These strategies are an important part of the intensional level of the law and what distinguishes exclusion from governance is the specificity with which uses are picked out in the process of delineation (and processing by duty bearers). The ‘right to exclude’ protects uses but without doing much to mention them. One could say that exclusion is like use-neutral governance, and governance is use-based exclusion.

2. Formalism versus Contextualism

When reductionism effaces the intensional level of legal concepts, it is natural to regard resistance to this way of thinking as formalistic. Or to take things the other way around, the anti-formalists’ attempt to make context always available in principle tends to lead to an overemphasis on extensions.

Concepts as intensions are often identified with formalism. Formalism comes in several varieties. The anti-formalists who are the most sceptical of formalism in property see concepts as part of an approach to law that is overly autonomous. The anti-formalist holds that if concepts were allowed to play an essential role in legal reasoning, they would gloss over important parts of the real world context and get in the way of making policy through legal reasoning. The Holmesian aphorism ‘The life of the law has not been logic: it has been experience’55 is the rallying cry for those who see concepts as getting in the way of policy-oriented pragmatism. Further, the traditional concepts of the law were regarded by the realists and their successors as building in an inherent bias for the status quo and entrenched interests. Ownership itself and the formulation of property in terms of rights serve merely as barriers to overcome in tailoring property to particular types of situations and achieving policy goals.

The opposition of contextualism and formalism is a gross oversimplification that nevertheless contains a kernel of truth. To begin with, there is some question as to whether pre-realist law was as formalistic as the realists claimed it was.56 The realists found it convenient to define their opponents. It may well have been rhetorically effective to oppose traditional property concepts in order to take a decisive new direction, but it was not strictly necessary. To this day, progressive courts sometimes achieve results that could have been reached employing traditional property concepts, but they go out of their way to disparage concepts themselves. The most famous recent and emblematic example is State v Shack.57 In that case, the New Jersey Supreme Court held that the landowner could not prevent migrant agricultural workers living on his land from receiving aid workers as guests. The court held that the aid workers had not violated the criminal trespass statute. The court could have grounded the result in the right of tenants to receive guests, and at least one other court took exactly this route.58 But the New Jersey court disdained this

571971, 374–5.

58See e.g. State v DeCoster 1995, 894 (holding that farmworkers living on housing provided by a farmer are ‘tenants’, and as such ‘have a right to quiet enjoyment, which includes a right to receive visitors in their homes’). See Smith 2009, 982–4.

approach, by declaring that ‘[p]roperty rights serve human values’ and that ‘[t]hey are recognized to that end, and are limited by it’.59 Moreover, in the court’s view concepts are confining and merely get in the way:

We see no profit in trying to decide upon a conventional category and then forcing the present subject into it. That approach would be artificial and distorting. The quest is for a fair adjustment of the competing needs of the parties, in the light of the realities of the relationship between the migrant worker and the operator of the housing facility.60

Shack is in a long line of New Jersey cases that engage in relatively low-level balancing to decide whether other interests overcome the owner’s right to exclude61—culminating in the court’s balancing act extending to the question of card counters in casinos.62 This approach is open to the objection that it is less simple and stable than the traditional approach.63 The alternative would be to see how many of the results, like the rights of migrant workers, can be achieved through the traditional categories (such as landlord–tenant).

Relatedly, approaches that advocate the most direct and transparent role for property in promoting policy, whether of efficiency, fairness or human flourishing, tend to dismiss the notion of exclusion as being too formalistic. Recent work on human flourishing is distinguished by impatience with property’s lack of fit with notions of flourishing in various situations, leading to a variety of anti-formalism.64 Elsewhere, Merrill and I have shown how Coase-inspired law and economics likewise downplays traditional notions of exclusion in property in favour of the bundle of sticks tailored to individual resource conflicts.65

Again, property uses a combination of more and less direct means to promote human flourishing, and the problem with this recent work is its tendency, like the realism out of which it grows, to flatten property out and reduce it to its consequences. Even those who profess to be pluralists are reductionists in this sense: they reduce property to a level very close to extensions.

By contrast, elsewhere in private law theory, formalism is taken very seriously indeed, to the extent that the intensional level of property might really be quite immune from revision in light of our views about the extensional consequences of the current set of rules.66 Thus it appears to many that formalism is a matter of all or nothing and calls for simply taking one’s pick between logical coherence and congruence with policy.

61See e.g. State v Schmid 1980; Alexander 2009; Smith 2009.

62Uston v Resorts International Hotel, Inc. 1982. The court declared that ‘when property owners open their premises to the general public in the pursuit of their own property interests, they have no right to exclude people unreasonably.’ Uston v Resorts International Hotel, Inc. 1982, 375. In a possible sign that the New Jersey Supreme Court’s balancing approach to the law of trespass should not be taken too literally, the court dismissed much of the expansive discussion in Uston as ‘dicta’ and fell back on an unelaborated ‘public policy’ limit on trespass, in the course of an opinion the very next year upholding the right of a racetrack owner to eject a horse racer. Marzocca v Ferone 1983, 1137; Kenneally ms.

