Backwardness of law

Outside the Law

This demonstrates for me everything about economists that makes them superior to lawyers. The myopia of the lawyer and the breadth of vision of the economist.

Yes, it is possible for institutions not to follow the law. It is possible for laws to be written to be broken. You might think it would take a poet to realize that; or perhaps a lawyer, that great cross-examiner of witnesses, before an economist. What do technocrats know about the complexities of behavior, about dissembling and treachery?

But in the event it is the economists who present as ten times more humanist than the lawyers and shrewder judges of the soul. And it is the lawyers who present as robotic and shallow in their judgements. But how can this not be the case? The lawyers are invested in the power of the text. And not even a metaphorical text, like priests, but a literal text! They are invested in literalism, shallowness, and superficiality. Without it they have no claim to value and no professional respect.

So they will look at you and say, without the slightest irony, that if you read the text carefully the Fed had the power to bail out Lehman Brothers. As if, as if, as if what the text says has any first order relevance in determining what happens in the world.  As between the devotees of the written rules and the devotees of the unwritten rules, I choose the latter.


Adverse Selection in Insurance

Saying that adverse selection in insurance is a problem to be eliminated because it frustrates marginal cost pricing is like saying that R&D fixed costs leading to innovation and product improvement are a problem to be eliminated because they frustrate marginal cost pricing.



Don’t disdain those passed,
Thou no diff’rence from them hast;
Don’t admire the past.

Meta World

A Philosophy of War

Ask yourself: if all the military power in the world were controlled by a just ruler, how would it be deployed?

Support deployments of force whenever they coincide with the virtuous plan and oppose deployments of force whenever they fail to coincide with the virtuous plan.

So, for example, if a just ruler in charge of the world’s military power, including the U.S. army, would send in the U.S. army to save Syria, then you must advocate the sending in of the U.S. army to save Syria.

Objection: but you can’t trust the Americans to do the right thing once they’re involved!  Reply: according to my rule, you should advocate the sending in of the Americans to do the right thing.  If you don’t think they’ll do the right thing (in the sense that they’ll do what a virtuous ruler would do), then you shouldn’t advocate sending them in.  My rule is fine with that.

The rule is intended as a refutation of blanket rejectionists of all American military involvement in anything under all circumstances.  Suppose that you think that the U.S. government never ever means well toward anyone.  But suppose that it looks like, due to incompetence or luck, the U.S. government is about to engage in a military intervention that is precisely what justice calls for.  The fact that the U.S. government is behind it shouldn’t matter a lick.  You should support the intervention.  But only, of course, so long as it fully complies with the virtuous plan.

This might be an argument for the American intervention in Libya in 2011.

You might, of course, conclude that a just ruler would never use military force.  But once you pause to consider how the angels of justice would bear arms, it starts to become a lot easier to imagine just conflicts.  It seems more likely to me that you might conclude that there are plenty of just deployments of force, but no real military can ever be trusted to execute any of them, inadvertently or not.

Now, the rise of the war machines might make a difference to you, however, because with time one assumes that it will be possible to exert the finest control over their behavior.

Still, whoever is running them will have to want the right behaviors.


Poetry and Unfamiliar Language

Poetry is neither word painting nor the use of unfamiliar locutions for their own sake.  It is the charming and precise conveyance of ideas.  That poetry may use words in unfamiliar ways happens because poetry sometimes deals in ideas that have never been put to words before.


Poetry and Science

Poetry is the art of recognizing peculiar structures in nature.  You don’t understand the structure, you just recognize it.  Some people spy out the four leaf clover; you, poet, spy out the four leaf relationship, the four leaf justification.

It is very difficult to do this.  Years later a scientist may come to describe and understand the relationship; when this happens, it is appropriate for the scientist to quote the poem at the beginning of her article on the subject.


In Paradise Regained, Milton writes:

Upon my head, long the decrees of Heav’n
Delay, for longest time to him is short

I : 55-56.

He’s captured the notion of the immeasurability of time.  When Kant comes to describe this in Critique of Pure Reason, it would be appropriate for him to quote those lines.


The Moral Rate of Legal-Technical Substitution

There are many things that should be illegal that the law need not proscribe because humanity lacks the power to do the thing.  As technology advances and humanity acquires the power to do more things, this set of things that need not be proscribed shrinks.  The law must be at the frontier between what can be done and what cannot, substituting rule whenever another bad thing comes up into the light of science.

In general, there is this rule: As technology advances, the importance of law increases.  As our power increases, our discipline must increase.  Eventually, there will be no natural laws left to bind us, only human laws.  Laws; but no laws of physics.

