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            \begin{large}
    {\bf The Economics of Desecration: Flag Burning 
and Related Activities } \\
    (  {\it   The Journal of Legal Studies},   (June 1998) 27: 245-270 (lead 
article))  \\
             \end{large}
                    \vspace*{24pt}
  
September 24, 1997 \\
 
                    \bigskip
                    Eric Rasmusen \\
                    \vspace*{ 1in}
                     { \it  ABSTRACT} \\
 \end{center}
\begin{small}
     When a symbol is desecrated, the desecrator obtains benefits
while other people incur costs.  Negative externalities are intrinsic
to desecration, suggesting a case for government regulation if the
costs exceed the benefits.  The case for restrictions is especially
strong because of the impracticality of Coasean bargaining and the
possibility of efficient lawbreaking.  In addition, desecration
reduces the incentive for the creation and maintenance of symbols,
which, like other goods, need property-rights protection for
efficient production. 

   \end{small}
                              		 
          \vspace{ 24pt} 
\begin{small}
          \noindent \hspace*{20pt} Indiana University School of
Business, Rm. 456, 1309 E. 10th Street, Bloomington, Indiana,
47405-1701.
  Office: (812) 855-9219.  Fax: 812-855-3354. Email:
Erasmuse@indiana.edu. Web:  Php.indiana.edu/$\sim$erasmuse.
  
\vspace {24pt}

 I would like to thank F. Buckley, Lynn Fisher, David Friedman,  Bruce 
Kobayashi, William Landes, 
John McGinnis, Eric Posner, Richard Posner, Richard Steinberg, and
seminar participants  in  political economy at  Columbia University, law at 
George Mason, and the    the Indiana University Workshop in Political Theory for
their comments, and participants in the Econlaw discussion list for
the on-line discussion that stimulated this paper.

 \end{small}
         
 \newpage

%------------------------------------------
 
 
 \begin{center}
{   I.  INTRODUCTION} 
 \end{center}

             One might think that desecration is a matter for the
theologian, not the economist.  Consider, however, its
definition:\footnote{ { Webster's Ninth New Collegiate Dictionary,
First Digital Edition}, NeXT Computer Inc. and Merriam Webster, Inc.,
1988, 1992. }
 \begin{quotation} \begin{footnotesize} \noindent  Desecrate: \\
 1: to violate the sanctity of: profane\\ 
 2: to treat irreverently or
contemptuously, often in a way that provokes outrage on the part of
others. 
 \end{footnotesize}
 \end{quotation}

 Part 1 of the definition is indeed beyond the economist's scope.
Part 2, however, brings desecration down to the level of the effect
on onlookers, rather than on God or the desecrator's soul.  When one
person does something that another would pay to prevent, there is a
negative externality, and externalities are something about which
economists have expertise.  We know that in the presence of
externalities, unregulated self-interested behavior is inefficient.
Economic theory helps determine which policies provide efficient
incentives, balancing the conflicting desires of the people involved.
It can do this just as easily for desecration as for pollution,
international trade, or the tax laws.\footnote{  \label{mega} The economic 
approach
has already been applied to a number of other free speech issues.
See, besides the literature on copyright and trademark,   R.H. Coase, The 
Economics of the First Amendment: The Market
for Goods and the Market for Ideas, 64 Am. Econ. Rev. Proc.  384
(1974); Richard Posner, Free Speech in an Economic Perspective, 20 {
Suffolk U. L. Rev.} 1 (1986); Peter Hammer, Note: Free Speech and the
`Acid Bath': An Evaluation and Critique of Judge Richard Posner's
Economic Interpretation of the First Amendment, 87 { Michigan L.
Rev.} 499(1988) ; Daniel Farber, Free Speech without Romance: Public
Choice and the First Amendment, 105 { Harvard L. Rev.} 554 (1992);
Kathleen M. Sullivan, Free Speech and Unfree Markets, 42 UCLA L. Rev.
949 (1995);  Richard Posner, The Economic Analysis of Law, 4th edition,  chapter 
27 (1992); 
 Richard  Epstein, Property, Speech, and the Politics of Distrust,
59 U.  Chi. L. Rev. 41 (1992).  None of these discuss desecration,
but they do consider the problem of information production and
dissemination under different legal regimes.  } 

   This article will offer a new approach to thinking about statutes
against flag burning, the desecration law that has been most
discussed in recent years.  In the 1989 case of {\it Texas v.
Johnson}, the U.S. Supreme Court invalidated a Texas statute
criminalizing flag burning.\footnote{ { Texas v. Johnson}, 491 U.S.
397 (1989).} Before and after that decision, much has been written on
the constitutionality of desecration laws, but the present article
will focus on the somewhat neglected issue of the law as public
policy.\footnote{For entry into the law review literature, see John
Ely, Flag Desecration: A Case Study in the Roles of Categorization
and Balancing in First Amendment Analysis, 88 { Harvard L. Rev.} 1482
(1975) ; Frank Michelman, Saving Old Glory: On Constitutional
Iconography, 42 { Stanford L. Rev.} 1337 (1990); and Sanford
Levinson,
  Freedom: Politics: They Whisper: Reflections on Flags, Monuments,
and State Holidays, and the Construction of Social Meaning in a
Multicultural Society, 70 { Chicago-Kent L. Rev.} 1079 (1995).  } 
   
 Since flag burning has been the focus of public discussion, I will
use it as a running example.  I will refer to persons wishing to
desecrate as ``desecrators'' and persons opposing the action as
``venerators''.  Section 2 will set up the basic cost-benefit
calculation and the idea of mental externalities.  Section 3 will
discuss the special feature of malice.  Section 4 treats of
desecration as the harming of created goods, which raises questions
of intellectual property.  Section 5 distinguishes desecration from
speech and vice.  Section 6 analyzes the results of mistaken
policy, Section 7 examines whether actual statutes could be motivated
by efficiency concerns, and Section 8 addresses various objections.  


   
   % ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

  \begin{center}
{   II.    THE EFFICIENCY CALCULUS} 
 \end{center}



\noindent
  {\it   A.   A Simple Example of Wealth Maximization}

       Let us start with a simple example: desecration of a
private symbol.\footnote{Government symbols such as the U.S. flag
raise additional issues, similar to those raised by government
property generally, of who has use rights and who has the  standing or
duty to protect the property from damage. } 
  \begin{quotation}
\begin{footnotesize}
       Smith and his followers bow down to a symbol, the Smith Flag.
Jones, Smith's rival, burns a replica of the Smith Flag.  This causes
X dollars in pain to the Smithians, and Y dollars in pleasure to
Jones. Everyone else in the country is indifferent to the flag's
burning.  
   \end{footnotesize}
 \end{quotation}
      The potential burning of the flag is a good which has value to
both Jones and the Smithians.  The amounts X and Y represent the
amounts the Smithians and Jones would pay for that good, the right to
control the action.  These values will depend on the wealth and the
tastes of the individuals involved.  As always, efficiency requires
allocating consumption of the good to whoever has the highest
willingness to pay for it.  The good is not the flag itself, which
belongs to Jones, but the right to burn the flag. Usually, the law
bundles together various rights to do things with a material
object---to use it, sell it, destroy it, or desecrate it--- but the
issue before us is whether the usual bundling is efficient in this
context.  

 Let us suppose that X = \$3,000 and Y = \$500.  Efficiency then
requires that Jones refrain from desecrating the flag, because
aggregate social surplus is \$2,500 higher when the flag is not
burned. 

  If there were no difficulties in buying and selling the good, the
efficient result would be achieved by the market regardless of how
the law allocated the initial property right.  If the law allowed
Jones to burn the flag, and to sell his right to burn it, then he
would sell that right to Smith for an amount between \$500 and
\$3,000.\footnote{Note the importance of alienability of the right to
burn flags. If the law makes flag burning an inalienable right, the
outcome might not be efficient.  } If the law prohibited Jones from
burning the flag without Smith's permission, then Smith would offer
to sell his permission for \$3,000 and Jones would reject that offer.
Either way, the flag would not be burned, an example of the Coase
Theorem at work.\footnote{ Ronald Coase, The Problem of Social Cost,
3 { J. L. \& Econ.} 1 (1960).  } 
   

   The assumptions of the Coase Theorem
are   unlikely to be satisfied here, however.   Four  problems arise.    

\noindent
     \underline{ 1. Information. } Smith and Jones must bargain over
the price of the permission to burn the flag.  Since the harm and
benefit from burning the flag are both emotional, Jones is unlikely
to have a good estimate of Smith's pain, $X$, and the Smithians are
unlikely to have a good estimate of Jones's pleasure, $Y$.  This will
lead to posturing for bargaining advantage and the usual
inefficiencies of bargaining under asymmetric information: delay and
possible lack of a completed bargain even when gains from trade
exist.\footnote{For elaboration of the problem of asymmetric
information, see Chapter 11 of Eric Rasmusen, { Games and
Information}, 2d Ed., (1994) and the references therein.  } 

\noindent
     \underline{ 2. Bitterness.} If the Smithians are sufficiently
unhappy over the very act of conducting negotiations on this topic,
that unhappiness might be worth more than \$3,000 to them.  The same
might be true for Jones.  In either case, bargaining could not attain
the efficient outcome.  Even if the disutility of bargaining were
smaller, uncertainty over how much disutility each party suffers
would compound the information problem.  

