Brian’s basic argument is that law schools have been on an unsustainable path fueled by the ready availability of student loans, the cartel power of the ABA, and the influence of the U.S. News rankings, all of which have led schools to adopt policies that help law professors more than they serve students. In most states, you can’t be a lawyer unless you graduated from an ABA-accredited school. Law professors have run the ABA accreditation process, however, and have done so in ways that ensure that all ABA-accredited schools treat professors extremely well and that law schools are quite nice places to work. This has led to a surprisingly uniform educational system in which nearly every school adopts a high tuition model that gives professors low teaching loads, nice salaries, and lots of time for research. Some professors work extremely hard and produce important scholarship, which is the goal. But many other professors just coast and take advantage of their good fortune after making it past the (typically low) tenure hurdle. And Deans generally can’t treat the hard workers and productive scholars better than the dead wood because Deans generally require faculty support to stay in office: A Dean who favors the productive scholars and top teachers too much may not stay in office long. So salaries for all professors are high and course loads are low, whether the professors work 80 hours a week or 20.

While this is a great situation for law professors who want a cushy life, it doesn’t serve students. The high cost model of legal education means that students are mostly denied ways of obtaining low-cost legal educations, which has led to spiraling costs for legal education that make law school best suited for the wealthy, those on scholarship, and those able to compete successfully for corporate or public-interest jobs. Some applicants don’t realize this, in part because loans are so easy to obtain and schools are in no hurry to point out the economics of legal education. And even while law school is so expensive, the obsessive focus by law school applicants and alumni on the U.S. News ranking has led schools to change their programs and their admission standards to whatever helps their U.S. News ranking, even if it hurts the quality of their educational programs. Maximizing U.S. News rankings has led schools to restructure their admissions standards, limit part-time programs, raise the number of transfers, and raise tuitions to make room for scholarships that can be used to maximize the numbers of the entering class. A Dean who doesn’t do this won’t stay a Dean long; the U.S. News rankings are so widely considered authoritative that a Dean whose school falls in the ranking is considered a failure. So even at the high dollar figure of most law schools, the focus is on making changes that maximize rankings, not delivering the most effective education for students. The model is unsustainable, Brian argues, and we have begun to see that already with the recent drop in law school applications that may soon threaten the viability of a number of law schools.

Importantly, Brian does not argue that every school needs to change. His basic argument is that there are lots of different kinds of law schools, and they should be allowed to follow different models. There is no one way to create a lawyer, contrary to the assumption of the ABA accreditation process. The “top” schools can and should continue basically as-is. Their students want a 3-year academic degree in a scholarly atmosphere, and their graduates generally can get the jobs needed to pay off loans quickly. So there is no need to change there. But less elite institutions should be free to adopt lower cost models. They should be free to rely more on adjuncts, or have professors with higher teaching loads or who don’t focus on research. They should be free to offer two-year degrees instead of three-year degrees. A diversity of offerings will better serve students who have different needs and different abilities to pay for legal education. One-size-fits-all just can’t work.

I found Tamanaha’s analysis compelling, and his basic deregulatory solution pretty convincing. (I wasn’t fully convinced by all of the details in the various proposals he makes, but that’s a quibble in the overall scheme of things.) Whether people agree or disagree with the book, it should — and I think will — receive a wide audience among legal academics. Tamanaha’s book is both thoughtful and damning, made all the more persuasive because Tamanaha is an experienced and respected academic who builds his argument carefully step by step with an insider’s understanding. It’s definitely worth a careful read — and for defenders of the status quo, a thoughtful response.

Some professors have sought to squelch the distribution of notes and outlines from their courses. Professor Bainbridge has come up with a better idea — one I may have to emulate.

I’m going to buy some of these note sets and outlines being sold for my classes. I’ll go through them and find all the mistakes. And then I’ll write exam questions testing on those very same mistakes. If we all did that, the market would dry up pretty quick.

UPDATE: Some of the comments below reflect an odd view of legal education.  A law school exam should test the extent to which a student has mastered the assigned materials.  A student who has mastered the assigned materials will not reflexively regurgitate mistakes found in an outline, whether purchased in a book store or downloaded from the web.  Indeed, uncritically copying or repeating what one finds in an outline is no way to learn the law.  Fortunately, in my classes, this problem appears to be confined to a handful of students each year.

An exam should fairly represent the material covered, not focus on picayune details or play gotcha. My own exams reflect this approach.  They are difficult (or so my students say), but are a fair reflection of what we covered in class.  Most of my former students say my exams were “tough but fair” — and that’s what I want them to be.  Reviewing attendance records, I’ve also found that those students with the poorest attendance records tend to have among the lowest scoring exams, suggesting that paying attention in class pays dividends — and, again, that is what I would hope for.

I have no problem with outlines or other supplemental material if used properly. Every year I make a point of recommending supplemental material that I believe students will find helpful and of explaining how such material (including commercial outlines) can be used most productively.   I referred to outlines in some of my classes as a student.  Yet as I explain to my students every year, I don’t believe commercial or web-based outlines are a substitute for reading and digesting the material or preparing one’s own outline of a course.  If all that were necessary to achieve a good grade were finding the right outline, there would not be much value in taking the course — indeed, there would not be much value in law school beyond the credential.

For example, I wonder how falling costs of producing books and different and cheaper distribution models via Amazon interacts with a relative decline, at least among senior law professors, in the prestige of law review articles in favor of books.  I wonder about shifts in the hiring, promotion, tenure, and lateral process and ways in which that drives a cycle of academic production – at least among law professors – of crank out articles, repackage as book, start cycle again – but without it being clear to me, at least, that there is great value added in putting the articles between hard or soft covers.  We tell ourselves that we are pulling together a handful of articles into a unified book-y whole, but, well, I wonder how much it is simply driven by a combined shift in the prestige markers within our academic world and shifts downward in the cost of production, along with dissatisfaction with the student law review publishing model.

Is that a bad thing?  The sometimes assumed frivolity and waste of publishing in humanities, social science, and law – the purely critical story is not all there is to it, by any means.  I, for one, do look forward to a revival of the humanities as a source of meaning.  The availability of an increasing number of scholarly books at a much cheaper price than, well, Cambridge UP’s sticker-shocker numbers is a terrific thing.  It takes into account lower productions costs, the idea that university libraries are not the only places to find these books, and a host of other things.  That many of these books are deliberately aimed at a wider audience than the university library is a feature of many of these new business models; that will inevitably mean more popular titles.  It will inevitably mean a certain amount of wishful marketing … frankly unreadable academic tomes with exciting titles, cool covers, and misleading blurbs.  But I’m not convinced at all that these will crowd out traditional academic monographs.

Those are mostly questions I have within the world of academic law publishing, however, while Shivani’s post is on university presses more broadly.  It is worth reading in part just to get a sense of the ways in which presses are extending themselves, and also because it might give some readers a sense of where to turn to for particular varieties of books, and for authors among us to get a sense of what presses might be suitable for what ventures.

Speaking of blurbs, I’m somewhat surprised that as a marketing strategy, academic writers do not take a page from the marketing of that great work of 1990s fiction, A.A. Gils Sap Rising. Reviews were either wildly positive or wildly negative … so the publisher put them all on the back, including in alternation:

• “He writes so brilliantly.”
• “Extremely badly written, hideously and unamusingly obscene.”
• “A clever, sexy story.”
• “Frightful pile of garbage.”

And then it ended up with the laconic comment of the Times Literary Supplement (a venue for which I occasionally write, and for which this kind of plain, unadorned, Eric-Blair-would-approve-of-it prose makes me proud to be a TLS contributor):

• “This is a dirty book.”

