{"id":3327,"date":"2020-05-01T11:08:58","date_gmt":"2020-05-01T15:08:58","guid":{"rendered":"https:\/\/hedgehogsandfoxes.org\/?p=3327"},"modified":"2020-09-23T21:27:20","modified_gmt":"2020-09-24T01:27:20","slug":"money-talks","status":"publish","type":"post","link":"https:\/\/hedgehogsandfoxes.org\/index.php\/2020\/05\/01\/money-talks\/","title":{"rendered":"Money Talks"},"content":{"rendered":"
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Jessie Allen, School of Law, University of Pittsburgh<\/a><\/p>\n

Blackstone Weekly needs to pause to mark the moment. The last post of 2010 (on corporations, death and the Second Circuit\u2019s provocative Kiobe<\/em>l decision) completed Volume I of the Commentaries.  One down, three to go.  We press on.<\/p>\n

Book the SECOND, Of the Rights of Things.  Chapter the first.  Of PROPERTY, in general.<\/em><\/strong><\/p>\n

The title of Blackstone\u2019s second volume makes it look like it\u2019s about something that it isn\u2019t. \u201cThe Rights of Things,\u201d is not<\/em> about the question, for instance, whether robots have a right <\/a>to avoid injury. It is not about the proposal to protect the environment by giving the natural landscape a right to preservation, rather than depending on individual citizens or government to enforce their respective rights to enjoy and regulate nature.  In this first chapter<\/a>, Blackstone explains that \u201cthe objects of our inquiry in this second book will be the jura rerum<\/em>, or, those rights which a man may acquire in and to such external things as are unconnected with his person.\u201d (p. 1) Ho, hum, more rights for men.  Still, the oddness of the title alerts us to a divergence between our usual focus and Blackstone\u2019s point of view. Blackstone\u2019s approach to property rights implies a relation, between a person and a thing, and among persons through things and things through people, that changes the nature of all concerned.<\/p>\n

The idea that owning something can transform it is not necessarily a sophisticated concept.  When my daughter was about six, she came home one day from a play date and announced, \u201cI like Ewan\u2019s house better than ours \u2013 it\u2019s cleaner, and they own it.\u201d  Now, reading Blackstone, it occurs to me that there is something of the six-year-old in his famous evocation of the thrill of exclusive ownership:  \u201cThere is nothing which so generally strikes the imagination, and engages the affections of mankind, as the right of property; or that sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe.\u201d  (p. 2)  Actually, that sounds more like a two-year-old.  Sorry, William, but you have to share!<\/p>\n

I am reading another book, however, that illuminates a contrary aspect of Blackstone\u2019s property romance.  In <\/a>The Meaning of Property<\/a><\/em>, Jedediah Purdy makes the case that for Blackstone (and Adam Smith) private property was a force for social cooperation rather than savage competition.  Purdy explores the Enlightenment notion that private property\u2019s exclusive character \u2014 combined with the potential to buy, sell or otherwise exchange property from one owner to another \u2014 fosters \u201ca society of negotiation.\u201d Purdy at 15.  In this vision, property owners\u2019 right to exclude others is the feature that allows them \u201cto decline any proffered relationship or joint venture\u201d and so forces the profferer to negotiate, to convince the owner to go along \u2013 by practicing the civilizing skills of \u201cinterest based persuasion.\u201d  Id.<\/em> at 17. To be successful in such a world, men needed \u201csensitivity\u201d and \u201cawareness of others\u2019 interest and feelings\u201d and earned the respect of their negotiating partners through \u201csteady and solid execution of their commitments.\u201d  Id.<\/em> at 16.  As Blackstone himself puts it, property \u201chas been the ennobling of the human species, by giving it opportunities of improving its rational faculties, as well as of exerting it\u2019s natural<\/em>.\u201d (p.  8 )<\/p>\n

It seems that Blackstone (and Locke and Smith) would agree with Marxist critics that our legal system is an \u201cepiphenomenon,\u201d created to serve the interest of private property: \u201cIn order to insure that property, recourse was had to civil society, which brought along with it a long train of inseparable concomitants; states, government, laws, punishments . . . .\u201d (p. 8)  They just have very different ideas about the moral and social consequences.  Critics see a legal system enforcing an inequitable distribution of property among parties whose differences in buying power are so extreme that every \u201cnegotiation\u201d is more like a Godfather-style offer the owner could not refuse.  What Purdy points out is that for the Enlightenment founders of capitalist democracy, protecting private property meant something more than creating the conditions for economic prosperity.<\/p>\n

In Blackstone\u2019s story,  private property is not just \u2013 or not directly \u2013 the key to individual liberty.  Property changes human nature as it goes about building social institutions \u2013 transforming a bunch of grabby toddlers clutching toys and shouting \u201cmine, mine, mine\u201d into a complex society of cooperating six-year olds who know how to \u201cuse your words.\u201d I have no idea about the empirical soundness of the underlying causal claim here.  What interests me is the continued vitality of the idea of negotiation as character-forming communication.   For instance, after Purdy\u2019s book, I now hear echoes of this theme in accounts of the recent housing crisis.<\/p>\n

