Law and Economics Commons^™

Roundtable Discussion: Visions For The Future, Daniel L. Greenberg (Moderator), Anthony V. Alfieri, Michelle Adams, Edgar S. Cahn, Jennifer Gordon, Luis Garden Acosta, Alan W. Houseman, Errol G. Louis, Esmerelda Simmons, David A. Thomas

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No abstract provided.

Toward A Tax-Based Explanation Of The Liability Insurance Crisis, Kyle D. Logue

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The so-called liability insurance crisis of 1985 and 1986 transformed the way we think about tort law and about liability insurance markets. The crisis phenomena, which first appeared in late 1984 and lasted until mid-1986, consisted of enormous increases in liability insurance premiums and alarming reductions in the availability of certain types of liability coverage. In the two principal liability lines of insurance (Other Liability and Medical Malpractice), premiums increased by hundreds (in some cases thousands) of percentage points in a matter of months. At the same time, the availability of liability insurance contracted sharply. The liability policies that were …

Rhetoric And Reality In Copyright Law, Stewart E. Sterk

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The article challenges traditional justifications for copyright law, particularly the notions of desert and corrective justice, arguing that these frameworks fail to provide a robust foundation for intellectual property rights. Instead, it posits that the justification for copyright protection must primarily lie in the incentive to promote creative activity. The analysis critiques the application of Lockean labor theory and restitutionary models, emphasizing that distributive justice, which focuses on the moral worth and social contributions of creators, offers a more coherent basis for copyright law.

"Do Justice!": Variations Of A Thrice-Told Tale, Michael Herz

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Although recent debates would suggest that narrative scholarship is brand new,4 lawyers, judges, and law professors, like all humankind, have always offered stories for illustration or support or to make a point in an indirect, and often more effective, way. Learned Hand's story about telling Justice Holmes to "do justice" is one widely-used example, offered by many writers in addition to Judge Bork and Professor Chayes. Its popularity is easy to understand. The story has a substantive message, pithily expressed, on a basic jurisprudential issue; it involves two members of the pantheon; and it crams a lot of human interest …

Faculty Spotlight - Kyle D. Logue, Kyle D. Logue

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Most of my teaching and research efforts are currently spent in two general fields of law - taxation and insurance. Which raises an interesting question: Why would a rational person decide to devote a good portion of his academic career to areas of law that many people - lawyers and nonlawyers alike - find painfully boring and unreasonably complicated? The ta and insurance lawyers in the audience, of course, already know the answer - that ta ation and insuran e are e ceptionally interesting topics and that, if one wants to understand how the real world works (in particular, the …

Tax Transitions, Opportunistic Retroactivity, And The Benefits Of Government Precommitment, Kyle D. Logue

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What if the current federal income tax laws were repealed and replaced with a simple flat tax? What if the entire Internal Revenue Code (with its graduated rates and countless deductions, exclusions, and credits) were scuttled in favor of a broad-based consumption tax? Only a few years ago, such proposals would have seemed radical and extremely unlikely to be adopted. But times are changing. Calls for a drastic overhaul of the Internal Revenue Code have become commonplace, even at the highest levels in the tax-policy community. In addition, proposals that would replace the income tax with a flat-rate broad-based consumption …

The Right To Self-Defense Once The Security Council Takes Action, Malvina Halberstam

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No abstract provided.

The German Duality Of State And Society, David Abraham

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Debt Collection As Rent Seeking, David G. Carlson

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The article presents an economic theory of debt collection, arguing that it can be viewed as a form of rent-seeking behavior where creditors extract wealth without adding economic value. The author, David Gray Carlson, posits that legal frameworks such as Article 9 of the Uniform Commercial Code and bankruptcy laws are crucial in preventing local monopolies and promoting a competitive national credit market. These mechanisms reduce information asymmetry and prevent local creditors from exploiting debtors, thereby benefiting debtors and fostering economic efficiency.

Property Rules And Liability Rules: The Cathedral In Another Light, James E. Krier, Stewart J. Schwab

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Ronald Coase's essay on "The Problem of Social Cost" introduced the world to transaction costs, and the introduction laid the foundation for an ongoing cottage industry in law and economics. And of all the law-and-economics scholarship built on Coase's insights, perhaps the most widely known and influential contribution has been Calabresi and Melamed's discussion of what they called "property rules" and "liability rules."' Those rules and the methodology behind them are our subjects here. We have a number of objectives, the most basic of which is to provide a much needed primer for those students, scholars, and lawyers who are …

Grant Gilmore, Holmes, And The Anxiety Of Influence, Charles M. Yablon

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The article explores Grant Gilmore's ambivalent relationship with Oliver Wendell Holmes, particularly in The Death of Contract. Gilmore both praises Holmes's intellectual brilliance and critiques his formalistic approach to contract law. Drawing on Harold Bloom's The Anxiety of Influence, the analysis suggests that Gilmore engages in a struggle with Holmes's legacy, reflecting a mix of admiration and opposition, akin to how strong poets handle influential predecessors.