In academic writing, however, one is not looking for this exactly, it is slightly different.  What one wants in academia is not a collection of wildly for and wildly against.  Because academic writers are generally trapped – self-stranded, to be precise – in cul-de-sacs of like-minded academics, no one is much impressed by the log-rolling blurbs of one’s confreres.  But for a converse (or do I mean ‘obverse’?) reason, no one will be much impressed by the attacks of one’s enemies, either.  What one wants is what so much of contemporary academia is out to deny – except when it comes to what people say about one’s own academic work – viz., that I utterly disagree with it and indeed at some profound level think it deeply mistaken and even wrong, but alas I cannot deny the sheer intellectual power, unaparalleled learning and erudition, and brilliance heft of this work.

Endorsement from outside one’s epistemic community, in other words, on the basis of an ideal of neutral, objective quality that we long for, when it comes to our own stuff, but within academia don’t really accept.  We deny its validity – but then want its validation.

If the study to which Todd links is correct, and administrative staff is growing in this way, along with an accumulation of administrative power within universities, what are the incentives of university administrators with respect to the institution of faculty tenure?  Would they tend to disfavor tenure because it empowers faculty potentially vis a vis administrators?  Because administrators would prefer to see faculty as employees or, perhaps, simply independent contractors?  Rather than a potentially competing source of university governance on the traditional (and somewhat mythical, at least in the past few decades) “collegial” model?  Or are their incentives something else altogether?

That is, I am asking a very specific question regarding the rational incentives of university administrators.  (Please comment only if you have something that goes to that question, and please, no rants or off-topic disquisitions.)

Call for Papers Announcement

AALS Section on Financial Institutions and Consumer Financial Protection

Beyond Financial Reform:  Mapping Regulatory Objectives, Institutional Forms, and Accountability in the Post-Crisis Landscape

Friday, January 7, 4-5:45 pm

2011 AALS Annual Meeting

San Francisco, California

The AALS Section on Financial Institutions and Consumer Financial Services will hold a panel presentation of selected papers during the AALS 2011 Annual Meeting in San Francisco, California.

Program Summary:

Three years into the deepest financial crisis in decades, debates rage on about the core objectives of regulating finance, the relative importance of competing objectives and the relative competences of competing local, national and global regulators.  This program will assess the recent reform efforts in context, to shed light on the choices inherent in determining who gets to regulate whom, how, and for whose sake.  What, if any, tradeoffs must be made between systemic stability and growth?  … safety and soundness and consumer protection?  … risk management and innovation?  … home country, host country, and multilateral regulation?  … regulatory effectiveness and accountability?

Leading policy makers, academics and market participants have staked out positions on the merits; yet others contend that reform has been mired in false choices.  The program will address the competing claims; explore the relationships among regulation, finance, and its economic, political and social context; and try to shift the terms of theoretical and policy debates to chart the path ahead.  Of particular interest are papers that:

Engage with economic and political thought on urgent policy problems,  such as macroprudential and countercyclical regulation;

• Address the challenges of compliance, regulatory arbitrage, and regulatory capture;
• Contribute to the debate about the institutional structure of regulation and the competing bases for allocation of regulatory authority; and
• Explore insights for financial regulation from other law disciplines, including bankruptcy, international law, and administrative law, as well as institutional and behavioral fields outside the law.

Call for Papers:

Law teachers and other scholars are invited to submit a manuscript or précis on any aspect of the foregoing topic.  Junior faculty members are particularly encouraged to submit.  A review committee consisting of Section officers will select one or more papers or proposals and will invite the author(s) of each selected submission to make a presentation at the program panel.  A précis should be comprehensive enough to allow the review committee to evaluate the likely content and quality of the proposed paper; however, complete drafts will receive preference in the selection process.  Please send submissions to the Program Chair–Anna Gelpern, American University Washington College of Law, agelpern@wcl.american.edu–no later than August 1, 2010. Please forward this Call for Papers to anyone who might be interested.

Eligibility:

Faculty members of AALS member and fee-paid law schools are eligible to submit papers for this panel presentation. Foreign, visiting and adjunct faculty members, graduate students, and fellows are not eligible to submit for this panel presentation; however, any such submissions may be considered for other parts of the Section program at the Annual Meeting.

Registration Fee and Expenses:

Call for Paper participants will be responsible for paying their annual meeting registration fee and travel expenses.

How will papers be reviewed?

Papers will be selected after review by members of the Executive Committee of the Section.

Deadline date for submission:

August 1, 2010

Contact for submission and inquiries:

Anna Gelpern, American University Washington College of Law,

agelpern at wcl dot american dot edu

Authors of accepted papers will be notified in September 2010.

On hedge funds and private equity in a different direction, I received an examination copy of a new textbook, An Introduction to Investment Banks, Hedge Funds, and Private Equity: The New Paradigm, by David P. Stowell.  It is excellent – clear, informative, well-written.  It is aimed at an undergraduate course audience, perhaps in the upper classes, but would also be perfectly useable in business school as an intro text, as well as in law school as an introductory class in these topics, if the professor were able to supplement it with legal materials.  (In fact, that might make an easy way to create something that does not now seem to exist for law school – a private equity-hedge fund text that covers both the business and legal aspects.  A fix for that might be to use this book, with a detailed supplement with examples and legal documents to illustrate the business descriptions in the text.)

I decided to stop teaching my introductory law school course on venture capital, private equity, and hedge funds, and instead return to the basic Business Associations class in the fall, after 7 or 8 years away from it.  I did so for two reasons – one, I find the whole private equity-hedge funds field too unsettled at the moment to teach with a lot of confidence that what I say now will reflect the industry in even just a couple of years, and I also think that at this moment, it has become so much just part of the deal industry that I can safely leave most of it to the M&A class, at least for now.  Second, though, I also wanted to return to BA, because my interests in business and finance law are shifting back towards the deeply embedded concepts of trust, agency, fiduciary duty, duty of care and duty of loyalty, and away from my long time focus on financial instruments and derivatives.

The latter goes to my scholarly interest in what I have called the “moral psychology of finance,” and somtimes called “virtue economics” – not in the sense of distributional justice in the economy, but instead the Aristotlean sense of “virtue ethics” and its intersection among practical reason, attitudes and rationality, and affective behavior and rational choice.  I am slowly re-reading Theory of Moral Sentiments, alongside Ian Simpson Ross’s exemplary Life of Adam Smith, a book I read with insufficient attention when it first appeared, but which I am re-reading with a great deal of care.

And finally, in this same broad area, I am also re-reading with intense care and considerable respect the papers in Ruth Chang’s 1997 volume, Incommensurability, Incomparability, and Practical Reason – with particular attention to Chang’s excellent introductory paper, and then Elizabeth Anderson’s contribution on practical reason (I’ll let the library locate me her later 2001 book, Making Comparisons Count, at over $100).  Partly this has to do with how this notion of virtue ethics intersects with practical reason – with every passing week, especially as I acquire and mostly skim an ever growing pile of books on the roots and solutions to the financial crisis and regulation, I am convinced that there is a lot more work to be done on the philosophy of economics, the philosophy of value and even the philosophy of valuation.  If I were advising a young person where to make a mark today, that would be a good starting point – where philosophy, economics, and intellectual history come together on these topics.

But, interestingly, the whole question of incommensurability and incomparability is at the center of a new paper I am completing on the vexed issue of proportionality in the laws of war.  Reading the examples in Chang’s book, I am much struck that the question of incommensurability and proportionality are far more real and unavoidable, as far as I can tell, in the ethics of war, and the classic calculation in the ethics of war between the demands of military necessity, on the one hand, and civilian harm, on the other.

