1982]
Mo:R.To~
J.
HORWITZ
t
The
distinction
between
public
and
private
realms
arose
out of
a
double
movement
in
modern
political
and
legal
thought.
On the
one
hand,
with
the
emergence
of
the
nation-state
and
theories of
sovereigntyin
the
sixteenth
and
seventeenth
centuries,
ideas
of
a distinctly
public
realm
began
to
crystallize.1
On
the
other
hand,
in reaction
to
the
claims
of
monarchs
and,
later,
parliaments
to
the unrestrained
power
to
make
law,
there
developed·a
countervailing effort
to
stake
out
distinctively
private
spheres
free
from
the
·
eri• croaching
power
of
the
state.2
Natural
rights
theories
were
elabo• rated
in
the
seventeenth
century
for
the
purpose
of
setting
limits on
state
power,
both
over
property
and
religious
conscience.
·Rights theories
were
therefore
not
only
efforts
to
incorporate
into
law
what one
writer
has
called
a
philosophy
of
"possessiveindividualism,"
3 but
also
to
provide
an
important
basis
for
arguing
for
religious toleration.
One
can
trace
the
emergence
of
a
distinctively
public
realm
in various
legal
doctrines.
By
the
late
medieval
period,
for
example, English
law
had
already
begun
to
draw
a
distinction
between
two different
roles
of
the
monarch
as
landowner.
First
were
the
lands the
King
held
as
feudal
lord.
These
he could
alienate
as
private property.
But,
increasingly,
English
law
defined
a
second
category of
crown
lands-in
essence,public
lands-which
he
could not
alien• ate.
Here
we
see
an
example
of
the
gradual
emergence
of
a
dis• tinctively
public
realm,
which
in
the
field
of
crown
ownership
of land
finally
crystallized
in
seventeenth
century
struggles·over
the King's
power
to
alienate
land
between
high
and
low
watermark."
Taxation
provides
a
fascinating
example
of
the
emergence
of
the
public/private
distinction.
As
late
as
the
sixteenth
century, English
judges
still
analyzed
taxation,
not
as
an
exaction
by
the
t
Professor
of
Law,
Harvard
University.
A.B.
1959,
College
of
the
City
of New
York;
Ph.D.
1964,
LL.B.
1967,
Harvard
University.
Member,
Massachusetts Bar.
1
See
D.
HANsoN,
FROM
KINGDOM
TO
COMMONWEALTH
1-19
(1970).
2
See
J. APPLEBY,
EcoNOMIC
THOUGHT
AND
IDEOLOGY
IN
SEVENTEENTH-CEN•
TURY
ENGLAND
62-63
(1978).
See
generally
J.
GouGH,
FUNDAMENTAL
LAw
IN ENGLISH
CONSTITUTIONAL
HISTORY
(1961);
C.
McPHERSON,
THE
POLITICAL
THEORY
OF
POSSESSIVE
INDIVIDUALISM
(
1970).
3
C.
McPHERsoN,
supra
note
2.
4
See
D.
HANsoN,
supra
note
1,
at
143-46. (1423)
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UNIVERSITY
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state
but
as
a private
gift
from
the
donor-the
taxpayer.
Parlia• ment
was
thought
to
have
simply
arranged
this
consensual
private transaction.5
Only
with
the
development
of
theories
of
sovereignty in
the
seventeenth
century
did
taxation
begin
to
be
understood
as part
of
public
law.
Another
set
of
issues
illustrates
the
same
point,
highlighting
how
recently it
was
that
a
distinctively
public
realm
came
to
be
a generallyunderstood
part
of
political
and
legal
consciousness.
Until the
nineteenth
century,
lawsuits
involving
the
removal
of
a
public officialfrom
officewere
analyzed
more
frequently
than
not
as
ques• tions
of
property.
The
officeholder
often
successfullyclaimed
a
property
interest
in
the
officefrom
which
he
could
not
be
divested."
So
we
see,
on
one
side,
that
it
was
only
gradually
that
English
and
American
law
came
to
recognize
a
public
realm
distinct
from
medieval
conceptions
of
property.
And
equally
gradually
legal
doctrines
developed
the
idea
of
a
separate
private
realm
free
from
public
power.
Although
one
can
find
the
origins
of
the
idea
of
a
distinctively
private
realm
in
the
natural-rights
liberalism
of
Locke
and
his
suc•
cessors,only
in
the
nineteenth
century
was
the
public/private
dis•
tinction
brought
to
the
center
of
the
stage
in
American
legal
and
political
theory.