\noindent
  \underline{ 3. Free Riders.} The Smithians are a group, and the
prevention of flag burning is a public good for them.  Each Smithian
would like to free ride on the other Smithians, paying nothing and
letting the others pay Jones not to burn the flag.  Institutions such
as clubs and churches try to address this kind of free rider problem,
but they lack the coercive power of government.  The government could
force each Smithian to contribute to Jones's payment, but Smith
cannot, except by expelling members from his organization.\footnote{A
similar problem could arise on the side of the desecrators. If there
were many people who would derive utility from the act of desecration
even if they did not commit it personally, desecration might be
underprovided.}

  

 \noindent
    \underline{ 4.  Hold-Outs.} Suppose that the legal rule is that
not only Jones but any of a large number of people have the right to
burn the flag.  Even if each of them has only a small benefit, each
can impose the entire cost of \$3,000 on the Smithians.  Unless the
Smithians can negotiate with the desecrators as a group, any
individual desecrator has a strong incentive to wait until the others
have sold their rights to the Smithians, after which he can bargain
using the threat of imposing the entire \$3,000 cost on them.  

     
 \noindent 
 {\it B.   Regulation as a Solution}

  The failure of the Coase Theorem makes desecration a natural
subject for government regulation and suggests why it has
traditionally been a part of criminal law.  Desecration should be
regulated for the same reason as pollution: one person is inflicting
a cost on another without compensation, and bargaining is
impractical.  A factory emits sulfur dioxide, harming the neighbors'
trees.  A desecrator burns a flag, hurting its venerators' feelings.
From the economic point of view, the situations are identical.  In
each case, one party inflicts a negative externality on another
party.\footnote{\label{epstein1} The externality is real rather than
pecuniary, as when a spillover occurs because A's action causes
prices to change in a way that affects B.  When A bids up the price
of babysitters and thereby makes B pay more for babysitting, A has
inflicted a negative pecuniary externality on B, but no inefficiency
results, because A and the babysitters gain more than B loses.  If,
however, A burns a flag in a way that offends B, A has inflicted a
real externality on B, because B's disutility is not mediated by a
price change.  The difference is not whether the effect is material
or mental, but whether it is mediated by price changes.  See Richard
Epstein,  The Harm Principle---And How it Grew, 45 { U. Toronto L. J. }
369, 374 (1995).  The law early recognized the difference between
real and pecuniary harms; see { Keeble v.  Hickeringill} (1707),
reported in 103 ER 1127 (1809), in which dictum suggested that a new
school was entitled to attract pupils away from an old one in the
course of ordinary competition, but not by use of intimidation, and {
NAACP v.  Claiborne Hardware Co.}, 393 So. 2d 1290 (Miss 1980), 458
U.S. 886 (1982), where a major issue was whether a black boycott of
white merchants was voluntary or enforced by intimidation.}

    Air pollution and flag burning both create externalities.  The
difference is that the desecration externality is a direct effect on
the mind of the venerator on hearing of the event, rather than a
physical effect on some material object which then affects his mind.
Let us distinguish between the two effects by calling them mental
externalities and physical externalities.
 
  The economic approach can cope with hurt feelings as easily as with
damaged trees.  If someone would pay \$3,000 to avoid flag burning,
that is the amount of the desecration externality.  The economist
need not judge whether \$3,000 is too much or too little. It is
simply data. If someone is willing to pay for something, that
something has economic value, whether it be a material good or
not.   The point is crucial, because both sides will claim their tastes
are privileged.\footnote{ Ronald Coase has this explanation for judicial 
hostility to expressive, but not  economic,  regulation: ``Self-esteem leads the 
intellectuals to magnify the importance of
their own market.  That others should be regulated seems natural,
particularly as many of the intellectuals see themselves as doing the
regulating.  But self-interest combines with self-esteem to ensure
that, while others are regulated, regulation should not apply to
them.''   Coase (1974),  {\it supra}, note \ref{mega}.  He suggests treating 
both markets alike, the inspiration  of the present article: ``My argument is 
that we should use the same {\it approach} for all markets when deciding on 
public policy.  In fact, if we do this and use for the market of ideas the same 
approach which has commended itself to economists in the market for goods,  it 
is apparent that the case for government intervention in the market for ideas is 
much stronger than it is, in general, in the market for goods.''   Id., at 389.}  
Jones will say that the Smithians' disutility is
illegitimate in a free country, and the Smithians will say that
Jones's pleasure from desecration is sinful.  The economic approach
allows for an objective analysis that depends on the empirical facts
rather than special pleading.  In the Smith-Jones example,
desecration should be banned, but only because of the particular
numbers chosen. If the evidence showed that Jones would pay not
\$500, but \$5,500 to burn the flag, the conclusion would change.
Rather than assuming the answer---that the policy is legitimate or
illegitimate--- economics relies on how well the policy serves to
satisfy human wants.\footnote{ The contrary view---that some desires
are illegitimate---is usually associated with a religious view of the
world, but it is not restricted to religion.  One of its most
influential proponents is John Stuart Mill, who rejects the
legitimacy of mental externalities and criticizes those ``who
consider as an injury to themselves any conduct which they have a
distaste for, and resent it as an outrage to their own feelings,
since a person's taste is as much his own peculiar concern as his
opinion or his purse.''  John Stuart Mill, { On Liberty}, Chapter 4
(1859).  Mill does, however, reject some tastes---tastes concerning
other people's behavior.  If he were a more consistent utilitarian,
he would consider moral feelings as legitimate as immoral behavior.
For a discussion of Mill's thought on this issue , see Chapter 2 of C. L.  Ten, 
{ Mill
on Liberty} (1980) and   Keith Hylton,    Implications of Mill's Theory of 
Liberty for
the Regulation of Hate Speech and Hate Crimes,  3 { U.  Chicago L. School 
Roundtable}  35  (1996). 
 A briefer discussion, with special reference to
tort, can be found in Richard Epstein, Harm Principle, {\it supra}
note \ref{epstein1} at 372.  In another work, Epstein makes the point
that allowing outsiders' offense to contractual provisions would
greatly increase the uncertainty over whether agreements could be
enforced, and states his preference for these externalities to be put
in the Roman law category of {\it damnum absque injuria}---harm
without legal injury.  Richard Epstein, { Forbidden Grounds} (1992)
at 415.  In the context of desecration, criminal law is more
appropriate than tort, both for specificity and to reduce the costs
of measuring injury in particular cases.  }

  To explore this point further, ponder the following examples: 
       \begin{quotation}
\begin{footnotesize}
 
 1.  The factory's sulfur dioxide harms my trees, reducing my
property value.\\ \vspace*{4pt}

  2.  The factory's sulfur dioxide harms my lungs, requiring medical
care.\\ \vspace*{4pt}

 3.  The factory's sulfur dioxide tickles my throat, making me feel
bad.\\
 \vspace*{4pt}

 4.  The factory's noise bothers me. \\
\vspace*{4pt}

 5.  The factory's smokestack emits steam,  which is harmless but looks
ugly to me.\\
 \vspace*{4pt}

 6.  The factory burns a flag, offending me.  
  \end{footnotesize}
 \end{quotation}
            Items one through four are physical externalities, while
five and six are mental. But what is the difference between them 
all?\footnote{For one long and interesting   philosophic attempt to distinguish 
between them, see Joel Feinberg,  {  The Moral Limits of the Criminal Law,
Volume 2: Offense to Others}  (1985).  For a critique of economists' reluctance  
not to treat all externalities equally, see chapter 10, A Second Look at 
Externalities, of Steven Rhoads, The Economist's View of the World (19xx). }


   In the original story, the Smithians lost \$3,000 and Jones gained
\$500 from desecration.  Picking those numbers determined the
welfare-maximizing policy, and if they had been reversed, desecration
would be efficient.  Is it really possible to measure the costs and
benefits?