Most of Russell’s paper concentrates on Simkins’ career at UT, as well as the 1954 decision (five weeks after Brown v. Board was announced) to name the dormitory after him. I was curious to learn more about Simkins had actually done with the Florida Klan, so I read Michael Newtown’s book The Invisible Empire: The Ku Klux Klan in Florida.

The Florida KKK organized in 1867-68. Simkins later described himself at the Klan leader in Taylor, Madison, and Jefferson counties. These three contiguous counties are part of the eastern panhandle, east of Tallahassee. As far as the record shows, Simkins never claimed that any Klan actions in those counties had been carried out contrary to his orders, or that he regretted anything the Klan did in those counties. Accordingly, it is plausible to hold Simkins personally responsible Klan activity there.

Federal troops were withdrawn from Florida in July 4, 1868. From July 8 through 14, five blacks were murdered by “white regulators.” In mid-July through October 1868, the Madison County KKK murdered seven more blacks, including Randall Coleman, a leading Republican.

In Taylor County, “masked night riders paraded with KKK flags and threatened farmers who refused to join the Klan.”

Florida’s Governor Reed had purchased two thousand muskets for the state militia. On the night of November 5, 1868, while the train carrying the muskets had stopped at the Greenville station in Madison County, Klan raiders removed all two thousand muskets–destroying some, and keeping the rest. Simkins later bragged that “Every telegraph operator, brakeman, engineer and conductor on the road was a Ku Klux.”

The Jefferson County Klan coerced white farmers into refusing to sell land to freedmen, or to taking the money, and then having the Klan drive the freedmen off his new freehold.

According to Newton, Madison County was the second-worst county in Florida for Klan violence, with 25 murders from 1868-71. The victims were always members of the Republican party.

On the night before the November 7, 1870, election, “armed riders invaded” the town of Madison, “harassing black voters.” On election day in Monticello, Jefferson County, “Georgia Klansmen joined the local mob and hundreds of shots were fired in a rioutous demonstration of white solidarity,” intended to frighten blacks against voting.

The election results left the state government weakly in reconstructionist hands. The store belonging to Madison County Sheriff Montgomery was burned on December 17.

Congress passed a new, stronger Enforcement Act in April 1871, and in November, a congressional subcommittee held four days of hearings in Tallahassee about Klan crimes. Even so, another Republican’s store was torched on November 6, 1871. However, President Grant’s October declaration of martial law in nine South Carolina counties had a chilling effect on the Klan, and by 1873, Florida Klan supporters were denying that there have had been a Klan in Florida, or were claiming that if there had been one, it was no longer active.

Simkins himself happened to leave Florida for Texas in either 1871 or 1873. (Sources conflict.) He particpated in two 1894 U.S. Supreme Court cases, Reagan v. Farmers’ Loan & Trust Co. and Reagan v. Mercantile Trust Co. He supported the Texas Attorney General’s argument that the judiciary had no power to review the reasonableness of railroad rates which had been established by the Texas Railroad Commission. The Supreme Court, in an unanimous opinion by Justice Brewer, disagreed.

That Simkins was an advocate of the unreviewable power of unreasonable government economic regulation should be no surprise. As David Bernstein explains in his book Only One Place of Redress: African-Americans, Labor Regulations, and the Courts from Reconstruction to the New Deal, the caste system of Jim Crow was founded on government power to prevent black and white people from freely choosing to engage in economic relations.

Last Friday, the University of Texas announced the formation of a special working group which will issue a report on the Simkins naming controversy by the end of June.

Simkins should have been denied admission to the Florida bar in 1870, based on his admitted role in the theft of firearms from the militia of the state of Florida, and his role in organizing and leading a terrorist organization which appears responsible for numerous homicides and many other violent felonies. In 1870, the Florida Supreme Court did not know of the evidence regarding Simkins’ terrorist crime spree in 1868-70,  but the 2010 working group will have more information.

Of course the fact that a person is an unrepentant, retired, terrorist is not necessarily a bar to being a professor at a prestigious law school–not for William Stewart Simkins at Texas in the early 20th century, or for Bernardine Rae Dohrn at Northwestern in the early 21st century.

Readers who are interested in more on the Simkins controversy may enjoy the blogging thereon at The Faculty Lounge, which has been covering the story since Russell released his paper.

Footnote 72 includes the following:

The Supreme Court has seen fit to rein in some of the most activist lower-court decisions. . . . But additional cases continue to test the limits. See, e.g., United States v. Emerson, 270 F.3d 203, 227-29 (5th Cir. 2001) (agreeing with district court that Second Amendment confers an individual right to bear arms, notwithstanding contrary indications in United States v. Miller, 307 U.S. 174, 178 (1939)).

[W]hile I was [at NYU Law School] I saw posters for a lecture this afternoon by Eugene Volokh on the structure of slippery-slope arguments.  … the posters for Volokh’s talk read, as I remember: “Founder of The Volokh Conspiracy blog and Gary T. Schwartz Professor of Law at UCLA.”

I wonder how the Schwartz family feels about that. Indeed, I wonder how UCLA law school feels. For that matter, I wonder how I feel. Since when has even a blog as interesting as the The Volokh Conspiracy trumped, for a law-school audience, a chair at a major law school and all the speaker’s academic publications?  A fascinating change in the culture of things.

Well, heck (and  not speaking for Eugene), I feel pretty darn good as a coat-tails participant at VC!

Consider Eric Roberts’ soliloquy on agent-principal relations, and the many ironies involved.  (Midway through – the focus here is not on the political discussion at the beginning, but the Australian sound debate midway through.)  Good teaching tool?  (Also, the Coke jingle by Tim Finn is surely one of the best around, and I’m amazed that the real Coke corporation never figured out it had a winner.)

[youtube]http://www.youtube.com/watch?v=ml0TURpHRuw[/youtube]

(My only complaint is that at $70 list, and $50 on Amazon, it is still a little pricey at least if, like me, you would want it for students and courses, like my private equity course, where it would be a fantastically useful and readable supplement.  I think OUP has missed on market pricing here.  I would love to require it as a secondary text in my private equity course, but at that price, I don’t think I can justify it.  Maybe when it’s out in paperback?  Or Kindle?)

I am particularly fascinated by how close Carl Schmitt, the political theorist who has influenced both the right and the left, came to being a defendant in one of the trials.  After Schmitt joined the Nazi Party in 1933, he had been appointed the head of the Union of National-Socialist Jurists and had written a number of pro-Nazi and anti-Semitic articles for the self-published German Jurists’ Newspaper.  Schmitt had a falling-out with the SS in 1937 and resigned his position as Reich Professional Group Leader, although he was able to keep his professorship at the University of Berlin because Goering protected him.

As I detail in the book, the OCC submitted three different trial programs to the US’s Occupational Military Government (OMGUS): on 14 March 1947, 20 May 1947, and 4 September 1947.  Schmittt was listed in the first program as a possible defendant in what the OCC called the “Propaganda and Education case.”  …  At some point between 14 March and 20 May, when the OCC submitted its second trial program, Taylor’s staff decided not to prosecute Schmitt.  The second trial program no longer includes Schmitt as a possible defendant.

Kevin cites to an article in the social/critical theory journal Telos, of which I was long an editorial associate, along with the late great founding editor Paul Piccone, and an astonishingly long list of people you might not have expected to have done a stint with a New Left, then Post New Left, then sometimes left and sometimes right editorial board.  Fred Siegel, Seyla Benhabib, Jean Bethke Elshtain, Jean Cohen, Andrew Arato, David Pan, Joe McCahery Moishe Gonzales, it’s a really, really long list.  (Once in a while it has done important articles on critical jurisprudence – I am proud to say that as an editor in the 1980s, I commissioned a piece from Martha Minow, “Law Turning Outward,” that bears re-reading today, if only if were online!)  It is subscription only, dense, difficult, highly abstract and theoretical reading, within a sometimes alien critical theory tradition that is part homegrown and part European intellectual inheritance – and over the course of forty years, some of the best social theory in the world.