Legal education

Disobedience in the Law School Curriculum

The study of disobedience should be a core part of the law school curriculum.  Instead, law schools pretend that all rules get followed, or, at least, that all rules should be followed.  So teaching the rules is for them enough.  This is ridiculous.  Not only is it fact that many rules don’t get followed by courts and other government administrators, or get selectively or imperfectly enforced, it is also the case that this can be a good thing.  Congress cannot see the future or adjudicate in advance every case to which its rules will be applied.  So implementing its intent often involves disobeying the letter of its laws.  A good lawyer must be able to predict what rules will get enforced and what rules will not get enforced and know how to argue for and against enforcement.  Indeed, a great deal of legal practice involves no more than this.  Yet a lawyer receives zero training for this in today’s law schools.

Is teaching lawyers disobedience dangerous or immoral because they may use it to pervert justice rather than achieve it?  The fact that the law is non self executing and imperfectly enforced means that lawyers have much discretion in their behavior.  And where there is discretion there is ambit for ethics and morality.  But if law schools have no course directed to disobedience they certainly do not teach lawyers how to exercise their discretion in a moral fashion.  If we pretend that all lawyers should follow the law when we know that they do not and sometimes should not, then we miss the opportunity to teach them when it is morally right for them to do so and when it is morally wrong.  If you deny the reality of disobedience, then there is no hope of addressing it.

What a lawyer needs is a course on cultural attitudes toward disobedience.  When does it get noticed, when not?  What does it do to the social and political standing of the client?  When is it required as a moral matter and when not?  When is it advisable as a business matter and when not?  How do you identify rules that are likely to be enforced and when not?

I recall reading somewhere that planners call dirt paths that appear in parks “desire lines” because they show you where park users wish to have paved roads.  We might sometimes think of areas of disobedience as legal desire lines, reflecting areas in which the public desires non enforcement.  And often gets it, if, for example, the sheer volume of disobedience overwhelms enforcers.   A good course in disobedience  might teach lawyers how to identify legal desire lines to which enforcers have acquiesced and help guide clients through them.  Assuming, of course, as a moral or policy matter, we think that the public’s desire should be respected.


The Rhythm of Lovelace

I don’t like this scansion of Lovelace’s To Althea, From Prison.  The lines all have four stressed syllables, I think, rather than alternating four and three.  At least, they sound better when I read them that way.

When LOVE | with UN | con FIN | ed WINGS
Hov ERS | with IN | my GATES

doesn’t work.  It’s got to be

When LOVE | with UN | con FIN | ed WINGS
HOVers | with IN | MY GATES

. Maybe the stress in 17th century English was on the ERS in Hovers.  But today that just sounds ridiculous.  And anyway, moving from tetrameter to trimeter sounds terrible and must have four hundred years ago.  The lines read so much better with four downbeats each.  And it’s not hard to find four downbeats in the line so long as you stop worrying about retaining the iambs and embrace spondees.

The same is true for the rest of the poem.

We recast this reading of the next two lines,

And MY | div INE | Al THE | a BRINGS
To WHIS | per AT | the GRATES

, to get

And MY | div INE | Al THE | a BRINGS

. The double downbeat at the end echoes the double downbeat at the end of the first two lines.

The next two lines,

When I | lie TANG | led IN | her HAIR
And FET | tered TO | her EYE

, become:

When I | lie TANG | led IN | her HAIR
And FET | tered TO | HER EYE

And the last,

The BIRDS | that WAN | ton IN | the AIR
Know NO | such LIB | er TY

, becomes:

The BIRDS | that WAN | ton IN | the AIR
KNOW NO | such LIB | er TY.

I find this scansion very satisfying.  The alternating of regular and irregular meter while preserving the number of downbeats puts the meter slightly off balance without making it messy, saving us from the monotony of consistent meter without losing the music that meter lends to the poem.  Photographers are suppose to frame a subject off center in the picture to drag the eye across the image and avoid cancelling its power through symmetry.  This scansion does that.

It works even better in To Lucasta, Going to the Warres:

Tell me | NOT,  SWEET, | I AM | un KIND,
THAT FROM | the NUN | ne RY
Of THY | chaste BREAST | and QUI | et MIND
TO WAR | and ARMS | I FLY.

TRUE, a | new MIS | tress NOW | I CHASE,
And WITH | a STRON | ger FAITH | em BRACE,

Yet THIS | in CON | stan CY | is SUCH
I COULD | not LOVE | thee, DEAR, | so MUCH,
LOV ed I | not HON | or MORE.



