Tag Archives: Law

Reparations As Law

There has been a lot of talk lately about race-based reparations, initiated by this Atlantic article. (See also here, here, here.) I’m not a lawyer, but I do teach Graduate Law & Econ, and the discussion I’ve seen on reparations has ignored key legal issues. So let me raise some of those issues here.

The argument for reparations is based on the very solid well-accepted principle that when A harms B, A should compensate B, both to help B and to discourage future A’s from acting similarly. But over the centuries we’ve collected many other legal principles which limit the scope of application of this basic legal principle.

For example, we usually require that a specific person B identify a specific person A, and offer clear evidence of a particular clear harm that B suffered, relative to some other state that B had a right to reasonably expect. We also require a clear causal path between A’s acts and B’s harm, a path that A could have reasonably foreseen. We usually require public notice about legal prohibitions, we forbid double jeopardy and retroactive rules, and we impose statutes of limitations to limit the delay between act and claim.

Each of these limitations no doubt prevents some Bs from getting compensation from some As, and thus fails to discourage related As from causing related harms. But these limitations are usually seen as net gains because they prevent fake-Bs from using the legal system to extract gains from not-actually-As, which would reduce the perceived legitimacy of the whole legal system due to a perception that such fake cases were common.

Now it is actually not obvious to me that all these limitations on law are net gains. I can see the arguments for allowing hearsay evidence, emotional harms, double jeopardy, retroactive rules, no statutes of limitation, and taking compensation from non-A folks that As care about. That is, I can imagine situations where each of these limitation violations might usefully help to discourage As from hurting Bs.

Our limitations on law have so far mostly prevented people from using the legal process to obtain race-based reparations. After all, cash reparations for US slavery would react to a broad varied pattern of centuries-old harm by transferring from folks distantly and varyingly related to As to others distantly and varyingly related to Bs. Such transfers could only very crudely track the actual pattern of cause and harm. So new policies of race-based reparations would in effect embody many new exceptions to our usual limitations on legal suits. And they would create precedents for future exceptions, making it easier to obtain further reparations based on race, gender, and many other factors.

So regarding race-based reparations, what I most want to hear is a general principled discussion about the pluses and minuses of our usual limitations on law. Yes, we may have imposed overly strict limits. And yes, the legitimacy of the legal system can also be reduced when everyone knows of big harms the law didn’t address. But still, we need to identify principles by which we could make exceptions to the usual limitations.

Yes, one simple principle might be to give big compensation whenever the chattering classes nod sagely enough and say loudly enough that yes it is the right thing to do. But it would be nice to hear concrete arguments on why this approach tends to avoid the usual problems that the limitations on law are said to be there to avoid. Might it be better to create a whole new system of reparation courts that operate according to new legal principles?

Of course in signaling terms, one’s willingness to throw out all the usual legal precautions to endorse race-based reparations can signal exceptional devotion to the race cause. But is this really a path we want to go down, competing to outdo each other in our eagerness to toss out our usual legal protections in order to signal our devotion to various causes?

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The Up Side Of Down

In her new book, The Up Side of Down: Why Failing Well Is the Key to Success, Megan McArdle takes some time to discuss forager vs. farmer attitudes toward risk.

Forager food sources tended to be more risky and variable, while farmer food sources are more reliable. So foragers emphasized food sharing more, and a tolerate attitude toward failure to find food. In contrast, farmers shared food less and held individuals responsible more for getting their food. We’ve even seen the same people switch from one attitude to the other as they switched from foraging to farming. Today some people and places tend more toward farmer values of strict personal responsibility, while other people and places tend more toward forager forgiveness.

McArdle’s book is interesting throughout. For example, she talks about how felons on parole are dealt with much better via frequent reliable small punishments, relative to infrequent random big punishments. But when it comes to bankruptcy law, a situation where the law can’t help but wait a long time to respond to an accumulation of small failures, McArdle favors forager forgiveness. She points out that this tends to encourage folks who start new businesses, which encourages more innovation. And this does indeed seem to be a good thing.

