Tag Archives: Law

It’s Called “Stock”

By Robin Hanson · October 24, 2011 10:49 am · Comments (32)

There’s something the federal government can do right now to help students caught by our terribly unjust higher-education financing system. … Under an income-contingent loan system, … students pay a fixed percentage of their income toward their loans. Payments are automatically deducted from their paychecks by the IRS. .. After an extended time period of 20 or 30 years, any remaining debt is forgiven. … The concept has been proven to work—Australia and Britain have used it for years— and … the Nobel Prize-winning economist Milton Friedman proposed the idea all the way back in 1955. …

Because student loans can almost never be discharged in bankruptcy, defaulted loans can haunt students for a lifetime. … That is insane. A similar-sounding federal program, called income-based repayment, is now on the books and is scheduled to become somewhat more generous starting in 2014. But the program is administratively complicated, involving income-eligibility caps and requiring students to reapply every year. (more)

Yup, it can be easier to fund investments via “loans” whose repayment amounts are set to be a proportion the venture’s net income. This is usually called “stock,” however, and proposals for private sector stock in individual future income are usually criticized as “slavery.” Especially if such stock claims on income are exempt from the usual bankruptcy evasions. But to most folks the same policy doesn’t seem like slavery if the government does it, just like we refuse to call conscription slavery.

Some argue that the government needs to make student loans because private loan markets fail in this case. But if they fail, it is mainly because we purposely hobble private investors by not allowing them the tools we are allow governments to ensure a return on their investment. This is how a lot of market failures go these days – they are real failures, but failures caused in large part by refusing to allow private actors all the tools we allow governments.

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Municipalize Drug Law

By Robin Hanson · October 8, 2011 10:00 am · Comments (27)

Supreme Court Justice Antonin Scalia isn’t a supporter of legalizing drugs. But he does believe that passing federal laws against them has done harm to the U.S. government. “It was a great mistake to put routine drug offenses into the federal courts,” he told the Senate Judiciary Committee Wednesday. … Chief Justice William Rehnquist complained as far back as 1989 that the war on drugs was overwhelming the federal judiciary. (more; HT John Fast)

There’s no way the US will legalize drugs anytime soon, but if drug laws were up to cities or counties, a few places would legalize them, and then everyone else could see if that works out ok. And then maybe more places would legalize. Those of you who saw The Wire may recall that its successful experiment in local drug legalization was shut down by threats from feds.

Back in ’09 I suggested a similar solution on medicine. There’s no way we’ll substantially privatize medicine anytime soon, but if cities were in charge then places that let spending get out of control would decline relative to others that controlled costs more effectively. Losers would learn from winners, to all our benefit.

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Moneyball Slavery

By Robin Hanson · September 26, 2011 1:00 am · Comments (52)

Moneyball is a good movie – it is fun to see an underdog economist start a revolution somewhere. (Though I’d be more inspired if I could see more clearly how the world is better because of this revolution. Are fans happier now? Players? Who?)

Along the way, the movie vividly depicts profit-driven buying and selling of people, over which the people involved have little say. If traded, players must immediately move across the country, with little compensation. On the screen, it sure looks a lot like slavery. But I can’t find a single mention of slavery in any of the Moneyball commentary. It seems viewers don’t even notice the issue — even viewers who don’t know or care much for baseball, and doubt baseball makes the world a better place.

This supports the theory that we see “slavery” as low status by definition – so by definition anyone high status can’t be a slave. You may recall that in May I wrote:

Bryan is probably right – we don’t call conscripts slaves, but do call comfort women slaves, because the first is high status and the second low. … On reflection, the main effect here is probably that many people take “slavery is bad” to be part of the definition of slavery. So therefore by definition anything good cannot be slavery. (more)

Here is some detail on trading of baseball players:

Players eligible for neither free agency nor salary arbitration are very seldom offered contracts for much more than the league minimum salary, as the player has no recourse to try to obtain a better salary elsewhere. For this reason, in the first three major league years of their careers (except for the “Super Two” exception above), it is standard practice for players to accept comparatively low salaries even when their performance is stellar. (more)

