal theorists have also ignored the vital role that inventors and entrepreneurs play in developing and testing new ideas. To help fill this embarrassing gap, Professor Malloy identifies possible links between the work of Adam Smith and the ideas of Israel Kirzner (pictured below), an economist who has explored the process of creative discovery. For his part, Malloy makes the following critical connection between Kirzner’s emphasis on new ideas and Smith’s invisible hand and defense of free markets: the “invisible hand” of free trade and voluntary exchange creates new opportunities for alert, profit-seeking individuals to make new discoveries; so the larger the extent of the market, the more opportunities for inventors and entrepreneurs to emerge.

In other words, although Adam Smith himself did not discuss the role of inventors or entrepreneurs, Smith’s “invisible hand” approach to political economy makes ample room for these pivotal figures. Specifically, by extending the domain of Smith’s metaphorical invisible hand, i.e. by expanding the market and creating new opportunities for trade and voluntary exchange, we make it more likely for inventors and entrepreneurs to emerge and work their magic. To put this idea in Smithian terms, the emergence of inventors and entrepreneurs, like the division of labor (specialization), is limited by the extent of the market!

As it happens, the next chapter of Law and the Invisible Hand (Ch. 11) revisits an even deeper theoretical puzzle, an enigma at the heart of Malloy’s beautiful book: what is the relation between the invisible hand of the market and the impartial spectator of ethics and aesthetics? I will further explore “Malloy’s enigma” in my next two posts.

Alternative Title: Review of Chapter 9 of Law and the Invisible Hand

If you are a legal theory geek like myself, then Chapter 9 of Robin Paul Malloy’s Law and the Invisible Hand is a really fun chapter to read. In that chapter, Professor Malloy compares and contrasts Adam Smith’s “impartial spectator” with two competing legal-theory constructs. One is homo economicus: the so-called “rational actor model” that dominated the old-school “Law & Economics” movement associated with Judge Richard Posner and the University of Chicago. The other is homo identicus, Malloy’s short-hand for critical race theory (CRT), which emphasizes race and the primacy of group identity.

As Malloy correctly notes, these two legal-theory “paradigms” (in the Kuhnian sense) espouse radically different ends or goals. The central aim of homo economicus, the “economic man” of the rational actor model, is utility maximization at the individual level and wealth maximization at the social level, or “efficiency” at both levels. By contrast, the main goal of critical race theorists is anti-subordination or “equity”, such as reparations for past wrongs like slavery and genocide. Both efficiency and equity are no doubt laudable goals; in fact, the two most iconic legal documents in U.S. history–the Declaration of Independence of July 4, 1776 and the Emancipation Proclamation of January 1, 1863–are more about anti-subordination than they are about the efficient use of scarce resources.

[As an aside, my 2006 paper “Cornel West, Meet Richard Posner” explores what these two influential legal-theory paradigms might share in common. Also, there are two problems with Malloy’s picture of “Law & Economics” and CRT in Chapter 9. For starters, Malloy himself concedes that homo economicus and homo identicus are both simplified caricatures of the theories they are standing in for. The more serious problem is that these caricatures are either incorrect or incomplete. A key concept developed by CRT scholars, for example, is missing from Malloy’s description of homo identicus: the idea of “intersectionality.” Worse yet, homo economicus is for all practical purposes dead and buried; so-called “behavioral economics” has replaced the unrealistic economic assumptions of yore.]

In any case, what is the impartial spectator’s goal? Alas, here is where Professor Malloy’s interpretation of the impartial spectator starts to fall apart. On the one hand, Malloy claims in a previous chapter that Smith’s spectator is about process, not about outcomes or end-states. For Malloy, the impartial spectator is a useful tool we can use, if we so choose, to help us judge the morality of our actions (cf. Malloy’s inner spectator) and the justice of our social norms and laws (cf. his “outer” spectator), and these inner and outer spectators are more like the “reasonable man” of the common law tradition, a familiar legal standard used by Anglo-American courts to judge individual conduct. At the same time, however, Malloy is trying to build a Smithian theory of justice, and according to Malloy’s version of Smith’s theory, the ideal of justice (defined by Smith himself as the protection of one’s person and property) is the most important goal of all, the “pillar” that holds civil society together. If Malloy’s version of Smith’s theory is correct, then one could easily conclude that the impartial spectator does have an ultimate end: the supreme goal of justice.

