Henry E. Smith

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Exclusion and Property Rules in the Law of Nuisance, 90 Virginia Law Review 965 (2004)


Nuisance law holds a special place in the development of law and economics. From Ronald Coase’s article on social cost and continuing on through the present day, the analytics of the classic nuisance dispute have been the touchstone of economic theories of law. When the question is how to internalize pollution externalities or whether people bargain under the shadow of property rules and liability rules, economic models present the dispute as a conflict between plaintiff and defendant, and very often between polluter and pollutee. I did not say “polluter and victim” because one of the prime results of the economic analysis of law has been to cast doubt on ordinary notions of causation in favor of an economically more sophisticated view in which use conflicts exhibit symmetric causality: the pollutee’s nose causes the use conflict just as much as the polluter’s smokestack. Only an economist might be surprised that the world has stuck with ordinary notions of causation even in the face of the insights of Coase and his successors.

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