Folks who start new businesses are pretty rare, however, and it is less obvious to me that more leniency is good overall. It is not obvious that ordinary people today face more risk than did most farmers during the farming era. The US apparently has the most lenient bankruptcy law in the world, and that is indeed some evidence for its value. However, it seems to me more likely that US forager forgiveness was caused by US wealth than vice versa. McArdle says the US got lenient bankruptcy in the late 1800s via lobbying by senators representing western farmers in debt to eastern banks. And it is even harder to see how farming in the US west then was more risky than has been farming throughout the whole farming era.

Most likely what changed was the wealth of US farmers, and their new uppity attitudes toward rich elites. This fits with debt-forgiveness being a common liberal theme, which fits with liberal attitudes being more forager-like, and becoming more common as rising wealth cut the fear that made farmers. If lenient bankrupts is actually better for growth in our world, this would be another example of Caplan’s idea trap, where rising wealth happens to create better attitudes toward good policy.

Overall I found it very hard to disagree with anything that McArdle said in her book. If you know me, that is quite some praise. :)

Added 2May: The fact that most farmer cultures were clannish may be part of an explanation here. The strict farmer morality is mostly about how to deal with outsiders, distant from your immediate family. The clan is punished severely, but it is usually more forgiving internally. If farmer clans had lower risk than do isolated families today, that could be a reason to have more forgiving bankruptcy law today.

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Let Re-Discovery Evade Patents

In this post I’m going to explain why patents can be a good idea, why they often go wrong today, and a way to fix that problem. And I’ll do that all in the context of a situation you should understand well: finding a shorter route to drive from home to work. (This post is ~1600 words, and so longer than usual.)

Imagine that you usually take a particular route from home to work, and some firm offers to find you a better route. You tell them your current route, and they tell you that they have found a different route that will save you thirty seconds a day, which over a year adds up to eight hours. You can inspect their route to verify their claim, but only if you agree that you can’t use that route (or anything close) unless you pay them a mutually agreeable fee. (Assume they can enforce that, by seeing your car’s driving path records. And assume you can verify their claim somehow.) You agree, inspect and verify, and then agree to pay them one hundred dollars, which is well below your value of saving eight hours of driving, and above their cost of finding the route.

This example contains an info property right: once you agree not to use their route unless you pay for it, then they own a right to your use of that route. Since the route is info, what they own is info. The prospect of owning that info right gives the firm an incentive to work to find that route. And because they must find a mutually agreeable price, their incentive to work is neither too much nor too little. An agreeable price must lie between their cost of finding the route and your added value from using it.

Now imagine that you are one of hundreds of drivers who go from the same initial home area to the same final work destination. Now this route-finding firm wants to sell a better route to all of you. But there is a problem. Once this firm sells the route to a few of of you, the others may learn of that route from these few buyers, either by being told or by following their cars. In this case the total price the firm could get from all the drivers might be much less than the sum of driver values for using the better route. Thus the firm’s incentive to work to find a better route could be too low. That is, this group of drivers could be better off it they joined together to paid the firm more to find a better route. But joining is too hard, so it doesn’t happen. Continue reading "Let Re-Discovery Evade Patents" »

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Why Is Law Fertile For Econ?

I’m about to teach graduate law & econ for the first time, after teaching the undergrad version five times. Going over my new text (Shavell) I’m struck by a difference between law & econ and other areas of applied econ, like labor econ, enviro econ, defense econ, managerial econ, public choice, econ of the family, etc. Relative to these other areas, it seems to me law & econ has more non-obvious insights that can be explained with very little econ machinery, usually in just a paragraph or two of text. Yes most areas have some of these, but in law they just seems to go on and on. Why is law so fertile for economics this way?

You might say that law & econ started recently, but in many other areas we learned most of what we know after law & econ work started. You might say that law & econ has participation by law specialists and it helps to have simple arguments to be able to explain insights to them. But most of these other areas also have specialists who appreciate simple arguments.