  Measurement is a problem, but it is not special to the mental
externalities involved in desecration.  Any public goods creates the
same problem.\footnote{Desecration is a public good in the sense of
being nonexcludable (other people besides the desecrator cannot be
blocked from experiencing changes in utility as a result of his
action) and nonrivalrous (creating a utility effect on other people
does not incur extra costs).  It is different from a conventional
public good in that some people's utility from it is positive and
some negative.} When the government decides between selling public
land or keeping it as a national park, citizens disagree about the
costs and benefits, either because personal values differ or because
of differing estimates of common values.\footnote{Law and politics
often need to discover which tastes are predominant.  We legislate
requiring strip mine reclamation because we judge that on average,
people prefer to see reclaimed land.  We cannot say that this
preference is the only rational one.  People from Illinois are
willing to drive far to see the Badlands in South Dakota, which are
not dissimilar to eroded strip mines.  Reportedly, the Mount Lyell
Mining and Railway Company of Queenstown, Tasmania tried to clean up
an area devastated by acid rain from its copper smelter, but the
government stopped it from planting seeds and fertilizing.  The bare
hills are the town's main tourist attraction, even attracting artists
who wish to paint them, and restoration would be undesirable. See
John Kohut and Roland Sweet, { Dumb, Dumber, Dumbest: True News of
the World's Least Competent People} (1996) at 79.  } 
   Those citizens opposed to the park will tend to under-report their
benefits from the park in public debate, and those who support the
park will exaggerate their benefits.  The valuation may be difficult,
but we do not eliminate national parks just because the costs are
easier to monetize than the benefits.\footnote{For a collection of
articles discussing the problems of valuing public goods, see the
Fall 1994 issue of {\it J.  Econ. Perspectives}, and, in particular,
Paul Portney, The Contingent Valuation Debate: Why Economists Should
Care, 8 { J.  Econ. Perspectives} 3 (1994).}



 The political process provides a way for citizens to demonstrate the
extent of their utility or disutility of desecration, a form of
bidding for laws.\footnote{ \label{tiedeman} It has been common historically for 
majority symbols
to be protected from desecration, but not minority symbols.  Such
laws may well be justified as efficient.  A discussion that shows the
age of this utilitarian argument can be found in Christopher
Tiedeman, { A Treatise on the Limitations of the Police Power in the
United States} (1886) at 168-69 (see {\it infra} at note \ref{oldstuff}).}  
  If desecration law is allowed to stay a political
question, citizens show their preferences by the intensity of their
political effort.\footnote{The Rehnquist dissent in { Texas v.
Johnson}, 491 U.S. 397, 435 (1989) has this flavor: ``Surely one of the
high purposes of a democratic society is to legislate against conduct
that is regarded as evil and profoundly offensive to the majority of
people---whether it be murder, embezzlement, pollution, or flag
burning.  Our Constitution wisely places limits on powers of
legislative majorities to act, but the declaration of such limits by
this Court `is, at all times, a question of much delicacy, which
ought seldom, if ever, to be decided in the affirmative, in a
doubtful case.'  Fletcher v.  Peck, 10 U.S.  (6 Cranch) 87, 128, 3
L.Ed. 162 (1810) (Marshall, C.J.).  Uncritical extension of
constitutional protection to the burning of the flag risks the
frustration of the very purpose for which organized governments are
instituted.''  }
 Political effort is subject to the same free rider problems as
Coasean bargaining between groups.  In particular, smaller,
concentrated, and organized groups would have a political advantage.
In the Smith-Jones example, Jones, being an individual, would have an
advantage over the Smithians, and might successfully lobby against a
desecration law even if it were efficient.  Nonetheless, the
political process does provide some empirical evidence of the
strength of preferences, and is no less useful here than for deciding
on taxing or spending.\footnote{ John
Stuart Mill regards ``the selfishness of the public, with the most
perfect indifference, passing over the pleasure or convenience of
those whose conduct they censure, and considering only their own
preference'' (Mill, { On Liberty}, chapter 4 (1859)).  As with any
policy, from tax law to smoking regulations, some group must lose
from desecration policy, and it is not clear why the injustice would
be greater with symbol protection than with property protection, or
why the general rule should be that minority opinions should outweigh
majority opinions.  The argument for Mill's position would have to be
that (a) the political process does not sufficiently protect minority
interests by allowing intensity of preferences to affect outcomes,
and (b) the disutility of the minority from regulation generally
exceeds the utility of the majority.  }
 
    
     

  % ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

 \begin{center}
{   III.   DESECRATION AS MALICE} 
 \end{center}
     Let us now add a detail to our story of Jones and the Smithians:
Jones's motive is malice: he dislikes the Smithians, and wants
to see them unhappy.  
  
Malice helps with the measurement problem.  A reasonable empirical
generalization is that the utility of the malicious party is less
than the disutility of his victim -- that rarely would he be willing
to pay more to perform the malicious act than the victim would pay to
prevent it.  Malice is a secondary effect, an echo weaker than the
original sound.  This kind of judgement is universal in criminal
law.\footnote{It also puts in an occasional appearance in civil law.
Under the common law, for example, if someone gave advice to a friend
not to employ a certain doctor out of concern for the friend, the
doctor had no action against him. If, however, he gave the advice out
of malice against the doctor, the doctor could sue.  Oliver Wendell
Holmes, Privilege, Malice, and Intent, 8 { Harvard L. Rev.} 1 (1894).
``...a malicious motive in the defendant may make an act which would
not be wrongful without the malice, a wrongful act when done with
malice.''  Mogul Steamship v. McGregor, 21 Q.B.  544, 608 (1889). 
    } We believe that the thief values the television less than the
owner, the murderer values killing less than the murdered person
values life, and the rapist values his pleasure less than the victim
values her pain.  Otherwise, theft, murder, and rape could be
efficient ways of minimizing transaction costs.\footnote{An example
of misapplication of this kind of reasoning, relevant because it does
try to tie together mental externalities with theft, is John Stuart
Mill's statement in Chapter 4 of { On Liberty} that ``...there is no
parity between the feeling of a person for his own opinion, and the
feeling of another who is offended at his holding it; no more than
between the desire of a thief to take a purse, and the desire of the
right owner to keep it.''  The purse is a private good, valuable only
to one person at a time.  The opinion is probably more important to
its holder than to any other one person, but it is much less clear
that the holder would pay more to hold it than a large number of
other people combined would pay for him to abandon it.  }

In addition, malice, because it ineluctably couples one person's
utility with another's disutility, channels resources into
rentseeking efforts to carry out the involuntary transaction or to
avoid it.  Conceivably, malicious actions are still efficient, but
because they transfer utility, rentseeking costs must be added to
production costs.\footnote{This   idea that  malicious actions create  rent-
seeking  costs  has long been applied to the economic analysis of intentional 
torts. See chapter 6, Intentional Torts and Damages, of William Landes and 
Richard Posner, The Economic Structure of Tort Law (1987).  It is one answer to 
the paradox of the efficient malicious rape proposed by Gary Schwartz, 
Economics, Wealth Distribution, and Justice, 1979 Wisc. L. Rev. 799 (1979)  
(that  the rapist may derive great utility precisely from  forcing a woman,and 
would  pay more than the woman would pay to prevent the rape.).  I prefer  the 
simpler answer that  experience suggests that  few, if any, such rapists exist.           
}  
  
 
Malice helps explain why public policy differentiates between
different kinds of symbols.  Flags have long served   to
increase altruism towards   fellow citizens,
especially in wartime.  Soldiers are spurred to take extra risks to
prevent flags from being captured.  Armies incur real costs to use
flags in this way; soldiers of special ability are chosen to carry
flags, which means they cannot carry weapons. Dying in battle to
defend the flag against capture, however, loses some of its allure if
teenagers back home can  wear the flag on the seat of their
pants.  A similar argument justifies encouraging desecration of malicious
symbols, or even   government bans on  them.  The
swastika, for example,  has very little use as a positive symbol, but 
considerable
strength for malicious purposes.\footnote{Section 86(I)(4) of the German Penal 
Code is
  ``Prohibition of Distribution, Production and Importing of Goods
Used to Propagate Nazi Ideology,'' as cited in Bernhard Bleise,
Freedom of Speech and Flag Desecration: A Comparative Study of
German, European and United States Laws, 20 { Denver J. 
International Law and Policy} 471, 472 (1992).  The ban would be
considered  unconstitutional in the United States,  but would surely have helped 
Germany had it been in force in 1930.  }
 
  Malice is by no means a necessary
element of desecration.  Eric Posner has suggested to me the
following hypothetical that turns the idea on its head.  A white Alabaman   
erects a Confederate flag in his yard for the sole purpose of
outraging his black neighbor, who responds by burning it down.  The
venerator is malicious, while the  desecrator  just wants to eliminate an 
eyesore.  Yet laws are general rules made to
fit average cases,   and it is fair to say that malice
plays a prominent part in desecration generally. 

  
  % ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
  \begin{center}
{  IV.    DESECRATION AS PROPERTY DESTRUCTION} 
 \end{center}
   
 \noindent 
 {\it A.   Symbols are Created and Maintained}

    ``Desecrate''  is a transitive verb.  Something must be there to be
desecrated.  From whence comes this something?  --It is a produced
good, created at a positive cost.  Just as a car is produced from
steel, labor, and energy, a symbol is created from the time and
emotional commitment of the venerators. Just as fewer cars will
be produced if a tax is imposed on car companies, so fewer symbols
will be produced if desecration is allowed.  