If so, then what is the impartial spectator’s view of justice? More to the point, why should we prefer Smith’s conception of justice (protection of private property at all costs) over other conceptions of justice, such as Kantian duties, utilitarian efficiency (cf. homo economicus), or even equity (cf. homo identicus)? Alas, as I shall explain in a future blog post, it is here where we may encounter an insurmountable difficulty.

Alternative title: Review of Chapters 6-8 of Law and the Invisible Hand

Chapters 6, 7, and 8, the three most important chapters of Law and the Invisible Hand, should be read as a whole. Briefly, although these chapters, especially Ch. 6, are somewhat technical and full of digressions, covering contemporary theories of linguistics and aesthetics as well as Adam Smith’s own theory on the origins of language, Robin Paul Malloy–perhaps unwittingly–makes another creative move, an Adam Smith-inspired conjecture that, in my view, provides a more solid foundation for building a truly “Smithian” theory of justice.

To the point, Professor Malloy further refines and extends Adam Smith’s original “impartial spectator” metaphor by positing the existence of an “outer spectator” or outward-looking observer. Although this modified metaphor had appeared in previous chapters, it is in these three chapters, 6 through 8, where Malloy explains how this outward-looking observer is able to make judgements about beauty, politics, and culture. Among other things, for example, Malloy explains how Smith’s spectator not only has the ability to make internal moral judgements about one’s own conduct; it is also able to make external aesthetic judgements, i.e. judgements about beauty, the common good, and justice (see, e.g., pp. 71-72 & pp. 85-86). To see why this simple but ingenious move is so brilliant, I have to say a few words about the original spectator metaphor in Smith’s work.

In summary, Smith’s “impartial spectator” was by definition an introspective and inward-looking inner being, an imaginary third party who enables each individual to objectively judge the morality of his actions. Although Smith’s original device of the impartial spectator was designed to be a purely introspective or inward-looking tool, why can’t this inner spectator expand his or her or its gaze toward the wider world around us? That is, in addition to judging the ethical status of one’s actions, what is preventing our “inner” spectators from becoming “external” ones, from judging the normative status of social norms, formal rules (laws), and other worldly things? In short, what Malloy does in these chapters that is so brilliant — an ingenious move that is at once plausible and promising — is to turn the direction of this spectator’s gaze outward, toward the external world itself!

Would Adam Smith have endorsed this extension of the impartial spectator’s jurisdiction? If so, why didn’t he make this move himself? Either way, who cares, for Malloy’s outward-looking spectator move is a creative one and deserves further scrutiny. Specifically, how would this external spectator actually work in a morally-and culturally-pluralistic society as ours? I will revisit these key questions when I review the last part of Malloy’s book (Chapters 9-12) in my next few posts.

Alternative title: Review of Chapter 5 of Law and the Invisible Hand

Chapter 5 of Law and the Invisible Hand is the most speculative chapter in Robin Paul Malloy’s new book–and also the most original and creative one. In summary, having identified the main ingredients of “Smith’s theory of jurisprudence” in his two previous chapters — i.e. Smith’s “three metaphors” in Chapter 3 and Smith’s “three pillars of civil society” in Chapter 4 –, Professor Malloy then dons his academic chef’s hat and combines this hodgepodge of ingredients in a new and novel way in Chapter 5 to develop a Smithian-inspired theory of justice. For the sake of brevity, I won’t restate the specific steps of Malloy’s intricate intellectual recipe here; instead, I will limit myself to making the following few observations, criticisms, and suggestions:

