The Missing Definition: Coercion and the Shaky Foundations of Law and Political Economy {#the-missing-definition-coercion-and-the-shaky-foundations-of-law-and-political-economy .Title}

Seth C. Oranburg¹

The Law and Political Economy movement rests on a claim about coercion. The claim is that market transactions for basic necessities are coercive when one party can threaten to withhold economic opportunity from the other. On this foundation, the movement’s founders build a normative program of substantial ambition: because such transactions are coercive, they are illegitimate; because they are illegitimate, the state must intervene to remove basic needs from the domain of private bargaining.² The program’s implications for American private law are far-reaching. If the L&PE account of coercion is sound, then contract law, property law, employment law, and large portions of commercial law rest on a defective premise about the voluntariness of exchange.

This Essay argues that the foundation is unsound. The L&PE framework treats coercion as a descriptive observation about market conditions when it is, in fact, a normative conclusion about the legitimacy of particular exercises of economic power. The word “coercion” carries within it the judgment of illegality. To call a transaction coercive is to conclude that it should be prohibited or reformed. L&PE deploys the term as though it were a premise from which legal conclusions follow, when it is the conclusion itself, dressed in empirical clothing. The circularity is not a minor technical defect. It is the load-bearing wall of the framework, and it has not been adequately examined.

The irony is that the thinker who saw this problem most clearly was Robert Hale, the progressive economist and Columbia Law School professor whom L&PE claims as an intellectual ancestor.³ Hale recognized, a century ago, that labeling economic pressure “coercive” merely restates a prior moral judgment about whether the pressure is justified. His observation applies with equal force to L&PE’s own deployment of the term. The movement’s founders have not reckoned with the implications of their progenitor’s insight.

I. WHAT L&PE CLAIMS

A fair engagement requires a fair reconstruction. The L&PE framework, articulated in Britton-Purdy, Grewal, Kapczynski, and Rahman’s Building a Law-and-Political-Economy Framework: Beyond the Twentieth-Century Synthesis,⁴ proceeds in three steps.

The first step is diagnostic. The authors identify what they call the “Twentieth-Century Synthesis”: a set of intellectual commitments, shared across legal fields, that treats market outcomes as presumptively legitimate, economic efficiency as a governing value, and the boundary between “private” and “public” law as analytically meaningful. On this account, contract law, corporate law, and property law are analyzed through the lens of wealth maximization and transaction costs, while questions of justice, equality, and power are consigned to constitutional law and public administration. The Twentieth-Century Synthesis, the authors argue, has “rendered key kinds of power invisible” and “generated a skepticism of democratic politics” that insulates market outcomes from normative scrutiny.⁵

The second step is conceptual. The standard doctrinal taxonomy classifies commercial bargains into two categories: those that are voluntary (and therefore legally enforceable) and those that are coerced (and therefore voidable or illegal). L&PE introduces a third category. Between the plainly voluntary and the plainly coerced lies a vast terrain of transactions in which one party “threatens to withhold economic opportunity” from another who needs that opportunity to satisfy basic requirements of survival and dignity.⁶ A worker who accepts dangerous working conditions because the alternative is unemployment. A tenant who agrees to an exploitative lease because the alternative is homelessness. A patient who pays an exorbitant price for a drug because the alternative is suffering or death. On the L&PE account, these transactions are not voluntary in any meaningful sense, even though no physical force or threat of violence is involved. The power imbalance between the parties produces outcomes that the weaker party would not accept if genuine alternatives were available.

The third step is normative. If transactions for basic necessities are coercive, then the appropriate response is to remove those necessities from private bargaining altogether. The L&PE framework proposes that goods essential to human dignity and survival should be provided through collective mechanisms, insulated from the pressure dynamics of market exchange. The framework’s own formulation is direct: “Hazards such as hunger, loss of shelter, loss of dignity, the safety or basic opportunities of one’s children, and the dignity of the disabled should be taken off the table in individual bargaining, as already socially resolved.”⁷

Stated at this level of generality, the argument has an intuitive appeal that explains its influence. Few would deny that a worker who accepts a dangerous job because starvation is the alternative faces a constrained choice. Few would celebrate the bargaining position of a chronically ill patient confronting a monopoly drug manufacturer. The question is whether the concept of “coercion” is the right analytical tool for capturing what is wrong with these situations, and whether L&PE has defined that concept with the rigor its normative program demands.