Added 10a: It is possible to be sold into slavery, or to sell oneself into slavery, so up front compensation is consistent with slavery. The key is that while you are a slave you have little control over what you do. The “degree” of slavery is set by the size of the penalty if you don’t follow orders. A death penalty makes for a strong slave, while merely being fired from your current job with many similar jobs available makes for a rather weak “slave.” In baseball, the penalty is pretty big — never again working in your chosen profession and life-calling, and having almost no prospect for anything remotely as fun or profitable. For an analogy, imagine that if you don’t do what your boss says, you must to move permanently to a poor country where you don’t know anyone and have no unusually valuable skills.  That is a strong enough commitment that I’d be tempted to call it “slavery.” Even though you still have a choice.

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We Ban Lies, To Officials

By Robin Hanson · September 23, 2011 10:00 pm · Comments (17)

When I posted before on not seeing why lies should be legal, many complained that laws against lies are impractical. But in fact, it has long been illegal to lie to government officials:

Did you know that it is a crime to tell a lie to the federal government? Even if your lie is oral and not under oath? Even if you have received no warnings of any kind? Even if you are not trying to cheat the government out of money? Even if the government is not actually misled by your falsehood? Well it is.

Title 18, United States Code, Section 1001 makes it a crime to: 1) knowingly and willfully; 2) make any materially false, fictitious or fraudulent statement or representation; 3) in any matter within the jurisdiction of the executive, legislative or judicial branch of the United States. Your lie does not even have to be made directly to an employee of the national government as long as it is “within the jurisdiction” of the ever expanding federal bureaucracy. Though the falsehood must be “material” this requirement is met if the statement has the “natural tendency to influence or [is] capable of influencing, the decision of the decisionmaking body to which it is addressed.” United States v. Gaudin , 515 U.S. 506, 510 (1995). (In other words, it is not necessary to show that your particular lie ever really influenced anyone.) Although you must know that your statement is false at the time you make it in order to be guilty of this crime, you do not have to know that lying to the government is a crime or even that the matter you are lying about is “within the jurisdiction” of a government agency. United States v. Yermian , 468 U.S. 63, 69 (1984). …

Some [Assistant United States Attorneys] specifically send agents out to conduct interviews knowing that a witness will either tell the truth and help build a case against someone else or lie and subject himself to a Section 1001 charge . … You will probably not be shown any of the pertinent documents before the interview begins. You could easily make factual mistakes during your interview. … Your mistakes can easily be interpreted as intentional falsehoods under Section 1001. …

Tell the agent that you have an attorney and that “my attorney will be in contact with you.” … If you are not in custody, your total silence, especially in the face of an accusation, can very possibly be used against you as an adoptive admission under the Federal Rules of Evidence. Your invocation of counsel, however, cannot be used against you at trial. (more)

This law may or may not be a good idea, but surely it is feasible.

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Let Us Give To Future

By Robin Hanson · September 19, 2011 6:30 pm · Comments (26)

18 months ago I wondered:

Franklin … [left] £1000 each to Philadelphia and Boston in his will to be invested for 200 years. … by 1990 the funds had grown to 2.3, 5M$. … Why has Franklin’s example inspired no copy-cats?

Thanks to Gwern, I now know of several copy-cats, mostly failures (quotes below). This confirms that many are willing to donate to distant future folks, but are prevented by law, largely from fears that donor funds will eventually dominate the economy. Alas, as these are the likely consequences of allowing donations to the distant future:

1) The fraction of world income saved would increase, relative to consuming not-donated resources immediately. This effect starts small but increases with time, until savings become a large fraction of world income, after which diminishing returns kicks in.

2) While funds are in saving mode, world consumption would be smaller at first, relative to immediately consuming donor resources, but then after a while it would be higher, though it might eventually fall to zero difference. When such funds switch from saving to paying out, or when thieves steal from them, the consumption of thieves and specified beneficiaries would rise.

