22 December 2014

Some Grudging Admissions

I hope no one who has read my libertarian-doubting posts (a couple of recent ones here and here) has mistaken me for a statist. If you doubt the bona fides of my fears about how much damage civil government can do read one of my posts about the travails of Trinity Western University here.

Yet, at this Christmas season I am compelled by the force of James K.A. Smith's cogent arguments to acknowledge the value of the phenomenon of government regulation. Go here to read his blog post titled "Thank God for Bureaucracy." Per Smith, regulation "is the banal way that the modern, liberal, democratic state tries to secure some baseline of justice and flourishing." (Italics mine.) (Smith's post came in connection with a review of a book by Cass Sunstein on whom I have commented here.)

The banality of the modern regulatory state is clear to anyone who has waited in line at any Department of Motor Vehicles. And the limitations of the ability of regulation to get us to a life flourishing in the virtues is obvious enough. Yet as oppressive as life in a contemporary over-regulated regime may be, it stands in stark contrast to a world of anarcho-capitalism that indeed would be nasty, brutish and short for many people. The complexity of state regulation has increased along with the complexity of the interdependence of human life in an increasingly interconnected world.

Moves from local to national to global economies have seen the concomitant move from regulation by common law to regulation by legislation to regulation by administration. Repristination of a pre-regulatory world is fine if you're willing to live in such a world (e.g., Old-Order Amish) or one in which capital-rich entities rule the day (as is the case in much of the developing world). The question is not whether we will continue to swim in the regulatory sea of life but whether the burdens of regulation will be fairly shared. With respect to that question it seems neither American political party is up to the task. (Some earlier thoughts about that here and here.)

My second grudging admission comes courtesy of The Economist (here), which observes that by the end of a Christmas Carol even Scrooge realized there was more to life than ever-increasing GDP. As the writer observes, "this is the season when, for devout Christians at least, the ineffable supplants the material (and the other way around for most folk). That makes it a good time to ponder whether maximizing income should really be the be-all and end-all of economic policy." In short, this piece amounts to a surprisingly useful meditation on the some of implications of the Incarnation.

It thus turns out that a life freed from the constraints of limits on the market and oriented only toward the increase of individual welfare is the one to which we should say, "Bah, humbug."

21 December 2014

Health Care in the Netherlands

If you're like me, you had no idea how health care is financed in the Netherlands. Is it a single-payer system or a system of private insurance? If the latter, does the government subsidize policy holders and, if so, to what extent? And, on top of these policy details, does a small nation like the Netherlands have a political consensus on the subject?

If I've whetted your curiosity, go here to read an interesting post by Hetty ten Oever of the Leiden Law School about the near collapse of the current Dutch government over the extent to which private health insurers can limit access to what in America would be called "out-of-network" providers.

In a brief compass the post explains the current Dutch system and the three-way tug of war among insurers, providers, and consumers of health care. I found it very instructive on what seems to be a good system but surprised that even in a comparatively homogeneous society (compared to the U.S., anyway) there is significant disagreement about the balance of power among the three interested entities.

16 December 2014

Other Thoughts on Angle of Repose

Over a year ago I posted some thoughts about Wallace Stegner's Pulitzer Prize-winning novel Angle of Repose here and here. Go here to read some more insightful comments by now-retired Dordt College professor Jim Schaap.

15 December 2014

Thoughts Abourt Religion, the Market, and Contracts

To my thinking, two of today's best scholars about the relationship of law, religion, and the market are Val Ricks and Nate Oman. You can read two earlier posts about Rick's work here and here and Oman's here and here. In this post I want to direct attention to two just-published pieces by Oman: Doux Commerce in the City of God: Trade and the Mormon Ideal of Zion (download here) and Need for a Law of Church and Market (download here).