Consider the
origin of the Smith flag.  Suppose that the Smithians' cost of
turning a piece of cloth into the sacred flag was \$10,000 in design
costs, time spent venerating the cloth, and energy in teaching its
meaning to their children.  In return, they receive 
 \$12,000 in benefit from the flag  through   group solidarity and  pleasure
in worship.    
   
   By the time of the desecration, the \$10,000 is a sunk cost,
irrelevant to short-run decisions.  If desecration were illegal, the
Smithians' net payoff would be \$2,000 (\$12,000 - \$10,000) and
Jones's would be \$0.  If desecration were legal and unforeseen, the
Smithians' net payoff would be -\$1,000 (\$12,000 - \$10,000 -
\$3,000), and Jones's would be \$500.  As before, welfare is
maximized by banning desecration, and if it is not banned the
regretful Smithians will have a negative payoff. 

 
But if  the government has a policy of allowing desecration,  groups like the 
Smithians will revise their calculations in the long run. If
the Smithians had foreseen  that  desecration would be legal,
they would not have gone to the expense of creating the flag in the
first place.  The payoffs would then have been  \$0 for the Smithians and \$0
for Jones.  Comparing the payoffs under the two policies of toleration and
prohibition of desecration yields the striking result that nobody is
helped by toleration. Jones's payoff is zero either way, and the
Smithians strictly prefer the ban.  The Smithians are less happy and
Jones no happier as a result of desecration's legality.  




  The feature of diminished production of symbols is insidious
because it is an absence.  A society that tolerates desecration will
have fewer symbols, but it may not realize why.  By not allowing
anything to be kept sacred, it may lose the very idea of
sanctity.\footnote{ 
 John McGinnis points out a paradox here.  If desecration becomes
commonplace, it may lose both its offensiveness to venerators and its
usefulness to desecrators.  Thus, the long-run effect could be
neutral for the venerators and negative for the desecrators, who no
longer can obtain publicity, but could, at the price of the criminal
penalty,  while desecration was illegal.   At the same time, the venerators have
still suffered a loss--- the utility they could have derived from
veneration if the symbol's value had remained intact.  This is
analogous to measuring the effect of the OPEC oil price increases of
the 1970's.  After ten years, the higher price was much less painful
to consumers, but only because they had incurred the costs of
substituting from oil to  capital and alternative   energy sources. }


Perhaps even more important than symbol creation is symbol
maintenance.  If besides the cost of creating the symbol, costs must
be incurred to maintain its effectiveness, then in the long run the
legality of desecration will lead to the elimination of the symbol's
power as it gradually depreciates.\footnote{New arguments or ideas
are different from new symbols in this respect. A good argument is
actually strengthened by the lack of success of counterarguments,  and
its supporters  correspondingly heartened.  Supporters of a
symbol, however, rarely derive pleasure from its desecration.}

    Lack of awareness that symbols are produced goods also makes
short-run cost-benefit calculation misleading.  Suppose that Jones's
benefit from desecration is not \$500 but \$5,000, while the
Smithians' cost of desecration remains at \$3,000.  The short-run
calculation yields a clear policy recommendation: allow desecration.
But the long run effects are the same as before.  Allowing
desecration results in no flag being created and the payoffs of both
Jones and the Smithians are \$0.  Thus, it may happen that even if
the short run cost-benefit calculation does {\it not} work out in
favor of the venerators, desecration should still be prohibited.  
 
  Incorrect short-run calculations are all the more dangerous because
under our political institutions,  distortions arise whenever there is
a tradeoff between short run and long run. The simplest problem is
that the judge or politician may not realize that the short-run
benefit has a long-run cost.  More unavoidably, he receives a share
of the short-run benefit, but does not pay the long-run cost.  In the
present context, toleration of desecration may have short-run
advantages, depending on the cost-benefit calculation and the tastes
of the policymakers, but long-run costs.  Elected officials clearly
have strong incentives to favor short-run considerations, but so do
judges, who by striking down laws against desecration can feel good
about themselves and the individual desecrators before them.  The
losers, in the short run, are the venerators, who may be large in
number but are represented in the courtroom only by prosecutors.  In
the long run, fewer symbols will be created, and everyone may lose.    Future 
generations, however,  are   not present in the courtroom. 
 
  
 \noindent 
 {\it B.   Trademark Protection}

      In {\it Smith v. Goguen} , Justice White wrote:\footnote{ {
Smith v. Goguen}, 415 U.S. 566, 587 (1974).}
      \begin{footnotesize}
  \begin{quotation}
         The flag is a national
property, and the Nation may regulate those who would make, imitate,
sell, possess, or use it.  ...  There would seem to be
little question about the power of Congress to forbid the mutilation
of the Lincoln Memorial...  The flag is itself a monument, subject to
similar protection.  
 \end{quotation}
        \end{footnotesize}
        The difficulty is that symbols are denied the protection granted
to other kinds of property, including other forms of intellectual
property.  I can trademark a symbol, but that only protects  against other 
people using that symbol and pretending it was
authorized by me.  I cannot copyright it,
which would prevent other people from copying it without my consent.
 {\it A fortiori}, I cannot control its use.  A liberal poet can
refuse to sell a license to conservative Rush Limbaugh to recite his
poem, but the Smithians in my story cannot refuse Jones the right to
desecrate their symbol.  That inefficiency results should not be
surprising.  Unless symbols, like books and inventions, have
intellectual property protection, they will be underproduced.  The
government grants monopolies on the use of patented and copyrighted
goods to their creators even though this infringes on the freedom of
everyone else  because the monopoly encourages creation of the goods. 

 
A trademark is a symbol which a business uses to convey its identity
to others.  Violation of trademark, like desecration, is abuse of a
symbol, resulting in degradation of the value of the symbol and
reduced incentive for the symbol's creation and maintenance.  A
crucial difference, however, is that the harm prohibited by trademark
law is limited to mistaken perceptions rather than to all injury to
the symbol.\footnote{A federal court has  held that the
U.S. flag does not even have trademark protection.  { Parker v.  Morgan},
322 F.  Supp 585 (1971).}

     If Jones pretends he is a Smithian using their symbol as part of
his pretence and brings ridicule on the group,  the resulting harm is
akin to trademark violation but distinct from desecration.  Jones
uses fraud to convince the public of a certain view of the Smithians.
Even if this view happened to be accurate, the law frowns on fraud,
as ordinarily having inefficient results.  This wrong is distinct,
however, from desecration, which involves no fraud,  and harms the
Smithians directly rather than through its effect on third parties.
Thus, trademarking their symbol would do venerators little good against  the 
distress of desecration. 



 \noindent 
 {\it C.   Copyright Protection}


 Why not accord something like copyright protection to symbols? --The problem is 
that symbols are 
created and distributed differently from books.  The cost of creating
a book is incurred early, maintenance is cheap, the identity of the
creator is clear, and, most importantly, the books are sold.  Symbols
have maintenance costs, the identity of those who care about them
is  less clear, and they have no price tags. The harm from
infringement of the property right is not lost sales, but direct
disutility.  As a result, the dollar value of the loss may be hard to
measure, making determination of damages costly in civil litigation.
Ownership of the symbol, which in effect means standing to sue for
copyright infringment, would also be a problem, since venerators may
not be a single organized group and might, indeed, be a substantial
fraction of the nation's population.  All of these make it difficult
to apply copyright protection to symbols.\footnote{The focus in
copyright law is on lost sales, but issues similar to desecration's
do  arise, when, for example, someone publishes a shoddy rewrite
of an author's work.  The French term {\it droit morale } applies to
the rights of creators to restrict misuse of their work.  American
copyright law is almost entirely restricted to pecuniary rights, although this 
is not generally known.  I have found, for example, that even law professors  
are commonly dismayed to learn that when they sign away the copyright
a law  journal is free to publish their  articles
anonymously.   But
courts have recognized moral rights using other doctrines such as
unfair competition and tort.   See Roberta Kwall, Copyright and the Moral Right, 
Is an
American Marriage Possible?  38 { Vanderbilt L. Rev.} 1 (1985); Henry
Hansmann and Marina Santilli, Authors' and Artists' Moral Rights: A
Comparative Legal and Economic Analysis, 26 { J. Legal Stud.} 95
(1997).  Even the European right of integrity, however, which
regulates mutilation of art, focuses on protecting the artist's
reputation for producing art as he intended it rather than on
protecting his   feelings. See Hansmann and Santilli, at
99-100.  }
 
 Even if it applied, however, copyright protection would not prevent
desecration.  The law does not recognize servitudes on chattels
---restrictions on the use of personal property imposed by the seller
on the buyer.\footnote{See Hansmann and Santilli, pp. 100-102, and
their further discussion of {\it droit morale} as division of
property rights in an object.} Such restrictions are allowed only in
land transfers. The first sale doctrine of copyright is an example:  a book or 
video seller cannot restrict resale or rental. What
the venerators of a symbol require, however, is precisely a
restriction on its use by people who buy a copy of the
symbol.\footnote{Some hope exists in this direction, however. It has
long been the case that sellers of information have been  allowed to
restrict its dissemination.  See Chicago Board of Trade v. Christie Grain \&
Stock Co., 198 U.S. 236 (1905) (upholding a contract forbidding dissemination of
grain prices).  } 