3) As investment became a large fraction of world income, interest rates would fall, and the market would take a longer term view of the future consequences of current actions.

4) Some would change their behavior in order to qualify for benefits, according to the conditions specified by the original donors and the agents they authorize to later interpret them.

These changes seem good overall, especially if, as I estimate, the future will have many folks in need. Not only would donors actually get to do what they want with their resources, but policy-makers usually lament that savings rates are too low, and interest rates too high, leading us to neglect distant future consequences of our actions. The added consumption given to future folk is mostly stuff that would not exist if not for their donations, so it is hard to begrudge them giving to whom they wish. Our evolved instincts to resist domination makes less sense here, as “dominating” donors are long dead, influencing the world only via largely-altruistic explicit visible instructions.

Note that once physical, if not economic, immortality is feasible (i.e., paying enough lets you survive indefinitely), then original donors can stay around to manage their growing funds. Those promised quotes:

Continue reading "Let Us Give To Future" »

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Inbred Law Schools

By Robin Hanson · September 6, 2011 4:30 pm · Comments (12)

Top law schools are much more likely to employ graduates of top ranked law schools than elite law firms, and the difference exists at both the junior and senior levels. We find no evidence that the graduates of top 5 law schools outperform grads of less prestigious schools in publications or citations. In the absence of a profit motive, academic hiring appears more likely to indulge a preference for pedigree, and by implication, this may explain other scholarly prejudices in the academy. (more)

Relative to law firms, law schools care more about the prestige of a lawyer’s school. Which makes sense if law schools sell credentialed impressiveness more than an increased ability to do real legal work.

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Rah Self-Incrimination

By Robin Hanson · August 30, 2011 12:00 pm · Comments (18)

The more I think about law, the more I see arbitrary historical accidents enshrined into unquestioned dogma. Consider: we require people to answer questions by police or courts investigating crimes, without privacy excuses and without compensation for lost time. We apparently estimate the value of investigating crime to outweigh such costs. Except, we exempt criminal suspects from answering questions! (We also exempt folks statusfully related to suspects.) Yet if anyone should give up time and privacy to help investigate a crime, it is the suspects.

Here is one account of this history of this rule:

The right was created in reaction to the excesses of the Courts of Star Chamber and High Commission … 1487-1641. These courts utilized the inquisitorial method of truth-seeking … sufficient “proof” came from browbeating confessions out of the accused. These courts required the accused to answer any question put to him, without advance notice of his accusers, the charges against him, or the evidence amassed. … By the 18th century, English law provided that neither confessions coerced during the trial nor pretrial confessions obtained through torture could be used. …. The U.S. Supreme Court has expanded the Fifth Amendment to apply … to “any other proceeding, civil or criminal, formal or informal, where his answers might incriminate him in future criminal proceedings.” (more)

Somehow, many think this history shows that today a right not to self-incriminate keeps police from torturing confessions out of suspects. But to prevent torture, we should just have rules against torture. A further rule against self-incrimination can’t prevent torture for the simple reason that we let people waive their right not to self-incriminate. If police can force confessions via undetected torture, then police can also use undetected torture to force people to waive their right against self-incrimination!

The following video argues that if suspects must answer police questions, then police can find enough mistakes in what most anyone says to make them seem guilty:

The detective in this video also says that if he follows most anyone long enough he can catch them breaking a law. But if true these seem grounds for raising standards of proof at trial, and for disclosing at trial the amount of questioning or following done.

We don’t want to protect people from being framed by the police merely by making police work generically harder. For example, requiring police to always hop on one foot, or to constantly sing the national anthem, would surely make it harder for police to frame folks, but simply by making it harder for them to do anything! The rule against self-incrimination seems yet another arbitrary handicap, making police work harder overall, without discouraging bad policing more than good policing.

Rather than giving arbitrary handicaps, we’d do better to just reduce the size of the police force and budget, and to restrict police in ways that more directly distinguishes good from bad policing. Having suspects answer police questions does not so distinguish, being just as much a part of good as bad policing.

