Contract law scholars may be interested in a new paper, The Relational Economics of Commercial Contract, recently posted to SSRN by Chapin Cimino of Drexel Law School:
For almost half a century, the mainstream law-and-economics movement in contract law has zealously protected the parsimony – or simplicity – of economic analysis. The faith in ever-increasing formality is captured both by stubbornly spare assumptions about human behavior and tightly controlled econometric modeling. With few exceptions, the trend in most mainstream contract law scholarship – where the law-and-economic approach is dominant – has been toward excluding, not including, any variable which would capture the realities of actual contracting behavior. This trend has fueled the rise of neo-formalism in both contract theory and doctrine to the exclusion of other accounts.
At the same time, however, economic empiricists in other disciplines have been capitalizing on insights from sociology – insights almost as old as the law-and-economics movement itself – showing not only that, but also how, commercial actors in contemporary transactions rely on cooperative social behaviors common in everyday contracting. These behaviors, called relational norms, were originally identified by law-and-sociology professor Ian MacNeil as part of what is now called relational contract theory. Since the early 1990’s, economics scholars working mostly in the fields of marketing and strategic management have included relational norms as key variables in transaction cost analysis research. Strangely, though this work has clear implications for contract law and theory, this work has yet to be discussed in contract law literature. This article breaks new ground by introducing that work in contract law scholarship. The article shows how, contrary to received wisdom in law-and-economics, including relational behaviors in transaction cost research can improve, not detract from, the predictive power of economic analysis.
I think Cimino oversimplifies both the modern law and economics approach to contract as well as the reasons for some of its adherents’ attachment to formalism. For example, Cimino argues in the paper that:
For the past half-century, law and economics has played the dominant role in contracts scholarship. Scholars in this tradition value the prediction of behavior based on a cost-benefit analysis over the ability to precisely describe the world in which that behavior occurs.
Of course, that describes some contract scholarship in the law & econ tradition, but far from all of it, and even scholars making simplifying assumptions for the sake of modeling often have valid reasons for those assumptions – for example, to highlight and provide insights into a particular aspect of contracting behavior. And my own sense is that some of the law and economics scholars cited in the paper favor formalist approaches, not out of a vague attachment to simple predictive models, but because they believe it will lead to the most favorable results under real-world relational contracting conditions (such as sophisticated repeat players and informationally disadvantaged courts).
Nonetheless, the paper discusses in detail literature of which many contracts scholars may be unaware and argues for its relevance to current contract law debates, so be sure to read the whole thing here.
Interestingly, the call to turn to the nuance of sociology rather than to the simplicity of economics comes at a time when at least some sociologists are urging the opposite result. In Fuck Nuance, my co-author (on, coincidentally, a contract law paper), the sociologist Kieran Healy argues that:
Nuance is not a virtue of good sociological theory. Sociologists typically use it as a term of praise, and almost without exception when nuance is mentioned it is because someone is asking for more of it. I shall argue that, for the problems facing Sociology at present, demanding more nuance typically obstructs the development of theory that is intellectually interesting, empirically generative, or practically successful.
. . .
To take the most obvious example, it is traditional in Sociology to deride the way Economists work, depending as they do on an extremely pared-down model of human action. There is no less nuanced a character than Homo Economicus. While it is easy to snipe at theory on this basis, the strategy of assuming a can opener (as the old desert-island joke goes) turns out to be an unreasonably effective way of generating some powerful ideas.
But, of course, the best part of the paper is the abstract, which reads in its entirety: “Abstract: Seriously, fuck it.”
Clearly, the law professoriate needs to borrow from sociology its brevity and humor, if not its nuance.
My understanding is that the paper was a big hit at the 2015 American Sociological Association Meetings.
A few years back, I put up a few posts discussing a new initiative we were trying out at my school, called the Duke Project on Custom and Law. As I said at the time:
We’re trying out something new at Duke next (2011-12) academic year that I wanted to float by Lounge readers. . . .
The plan is to have a continuing academic dialogue at the law school that is broad enough to include large segments of the faculty (ideally, all of it) and, eventually, other folks on campus as well. I think that the goal is to encourage conversation, collaboration, and cross-pollination among as much of our immediate community as possible. In order to do that we need a topic that is relevant to many people’s scholarship across fields, obviously.
We’ve chosen the relationship between custom and law. Sometimes custom informs the law, sometimes it is antagonistic to law, and sometimes it actually is the law. The year-long dialogue will explore these differing relationships between custom and law.
In hindsight, I think that we accomplished some of those goals better than others, but had sufficient success that our Dean has approved a new project for the 2015-16 academic year, The Duke Project on Law and Markets. This year’s project will be led by my colleague, Joseph Blocher, and me. Like the Custom and Law Project that precedes it, the Law and Markets Project will include a summer reading group (see here for a reading list), a full year of workshops dedicated to law and markets (see here for the fall schedule), a student seminar (course description here), and will culminate in a symposium and volume (this one will be published by Law & Contemporary Problems, a quarterly, interdisciplinary, faculty-edited publication of Duke Law School).
