Pliability Rules

In 1543, the Polish astronomer, Nicolas Copernicus, determined the heliocentric design of the solar system. Copernicus was motivated in large part by the conviction that Claudius Ptolemy’s geocentric astronomical model, which dominated scientific thought at that time, was too incoherent, complex, and convoluted to be true. Hence, Copernicus made a point of making his model coherent, simple, and elegant. Nearly three and a half centuries later, at the height of the impressionist movement, the French painter Claude Monet set out to depict the Ruen Cathedral in a series of twenty paintings, each presenting the cathedral in a different light. Monet’s goal was to demonstrate how his object of study may be perceived by observers differently depending on the circumstances of the observation. In the spirit of these two projects, in 1972, Guido Calabresi and Douglas Melamed resolved to craft a comprehensive, yet elegant, model for organizing the universe of legal entitlements. The article’s impact has been profound and enduring. In their path-breaking article, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, Calabresi and Melamed established a new way of conceptualizing legal rights and duties. Departing from traditional jurisprudential notions, Calabresi and Melamed introduced the concepts of “property rules” and “liability rules” as the ordering principles of the legal system, and then analyzed their virtues and vices as means of protecting legal entitlements. Property rule protection forces potential takers to secure the consent of the entitlement owner, and thus allows the owner to determine the price of her entitlement. Liability rule protection, by contrast, allows potential takers to avail themselves of other people’s entitlements as long as they are willing to pay a collectively determined price that is usually set by a court, a legislator, or an administrative agency.