For more academic critiques, see here, here and here.

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Blackmail Enforces Law

By Robin Hanson · August 12, 2011 9:00 am · Comments (16)

A year ago, I pushed private bounty-based law enforcement:

For each type of crime, we’d set a bounty amount to be paid to anyone who successfully convinced a court that a particular in-custody person had committed that sort of crime. We’d have to decide what investigative powers to grant bounty hunters, what regulations to impose on them, and what plea-bargains to allow. We’d also have to set rules on when to detain suspects, and how to prevent double jeopardy. (Options below.) We might want especially solid anti-trust regulations.

Since I’ve talked about blackmail lately, I should mention that legalizing blackmail would create an especially cheap and flexible system of private law enforcement. If an associate of a criminal discovered evidence of their crime, this associate could via blackmail extract close to the cash equivalent of the punishment to the criminal. While this might modestly lower the level of punishment of a caught criminal, it should greatly increase the probability of punishment, leading to more expected punishment of crime. And relative to public police, blackmailers should have much lower costs to investigate crime and implement punishment.

The main academic complaints (e.g., here, here) against blackmail as private enforcement of law are complaints against the very idea of private enforcement of law. It would be just terrible, they say, if criminals got punished without everyone being officially informed. Law enforcers in general face temptations to obtain evidence illegally, and to treat the rich and poor differently, and they face possible violent retaliation from criminals – and we all just know, they say, that public police better deal with these problems. Some also fear that adding private enforcement onto an optimal public enforcement would create too much deterrence, not realizing that one could compensate by reducing public penalties and enforcement.

One unmentioned possible cost of blackmail is a weakening of the bonds that tie people together. You’ll be less open to people who could blackmail you. This is a cost of all law enforcement – you will, for example, be less open with someone who could testify against you in court. For this reason (supposedly), the law today privileges certain relationships, such as spouses, doctors, clergy, reporters, and researchers, against having to testify in court. Reasoning similarly, one could prohibit blackmail within specific relationships.

But as such privileges make it harder to protect the rest of us from their law breaking, it seems to me that they should have to pay us to gain this privilege, unless it is clear that their relation produces more than enough compensating benefits to us. One way to pay would be by sharing some responsibility for their crimes.

The distortion that I’d worry about most is that blackmail as private law enforcement creates an added incentive to associate with potential criminals and ne’er-do-wells, in order to later blackmail them. The cost of this distortion probably doesn’t outweigh the benefits of much cheaper enforcement, however.

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Defenses of Hypocrisy

By Robin Hanson · August 10, 2011 12:15 pm · Comments (6)

Excerpt from Guarding Life’s Dark Secrets:

I describe, chiefly for the nineteenth century, a complicated network of doctrines that seemed to be designed to protect reputation and that operated chiefly for the benefit of respectable men and women. … I call this network of doctrines the Victorian compromise. … Some … legal institutions … act to protect the reputation of people who are not innocent —people who are the victims, not of lies, but of the bitter truth. …

Take, for example, the crime of blackmail. … Who is the victim here? It is a man who has committed a crime or who has done some scandalous or awful act, one that would blacken his reputation if the news got out. Yet the law defines him as a victim. …

Take the old law about breach of promise. If a man promises to marry a woman and then backs out, she can sue him for damages. In many cases her real complaint is that she had sexual intercourse on the strength of his promise. … Here too the woman, like the blackmail “victim,” is hardly innocent. She violated nineteenth-century norms. She was guilty of fornication, which in many states was actually a crime. But despite her sins and transgressions, the law gave her this remedy. …

The living law of prostitution is yet another example … Prostitutes themselves were mostly social pariahs. … Yet, curiously enough, prostitution itself for much of our history was not actually illegal. Prostitutes were jailed as vagrants, and brothel keepers could be prosecuted, but buying and selling sex itself was not clearly labeled a crime. What this meant is that customers of prostitutes were immune from prosecution. … A screen of silence, and even some aspects of the formal law, shielded the men and protected their privacy and their reputations. …