As the title of Oman's first article suggests, he is a Later-day Saint (Mormon), as is Ricks. Perhaps I should re-read Wallace Stegner's The Gathering of Zion because, apart from the obvious, my knowledge of early Mormon society and economics is quite hazy. Thus, until reading Doux Commerce, I had not known that the early Mormons had sought to establish a self-sufficient and egalitarian economic community referred to as Zion. Like other ante-bellum nineteenth century sects, the efforts of the Later-day Saints ultimately came to naught. Some current Mormon scholars have attempted to retrieve the early concept of Zion in their critique of contemporary consumer capitalism. Oman argues that, notwithstanding the enervating effects of modern economic life, trade and commerce are compatible with those nineteenth century ideals.
Trade requires trust. Exchange over time requires investment in a transaction in the expectation of future performance by one’s counterparty. The vulnerability inherent in commercial relationships is part of what has made it difficult to generate widespread and healthy markets in human history.
Rather than serving as a mark of godlessness, commerce demonstrates the existence of trust between parties who otherwise could advance neither their own or each other's interests. Suffice to say that Oman's article goes into great depth about the teachings of the Mormon scriptures, early practices (including anti-market and anti-"gentile" sermons) as well a addressing the insights of modern socio-economics and thinkers as diverse as Hayek and Polonyi. I highly recommend this article.

Need for a Law of Church and Market addresses a related topic without the distinctives of LDS history and practices. For this piece I'll let Oman's abstract serve as my commentary:
This essay uses Helfand and Richman’s article “The Challenge of Co-Religionist Commerce” to raise the question of the law of church and market. I argue that the question of religion’s proper relationship to the market is more than simply another aspect of church-state debates. Rather, it is a topic deserving explicit reflection in its own right. Courts and legislators have been creating a law of church and market without thinking about it when they resolve questions religious commerce poses by applying legal theories developed without any thought for the proper relationship between church and market. I also examine one of the few areas in our law where we do explicitly try to structure the relationship between commerce and religion: anti-discrimination laws. I argue that the assumptions about the proper role of religion in the market on which these laws are predicated are actually quite different than the ultimately contractual regime that Helfand and Richman assume. While anti-discrimination laws do not directly implicate the doctrinal issues flagged in their article, the theoretical gap between their approach and anti-discrimination law illustrates the need for greater attention to the law of church and market.

10 December 2014

The Ebbing Tide of Human Rights

Several years ago I wrote Looking for Bedrock: Accounting for Human Rights in Classical Liberalism, Modern Secularism, and the Christian Tradition (download here). I've previously blogged on the topic of human rights (here, here,and here, for example) but suffice it to say that in my published article I expressed concern about the future of human rights as a meaningful form of discourse.

Several reasons animated my concerns but one was the dissociation of the notion of human rights from a thick anthropology. If there's no consensus on what human beings are, then there should be concern that the very notion of rights has no substance to which to attach. Rights-talk untethered from what it means to be human can lead toward a denial of the existence of rights (in the sense of a trump of other considerations) or an expansion of the set of rights-bearers to include non-humans such as "higher" species of animals. Or both.

Go here to read Eric Posner's instructive piece in The Guardian. Titled The Case Against Human Rights, Posner first argues that 
The truth is that human rights law has failed to accomplish its objectives. There is little evidence that human rights treaties, on the whole, have improved the wellbeing of people. The reason is that human rights were never as universal as people hoped, and the belief that they could be forced upon countries as a matter of international law was shot through with misguided assumptions from the very beginning.
Second, Posner asserts that the 1990s represented the high-water mark of the idea of human rights. Since 9/11, however, the tide has ebbed for a number of reasons including:
America’s recourse to torture was a significant challenge to the international human rights regime. The United States was a traditional leader in human rights and one of the few countries that has used its power to advance human rights in other nations. Moreover, the prohibition on torture is at the core of the human rights regime; if that right is less than absolute, then surely the other rights are as well.