You might say that law typically deals with interactions in pairs, which are intrinsically simpler than interactions between many parties. But when supply and demand applies it is also a pretty simple interaction, and many other areas like family econ also deal with pairs a lot.

Another explanation is that for most of us the usual heavy moral coloring of law blocks our simple understanding of consequential arguments in law. In other areas of econ application that lack such mental blocks, most people would already understand the simple consequences of simple actions, and so economics couldn’t get credit for those as insights. But in law economics can get credit for explaining simple consequences that many folks would have already understood in other areas without such mental blocks.

This last explanation is my tentative favorite, though I’m open to other suggestions. It says law is an area where most folks are especially reluctant to let themselves appreciate simple consequences, most likely because they prefer to hold onto standard far ideals about law, and try not to see consequences that might conflict with such ideals. For example, seeing contract breach as immoral promise breaking makes it hard to see how good breaches happen when damages for contract violation equal the value the other party places on non-breach.

Of course this explanation also suggests it will be particularly hard to get the actual law to change much in response to good economic arguments about law. Which is roughly what we see.

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`Best’ Is About `Us’

Why don’t we express and follow clear principles on what sort of inequality is how bad? Last week I suggested that we want the flexibility to use inequality as an excuse to grab resources when grabbing is easy, but don’t want to obligate ourselves to grab when grabbing is hard.

It seems we prefer similar flexibility on who are the “best” students to admit to elite colleges. Not only do inside views of the admission process seem to show careful efforts to avoid clarity on criteria, ordinary people seem to support such flexibility:

Half [of whites surveyed] were simply asked to assign the importance they thought various criteria should have in the admissions system of the University of California. The other half received a different prompt, one that noted that Asian Americans make up more than twice as many undergraduates proportionally in the UC system as they do in the population of the state. When informed of that fact, the white adults favor a reduced role for grade and test scores in admissions—apparently based on high achievement levels by Asian-American applicants. (more)

Matt Yglesias agrees:

This is further evidence that there’s no stable underlying concept of “meritocracy” undergirding the system. But rather than dedicating the most resources to the “best” students and then fighting over who’s the best, we should be allocating resources to the people who are mostly likely to benefit from additional instructional resources.

But this seems an unlikely strategy for an elite coalition to use to entrench itself. If we were willing to admit the students who would benefit most by objective criteria like income or career success, we could use prediction markets. The complete lack of interest in this suggests that isn’t really the agenda.

Much of law is like this, complex and ambiguous enough to let judges usually draw their desired conclusions. People often say the law needs this flexibility to adapt to complex local conditions. I’m skeptical.

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Whistleblowers Think Far

Rita Handrich:

The “highly conscientious” … are more likely to work hard to achieve their goals [both personally and on behalf of their organization] and often have organizational abilities that help them succeed. In other words, these are the people actually doing the work to help the organization survive and thrive. Why, you might wonder, would those “organizational darlings” blow the whistle on negative practices or leadership failures in a group they so vigorously support? …

Conscientiousness is much more related to performance and our pursuit of goals than it is to conformity. And sometimes the conscientiousness is a commitment to principles that the hard worker can feel were betrayed by the conduct about which they blow the whistle. … The findings from two separate studies support [this]:

Highly conscientious group members with high-level construal (e.g., abstract or “far”) were more willing to articulate (in Study 1) and to express (in Study 2) criticism of the group, even when others did not.

In other words, they were more likely to not only formulate critical positions but more willing to also express them even when they knew other group members would not want to hear it.

(Those studies are here.) Interestingly, Rita mainly applies this to getting cross-examined witnesses to say what she wants them to say, without discussing if that is actually good for the legal system or world. Seems Rita is firmly in near mode here.

This seems another example of far mode being designed more for making good social impressions than good decisions. We might want other people to be whistle-blowers, especially people in other groups, and admire them abstractly, and so people want to give the impression that they’d be whistleblowers too should the occasion arise, at least to people outside their organization. But most people who actually become whistle-blowers suffer substantially because of it. People who actually do it probably suffer from the smart sincere syndrome, not realizing how much the rest of us are just hypocritically pretending to support them.