II. THE CIRCULARITY PROBLEM

The concept of coercion has a specific function in law. It marks the boundary between transactions that the legal system will enforce and transactions that it will not. A contract signed under duress is voidable. A confession obtained by coercion is inadmissible. A marriage procured by force is void. In each case, the finding of coercion is a conclusion that triggers a legal consequence: the transaction or act is stripped of its normal legal effect.

The Restatement (Second) of Contracts captures this structure precisely. Section 175 provides that a contract is voidable if a party’s assent was induced by an “improper threat” that left the party “no reasonable alternative.”⁸ Two elements are required: the threat must be improper (a normative judgment), and the party must lack reasonable alternatives (a factual judgment). The definition is explicitly moralized. A threat to exercise a legal right is not ordinarily “improper” even if it places the other party under severe pressure. A threat to breach a contract, to file a lawsuit, or to terminate an at-will employment relationship may produce hardship for the party on the receiving end, but these threats do not constitute duress unless additional circumstances render them wrongful.⁹

The doctrinal structure reflects a deeper philosophical point. Coercion is not a natural fact about the world. It is a judgment that a particular exercise of power exceeds the bounds of legitimate conduct. The judgment requires a baseline: a specification of what the parties are entitled to do, against which the challenged conduct can be measured as wrongful. Without a baseline, the concept of coercion collapses. Every transaction involves the possibility that one party will withhold something the other party wants. Every refusal to deal inflicts some measure of hardship on the person denied. If hardship alone sufficed to establish coercion, then the concept would swallow all of commercial life, and the distinction between coerced and voluntary transactions would disappear.

The analytical philosophy literature has grappled with this problem for decades. Robert Nozick’s foundational essay on coercion (1969) demonstrated that distinguishing coercive threats from legitimate offers requires a normative baseline specifying the “normal or expected course of events” against which a proposal is measured.¹⁰ A proposal that worsens the recipient’s position relative to this baseline is a threat; a proposal that improves the recipient’s position is an offer. The classification depends entirely on where the baseline is drawn, and drawing the baseline requires a prior normative theory about entitlements and rights.

Alan Wertheimer’s Coercion (1987), the most comprehensive philosophical treatment of the subject, extended Nozick’s analysis by demonstrating that the baseline problem is inescapable.¹¹ Wertheimer surveyed American case law on duress, plea bargaining, blackmail, and consent, and concluded that legal and moral judgments about coercion are always “moralized”: they depend on prior normative commitments about what people owe one another and what kinds of pressure are legitimate. The concept of coercion does not generate these normative commitments. It presupposes them. Wertheimer’s two-pronged test asks whether a proposal is a threat (rather than an offer) and whether the threat is wrongful. Both prongs require normative input that the concept of coercion itself cannot supply.

L&PE’s deployment of “coercion” does not engage with this philosophical apparatus. The framework identifies a category of transactions, those involving threats to withhold economic opportunity, and labels them coercive. But the label assumes precisely what needs to be demonstrated. Whether a threat to withhold economic opportunity is coercive depends on whether the party making the threat is entitled to withhold it. An employer who refuses to hire an applicant is withholding economic opportunity. A landlord who declines to renew a lease is withholding shelter. A pharmaceutical company that prices a drug above what some patients can afford is withholding access to medicine. Whether any of these acts constitutes coercion depends on a prior theory of entitlements: Is the employer obligated to hire? Is the landlord obligated to renew? Is the pharmaceutical company obligated to price its product at a level all patients can afford? These are the hard questions, and calling the conduct “coercive” does not answer them. It restates them in morally loaded vocabulary.

The circularity operates as follows. L&PE’s premise is that threatening to withhold economic opportunity is coercive. Its conclusion is that the state should intervene to prevent such coercion. But the premise assumes what the conclusion asserts: that withholding economic opportunity is wrongful and should be legally prohibited. The concept of coercion is doing no independent analytical work. It is a vessel into which the authors have poured their normative commitments and from which they retrieve those same commitments as though they were independently derived.