(One of these days I’ll talk about why social theory is both important and ripe for revival.  This, despite the general collapse of social theory into mere identity politics in the academy, thus driving people interested in rigorous thinking into more technically rigorous, but also more “surface” fields, such as economics, and the imitation of economics in other fields.  Maybe I’ll ask the current Telos editor, Russell Berman, if he’d like to take a crack at explaining why it matters.)

As to Schmitt, well, Telos was largely responsible for introducing him to the American academic community, translating and commenting on much of Schmitt’s output.  Schmitt continues to resonate today – the idea of emergency, after 9/11, for example, attracted much discussion.  In Europe, Schmitt overcame his past as a Nazi collaborator – rather, it seems never to have been much of an issue – and developed a very wide following across ideological boundaries, and considerable influence on the political theory of the Continent.  One reason I first read Schmitt was that it was clear to me I couldn’t understand Continental political theory, including Habermas and many others, without understanding Schmitt; he was a crucial part of the background discussion and intellectual assumptions over decades.

In the United States, the invocation of Schmitt always raises at least as a backdrop the question of Schmitt as a Nazi party member and full-on collaborator over important years.  My own view is that Schmitt was not a Nazi, far from it – in the ways in which Nazism was truly radical, Schmitt was a reactionary.  By all measures, a morally repellent character who saw where things were going in Germany and hopped aboard, and then saw where they were going and hopped off again.  But not a Nazi in his thinking or, really, sympathies despite, true, his long list of public intellectual credentials during historically crucial years.

The truth is, as an intellectual matter, I think Schmitt has long since run out of steam in terms of what he offers to American political and social theory.  This is possibly because I was intimately involved at Telos in the Schmitt revival from the beginning, felt like I absorbed what seemed important to me, and moved on by the 90s.  For example, the notion of emergency in Schmitt is both deeper but more alien to American political thought than, I suspect, many American theorists think – they really mean something that just is regular old consequentialism pushed hard, whereas for Schmitt, such notions are part of a far deeper and more committed system.  And although I once wrote a paper not long after 9/11 with a section carrying the very Schmittian title, “Criminals and Enemies,” what I meant by that had little to do with Schmitt and I was amazed at how quickly it was cast in Schmittian terms.  Far, far more important than Schmitt in contemporary American social theory – if there were such a thing outside the cul-de-sac of identity politics – is the revival of New Class theory in the American contempory context, and a theory of elites.

Academic economists gather in Atlanta this weekend for their annual meetings, always held the first weekend after New Year’s Day. That’s not only because it coincides with holidays at most universities. A post-holiday lull in business travel also puts hotel rates near the lowest point of the year.

Economists are often cheapskates.

The economists make cities bid against each other to hold their convention, and don’t care so much about beaches, golf courses or other frills. It’s like buying a car, explains the American Economic Association’s secretary-treasurer, John Siegfried, an economist at Vanderbilt University.

The rest of the article has entertaining stories of people like Keynes and Milton Friedman.  But let me stick with professional conferences.  We law professors are also holding professional conventions this week, as are many other academic groups, such as the MLA.  Price is part of the timing; so is, as the article notes, the general agreement to schedule academic calendars across the country’s institutions in order to hold the professional meetings before classes resume.

Update: I didn’t realize that this economics conference is also a job market and not just professional confab – definitely changes the picture.  Here is an interesting comment, pulled up from below:

As someone pretty close to the economics AEA meetings, I think the article misses the point about these meetings: they aren’t in fancy places because a huge swath of attendees are graduate students doing job market interviews. These students basically have 0 willingness to pay for beaches or casinos at this point. Economics conferences are often held in really expensive and fancy places, but the winter meetings are different. Maybe I’m overestimating the importance of this factor, but it seems at least worth mentioning.

But we law professors hold our meetings in places like San Diego and, this year, New Orleans.  What does this say about us, compared to the economists?  More interested in rent-seeking than being good agents on behalf of our institutional principals?  More efficient rent-seeking public-choicers than the economists (I mean ‘rent-seeking’ here in the sense of, we won’t come if you hold it in Minneapolis in January, so …)?  We care more about golf and beaches?  We’re better at golfing and surfing and, in New Orleans, eating?  Our meetings are more boring to attend, so we need better venues to attract conference-goers?  Our attendees are so dedicated to their conference sessions, it doesn’t matter whether they’re held in San Diego or Moose Jaw (in winter and summer, below fold)?

Moose Jaw in summer is quite lovely, by the way, and not just as places in Saskatchewan go.  I’m not going to the AALS meetings – I’ve almost never gone.  I’m not sure why, come to think of it.  It’s paid for by the school and the cities are often great places to go.  (This year I have a conflicting Hoover meeting in Palo Alto, and those task force meetings are always great.) But, sad truth be told, I also think it’s because I’m a rampant egotist beneath the tranquil academic exterior, and it’s hard for me to go to a conference where … I’m not on the program.  This is embarrassing to admit, but, if I’m honest, it’s hard for me to sit through a meeting where I’m not doing the talking or some chunk of it.  But am I truly alone in that – be honest – it must be part of the reason why conferences today feature so many talkers on panels (besides the fact that traditional academic papers have to be read to be understood, not read aloud)?  Plus, as Steve Bainbridge commented on his blog, most of the intellectual action in law these days takes place in more specialized venues.

(PS.  I haven’t participated in any conference venue negotiations, but I’d be easily open to persuasion that major conference cities do price weather and season, not just to say, bad weather=cheaper rates, but also running the other way: Bad weather=fewer conferences in off-season=not geared up for major conferences in places like Minneapolis in winter except at higher effective prices=New Orleans or San Diego have better weather and more cost effective at the same time, with golf and beach merely marginal bonuses or loss-leaders.)

(Update.  I’m going to take out some stuff  below- sitting in airports puts me in a bad mood, and it showed.  I’ll repost some of it expressing less irritation another time.)

Moral Machines: Teaching Robots Right from Wrong, Wendell Wallach and Collin Allen (Oxford 2009).  If anyone follows my posts over time here and at Opinio Juris, I have a large interest in robotics, war, law and ethics.  And my most recent trip was to Stanford Law School, for a panel discussion of robotics, society and law – more on that in a separate post, but a great session on law and future technology.  This is a terrific book, and not just for people interested in robotics and technology.  It is manages to be both philosophically and technologically acute, and while not focused on law the way lawyers would focus, the questions raised clearly lead that direction.

Means to an End: US Interest in the International Criminal Court, Lee Feinstein and Tod Lindberg (Brookings Press 2009).  If you are around DC on Monday afternoon, there will be a screening of part of a new documentary on the ICC, The Reckoning, and then a panel discussion afterwards featuring Jane Stromseth, Gary Solis, John Bellinger, and me, moderated by Ruth Wedgwood.  Screening at 4:30-5:oo, panel discussion 5-6:00, at the Rome Auditorium, SAIS.  This short book is well worth reading; I comment on it briefly here at Opinio Juris and on the general question of US relations with the ICC at this point in time (about which I am much more dubious than I was a year ago when I was commenting on drafts of this book; at that point I thought there was much more room for US engagement than I think there is today, but see my discussion at OJ).

In any case, this is a wonderfully clear book, and a surprisingly plainly written one, given that it is a “centrists reaching across the partisan divide” work.  Lee and Tod are both old friends.  Lee was foreign policy director for the Clinton campaign, former Clinton administration DOS official, and currently US ambassador to Poland.  Tod is a Hoover fellow and editor of its marvelous journal Policy Review.

