Re: Vertical vs Horizontal Segmentation

Date: Mon Feb 19 2001 - 18:33:42 MST

In a message dated 2/13/01 5:17:56 PM Central Standard Time,

> We occasionally discuss a different concept for dividing the government
> to reduce its power, sometimes called "Privately Produced Law" or PPL.
> Bruce Benson (in The Enterprise of Law) and David Friedman (in The
> Machinery of Freedom) are two authors who have explored this possibility
> in detail. It can be thought of as a form of horizontal segmentation of
> government. Instead of one police force, there would be many; instead
> of one legislature, there would be multiple ones, each creating their
> own constellation of laws.
> Of course such segmentation already exists in the world, but strictly
> along geographic lines. The idea explored by these authors is to
> allow competition to exist within a geographic region among multiple
> governments. Each person could choose which government's laws to follow,
> they would pay whatever taxes that government specified, and they would
> then receive whatever protection it was able and willing to provide.

Hal, you make an interesting proposal below, but I thought I'd pick a nit
first. With the federal system in the US we actually have both horizontal
and vertical segmentation. In theory the subject matter regulated by federal
and state governments and their legal systems shouldn't overlap much, but if
they didn't at least have the potential to, my life would be a lot easier.
In fact, with "diversity" jurisdiction for the federal courts, we actually do
have a surprising degree of overlapping subject matter between two fully
articulated court systems, although the applicable law is supposed to sort
itself out in a way so that only federal or state law will apply on an
issue-by-issue basis, even in cases subject to diversity jurisdiction. The
same happens in many instances with state, county and municipal jurisdictions
for various different kinds of issues.

This has in fact led to some "competition" within the same geographic region,
although the competition doesn't work itself out in a market, as Friedman and
Benson have proposed. Instead, it plays out with evolving legislative
accommodation between the different governments, with some judicial
interpretation of questions of overlapping subject matter jurisdiction. The
most acute example that comes to mind here is the invasion of regulation of
commercial matters by federal law that began in the 1880s and continues on
into the current era, punctuated by a famous series of cases in which the US
Supreme Court reinterpreted the Commerce Clause of the US Constitution to
legitimize this trend.

All of this is fresh in my mind because last week I hosted a Chinese trade
delegation here that was studying US commercial law as part of their
accession to the WTO. I relished explaining to them the complexity of the
whole system and that it was INTENDED to be inefficient in the sense of
limiting any government or branch of government from having too much power
over the lives of individual citizens.
> With horizontal segmentation, we could safely allow vertical integration.
> There would no longer be a need for a government to have independent
> legislature, executive and judiciary. If various governments compete
> for citizens, they may choose to organize themselves internally in any
> way they desire. Efficiency, rather than limitation of power, would be
> the guiding principle.

This is an interesting idea and one with which we'd have a chance to
experiment in a society that really treated law as a commodity. I think
there's a natural efficiency in separating at least some legislative
functions from the everyday work of initial dispute resolution, if for no
other reason than that the latter is so time-consuming and requires
specialized skills and close and constant attention. I also think it's
probably a Bad Idea to have the cop on the beat engaging in rule-making.
However, we might see an interesting hybridization of the appellate judiciary
and the legislative functions. Come to think of it, this WAS the original
model of the English constitution (yes, they have a constitution - they just
don't capitalize the word because it's not all in one document), with the
upper house of the legislature also doing duty as the ultimate appellate

       Greg Burch <>----<>
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