4. Holism and Emergence

By separating out our interests in using things and the devices that legally protect those interests, the desirable features of property emerge out of their interaction. Property’s effectiveness cannot be associated with interests alone (or in the main) as the modern natural rights thinkers would have it, and they cannot be associated with mechanism alone as the bundle theorists believe. Otherwise, property is an uneasy blend of the intensional and the extensional, whether this blend is more chunky as in natural rights or more detailed and contingent as it is in realism and post-realism.

Not distinguishing what property does from how it does it—roughly extension versus intension—tends to lead to the fallacy of division. On the conventional approach, concepts and rules are expected to track closely their desired consequences. But if property in all its parts should reflect the purposes of property, we wind up expecting each of the concepts and rules to reflect them as well. To expect this generally is to commit the fallacy of division: just as water is wet without water molecules being wet, property may serve a purpose or be just or efficient without entailing that the constituents of property law, or each occasion it is invoked, will do the same.75

Some rules and concepts may, as intensions, be closer to extensions justifiable in terms of fairness, and other intensions may track efficiency-oriented extensions. For example, the Implied Warranty of Habitability is easier to see as based on fairness, whereas the operation of the law of trespass with its deference to owners may be seen as implementing a policy of promoting efficiency, liberty, or autonomy.

Closely related to the moderate functionalism of the information cost theory is its ability to capture emergent properties of property. The purposes of property law might well be served by the institution as a whole—through its overall architecture. Rather than individual rules or concepts taken in isolation serving these purposes, they may work in tandem to produce them. As Herbert Simon noted a long time ago, complex systems and their frequent reliance on modular architecture allows one to be an ‘in principle’ reductionist and a ‘pragmatic’ holist.76 Because I am not arguing for a particular foundational theory, let it suffice that the type of reductionism and holism that the information cost theory employs is fully consistent with respecting the holistic nature of the institution of property.

75Smith 2012b. Hart made a similar point about morality and law: after noting that the connection between law and sanctioning or between law and efficacy might hold at the level of a legal system without doing so at the level of individual laws or rules taken separately, he has this to say: ‘Perhaps the differences with respect to laws taken separately and a legal system as a whole are also true of the connection between moral (or other) conceptions of what the law ought to be and law in this wider sense.’

76Simon 1981, 195.

5. An Application to in Rem Rights and Duties

Keeping concepts and categories—intensions and extensions—distinct in property theory allows us to untangle a perennial problem at the heart of property: the nature of in rem rights and duties.

Let’s start with a deceptively simple question: to whom do duty bearers owe their duties in the law of property? James Penner points out that a duty bearer need not know much about the owner of a thing and that this is true of owners in general.77 He concludes that the duty is owed not to individual owners but is what might be termed ‘reverse in rem’—owed to a large and indefinite class of owners. So, according to Penner, property is two-way in rem.

Some lack of personalization is indeed at the heart of property. It can help explain the numerus clausus principle.78 Large numbers of far-flung and impersonal duty bearers cannot be expected to keep track of large amounts of idiosyncratic information.

More generally, property manages complexity through modularity, which hides much personal information from other parts of the system. Duty bearers do not need to know much about the identity of owners, as in Penner’s example of someone in a parking lot not needing to know the identity of the owners of cars in order to know not to take or damage them.79 Rules about good faith purchase and nemo dat (and even more so negotiability) make certain information about past transactions less relevant to current holders and would-be holders of property rights. Interactions between actors with respect to the use of resources are broken into components containing much purely internal interaction, and between these components interactions are limited to those consistent with defined interfaces.80 This modularization begins with defining things and employing exclusion strategies to protect them as a first pass.

That the intensional level lowers information cost by suppressing some information helps explain one of the controversies between the realists and Albert Kocourek over the Hohfeldian system of legal relations. As we have seen, Corbin and the realists insisted that in rem rights were really a collection of numerous ‘unital’ rights. The two sides argued about situations that were not necessarily different extensionally, but the approaches clearly differed at the intensional level, with Corbin and the realists downplaying the role of concepts and insisting that they track closely the articulated Hohfeldian lowest common denominator-style, externally oriented relations.81 By contrast, Kocourek, building on the indefiniteness of in rem rights, argued that the key characteristic of in rem rights was based on delineation: ‘a right in rem is one of which the essential investitive facts do not serve directly to identify the person who owes the incident duty’.82 Kocourek gave the example of an owner A who gave an easement to everyone except B.83 Is A’s right

against B in rem or in personam? In terms of numerosity it is in personam, but Kocourek insisted it is in rem, over the objection of Corbin. Corbin thought that in such an example B was directly identified,84 but here Corbin is relying on some combination of the extension and what someone is likely to know in that scenario by isolating B in that fashion.