Posner goes on to note several additional reasons why the idea of human rights is waning included some about which I expressed concern in my article. His conclusion is insightful: "It is time to start over with an approach to promoting wellbeing in foreign countries that is empirical rather than ideological." In other words, the proponents of human rights should stop talking about rights in the abstract. They should stop worrying about formal inclusion of various and sundry rights in national constitution. Instead, they should simply work toward improving the plight of the oppressed through verifiable means.

I find much to applaud in Posner's critique and much to support in his alternative to the traditional model of human rights activism. I cannot, however, join in his abdication of rooting any sort of ameliorative efforts in the reality of a distinctive human nature.

Without more, Posner's well-intended efforts to reorient human right will simply increase the efficiency of a different set of priorities. In Posner's utilitarian world, the trains will run on time but who knows where they are going?

09 December 2014

Advent and Sociopathy

I've previously linked to the article by my colleague Craig Stern here. Stern's article, The Heart of Mens Rea and the Insanity of Psychopaths (read the abstract here) argued that "psychopaths [or sociopaths]--those who lack sense of the normative nature of more rules--are not thereby excused from liability under the criminal law."

So far nothing new.

But for something that is new go here to read an account with an embedded link about how the gospel can reach even those for whom the notions of right and wrong have no affective traction. David Wood was a sociopath. Yet, with the power of the gospel, he's no longer indifferent to the claims of right and wrong.

Joe Carter, the author of the post, goes on to lay out the moral argument for the existence of God. Carter is clear and with the backing of the Wood's story makes a compelling case for the apologetic value of this argument.

07 December 2014

Regent Law School Center for Global Justice: Human Rights and the Sexualization of Culture

A heads-up to all my readers. Go here to read more about the fourth annual symposium sponsored by the Center for Global Justice at Regent University. The symposium will take place on February 21, 2015 (go here for scheduling details). A list of speakers can be found here and registration here.

A brief summary:
The symposium will kick off in the morning with panel discussions on the roots of human rights and crucial questions for which the law sorely needs direction: How should the law address the"right to sex" when this leads to sex as a business? What should the law provide when these asserted rights involve treating children as property: Answers to these questions go hand in hand with fighting human trafficking and protecting those now defenseless.
Please put this great opportunity on your calendar now.

03 December 2014

An Aside on the Corporate Purpose

Over the years I've posted several times on the purpose of corporations. Check here, here, and here to demonstrate I'm telling the truth. In short, profits are the efficient but not final cause of the existence of business firms including corporations.

Notwithstanding my insights, since around 1990 the dominant model of corporate purposefulness is shareholder value. One might think that such a model would produce great returns for shareholders. But one would be wrong.

Go here to read an article in The Economist that argues that shareholder return since 1990 were less than in the preceding 50 years. Why? Because, as James Montier suggests,
[Even though] shareholder returns haven't gone up in the era of "shareholder value". CEO pay has, though. Hard to believe but CEOs got by in the 1970s on $1m or so; their total remuneration has grown eightfold in real terms since then. The focus on the share price has led to an unhealthy concentration on meeting the short term earnings per share target; surveys have shown that executives will reject a project with a positive rate of return if it damages the ability to meet the next quarter's eps.
Thus, even on its own terms, defining corporate purpose solely in terms of profits has the effect of reducing profits. Seems there might be a moral here.