1. Stop saying “Smith’s theory of jurisprudence”; Adam Smith did not have one. Although the subtitle of Malloy’s book is “A Theory of Adam Smith’s jurisprudence,” Malloy keeps referring to “Smith’s theory of jurisprudence” and to “Smith’s theory” in each of the chapters of his book when Smith never developed a theory of jurisprudence. In truth, Malloy is just presenting his conjecture of what Smith’s theory of law and justice would have looked like had Smith actually completed his promised book on jurisprudence, which Smith did not. That said, is Malloy’s novel conjecture in Chapter 5 a good one?
2. “Entities are not to be multiplied beyond necessity.” We know from Smith’s early essay on “The History of Astronomy” that Smith himself admired the elegant simplicity of Newton’s three laws of gravity, not the ad hoc or makeshift epicycles of Ptolemaic astronomy. Alas, Malloy’s conjecture, his attempt to formulate a Smithian theory of justice out of a hodgepodge of Smithian concepts, falls more on the Ptolemaic end of the social-science spectrum. To sum up, although Malloy’s efforts are admirable and his guess is a plausible one, my main criticism is that it has too many moving parts to be considered a “Smithian” or Enlightenment theory of justice.
3. It takes a theory to beat a theory. Even if my criticisms above are on point, Malloy still deserves great credit for bringing to our attention a lesser-known aspect of Adam Smith’s work, his lectures on jurisprudence, and for identifying possible connections between these lectures and Smith’s published work. Moreover, Malloy himself, perhaps unwittingly, effectively responds to objection #2 above in the very next chapter of his book, where he presents a simpler and more plausible Smithian theory of justice. I will thus turn to chapter 6 in my next post …

Robin Paul Malloy identifies and describes “three pillars of civil society” (p. 5) in Chapter 4 of Law and the Invisible Hand, three key concepts that appear in various parts of the work of Adam Smith: utility, authority, and justice. In brief, “authority” (pp. 41-44) refers to the power of the sovereign to resolve disputes and protect one’s person and property, while “utility” (pp. 44-49) refers to propriety of the methods used by sovereign to perform these essential tasks (i.e. society as a whole is better off when disputes are resolved peacefully and when everyone’s personal safety and property are protected), but of these three pillars, Malloy devotes the most space to “justice” (pp. 49-57). According to Malloy’s interpretation of Smith, “justice” refers to the protection of one’s person and property and is the most important of these three pillars, the one that holds the edifice of society together (p. 40).

This tripartite picture of “civil society” is no doubt a useful and reasonable one, but is it really the picture that Adam Smith himself would have painted? I pose this key question here because Smith himself never developed a theory of justice. Yes, Smith acknowledged that one of the principal duties of the sovereign is “to protect[], as far as possible, every member of the society from the injustice or oppression of every other member of it.” [See The Wealth of Nations, Glasgow edition, pp. 708-709 (para. 1).] And, yes, Smith defined justice as “a mere negative virtue” (i.e. not harming others) in his treatise on moral sentiments. [See The Theory of Moral Sentiments, II.ii.1.9.] But as I mentioned in a previous post, Smith never completed his promised book about law and justice.

Furthermore, to equate justice with restraint from harming others (justice as a negative virtue), as Smith does in The Theory of Moral Sentiments, or conversely, to equate injustice with oppression, as Smith does in The Wealth of Nations, is not enough to build a full-fledged theory of justice. Why not? Because one man’s harm or oppression is another man’s natural liberty! We therefore need to define what forms of conduct constitute “harm” and what types of acts constitute “oppression”, and we also need to identify the circumstances, if any, in which such harms and acts of oppression can be justified or excused. In short, at a minimum, we need a theory of harm as well as a theory of justification and excuse.

Perhaps, however, we could we use one of Adam Smith’s three metaphors–the invisible hand, the man in the mirror, or the impartial spectator, or some combination thereof–to fill this massive gap in Smith’s work, i.e. to develop “a Smithian theory of justice.” As it happens, this is precisely what Professor Malloy attempts to do in Chapter 5 of Law and the Invisible Hand, his most original and thought-provoking chapter. In the alternative, perhaps this gap in Smith’s work was an intentional one; that is, perhaps Smith came to believe that developing a comprehensive theory of justice would be a complete waste of time! Either way, I will proceed to Chapter 5 in my next blog post.