Before
this
could
occur,
it
was
necessaryto
under•
mine
an
earlier
tradition
of
republican
thought
that
had
closely
identified
private
virtue
and
public
interest,"
The
emergence
of
the
market
as
a
central
legitimating
institu•
tion
brought
the
public/private
distinction
into
the
core
of
legal
discourse
during
the
nineteenth
century.8
Although,
as
we
have
seen,
there
were
earlier
anticipations
of
a
distinction
between
public
law
and
private
law,
only
the
nineteenth
century
produced
a
funda•
mental
conceptual
and
architectural
division
in
the
way
we
under•
stand
the
law.
One
of
the
central
goals
of
nineteenth
century
legal
thought
was
to
create
a
clear
separation
between
constitutional,
criminal,
and
regulatory
law-public
law-and
the
law
of
private
transactions-torts,
contracts,
property,
and
commercial
law.
5
Lampson,
Some
New
Light
on
the
Growth
of
Parliamentary
Sovereignty:
Wimbish
versus
Taillebois,
35
.AM.
PoL.
Ser.
.REv.
952
(
1941).
GW.
NELSON,
AMERICANIZATIONOF
THE
COMMON
LAW
125
(1975);
Nelson,
Offeceholding
And
Pouienoielding:
An
Analysis
of
the
Relationship
Between
Structure
And
Style
In
American
Administrative
History,
10
LAW
&
Soc'y
REv.
187,
194-95
(1976).
7
G.
Woov,
THE
CREATION
OF
THE
.AM.EmcANREPUBLIC,
1776-1787,
at
53-65,
608-10 (
1969).
s
The
classic
work
is
K.
PoLANYI,
THE
GREAT
TRANSFORMATION(
1944).
See
generally
P.
ATIYAH,
THE
Brsa
AND
FALL
OF
FREEDOM
OF
CONTRACT
226-31
(1979).
Let
me
offer
some
illustrations.
Among
the
most
famous
is the
entirely
novel
separation
between public
and
private
corpora•
tions
in
the
Dartmouth
College
Case,9
decided
in
1819.
Its
pur• pose-certainly
the
purpose
of Justice
Story's
famous
concurring opinion-was
to
free
the
newly
emerging
business
corporation
from the
regulatory
public
law
premises
that
had
dominated
the
prior law
of
corporations,
whether
municipal or
trading
corporations;
both
of
which
were
regarded
as
arms
of
the
state.
Another
more
all-encompassingexample
is
the
effort
of
nine•
teenth
century
thinkers
to
contractualize-that
is,
to
"privatize"-a
host
of
common
law
doctrines
that
had
previouslyserved
to
regulate bargains.
The
watering-downof
doctrines
like
the
rule
that
equity will
not
enforce
unfair
contracts
was
inspired
by
the
idea
that
con• tract
is
an
entirely
private
institution
between
consenting
individ• uals
in
which
the
state should
have
no
interest.t?
By
1850,
it
was common
for
courts
to
permit
parties
to
contract
out
of
common
law duties,
which
only
one
generation
earlier
had
been
regarded
as beyond
their
power
to
alter.P
A
final
example
of
the
persistent
effort
of late
nineteenth• century
legal
thinkers
to
create
a
sharp
distinction
between
public and
private
law
was
the
movement
to
eliminate
punitive
damages in
tort.
Because
the
purpose
of
punitive
damages
was
to
use
the tort
law
to
regulate
conduct,
not
merely
to
compensate
individuals for
injuries,
their
imposition was
regarded
as
a
usurpation
of
the public
law
functions of
the
criminal
law.
Several
states
abolished punitive
damageson
the
grounds
that
combining
public
and
private law
functions
was
an
unhealthy
and
dangerous
business.12
What
were
the
concerns
that
created
a
virtual
obsession
with separating
public
and
private
law,
both
conceptuallyand
practically, during
the
nineteenth
century?
Above
all
was
the
effort
of
ortho• dox
judges
and jurists
to
create
a
legal
science
that
would
sharply separate
law from
politics.