Needless to say, I’m very excited about this lineup of speakers and topics and about the project more generally. Although I was interested in Custom and Law and enjoyed that Project, those of you who know me know that I am much more passionate about law and markets! Our PR folks have circulated a lengthy news article describing the Project in some detail, for those who are interested. From the article:
About 30 faculty members took part in the project’s first event on June 1, a discussion of a controversial 1970 article on blood donation, which argued that a system based on altruism is superior to a market-based system regulated by self-interest. “We had a very lively, two-hour discussion,” said Blocher. “It was a great kick-off.”
I’ll post updates about the Project as the year progresses. For now, I’ll just post the speaker schedule, along with an invitation for area Loungers to join us for speakers or topics that interest you. Just let me or Joseph know of your interest, and we’ll keep you in the loop.
The Duke Project on Law and Markets 2015-2016 Faculty Workshop Series will feature the following scholars:
Sept. 9, 2015, 3:45 p.m., Room 4046
Guy-Uriel Charles, Charles S. Rhyne Professor of Law and Senior Associate Dean for Faculty & Research, Duke University School of Law
Representative scholarship: Corruption Temptation, 102 California Law Review 25 (2014)
Margaret H. Lemos, Robert G. Seaks LL.B. '34 Professor of Law, Duke University School of Law
Representative Scholarship: For-Profit Public Enforcement, 127 Harvard Law Review 853 (2014) (with Max Minzner)
Sept. 23, 2015, 3:45 p.m., Room 4046
Kara W. Swanson, Professor of Law, Northeastern University
Representative scholarship: Banking on the Body The Market in Blood, Milk, and Sperm in Modern America, (Harvard University Press, 2014)
October 7, 2015, 3:45 p.m., Room 4046
Jason F. Brennan, Associate Professor of Strategy, Economics, Ethics, and Public Policy at the McDonough School of Business; Associate Professor of Philosophy, at Georgetown University
Representative scholarship: Markets without Limits, with Peter Jaworski (Routledge Press, 2015)
October 21, 2015, 3:45 p.m., Room 4046
Lawrence A. Zelenak, Pamela B. Gann Professor of Law, Duke University School of Law
Representative Scholarship: Custom and the Rule of Law in the Administration of the Income Tax, 62 Duke Law Journal 829 (2012)
November 4, 2015, 3:45 p.m., Room 4046
Jon D. Michaels, Professor of Law, UCLA
Representative scholarship: Running Government Like a Business…Then and Now, 128 Harvard Law Review 1152 (2015).
November 18, 2015, 3:45 p.m., Room 4046
Gillian E. Metzger, Stanley H. Fuld Professor of Law, Columbia Law School
Representative Scholarship: Privatization As Delegation, 103 Columbia Law Review 1367 (2003). Excerpted in Modern Constitutional Theory: A Reader (John H. Garvey, T. Alexander Aleinikoff, & Daniel A. Farber, eds. 2004) To download click here
December 2, 2015, 3:45 p.m., Room 4046
Mario Macis, Assistant Professor, The Johns Hopkins Carey Business School
Representative scholarship: Will There Be Blood? Incentives and Displacement Effects in Pro-Social Behavior, American Economic Journal: Economic Policy, 2012, 4 (1): 186-223 (with Nicola Lacetera and Robert Slonim)
This is the second in what I intend to be a short series of posts on the importance and limitations of Mike Simkovic’s and Frank McIntyre’s recent contributions to the literature on the purpose and value of a legal education. (The first is here.)
I’ll devote this post to setting aside what I think is a peripheral issue that has occupied some of the resurgent debate spawned by Mike Simkovic’s series of posts on Brian Leiter’s blog. In recent exchanges, this issue has emerged as a series of accusations and assumptions about what employment and earnings data ought generally to be presented, and whether the way such data are generally understood makes their presentation subject to misinterpretation. A lot of the recent controversy has focused on whether, when a law school reports its graduates’ employment numbers, “employed” should or should not include part-time, short-term or non-law-related employment; and whether “unemployed” should include only those actively seeking work, excluding the category the ABA collects as “unemployed—not seeking.” Similar disagreements persist over how to count school-funded positions, and what qualifies as law-related employment, though these are not front-and-center in the recent exchanges I’m writing about here.
Mike’s recent posts have taken the strong and categorical view that law schools, NALP and the ABA ought to report law-graduate employment the same way the U.S. government reports on employment generally, and that any other view is ignorant or misinformed. Board of Labor Statistics and Census data (among others) report people as “employed” if they have any kind of work at all, including work that is part-time, short-term, or (in the case of law-school graduates) entirely unrelated to their legal education; and as "unemployed" only those who are actively looking for work. The widely articulated criticism “that law schools behaved unethically or even committed fraud . . . by presenting their employment statistics in a misleading way,” says Simkovic, “comes down to this: The law schools used the same standard method of reporting data as the U.S. Government.” Any contrary view, he argues, is “based on an incorrect belief that law school only benefits the subset of graduates who practice law . . . ,” a point he not infrequently expresses as an impatience for those who would be influenced by near-term results resembling the ones they might desire for themselves rather than more dispassionately considering lifelong outcomes of the JD population as a whole to assess their prospects.
Not so fast. It matters who counts, and who cares. As for who counts, there is a very significant issue in equating the accuracy and reliability of statistics gathered and disseminated by disinterested government employees with those gathered and disseminated by self-reporting law schools, especially in an environment in which both rankings and prospective law student decisions essential to the welfare of the reporting school are often based on what it reports. I have no doubt that many schools are meticulous and unstintingly honest in their self-reporting. But we already have several documented incidents of motivated or flatly dishonest reporting, and my regretful suspicion is that such discrepancies will prove to be more common than anyone would hope as the ABA starts auditing.
