Legal History Commons^™

What Would Surrey Say? The Long Reach Of Stanley S. Surrey, Reuven S. Avi-Yonah, Nir Fishbien

Law & Economics Working Papers

This essay examines the extent of Surrey’s influence on developments in tax law after his death. It argues that his ideas clearly impacted the tax reform of 1986, but can even be seen in later enactments like the Tax Cuts and Jobs Act of 2017 and contemporary developments in international taxation. This in turn enables us to get a clearer perspective on what Surrey aimed to achieve and what the goals of these later developments are.

Unreasonable Risk: The Failure To Ban Asbestos And The Future Of Toxic Substances Regulation, Rachel Rothschild

Law & Economics Working Papers

Every day, Americans are exposed to hundreds of chemicals in the air we breathe, the water we drink, and the products we use. The vast majority of these chemicals have never been tested for safety. Many have been shown to cause serious health harms, ranging from cancer to autoimmune illness to IQ loss. They also have disproportionate effects on some of the most vulnerable populations in our society, such as children, minorities, and industrial workers.

The law that is supposed to protect Americans from dangerous chemical exposures – the Toxic Substances Control Act (TSCA) – was long considered a dead …

Stanley Surrey, The 1981 Us Model, And The Single Tax Principle, Reuven S. Avi-Yonah, Gianluca Mazzoni

Law & Economics Working Papers

2021 marks the 40th anniversary of the 1981 U.S. Model Tax Treaty as well as the 5th anniversary of the 2016 US Model Tax Treaty. The first author has repeatedly argued that the 1981 Model gave life to the single tax principle (“STP”). The 2016 Model updates effectively implemented the principle that cross-border income should be taxed once – that is not more and but also not less than once. For example, the 2016 Model does not reduce withholding taxes on payments of highly mobile income that are made to related persons that enjoy low or no taxation with respect …

Rebellion, Rascals, And Revenue: Pleasingly Gaudy And Preposterous, Reuven S. Avi-Yonah

Law & Economics Working Papers

Michael Keen and Joel Slemrod’s REBELLION, RASCALS AND REVENUE: TAX FOLLIES AND WISDOM THROUGH THE AGES (Princeton University Press, 2021) is a wonderful book, which should be read by any student of taxation. To most tax policy makers and academics, tax history may seem a bit arcane, because they believe that the study of taxation and especially public finance economics is a story of progress and that we know better how to design good tax systems than our ancestors. To this attitude, Keen and Slemrod offer a decisive rejoinder: We do not necessarily understand taxation better than our predecessors, and …

Of Bodies Politic And Pecuniary: A Brief History Of Corporate Purpose, David B. Guenther

Law & Economics Working Papers

American corporate law has long drawn a bright line between for-profit and non-profit corporations. In recent years, hybrid or social enterprises have increasingly put this bright-line distinction to the test. This Article asks what we can learn about the purpose of the American business corporation by examining its history and development in the United States in its formative period from roughly 1780-1860. This brief history of corporate purpose suggests that the duty to maximize profits in the for-profit corporation is a relatively recent development. Historically, the American business corporation grew out of an earlier form of corporation that was neither …

China's 'Corporatization Without Privatization' And The Late 19th Century Roots Of A Stubborn Path Dependency, Nicholas C. Howson

Law & Economics Working Papers

This Article analyzes the contemporary program of “corporatization without privatization” in the People’s Republic of China (PRC) directed at China’s traditional state-owned enterprises (SOEs) through a consideration of long ago precursor enterprise establishments—starting from the last Chinese imperial dynasty’s creation of “government promoted/supervised-merchant financed/operated” (guandu shangban) firms in the latter part of the nineteenth century. While analysts are tempted to see PRC corporations with listings on international exchanges that dominate the global economy and capital markets as expressions of “convergence,” this Article argues that such firms in fact show deeply embedded aspects of path dependency unique to the Chinese context …

A Revisionist History Of Regulatory Capture, William J. Novak

Book Chapters

The idea of regulatory capture has controlled discussions of economic regulation and regulatory reform for more than two generations. Originating soon after World War II, the so-called capture thesis was an early harbinger of the more general critique of the American regulatory state that dominated the closing decades of the twentieth century. The political ramifications of that broad critique of government continue to be felt today both in the resilient influence of neoliberal policies such as deregulation and privatization as well as in the rise of more virulent and populist forms of anti-statism. Indeed, the capture thesis has so pervaded …