Before I proceed with my review of the remaining chapters of Robin Paul Malloy’s Law and the Invisible Hand (Chs. 4-12), I want to pose a few additional questions about Adam Smith’s impartial spectator, one of the most compelling and memorable metaphors in the history of ideas, along with Plato’s cave, Schrödinger’s cat, and Rawls’ veil of ignorance. Among other things, at the end of my previous post I identified a fundamental disagreement between Professor Malloy and myself regarding this metaphor. To the point: Malloy models Smith’s spectator after a common law judge, while I would liken him to a theater-goer, i.e. a member of the audience at a theatrical performance. Which of us is right? Either way, Smith’s impartial spectator metaphor also presents a peskier set of puzzles and conundrums, a deep and difficult set of questions that I once posed to Ryan Patrick Hanley (see here) and that I now pose to Professor Malloy:

1. Who is this impartial spectator? First and foremost, what is the ontological status or metaphysical origins of this imaginary being? Specifically, is he (she?) (them?) (it?) an artificial human creation–i.e. something we conjure up out of whole cloth–or is this imaginary being somehow “hardwired” by natural or sexual selection into every human brain–an innate faculty we are born with? (Cf. McHugh 2016.) Either way (human invention or innate faculty), does this abstract entity have an ethnicity, a gender, or a sexual preference? (Cf. Weinstein 2016, p. 356.) [Note: All author and page references are to Volume 13, Issue 2 of Econ Journal Watch (May 2016), which contains a special symposium devoted to Adam Smith’s impartial spectator.]
2. When and how does this spectator come into play? Secondly, and from a purely logistical or practical perspective, when does the impartial spectator, if he (her/them/it) really exists, actually come into play? To the point: if it’s true, for example, that the average person makes up to 2000 decisions every hour (see here), which of these myriad decisions are subject to review by one’s impartial spectator–i.e. actually go up “on appeal”, so to speak. Put another way, if Smith’s impartial spectator operates like a Court of Appeal, what criteria does he (the impartial spectator) use in deciding which of our decisions will be taken on appeal?
3. Is the impartial spectator a moral relativist? Next, what is the moral or normative status of the moral judgements generated by this heuristic, i.e. the decisions or verdicts rendered by the impartial spectator? (Note: I prefer the British spelling of the word “judgement.”) Are these verdicts/judgements fallible or infallible? Final or tentative? Put differently (cf. Mueller 2016), do the judgements and identity of this imaginary entity vary from person to person, or is Smith’s impartial spectator capable of generating universal and timeless moral judgements?
4. How does the impartial spectator overcome its biases? Also, how helpful or reliable is Smith’s imaginary spectator, really? Specifically, can he or she or them transcend or correct our “entrenched cultural biases” (Fleischacker, 2016, p. 278)? By way of example, Walt Disney’s Jiminy Cricket famously admonished Pinocchio to ”let your conscience be your guide.” This is helpful advice if your impartial spectator is able to reliably discern right from wrong, but how reliable is your conscience? Circling back to Smith, since the impartial spectator is not a real person–it is an imaginary being–it is only as reliable as the person conjuring him/her/them up. After all, the impartial spectator, being an imaginary entity, has no store of knowledge beyond that of the person who is conjuring it up.
5. How does the impartial spectator enforce its judgements? Lastly, isn’t Smith’s impartial spectator, assuming it really exists, a superfluous entity? If not, what work does this imaginary being really do? (Cf. Craig Smith 2016.) To the point: if a virtuous person is someone who is guided by the judgements of the impartial spectator, then by definition a non-virtuous person is someone who neglects or ignores these judgements. In that case, the impartial spectator falls into a circular trap; it is the mysterious quality of “virtue” (not the judgements of the impartial spectator) that is doing the heavy moral lifting.