As for who cares, my modest proposal is that people should get the information they want in the terms they are most likely to understand. I would guess that a libertarian economist like my friend Mike Simkovic agrees, in which case his arguments on these issues don’t square with our apparently shared principles in at least two important respects.
First, with respect to the proposition that people should get information in the form they are most likely to understand: It is demeaning and more importantly inaccurate to argue that everyone understands—or any “reasonable” person should—that law schools reported employment statistics the same way the government does. In fact many if not most people relying on US News rankings and law-school statistics (among others, tens of thousands of prospective law students and their families each year) didn’t understand that at all, which is why the ABA stepped in to change the reporting requirements in 2010. I personally was stunned when I first learned that law schools’ “employment” rates reported before 2011 included part-time, short-term and non-law-related work. I am not, as I have previously cautioned all of you, a social scientist, but I daresay I’m no more stupid or ignorant than the next guy. Countless others have expressed the same surprise, and even greater surprise at the discrepancies between “employment” as reported before 2011 and the more granular information reported afterwards. We needed more detailed and explicit reporting for the same reason that just about every state has consumer-protection legislation governing the form and content of disclosures regarding common consumer transactions: You take your audience as you find them.
Second, with respect to giving people the information they want: Simkovic and McIntyre are free to argue (as they do) that any prospective law student’s interest in the nature or duration of near-term post-graduate employment is “based on an incorrect belief that law school only benefits the subset of graduates who practice law . . . .” And they have in fact presented significant empirical evidence suggesting that it is possible for some people to overemphasize these near-term details at the expense of best-informed decisionmaking. As I will discuss in future posts, that doesn’t mean that these conclusions should immediately be uncritically accepted as immutable laws of the universe, and it especially doesn’t mean that they are true for all of the people all of the time. And I assume that, even if they are fully convinced of the truth and immutability of their conclusions (a conviction I suggest is premature), they are not arguing we should withhold information from people so that they can make decisions that the authors consider “better.”
Just as importantly, Simkovic and McIntyre’s studies attempt to quantify the effect of a JD degree on career earnings, and offer suggested courses of action some might choose to take if their goal is to make as much money as they can over a lifetime. No one could claim that this is an irrelevant perspective, but it is hardly the only one we see: While it certainly isn’t true of everyone, many people actually go to law school because they want to be lawyers. Some crave the drama of the courtroom; some have specific social or political purposes in mind; some (and there is at least one study suggesting that this may be particularly true of some who attend lower-ranked law schools with less robust employment prospects and are among the first in their families to seek higher education) enjoy satisfaction from the prestige of being a professional. Even the most doctrinaire neoclassical economist would not presume to argue with a consumer’s utility preferences—which is just econo-speak for there’s no accounting for taste. For the population—and I will suggest that it is a significant one—that specifically wants to be lawyers, statistics about any old job held by JDs are not very helpful. And if you’re still thinking that this doesn’t reflect the real thoughts of real people in the real world, consult the recent exhortation posted by the dean of Cooley Law School—an institution that, with all respect, has an uninspiring recent track record in placing its graduates in lawyer jobs—proclaiming “Now Is the Time to Fulfill Your Dream of Becoming a Lawyer!”
So let’s talk about what information people might want, and let’s talk about how they ought to consider using it. I think Mike Simkovic’s recent posts on the Leiter Blog focus predominantly on just that, and hats off to him for doing so. Let the discussion continue.
But I do want to close by taking issue with one of those posts, which I view as a cautionary tale about the temptations of partisanship. On March 31, a Berkeley Law professor published an op-ed in the New York Times entitled “Law Schools and Industry Show Signs of Life, Despite Forecasts of Doom.” The first paragraph poses the question “is now a good time to go to law school?” and the balance of the op-ed argues hell yes, focusing on (among other things) the employment prospects of recent graduates of Georgetown Law, and on the growth of “quite profitable” large law firms and in-house law departments to argue future need for “lawyers, and plenty of them.” Kyle McEntee (of Law School Transparency) and Steven Harper (of Belly of the Beast) both took strong issue with these arguments on a number of grounds, principally that they were inexcusably sloppy and cherry-picked statistics misleadingly—for example choosing one of the top law schools’ employment outcomes for an example when scores of them have much worse results; suggesting that large firms are hiring aggressively when in fact they are hiring about 30% fewer new lawyers than they did seven years ago; and using part-time, short-term and non-law-related employment outcomes to argue that we could anticipate lots of future demand for lawyers.
One of Mike’s posts not only defended the op-ed uncritically, but did so in terms and in tone that (I hope he’ll forgive me for saying) fall well below the standards I have come to know him for. “Mr. McEntee’s problem,” Mike wrote, “is not that The New York Times got the facts wrong. His problem is that The New York Times got too many of the facts right. Mr. McEntee simply dislikes the facts.” With all respect to Mike Simkovic, that’s really quite unfair. In my own view, McEntee and Harper both nailed it. The op-ed author used cherry-picked statistics including non-lawyer employment and lawyer underemployment to predict (among other things) the future demand for lawyers. That’s misleading. And the entire thrust of the op-ed—“is now a good time to go to law school?” and can those who apply to law school now expect to work as lawyers?—is antithetical to Simkovic’s and McIntyre’s hypotheses, which are that it’s a bad idea to ask whether now is a good time to go to law school (because you can’t know, and any one time is as a matter of prediction as good as any other), and an even worse idea to worry about whether you’re going to be a lawyer when you’re done (because that could distract you from the long-term earnings enhancements that they believe JDs offer most comers). Mike should have lambasted the editorial for citing his work while missing his point.
