Law Commons^™

Daca's Tax Benefits Highlight The Need For Broader Immigration Reform, Jacqueline Lainez Flanagan

Journal Articles

America’s aging population and declining birth rates are negatively affecting the nation’s Social Security and Medicare safety nets, reducing tax revenue, and weakening the broader economy.1 Meanwhile, immigration is increasing workforce participation by expanding the number of young adults in the United States.2 Despite political setbacks, the Deferred Action for Childhood Arrivals (DACA) program exemplifies the economic and tax benefits of immigration, providing data and the impetus for a better way forward. Although not all DACA-eligible youth have registered for it, it is estimated that in 2017 alone, more than $2.2 billion in federal taxes were paid by DACA-eligible youth …

The Private Costs Of Behavioral Interventions, Avishalom Tor

Journal Articles

The increasing popularity of behavioral interventions—also known as nudges—is largely due to their perceived potential to promote public and private welfare at dramatically lower costs than those of traditional regulatory instruments, such as mandates or taxes. Yet, though nudges typically involve low implementation costs, scholars and policymakers alike tend to underestimate their often-substantial private costs. Once these costs are accounted for, most nudges turn out to generate significantly lower net benefits than assumed, and some prove less efficient or less cost-effective than traditional instruments. At other times, the private costs of behavioral interventions are sufficiently large to render them socially …

When Should Governments Invest More In Nudging? Revisiting Benartzi Et Al. (2017), Avishalom Tor, Jonathan Klick

Journal Articles

Highly influential recent work by Benartzi et al. (2017) argues—using comparisons of effectiveness and costs—that behavioral interventions (or nudges) offer more cost-effective means than traditional regulatory instruments for changing individual behavior to achieve desirable policy goals. Based on this finding, these authors further conclude that governments and other organizations should increase their investments in nudging to supplement traditional interventions. Yet a closer look at Benartzi et al.’s (2017) own data and analysis reveals that they variously exclude and include key cost elements to the benefit of behavioral instruments over traditional ones and overstate the utility of cost-effectiveness analysis for policy …

The Law And Economics Of Behavioral Regulation, Avishalom Tor

Journal Articles

This article examines the law and economics of behavioral regulation (“nudging”), which governments and organizations increasingly use to substitute for and complement traditional instruments. To advance its welfare-based assessment, Section 1 examines alternative nudging definitions and Section 2 considers competing nudges taxonomies. Section 3 describes the benefits of nudges and their regulatory appeal, while Section 4 considers their myriad costs—most notably the private costs they generate for their targets and other market participants. Section 5 then illustrates the assessment of public and private welfare nudges using cost-benefit analysis, cost-effectiveness analysis, and rationality-effects analysis.

An Economic Approach To Religious Exemptions, Stephanie H. Barclay

Journal Articles

Externalities caused by religious exemptions have been getting the spotlight again in light a case the U.S. Supreme Court will hear this term: Fulton v. City of Philadelphia. Some argue that religious individuals should be required to internalize the costs they impose on third parties and thus should be denied the right to practice that harmful behavior. These new progressive theories about harm trade on rhetoric and normative intuitions regarding externalities and costs. But curiously, these theories also largely ignore an influential theoretical movement that has studied externalities and costs for the last fifty years: law and economics.

This Article …

Dismantling The Master's House: Toward A Justice-Based Theory Of Community Economic Development, Etienne Toussaint

Journal Articles

Since the end of the American Civil War, scholars have debated the efficacy of various models of community economic development, or CED. Historically, this debate has tracked one of two approaches: place-based models of CED, seeking to stimulate community development through market-driven economic growth programs, and people-based models of CED, focused on the removal of structural barriers to social and economic mobility that prevent human flourishing. More recently, scholars and policymakers have turned to a third model from the impact investing community—the social impact bond, or SIB. The SIB model of CED ostensibly finds a middle ground by leveraging funding …

Nudges That Should Fail?, Avishalom Tor

Journal Articles

Professor Sunstein (2017) discusses possible causes for and policy implications of the failure of nudges, with a special attention to defaults. Though he focuses on nudges that fail when they should succeed, Sunstein recognizes that some failures reveal that a nudge should not have been attempted to begin with. Nudges that fail, however, does not consider fully the relationship between the outcomes of nudging and their likely welfare effects, most notably neglecting the troubling case of nudges that succeed when they should fail. Hence, after clarifying the boundaries of legitimate nudging and noting the fourfold relationship between the efficacy of …

All Costs Have A Right, Martha T. Mccluskey

Journal Articles

From "Eleven Things They Don’t Tell You About Law & Economics: An Informal Introduction to Political Economy and Law."