 \noindent 
 {\it D.   The Tort of Misappropriation}
 
The common law and statutes of some states (including Illinois and
New York) recognizes the tort of misappropriation, which is commonly
traced to the 1918 case of {\it International News Service v.
Associated Press}.\footnote{ International News Service v.
Associated Press, 248 U.S. 215 (1918).  For a discussion of the merits
of this decision as public policy, see Richard A. Epstein,
International News Service v. Associated Press: Custom and Law as
Sources of Property Rights in News,    78 Va. L. Rev. 85 (1992).
Note also the Brandeis dissent, which criticizes the creation of
intellectual property rights by judicial fiat after Congress had decided not to 
do so.  }
 As Robert Denicola says, `` `Misappropriation' proved a convenient
reference when no other principle of unfair competition law would
serve to alleviate the perceived injustice of defendant's enrichment
at plaintiff's expense.  In its wake the case has left a collection
of decisions as diverse as any accumulated under a single common-law
label.''\footnote{ Robert Denicola, Institutional Publicity Rights:
An Analysis of the Merchandising of Famous Trade Symbols, 62 N.C.L.
Rev. 603, 628 (1984).} 

What the doctrine seems to center on  is unjust enrichment.
One person incurs costs in creating something of value that another
person uses for personal gain.  In {\it INS v. AP}, INS collected and
printed news that AP   read and reprinted elsewhere.  A more
typical case is {\it Bi-Rite v. Button Master}, in which a button
company representing various singers sued another company for selling
buttons with their pictures.\footnote{Bi-Rite Enterprises, Inc, v.
Button Master, 555 F. Supp. 1188 (S.D.N.Y. 1983).  As this case
illustrates, the ``right of publicity, '' originating in Pavesich v.
New Eng. Life Ins. Co., 122 Ga. 190, 50 S.E. 68 (1905), is closely
allied to the tort of misappropriation.  } It is unclear whether it
is unfair competition or unjust enrichment that is at the heart of
the doctrine. In {\it Board of Trade v. Dow Jones}, Dow Jones was
allowed to prevent use of its stock index in futures trading, even
though Dow Jones did not intend to use the index in this way
itself.\footnote{ Board of Trade v. Dow Jones \& Co., 456 N.E.2d 84
(Ill. 1983). } 
   In either case, the  goal  is to
encourage production of intellectual property otherwise unprotected
by the law.  The doctrine has not, however, been applied in ways that
would cover desecration.  The leading cases all involve commercial
exploitation, and they do not involve servitudes in chattels.  The
closest  that misappropriation has approached desecration is in cases where
commercial symbols are linked to immorality-- cocaine and
pornography, for example.\footnote{ Coca-Cola Co. v. Gemini Rising,
Inc., 346 F. Supp.  1183 (E.D.N.Y. 1972) (the cocaine  case).  Dallas
Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200 (2d
Cir. 1979)   (the  {\it Debbie Does Dallas} case).} But these cases have been 
decided on grounds of consumer
confusion and trademark dilution, not misappropriation.  The logic
behind the doctrine may apply to desecration, but so far the doctrine
has not. 
        

   % ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    \begin{center} { V.
DISTINGUISHING OTHER ACTS FROM DESECRATION } 
 \end{center}

 Before going on to consider how actual policies address the problems
of mental externalities, malice, and symbol creation, it may be
useful to pause to distinguish between desecration and  similar acts with which 
it might be confused.    

 \bigskip
\noindent
  { \it A.  Desecration is Not  Speech. } 
  
      The idea of mental externalities can be directly applied to offensive
speech, and in a world of perfect information,  efficiency would
require that certain kinds of speech   be prohibited. Practical
difficulties arise because inefficient offensive speech lies on a
continuum with efficient speech, and  a line must be drawn
somewhere.  The line can be drawn, however, and U.S.  law does
restrict many kinds of political speech--- loud midnight harangues in
residential neighborhoods and infringement of copyrighted material,
for example.  Banning desecration is a restriction of the same kind,
balancing the possible benefits of improved political communication
against the costs of mental externalities and symbol destruction.  
  
   Speech in general lacks the special features of desecration.
Offensive speech may be malicious, but its offensiveness may also be
purely accidental.  Two members of the same organization may say
things to communicate between themselves that would be offensive to
outsiders, but without any desire to publicize their speech.   Political speech 
is usually directed not at the target of its
criticism but at neutral, persuadable parties, whereas desecration is
more designed to offend than to persuade. Nor does offensive speech
generally destroy a produced good, unless it destroys an idea, which
we usually consider a benefit of free speech rather than a cost.
Some speech may be directed at destroying a symbol, to be sure, but
that is distinguishable from speech in general and is the kind of
speech prohibited in the Uniform Flag Act discussed later in this
article.  

       Much of what is offensive in speech is its content, the ideas
it conveys.  Ideas are much more likely to confer a benefit to
society than are the particular methods of communicating them.
Desecration, while sometimes meant to convey an idea, has the
substitute of simple speech.
 Saying that I am opposed to the Vietnam War may not be as effective
as if I burnt a flag and then made my statement, but the content is
the same.  The idea can still be expressed, even if I cannot get as
much attention as if I burnt a flag,  tortured a kitten,   spent   money to buy 
television coverage, or  were allowed to  subpoena listeners.
The marginal social return from increasing the number of ways in
which ideas can be communicated is decreasing, so a comparison of the
costs and benefits naturally leads to some ways being allowed and
some prohibited.  

Two purposes of constitutions are (1) to limit the actions of the
government and (2) to prevent those in power from continuing to
remain in power against the will of the people.  Limitations on the
government's ability to restrict political speech further both
purposes.  Political speech, even if unpopular, generally has
positive externalities because of information generation and
transmission, even if particular examples spread
misinformation.\footnote{\label{farber}For an explanation of free
speech as a public good, see Daniel Farber, Free Speech without
Romance: Public Choice and the First Amendment, 105 { Harvard L.
Rev.} 554 (1992).  } Allowing the government to distinguish which
speech is to be allowed may or may not yield too much discretion to
those in power, depending on which distinctions are allowed, but it
is much easier to distinguish speech from desecration.\footnote{The
classic article on the distinction between political and other speech
is Robert Bork, Neutral Principles and Some First Amendment Problems,
47 { Indiana L. J. } 1 (1971).  }


 \bigskip \noindent
  {\it B.     Desecration is Not   Vice } 

      The idea of mental externalities applies  naturally to
vices such as sodomy, prostitution, and drug abuse.  Someone, for
example, who smokes crack cocaine inflicts negative mental
externalities on friends, family, and even total strangers if those
persons would be willing to pay something to prevent his smoking. This provides 
a justification for regulation, though it must be
balanced against the benefit to the smoker.  The issues of whether
the various parties'  willingnesses to pay   truly represent their informed 
interest  becomes more
difficult, but the essential test remains the same.\footnote{This has
already been noted, even by those who think that conventional
regulation fails the test.  Richard Posner has said that  ``There is
nothing in principle to qualify disgust, even when irrational (and
revulsion against incest is not irrational), from counting as an
external cost to which a polity dedicated to economic efficiency
should pay heed.''   (Richard Posner,
   { Sex and Reason} (1992) 202, which goes on to suggest that much
of sexual morality is based on misinformation.)  David Friedman
discusses the legality of heroin, and concludes that although a ban
might be efficient in most of the United States, the most efficient
outcome would be legality in some locales, such as New York, and
illegality in others.  David Friedman, { The Machinery of Freedom},
2nd edition,  128 (1989).   See also Richard Epstein \& Eric Rasmusen, Debate on 
Social Regulation,
Harvard J. Pub. Pol.  (1998). 
} 
 

Like offensive speech, however, offensive conduct in general has
important differences from desecration. The issue of symbol
production does not arise, and malice is unimportant, both of which
tend to make regulation harder to justify than in the case of
desecration.  On the other hand, regulation of offensive conduct also
lacks some of the problems of regulation of speech. Positive
externalities are less important, since drug use, unlike speech,
offers no benefits to anyone but the drug user.  Definitions are also
easier;  speaking offensively  is  less concrete than smoking cocaine.  
      Offensive acts in general thus present much more difficult
questions than desecration even in a utilitarian framework.  A
similar analysis based on mental externalities could be undertaken,
but each activity would have to be approached on its own merits.  
 