Next time we’ll talk more about Mike’s points, including both their valuable insights, and those insights’ potential limits.
There has been a flareup in the debate over the purpose and value of law school. The new discussion has been prompted by a series of posts by Michael Simkovic on Brian Leiter’s Law School Reports in which he summarizes and elaborates on his work with Frank McIntyre in two recent articles, “The Economic Value of a Law Degree” and “Timing Law School.” (You can get Mike’s complete set of posts—there are, by my count, 14—on Leiter’s blog by starting here (posted March 19) and scrolling up. Paul Caron has collected links to commentary on the commentary from both sides of the debate here, not all of which are subject to the objection I register below.)
Full disclosure at the outset: Mike Simkovic visited with us here at UNC last term, where he proved himself an excellent teacher and an engaging colleague. I consider him a friend. Of course, I don’t always agree with my friends on everything (maybe that’s why I have so few), and as you’ll see I don’t agree with Mike about everything he’s written. (Editorial Aside: I recognize that there may be no intrinsic reason why anyone should care whether I agree with Mike or not. But since you’re reading this, I’ll indulge the fantasy that you’re a little bit curious, if not about whether then at least about why.) All that said, anyone with any intellectual honesty must appreciate the importance of Mike Simkovic’s recent contributions to the ongoing public discussion on the purpose and value of legal education. His work (and let’s just agree that from here on “he” stands for both Mike and his co-author) is by my lights the first serious, empirically grounded, methodologically thoughtful showing that things—at least some things for at least some people—may not be quite as bad as some of us have feared.
Predictably, extremists on both sides of this longstanding debate have popped up to demonize or deify Prof. Simkovic and his work, vilifying or vaunting his motives and methods in sweeping and categorical terms. I have only one request of all of you—please stop. Stop the toxic name-calling. Stop erecting effigies of your adversaries’ graves so you can dance on them. The subject is much too important to be obscured in petty rivalries. You’re not enlightening anyone, and it’s way too early to claim a victory lap, let alone drag your enemy in circles at the back of your chariot for the next nine days. (I, at least, perceive Mike as having managed to hold himself mostly above the fray thus far, with only an occasional descent into the snippy or snide when goaded a bit too much. But that happens to all of us now and then—not least, I regret to say, your not altogether gentle scribe. I hope we’ll both try harder from here on out.)
In order to keep length manageable, I propose to share several posts over the next couple of weeks with some thoughts on Mike Simkovic’s important contributions. I’ll try to point out some of the questions I think his work addresses, and the questions we still need to explore. Like it or not, this kind of discussion tends to crowd out those prone to announcing that each new datum proves them right about everything all over again.
I’ll conclude this post and set the table for future ones by summarizing Mike’s principal conclusions in broad strokes. “The Economic Value of a Law Degree” uses some accepted techniques of labor econometrics and a federal government dataset to compare the earnings differential over an entire career of people who get a law degree compared with people who end their higher education with a bachelor’s degree. The paper concludes that, whether or not the JDs work as lawyers (and taking into account the costs of law school), a significant majority of them earn appreciably more over their careers than the BAs do. “Timing Law School” builds on these conclusions, and determines that it is not possible to predict a better or worse time to attend law school in order to maximize your lifetime earnings. That is in part because, the study finds, while those who graduate law school into a bad economy suffer some early hits to their earnings and their earnings advantages over BAs, and those who graduate law school into a booming economy enjoy some corresponding early advantages, these differences tend to moderate and then disappear over the longer run of a full career—again, whether or not the JD practices law. (It’s also because it proves to be just as hard to time the labor market as it is to time the stock market; that is, to the extent starting your law career in a better or worse economy affects your overall lifetime earnings, there’s no point in trying to take advantage of it, because you can’t reliably predict at the time you apply to law school what the economy is going to be like when you’re done.)
Again, I take issue with these conclusions in some respects regarding (among other things) their breadth and predictive value for reasons I hope to explain in coming posts. But now you have the big picture.
From our friends at Berkeley Law comes the following announcement:
The Berkeley Center for Law, Business and the Economy is seeking to hire a Research Fellow with an anticipated start date of August 1, 2015.
The Berkeley Center for Law, Business and the Economy (BCLBE) is Berkeley Law’s hub for rigorous, relevant, empirically based research and education on the interrelationships of law, business, and the economy. BCLBE informs students, policymakers and the public of the implications of this innovative work to promote positive outcomes on business operations, economic growth, and market efficiency. BCLBE’s interdisciplinary approach to basic research, timely policy research, curriculum innovation, and public education empowers current and future leaders in business, law and policy to tackle the most pressing problems of today and tomorrow.
For more information about the position, including required qualifications and application materials, please visit: https://aprecruit.berkeley.edu/apply/JPF00669
The final deadline for applications is April 30, 2015. If you have questions about the position, contact email@example.com.