Contribution of the Rich to the Economy

Paul Krugman had an interesting post a couple of years ago about the claims of the rich to contribute a unique, valuable something to the economy.  (He calls it jobcreation.)  He pointed out that if we assume that the rich get paid every penny of their contribution to output, then the rich confer no net benefit on the rest of us.  All the value they create gets paid back out to them.  So causing them to work less in response to taxes won’t make the rest of us worse off.

Krugman suggests that the fact that labor gets paid its marginal product in textbook competitive markets makes the notion that the rich might get back all the value they create seem reasonable.  Maybe I’m missing something (possibly because I haven’t read the optimal tax literature that Krugman is thinking about here), but I think the rule that being paid your marginal product results in your being paid the value of your services holds only if demand is perfectly elastic.  Otherwise, the rich get their producer surplus and the rest of us get a consumer surplus.  The rich don’t get paid the full value of what they create.  And if they work less, some of the surplus to consumers disappears.  Of course, this doesn’t mean that the rest of us are net losers if the rich work less.  Krugman has a nice monopsony take on the situation that makes clear that the nonrich can come out ahead.    They lose some surplus due to reduction of production by the rich, but they make up for that by paying the rich a lot less for the output that the rich continue to contribute.

If we do away with the assumption that the rich get paid the value that they create in textbook competitive markets, then I think the wrongness of the job creators argument actually becomes clearer.  In a world in which demand is not perfectly elastic, the rich and non rich split the surplus created by the rich.   And that’s exactly what you want.  You want production to make everyone better off.  If the productive activities of the rich were to benefit only the rich, then society shouldn’t care at all about the contributions of the rich, let alone reward them.  Suppose a great entrepreneur produces a doohickey that is worth $5000 to you.  If she charges you $5000 for it, then your net gain from it is precisely zero.  You might buy the thing, but you’d have to give up so many other comforts to pay for it that your life wouldn’t actually be any better than if the thing had never been invented in the first place.  When we think of the rich as contributing to society, we’re definitely not thinking about this scenario.  We’re assuming that the rich sell what they create for less than its value, otherwise they wouldn’t be creating any value for the rest of us to speak of.

What this means is that when the rich say that they deserve more pay because they contribute more than the rest of us to society, they’re actually just asking to reduce their net contribution to society!  Herein lies the wrongness of their argument.

But doesn’t that prove too much?  Why not pay the rich nothing in order to maximize their contribution?  The answer is that what should determine pay is not the level of contribution but the cost.  To maximize the contribution of the rich to society you need to pay them the minimum amount necessary to induce them to work at a level that maximizes that contribution, which is to say, you need to pay what it costs the rich to produce at that level.  It’s cost that should matter for pay, and not contribution.

If our great entrepreneur could have made $1000 doing something other than producing the doohickey, then you’d want to pay her just enough to induce her to produce the doohickey instead — say, $1001.  You pay the entrepreneur that amount and she makes you a doohickey that you value at $5000.  The entrepreneur has contributed $3999 of value to you.  And she’s contributed $1 of value to herself (her income less her opportunity cost).  Everyone is better off.    And the entrepreneur will do the work.

There’s an additional element to the argument of the rich that I think deserves more scrutiny and criticism.  When the rich argue that they should get paid more, they tend to refer to the uniqueness of their contribution.  They have skills that no one else has.  I think that we have to understand this appeal to uniqueness to be an argument that the rich deserve monopoly power and have a right to exercise it.

Suppose that the competitive market for doohickeys results in a market price of $1001, causing our entrepreneur to control a piddly $1 of the $4000 surplus she has created through her herculean efforts.  She can live with that in the sense that it’s still enough to keep her in the market.  But she’s created so much more value for others and it just seems unfair to her not to control more of it.  What to do?  Well, she’s unique, which means that she doesn’t have to tolerate competitive pricing.  She can raise her price and not worry that you will buy from someone else at a lower price.  So she can charge $4000 or $4999 and you’ll just have to buy at that level.  And in this way our entrepreneur will end up getting what she wants, which is to be paid the full value of her contribution to society.  And, as we saw above, she will thereby eliminate her effective contribution to society.

When a CEO tells you that he deserves his high pay because no one else can fill his shoes, he’s saying that it’s just for him to use his monopoly power to extract all the surplus from the market.  And when he uses this argument to argue against having to pay more taxes, he is saying that the government should not be permitted to interfere with his monopoly power.