Many legal scholars have critiqued the dominant law and economics paradigm. However, important work is all too often neglected because it is not popularized in an accessible form. This Article features experts who synthesize their key insights into memorable and concise vignettes. Our 11 Things project is inspired by the work of the Cambridge economist Ha-Joon Chang, who distilled many facets of his work into a book called 23 Things They Don’t Tell You About Capitalism. That book was a runaway …

The Diminishing Duty Of Loyalty, Julian Velasco

Journal Articles

Fiduciary duties comprise an integral part of corporate law. It is generally understood that directors owe the corporation and its shareholders two fiduciary duties: the duty of care and the duty of loyalty. Although both duties are firmly established in corporate law, they are not treated equally. It is generally understood that the duty of loyalty is enforced far more rigorously than the duty of care. The justification for this dichotomy is twofold. First, differential treatment is appropriate because of the relative urgencies of the underlying subject matter: loyalty issues pose greater risks than do care issues. Second, the deference …

Teaching The Lochner Era, Barry Cushman

Journal Articles

This article, prepared for the St. Louis University Law Journal's issue on “Teaching the Fourteenth Amendment,” develops a taxonomy of the Supreme Court's economic substantive due process jurisprudence during the so-called “Lochner Era” of the late-19th and early-20th centuries, and offers an assessment of the trajectory and mechanisms of the decline of that body of doctrine.

Models Of Other-Regarding Preferences And Redistribution, Matthew Dimick, David Rueda, Daniel Stegmueller

Journal Articles

Despite the increasing popularity of comparative work on other-regarding preferences, the implications of different models of altruism are not always fully understood. This article analyzes different theoretical approaches to altruism and explores what empirical conclusions we should draw from them, paying particular attention to models of redistribution preferences where inequality explicitly triggers other-regarding motives for redistribution. While the main contribution of this article is to clarify the conclusions of these models, we also illustrate the importance of their distinct implications by analyzing Western European data to compare among them. We draw on individual-level data from the European Social Survey fielded …

Defining The Economic Pie, Not Dividing Or Maximizing It, Martha T. Mccluskey

Journal Articles

This essay challenges the question that drives much of legal analysis: whether to maximize or divide the “economic pie.” Regardless of the answer, this question skews legal analysis and rests on dubious economics. This framing binary inherently presents economic maximizing as the presumptive norm, represented as superior to socioeconomic distribution in both spatial and temporal dimensions. By definition, economic “maximizing” stands larger in scope and first in order. The essay first critiques the idea that legal analysis can aim to make the economy bigger without engaging contested questions of value and politics, showing how this misleading separation of quantity from …

Are We Economic Engines Too? Precarity, Productivity, And Gender, Martha T. Mccluskey

Journal Articles

No abstract provided.

Unicorns, Guardians, And The Concentration Of The U.S. Equity Markets, Amy Deen Westbrook, David A. Westbrook

Journal Articles

No abstract provided.

Remedies, Meet Economics; Economics, Meet Remedies, Samuel L. Bray

Journal Articles

One would expect the fields of ‘law and economics’ and ‘remedies’ to have substantial interaction, but scholars in each field largely ignore those in the other. Thus, law and economics scholars blunder in their description of the law of remedies, and remedies scholars are cut off from economic insights. For scholars who are in these fields, this article offers a critique, as well as suggestions for cooperation. For all legal scholars interested in melding conceptual and economic analysis, it offers a cautionary tale of disciplinary fragmentation.