The University of California, Berkeley is an AA/EEO employer.
I've also uploaded a fuller description of the fellowship opportunity here: Download BCLBE_Fellow_job_announcment_long 02_20_15
Having just finished up the Business Associations program on The Future of the Corporate Board this morning, I’m now off to Boston for a panel tomorrow at the American Economics Association Annual Meeting. If any other law profs happen to be wandering the halls, definitely stop in to say “hello.” I’ll be discussing my research on board diversity, and whatever lessons it may hold for diversity in the professions. Other panelists will discuss the single woman penalty and diversity and the innovation economy. Fellow law prof Laura Beny (Michigan) is moderating and will also discuss diversity and law firms.
Unfortunately, the timing of the two conferences was such that I’m only able to attend the last day of AEA. That’s too bad, as there were a number of sessions that I really wanted to attend. Ah well. Can’t be everywhere at once.
Jan 05, 2015 8:00 am, Boston Marriott Copley, New Hampshire
National Economic Association
Diversity and the Professions (J4)
Presiding: LAURA N. BENY (University of Michigan)
Diversity and the Innovation Economy
LISA D. COOK (Michigan State University)
Diversity and Performance of Elite United States Law Firms
LAURA N. BENY (University of Michigan)
Diversity and Talent at the Top: Lessons from the Boardroom
KIMBERLY KRAWIEC (Duke University)
Leadership and the Single Woman Penalty: A Role Expectations Account of Early Career Barriers to Promotion for Female MBAs
JENNIFER MERLUZZI (Tulane University)
DAMON PHILLIPS (Columbia University)
TERRY-ANN CRAIGIE (Connecticut College)
ROBYNN COX (Spelman College)
Well, we've rounded Labor Day, which means that summer's over and it's time to get down to talking scholarship. Daniel Klerman of the University of Southern California has a characteristically terrific paper, "The Economics of Legal History," on the recent writing on legal history that is influenced by (or uses may be a better term) economic analysis of law. It's forthcoming in the Oxford Handbook of Law and Economics (Francesco Parisi ed., 2014). This builds on one of his earlier pieces (which happens to be one of my favorite works of recent legal history), "Statistical and Economic Approaches to Legal History" and I guess on "Economic Analysis of Legal History," too.
Two brief observations here. First, I was a little surprised to see Morton Horwitz' Transformation of American Law, 1780-1860 get such limited attention here -- Klerman acknowledges that was about the economic effects of changes in law (in fact, Horwitz depicts economics as the driving factor behind the "transformation" of American law), but Klerman limits the chapter to works that are influenced by Posner and later scholars who apply economic analysis to law. We are all permitted to define the boundaries of our work and I agree that the boundaries in this case make sense. However, I see (and I don't think I'm the only one) Horwitz as drawing from the same core of cultural ideas as Posner and as in many ways a pretty explicit response to the growing law and economics movement. Remember that Horwitz and Posner were both writing in the early 1970s and both looked at the ways that nineteenth century judges took economic considerations into account in shaping the common law. It's just that for Horwitz the turn to economics in the nineteenth century was something to lament and for Ponser it helped make the case that there should be more economic analysis. Anyway, let's just chalk that point up to my deep affection for Transformation I!
On a bigger and more substantive point, Klerman identifies five ways in which economic analysis can illuminate legal history (and here I'm cribbing from his abstract):
1) Law as the dependent variable. This genre tries to explain why societies have the laws they do and why laws change over time. Early economic analysis tended to assume that law was efficient, while later scholars have usually adopted more realistic models of judicial and legislative behavior that take into account interest groups, institutions, and transactions costs.
2) Law as an independent variable. Studies of this kind look at the effect of law and legal change on human behavior. Examples include analyses of the Glorious Revolution, legal origin, and nineteenth-century women’s rights legislation.
3) Bidirectional histories. Studies in the first two genres analyze law as either cause or effect. In contrast, bidirectional histories view law and society as interacting in dynamic ways over time. Laws change society, but change in society in turn leads to pressure to change the law, which starts the cycle over again. So, for example, the medieval communal responsibility system fostered international trade by holding traders from the same city or region collectively responsible. Nevertheless, the increase in commerce fostered by the system undermined the effectiveness of collective responsibility and put pressure on cities and nations to develop alternative enforcement institutions.
4) Private ordering. A significant body of historical work investigates the ability of groups to develop norms and practices partly or wholly independently of the state. Such norms include rules relating whaling, the governance of pirate ships, and, more controversially, medieval commercial law (the “law merchant”).
5) Litigation and Contracts. Law and economics has developed an impressive body of theories relating to litigation and the structure of contracts. These theories often shed light on legal behavior in former times, including contracts between slave ship owners and captains, and the suit and settlement decisions of medieval private prosecutors.
I would add that such classifications are also very useful in thinking about law and cultural legal history. That is, those of us who write from cultural more than economic perspectives, should be thinking about similar ways of categorizing the influence that law and legal institutions exercise on culture (and how they are influenced). I might also expand a little on the fourth category to think about how legal institutions (such as courts) facilitate ordering and on the fifth category how legal technology (like contracts, trusts, or wills) illuminate how law functioned. They can also reveal core cultural values.
Hat tip to Dan Ernst of Legal History Blog.
