analyses the development of punitive and compensatory remedies in ancient law, with special reference to the lex talionis (the familiar principle of “an eye for an eye”). Although the talion law is sometimes perceived today as unacceptably primitive, it represented an advance in ancient law by limiting the scope of retaliation which a person could inflict on an injurer.
“The talionic rules of this period serve two main purposes. First, they create an upper limit to retaiatory justice: only one life for a life can be vindicated, no more. Second, they serve as minimum punishment for the criminal: no less than the law requires.
Parisi argues that the one-to-one ratio imposed by the lex talionis dealt with a dynamic instability problem under older systems with talionic multipliers greater than one, which tended to lead to destructive feud behaviours. He then demonstrates that once the lex talionis was in place, the parties to a dispute had the opportunity to engage in private bargaining around the rule. Since aside from obtaining a feeling of revenge, the victim achieves nothing by inflicting the same harm on the injurer, and the injurer incurs a considerable cost, the parties can make themselves jointly better off by agreeing on some time of monetary compensation – a bargaining process that Parisi conjectures was a precursor to systems of monetary compensation and, eventually, to schedules of fixed pecuniary penalties.Miller, Geoffrey P., Economics of Ancient Law (August 17, 2010). NYU Law and Economics Research Paper No. 10-36. Available at SSRN: http://ssrn.com/abstract=1660417
“so that, if a person has maimed another’s limb, there should be retaliation in kind, unless victim and injurer reach an agreement for compensation… The rise and fall of retaliatory justice is readily explained considering that the lex talionis gives an enforceable and disposable right to the victim: the right to perpetrate literal retaliation. This endowment is disposable, in the sense that the decision to retaliate is in the victim’s discretion. Under normal circumstances, the highest valuing individual for the talionic endowment is the wrongdoer (or his clan), who is destined to suffer the talionic loss. This merely assumes that the punishment imposes a loss to its recipient (i.e., on the wrongdoer) in excess of the amount of benefit or satisfaction enjoyed by those who impose it (i.e., the victim or his clan). Compensation (blood money) is therefore the price paid for the transfer of the right to retaliation to the highest valuing individual…physical retaliation remains a viable option, but the possibility to accept an offer of pecuniary compensation creates an immediate opportunity cost for the victim’s choice to demand literal talionis
First, …If the wrongdoer preferred to suffer physical penalties to paying the excessive pecuniary compensation demanded by the victim, it would be irrational for the victim to refuse a lower offer of compensation and carry out the actual talion. … In an iterated game, imposing physical penalties would not render future threats of retaliation any more effective… Second, and most compellingly, the wrongdoer’s willingness to pay is the best approximation of the true subjective value of the forgone physical mutilation. The wrongdoer’s highest offer to save his eye – by the very definition of revealed preference – indicates how much the wrongdoer values his eye. Absent budget constraints, the threat of proportional 1:1 retaliation is thus a mechanism that generates a level of compensation that, on average, approximates the economically efficient level of compensation.