  
  
  % ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


  \begin{center}
{   VI.  THE CONSEQUENCES OF MISTAKEN POLICY } 
 \end{center}

       One of the most important considerations in setting policy is
the cost of mistakes.  This is familiar in pollution and antitrust regulation.  
Rigid quantity restrictions on
air pollution emissions can be extremely costly if the wrong limit is
chosen.  Environmental damage results from  lax   limits  and economic losses 
from   tight  limits.  Alternative
policies such as pollution taxes or generous standing to sue the
polluter   can reduce the cost of government mistakes.\footnote{ The
classic article on losses from mistakes in pollution policy is Martin
Weitzman, Prices vs. Quantities, 41 { Rev. Econ. Stud. }
477 (1974).} Antitrust regulation provides numerous examples where
interventions by an omniscient and benevolent government would be
beneficial but where laissez faire is the best 
  policy for realistic governments.  There is widespread agreement
that antitrust laws against bid-rigging in auctions are good policy,
even conducted by an imperfect government, but few economists recommend  price  
controls  in    concentrated markets, even
though theory suggests that unregulated prices will be inefficiently
high.   They realize that actual government intervention is unlikely to be the 
same as ideal government intervention. 

    Measurement of the costs and benefits of desecration is difficult
enough that the government might well err on the side of either
prohibition or toleration.  Moreover, either alternative is unlikely
to achieve the correct outcome in every situation, since desecration
will sometimes be efficient and sometimes inefficient.    Recognizing that we 
are fallible and that any policy simple enough
to implement will be suboptimal in some cases, what can we say about
desecration law?  Continuing with the Smith and Jones example, let us
consider four policies---Strict Prohibition, Mild Prohibition, Mild
Toleration, and Strict Toleration.
 
 \begin{footnotesize}
  \begin{quotation}
 \noindent
  {  Strict Prohibition.} Desecration is banned: If Jones burns the
 flag, he will be executed.  

\vspace*{12pt}

 
 \noindent
 {  Mild Prohibition.}  Desecration is banned: If Jones burns
the  flag, he will be fined \$1,000. 

 \vspace*{12pt}

   \noindent
 {  Mild Toleration.}  Desecration is permitted: Jones may burn the
 flag.  If Smith forcibly stops him, Smith will be   fined \$1,000. 

 \vspace*{12pt}
 
 \noindent
  {  Strict Toleration}.  Desecration is permitted: Jones may burn the
 flag.  If Smith tries to stop him, Smith will be   executed. 
  \end{quotation}
 \end{footnotesize}

 Laws do not ban crimes; they merely impose penalties on them.  The
citizen can weigh costs and benefits and still undertake the
activity.   Strict Prohibition would  presumably deter
desecration and Strict Toleration would deter private punishment of
desecration, but the two mild policies would allow for efficient
violation of the law.\footnote{In  chapter 7 of {\it Economic Analysis of the 
Law} (4th edition, 1992), Richard Posner  discusses various differences between 
intentional torts and crimes.   Desecration illustrates one reason for 
criminalization   that he does not discuss:  an action may be classified as a 
crime  rather than  a tort if  the harm is to a large group of people, so that 
transaction costs make private litigation especially costly.  }   

To illustrate efficient violation, let the venerators' utility cost
from desecration always be
 \$3,000,   but  let   the desecrator's benefit $Y$   be sometimes    \$500 and
sometimes  \$5,000. We will ignore the long-run issue of symbol production.  
Thus, the cost-benefit calculus goes both ways, and no single policy
will always be right.  

    Strict prohibition will achieve the optimal result of no
desecration if $Y$=\$500 but will be suboptimal if $Y$=\$5,000
because the desecrator's benefit from desecration would exceed the
venerators' loss.  Strict toleration
achieves optimality if $Y$=\$5,000,  but not if $Y$=\$500.  Thus, the
possibility of mistakes or of not being able to tailor the law to
individual situations provides no reason for preferring one policy to
the other. 


   Mild prohibition is more interesting.  It will achieve the
efficient outcome of no desecration if $Y$=\$500, because the
desecrator is unwilling to incur a fine of \$1,000 to obtain a
benefit of just \$500.  It will also, however, achieve the optimal
outcome of desecration if $Y$=\$5,000.  In that situation, the
desecrator will be willing to pay the fine of \$1,000 to obtain the
benefit of \$5,000.  Moreover, since the penalty is a fine, a
transfer rather than a social cost, the only loss to society is the
transaction cost of imposing the fine.  The fine itself just
transfers wealth from the desecrator to the government.  Thus, mild
prohibition is an attractive policy if the empirical magnitudes of
cost and benefit are unclear.  
      
   What of mild toleration?  It is not symmetric to mild
prohibition.  The key is what the venerators do when the desecrator
burns the flag.  If it is one venerator who suffers the \$3,000 loss,
and Coasean bargaining works, he will offer the desecrator up to that
amount, and desecration will occur only if it is efficient for it to
occur.  As Section 2 discussed, such bargaining is likely to fail.
Consequently, the venerator's only option is self-help, i.e., to
deter or prevent the desecration by violence.\footnote{More than one reader has  
suggested that an alternative form of self help is for the
venerator to retaliate by desecrating the desecrator's symbol.  If
such retaliation were credible and foreseen, the small-scale balance
of terror would prevent desecration. Not everyone has a vulnerable
symbol that they venerate, however, limiting the usefulness of
retaliation.  } 

     Self-help has two costs.\footnote{There  also may be  a special  benefit to
the self-helper, since revenge is sweet.} First, the assault itself
is costly, since the desecrator can fight back.  Second, assault is a
crime, and the assaulting venerator will be penalized by the
government.  If the penalty for assault is  \$1,000, which is  less than 
\$3,000, the venerator will carry out the assault, but he will
carry it out regardless of whether the benefit to the desecrator is
\$500 or \$5,000.  If the penalty for assault is large, it will
inefficiently deter assault that would prevent desecration, but if
it is small, it inefficiently encourages assault
and overdeters desecration.  Worse yet, since assault has many more
common motives than deterrence of desecration a mild penalty would
induce an excessive number of assaults generally, even if the number
connected with desecration became optimal.  Thus, it is hard to use
self-help as a check on mistaken toleration.\footnote{That state punishment of 
desecration would
prevent this kind of self-help was one argument of the state of Texas
in { \it Texas v. Johnson}.  An obvious response is that criminal
penalties for assault should prevent assault, but the argument of
this paragraph is that such penalties are too severe: sometimes
assault (or the threat of it) is efficient,  a form of  the privatization which 
we value in so many areas of  former government activity.  
       }

  If lawmakers make mistakes in the cost-benefit calculations or if
the calculations turn out differently in different cases, a mild
policy is better than a severe one because mild policies allow for
efficient lawbreaking.  Mild prohibition is an attractive policy
because it allows the desecrator to desecrate if he is willing to pay
a moderate price for the privilege, which signals that his benefit
from desecration is unusually high.  Mild prohibition is not
symmetric because the efficient lawbreaking there would consist of
illegal private penalties for desecration, a dangerous exception to
the public monopoly on violence.  
 
% ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
 
 \begin{center}
{   VII. ACTUAL STATUTES } 
 \end{center}

 Section 6 discussed one set of problems that arise  in the
implementation of government policy: laws that by miscalculation do
not apply to all situations correctly.  A different problem is
presented by a government that is not seeking to maximize social
welfare and uses arguments such as those made in this article to
cloak efforts to satisfy the material or ideological desires of
influential people.  
    The earlier sections of this article have provided reasons for
laws against desecration, but even if these reasons are valid in
theory, are they just rationalizations in practice?  I have suggested
comparing costs and benefits, but have actual desecration laws been
prompted instead by ideology or theology?  The motive of the lawgiver
is not directly important to the value of a law, but if the motive is
wrong, the law is more likely to be crafted to reduce welfare rather
than increase it.  

   Title 18 U.S.C. Section 700(a) says:  ``Whoever knowingly casts
contempt upon any flag of the United States by publicly mutilating,
defacing, defiling, burning, or trampling upon it shall be fined not
more than \$1,000 or imprisoned for not more than one year, or both.'' 
This federal flag desecration law only dates back to  1967, but
state laws are much older.  In 1989, every state but Alaska and
Wyoming had a statute prohibiting the burning of the flag\footnote{ {
Texas v. Johnson}, 491 U.S.  397 , 428 (1989), where citations to the
statutes can be found.  For a history of state law, see Albert
Rosenblatt, Flag Desecration Statutes: History and Analysis, {
Washington University Law Quarterly,}
 193 (1972). }, usually patterned after the
Uniform Flag Act of 1917,\footnote{ {  Proceedings of the
National Conference of Commissioners on Uniform State Laws,} 323-324
(1917).}
sections 2 and 4 of which  look very much like intellectual property
protection, prohibiting merchants from using the flag for advertising
purposes.  Indeed, the conduct at issue in the most important early
Supreme Court case on flag misuse, { \it Halter v. Nebraska}, concerned  a
flag on a beer label.\footnote{ { Halter v. Nebraska}, 205 U.S. 34
(1907).}
  Section 3 deals with desecration:  ``No person shall publicly mutilate, 
deface,
defile, defy, trample upon, or by word or act cast contempt upon any
such flag, standard, color, ensign or shield.'' 