III. HALE’S GHOST

The deepest irony in L&PE’s treatment of coercion is that its own intellectual ancestor identified this precise problem a century ago.

Robert Hale’s “Coercion and Distribution in a Supposedly Non-Coercive State” (1923) is a canonical text in the progressive legal tradition and one that L&PE expressly claims as a foundation.¹² Hale argued that the laissez-faire distinction between coercive government intervention and non-coercive private ordering is a fiction. Property rights are themselves a form of state-backed coercion: the owner’s legal right to exclude others from the use of property means that others must accede to the owner’s terms or go without. The worker who accepts a low wage does so under a form of economic pressure that is maintained and enforced by the legal system. On Hale’s account, all market transactions involve coercion, because all property rights involve the state-backed power to withhold resources from others.

Hale’s argument was powerful and remains influential. It demolished the notion that market outcomes are “natural” and that government intervention represents an intrusion into an otherwise coercion-free domain. L&PE inherits this insight directly. The movement’s insistence that “markets are creatures of law” and that economic power is politically constituted echoes Hale at every turn.¹³

But Hale saw something else as well, something his intellectual descendants have not adequately absorbed. In the same 1923 article, Hale confronted the circularity that pervades the concept of economic coercion. His observation deserves quotation at some length. Hale noted that one “is likely to have a vague feeling against the use of a particular form of economic pressure, then to discover that this pressure is ‘coercive,’ forgetting that coerciveness is not a ground for condemnation except when used in the sense of influence under pain of doing a morally unjustified act.”¹⁴ And further: when coercion is defined as submission to demands made under threat of an act the threatener has no right to perform, then “we get right back to the use of the term to express our conclusion as to the justifiability of the use of the pressure in question; with the ensuing circular reasoning of condemning an act because we have already designated it ‘coercive.’”¹⁵

Hale understood, in other words, that calling economic pressure “coercive” is not an independent analytical step. It is a restatement of a prior moral judgment about the legitimacy of the pressure. The word contributes nothing that the moral judgment does not already contain. Hale’s own solution was to abandon the effort to distinguish coercive from non-coercive economic arrangements and instead to evaluate property rights and market structures on the basis of their distributive consequences.¹⁶ Whether or not one accepts that solution, Hale’s diagnosis of the circularity problem stands.

L&PE does not engage with this aspect of Hale’s work. The framework invokes Hale for the proposition that markets are coercive, but it does not reckon with Hale’s acknowledgment that the concept of coercion, once extended to encompass economic pressure generally, loses its capacity to distinguish the transactions that require intervention from those that do not. If all property rights are coercive (Hale’s position), and if all market transactions for necessities are coercive (L&PE’s position), then the concept of coercion provides no criterion for identifying which transactions should be reformed and which should be left alone. Something else must do that work. But L&PE has not specified what that something else is.

IV. THE LEGAL REALISM PROBLEM

L&PE describes its approach as “running back to the Realist and Progressive Eras.”¹⁷ The invocation of Legal Realism carries significant rhetorical weight. Legal Realism, in the standard intellectual history, dismantled the formalist pretension that legal rules are self-applying and value-neutral. The Realists demonstrated that legal doctrine is shot through with policy choices, that “the law” does not decide cases in the way that formalist jurisprudence supposed, and that the allocation of legal entitlements reflects political commitments rather than logical necessity.¹⁸

L&PE’s claim to Realist heritage is grounded in its rejection of what it considers the formalist assumption underlying the Twentieth-Century Synthesis: that “uncoerced agreement” in the marketplace is a neutral baseline requiring no normative justification.¹⁹ On L&PE’s account, the belief that voluntary exchange is prima facie legitimate is a form of Legal Formalism, and the L&PE movement’s insistence on examining power dynamics behind market transactions is a form of Legal Realism.

