Aesop Econ: The Charcoal-Burner and the Fuller

My Amazon Kindle app came with a free copy of Aesop’s Fables (translation by George Fyler Townsend), which I began reading a few days ago. Aside from being charmed by their brevity and deceptive simplicity, I was also struck by how many of the stories involved economic concepts -- some obviously, others subtly. So I thought it might be fun to do a series of blog posts analyzing Aesop’s Fables from an economic perspective.

To start, here’s a fable called “The Charcoal-Burner and the Fuller.”

A CHARCOAL-BURNER carried on his trade in his own house. One day he met a friend, a Fuller, and entreated him to come and live with him, saying that they should be far better neighbors and that their housekeeping expenses would be lessened. The Fuller replied, “The arrangement is impossible as far as I am concerned, for whatever I should whiten, you would immediately blacken again with your charcoal.”

Like will draw like.

This is a story about negative externalities. Were the charcoal-burner and fuller to move in together, the charcoal-burner’s trade would impose unwanted costs on the fuller’s. How might this problem be addressed?

In a traditional Pigovian analysis of the situation, the coal-burning’s harmful side effects might be regarded as justifying a correction. Perhaps the government ought to impose a tax on burning charcoal; the optimal tax would be set equal to the marginal external cost in terms of blackened garments. That would induce the charcoal-burner to consider the full costs of his choices, and therefore to reduce his charcoal-burning to the efficient level.

But Aesop’s story presages a more sophisticated Coasean analysis. As Ronald Coase observed, externalities are reciprocal in nature. To permit the burning of coal would harm the fuller -- but to restrict the burning of coal would harm the coal-burner. The presence of both activities is necessary for the externality to exist. And this draws our attention to the possibility of averting the harm by means other than reducing coal-burning. According to the least-cost avoider principle, an externality should be reduced or prevented by the party who can do so at the lowest cost. In the case at hand, the fuller can avoid the externality by not moving in with the charcoal-burner in the first place.

In most modern externality analysis, the story begins with two parties or activities that are already in conflict. But Aesop properly chooses to start his story before the conflict comes to be. Moreover, Aesop (like Coase) reminds us that externality problems can, at least sometimes, be solved or avoided by the interested parties themselves.

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What is Originalism Good For?

Originalism--the theory that we should Interpret the Constitution according to the public meaning of its words at the time of its ratification--serves important instrumental goals. It promises to give relatively clear and objective definitions to crucial but contestable terms, such as “cruel and unusual” or “due process of law,” by recurring to the linguistic usage of those who ratified the Constitution. That interpretive process, though hardly easy, at least protects us from the sort of judicial casuistry that threatens to drain all fixed meaning from the Constitution’s words.

To praise originalism for relative certainty and objectivity is not to say that its definitions always comport with our own, however, or that they hold constant from one place in the Constitution to another. Consider “cruel and unusual,” for instance. So long as they do not lapse into what Scalia called a “faint-hearted” devotion to principle, originalists must admit that it is not unconstitutional to publicly flog or brand criminals. Originalism thus gives us a very clear answer, and one untainted by any contemporary bias (indeed, entirely divorced from modern sensibilities), to the question of what “cruel and unusual” means. It may not be quite the answer the average person—or the average criminal—expects, but originalism does not pretend to play to the crowd.

Nor does originalism, despite its certainty and objectivity, always give words consistent interpretations. In the case of “due process of law,” for instance, originalism suggests that a different meaning applies each of the two times the phrase appears in the Constitution. Why? Because each such appearance dates from a different ratification process, in a different era, in which “due process of law” meant different things. Perhaps it would not be fair to thereby criticize originalism for inconsistency on that count; the same interpretative process applies to each appearance of “due process,” after all. But it does drive home the point that originalism does not care about reading the Constitution in the same way that an ordinary subject, using ordinary English, would read it today.

Originalism has another instrumental virtue: It tends to generate such substantively attractive results as limited government, the rule of law, and respect for individual rights. For that, we can credit not just the sound political judgments of the Founders but also, and more generally, the supermajoritarian constraints imposed on Constitutional ratification. Because the ratification process has to satisfy so many parties, who have many conflicting interests, the Constitution and its amendments tend to support universal values. Contemporary judges, because they do not face those similar constraints, risk following the twists and turns of case law toward unlimited government, arbitrary laws, and disregard for individual rights. Originalism, by recurring to the Constitutional meanings that won ratification, offers a way (though not the only or necessarily best way) to stave off that ugly outcome.

[The above comes from my forthcoming paper, Originalism and the Consent of the Governed: A Critique and a Cure, which I’ve submitted for presentation at the Third Annual Originalism Works in Progress Conference.]

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