    The Uniform Flag Act  emphasizes the act of desecration
rather than the  intent.  If someone burns a flag to call
attention to his feelings about abortion, he has
violated the statute, whatever his feelings about the
flag.  He can express the same opinion in a different
manner  and be   exempt from prosecution.  As in torturing a
kitten to call attention to one's opinions, the offense
is   the act, not the content.    The only exception is the
  ``words or act''   clause, but even this does not suppress
any substantive opinions except about the flag itself,
and the desecrator's scope for expression is no more
limited than if the flag never existed.      This was put well
by Justice Stevens in his dissent in  { \it  Texas v.
Johnson} : 

    \begin{footnotesize}
  \begin{quotation}
 The concept of `desecration' does not turn on the substance of the
message the actor intends to convey, but rather on whether those who
view the act will take serious offense.  Accordingly, one intending
to convey a message of respect for the flag by burning it in a public
square might nonetheless be guilty of desecration if he knows that
others--perhaps simply because they misperceive the intended
message---will be seriously offended. 
 
  ...

  It seems obvious that a prohibition against the desecration of a
gravesite is content neutral even if it denies some protesters the
right to make a symbolic statement by extinguishing the flame in
Arlington Cemetery where John F. Kennedy is buried while permitting
others to salute the flame by bowing their heads.  Few would doubt
that a protester who extinguishes the flame has desecrated the
gravesite, regardless of whether he prefaces that act with a speech
explaining that his purpose is to express deep admiration or
unmitigated scorn for the late President.\footnote{ { Texas v.
Johnson}, 491 U.S.  397, 438 (1989).} 
       \end{quotation}
        \end{footnotesize}

   We still must worry whether laws against desecration have benefits
greater than their costs, but the democratic process is admirably
suited to deciding such policy questions.  If many more people wish
desecration to occur than are bothered by it, elected officials are
unlikely to support laws against desecration.  The issue is simple
and public---whether the voter dislikes seeing the flag burned or
not.  Desecration is not like the corporate tax code, a complex maze
where special interests can conceal actual government policy and
  policy can be determined by a few heavily interested parties.  In
the case of desecration, government failure is more likely to result
in toleration than prohibition, since many voters support prohibition
mildly and only a few---but those few overrepresented in the legal
profession---strongly wish
 to permit it.\footnote{ \label{gallup} See George Gallup and Frank
Newport,  Americans Back Bush on Flag-Burning Amendment, { The Gallup
Poll Monthly}, June 1990, pp. 2-4.  ``There has been discussion lately
about a constitutional amendment which would make it illegal to burn
or desecrate the United States flag.  Some people favor a
flag-burning amendment because they say the flag is America's unique
symbol and deserves constitutional protection from desecration.
Others oppose a flag-burning amendment because they say burning the
flag is a form of freedom of speech, no matter how offensive, which
is protected by the Bill of Rights. Which of these two opinions comes
closest to your own?''   The two points of view were rotated.   66
percent favored the amendment, 29 percent opposed, and 5 percent had
no opinion. Using the simpler question, ``Do you think we should pass a
constitutional amendment to make flag burning illegal or not?''    in June 1990, 
71 percent thought the amendment should be passed
and 24 percent were opposed, up from 68-27 in June 1989.  Support for
the amendment was not concentrated in a few well organized groups,
but almost without exception had a margin of support of at least 6
percent (and up to 56 percent) in every variety of sex, age, region,
race, education, party, ideology, and income.  (The one exception was
the 8.5 percent of respondents who chose
  ``None''    for their religion, who opposed the amendment
48 to 46 percent.)  }  
       

  
            The Texas statute struck down in  { \it s Texas v. Johnson}
was different.  It   said, 
  \begin{footnotesize}
  \begin{quotation}
\noindent
    $\S$ 42.09. Desecration of Venerated Object\\
      (a) A person commits an offense if he intentionally or
knowingly desecrates:\\
     \noindent  (1) a public monument;\\
     \noindent (2) a place of worship or burial;  or\\
     \noindent (3) a state or national flag.\\
      (b) For purposes of this section, `desecrate' means deface,
damage, or otherwise physically mistreat in a way that the actor
knows will seriously offend one or more persons likely to observe or
discover his action.\\
      (c) An offense under this section is a Class A misdemeanor. (Tex.Penal 
Code Ann.  (1989)). 
       \end{quotation}
        \end{footnotesize}
        This statute is entirely driven by mental externalities. On
its face, a Texan may legally burn an American flag, if nobody cares,
but not his own church, if that would seriously offend a member of
the general community. The harm prohibited is the unhappiness of
observers, not the effect on patriotism or morality.  Whether this
statute is justified on efficiency grounds becomes a question of
whether such desecration tends on average to increase the happiness
of the desecrator more than it decreases the unhappiness of other
citizens.  The citizens in general are given a property right in
desecration; the desecrator must obtain a release from them all
before he can engage in desecration, or be willing to pay the penalty
for a class A misdemeanor.\footnote{Under the Texas act, desecration
is not illegal if nobody finds out about it, something irrelevant to
desecration viewed as violation of the sacred.  The Uniform Flag Act
could be interpreted the same way because of its adverb publicly
modifying the conduct banned.  A Maine court dismissed a  case
because the desecration occurred in the defendant's home rather than
in a public place.  { State v.  Peacock}, 138 Me. 339 (1942).} 
     
  The idea that the law functions to protect believers against
annoyance, rather than God against blasphemy is  not new.  Tiedeman's 1886 
treatise on the police power of government
says,\footnote{ \label{oldstuff} Tiedeman, {\it supra} note \ref{tiedeman} at 
168-69.
Similarly, Justice Story wrote of  religion  in { Vidal v. Girard's Exrs.}, 43 
U.S.
127  (1844), 
   ``it is not to be maliciously and openly reviled and blasphemed
against, to the annoyance of believers or the injury of the public.''
}
      \begin{footnotesize}
  \begin{quotation}
  If the laws against blasphemy rested upon the admission by the
law of the `divine origin and truth' of the Christian religion, they
would fall under the constitutional prohibitions, which withdraw
religion proper from all legal control. Blasphemy is punishable,
because, as already stated, it works an annoyance to the believer and
an injury to the public.... In order than an utterance or writing may
be considered a legal blasphemy, it must be accompanied by malice and
a wilful purpose to offend the sensibilities of
Christians. 
  \end{quotation}
   \end{footnotesize}

 Even clearer is the opinion in { \it State v. Chandler}, which says,
\footnote{ { State v. Chandler}, 2 Harr. 553.   (Del. xxx) }
   \begin{footnotesize}
 \begin{quotation}
     The common law adapted itself to the religion of the country
just so far as was necessary for the peace and safety of civil
institutions; but it took cognizance of offenses against God only
when, by their inevitable effects they became offenses against man
and his temporal security.  \end{quotation}
        \end{footnotesize}

The laws and courts prior to 1989 did not justify anti-desecration
laws on the basis of ultimate truths, but on human utility.  These laws were not 
anomalous, but, like commercial laws, had utilitarian goals. 
    
  % ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
 
\begin{center}
{   VIII.  OBJECTIONS } 
 \end{center}
             In this last section I will address various objections that
might be made to desecration laws. 

 
\bigskip \noindent
   {\it A.   Objection One:     A better  solution   is to
change the venerators'  preferences.} 

  Since mental externalities arise from the tastes of the venerators,
one solution is to change their tastes.  The venerator's harm is all
in his mind, so why not change his mind? 
 
 
 This  argument is reasonable and has analogies in physical
externalities.  The most efficient solution to a neighbor's noisy
parties might be earplugs, and the most efficient solution to smoke in
a restaurant might be for non-smokers to  patronize a different restaurant, both 
being ways that
the injured party eliminates his injury more cheaply than the injurer
could.  In the context of desecration, however, preference-changing
has two special problems, even if we suppose that the cost of
changing preferences is low.

 First, ending the offensiveness of desecration cannot be done
without diminishing the usefulness of the venerated symbol.  If the
believer no longer cares if   the cross is defiled, the cross cannot
be as potent a symbol.  Thus, changing a preference of this kind is
costly.  It is like wearing earplugs because my neighbor's loud
parties prevent me from listening to soft music on my stereo.  
 
   Second, if the venerator no longer cares about desecration, the
desecrator loses his benefit from it. The motives of
attention-getting and malice both disappear; nobody gets media
attention by burning Kleenex.  Thus, the preference-changing solution
hurts the desecrator as well as the venerator.  

 Both problems are special to desecration and further distinguish it
from offensive speech and action.  The argument that the offended
person can change his tastes has more strength when applied to
offense caused by a neighbor's cocaine use, because the person who is
displeased by those two things does not so obviously lose something
by changing his preferences.  The person who engages in them does not
need the disutility of someone else as a foundation for his own
utility.  
  