The New Gospel Of Wealth: On Social Impact Bonds And The Privatization Of Public Good, Etienne C. Toussaint

Journal Articles

Since Andrew Carnegie penned his famous Gospel of Wealth in 1889, corporate philanthropists have championed considerable public good around the world, investing in a wide range of social programs addressing a diversity of public issues, from poverty to healthcare to criminal justice. Nevertheless, the problem of “the Rich and the Poor,” as termed by Andrew Carnegie in his famous essay, remains unsolved. Socially conscious investors have recently called for America to reimagine a new “gospel of wealth”, one that not only grapples with the what of social injustice, but also explores the how and the why of systemic social and …

Prolegomenon To A Defense Of The City Of Gold, David A. Westbrook

Journal Articles

In recent political contests, economics has been used as a subjective language of disputation and identification, contradicting the field's traditional aspirations to objectivity, even science. In both partisan politics and the related but not identical bifurcation between "populist" and "establishment" or "elite" discourse, positions have become routinized into antagonistic tropes. This poses a serious problem for the United States, which uses political discourse not only for politics, but to create social cohesion among disparate groups. More generally, elites bereft of Marx no longer have a grammar with which to conceptualize, critique, and ultimately defend the global liberal order that they …

The Altruistic Rich? Inequality And Other-Regarding Preferences For Redistribution, Matthew Dimick, David Rueda, Daniel Stegmueller

Journal Articles

What determines support among individuals for redistributive policies? Do individuals care about others when they assess the consequences of redistribution? This article proposes a model of other-regarding preferences for redistribution, which we term income-dependent altruism. Our model predicts that an individual’s preferred level of redistribution is decreasing in income, increasing in inequality, and, more importantly, that the inequality effect is increasing in income. Thus, even though the rich prefer less redistribution than the poor, the rich are more responsive, in a positive way, to changes in inequality than are the poor. We contrast these results with several other prominent …

How The United States Postal Service (Usps) Could Encourage More Local Economic Development, Randall K. Johnson

Journal Articles

Over the last ten years, the United States Congress has made it increasingly difficult for the United States Postal Service ("USPS")1 to encourage economic development on the ground. Congress has deprived the USPS of its traditional means of achieving local economic development goals, which have largely benefited sub-national governments by providing indirect federal subsidies. This deprivation has occurred, at least in part, through the 2006 Postal Accountability and Enhancement Act ("PAE Act"), which expressly limits the USPS's right to offer certain non-services like domestic money transfers and other financial products. In an attempt to provide a measure of guidance to …

Money Norms, Julia Y. Lee

Journal Articles

Money norms present a fundamental contradiction. Norms embody the social sphere, a system of internalized values, unwritten rules, and shared expectations that informally govern human behavior. Money, on the other hand, evokes the economic sphere of markets, prices, and incentives. Existing legal scholarship keeps the two spheres distinct. Money is assumed to operate as a medium of exchange or as a tool for altering the payoffs of different actions. When used to make good behavior less costly and undesirable behavior more costly, money functions to incentivize, sanction, and deter. Although a rich literature on the expressive function of law exists, …

Constitutional Economic Justice: Structural Power For "We The People", Martha T. Mccluskey

Journal Articles

Toward that goal, this essay proposes a structural principle of collective economic power for “we the people.” This principle is both consistent with longstanding Constitutional ideals and tailored to the current challenges of neoliberal ideology and policy. It develops two premises: first, it rejects the neoliberal economic ideology that defines legitimate power and freedom as individualized “choice” constrained by an existing political economy. Instead, this proposed principle recognizes that meaningful political economic freedom and power fundamentally consist of access to collective organizations with potential to create a “more perfect union” with better and less constrained options. Second, the post-Lochner principle …

Framing Middle-Class Insecurity: Tax And The Ideology Of Unequal Economic Growth, Martha T. Mccluskey

Journal Articles

Prevailing tax discourse rationalizes growing economic inequality. Using the example of state and local economic development “subsidy wars,” this article explores how conventional tax ideas present unequal sacrifice and risk as a public responsibility, driven by economic fact rather than unjust politics.