The genealogical claim is incomplete. Rejecting Legal Formalism does not entail adopting the L&PE normative program, and some of the most prominent Legal Realists evidently believed that contractual freedom could survive the demolition of formalist foundations. Karl Llewellyn co-founded the Legal Realist movement and then served as the principal drafter of the Uniform Commercial Code, a statutory framework that facilitates and enforces private commercial bargains across a vast range of transactions.²⁰ Llewellyn did not draft the UCC because he believed commercial bargains were coercive. He drafted it because he believed that a sophisticated, context-sensitive legal framework could make commercial bargaining more effective, fair, and predictable, without abandoning the premise that private parties can and do reach mutually beneficial agreements. Arthur Corbin, a proto-Realist who organized the Second Restatement of Contracts, similarly worked within a framework that treated most contractual agreements as binding, while acknowledging that the boundaries of enforceability are set by policy rather than logic.²¹

The point is not that Llewellyn and Corbin were correct and L&PE is wrong. The point is that Legal Realism, as an intellectual tradition, does not generate the expansive concept of economic coercion that L&PE’s normative program requires. A Legal Realist can acknowledge that contract doctrine embeds policy choices, that property rights are state-created entitlements, and that market outcomes reflect power relations, while still concluding that most commercial transactions involve genuine, voluntary assent. The acknowledgment of power and the finding of coercion are distinct analytical steps. L&PE collapses them.

The recent effort to produce a Restatement (Third) of Consumer Contracts illustrates the distinction. That project, undertaken by the American Law Institute, responded to perceived power imbalances between individual consumers and corporate suppliers, particularly in the context of standard-form contracts and clickwrap agreements.²² The project attracted significant criticism and limited adoption. Even its proponents, however, progressive voices working within the contract law academy, did not frame consumer transactions for necessities as inherently coercive. They sought to adjust the doctrinal framework for specific types of agreements (standard-form contracts, arbitration clauses, liability waivers) rather than to reclassify all transactions involving economic need as coerced. The contrast with L&PE’s approach is instructive. The consumer contracts project operated within the balance paradigm, seeking marginal adjustments to the boundary between enforceable and unenforceable agreements. L&PE seeks to redraw the boundary entirely, and coercion is the concept on which the redrawing depends.

V. THE DEFINITIONAL GAP

L&PE’s founders have not defined coercion. The framework article identifies the phenomenon by example (hunger, homelessness, medical need) and by gesture (transactions involving “threats to withhold economic opportunity”), but it does not specify the conditions under which withholding economic opportunity constitutes coercion rather than the ordinary exercise of a legal right.²³ The absence is consequential. Without a definition, the concept cannot be applied consistently. Without consistent application, the normative program built on the concept lacks a stable foundation.

A definition of economic coercion would need to address at least four questions that L&PE’s framework leaves open.

The first question concerns the baseline. Against what standard is a transaction measured to determine whether it is coercive? If the baseline is the status quo (the parties’ positions before the proposed transaction), then most market offers improve both parties’ positions and are therefore non-coercive. If the baseline is some hypothetical just distribution of resources, then most market transactions in an unequal society are coercive, and the concept loses its capacity to discriminate. Nozick and Wertheimer identified this as the central difficulty in any theory of coercion, and L&PE has not addressed it.²⁴

The second question concerns scope. If transactions involving basic necessities are coercive because one party lacks meaningful alternatives, how are “basic necessities” defined? Food and shelter are obvious candidates. Medical care is a strong candidate. Employment? Education? Transportation? Internet access? The boundaries of the category determine the scope of the normative intervention L&PE proposes, and reasonable people will disagree about where those boundaries lie. The disagreement is not resolved by calling the transactions “coercive.” It is the disagreement that the definition of coercion must resolve.

The third question concerns agency. L&PE’s account of coercion emphasizes structural power imbalances. But structural accounts of power risk erasing the agency of the persons they purport to protect. A worker who accepts a low-wage job in preference to unemployment has made a choice that reflects, among other things, an assessment of available alternatives, a set of priorities, and a judgment about acceptable risk. Characterizing that choice as “coerced” denies it the respect that a theory committed to human dignity would seem to require. The tension between structural analysis and individual agency is not new. It runs through the entire history of progressive legal thought. L&PE has not resolved it, and the concept of coercion, undefined, cannot resolve it either.