There certainly is a way to narrate the housing market meltdown as a cautionary tale about the way deteriorating modes of property transfer undermine social structures.  In this story arguments about different individuals\u2019 interests give way to a collective fantasy that real estate prices can never fall. Far from \u201ca society of negotiation,\u201d this was a world in which it became either unnecessary or impossible to persuade anyone to make the deals being undertaken.  The previously legible structures of real property transfers got hopelessly tangled and unintelligible \u2013 even to those who ordinarily fared well in the old system of unequal opportunity.<\/p>\n

For many prospective homebuyers, the terms on which they were being offered the American dream of home ownership were so irrational that actual insight into one\u2019s own interest (to say nothing of the other guy\u2019s) would only kill the dream.  Remember the banks that \u201cchecked\u201d prospective home buyers\u2019 income estimates by estimating what people in their occupations generally made?  When the mortgager is encouraging the borrower to misstate  reality in order to qualify for the loan, both parties are invested in non-communication (or outright misrepresentation.)<\/p>\n

At the other end of the economic chain, so this story goes, a voracious foreign credit demand outstripped not only supply but any need or ability to understand, let alone thoughtfully negotiate transfers of the novel products created to satisfy this insatiable market.  The language of property no longer kept up with the material reality it sought to describe and construct.  The things on the other side of the property relation became increasingly transubstantial and unarticulated \u2013 from houses to mortgages to mortgage backed securities that were conglomerations of pieces of different debt transactions that had themselves passed through so many previous transfers that no one had any idea anymore who owned what.  In this imagined market-babble, nobody could talk fast enough to articulate the complexities of the transactions that just kept on growing and anyway no one was really sure to whom they should be talking, and for lack of anything more intelligent to say, everybody just wound up screaming \u201cBuy! Buy!  Buy!\u201d<\/p>\n

What does it mean to figure the sub-prime mortgage fiasco as a failure of property communication<\/em>? Most obviously, if the foreclosure crisis came about because the language of negotiation got garbled, we might hope to set things right by adjusting and better controlling property transaction structures  \u2013 rather than facing a need for increased state regulation of private property itself.   From a cultural perspective, the coherence of this story suggests that we have internalized a foundational liberal-Enlightenment notion about the way<\/em> private property can lead to a good life \u2013 i.e., by helping us articulate<\/em> ourselves to one another.<\/p>\n

The problem with this communication-deterioration account of the housing crisis is that the Enlightenment belief in the of property exchange as socializing language never entailed any actual<\/em> persuasion or negotiation.  Purdy quotes Adam Smith explaining that the exchange of a shilling \u201cis in reality offering an argument to persuade one to do so and so as it is in his interest.\u201d  Purdy at 15.  The idea seems to be that payment itself is a ritual of persuasion \u2013 a condensed communication \u2014 somehow capable of attuning buyers and sellers to one another\u2019s \u201cinterests.\u201d  If that is the case, it doesn\u2019t really matter how incoherent the real language of property exchange becomes.  So long as payment is taking place, Smith\u2019s implied negotiation should still work its socializing magic.<\/p>\n

Then again, perhaps the notion of a silent humanizing discourse of property makes most sense as a kind of Anglo-American cultural ideal. Like other rituals, we might see it as an imagined pattern that we aspire to emulate but never to actually achieve in our own dealings. (See, e.g., Seligman et al., Ritual and Its Consequences<\/a>) What is striking is that looking back to an earlier time in my life, the real patterns of property exchange appear much closer to this ideal of silent communication.  In the quintessentially middling society I grew up in \u2013 as a middle-class kid of the Midwest in the mid-twentieth century \u2014 there was always something vaguely disreputable about overt bargaining. Persuasion had a shifty, feminized, aspect \u2013 the opposite of the upright, character-building interactions envisioned by Blackstone.  It was as though negotiation implied at once weakness (the inability to simply proffer the named price) and a tricky desire to get more than one deserved. The respectable thing to do was to pay the amount discretely printed on the tag and never mention price.  In the booming U.S. economy of the 1960s, middle-class Americans could and did buy everything from groceries to houses through these wordless payment rituals.<\/p>\n

As a matter of empirical reality, it seems highly questionable that silent payment rituals could ever generate Blackstone and Smith\u2019s humanizing discourse of self interest.  But the fact that we can see those rituals brought to life in a previous \u201cgolden age\u201d of economic stability and social and political creativity \u2013 and find them spoiled in a current socioeconomic crisis \u2013 suggests how powerful the myth remains. As an ideal cultural pattern, developing ourselves through payment seems still to capture American imaginations.<\/p>\n

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