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Hylton, Keith N. --- "Some Notes on Property Rules, Liability Rules, and Criminal Law" [2012] ELECD 563; in Harel, Alon; Hylton, N. Keith (eds), "Research Handbook on the Economics of Criminal Law" (Edward Elgar Publishing, 2012)

Book Title: Research Handbook on the Economics of Criminal Law

Editor(s): Harel, Alon; Hylton, N. Keith

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848443747

Section: Chapter 3

Section Title: Some Notes on Property Rules, Liability Rules, and Criminal Law

Author(s): Hylton, Keith N.

Number of pages: 17

Extract:

3 Some notes on property rules, liability rules, and
criminal law
Keith N. Hylton


1. INTRODUCTION
Property rules prohibit conduct and liability rules internalize costs.1 Using this distinc-
tion, criminal law can be described as a set of property rules. The law aims to prohibit
offensive activity altogether rather than regulate it to some optimal level. In other words,
criminal law assumes that there is no "optimal level" of offensive activities such as fraud,
rape, and robbery.
In view of this, one should expect the property-liability rules framework set out in
Calabresi and Melamed (1972) to point the way toward a robust positive theory of crimi-
nal law. Posner (1985) applies the property rule theory to explain criminal law at a high
level of detail. No other article has attempted such a complete survey of the criminal law
grounded in positive theory.2
The value of the property-liability rules framework has come under attack in recent
years. Kaplow and Shavell (1996) present perhaps the most troubling critique. They
argue that property rules and liability rules are equivalent, in low transaction cost
settings, in terms of their welfare implications.3 The reason is that takings will not
be observed under either property rules or liability rules.4 I refer to this below as the
Indifference Proposition.
In this chapter I re-examine the Indifference Proposition. I have argued before that
even on its owns terms the Indifference Proposition does not imply that property rules
and liability rules are ...