Given Randolph Macon College Economics Professor David Brat's stunning victory in the Republican primary in Virginia's 7th Congressional District yesterday I suppose it's time to add to my list of the academic writings of the now-famous. Dr. Brat (cv last updated in 2012 here) holds a Ph.D. in economics from American Univeristy (as well as a master's from Princeton Theological Seminary). His Ph.D. dissertation was “Essays on Human Capital, Religion, and Growth” and his master's thesis was “The Impact of the Philosophical Movement, Logical Positivism, on the Methodology of Economic Science: Karl Popper and Milton Friedman." His interests include economic history and the history of ideas.
Man, though, I'd love to see the syllabus for his course on "economic justice and social change." I think perhaps Stacey Gahagan and I could write a follow-up to our article on Professor Obama's race and law syllabus.
Update: the internets have come through for me again! Here's his 2004 syllabus on "The Ends of Economic Justice." (An economics blog puts this course into some context.) Looks like it covers pretty similar material to his Economics 370 course, "Economic Justice." The RMC website describes the course as covering:
An historical examination of the major conceptions of economic justice primarily in the western world. Major ethical schools of thought include the Socratic/Platonic/Aristotelian, the Judeo-Christian, and the Enlightenment school of Locke, Rousseau, Kant, Mill and Marx. Finally, contemporary moral theorists such as John Rawls and Eobert Nozick will be used to compare/contrast this legacy of ethical thought with the orthodox models of economic thought, as represented in the writings of economists such as Adam Smith, John Maynard Keynes and Milton Friedman.
Journalists are already deep into Brat's writings -- including the Wall Street Journal's "Who Is David Brat? Meet the Economics Professor Who Defeated Eric Cantor" and Vox' "The guy who beat Eric Cantor penned a scathing, seemingly unpublished book about the economics profession." By the way if you're looking for his book, "The Philosophy of Economics: A History of Science, Method and Ethics," the wayback machine has it. It also has his paper on "Economc Growth and Institutions: The Rise and Fall of the Protestant Ethic?"
After spending more time than I should have this morning reading Brat's work I think I need to conclude that he's very focused on the relationship between religious thought (particularly Christianity) and economic thought (particularly classical liberalism). One sign of just how little we actually know about this guy is Time Magazine's story this morning that is written -- not kidding here -- out of comments from Brat's ratemyprofessor site. I guess I find that pretty much astonishing.
Actually, I should probably be writing about Jack Trammell, too, who will be Brat's opponent in November. His most recent book is on the Richmond's lave market. When I'm back in the office I'll pull it from Davis Library.
The image is of Randolph Macon's Washington and Franklin Hall on their Ashland campus. (You may recall that RMC was in Boydton, Virginia, before The War.)
I'm working away on a paper on what I like to refer to as the ideological origins of secession -- the constellation of ideas about the centrality of slavery to Southern life and how slavery was threatened by Lincoln's election -- and events in the North more generally. It's the bookend of University, Court, and Slave, which tries to tie together the ideas and economic and demographic reality of slavery that gripped the south in the decades leading into war with their role in the coming of war. I'm very much looking forward to talking with my friends at the University of Florida about this on March 21. I guess I might have called it the constitutional origins of secession but I didn't want to seem to be legitimizing the southern constitutional arguments or making it seem as though I thought that secession was constitutional. So instead I'm cribbing the title of one of my favorite works of history -- Bernard Bailyn's Ideological Origins of the American Revolution.
Little bit of background here -- there's a really important question about just what would have happened to slavery had war not intervened -- would slavery, as many in the south after the war said, have ended pretty quickly? In some ways this lets the south off the moral hook rather easily -- as in it suggests that slavery was on the way out (both economically and morally) and it calls into question the need for the enormous sacrifices of war.
....Or would slavery have continued for decades, just as Jim Crow did. Part of this question turns on how people think about the economics of slavery; it used to be assumed that slavery was inefficient. This is partly due to the pre-war southern argument that slavery was hindering the growth of industry in the south (this was employed by anti-slavery southerners and also by some proslavery southerners who wanted to make it appear that they were making sacrifices for the benefit of their enslaved property). But more recent investigations -- for instance Gavin Wright's Political Economy of the Cotton South -- points to a rather different picture -- one of a healthy institution of extracting labor at a relatively low cost. I'm on the side of this would have continued for a long while -- though I suppose that eventually the North would have stopped it.
For this purpose, though, I want to go back to the time in the fall of 1860 when white southerners were thinking that their way of life was imminently threatened. What interests me about this is that Southerners spoke often in terms of a series of ideas -- the centrality of slavery to southern life; the constitution's protection of slavery; and the North's violation of the South's constitutional rights. A couple weeks back I wrote about why historians haven't focused so much on the constitutional rhetotic. But whatever the reasons for overlooking the constitutional arguments, I think there are some important reasons to spend some time with it now -- for the constitutional arguments help us understand what Southerners were thinking and they point out some of the ways that the Supreme Court and public constitutional arguments added to the South's claims.
I see that Paul Caron is blogging about the new paper by Joni Hersch and W. Kip Viscusi (both of Vanderbilt Law School), entitled "Law and Economics as a Pillar of Legal Education," which is now up on ssrn. Lots of good stuff to talk about in there. For instance, about 32% of faculty at the top 13 schools have Ph.Ds. I didn't realize that recent hiring has been so phd-centric at those schools. Also, I was somewhat surprised by table 1 ("Educational Profiles of Faculty at the 26 Highest Ranked Law Schools"). Of the 1338 faculty at the top 26 schools, 65 have only a phd (and no law degree).