The Victorian compromise … put enormous emphasis on surface behavior. The official rules remained in place, sometimes expressed in quite general or absolute terms; meanwhile, the law in action was quite different. There is a kind of double standard. No real attempt is made to enforce the official rules with vigor. They remain slogans or a kind of facade; or they are enforced selectively, according to norms and rules that are never made explicit. …

The Victorian compromise should not be dismissed as mere hypocrisy. The living law had a curious double standard, but this had a purpose, at least implicitly. … The laws relating to prostitution were like laws against speeding today. Nobody really thinks speed limits are totally effective. Everybody violates them from time to time. Enforcement is a sometime thing. But the laws, at existing levels of enforcement, are not useless or hypocritical. Arguably, they keep the amount of speeding under control. If you took off the lid entirely, who knows how fast and how recklessly some drivers might drive on the roads. (more; HT Peter Twieg)

Hypocrisy is rarely “mere.” Yes hypocritical acts are usually integrated into a complex equilibrium of mutually adapted behaviors, so that changing any one act alone tends to make things worse. But that hardly justifies hypocrisy – other matching changes are usually possible. For example, I’m told that in Australia they enforce speed limit laws pretty strictly. Speed limits are higher, and it all works out. By comparison, hypocritical speed limits in the U.S. mainly give police more discretion in whom to harass. This might be on net a good thing, but that sure isn’t obvious.

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Why I’m Not Libertarian

By Robin Hanson · August 9, 2011 11:40 am · Comments (68)

Over lunch yesterday, Bryan Caplan explained to me some finer points of standard libertarian legal philosophy. Here is my current understanding (errors mine of course):

Libertarians believe: Each human is endowed with property in his or her own body, and can obtain property in other physical objects, including land, via certain “making” processes. People can trade such property rights via explicit contracts. It is not morally permitted to violate property rights as determined by current contracts, except to defend or retaliate against other violations. Contract violations can happen via “fraud” (= lies) that create deviations between a contract’s words and deeds. (If a contract specifies damages for breach, it is not immoral to breach if you pay the specified damages.) There is more to morality, and within these constraints people should use their property to achieve such other morality.

I’m an economist who appreciates the economic analysis of law. I know how very useful property and contract can be in achieving economic efficiency. But the most efficient forms of property and contract are not obviously only these libertarian ones. For example, many sorts of non-physical property are probably efficient, beyond those that can easily be created via local contracts. It is probably sometimes efficient to initially allocate property in other ways than via the usual “making.” It is probably efficient to endow parents with partial ownership of their children. And it is probably efficient to enforce non-explicit contracts, such as among very large groups.

Yes most libertarians bite these bullets and say the libertarian choices are the moral ones, even if inefficient. But I just don’t find very compelling the morality of this urge to make most everyone worse off on average in order to follow certain traditional rules.

I especially get stuck on the claim that law should limit its attention to “physical,” not info, property and harms. (That’s in quotes because info is completely physical; in fact, there may be nothing physical that isn’t info.)  That is, physical rights are said to be pre-existing, but any info rights must be explicitly constructed by contract. Yet people can hurt each other “non-physically” via info in so many ways.

Many libertarians seem to feel they have discharged most of their info moral obligations if there is a reasonable interpretation of their words which has them telling no clear lies. As someone who spend most of my early economist years specializing in the economics of info, this seems spectacularly inadequate. I wonder if, as kids, libertarians tended to be witty weaklings – losing most fair physical fights, but winning most fair verbal sparring. Perhaps such kids prefer everyone to embrace the slogan “Sticks and stones may break my bones but words will never hurt me,” because then the people they hurt via words can’t complain, because they can’t even admit they were hurt.

Now as a matter of practice, libertarians and I tend to agree in many policy disputes. Their support of property and contract often promotes economically efficient outcomes. And for that, I salute them. I even say sometimes that I “lean libertarian.” But I cannot embrace the above strict concept of libertarian morality.

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