Again, the intensional level helps untangle the nature of in rem rights. As Kocourek argued, an in rem right is not delineated in terms of the identity of the duty bearer—or, as we shall see, in terms of the identity of the owner—so whether one knows more than is needed is beside the point. Kocourek’s example of the nearuniversal easement is unrealistic, precisely because delineation costs in giving an easement to everyone except B would be virtually as high as if one created in rem rights duty holder by duty holder in a literally Hohfeldian fashion. Kocourek’s investitive facts relate to the intensional level, or, as he termed it, the level of ‘internal, substantial qualities’.85

In Kocourek’s terms, the ‘investitive’ facts of property are in the first instance relatively free from information about use. Kocourek drew inspiration from the civilians and may have been inspired by Austin’s civilian-style declaration that the essence of property is its indefiniteness.86 When delineation in terms of investitive facts suppresses information and allows property rights to be indefinite (in terms of duty bearers, the residual claim, and the like), the intensional level affords an opportunity to save on information costs.

A similar story can be told about a duty bearer’s knowledge about owners. Christopher Essert argues that one can owe duties without knowing much about the right holder.87 He notes that Penner has pointed out a serious problem with the Hohfeldian analysis of rights and duties. If an in rem right consists of a series of in personam right-duty relations between A and B, A and C, A and D, etc., then after the transfer to B, the relations between A and B are reversed, but also C, D, etc. now owe a duty to B, not A. How can the transfer from A to B affect the content of the duties owed by these many others, i.e. everyone else? Most of these others are probably unaware of and need not know about the transfer. Penner considers this massive shift in the content of duties to be absurd, and Essert dubs this ‘Penner’s Problem’. Essert agrees with Penner that this is indeed a problem, and that the right-duty relationship in property is depersonalized in both directions, at least before any violation has occurred. He disagrees with Penner’s solution of two-way in-rem-ness, in which the duty of non-owners is not owed to individual owners, but is to respect ownership of Blackacre, Whitacre, etc. generally. Essert wants to maintain that duties are owed to individual owners, but impersonally: his solution is to posit an office of owner: the duty bearer owes the duty to the owner qua owner. One owner can be substituted for another by assuming the office. Thus, the

86Austin 1885, 799 (‘[I]ndefiniteness is of the very essence of the right; and implies that the right . . . cannot be determined by exact and positive circumscription’).

87Essert 2013.

duty bearer need not know anything about the owner, as Penner requires, even though the duty is to the owner (qua owner, as the office holder).

Distinguishing concepts from categories, or intensions from extensions, permits another solution to Penner’s Problem, without any extra machinery. The use of things to mediate the right-duty relationship facilitates two-way depersonalization. But this depersonalization relates to delineation and Kocourek’s investitive facts— at the intensional level—which is consistent with the rights and duties availing between individuals at the extensional level. So one can owe an extensional duty to an owner that is delineated using an intensional mode of presentation (with investitive facts) that makes no reference whatever to the personal characteristics of the owner. Moreover, the mode of presentation, at the level of concepts, economizes on information costs, precisely because it does not make reference to personal information of owners—or of duty bearers. Duty bearers need not know anything about owners and vice versa, most of the time. As with the controversy between Corbin and Kocourek, what serves to identify an owner and what a duty bearer needs to know are easier to account for when we keep intensions (where this information matters) distinct from extensions (where it generally does not). Thus, the Hohfeldian multital right—a conglomeration of paucital or unital rights—is extensionally accurate in capturing in rem rights but does not capture the mode of presentation, the concept or intension. Thus, one can be an extensional Hohfeldian (as is Essert) but an intensional Pennerite. To do so, we need not conflate the structure of rights and duties with the psychological states of right holders and duty bearers. Nor do we need a new device of an office of ownership (at least for these purposes), because the concept, or mode of presentation, serves to depersonalize the relation where it counts for information cost purposes. Again, it is essential to distinguish the intensional from the extensional in property law.

6. Conclusion

In this chapter I have argued that identifying the important role that concepts play as intensions—modes of presenting particulars in the world—explains some dilemmas in property theory and paves the way for a better type of theory that combines the best of conceptualism and realism, formalism and contextualism, functionalism and moralism, and even reductionism and holism. Most accounts must veer to one pole or the other because they do not allow the intensional level to do all the work it can do. In particular, isolating the intensional level brings the costs of delineating property back into the picture, which is an essential factor in shaping the contours of actual property law.