Here is the abstract:
This paper reports the distribution of doctoral degrees in economics and in other fields among faculty at the 26 highest ranked law schools. Almost one-third of professors at the top 13 law schools have a Ph.D. degree, with nine percent having a Ph.D. in economics. Law school rank is highly correlated with the share of faculty holding a Ph.D. in economics and is less correlated with the share of faculty with other doctoral degrees. Law and economics is a major area of legal scholarship based on citations in the law literature and other impact rankings. In recognition of the increased importance of law and economics in legal education, in 2006 Vanderbilt University established a joint J.D./Ph.D. program in law and economics. We provide information on the genesis and operation of the program.
It must be fall, if the next generation of rankings scholarship is going up on ssrn!
Well, I'm back from a fabulous conference, Slavery's Capitalism. Lots of stuff to talk about here. The first thing, of course, is ... a picture! At right is a picture of a Civil War monument in downtown Providence, which I'm told was the first Civil War monument to depict a slave -- or some such. Kirk Savage's Standing Soldier, Kneeling Slave will have the complete story on it.
The organizers, Seth Rockman and Sven Beckert, assembled a bunch of senior scholars -- including the legendary Stanley Engerman and Lorena Walsh, whose Motives of Pleasure, Honor, and Profit I hope to talk about some this summer. There were some old friends there -- which I guess that means they're (we're) senior folks, too, these days -- like James Campbell, Mike Vorenberg, and Josh Rothman, among many others. And there were a lot of younger folks doing some incredibly creative work.
The conference took inspiration in some ways from the Brown Slavery and Justice Committee's work from a few years back that looked to Brown and Rhode Island's connections to slavery (and to a lesser extent anti-slavery). In contrast to the Emory University conference on slavery and the university from back in February, this one was focused on the economic connections between slavery and the north and Europe, more than the intellectual ones.
The organizers cast the net broadly. Thus, there was a lot of talk about the ways that slavery drove economic and technological development. For instance, to take just two examples from many papers, Bonnie Martin spoke about her work that you may have seen in the Journal of Southern History ("Slavery's Invisible Engine: Mortgaging Human Property") last fall on slave mortgages and Daniel Rood spoke about his most innovative work on how the desire to increase agricultural output (or at least the speed of harvesting) drove technological innovation. There was also talk about how slavery and the products of slavery were important to economic development in the north, the Caribbean, and Europe, among many, many other topics.
The conference has already drawn some stories, including two from the Providence Journal and one in the Brown Daily Herald and another in the Harvard Crimson. What sort of surprised me were the comments to the Projo articles, because the discussion of contemporary issues, like reparations, was just about non-existent at the conference. There was not a single paper that dealt with this as even a side theme and I think the only person who mentioned that word reparations did so in a dismissive way in a single sentence. One commenter mentioned that she hoped to see more of the moral outrage in some of the papers, which suggests that if anything the presenters were tilting in the opposite direction. Obviously some people don't even want to hear about this history at all.
Now, a couple of other thoughts about this. As the Crimson article points out, there were a number of presentations of student work from history department classes at both Brown and Harvard, which focused on individual elements of Harvard and (in the case of the Brown University papers) Rhode Island connections to slavery and Jim Crow. One paper was on debates at the Harvard Divinity School's literary society over slavery -- a topic near to my heart, of course (and here), though my focus is on the southern part of the story.
My paper was on considerations of utility in American legal thought and how those considerations supported slavery both North and South, though more of my examples were drawn from south of the Mason-Dixon line than north of it. I'm interested in a flip on the typical story of how trade and the market led to antislavery results. You may recall, for instance, that long before historians like David Brion Davis began talking about the ways that capitalism caused the growth of anti-slavery values that Ralph Waldo Emerson spoke of the powerful effect of trade on pushing down slavery.
The philosopher and lover of man have much harm to say of trade; but the historian will see that trade was the principle of Liberty; that trade planted America and destroyed Feudalism; that it makes peace and keeps peace, and it will abolish slavery. We complain of its oppression of the poor, and of its building up a new aristocracy on the ruins of the aristocracy it destroyed.
Certainly, the market was instrumental in giving free workers in the north and in Europe the power and the incentive to oppose slavery. And I am a firm believer in the ways that affluence can lead to a rise in moral sensibilities and to the power to act on those refined sentiments. Yet, there is also a close connection between trade and the market and proslavery attitudes.
Anyway, here is a podcast of my talk, "Utility, Market, and Slavery in American Legal Thought." I should add that while I am a huge advocate of histories that deal with the ways that African Americans, particularly African American intellectuals, tore down slavery and Jim Crow and also of talk of accounting for the crimes of slavery and Jim Crow that at this conference I was focused on other issues -- that is, I spoke almost exclusively about dead, white, slaveholding men (with an occassional gesture towards an anti-slavery white woman or white man). While I hope that we will have more conversations about how African Americans opposed slavery and, of course, how their forced labor contributed to American (and world) economic development, it is important to understand how the powerful, the wealthy, and the well-educated thought about property rights and law. Amidst some very important papers about how mechanical and financial technology led to economic development, I hope that there will be talk of how the technology of law was mobilized and refined to make the system of slavery as profitable as it was and to drive further economic development. That is a story in which we need to return to the ideas of dead white slave-owning men (and women), and northern judges, lawyers, and merchants, as well as those of the enslaved and the anti-slavery advocates.