The fourth question concerns symmetry. Hale’s original insight was that coercion is symmetric: the worker coerces the employer (by threatening to withhold labor) just as the employer coerces the worker (by threatening to withhold wages).²⁵ If coercion is defined as the power to withhold something the other party needs, then every party to every transaction possesses coercive power, because every party can refuse to deal. L&PE implicitly assumes that coercion runs in one direction only, from the economically powerful to the economically vulnerable. That assumption may be morally sound, but it is not derived from the concept of coercion. It is derived from a prior commitment to distributive equality, a commitment that the concept of coercion is supposed to ground rather than presuppose.

These four questions are not unanswerable. Wertheimer’s moralized baseline theory offers one framework for addressing them. Capability theories in the tradition of Sen and Nussbaum offer another.²⁶ Republican freedom theories, emphasizing domination rather than interference, offer a third.²⁷ Each of these approaches provides substantive criteria for distinguishing coercive from non-coercive exercises of economic power. Each requires normative commitments that go well beyond the bare assertion that withholding economic opportunity is coercive. L&PE has not adopted any of these frameworks, nor proposed an alternative. The definitional gap remains.

VI. WHAT FOLLOWS

Two clarifications are necessary to prevent misunderstanding of this Essay’s claims.

The first clarification is that identifying L&PE’s circularity problem does not vindicate the status quo. That many market transactions for basic necessities produce unjust outcomes is a proposition for which substantial evidence exists and which this Essay does not dispute. That workers in precarious employment, tenants facing exploitative landlords, and patients confronting monopoly pricing are subject to forms of economic pressure that warrant legal attention is, again, a proposition this Essay does not challenge. The argument is not that the problems L&PE identifies are fictitious. The argument is that calling those problems “coercion” is not an analytical step. It is a rhetorical move that substitutes a morally loaded label for the difficult definitional work that a normative program of this ambition requires.

The second clarification is that the circularity problem is fixable. L&PE’s project does not depend on the concept of coercion, and the framework would be strengthened by abandoning the term in favor of more precise normative vocabulary. If the claim is that certain distributions of economic power produce outcomes that violate human dignity, then the framework should define dignity and specify its requirements. If the claim is that certain market structures produce domination, in the republican sense of subjection to another’s arbitrary will, then the framework should adopt the republican vocabulary and accept its analytical commitments. If the claim is that certain basic capabilities are prerequisites for genuine freedom, then the capability approach provides a rich normative apparatus that does not depend on the contested and circular concept of coercion.²⁸

Each of these alternatives would require L&PE to make its normative commitments explicit and subject them to scrutiny. That is precisely what a rigorous scholarly framework demands. The concept of coercion, by contrast, permits the framework to smuggle its normative commitments past the checkpoint where they would ordinarily be examined. The label does the work that the argument should do.

The stakes are practical as well as theoretical. L&PE’s normative program proposes to transfer substantial domains of economic activity from private bargaining to collective provision. The scope of the transfer depends on the definition of coercion: the broader the definition, the larger the domain that must be removed from the market. An undefined concept of coercion provides no limiting principle. It authorizes intervention wherever economic power imbalances exist, which is to say, everywhere. A defined concept of coercion, or a substitute normative framework that specifies the conditions under which market outcomes are unjust, would provide the limiting principle that the current framework lacks.

L&PE’s founders are serious scholars engaging with genuinely important problems. Economic inequality, precarity, and the erosion of democratic governance are among the defining challenges of the current moment. A legal framework that addresses these challenges with analytic rigor and normative precision would be a significant contribution. The L&PE movement has the ambition and the institutional infrastructure to produce such a framework. What it lacks is the conceptual foundation, and that foundation cannot be laid until the concept of coercion is either defined with sufficient precision to do the work assigned to it or replaced with a concept that can.

The invitation is to do the hard work that Hale recognized was necessary a century ago: to specify, with precision, the conditions under which the exercise of economic power is illegitimate, rather than to label it “coercive” and treat the label as self-executing. The progressive tradition is capable of this work. L&PE has not yet done it.