By
creating
a
neutral
and
apolitical system
of legal
doctrine
and
legal
reasoning
free
from
what
was thought
to
be
the
dangerous
and
unstable
redistributive
tendencies of
democratic
politics,
legal
thinkers
hoped
to
temper
the
problem of
"tyranny
of
the
majority." Just
as
nineteenth-century
political economy
elevated
the
market
to
the
status
of
the
paramount
insti-
!I
Trustees
of
Dartmouth
College
v.
Woodward,
17
U.S.
(
4
Wheat.)
518,
559,
669-73 (
1819).
10
See
generally
P.
ATIYAH.,
supra
note
8.
11
M.
Honwrrz,
THE
TRANSFORMATION
OF
AMEru:cAN
LAw
201-07
{1977).
12
See,
e.g.,
Murphy
v.
Hobbs,
7
Colo.
541,
5
P.
119
(1884);
Fay
v.
Parker,
53
N.H.
342
(1872).
1426
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tution
for
distributing
rewards
on
a
supposedly
neutral
and
apoliti•
cal
basis,
so
too
private
law
came
to
be
understood
as
.a
neutral
systemfor
facilitating
voluntary
market
transactions
and
vindicating
injuries
to
private
rights.
The
hostility
to
statutes
expressed
by nineteenth-century
judges
and
legal
thinkers
reflected
the
view
that
state
regulation
of
private
relations
wasa
dangerous
and
unnatural
public
intrusion
into
a
system
based
on
private
rights.
The
sharp
distinction
between
public
and
private
began
to
come
under
attack
in
reaction
to
the
Supreme
Court's
1905
decision
in
Lochner
v.
New
York,13constitutionalizing
freedom
of
contract.
For
the
next
thirty
years,
the
most
brilliant
and
original
legal
thinkers
America
has
ever
had
devoted
their
energies
to
exposing
the
conservative
ideological
foundations
of
the
public/private
dis•
tinction.
Culminating
in
the
Legal
Realist
Movement
of
the
1920's
and
1930's,judges
such
as
Holmes,
Brandeis,
and
Cardozo
and
legal
theorists
such
as
Roscoe
Pound,
Walter
Wheeler
Cook,
Wesley
Hohfeld,
Robert
Lee
Hale,
Arthur
Corbin,
Warren
Seavey,Morris
Cohen,
and
Karl
Llewelyn
devoted
themselves
to
attacking
the
premises
behind
the
public/private
distinction.P
Paralleling
argu•
ments
then
current
in
political
economy,
they
ridiculed
the
invisible•
hand
premise
behind
any
assumption
that
private
law
could
be
neutral
and
apolitical.
All
law
was
coercive
and
had
'distributive
consequences,
they
argued.
It
must
therefore
be
understood
as
a
delegation
of
coercive
public
power
to
individuals,
and
could
only
be
justified
by
public
policies.
Contract,
that
most
"private"
of
nineteenth-century
legal
categories,
was
reconceptualized
as
simply
a
delegation
of
public
power
that
could
be
justified
only
by
public
purposes.
Fuller
and
Perdue's
famous
1936
article
on
contract
damages
15
demonstrated
that
awarding
damages
for
breach
of
con•
tract
could
not
be
deduced
from
the
"logic"
of
contract
or
from
the
will
of
the
parties,
but
was
a
state-imposed
sanction
determined
by
the
choice
among
policies.
Shelley
v.
Kraemer
16
is
perhaps
the
most
famous
culmination
of
a
generation
of
successful
attacks
on
the
public/private
distinction.
By
1940,
it
was
a
sign
of
legal
sophistication
to
understand
the
arbitrariness
of
the
division
of
law
into
public
and
private
realms.
13
198
U.S.
45
(
1905).
14
See,
e.g.,
Cohen,
Properly
and
Sovereignty,
13
Con.'<ELL
L.Q.
8
(
1927);
Cohen,
The
Basis
of
Contract,
46
HARv.
L.
fu:v.
553
(1933);
Hale,
Force
and
the
State:
A
Comparison
of
"Political"
and
"Economic"
Compulsion,
35
CoLUM.
L.
REv.
149
(1935);
Pound,
Liberty
of
Contract,
18
YALE
L.J.
454
(1909).
15
Fuller
&
Perdue,
The
Reliance
Interest
in
Contract
Damages
(pt.
1),
46
YALE
L.J.
52
(1936).
1s334
U.S.
1
(1948).
No
advanced
legal
thinker
of
that
period,
I
am
certain,
would
have predicted
that
forty
years
later
the
public/private
dichotomy
would still
be
alive
and,
if
anything,
growing
in
influence.