(Hint.  If you don’t read Policy Review, you should – eclectic, readable, intelligent, and intellectual in the sense of never falling into “trivially academic” or “trivially policy” or “trivially political.”  The intellectual political essay – under the hand of a skilled editor of mature judgment – is not dead.  If you’re a writer and have something more significant than a blog post to say, you might want to suggest it to Policy Review as a 4,000 essay.  This was the journal that launched, among other things, Robert Kagan’s Power and Weakness essay, for example – and which, if I may be so bold, was better as the Policy Review essay than as a book.)

Gods at War: Shotgun Takeovers, Government by Deal, and the Private Equity Implosion, Steven Davidoff (John Wiley 2009).  The NYT’s Dealbook columnist and corporate law professor Steve Davidoff puts a lot of stuff together in a terrific book.  It covers a lot of ground because its subject is dealmaking – as it cuts across private equity, hedge funds, sovereign wealth funds, the financial crisis, government bailouts … what fascinates me about this book, what makes it very special, is that Davidoff keeps the focus on the law and legal battles that create the frame in which the dealmaking takes place.

As such, he pushes back against a sense among many commentators that the legal stuff is merely the lawyers coming to act as scribes for transactions, the essential economics of which is set elsewhere.  Davidoff reminds us that while that might be true in the middle of the bell curve, in ordinary times – when things go bad, for one side, both sides, all sides, then the words written down for all those contingencies turn out to matter, as words and sentences on paper.  Judges will have to interpret them.  The discussion of the evolution and interpretation of the “material adverse change” clause in the courts is worth the price of this book.  Likewise the “regulation by deal” discussion that I originally saw in Davidoff’s paper with David Zaring.  I think I will probably assign this book to my private equity course next term – there’s a lot of stuff that isn’t my focus, but this book can help my students understand some hugely important issues.

“Enemies need not be insane,” Christopher Caldwell’s Financial Times column of November 13, 2009 (sub req’d?).  Caldwell particularly focuses on:

Public doctrine insists on a distinction between Islam and Islamism. Islam is a religion, and Americans are punctilious about respecting the religions of others. Islamism is a violent political ideology, a “perversion” of Islam if you like, that has already taken thousands of US lives. Voters will punish pitilessly any politician who does not fight it with every tool at his disposal.

Hence the crisis. Maj Hasan’s case shows that authorities are incapable of making the very distinction between Islam and Islamism that they insist the public make. That Maj Hasan was a Muslim need not concern Americans. But he was an Islamist, too, if that word has any meaning. And those who had the authority to monitor him more closely were either unable or unwilling to.

This is as well put as you are likely to find.  But let me carry this one step further.  Read the columnists or listen to the talking heads on NPR and note the preferred narrative of the moment.  Why didn’t the military or the government or someone look any more closely at this and make some kind of judgment that this was dangerous?  Because of An Elite Narrative that said, and which had trickled down years before, permeating official responses as both Sense and Sensibility, or the lack thereof, to ask these kinds of questions is to be a racist.  Do it and it’s career suicide.

But the measure of elite narrative control is to play bait and switch, have your cake and eat it too:  the ideologies of the elites will prevent anyone in officialdom from asking or acting on anything that contravenes official multicultural sensitivities.  But when someone does shoot up the joint and kill a bunch of people (and they tend to  be places like Ft. Hood and somehow not places like Sidwell, Dalton, St Albans, Crossroads High, etc.), then exactly the same set of Elite Narrative Commentators will sententiously ask why government and officialdom ignored all the warning signs.  If you’re an NPR commentator or NYT editorial writer or WaPo opinion columnist, you get to have it both ways; if you’re the FBI or military official faced with all this stuff, you’re damned if you do and damned if you don’t.

Which is another way of saying that the currently preferred Elite Narrative of Ft. Hood is exquisitely tailored to insulate our Political and Media Elites from the blame that they are now scurrying to put upon officialdom.  It must be nice to live in a world without accountability.  In a Better World this kind of crime would result in also putting the occasional NYT op-ed writer on trial, pour encourger les autres,  for having made it impossible to stop the actual perpetrator.  In Our World, the ones who largely made the perpetrator unstoppable then proceed to conduct the public inquisition of Why He Was Not Stopped.

Actually, if you haven’t taken a look at Caldwell’s Reflections on the Revolution in Europe: Immigration, Islam, and the West (Doubleday 2009), you are missing the most important discussion I am aware of on these issues of global multiculturalism and the collapse of secular European public culture from the ideal of the liberal public-private divide into an ironically human rights-mediated ideal of global religious communalism (facilitating this changeover in the essential meaning of human rights from ‘liberalism’ to ‘multiculturalism’ will, in my view, turn out to be Human Rights Watch’s actual global legacy, by the way).

“Unlawful Killing with Combat Drones: A Case Study of Pakistan, 2004-2009,” Mary Ellen O’Connell (draft book chapter up on SSRN).  There is not very much that I agree with in this new paper by Mary Ellen O’Connell; my view is here.  However, it is the plainest statement to date on how to view Predator strikes in Pakistan, and by extension various other places, as violations of international law and criminal law and war crimes.  I admire it on the grounds of intellectual and moral honesty, although, I stress, it’s not so much a matter of disagreement as not sharing nearly any part of the intellectual world from which it comes.  But I think the CIA in particular ought to take account of it, because although not my world view or, presumably, its, the chapter does capture with remarkable clarity the world view of the community that would finally like to put the CIA on trial.  My view is that the “international law community” – what is sometimes called the “invisible college of international law” - already essentially agrees with its conclusions, even if  it will take more circuitous and less obvious legal routes to get there and avoid expressing itself so plainly and directly.

But the invisible college of international law won’t get to those conclusions, in my estimation … until the day after the Obama administration leaves office, whereupon suddenly a whole series of legal conclusions will magically be pronounced “customary international law” dating back to Grotius or Vatel or someone, and a couple of sentences from some Nuremberg opinion will be deployed for the occasion, and various human rights groups will round up a bunch of countries on the Human Rights Council to lecture the US and as ever ignore Sudan, as they repose in human rights majesty listening to some special rapporteur drone on beneath the HRC chamber’s $23 million ceiling consisting, alas, of money partly diverted from Spain’s international development aid budget for, you know, really poor people, opining what a human rights abuser the US is and such war criminals its officials are, and the US, member of the HRC on account of its excess of zeal to be one of the multilateral good guys, mumbles apologies for existing, and finally the US, having joined the ICC as a little parting gift of the Obama administration, discovers that its officials in the CIA – but not, note, the DOS Legal Advisers office, which was so very, very careful not to say anything very specific about this – are subjected to legal investigations by the ICC prosecutor, and investigations by Spanish prosecutors eager to prove to their consciences that they have expunged Franco by embarking on human rights adventures abroad, although conspicuously not, in the real-politik of the real world, human rights adventures involving the New Hegemon, China, but instead focusing on the Country That Chose Decline … and so one of the genuine advances in discrimination in targeting in self-defense, targeted killing from stand-off remote platforms, will be removed from the US arsenal in what we might call the on-going ‘war against war’ currently underway by the Forces of Good Who Tend to Ignorance and Disavowal of Responsibility for Unintended Consequences (e.g., new terrrorist attacks against soft targets in South Asia, but hey, they’re not Americans!!), and the legal process thereof buttressed by expressions of support and amicus briefs by former Obama lawyers suddenly discovering they had views on these topics after all, and they all somehow tended toward the liability of the US and its agents.

