Law and Economics Commons^™

Public Actors In Private Markets: Toward A Developmental Finance State, Robert Hockett, Saule Omarova

Saule T. Omarova

The recent financial crisis brought into sharp relief fundamental questions about the social function and purpose of the financial system, including its relation to the “real” economy. This Article argues that, to answer these questions, we must recapture a distinctively American view of the proper relations among state, financial market, and development. This programmatic vision – captured in what we call a “developmental finance state” – is based on three key propositions: (1) that economic and social development is not an “end-state” but a continuing national policy priority; (2) that the modalities of finance are the most potent means of …

Cleaning The Muck Of Ages From The Windows Into The Soul Of Income Tax, John Passant

John Passant

The aim of this paper is to provide readers with an insight into Marx’s methods as a first step to understanding income tax more generally but with specific reference to Australia’s income tax system. I do this by introducing readers to the ideas about the totality that is capitalism, appearance and form, and the dialectic in Marx’s hands. This will involve looking at income tax as part of the bigger picture of capitalism, and understanding that all things are related and changes in one produce changes in all. Appearances can be deceptive and we need to delve below the surface …

Taking Distribution Seriously, Robert C. Hockett

Robert C. Hockett

It is common for legal theorists and policy analysts to think and communicate mainly in maximizing terms. What is less common is for them to notice that each time we speak explicitly of socially maximizing one thing, we speak implicitly of distributing another thing and equalizing yet another thing. We also, moreover, effectively define ourselves and our fellow citizens by reference to that which we equalize; for it is in virtue of the latter that our social welfare formulations treat us as “counting” for purposes of socially aggregating and maximizing. To attend systematically to the inter-translatability of maximization language on …

Minding The Gaps: Fairness, Welfare, And The Constitutive Structure Of Distributive Assessment, Robert C. Hockett

Robert C. Hockett

Despite over a century’s disputation and attendant opportunity for clarification, the field of inquiry now loosely labeled “welfare economics” (WE) remains surprisingly prone to foundational confusions. The same holds of work done by many practitioners of WE’s influential offshoot, normative “law and economics” (LE). A conspicuous contemporary case of confusion turns up in recent discussion concerning “fairness versus welfare.” The very naming of this putative dispute signals a crude category error. “Welfare” denotes a proposed object of distribution. “Fairness” describes and appropriate pattern of distribution. Welfare itself is distributed fairly or unfairly. “Fairness versus welfare” is analytically on all fours …

The Impossibility Of A Prescriptive Paretian, Robert C. Hockett

Robert C. Hockett

Most normatively oriented economists appear to be “welfarist” and Paretian to one degree or another: They deem responsiveness to individual preferences, and satisfaction of one or more of the Pareto criteria, to be a desirable attribute of any social welfare function. I show that no strictly “welfarist” or Paretian social welfare function can be normatively prescriptive. Economists who prescribe must embrace at least one value apart from or additional to “welfarism” and Paretianism, and in fact will do best to dispense with Pareto entirely.

The First Thing We Do, Jorge R. Roig

Jorge R Roig

The Legitimacy Of Crimmigration Law, Juliet P. Stumpf

Juliet P Stumpf

Crimmigration law—the intersection of immigration and criminal law—with its emphasis on immigration enforcement, has been hailed as the lynchpin for successful political compromise on immigration reform. Yet crimmigration law’s unprecedented approach to interior immigration and criminal law enforcement threatens to undermine public belief in the fairness of immigration law. This Article uses pioneering social science research to explore people’s perceptions of the legitimacy of crimmigration law. According to Tom Tyler and other compliance scholars, perceptions about procedural justice—whether people perceive authorities as acting fairly—are often more important than a favorable outcome such as winning the case or avoiding arrest. Legal …

Licensure Of Health Care Professionals: The Consumer's Case For Abolition, Charles H. Baron

Charles H. Baron

While state medical licensure laws ostensibly are intended to promote worthwhile goals, such as the maintenance of high standards in health care delivery, this Article argues that these laws in practice are detrimental to consumers. The Article takes the position that licensure contributes to high medical care costs and stifles competition, innovation and consumer autonomy. It concludes that delicensure would expand the range of health services available to consumers and reduce patient dependency, and that these developments would tend to make medical practice more satisfying to consumers and providers of health care services.

The “Ensuing Loss” Clause In Insurance Policies: The Forgotten And Misunderstood Antidote To Anti-Concurrent Causation Exclusions, Chris French

Christopher C. French

As a result of the 1906 earthquake and fire in San Francisco which destroyed the city, a clause known as the “ensuing loss” clause was created to address concurrent causation situations in which a loss follows both a covered peril and an excluded peril. Ensuing loss clauses appear in the exclusions section of such policies and in essence they provide that coverage for a loss caused by an excluded peril is nonetheless covered if the loss “ensues” from a covered peril. Today, ensuing loss clauses are found in “all risk” property and homeowners policies, which cover all losses except for …

Regulation By Markets And Higher Education, Benedict Sheehy

Benedict Sheehy

Markets have a number of uses. One increasingly important use by politicians is as a means of regulating the supply and distribution of goods and services formerly supplied and distributed by governments on non-market bases. The use of markets as a regulator of higher education is not novel. However, the increased reliance on markets as a regulator of higher education is an on-going experiment with certain predictable failures. This article explores the uses of the market in the supply and distribution of higher education and weighs it against the stated policy objectives, with particular attention to the application proposed in …

Behavioral Public Finance, Edward J. Mccaffery

Edward J McCaffery

These are slides from a presentation to the Gruter Institute for Law and Behavioral Research, Squaw Valley Conference, May, 2008 (at which event Michael Jensen got me to agree to post these slides as a pdf on SSRN . . . ). The task is to give an overview of what I hope to be an emerging field of behavioral public finance. Behavioral finance, as per Barberis and Thaler 2003 (and others), consists of two parts: (1) individual level heuristics and biases, which can lead to sub-optimal (inconsistent) judgment and decision-making, and (2) institutional arbitrage mechanisms. In private finance and …

Comments On Liebman And Zeckhauser, Simple Humans, Complex Insurance, Subtle Subsidies, Edward J. Mccaffery

Edward J McCaffery

These are brief comments on an excellent paper by Jeffrey Liebman and Richard Zeckhauser, prepared for a conference sponsored by the Urban Institute and Brookings on tax and health care policy. Liebman and Zeckhauser summarize the complexities involved in making optimal health insurance decisions, and offer generally cautionary notes about conflating these with tax law (a theme of the conference). Most importantly, Liebman and Zeckhauser suggest a positive role for employers in health care and insurance decisions, as better setters or framers of choice sets—witness 401(k) plans. In this Commentary, I applaud Leibman and Zeckhauser’s general work and particular observation, …