Eti, Phone The Department Of Labor: Economically Targeted Investments, Ib 94-1 And The Reincarnation Of Industrial Policy, Edward A. Zelinsky

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In Interpretive Bulletin 94-1 (B 94-1), the Department of Labor defines economically targeted investments (ETIs) as investments which bear risk-adjusted, market rates of return and which also generate collateral economic benefits. lB 94-1 declares ETIs, so defined, to be consistent with the fiduciary provisions of the Employee Retirement Income Security Act of 1974 (ERISA). In his critique of lB 94-1, Professor Edward Zelinsky finds the ET1 concept unsound as a matter of policy and logic and incompatible with ERISA's statutory standards governing pension trustees' investment decisions. Professor Zelinsky views 1B 94-1 as resurrecting the discredited notion of industrial policy. He …

The Market For Loyalties: Electronic Media And The Global Competition For Allegiances, Monroe E. Price

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The article critiques the traditional "marketplace of ideas" metaphor in First Amendment jurisprudence and proposes a more accurate framework: the "market for loyalties." This model highlights how powerful entities, including governments and private actors, use communication regulation to shape identities and allegiances. The First Amendment, under this interpretation, functions as a regulatory allocation among these entities rather than a guarantee of unfettered speech. The rise of global communication technologies and competing loyalties challenges the nation-state's ability to control this market, reshaping the role of law and governance in identity formation.

Virgin Territory: Margaret Radin's Imagery Of Personal Property As The Inviolate Feminine Body, Jeanne L. Schroeder

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Margaret Jane Radin's theory of property for personhood posits that certain personal property is deeply intertwined with individual identity, necessitating legal protections that go beyond traditional property rights. While her approach offers a feminist perspective by emphasizing the body and body-like objects as extensions of selfhood, critics argue that her framework lacks an account of community and intersubjectivity, rendering it incomplete. The article suggests that integrating insights from Hegel and Lacan could provide a more comprehensive understanding of property relations, addressing both personal and communal dimensions.

On The Efficiency Of Secured Lending, David G. Carlson

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The article challenges the Law and Economics movement's assertion that secured lending is inefficient, arguing instead that it can be efficient by reducing risk and lowering the cost of credit. Carlson contests the movement's reliance on outdated theories like the Modigliani-Miller model, which he believes fails to account for real-world factors such as time and risk. He posits that secured lending can prevent debtor misbehavior, thereby making credit more accessible and reducing risks for creditors.

Solving The Judgment-Proof Problem, Kyle D. Logue

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A tortfeasor who cannot fully pay for the harms that it causes is said to be "judgment proof." Commentators have long recognized that the existence of judgment-proof tortfeasors seriously undermines the deterrence and insurance goals of tort law. The deterrence goal is undermined because, irrespective of the liability rule, judgment-proof tortfeasors will not fully internalize the costs of the accidents they cause. The insurance goal will be undermined to the extent that the judgment-proof tortfeasor will not be able to compensate fully its victims and that first-party insurance markets do not provide an adequate response. Liability insurance can ameliorate these …

Tax Policy V. Revenue Policy: Qualified Plans, Tax Expenditures, And The Flat, Plan Level Tax, Edward A. Zelinsky

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No abstract provided.

Unfunded Mandates, Hidden Taxation, And The Tenth Amendment: On Public Choice, Public Interest, And Public Services, Edward A. Zelinsky

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Few contemporary issues concern state and local policymakers as intensely as unfunded mandates. Mayors, county executives, city councilmen, and the professional associations representing them routinely argue that the federal and state governments have, in recent years, imposed at an accelerating rate expensive requirements on municipalities without granting corresponding funds for compliance, thereby irresponsibly straining the fiscal capacity of municipalities, hampering their ability to provide essential services, and improperly infringing upon the scope of local control. The complaints of municipal policymakers have provoked a variety of proposals for restraining unfunded mandates: obligatory disclosure of the projected costs of proposed mandates, requirements …

Modern Corporate Theory: Public Utility Or Private Part? A Comment On Professor Wolfe's Paper, Charles M. Yablon

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The article critiques the current state of corporate law theory, particularly the "nexus of contracts" model, for being overly simplistic and failing to provide a realistic or normatively satisfying account of corporate behavior. It argues that while critiques of this model exist, there is no substantial alternative theory, and the field remains mired in incremental debates that lack depth or practical relevance. The author suggests that corporate law scholarship should adopt a more practical, lawyerly approach, focusing on policy arguments and real-world implications rather than theoretical abstractions.