The arguments will not be as reaching, and certainly not as plain – or as honest, come to that – as O’Connell’s, but I think pretty much every conclusion she reaches will be reached by the ‘visible and noisy’ college of international law:

Abstract:

Within days of his inauguration as president, Barack Obama ordered the CIA to continue President Bush’s policy of attacks by unmanned aerial vehicles (UAVs) or drones in Western Pakistan. By October of 2009, the CIA had launched around 80 drone attacks. These attacks cannot be justified under international law for a number of reasons. First drones launch missiles or drop bombs, the kind of weapons that may only be used lawfully in an armed conflict. Until the spring of 2009, there was no armed conflict on the territory of Pakistan because there was no intense armed fighting between organized armed groups. International law does not recognize the right to kill without warning outside an actual armed conflict. Killing without warning is only tolerated during the hostilities of an armed conflict, and, then, only lawful combatants may lawfully carry out such killing. Members of the CIA are not lawful combatants and their participation in killing persons—even in an armed conflict—is a crime. Members of the United States armed forces could be lawful combatants in Pakistan if Pakistan expressly requested United States assistance in a civil war to end a challenge to Pakistan’s civilian government. No express request of this nature has been made. Even if it were made, drone attacks are the wrong tactic in the context of Western Pakistan. The CIA’s intention in using drones is to target and kill individual leaders of al-Qaeda or Taliban militant groups. Drones have rarely, if ever, killed just the intended target. By October 2009, the ratio has been about 20 leaders killed for 750-1000 unintended victims. Drones are having a counter-productive impact in Pakistan’s attempt to repress militancy and violence. The use of the drone is, therefore, violating the war-fighting principles of distinction, necessity, proportionality and humanity.

Let me repeat one of those sentences in case the CIA counsel’s office was not paying attention:

Members of the CIA are not lawful combatants and their participation in killing persons—even in an armed conflict—is a crime.

(Update.)  I guess we might as well add Roger Cohen’s op-ed in the NYT, in which he takes up the subject of drone warfare and, seemingly having no idea what he actually thinks, decides to call for … a public debate.  He has not thought very much or very long about drone warfare if he thought Jane Mayer’s recent New Yorker piece, as he says, “ground-breaking.”  Only if you became aware of Predators last week.

That means that I don’t want it to be super-math heavy.  It also needs to focus around the 1L courses that they’ve been taking – antitrust and IP and my own corporate finance won’t work, because they come in later years, and so it needs to focus around contracts, tort, property, criminal law.  In addition, it is only a two unit, once a week class, so it can’t cover vast swathes of material, and in fact very far from it.  I’ve never taught the basic, intro law and econ class before, and I’ve never taught 1Ls, so it should be an exciting pedagogical experience – for me, at least!  I’d be grateful for suggestions in two categories:

• Main text – please tell me why this would be a useful textbook, given my constraints above.
• Supplemental texts, such as short introductions on game theory, statistics, supplemental readings on law and econ, etc., but specifically with law students in mind.

Large swaths of economics are going to have to be rethought on the basis of what’s happened.” So said Larry Summers, President Obama’s chief economic adviser, in an interview in the weeks after the markets crashed a year ago. Yet to a remarkable degree, economic thinking hasn’t changed very much at all.

Now financier George Soros is announcing a $50 million effort to speed things along. This week Soros is gathering some of the leading practitioners of the market-skeptic school, who were marginalized during the era of “free-market fundamentalism,” among them Nobelists Joseph Stiglitz, George Akerlof, Michael Spence, and Sir James Mirrlees. He’s also creating an “Institute for New Economic Thinking” to make research grants, convene symposiums, and establish a journal, all in an effort to take back the economics profession from the champions of free-market zealotry who have dominated it for decades, and to correct the failures of decades of market deregulation. Soros hopes matching funds will bring the total endowment up to $200 million. “Economics has failed not only to predict and explain what happened but has also failed to protect society,” says Robert Johnson, a former managing director at Soros Fund Management, who will direct the new institute. “That’s what the crisis revealed. The paradigm has failed. There is no guidance.”

I am curious what professional and academic economists make of this kind of initiative.  (Update:  Here’s a much better article from the FT.  And I’ve added … still more to the post below.)

George Soros, the fund manager, has pledged $50m to back a new think-tank with the mission of reconceiving the field of economics, which he describes as “a dogma whose time has passed” …  The group’s advisory board will be studded with economists such as Jeffrey Sachs, George Akerlof, Kenneth Rogoff and Joseph Stiglitz as well as public commentators such as Anatole Kaletsky and John Kay, a Financial Times columnist. Mr Soros is pledging $5m a year for 10 years.

II

As the FT notes, one way to see this is that Soros is simply funding a stellar academic cast in order to push his own philosophical theory of “reflexivity” – will the Nobelists go along with that?  Or simply do what they were going to do anyway?:

Mr Soros, who has long been a critic of economic “fundamentalism”, blames the unwavering belief in unchecked free markets, which remains pervasive in universities, for allowing financial markets and asset prices to melt down. Through INET, he will be indirectly funding his philosophy of “reflexivity” – that markets tend to influence perceptions of reality, which in turn feed back into markets.

This new institute will based in Hungary, at the Central European University, by the way, which Soros created back in the 1990s, and it should certainly give some oopmh to the CEU. Overall, you can think of many ways to conceive of this kind of institute, including (thanks to commenter below) this observation from Peter Boettke:

So to challenge the economic establishment which doesn’t permit creative thought outside of free market fundamentalism, we are going to enlist 2 professors from Columbia (1 a Nobel Prize winner, and the other the closest thing the profession has to a rock star), 1 from Harvard, and another from UC-Berkeley (who also won the Nobel Prize).  Because I guess the profession has been dogmatic in the treatment of their ideas, or that the US government hasn’t been influenced for the past 20 years by their ideas on regulation of markets, managament of the macroeconomy, and foreign aid goals.

I think I am highly committed to free markets without thinking of myself as a dogmatist; the EMH is an empirical hypothesis that bears only as much weight as the evidence shows.  I have no view that markets tend always to efficiency let alone perfection, and I am quite sympathetic to the idea that economics is entirely too much in love with elegant mathematical modeling and has turned itself into the Glass Bead Game.  I am second to none in my admiration for Professor Mankiw, but I must admit that one part of his famous blog post on why study math as an economist gives me pause, even if it was no doubt tongue in cheek:

4. Your math courses are one long IQ test. We use math courses to figure out who is really smart.

I don’t doubt for a moment the utility of much advanced math that I don’t understand, particularly, as Professor Mankiw says, because there are many genuinely counterintuitive economic conclusions.  The problem is, using advanced math skills as a professional filter is also a remarkably good way for ensuring that the connection between the real world and the academic world lessens.  Paul Krugman took abuse from the professionals for his recent NYT  Magazine essay on the state of economics.  No one should be surprised to learn that I am no fan of Krugman the pundit – but much of the criticism seemed to me curiously misplaced.  It was narrowly focused on talking about how little he knew about macro, and curiously unfocused, seemingly unaware, that there is a perfectly important conversation to be had about conceptions of elegance in the Glass Bead Game taking over from reality that apply, as he was speaking, to the discipline of economics as a whole.  Aesthetics, in the sense Krugman meant it, is a relevant observation about the nature of the discipline, and not addressed by sniping about specialized details.

That’s a point about sensibility that is external, as it were, to the sense of economics.  I was both surprised that Krugman made it and admiring that he made it so well.  I don’t doubt – see the discussion below – that there is a role for the humanities, philosophy, and the philosophy of value – in the re-widening, as it were, of the discipline of economics.  It will be incongruous with purely mathematical modeling, because it will be forms of explanation at least partly exogenous to the pure discipline.  But, to be clear, I do not mean by this the conversation I had with an anthropologist a year ago who, sensing academic blood in the water in the economics profession, sagely nodded and told me that none of the current market meltdown surprised him, because he had carefully studied … exchange rituals in hunter-gatherer tribal society and it wasn’t that different from macro.  (I exaggerate but frankly only barely.)  Not that exogenous; the Ache can teach us many things, I suppose, monetary policy not being among them, however.