What
accounts for
its
surprising
vitality?
Until
World
War
II,
twentieth-century
progressivism
empha•
sized
the role
of
the
state
.in
creating
institutions
that
would
pro• mote
a public
interest.17
In
reaction
to
the
spread
of
totalitarian• ism,
progressivismafter
World
War
II
capitulated
to
the argument
that
any
substantive
conception
of
the
public
interest
was
simply the
first step
on
the
road
to
totalitarianism.18
The
idea
of
a
public interest
thus
came
to
be
formulated
in
the
purely proceduralist
terms
of
interest-group
pluralism-simply
as
whatever
was
the
out• come
of
competition
among
interest
groups.19
This
was,
it
should be
emphasized,
a
twentieth-century
return
to
a
market
theory
of the
public
interest-but
this
time
the
competitors
were
groups
and the
;marketwas
the
political
process.
Earlier,
progressivismposited
a
sharp
conflict
between
a
sub•
stantive
public
interest
and
private
self-interest,
and
regarded
a primary
function
of the
state
as
creating
institutions
that
would transcend private
self-interest.
Unless
the
individualism
and
self• ishness
that
was
part
of
the
culture
of
capitalism
could
be
moder• ated,
they
believed,
the
systemcould
not
survive.
Most
of
the
Legal Realists operated
out
of
this
political
paradigm
and
understood their
task
to
be
the
moderation
and
limitation
of
private
greed and
domination.
But
once
the
idea
of a
substantive
public
interest
began
to confront
ridicule
after
World
War
II,
the
function of
the
state
came
to
be
redefined
as
simply
a
reflection
of
the
sum
of
the
vectors of
private
conflict.
Private
self-interest,
which
under
the
progres• sive
program
was
to
be
kept
suspiciouslyin
check,
once again
be• came
the only
legitimate
political
reality,
and
the
idea
of
an
au• tonomous
public
realm
began
correspondinglyto
sink
into
oblivion.
The
recent
revival
of
natural-rights
individualism in
legal
and
political theory
is
a
symptom
of
the
collapse
of
a
belief
in
a
distinc•
tivelypublic
realm
standing
above
private
self-interest.
It
is
not
only
a
dangerous
symptom
of
the
unravelling
of
all
sense
of
community,.
11
See J.
LA."'<DIST,
HE ADMINISTRATIVE
Paocsss
10-16,
26-28,
98-99
(1938); Lewis,
The "Consumer"
and
"Public"
Interests
Under
Public
Regulation,
46
J.
PoL. ECON.
97,
105
(1938).
is
See
E.
PuncELL, THE
Crusts
OF DEMOCRATIC
THEORY: SCIENTIFIC
NATURAL• ISM
AND
THE
PROBLEM OF
VALUE 235-66
(1973).
19
Schubert, Is
There
A
Public
Interest
Theory?,
in
THE PUBLIC
lNrnREsT
162. (
C.J.
Friedrich ed.
1962);
Sorauf,
The
Conceptual
Muddle,
in
id.
183.
142&
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[Vol.130:1423
but
also
a
relapse
into
a
predatory
and
vicious
conception
of politics.
Yet
reality
has a
funny
way
of
intruding
upon
theory.
The public/private
distinction
could
approximate
the
actual
arrange• ment
of
legal
and
political
institutions
only
in
a
society
and.
econ• omy
of
relatively
small,
decentralized,
nongovernmental
units. Private
power
began
to
become
increasingly
indistinguishable
from public
power
precisely
at
the
moment,
late
in
the
nineteenth· century,
when
large-scalecorporate
concentration
became
the
norm. The
attack
on
the
public/private
distinction
was
the
result
of
a widespread
perception
that
so-called
private
institutions
were
ac• quiring
coercive
power
that
had
formerly
been
reserved
to
govern• ments.
The
contemporary
erosion of
the public/private
distinction
in many
areas
of
legal
doctrine
described
by
Professor
Stone
20 is
but another
symptom
of
the
passing
of
that
world
of
nineteenth-century
decentralized competitive
capitalism
that
once
made
that
distinction a
rough
approximation
of
reality.
20 See
Stone,
Corporate
Vices
and
Corporate
Virtues:
Do
Public/Private
Dis•
tinctions Matter?,
130
U.
PA.
L.
Rzv.
1441
(1982).
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