Restraints On Alienation Of Human Capital, Stewart E. Sterk

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Qualified Plans And Identifying Tax Expenditures: A Rejoinder To Professor Stein, Edward A. Zelinsky

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The First-Party Insurance Externality: An Economic Justification For Enterprise Liability, Jon D. Hanson, Kyle D. Logue

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This Article explores the insurance and deterrence implications of important and long overlooked facts. Consumers are insured through first-party mechanisms against most of the risks of product accidents. However, first-party insurers rarely and imperfectly adjust premiums according to an individual consumer's decisions concerning exactly what products she will purchase, how many of those products she will purchase, and how carefully she will consume them. Such consumer decisions we refer to as "consumption choices. " This failure by first-party insurers to adjust premiums according to consumption choices gives rise to a first-party insurance externality. Based on this insight, this Article offers …

Risk And Design, James E. Krier

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Risk springs from uncertainty,' uncertainty invites error, and, since error can be costly, we would prefer to avoid it (provided, of course, that avoidance is not more costly yet). While there is much in the Noll and Krier article2 about judgmental error under conditions of risk and uncertainty, there is little about ways to avoid it. So avoidance-more accurately, minimization-of error costs is the topic I want to address very briefly and partially here.

Corporate Control: Markets And Rules, Caroline Bradley

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Taxation And U.S. Multinational Investment, James R. Hines Jr.

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In 1985, nonbank U.S. multinational companies employed 24.5 million workers, had worldwide sales of almost $3.5 trillion, and net income of $150 billion on assets of $4.2 trillion. The foreign (non-U.S.) affiliates of these companies had 6.4 million employees, $900 billion of those sales, and $43 billion of net income, with assets of $838 billion. United States multinationals accounted for roughly three-quarters of total American merchandise exports in 1985 and half of total imports, with approximately 40 percent of each category arising from transfers within U.S. multinationals between American parent firms and their own foreign affiliates. And 1985 is widely …

The Tax Treatment Of Qualified Plans: A Classic Defense Of The Status Quo, Edward A. Zelinsky

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The current tax treatment of qualified pension and profit sharing plans has been criticized by commentators as an unfair and expensive tax expenditure. In this Article, Professor Zelinsky challenges this characterization and defends the current treatment of qualified plans on the ground that it is at least as attractive as its alternatives and superior to many of them. After evaluating the current treatment and the alternatives under the criteria of measurability, administrability, liquidity, equity, and simplicity, Professor Zelinsky concludes that the present treatment of qualified plans can be viewed as an acceptable part of a normative income tax.

The Un-Easy Case For Technological Optimism, James E. Krier, Clayton P. Gillette

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"Technological optimism" is a term of art, an article of faith, and a theory of politics. It is a view that pervades modem attitudes, yet gets little explicit attention. For a brief period the situation was otherwise. In the early 1970s, the optimistic outlook figured prominently in an important debate about nothing less than the future of the world. Technological optimism won. The outcome was unsurprising, given the nature of the argument. On one side of the debate was a group of self-proclaimed Malthusians who foresaw an impending period of stark scarcity unless relatively drastic remedial steps were quickly taken; …

The Problem Of Social Cost Revisited, Donald H. Regan

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SOME years ago, in a paper entitled "The Problem of Social Cost," Professor Ronald Coase asserted and argued for a proposition which has since acquired the convenient sobriquet "the Coase Theorem." The proposition is: That in a world of perfect competition, perfect information, and zero transaction costs, the allocation of resources in the economy will be efficient and will be unaffected by legal rules regarding the initial impact of costs resulting from externalities. Note that there are two claims being made, which it is well to separate for purposes of discussion. The first claim is that, under the conditions described, …

Caveat Emptor And The Judicial Process, John B. Waite

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"There are many issues in the law whose solution has an essentially economic cost. There is one issue in particular, however, of immense and most important economic effect, which has been decided and re-decided, but which, strangely enough, the courts never seem to have considered on the merits of its economic relations and effects....

"...[O]ught one to be permitted safely, if honestly, to intrust possession of goods to others; or should one have power safely, if honestly, to buy goods from those in possession...."