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Thought Crime Hypocrisy

Philip Tetlock’s new paper on political hypocrisy re thought crimes:

The ability to read minds raises the specter of punishment of thought crimes and preventive incarceration of those who harbor dangerous thoughts. … Our participants were highly educated managers participating in an executive education program who had extensive experience inside large business organizations and held diverse political views. … We asked participants to suppose that scientists had created technologies that can reveal attitudes that people are not aware of possessing but that may influence their actions nonetheless.

In the control condition, the core applications of these technologies (described as a mix of brain-scan technology and the IAT’s reaction-time technology) were left unspecified. In the two treatment conditions, these technologies were to be used … to screen employees for evidence of either unconscious racism (UR) against African Americans or unconscious anti-Americanism (UAA). … Liberals were consistently more open to the technology, and to punishing organizations that rejected its use, when the technology was aimed at detecting UR among company managers; conservatives were consistently more open to the technology, and to punishing organizations that rejected its use, when the technology was aimed at detecting UAA among American Muslims.

Virtually no one was ready to abandon that [harm] principle and endorse punishing individuals for unconscious attitudes per se. … When directly asked, few respondents saw it as defensible to endorse the technology for one type of application but not for the other—even though there were strong signs from our experiment that differential ideological groups would do just that when not directly confronted with this potential hypocrisy. …

Liberal participants were [more] reluctant to raise concerns about researcher bias as a basis for opposition, a reluctance consistent [the] finding that citizens tend to believe that scientists hold liberal rather than conservative political views. …

This experiment confronted the more extreme participants with a choice between defending a double standard (explaining why one application is more acceptable) and acknowledging that they may have erred initially (reconsidering their support for the ideologically agreeable technology). … Those with more extreme views were more disposed to … backtrack from their initial position. (more; ungated)

So if we oppose thought crime in general, but support it when it serves our partisan purposes, that probably means that we will have it in the long run. There will be thought crime.

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What Is Private?

Where do we draw the line between public and private behavior? Consider:

The U.S. Court of Appeals for the 9th Circuit issued an opinion last month … that people seeking roommates are shielded from fair-housing laws by the First Amendment’s protection of free association. … The Fair Housing Act prohibits denying housing to someone based on a protected characteristic, such as race or religion. It also prohibits making or publishing discriminatory advertisements for housing. …

Two years ago I undertook a study of 10,000 housing ads posted to Craigslist … 5,000 ads for rentals and 5,000 ads for roommates. … The vast majority of discriminatory ads were taken out by people seeking roommates — that is, by ordinary individuals looking for someone to help share the rent. … Most of the ads expressing a racial, religious or ethnic preference were placed by members of minority groups who were seeking roommates like themselves. …. These people were in violation of the Fair Housing Act and subject to civil prosecution.

Just as it would be abhorrent for the government to prevent people of different races, ethnicities or religions from living together, it would be equally offensive to block people of a shared race, ethnicity or religion from living together. … If the 9th Circuit had ruled differently, the potential for backlash would have been enormous and support for a crucial civil rights law would have been undermined. (more)

Surely the main reason a landlord might care about your race or ethnicity is because your neighbors might care. If your neighbors are willing to pay more to live next to people with a race they like, then your landlord might try to accommodate their preferences. So assuming you’ll have your own private room in any case, what is the difference between apartment-mate and housing discrimination? It is mainly the difference between who you’ll share a bathroom, kitchen, couch, and big TV, and who you’ll share a garage, elevator, laundry room, playground, pool, or exercise room — and of course the bathrooms, kitchens, couches, and big TVs in your lobby and community center. Is this really what we think is the difference between acceptable and unacceptable race discrimination?