Were Standard Oil's Railroad Rebates And Drawbacks Cost Justified?, Daniel A. Crane

Articles

In this essay, written for a symposium on the centennial anniversary of the Supreme Court's Standard Oil decision, I reexamine the costjustification question. In the first part, I explain why the cost-justification question is central to the entire case and its acquired and evolving historical meaning. In the second part, I review the evidence of claimed efficiencies passed on to the railroads. I conclude that there is evidence that Standard Oil passed along significant cost savings to the railroads and that these savings could have justified a portion of the rebates and drawbacks. However, I conclude that there is little …

Law And The Social Control Of American Capitalism, William J. Novak

Articles

This Essay is part of a larger, ongoing investigation of the role of law in the creation of a modern American state from 1877 to 1932. That project charts the decline of an early nineteenth-century world of local, common law self government (what I called in a previous work a “well-regulated society”) and the rise of a distinctly modern administrative regulatory state in the United States. This new legal-political regime was rooted in three interlinked developments: the centralization of public power; the individualization of private right; and the constitutionalization of the rule of law. Beginning soon after the Civil War, …

The Ghost Of Telecommunications Past, Philip J. Weiser

Michigan Law Review

When the canon for the field of information law and policy is developed, Paul Starr's The Creation of the Media will enjoy a hallowed place in it. Like Lawrence Lessig's masterful Code and Other Laws of Cyberspace, Starr's tour de force explains how policymakers have made a series of "constitutive choices" about how to regulate different information technologies that helped to shape the basic architecture of the information age. In so doing, Starr displays the same literary and analytical skill he used in writing the Pulitzer Prizewinning The Social Transformation of American Medicine, the firsthand experience he gained …

The Cyclical Transformations Of The Coporate Form: A Historical Pespective On Corporate Social Responsibility, Reuven S. Avi-Yonah

Law & Economics Working Papers Archive: 2003-2009

This Article describes the transformations underwent by the corporate form from its Roman origins to the present. It shows that every time there was a shift in the role of the corporation, three theories of the corporation (the aggregate, artificial, and real entity theories) were brought forward in cyclical fashion. However, every time the real entity theory prevailed, and it is the dominant theory during periods of stability in the relationship between the corporation, the shareholders, and the state. The article describes this evolution in detail, and then attempts to derive normative consequences for the legitimacy of corporate social responsibility …

Economic Inequality And The Role Of Law, Richard L. Kaplan

Michigan Law Review

In this ambitious book, famed commentator and analyst Kevin Phillips attempts nothing less than a political history of American economic life with a specific focus on the wealthy. Succeeding far more often than not, Phillips interweaves the development of American technology with the rise and fall of economic fortunes, crafting a compelling tale with significant implications for the formulation of public policy and the laws that implement such policy. Festooned with more than seventy charts and graphs, the book explains how wealth has been accumulated throughout the entire history of the United States. It is full of intriguing insights and …

How The Corporation Conquered John Bull, A.W. Brian Simpson

Michigan Law Review

This is a study of the evolution of the forms of business organization during the industrial revolution. Historians never fully agree about anything at all, and often with good reason, but there is really no doubt that the period covered by this book is one that saw major changes in agricultural and industrial production, and in commercial practice and organization. It is convenient to refer broadly to the changes which took place in terms of a revolution, industrial, agricultural, or less commonly, commercial in nature. Long before the starting date for this study, which is the date of the Bubble …

The Electrical Deregulation Fiasco: Looking To Regulatory Federalism To Promote A Balance Between Markets And The Provision Of Public Goods, Jim Rossi

Michigan Law Review

Over the last thirty years, regulators have deregulated just about every regulated industry. In no industry has deregulation raised as much fear and concern as in electric power markets. Even before the Enron debacle, a crisis that is more about the failures of corporate than regulatory law, it was clear that something had gone seriously wrong in the turn towards deregulation of electric power. Recent events in California are illustrative. In early 2000, consumers in California, the first state to deregulate retail power markets on a mass scale, saw repeated months of power interruptions. Many utility customers experienced a risk …

