A Conversation With the Great Richard Epstein

On this episode of the AIER Authors Corner, Ethan Yang interviews Richard Epstein, who is quite simply, one of the most influential legal scholars in the world. Epstein is the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution, the Laurence A. Tisch Professor of Law at New York University Law School, and a senior lecturer at the University of Chicago. He has taught a vast wealth of subjects ranging from property rights to Roman legal systems, and is particularly known for his ability to incorporate both law and economics into his analysis. Some might even say that he is not a legal scholar, but an economist with a Yale law degree. 

One of his most famous books, Takings, outlined a radical departure from the current Progressive status quo regarding property rights, towards a more traditional and coherent view of private property. The book argued that much of the policies of President Roosevelt’s New Deal were unconstitutional and was famously waved around by then-Senator Joe Biden, during Justice Clarence Thomas’s confirmation hearing. Senator Biden, in an attempt to paint Justice Thomas as extremely ideological to the point of being unqualified, declared that if he subscribed to the ideas in that book, he was not qualified to be on the Court. Thankfully, in recent years there has been movement towards Epstein’s side and not Biden’s.

The topic of this podcast, however, was not Takings, but another one of his radical and important works, Simple Rules for a Complex World. A written summary can be found here. Although the title may suggest that the book is about self-help or life advice, it is actually a completely novel but highly reasonable prescription for an alternative form of governance. At least compared to the modern American state. What Epstein argues for in this book is a return to a classical liberal model of governance, where the government simply sets simple ground rules and allows a natural order to arise from that foundation. Today the government has entangled itself into countless areas of private life, spewing regulation and red tape as far as the eye can see. This has come at a drastic cost, not just to our checkbooks, but to our innovative spirit. Such a system is also contrary to the basic tenets of sound economics and a recipe for further decay. 

Although some would say that the government needs this complicated regulatory system because the world has become very sophisticated, Epstein’s book posits the exact opposite. The larger and more complicated systems become, the more simple the rules must be. That is because private discretion and decision-making, such as in the construction of an international credit system or the operation of a trillion-dollar corporation, is far preferable to government control. The world has become sophisticated and prosperous, not because of the omnipresent hand of government but because of the institutions of a free and open society. It simply does not follow that killing the goose that laid the golden egg by subsequently regulating the fruits of a free society into oblivion is an optimal strategy for governance. 

Epstein’s radical, yet commonsense departure from the status quo of having a law for every conceivable problem in society is a masterful fusion of law and economics. He is able to skillfully leverage legal theory and cite precedent, while also weaving in important economic concepts such as Coasian bargaining and incentive structures, which form the foundation for many of his views. 

During the interview, Epstein first opens with an explanation about why law and economics is a recent innovation in the academy, not a longstanding practice. Much of that stems from the historical aversion of legal scholars to the ideas of economics, which has subsequently led to many of the economically illiterate laws we have today. He then moves to further elaborate on his views regarding the use of simple rules, rather than complex regulation, to solve issues such as environmental protection. Rather than the use of public management, he cites evidence and theory to suggest that a greater emphasis on private property rights and market interactions would be far superior. Another important topic he touches on is the need to reduce administrative costs, which stem not only from the physical upkeep of the state but also from interacting with regulation whether that be compliance fees or efficiency losses. On that note, Epstein proceeds to give his opinions on whether or not the modern administrative state is even congruent with the rule of law. Finally, he leaves us with some key takeaways on the value and challenges of implementing the ideas in his book. 

Key Takeaways

Richard Epstein will easily go down as one of the great legal minds in the classical liberal canon, if not the broader academy in general. His book, Simple Rules for a Complex World, is simply a must read for those interested in imagining a far better regulatory order than the one that exists today. Cutting past the dense legal and economic theory, one can find a clear prescription for an embrace of the seemingly forgotten principles that made the world prosperous in the first place. That is confidence and respect for the power of free and voluntary interacting individuals, rather than the dictate of the mob or the leviathan.

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