Will Wilkinson is vice president for policy at the Niskanen Center.

Rand Paul was blindsided last week while mowing his lawn by Rene Boucher, his enraged next-door neighbor and fellow physician. The Kentucky senator was left with six broken ribs and fluid in his lung, Boucher with a charge for fourth-degree assault (he pleaded not guilty on Thursday morning).

No one knows exactly what lit Boucher’s wick. It’s clear that he and Paul have a long-standing beef, and reports from neighbors converge on a theme. According to the New York Times, those familiar with the feud “cited stray yard clippings, newly planted saplings and unraked leaves.” Jim Skaggs, the developer of Paul and Boucher’s gated community, told the Times, “They just couldn’t get along. … They just both had strong opinions, and a little different ones about what property rights mean.”


Paul is a libertarian-leaning Republican famed for his ideological intransigence. Boucher is a known Democrat with a hashtag-Resistance posting style on social media. Boucher’s lawyer insists “[t]he unfortunate occurrence of November 3rd has absolutely nothing to do with either's politics.” Yet it’s hard not to see it through the prism of politics or, if you’re an economics nerd like me, through the prism of free-market property rights theory.

The delicious irony in the idea that America’s most notable libertarian lawmaker might have been brutally tackled for violating his neighbor’s property rights with “stray yard clipping” was not lost on Twitter’s wits.

Nick Baumann, an editor for the Huffington Post, tweeted:

america's most famous libertarian politician blowing his leaves onto his neighbor's lawn is just perfect — Nick Baumann (@NickBaumann) November 6, 2017



In an even headier tweet, Tufts political scientist Daniel Drezner wondered whether a famous theory about property rights, beloved of enthusiastic capitalists like Paul, might have had something to do with it:

I really hope Rand Paul recovers and that the Coase Theorem played no role in this altercation. https://t.co/VSzwyFeZv1 — Daniel W. Drezner (@dandrezner) November 6, 2017



This is pretty funny, if you’re an egghead wonk.

Allow me to explain. Neighbors constantly subject one another to what economists call “externalities,” also known as “spillover effects.” If you let your lawn go to seed—or paint your house purple, or throw loud parties—the sounds, and sights, and weeds won’t stay inside the bounds of your property. They spill over to the neighbors.

The Coase Theorem, inspired by the work of the late Nobel laureate Ronald Coase, says that as long as there are no “transactions costs,” the spiller and the spillees can always arrive at an arrangement to deal with the externality that leaves some of the parties better off without making anyone worse off, no matter how property rights were initially assigned. Take the case of the ugly purple house, which subjects the neighbors to a horrible aesthetic externality every time they look out the window. According to the Coase Theorem, if there is a deal that could be cut that would leave the spillees better off, and the spiller no worse off, then that deal will get cut, even if the owner of the ugly purple house is entirely within her rights to paint it whatever color she damn well pleases. For example, the neighbors might pool their money to have the house repainted a subdued green, which the owner likes just as much as purple.

Likewise, if there’s a deal Paul and Boucher could make about, say, the locations of plantings or the disposal of leaves and lawn clippings that would leave both of them satisfied, then they’ll make it, and the exact location of the boundary between their properties won’t matter, as long as we make one grand assumption.

And there’s the catch. The Coase Theorem says these sweet deals will happen only in the absence of all the things that prevent mutually beneficial deals from materializing in the real world. That’s basically what a “transactions cost” is: a real-world friction, like ignorance or time or a lack of trust, that prevents positive-sum cooperation from getting off the ground.

That’s right: In the absence of transactions costs, you can do everything transactions costs prevent. This might seem vacuous, but the zero-transactions-cost thought experiment can be helpful by pushing us to identify the frictions standing in the way of new, mutually beneficial arrangements, and to ask what we can do to reduce them. When it comes to spillover effects, we should ask whether regulation is the best way to go or whether we can do better by directly addressing transactions costs standing in the way of an efficiency-enhancing exchange.