Tyler Cowen, by the way, remarks that as the formal discipline of economics includes fewer native English-speakers and fewer Americans:

In percentage terms, fewer and fewer economists are Americans by birth and upbringing.  Non-Americans are less likely to be fully fluent in English, which encourages mathematics.  Non-Americans also tend to be less market-oriented in their thought.  In any case they are less likely to stand along traditional U.S. ideological fault lines or even share ideological fault lines with each other.

If that is so, then what I am suggesting – a resurgence of humanities into economics, via such topics as the ‘moral sentiments’ or the deep conceptual philosophy of value (see the discussion below) – is unlikely to go anywhere.  But in that case, I think much of Soros’s project does not go anywhere, either, because it, too, is founded on a move away from Glass Bead Game economics as well as a move away from EMH.

III

One way to model this new institute – if, as I think many on the left do including perhaps Soros himself, you think that “conservatives” have done this kind of think tank thing better in recent decades – is on the model of Cato.  As Mark N points out in the comments, it’s probably the most accurate to Soros’s intentions, and those of his board.  If not that, then perhaps the Olin fellowship program.

Another way to see it, though, is as a sort of Hoover Institution of the left.  It would be a good model for such an institute, if it had the patience to persevere after Soros has left the scene.  Hoover’s slogan is “ideas defining a free society.”  But Hoover is nowhere near as monolithic as outsiders sometimes imagine – I often have the impression that many casual observers confuse Hoover and Heritage and Hudson.  Niall Ferguson is a Hoover senior fellow; so also, outside of economics, is Timothy Garton Ash or Michael McFaul, now a senior Obama official.  Hoover has far more diversity of thought as an academic institution than – well, to be perfectly frank, than many of the academic institutions I’ve ever been associated with.  It is a big tent on the idea of “defining a free society.”  Ironically it is not necessarily that far from Soros’s own ideas about the ‘open society’.

If it were modeled on Hoover, it could be a very good thing, precisely because while Hoover has a squishy tilt, it is a not a political task-master in any sense and it understands far better than most traditional academic institutions the role of free thought, particularly in academia.  One virtue of a free society/free market tilt is that it leads the institution genuinely to believe in a market place of ideas.  Whereas my (long and deep) experience in the nonprofit and foundation world is that, no matter what the spin, the advocacy community regards academic research and endeavors as “bought and paid for.”  (Which is a reason, by the way, not to bother to commission research, because – if you are looking for pre-set outcomes – it’s both cheaper and more reliable to buy off the shelf.)

But if this new Soros institute actually takes seriously the Hoover model of gently mission-driven but also capacious and not partisan, a research institution in the fundamentals of ideas rather than a day-to-day policy shop cranking out stuff for Capital Hill, a believer in the market for ideas, then it could be an excellent enterprise.  But also not particularly clear  how this new Soros initiative is different in that respect from … Brookings or, come to that, most universities, including their economics departments in the United States.  Indeed, if I were a senior vice president at Brookings, I would be wondering why Soros isn’t simply cutting Brookings a check right now.

IV

In any case, I’m not at all persuaded that the economics profession, in academia or out, has been captured by some “free market fundamentalism.”  It somewhat seems that the goal is much narrower than the economics profession and “market fundamentalism” – it might better be called, perhaps, the Anti-EMH Institute.  But I have serious doubts that the economics profession or academy has been taken over by that, or that to the extent it has, that it will not on its own momentum shift other directions in response to … “events, dear boy, events.”  The real, and real world abuse, of EMH, one might have thought, lies in the financial world itself, among people who did not sufficiently understand the models to challenge them; or who lived in a Dilbert’s world of “It must be right, it has math!!”; or who might have been skeptical about the risk models, but couldn’t be bothered to follow up because the monitoring incentives were wrong.

In any of those real world cases, it is easy to absolve oneself by saying, ‘But Dr. Pangloss at Chicago said we lived in the best of all possible worlds’ – but it is doubtful that is where the problem lies, not really.  It’s a convenient excuse and scapegoat.  In that case, the true mission of a Soros initiative on this would be aimed not at the academy and its supposed fundamentalism, but at the really hard, grindingly hard work of the ground level structure of regulations.  Policy not at the level of high, high abstraction economic theory, but the policy that deals at the ground floor of regulations and regulatory approaches to concrete problems of complexity, complacency, and conflicts of interest.  Felicitously, one might think that a Soros institute run by the eminent Robert Johnson is exactly positioned to connect new intellectual movements on such things as efficient markets to the real people of Wall Street and London.  But then there’s a catch:

A lot of that work is regulatory law informed by economics, not economics as such.  I’ve come to believe that the lawyers have far more to contribute to fixing financial regulation than many people – read economists – understand.  Or that we lawyers understand.  It is principally because lawyers seem to grasp better the sticky grit of institutions and their internal workings. As a caricature, economists seem better to understand markest; lawyers seem better to understand institutions.

Why is that, if so?  I think it has something to do with the fact that economists think so much of the time in models of abstract contract and freely contracting parties.  I’m always surprised by what economists often think the actual rules of contract law are; they in turn are often surprised when I point how many contingencies lie within contract interpretation, default, remedies.  Mitigation, for example, or oppression or adhesion.  I don’t mean this in any radical or skeptical sense, I just mean that contract rules and legal outcomes, as understood by lawyers and judges, are not quite as fixed as economic modeling sometimes seem to assume.

For that matter, I am often struck by the financial instruments that financial economics seems to treat as economically equivalent – various synthetic derivatives for example or, even easier, certain varieties of preferred stock and corporate debt.  When I actually look at the law underlying the instruments -the corporate law as well as contract, the contingencies of bankruptcy, etc., I think … these instruments are equivalent in the middle of the bell curve, in ordinary conditions trading in the market, but precisely when trouble strikes, the contingent risks that different instruments with different-reading contracts defining them will be read differently increase drastically.  And I can’t say I have any good reason to think that the markets have a mechanism other than fiat assumption that these contingent differences are captured in market valuations.  But hey, it’s tail risk, right?

V

In particular, when economists think about agency, they seem to think mostly in terms of failures of agency with respect to essentially contract relations.  Lawyers have shifted in that direction over time, but they are still far more imbued with concepts embedded in the law about agency as a genuine form of social life itself – apart from and beyond simple bargaining between free actors.  Fiduciary duty might not mean very much to an economist used to thinking solely in terms of what actors think they can get away with, but it still means something (less than it used to, granted) to lawyers.

Agency, in other words, as an affirmative body of social behavior, motivating and motivated on its own terms.  That, for me, was the most important signal from this year’s economics Nobels – indirectly, they signaled an acknowledgment of the importance of agency for its own sake, and as its own form of social life, with an independent impact on economic relationships.  The life of a fiduciary, the social ideal of the steward, the idea of a ‘shepherd’.  I have written about this in passing at VC – a return to the idea of the moral psychology of finance; ‘virtue economics’ not in the sense of welfare and distributional justice, but instead in the idea of economics informed by the ‘moral sentiments’.

