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.


Atlanta Botanical Garden

If you are going to put monumental plant sculptures in the botanical garden they ought to be made entirely of plants.  That includes the skeleton.  It might take 50 years to raise a tree to look like a cobra and grow appropriate plants upon it in a symbiotic mix.  But so much the more for wonder.

And the sculptures themselves should not be stereotyped representations of gorillas and frogs and such.  They should be beautiful and original.   Imaginary Worlds is disappointing: unremarkable sculptures papered over with plants.

(Note: I don’t prefer topiary; pruning a bush to look like a squirrel is just as superficial an art as wallpapering a squirrel statue with herbs.)

And if you’re going to give me Arcimboldo’s vegetables portraits in the flesh, they’d better be made with real vegetables.  Anything else is a monument to disappointment.

I’d much rather not have these tasteless distractions in what is an otherwise wonderful garden.

I do, though, like the Chihuly.


Prima Facie Evidence of Monopolization

Does anyone think Apple’s $147 billion cash horde is a reward that was required to induce Steve Jobs to create the iPhone?  It’s obviously not necessary to cover other costs.

Monopoly profit is by definition profit that’s not necessary to induce production.  When a firm generates a large cash horde, it’s because it doesn’t know what to do with the money.  Which means: it doesn’t need the money!

In a world in which antitrust were taken seriously, a cash horde of $147 billion would be prima facie evidence of illegal monopolization.

And the government would force Apple to rebate it to consumers.

Update (11/12/14): Krugman is on the case.


A Buck Is Just Another Ration Card

The price system, like queuing, is just another way of rationing access to resources.  And it’s perfectly reasonable for the government to prefer to impose a queuing system over a price system in certain circumstances.  For example, if you don’t want the rich to take all of a fixed resource.

So it’s perfectly reasonable for San Francisco to prefer that parking spaces go to the lucky, persistent, or fleet, rather than to the highest willingness to pay.

And perfectly reasonable too for San Francisco to put a stop to attempts to circumvent its preferred rationing system.  Attempts like this.



Stevinus's wind chariot for Prince Maurice of Orange.
Via Wikipedia, Stevinus’s wind chariot for Prince Maurice of Orange.

Preferences and Incentives

Our voluntary service he requires,
Not our necessitated, such with him
Finds no acceptance, nor can find, for how
Can hearts, not free, be tri’d whether they serve
Willing or no, who will but what they must
By Destiny, and can no other choose?

Paradise Lost : V : 529-34.

Why is it so important that obedience be voluntary and not necessitated?  After all, if the point is obedience, either will do.  The problem with necessitated obedience seems to be that it is fragile.

Voluntary obedience means obedience that isn’t compelled by external circumstances.  I clean your home because I love cleaning homes or love you or think it’s my duty.  You’ll stop me cleaning your home when you kill me.  This contrasts with necessitated obedience.  If you take all my money and then offer me a buck to clean your home then I’ll do it because otherwise I’ll die.  But if you don’t create a situation in which I have no alternative but to clean your home, I won’t do it.

Voluntary obedience is choice in the sense of preference alteration.  Necessitated obedience is choice in the face of static preferences.  Voluntary obedience is when you make your own preferences, necessitated obedience is when your preferences make you.

Basic economics can’t really distinguish between voluntary and necessitated obedience because it tends to treat preferences as static.  So it only admits of the existence of necessitated obedience.  In economics, the only way you’ll clean my house is if you’re forced to choose between doing that and starving.

Let’s look at another example.  Suppose you have the following game.

A's payoff / B's payoff B Cooperates B Betrays
A COOPERATES 5 / 5 0 / 8
A BETRAYS 8 / 0 4 / 4

Cooperation is efficient in the sense that the sum of the payoffs to parties A and B is the greatest when both try to cooperate. The trouble is that neither will want to cooperate.  For each, the payoff of betrayal exceeds the payoff of cooperation both when the other cooperates (5 > 4) and when the other does not (4 > 0).

Economics typically solves this problem through redistribution.  Suppose the penalty for betrayal is that you must pay 4 to the other party.  Now the game looks like this.

A's payoff / B's payoff B Cooperates B Betrays
A COOPERATES 5 / 5 4 / 4
A BETRAYS 4 / 4 4 / 4

Both parties have a chance to end up better off if they cooperate, so now they will both cooperate.

Both parties behave well, but they do so only because redistribution compels them to behave well.  If the redistribution that compels good behavior is removed, then they will regress back to their old noncooperative behavior.  In this sense their good behavior is necessitated and therefore fragile.  It is a world in which each party bides her time, waiting for the moment when the system will break down and betrayal can again produce a windfall.

Suppose that instead of redistributing payoffs, you were to change the preferences of the parties such that betrayal ceased to have any value to the parties.  They value 8 in betrayal as 0 and 4 in betrayal as 0 too.

Now the game looks like this.

A's payoff / B's payoff B Cooperates B Betrays
A COOPERATES 5 / 5 0 / 0
A BETRAYS 0 / 0 0 / 0

Now both stand to gain only through cooperation, so both will cooperate.  The difference here is that no amount of redistribution can compel the parties to prefer betrayal.  They are no longer mercenaries, blowing with the prevailing wind.

If your goal is to create an enduring commitment to cooperation, you want this second scenario, because it is immune to changes in the power of government to create felicitous incentives.  You want to change preferences, not incentives.  Only in this way can you ensure that Abdiel

Among innumerable false, unmov’d,
Unshak’n, unseduc’d, unterrifi’d
His Loyalty he kept, his Love, his Zeal;
Nor number, nor example with him wrought
To swerve from truth, or change his constant mind
Though single.

V : 898-903

For the economist, changing the betrayal payoffs to 0 makes the problem trivial, because the problem, for economists, is always how to achieve efficiency in the face of static preferences.  Rewriting preferences to make things work is cheating.  But of course rewriting preferences in real life is not as easy as zeroing betrayal payoffs in a matrix.  It was the major project of the pre-modern world; and remains a major project of the modern business world (though more in service of getting consumers to tolerate betrayal than of procuring universal cooperation).

It is no wonder that voluntary fidelity was elevated to divine command in the pre-modern world, where government was too weak to  redistribute wealth.   Where incentives could not be manipulated reliably, cooperation leading to an improvement in the fortunes of the group as a whole could be achieved only by manipulating preferences.

. . . unjust thou say’st
Flatly unjust, to bind with Laws the free,
And equal over equals to let Reign,
One over all with unsucceeded power.
. . .
Yet by experience taught we know how good,
And of our good, and of our dignity
How provident he is, how far from thought
To make us less, bent rather to exalt,
Our happy state under one Head more near

V : 818-21, 826-31

In many older cultures, the aggressive anticipation of needs is the signature of commitment, loyalty, and friendship.  You find that friends expend a great deal of energy giving you help you didn’t ask or pay for.  This behavior expresses felicitous preferences.  Your friends are showing you that they want to do these things, not that they must do them.




Natural Machines

“Machines — as in contraptions made with wire and metal and stuff — are not natural.  Sure, animals are like these machines in that they have nerves that connect things and bones and other mechanical parts.  But animals are really chemical contraptions; they’re not anything like the computers and cars that humans make.  That’s why animals are natural but computers and cars aren’t natural!”

But nature’s chemical machines have made her wire and metal machines.