Assuming their fight was really over shrubbery (and Paul’s cryptic retweets seem to deny it), we can’t know whether there was a possible deal Paul and Boucher might have made in the absences of transactions costs to compensate for neighborly negative externalities. Maybe there was. Maybe the thing that kept them from working something out is that one or both of them is a jerk. I believe that this is an excellent working hypothesis. I’ve seen Senator Paul up close. He is, let us say, pretty high on himself. And Boucher is the kind of guy who breaks his neighbor’s ribs “over a matter that most people would regard as trivial,” as his own lawyer put it.

In his famous paper, “The Problem of Social Costs,” Coase, a British economist who spent much of his career at the famously market-friendly University of Chicago, wanted to show that the point of institutions like our laws around property and legal liability is to facilitate gains from cooperation by reducing transactions costs. But if our economic theories assume transactions costs away, we won’t be able to see what these institutions are for.

So we can’t assume away the fact that an arrogant prick is, in effect, a walking, talking transaction cost. Unfortunately, property rights don’t much help with this specific impediment to prosocial cooperation. Indeed, property rights seem to have been a problem for Paul and Boucher. Aerial views of their irregular properties suggest a lack of clean, Euclidean boundary lines, which could have created vagueness about the edges of the plots. In principle, the rules of the homeowner’s association might have supplied some clarity for the men about the scope of their rights. But if rules are only sporadically enforced, they can become a point of tension, especially for jerks who don’t like the rules. Paul, the developer told USA Today, “was probably the hardest person to encourage to follow the [homeowner’s association regulations] of anyone out here…” Why? “[B]ecause he has a strong belief in property rights.”

In Order Without Law: How Neighbors Resolve Disputes, the Yale legal theorist Robert Ellickson pointed out that clarity over property rights and the niceties of legal liability aren’t always very helpful in the real world. Ellickson found that ranchers and farmers in Shasta County, California, weren’t very fussy about property rights, were largely ignorant of the law, yet hewed closely to a system of self-enforced informal norms that had evolved to deal with straying cattle, establish semi-communal grazing rights and assign financial responsibility for fence repairs.

I live in Iowa City, Iowa. Recently, my next-door neighbor, Todd, sweetly asked me to remove some weeds I’d allowed to grow in my fallow garden. Her dog likes to chase chipmunks, often into my garden, and the weeds cover his coat with burrs. I could have stood on my rights and said, “Your dog won’t get burrs from my weeds if you keep her in your own damn yard.” But we’re Iowan and my grumpy old Vizsla sometimes dawdles over to my other neighbor’s yard to relieve himself, which gives me an interest in an informal neighborhood norm of “let’s be cool about other people’s dogs in our yards.” Todd didn’t really want to bother me about it, and would have preferred to pop into my yard and pull the weeds himself. But he’s not a dog; property rights do matter; and he didn’t want to casually trespass, or hazard a gesture I might interpret as an insult to my landscape hygiene. So he asked me to do it. And I did. Nobody broke any ribs.

The “unfortunate occurrence” in Bowling Green, Kentucky, may not have been politically motivated, but it does seem emblematic of the breakdown of civility and mutual accommodation that afflicts our politics. We have to live together, but it seems we can’t stand each other. Disputes over the line between mine and thine are inevitable, but decent democracies, and decent neighbors, cut people slack and work things out. Partisan enmity has been turning Americans into bad neighbors and obnoxious jerks, like the feuding physicians of Bowling Green. The transactions costs imposed by our mutual distrust and contempt prevent us from moving on to a more peaceable positive-sum game, which makes us only angrier.

Civility may sound stodgy and lame, but it is in fact the first virtue of the citizen. Civility is the neighborliness of politics. It reduces the transactions costs inherent in the resolution of the pervasive conflicts of common life. If we insist on nursing resentments and won’t ever budge an inch, we’ll find that the black-letter rules stop working, and that a democracy, like Rand Paul’s ribs, can crack.