To his credit, Professor Malloy devotes several additional chapters of his book to Smith’s impartial spectator, so we will revisit the questions above in future blog posts. For now, it suffices to say that this imaginary device, which appears over five dozen times in The Theory of Moral Sentiments, is the centerpiece of Smith’s theory of morality (see, for example, the book cover pictured below) and thus deserves careful scrutiny. In the meantime, I will proceed to Chapters 4 and 5 of Law and the Invisible Hand in the next day or two …

Robin Paul Malloy makes two key moves in Chapter 3 of his new book Law and the Invisible Hand. First, he describes three of the most memorable, compelling, and complex metaphors in the writings of Adam Smith: the invisible hand, the man in the mirror (a phrase, however, that Smith himself did not use), and the impartial spectator. Next, he attempts to “connect” these three metaphors, i.e. identify what the common thread among them, if there is one, is. I will explore the connections among these metaphors in a future post; for now I will just say a few words about each metaphor:

1. Invisible hands. Adam Smith’s most famous metaphor has to be “the invisible hand,” a metaphor that appears in three of Smith’s works: in his essay on “The History of Astronomy”; in his treatise on moral philosophy (The Theory of Moral Sentiments); and in “Book I” of his work on The Wealth of Nations. Here, however, Professor Malloy commits a major mistake. Specifically, he fails to mentions that Smith uses his “invisible hand” metaphor in different ways in each one of these three works; as a result, we can’t say that Smith’s “invisible hand” metaphor has a single, stable meaning. (I could go into the nitty-gritty details here (see slide below), but I want to keep this blog post short, so just take my word for it for now.)
2. Adam and the looking-glass. Although Smith never used the phrase “man in the mirror” (this phrase is Malloy’s own invention), he did write about looking-glasses and mirrors in The Theory of Moral Sentiments. Among other things, Smith writes: “Were it possible that a human creature could grow up to manhood in some solitary place, without any communication with his own species, he could no more think … of the propriety or demerit of his own sentiments and conduct … than of the beauty or deformity of his own face…. Bring him into society, and he is immediately provided with the mirror which he [lacked] before…. [I]t is here that he first views the propriety and impropriety of his own passions, the beauty and deformity of his own mind.” [Quoted in Malloy 2022, pp. 27-28.] In other words, for Smith man is a social animal because we care what other people think about us.
3. Impartial spectators. The last of Smith’s three major metaphors is “the impartial spectator,” a term of art that appears over 60 separate times in The Theory of Moral Sentiments. (By contrast, as I mentioned above, Smith used the phrase “the invisible hand” only three times in his entire lifetime.) That Smith employed this theatrical metaphor so frequently in his first magnum opus tells us that the impartial spectator is a crucial part of Smith’s moral philosophy, but who is this impartial spectator, and what is his role in our lives? Alas, Malloy and I have a fundamental disagreement about Smith’s spectator. Malloy, for example, compares the impartial spectator to a common law judge, but in reality the metaphor of a spectator originates from the world of the theater, not law. Also, because the impartial spectator is such a crucial aspect of Smith’s thought, I will say a few more words about this metaphor in my next post.

To celebrate the day the Constitution of the United States officially became the law of the land–i.e., June 21, 1788, the day on which our nation’s charter was ratified by the requisite number of States–, below is a chronological listing of my constitutional law papers:

1. “Comment on Bush v. Gore and the Clemens-Piazza broken-bat incident” (2001) (analysis of Bush v. Gore).
2. “The most senile Justice?” (2007) (stinging critique of David Garrow’s law review article on mental decrepitude on the U.S. Supreme Court).
3. “A stag-hunt model of the U.S. Constitution” (2008) (game-theoretic model of the constitutional ratification process).
4. “Coase and the Constitution” (2011) (analysis of federalism).
5. “Gödel’s loophole” (2013) (analysis of Article V).
6. “Why don’t juries try ‘range voting’?” (2015) (analysis of jury trials).
7. “The problem with precedent” (2017) (review of Randy Kozel’s Settled Versus Right: A Theory of Precedent).
8. “Domestic constitutional violence” (2018) (historical analysis of the president’s authority to use military force inside the United States).
9. “Bitcoin, the commerce clause, and Bayesian stare decisis” (2019) (analysis of South Dakota v. Wayfair).
10. “Lockdowns as takings” (work-in-progress) (analysis of the takings clause).