Amidst all the talk of probate in the old South, I've been meaning to talk about another paper that Sarah Ludington and Mitu Gulati and I have up, "Applied Legal History: Demystifying the Doctrine of Odious Debts." The short version here is that Sarah and Mitu have previously written about the historical "origins" of the doctrine of odious debt. The doctrine allows successor regimes to repudiate the "odious" debts contracted by predecessor despotic regimes under certain, limited circumstances.
Jayachandran and Kremer brought this into the public discussion through a series of articles and Op-Eds in places like the Wall Street Journal. Among economists, a big question is whether to have ex ante or ex post solutions (the ex post decision-making that courts engage in strikes them as inefficient). The lawyers, on the other hand, see the request for ex ante labeling of regimes as good or bad as impractical. So we have a typical turf conflict between the economists and the lawyers, which is worth some more comment by someone more knowledgeable than me at some point.
Ok--back to "Applied Legal History." What we wanted to do in our paper was to go behind Sack, to look at the pre-history of odious debts, particularly in the United States. We looked at instances in which the United States repudiated (or countenanced repudiation) before 1920, as a way of trying to figure out what the doctrine of odious debt was, even before it was given that formulation by Sack.
So we set off to working on this -- Sarah and Mitu on the twentieth century repudiations that they know so well and I to the repudiations, both pre and post Civil War, in the south (and to a lesser extent in the pre-war North). What we found was not one "doctrine" but multiple doctrines that contemplated the repudiation of debts by sovereign states. At least in the nineteenth century, a lot of this involved questions of politics -- what could Mississippi and Pennsylvania, for instance, get away with in terms of scaling back of debt or repudiating it entirely? Could they sell to voters (and legislators who might want to try to raise money again through bonds) repudiation? (The eleventh amendment made it very difficult to try to reclaim money from the states, investors figured out some ways of getting around the eleventh amendment, more or less, by the early twentieth century.)
And in the post-war South, repudiation took place in the wake of Reconstruction, when white southerners retook control of their states from the carpetbaggers, scalawags, and recently freed slaves who had control of the southern legislatures until around 1877. After 1877, some southern legislatures repudiated the debts incurred by the Reconstruction governments. Ah, you never know in what place a doctrine will be found or who will use it, do you? All of which makes me think there's a creative, short article to be written, entitled, "The Jim Crow Origins of the Odious Debt Doctrine."
I think the paper's an exciting look at debt repudiation, which helps give a richer picture than has been available in the legal literature up to now about the pre-1920 instances of repudiation in US history. (A lot of this is well-plowed by economic historians, though they are somewhat less interested in the legal mechanisms of repudiation -- so I think one of the key contributions of this paper is in getting a couple of discrete fields talking.)
What may warrant more comment is the title, "Applied Legal History." Our thought was this was a piece of going back and doing serious history (or in the case of my section, mining the secondary literature by economic historians), with the intent that it also serve some purpose in contemporary advocacy regarding odious debt. At some point I'd like to talk more about this, because it goes to a really central question for historians (and legal historians): to what extent are our questions and research agendas driven (or should they be driven) by contemporary questions? Over at the legal history blog, Mary Dudziak and Dan Ernst engage these questions with some frequency. One important discussion there is that between Gordon Wood and Robin Einhorn over Wood's review of Einhorn's American Slavery, American Taxation in the NYROB. A lot of historians (Wood prime among them) question history with a specific advocacy purpose. Perhaps legal history is particularly well-suited to at least some instances of "applied" scholarship because questions of past experience are so closely related to current interpretation of law. That is, legal history may have a particular role to play in cases like the interpretation of odious debts. But on the larger issue of "applied history" I hope to have some other thoughts shortly.
"Odious debts" have been the subject of debate in academic, activist, and policy circles in recent years. The term refers to the debts of a nation that a despotic leader incurs against the interests of the populace. When the despot is overthrown, the new government-understandably-does not wish to repay creditors who helped prop up the despot. One argument has focused on whether customary international law supports a "doctrine" of odious debts that justifies non-payment of sovereign debts when three conditions are met: (1) the debts were incurred by a despotic ruler (without the consent of the populace); (2) the funds were used in ways that did not benefit the populace; and (3) the creditors were aware of the likely illegality of the loans. Advocates of this doctrine, which was synthesized by Alexander Sack in 1927, typically cite two examples of U.S. state practice for support: the negotiations between the United States and Spain following the Spanish-American War, in which the United States repudiated Cuba's colonial debt, and the Tinoco Arbitration, which repudiated certain debts of the deposed Costa Rican dictator, Frederico Tinoco. Those historical precedents do not support the first condition of Sack's doctrine of odious debts, but do support the second two requirements. In addition to these two instances, United States history is rich with examples of debt repudiation by states. Those examples suggest a doctrine of odious debts that is broader and more flexible than the one written by Sack. Indeed, it may be appropriate to speak of the doctrines (not just doctrine) of odious debts.