From Property To Contract: Political Economy and the Transformation of Value in English Common Law
| Published date | 01 March 1993 |
| Date | 01 March 1993 |
| Author | James Henry Bergeron |
| DOI | 10.1177/096466399300200101 |
| Subject Matter | Articles |
5
FROM
PROPERTY
TO
CONTRACT:
POLITICAL
ECONOMY
AND
THE
TRANSFORMATION
OF
VALUE
IN
ENGLISH
COMMON
LAW
JAMES
HENRY
BERGERON
University
College Dublin,
Ireland
INTRODUCTION
FFER,
ACCEPTANCE
and
consideration
are
the
fundamental
rules
~
defining
contract
in
the
Anglo-American
tradition.
During
the
Formal-
ist
period
in
legal
reasoning,
these
rules
were
applied
as
a
non-
ideological
process
of
deduction.
They
still
are
in
some
law
schools
and
casebooks.
Behind
the
apparent
doctrinal
purity
of
contract
law,
however,
lies
a
menagerie
of
political
and
economic
values.
The
law
is
seldom
ideologically
whole;
rather,
contract
embraces
tensions
wrought
of
the
uneasy
coexistence
of
competing
philosophies.
The
received
tradition,
the
basic
curriculum
of
every
LLB
student,
makes
two
fundamental
assumptions.
The
first
is
that
contract
is
not
property.
The
two
concepts
are
rigidly
divided,
both
conceptually
and
in
the
organization
of
teaching
and
scholarship.
Little
comment
is
made
on
the
historical
tensions
between
property-based
and
contractual
paradigms
of
legal
relationships.
Yet
this
eighteenth-century
legal
crisis
was
central
to
the
creation
of
modern
contract
law.
That
crisis
was
linked
to
the
development
of
the
second
assumption
of
the
6
received
tradition -
that
the
rules
of
contract,
especially
consideration,
are
unrelated
to
objective
fairness
in
exchange,
as
representing
a
natural
order
existing
between
equal
parties.
This
has
been
challenged.
Most
of
the
critical
scholarship
on
the
nature
of
contract
law
has
pointed,
whether
in
admiration
or
accusation,
to
the
values
of
liberalism
as
its
ideological
base
(Atiyah,
1979;
Horwitz;
1977;
Macpherson,
1962, 1985).
Linking
the
modern
law
of
contract
to
the
ideology
of
liberalism
goes
far
in
explaining
its
ideological
underpinnings,
but
threatens
to
oversimplify
a
complex
relationship
by
painting
law
as
part
of
a
larger,
internally
consistent
philosophical
movement.
Liberal
approaches
to
the
subject
of
contract,
and
particularly
to
consideration
as
an
element
of
economic
justice,
are
not
at
all
consistent.
Within
liberalism,
broadly
defined,
two
strands
of
political
philosophy
resolve
into
two
theories
of
exchange
value,
implying
different
concepts
of
economic
justice.
Part
of
each
tradition
was
incorporated
into
legal
discourse;
but
significantly,
part
of
each
was
rejected
as
well.
The
dominant
characteristic
of
classical
political
economy,
that
beachhead
of
modern
liberalism
from
Adam
Smith
to
J.
S.
Mill,
was
an
objective
theory
of
value,
motivated
under
the
property-based
paradigm
of
a
natural,
non-exploitative
economy
and
requiring
an
exchange
of
equivalents.
As
such,
it
has
much
in
common
with
the
ancient
and
medieval
philosophies
of
economic
justice
which
preceded
it.
Transferred
into
contract
law,
an
objective
theory
of
value
would
imply
a
substantive
measure
of
consideration.
Yet
the
received
tradition
eschews
any
such
pretence.
There
is
no
doctrine
of
laesio
enormis
and
peppercorns
generally
suffice.
As
stated
in
a
classic
text:
’The
Courts
will
not
make
bargains
for
the
parties
to
a
suit
and,
if
a
person
gets
what
he
contracted
for,
will
not
enquire
whether
it
was
an
equivalent
to
the
promise
which
he
gave
in
return’
(Guest,
1984).
In
tracing
the
ideological
roots
of
legal
liberalism
in
the
early
nineteenth
century,
Atiyah
and
Horwitz
point
to
the
classical
school.
Yet,
looking
forward
to
the
late
nineteenth
century,
a
new
theory
of
economic
relations
appears,
determined
to
bury
the
classical
economists,
which shows
a
much
greater
conceptual
similarity
to
the
received
tradition
of
freedom
of
contract.
The
neo-classical
or
Hedonist
school
of
Jevons
and
Menger
supplanted
the
older
labour
theory
of
value
with
a
theory
of
subjective
utility
(Jevons,
1888;
Menger,
1871/1950).
The
value
of
all
commodities
became
based
on
the
subjective
desires,
unpredictable
and
impenetrable,
of
discrete
individuals.
Accordingly,
no
social,
or
objective,
measure
of
value
could
exist.
Is
the
development
of
freedom
of
contract
to
be
regarded,
then,
as
a
reflection
of
contemporary
classical
economic
theory
or
an
anticipation
of
the
neo-classical
doctrine?
Atiyah
(1979)
appears
to
hold
to
the
former,
noting
that:
the
concept
of
freedom
of
contract
was
at
the
very
heart
of
classical
economics,
and
there
is
good
ground
for
thinking
that
the
common
lawyers
may
have
taken
over
the
concept from
the
economists
tn
the
early
part
of the
nineteenth
century.
Conversely,
little
importance
is
given
to
the
relationship
between
the
neo-
classical
school
and
legal
development,
considering
the
close
relationship
between
law
and
political
economy
ended
by
1870:
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