Antitrust Beyond Competition: Market Failures, Total Welfare, And The Challenge Of Intramarket Second-Best Tradeoffs, Peter J. Hammer

Michigan Law Review

Should antitrust law ever sanction the accumulation of market power or permit other restraints of trade if such conduct would increase social welfare? This is the challenge raised by intramarket second- best tradeoffs. The lesson of second-best analysis is that one market failure can sometimes counteract the effects of another market failure. In the presence of multiple market failures, it is conceivable that mergers or other restraints traditionally viewed as anticompetitive may be welfare-enhancing. A social planner, given the mandate of maximizing total welfare, would permit such restraints. Could an antitrust judge come to the same result under a defensible …

Empirical Insight And Some Thoughts On Future(S) Investigation: Comments On Mark West's 'Private Ordering At The World's First Futures Exchange', A.W. Brian Simpson

Michigan Law Review

Some considerable number of years ago, when I was in Chicago, I had a plan to undertake a general study of the origins of futures markets. They fascinated me for a variety of reasons, one being their bizarre nature: traders meeting together, usually in some form of ring, in order to sell, on a huge scale, quantities of commodities which they neither possess, nor intend to possess, to other traders, who have not the least wish to receive such commodities, and nowhere to put them if they did. At first sight it appears a weird perversion of the institution of …

A Public Choice Approach To Private Ordering: Rent-Seeking At The World's First Futures Exchange: Comments On Mark West's 'Private Ordering At The World's First Futures Exchange', Omri Yadlin

Michigan Law Review

The literature on private ordering systems has expanded exponentially over the last decade. Yet, very few scholars have actually attempted to define the term "private ordering" - a failure that sometimes leads to confusion. Some scholars identify private ordering with non-state ordering. According to this view, the private legal systems Robert Ellickson, Lisa Bernstein, McMillan & Woodruff, Mark West, and others have investigated are "private" simply because their norms are not manufactured or enforced by the state. The alternative view emphasizes the decentralized feature of private ordering systems. Robert Ellickson, for example, studied "how people manage to interact to mutual …

The Assault That Failed: The Progressive Critique Of Laissez Faire, Richard A. Epstein

Michigan Law Review

Robert Lee Hale has long been an intellectual thorn in the side of the defenders of laissez faire, among whom I am quite happy to count myself. As Barbara Fried notes in her meticulous study of Hale's work, his name is hardly a household word. But both directly and indirectly, his influence continues to be great. His best known work is perhaps Coercion and Distribution in a Supposedly Non-Coercive State, published in 1923 as a review of Thomas Nixon Carver's Principles of National Economy, itself a defense of the classical principles of laissez faire, remembered today only for the drubbing …

Private Ordering At The World's First Futures Exchange, Mark D. West

Michigan Law Review

Modern derivative securities - financial instruments whose value is linked to or "derived" from some other asset - are often sophisticated, complex, and subject to a variety of rules and regulations. The same is true of the derivative instruments traded at the world's first organized futures exchange, the Dojima Rice Exchange in Osaka, Japan, where trade flourished for nearly 300 years, from the late seventeenth century until shortly before World War II. This Article analyzes Dojima's organization, efficiency, and amalgam of legal and extralegal rules. In doing so, it contributes to a growing body of literature on commercial self-regulation while …

Securing Russia's Future: A Plea For Reform In Russian Secured Transactions Law, Jason J. Kilborn

Michigan Law Review

After many turbulent years of uneasy transition to a market economy, Russia is finally "open for business." Nonetheless, the transitional period remains far from over, and Russian enterprises are still starved for capital that they desperately need for retooling to convert from military to consumer production, for acquiring new equipment to replace old and worn machinery, and for undertaking new and lucrative projects. While Russian financial institutions may provide significant funding, their reserves are limited; they could not hope to finance independently the multitude of existing and potential enterprises within the expansive Russian territory. Therefore, much of the financing for …

Repossession: Of History, Poverty, And Dissent, Martha Minow

Michigan Law Review

A Review of The Dispossessed: America's Underclasses from the Civil War to the Present by Jacqueline Jones