There is a way out of this dilemma, and again it derives from paying attention both to the intension-extension distinction and to why it matters—in a functionally motivated formalism. The idea that conceptualism in property is formal is not entirely wrong, but we need a better definition of formalism and a new account of why it is desirable.

Formalism can be defined as relative invariance to context, which makes property concepts formal.67 The functions from worlds to categories are formal in the sense of not being fully responsive to context. The functions are not conditioned on every fact of the world: some are ruled out. And categories are not as narrow as they could be (in the limit they would replicate the complexity of all the particulars). In this sense concepts are formal in picking out general categories. Recall that the realists were not in favour of general or abstract concepts like property and title.

Contrary to the tenor of much of the debate between formalists and contextualists, formalism comes in degrees. The exclusion strategy is not the last word but it has some presumptive force. Exceptions to the exclusion strategy are many and various. Airplane overflights clearly call for an exception (or clarification) of the right to exclude, whereas the interests of card counters—which the New Jersey Supreme Court apparently see as outweighing the traditional rule that businesses can exclude patrons for any reason or no reason—clearly do not. Once antidiscrimination statutes and a variety of regulations are in place, the benefits from abrogating the traditional exclusion right across the board or balancing it on an ongoing basis look strained at best.68

Use of context at the intensional of level of law is costly. Particularly where large numbers of duty bearers must process rights, it makes sense to lower information costs by employing formal concepts. The concept of property itself relies on separation and exclusion to make the things through which rights and duties are mediated simpler and easier to use. I return to the right-duty structure of law in Section 5.

This view of formalism versus contextualism is, in fact, consistent with the actual natural rights and natural law tradition, or the ‘Grand Style’, which was targeted at discouraging evasion and opportunism.69 Realists see this earlier tradition as free-wheeling ‘situation sense’ and modern natural rights theorists see it as more formalistic. It is actually a hybrid with a modular architecture.

67Heylighen 1999, 49–53.

68See Smith 2009, 984 and n. 137. The leading case for the right of business owners to exclude patrons is Wood v Leadbitter 1845, which was largely overturned in a convoluted opinion in Hurst v Picture Theatres, Limited 1915 (Ct. App. (UK) 1914).

69See Clinton 2000, 948 (discussing Carl Dibble’s identification of a ‘moderate Enlightenment’ tradition of legal interpretation associated with Grotius, Blackstone, and Marshall, that emphasized the role of equity and located the need for interpreting laws not in the ambiguity of language but in the possibility ‘that corrupt, duplicitous persons will “treat the law in a sophisticated manner” in order to advance their own individual interests’), quoting Dibble 1994, 5.

3. Functionalism

The functionalist justification of formalism I just presented can be generalized. The account here is functionalist at a meta level, allowing us to take both the intensional and extensional levels of the law, and their relation, seriously. There is no need to reduce the former to the functions of the latter.

Functionalism is thought to be closely connected to reductive anti-conceptualism. As Ben Zipursky points out, the main contention between corrective justice theorists and legal economists is not about deontology versus utilitarianism; instead, disagreement centres on whether to capture the law’s function is to capture the law.70 In Zipursky’s view, economic analysis fails just as all purely functional accounts of the law do, because they do not give an account of law’s concepts: they reduce legal concepts purely to their functions.71

But functionalism need not be purely reductive. The information cost account does not suffer from the explanatory defects of pure (or greedy) reductionism. Functionalism here holds true at a meta level. Concepts themselves can be (partially) explained in terms of their function of managing complexity.

Indeed, if we keep the functional justification at the level of the system and bring information costs into the picture, it turns out that a functional economic account of private law, and property in particular, overlaps to a great extent with private law theory based on a variety of moral theories and corrective justice. Both tort law and property law employ concepts that keep the law modular: not all information is available all the time. Thus, tort law’s bilateral structure, duty, and causation are among the many devices for keeping its informational demands manageable.72 Property is even more straightforwardly simple and standardized in its most in rem aspects, and achieves simplicity—or, more accurately, allows for overall complexity through local simplicity—by defining things.73 Importantly in both torts and property, the employment of widely shared moral concepts reduces the costs of coordinating and communicating information about rights, duties, and other legal relations.74 Overall, then, moral and economic accounts of the law converge more than is usually thought. Disagreement can be left for foundational theories, but the scope and structure of the intensional level and its relation to the extensional, are susceptible of a multiplicity of explanations, including a non-greedy functional one based on information costs.

Keeping in mind that the functional justification here is not supposed to be an exhaustive explanation and is certainly not supposed to substitute for the concepts themselves, we can avoid the perils of a reductive functionalism.

73See e.g. Merrill and Smith 2000, 2001a; Smith 2003, 2012b.

74Merrill and Smith 2007a; Smith 2011a.