I suspect the real difference is that we are willing to blame and punish landlords, who are seen as rich and dominating, but not ordinary people. If we saw Craigslist as similarly rich and dominating, we might blame and punish them as well.

What if a group took an entire floor of an apartment building, declared it all to be a single apartment, and sought the required dozens of “roommates” from a given race? If they did it without the help of a rich firm, they’d probably get away with it. But if a rich firm helped, it would be outrageous racism!

Added 7a: Imagine Romney was revealed to have once rejected an apartment because blacks lived in the neighboring apartment. And imagine Obama was revealed to have rejected a roommate in college because he was white. How different would the resulting scandals be?

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Police Dominate

Human language let foragers express and enforce social norms. Their most important norm was to resist domination – leaders should only advise, and not give orders. Farmers tolerated violations, at least by socially distant upper classes. But as industry’s wealth weakened the fear that kept farmers in line, we turned to democracy to reaffirm our anti-domination norm.

Except we are hypocrites – we have always accepted domination, and pretended otherwise. This can be seen in how we relate to city police. Citizens pretend they control police, by electing mayors etc., and using laws to constrain their behavior. But citizens don’t notice or care that police are put mostly in charge of measuring their own performance, and of policing their own cheating. The predictable result is that police cheat and mis-measure their performance, and stand free to punish those who challenge them.

Pretty much no one runs for mayor or city council on a platform of having independent organizations measure or police the police. Which tells you that few expect voters to support such changes. Which tells you that most folks know they are being dominated by police who can cheat with impunity, and (as voters) prefer that situation to imagined alternatives.

If you doubt me, just review the latest NYPD news: Continue reading "Police Dominate" »

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Why Allow Lies?

Jonathan Turley wants to keep lies legal:

Alvarez … is a liar. … After his election to a water board in California, he introduced himself at a public meeting as “a retired Marine of 25 years,” a repeatedly wounded warrior and a Medal of Honor recipient. … He was found out, publicly ridiculed and hounded out of office. … [He is] one of the first people prosecuted under the Stolen Valor Act, … [which] makes it a crime to falsely claim “to have been awarded any decoration or medal authorized by Congress for the Armed Forces of the United States.” …

The problem with the law they may have broken is not just that it is unnecessary, but that it can be dangerous to criminalize lies. After all, with the power to punish a lie comes the power to define the truth — a risky occupation for any government. … Now the [Alvarez] case will go to the Supreme Court, where the Obama administration will argue that the First Amendment does not protect lies as it does true statements. …

Chief Judge Alex Kozinski balked at the notion that lies can be crimes in a society saturated by untruths. “Saints,” he noted, “may always tell the truth, but for mortals living means lying.” Kozinski is supported by a host of studies on the human propensity, even necessity, to lie. … The dividing line in the law has always been fraud or related crimes — using lies to gain money or benefits. … But the Stolen Valor Act was designed to address cases in which the individual is not deriving financial gain or other benefits; rather, the law punishes the boast or the brag itself. …

If it is harmful to lie about soldiers, what about lying about being a former police officer or a former firefighter? How about lying about politicians or religion or terrorism? Once we criminalize lies, someone must determine what is a lie and what is harmless embellishment. … The First Amendment protects … the right of everyone to speak, even when they may be called liars. As for our heroes, they are no more diminished by pathetic pretenders than top singers are diminished by bad karoke. We know the real thing when we see it. (more)

Turley’s arguments are surprisingly weak. We needn’t let government set the truth on all topics to outlaw very clear cases of lying. Lies being common in social talk doesn’t require us to legalize all lies. We surely do not all instantly “know they real thing when we see it.” Even if the harm from lies isn’t monetary, it is clearly real harm. And we already outlaw non-monetary lies to the government.

This seems to me more about feeling that a line has been crossed, such as with a sense of appropriate social spheres. In sex and friendship, we seem to prefer that those who are not socially savvy or well-connected suffer from lies by those who are more clever and connected, at least relative to letting law get involved. It is mainly when we see dominance, via money, business, or government, that we want to outlaw lies.

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