Antitrust's Protected Classes, Herbert Hovenkamp

Michigan Law Review

For purposes of argument, this essay assumes that efficiency ought to be the exclusive goal of antitrust enforcement. That premise is controversial. Nonetheless, several economic and legal theorists, primarily among the Chicago School of economics and antitrust scholarship, have developed an Optimal Deterrence Model based on this assumption. The Model is designed to achieve the optimum, or ideal, amount of antitrust enforcement. The Model's originators generally believe that there is too much antitrust enforcement, particularly enforcement initiated by private plaintiffs. I intend to show that, even if efficiency is the only antitrust policy goal, a broader array of lawsuits should …

Latin-American Land Reform: The Uses Of Confiscation, Kenneth L. Karst

Michigan Law Review

This article examines the legislative techniques for taking land, showing their confiscatory operation. For many lawyers, the analysis would then be easily completed: confiscation is wrongful and must be condemned. Rejecting the implicit absolutism of that conclusion, this article inquires into the justifications that can be pleaded on behalf of selective confiscation as an aid in solving some of Latin America's economic and social ills.

Stein & Nicholson: American Enterprise In The European Common Market: A Legal Profile. Vol. Ii, Sigmund Timberg

Michigan Law Review

A Review of American Enterprise in the European Common Market: A Legal Profile. Vol. II. Volume Two. Edited by Eric Stein and Thomas L. Nicholson.

Hunt: Law And Locomotives: The Impact Of The Railroad On Wisconsin Law In The Nineteenth Century, Alan N. Polasky

Michigan Law Review

A Review of Law and Locomotives: The Impact of the Railroad on Wisconsin Law in the Nineteenth Century. By Robert S. Hunt.

Product Competition In The Relevant Market Under The Sherman Act, David Macdonald

Michigan Law Review

The correct delimitation of the relevant market is the problem to be examined here. First the legal development of market concepts will be traced. Then, with the objective of coalescing the legal and economic concepts of .the market, a test will be proposed with which to measure the correct market in any given case.

The Seaman As Ward Of The Admiralty, Martin J. Norris

Michigan Law Review

The seaman has a peculiar status in American law. He is in most instances a mature individual, sui juris, and therefore capable of entering into his own contracts but nonetheless his contractual dealings with shipmasters and owners are as carefully watched by our admiralty courts as though he were a minor or a young heir. He is in contemplation of the maritime law a ward of the admiralty courts.

The seaman's position in a legal and economic sense is unique. Singled out by the Congress of the United States as one of a class of workers requiring special consideration …

Labor Law-Some Developments During The Past Five Years-(A Service For Returning Veterans), Russell A. Smith

Michigan Law Review

It will be helpful in appraising labor relations problems of today to recall that unionism in this country has trodden a rough and thorny path over the past century. Unions were not welcomed by employers, worker inertia itself was a considerable obstacle, and by and large the general public was dubious as to the value of unionism. Facing these difficulties unions from the- beginning felt compelled to resort to self-help--the strike, the picket line, the boycott, etc.--to achieve their aims. In so doing they encountered vigorous and successful opposition in the courts, as injured economic interests, and even the government, …

The Effect Of Inflation On Private Contracts: United States, 1861-1879, John P. Dawson, Frank E. Cooper

Michigan Law Review

The Northern inflation coincided almost exactly in its early stages with the inflation in the South, and was produced by the same basic factor - a budgetary deficit due to war expenditure. The financial mobilization of the North was handicapped at the outset by a deficit inherited from the previous administration and by an impaired national credit. The prompt response of the Northern banks enabled the Treasury to overcome this initial handicap and to finance the greatly increased expenditure through the early months of the war. How long orthodox methods of borrowing would have sufficed has been ever since a …

The Effect Of Inflation On Private Contracts: United States, 1861-1879, John P. Dawson, Frank E. Cooper

Michigan Law Review

The American Civil War provides ample material for studying the legal consequences of currency depreciation. The sudden demands of war on government budgets made it necessary in both North and South to issue a large volume of paper money, which produced a general rise in prices, a premium on gold, and all the other indices of major monetary inflation. American history had already illustrated the dangers in the use of unstable monetary standards and in too rapid an expansion of the monetary supply. The period of the Civil War is of peculiar interest to lawyers, however, because the record of …