This is not behavioral economics.  Behavioral economics is important as an empirical correction to rationalist models – but they both suffer from the incompleteness of not taking into account the depth of human psychology, at the conceptual level.  Behavioral economics is admirably superficial; in order to defend its empirical claims, it makes as few claims as possible about the deep psychology of social life.  But there is a deeper, if admittedly more contestable, aspect to humans and markets: concepts such as trust, honor, fidelity, fiduciary, agent, principal, steward, are not fully captured either by rational market models or by deliberately under-theorized behavioral finance.  And yet they do indeed inform human behavior and, for that matter, as Alan Greenspan noted to his sorrow, markets and even the favorite playground of the most abstract thinkers in economics, finance.

Sorry for the digression; I’d like to write a very short book-essay on the moral psychology (or the moral sentiments if you prefer) of finance.  It is on my mind everytime I think of these topics; perhaps the new Soros institute would like to underwrite my work and free me from teaching for a year (well, let’s say two … or maybe a year on Soros’s dime and a year out at Hoover?  Wow!)  In any event, if anyone related to this new institute happens on this – I hope you will consider carefully that

• an important aspect of the work worth funding is, in the intellectual foundations of finance theory, less about rationalist theory or behavioral finance than about the philosophy and intellectual history of the social virtues, the social sentiments, the socializing sentiments, the other half of Adam Smith’s endeavors; and
• the biggest task of intellectual reconstruction lies, perhaps surprisingly, and in the gritty work of policy involving law informed by regulatory policy, and so you need to fund more academic and regulatory lawyer policy work than you might have thought.

VI

The other possibility for the Soros institute, however, is that the effort is seen, either as perception or reality, as being an explicit effort to politicize the economics profession.  Since in one way of course economics is “politicized” in much of its work nearly by definition, in the broad sense of policy, that might be brushed off.  But within the professional community, there are policy and political preferences that can be explicitly put on the table and understood as such, either as assumptions or qualifiers – and there are bridges too far, as well.

It’s different if it appears that by taking funding from this think tank or that, you’re bought; and it’s not always easy to draw the lines, even though they are often understood informally.  It’s easy enough for Soros to fund the kind of research he wants to fund, and to do it in a way that absolves it of political controversy.  The aim here. however, seems to be to try and create a movement.  It might turn out very well, like the Olin fellows.  But it might turn out that taking those funds and sticking them into an organization with an explicit mission to “re-educate” the economics profession permanently taints those funds.  Is there a difference between that and Hoover or Brookings or other existing think tanks?  Depends on your view of things but, yeah, I think there is.

I am not a professional or academic economist, however.  I am curious to see what the professionals think and how they perceive it, now and as it plays out.  The Olin fellowships, after all, were a remarkably effective catalyst for change in the academy, in economics and law.  Or else they simply funded where people were headed anyway, though they were happy to take the money.  Or a little bit of both.

According to law school officials, the move to a more hands-on, resource-intensive approach to legal education and competition among schools for higher rankings appear to be the main factors driving the cost of law school, while ABA accreditation requirements appear to play a minor role. Additionally, officials at public law schools reported that recent decreases in state funding are a contributor to rising tuition at public schools.

Very interesting post over at TaxProfBlog – the screen shots include a number of powerpoint charts and graphs from the GAO report.  I agree with the GAO report and its surveyed law school officials that accreditation plays very little role in driving up law school costs, and that rankings are an important driver.  They are also an important driver in things schools spend money on that drive up costs, such as faculty student ratios, for example.

I also believe, however – but wouldn’t try to defend here – that law schools respond to the availability of federal dollars and capture that money from students, and that law school tuition rates reflect perceptions of the return on investment available to students in going to work for law firms.  At least in my discussions with fellow professors who have some idea about law school economics, the thought is that mid tier schools found that they could place more of their students into large law firms, not necessarily the very top firms, but large workhorse firms that paid well.

And in my discussions with professors, the concerns are two-fold.  First, that if the big law model is genuinely collapsing into the long term, then the returns on law school investment might well be declining to … what, exactly?  Well, for those of us here in Washington DC, it might be to something closer to what government lawyers earn.  Not to be sneezed at, heaven knows, particularly if you factor in the security and benefits, but not necessarily the returns long term that can support the rate of tuition increases at even mid tier schools like my own.

Second, if the USG becomes the lender directly, the pressure on it to intervene in the tuition “market” (I use that term very loosely indeed) and impose some cost controls is strong.  That could well be characterized, and might actually be, a regulatory mechanism for ensuring that subsidies aimed at students don’t wind up in the hands of a law school oligopoly.  Or not.  At least, that’s the substance of conversations I have with friends at a variety of schools in roughly my school’s tier.

Given the fascination of law professors with all things having to do with the ranking and dissection of the law school world, is it possible that someone has already done a genuine empirical study of the cost structures of law schools and their implied or explicit business models?

As a side note, I certainly find that I think harder than I used to about whether I am providing value to students, and I think of it as dollar value and return on long term investment.  I treat myself a lot more as an educational fiduciary than I used to.  I’m not alone in that, I suspect – I had a fascinating dinner conversation with a friend who teaches comp lit at a top five university; he told me that he thinks all the time about what he is going to convey and what it should mean, particularly as it is not professional education – it is inherently long term and about learning to think, reason, interpret, and write effectively, and in the context of the humanities and values.  He has a son about to enter college and it is on his mind same as it is on mine.  Yet it’s easier, really, for me to answer that teaching in a professional school – I don’t mean that the humanities, literature, etc., are not important, far from it, but that it’s an easier pedagogical question in a law school or medical school than in a literature department.

That means, from my point of view, thinking about law student education and what I think they need that they are not professionally able to determine for themselves.  I’m not an agent for a principal, I’m a fiduciary for an only partly competent principal.  My best advice, I suppose, is that you need a mix of plumbing classes and grad school classes; classes that teach you about the nuts and bolts, but also classes that teach you to think creatively and amply, because the field is not static, at least not in American law.  It might mean law and economics, to learn to think in a forward manner about incentives, for some students; and to learn to write and interpret difficult texts for others; and still something else for others.

Students, on the other hand, tend to think they know more than they do about what they need from law school, and at the extreme end, tend to think of themselves as the purchasers of a very expensive commodity called legal education, and I am the guy on the other side of the Starbuck’s counter purveying it to them.  Wants and needs.  There was a song about that, right?

Starting around 1250, courts in England began operating in French.  After hundreds of years, the legal language had turned into something called “law French,” which was a confusing amalgam of English and of a French that no French person would ever speak. The new American colonists jettisoned law French.  In America, the law was stated positively in statutes written in straightforward English comprehensible to ordinary people.

The writing of statutes in plain English was one of the methods by which the Americans ensured that the law was under the control of the people, rather than imposed from above.  One of the causes for the cynicism which many modern Americans feel about government in general, and law in particular, is the degree to which the laws Americans must obey have become as incomprehensible to a normal, literate American as law French was to a normal, literate Englishman.

Scholarly legal blogging is a wholesome, constructive development, in the tradition of the plain English statutory writing of our American ancestors four hundred years ago.  By making law, and legal scholarship, more accessible to the lay public, law bloggers are reconnecting American law with the American people.

In the same symposium, Sam Kamin writes briefly on how professors use law blogging to enhance their traditional writing. Alan Chen discusses the use of blogs in faculty hiring or promotion. Student Joe Aguilar explains Race to the Bottom, DU’s joint faculty-student blog on corporate governance.

If you’re interested in the role of blogs in legal education, you might also enjoy Of Empires, Independents, and Captives: Law Blogging, Law Scholarship, and Law School Rankings by J. Robert Brown, Jr., and David I. C. Thomson’s book Law School 2.0: Legal Education for a Digital Age. Thomson argues that the new electronic media can–and should–lead to more profound changes in legal education than anything that has occurred in the last hundred years. If you want to check out some of the book’s ideas before buying, a 2008 paper by Thomson sets up the issue, and another paper details how legal writing can be taught well in an online-only class.