Over the last several decades, one contributing cause of inequality has been the escalating tax and spending incentives offered by local governments to attract private business investment. This competition operates to favor wealthy corporations over small businesses, without producing broad or lasting economic gains to communities, and it erodes resources for public education, infrastructure, social services, health care, …

Why U.S. States Need Pension Waiver Credits, Randall K. Johnson

Journal Articles

[A] new tax expenditure concept, which is described for the first time in this article, achieves its goal by providing fresh consideration for each of the parties. This additional consideration takes two forms: a new tax credit allocation (i.e., this tax expenditure provides early access to retirement benefits, which would otherwise be accessible upon retirement, and thereby provides fresh consideration for public employees) and the right to discontinue offering defined-benefit pension plans (i.e., the waiver of this legal duty, which would otherwise need to be discharged, serves as fresh consideration for public employers). Because this fresh consideration is not tied …

The Final Step To Insider Trading Reform: Answering The "It's Just Not Right!" Objection, John P. Anderson

Journal Articles

This Article proceeds as follows: Section I sets the table by dismissing the notion that economic analysis of law should enjoy some privileged status (as more precise, rigorous, or scientific) over ethical analysis of law. Rather, it is suggested that economic and ethical reasons are best understood as different tools suited for different roles in legal reform. It is then argued that, given the current climate, ethical reasoning is the best tool for overcoming the remaining obstacles to insider trading reform in the United States. Section II begins the ethical analysis by arguing that even if it were admitted that …

Law And Economics: Contemporary Approaches, Martha T. Mccluskey, Frank A. Pasquale Iii, Jennifer Taub

Journal Articles

A relatively narrow version of Law and Economics has dominated public policy for several decades. This school of thought has mainly focused on neoclassical microeconomics. It fails to recognize the pluralism of contemporary economics in general, and the relevance of macroeconomics in particular. So-called “market forces” are thoroughly intertwined with law and cannot be understood without some reference to history, sociology, psychology, and other social sciences. It is time for legal scholars to develop a law and economics curriculum that catches up with the advance of economics as a discipline.

The urgent challenges of the 21st Century also call for …

Incarceration To Incorporation: Economic Empowerment For Returning Citizens Through Social Impact Bonds, Etienne C. Toussaint

Journal Articles

No abstract provided.

Latcrit Praxis @ Xx: Toward Equal Justice In Law, Education And Society, Tayyab Mahmud, Athena D. Mutua, Francisco Valdes

Journal Articles

This article marks the twentieth anniversary of Latina and Latino Critical Legal Theory or the LatCrit organization, an association of diverse scholars committed to the production of knowledge from the perspective of Outsider or OutCrit jurisprudence. The article first reflects on the historical development of LatCrit’s substantive, methodological, and institutional commitments and practices. It argues that these traditions were shaped not only by its members’ goals and commitments but also by the politics of backlash present at its birth in the form of the “cultural wars,” and which have since morphed into perpetual “crises” grounded in neoliberal policies. With this …

Framing Elite Consensus, Ideology And Theory And A Classcrits Response, Athena D. Mutua

Journal Articles

This short paper, really a thought piece, builds upon the examination begun in the Foreword of the ClassCrits VI Symposium which sought to outline a ClassCrits critique of neoclassical economic principles. It argues that neoliberal practices, theory and ideology, built on the scaffold of neoclassical economic ideas, frame an elite consensus that makes elites feel good but which are ethically, intellectually, and structurally problematic for the social well-being of most Americans. It does so, in part, by chronicling a number of recent practices of large corporations, including for example, the practice of inversion. Again, this paper takes as its specific …

Stuck: Fictions, Failures And Market Talk As Race Talk, Athena D. Mutua

Journal Articles

ClassCrits is a network of scholars and activists interested in critical analysis of law, the economy, and inequality. We aim to better integrate the rich diversity of economic methods and theories into law by exploring and engaging a variety of heterodox economic theories; including reviving, from the margins and shadowy past, discussions of class relations and their possible relevance to the contemporary context.

As a participant in the ClassCrits VI conference entitled, “Stuck in Forward: Debt, Austerity and the Possibilities of the Political”, I sat there at the end of the first day and puzzled over the fact that our …

How Tax Increment Financing (Tif) Districts Correlate With Taxable Properties, Randall K. Johnson

Journal Articles

TIF literature does not answer a basic question:Does this economic development tool positively correlate with expanded tax bases? The question is important because it avoids the difficult issue of causation, while also yielding insight into the nature of the relationship between TIF and expanded tax bases. As a result, this Article answers the question for suburban Cook County, Illinois.