 The possibility of preference-changing is a legitimate
consideration, however, and raises its own counter-argument: changing
the desecrator's preferences instead.  If he can be conditioned or
persuaded to derive greater utility from substitute activities or to
suffer internal  disutility from desecration, he will stop
desecrating.  We must ask whose preferences are the more easily
changed, and if ease of changing is inversely related to intensity of
the preferences and the number of people involved, this solution
takes us back to the same calculations as the original efficiency
calculus. 



\bigskip
\noindent
  {\it B.   Objection Two:     Some people have
 preferences against desecration laws, and the cost-benefit calculus
should take them into account.}

Some people would be displeased by the ban on desecration regardless
of whether anyone were ever prosecuted, or even whether anyone ever
wished to desecrate. As a separate matter, they might be displeased
by the punishment of desecrators.  I will call these
  second-order preferences,   since they are
preferences not over the actions of the venerators and
desecrators, but over the actions of the government with
respect to desecration.   These preferences are  worth
considering,  because the  number of people who oppose
desecration laws is certainly much greater than the tiny
number of actual desecrators.  

Second-order preferences fit into the utilitarian framework and
should be fully counted.  Their existence, however, does not go very
far towards resolving the policy question. The obvious difficulty is
that other people have opposite second-order preferences.  They would
be pleased by the ban on desecration, regardless of whether anyone
ever wanted to burn a flag.  Such people seem to be a large majority
of the general population, as the Gallup poll cited earlier shows. 

     Moreover, second-order preferences are relatively easy to change
in the long run.  A preference for sacred symbols cannot be changed
without the loss of a source of utility.  A preference for not having
desecration laws, however, can be replaced with a preference { for}
desecration laws by appropriate education, and  people  will be no
less happy.  It seems that second-order preferences should therefore
be given less deference than direct preferences.  
  
    
  
 \bigskip
\noindent
  { \it C.  Objection Three,: Desecration has
positive as well as negative externalities. }
   
 I have focussed on the negative externalities from desecration, but
are there positive ones too?  Do third parties benefit when Jones
burns the flag? If so, this must be included in the cost-benefit
calculus. 
  
When Jones burns the flag to convey his position on abortion, third
parties may be glad that he has done so, because they find his message
 worth listening to and better than whatever they would have done
with their attention instead.  If this is common, however, the
citizens will not favor laws against desecration, since they will
find desecration a helpful aid in forming their political views. 

  
If Jones is not allowed to desecrate, on the other hand, the positive
externalities from communication of ideas may actually increase
rather than diminish.  There are  two substitution effects. 

First, Jones will substitute to some other activity if desecration is
closed off to him.  He has a choice of many ways to try to
communicate his ideas.  If he chooses desecration, he has reduced his
use of some other method, and if desecration is banned, he will shift
to that other method, which may help the public more even though
Jones   prefers  desecration.  To the extent that rational
discourse is  better  than desecration and  that  Jones shifts to
rational discourse, public debate will be improved.  
   
        Second, the public substitutes between different kinds of listening.
If desecration is banned, they will turn their attention elsewhere,
from Jones burning a flag to Doe making a speech.  The viewers may
not prefer the speech, but it may make them better citizens than
watching desecration.\footnote{An extreme form of this is illustrated
by the Phoenix sheriff's policy of allowing only a few TV shows, including  CNN, 
the weather
channel, and Newt Gingrich's series, ``Restoring American Civilization''  in his 
jail cells.  The undoubted effect of this policy was
to induce prisoners to subsitute from entertainment to political (or
at least meteorological) education. As one prisoner said, ``Who cares about 
Newt.   We want Baywatch.''  But Baywatch was closed off as an option.  Paul 
Giblin, Overcrowded jail gets tents, tough discipline, Agence France Presse,  
September 27, 1996.  } Desecration is a flashy trick
that allows Jones more exposure for his views, capturing attention
not by the quality of his ideas, but by the vigor with which he
expresses them.\footnote{ Bad speech driving out good
is one example of how allowing more speech may reduce the
informedness of the public. Another is   libel: speech
that is not only distracting, but false. In an attempt to minimize
the effect on political speech, the law criminalizes this when the
falsehood is about private individuals, but not when it is about
public individuals. An interesting problem to which the idea of
mental externalities could be applied is group libel, as in the
Illinois law against racial defamation upheld by the U.S. Supreme
Court in Beauharnais v. Illinois, 343 U.S. 260 (1952).}

     

      In addition, there may be positive externalities from the
symbols that desecration damages.  A common argument against flag
desecration is that the flag serves to focus patriotism and increase
public-spiritedness.  These are positive externalities, which accrue
not just to the venerators but to anyone in the country. Positive
externalities from private symbols are less clear, but they exist to
the extent that private organizations using symbols provide public
goods, and we  commonly  do think that religious and political organizations
do have positive externalities.  



  \bigskip
\noindent
  { \it D.  Objection Four: Desecration laws may be fine in theory,
but can be abused by biased prosecutors and judges.} 

  Any statute that provides penalties   can be abused if
there is cooperation between prosecutors and judges.  If there is a
law against   desecration, innocent people can be charged with
violating it and harassed with investigations or punished after the
state manufactures false evidence.  

  This is an argument to be considered when enacting any statute,  but  
desecration laws  are  less dangerous   than most.  If   officials wish to 
persecute
someone, they have a vast array of tools available, including
regulatory agency investigations for violating labor, environmental, and land-
use 
regulations,  the planting of evidentiary drugs or stolen goods, and prosecution
for vaguely defined  crimes such as  disturbing the peace, assault, and civil 
rights
violations which  allow immense prosecutorial
discretion.  The  marginal contribution of desecration laws is small.\footnote{  
My claim   could be refuted if  it could be shown that   desecration laws were 
frequently used for
harassment during the 80 years they were in force.   At least one case does 
exist.  In 1920, a Montana man
was intimidated by a hostile crowd into saying insulting things about
the American flag, and sentenced for a term of 10 to 20 years hard
labor.  He made a habeas corpus appeal to federal court, but
lost despite the court's sympathetic opinion.    Ex parte Starr, 263
F. 145 (D. Mont.1920). This is a horrifying case, but its rarity
indicates that  desecration statutes were not a favorite tool of
oppressive state governments. }

     

 


 %------------------------------------------------
   


\begin{center}
{  IX.   CONCLUDING REMARKS }
    \end{center}
 Daniel Farber says in  his article on public choice theory and the First 
Amendment that \footnote{ Daniel Farber, Free Speech without Romance,
{\it supra} footnote \ref{farber} at 555. }
   \begin{footnotesize}
 \begin{quotation}
     The crucial insight of public choice theory is that, because
information is a public good, it is likely to be undervalued by both
the market and the political system. n8 Individuals have an incentive
to "free ride" because they can enjoy the benefits of public goods
without helping to produce those goods. Consequently, neither market
demand nor political incentives fully capture the social value of
public goods such as information.  Our polity responds to this
undervaluation of information by providing special constitutional
protection for information-related activities.  This simple insight
explains a surprising amount of First Amendment doctrine.  
    \end {quotation}
    \end{footnotesize}
 
Desecration is a public bad parallel to information's public good.
Although the insights that desecration has negative externalities and
discourages symbol production cannot explain the First Amendment
doctrine of the 1990's, it can explain much of traditional
legislation.  When a symbol is desecrated, the desecrator obtains
benefits, while those who venerate the symbol incur costs.  The
economic approach   asks whether the benefits exceed the
costs.  I conclude that they usually do not. Desecration is often
motivated by a desire to reduce the utility of others, which is
usually inefficient.  Moreover, symbols, like other produced goods,
need property-rights protection. If desecration occurs, people have
less incentive to create and maintain symbols. Laws against
desecration are a good way to provide this protection, given the
likely failure of the Coase Theorem and the possibility of efficient
law-breaking.  
  

 

 The ideas of mental externalities and malice have application to
public policy beyond desecration.  In Section 5, I distinguished
offensive speech and behavior from desecration because they, unlike
symbols, do not involve produced goods.  Regulation of these sources
of negative externalities may still be efficient, however, and
deserves theoretical and empirical analysis from the economic point
of view.  We may find that many traditional laws and customs in
social regulation can be explained as efficient responses to market
failure. 

  
 


   The thrust of this article is not so much that desecration laws
are desirable as that they can be desirable and are fully as
legitimate as other regulations.  Every law hurts some people and
helps others, and desecration laws are no exception.  The political
arena, however, is the place to decide the net benefits, just as much
for desecration laws as for import tariffs or income tax rates, and
no citizens should be privileged to have their preferences trump
those of the rest of the electorate.  

 



%------------------------------------------------


\newpage   
 \begin{center}  
 {\bf REFERENCES}   
 \end{center}

 
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Weitzman, Martin (1974) ``Prices vs. Quantities,'' {\it Review of
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 %------------------------------------------------
   

  


 \end{document}