01 December 2014

Why Legal Scholarship Gets Dissed

Jayan Nayar
‘Sovereignty’, it seems, confounds, and the fate of the ‘subject’ thus appears uncertain. Central to this existential and philosophical crisis of the ‘subject’ is the realization that state, as the bounded expression of ‘sovereign’ will, appears to be neither the protective, emancipative receptacle-vehicle for Man’s historical march towards the Future, nor the supreme actor in defining the actualities of global socio-political and legal relations within a context of a neoliberal, globalized, trans-territorialized order. Thus is sovereignty perpetually sought to be re-thought by critical philosophers, borders perpetually sought to be reconceptualised and the ‘political’ subject perpetually sought to be resurrected from abandonment. In this essay I present a different, decolonial, view of sovereignty as a philosophical invention. I begin by identifying three incommensurable conditions of subject-beingness: the precarious citizen-subject; the abject subject of ‘exceptional’ Bans; and the trans-territorial subject of ‘exemptional’ licence. Rather than aberrations, I suggest these are co-constitutively regulated and enforced by the invention of ‘sovereignty’ which constructs the materialities of differentiated subject-beingness within a global biopolitical regime of (b)ordered bodies-within(/out)- territory based on the incommensurable rationalities of license, containments and bans. The aim of this correction to the philosophy of sovereignty is to further the tasks of de-normalising the coloniality of (b)ordering that has captured, emplaced, and banned imaginations of Being(-otherwise). Conversely, a decolonial philosophy normalizes the oppositions to ‘sovereign’-presents, and naturalizes the many witnessed refusals and rejections of the present norm-alities of violence and dispossession. To de-invent sovereignty, is to therefore re-invent philosophy as decolonial praxes.

Some Malingering Bankruptcy Law Issues

Go here to read a short piece by Seton Hall law professor Stephen Lubben about what he perceives as several lacunae in the current U.S. bankruptcy law. Several of his observations might be counted as problems but like Lubben I don't foresee Congressional action.

In any event, and of more importance, is the question of whether secured creditors should be surcharged for using Chapter 11 to effect a quicker liquidation of their collateral than they could have achieved outside bankruptcy. Much to the surprise of most folks I'm sure is the positive value of bankruptcy to secured creditors.

Once upon a time, it was corporate debtors, their general creditors, and employees for whom bankruptcy reorganization functioned as a means of preserving a business's value as a going concern. The business's secured creditors got the value of their collateral but the surplus went to others. Today, because of more highly-refined means of obtaining a security interest in every scrap of a corporation's assets, there is no surplus. (If you want to know how to do this, take my course in Secured Transactions.)

The absence of any surplus for run-of-the-mill general creditors, employees, etc. is a function of state law. Federal bankruptcy law remains important, however, because the powerful secured creditors can get the corporate debtor to do their bidding (or, more precisely, they can permit the corporate officers to get paid to do their bidding) and sell off their collateral in a trice.

The bankruptcy system isn't free; we taxpayers subsidize it. Which raises the question of whether we should continue to do so if, on the corporate side, it functions to serve the private good of a small set of creditors at the expense of the common good of the taxpaying public.

25 November 2014

Theocracy in the Hebrew Bible

I highly recommend that you go here to download Geoffrey P. Miller's short (16 pages) article, The Kingdom of God in Samuel. Miller is a professor of law at New York University.

Miller's abstract is straightforward:
This paper argues that the idea of the kingdom of God in the Hebrew Bible refers to theocracy – the political system in which authority is exercised by God’s representative on earth. The relevant texts, most importantly parts of the Book of Samuel, explore the advantages and disadvantages of theocratic rule and compare that form of government with other models. Bible’s treatment of this topic is subtle and nuanced, recognizing virtues in theocratic rule but concluding, overall, that it does not deliver sustainable and effective governance in the real world.
The abstract does not, however, adequately demonstrate the quality of Miller's analysis. He begins by describing the benefits of narrative as opposed to the standard accounts of political theory:
Narrative is an effective analytical tool – so effective that it is widely used today, and is even a dominant approach in ostensibly scientific fields such as economic theory. Using narrative, the analyst can frame issues for discussion by specifying elements of the setting – when, where, and how events take place – and also the cast of characters – the figures to whom action is attributed within the narrative. The plot – the events that transpire in the narrative – is then a form of experiment: the analyst explores how events play out and, based on these results, can make normative assessments about the strengths or weaknesses of different arrangements.
He goes on to analyze the political account of threocracy in the Garden of Eden but then observes that 
The Bible does not, however, draw the conclusion that theocratic rule is best for actual human societies. Adam and Eve are expelled from God’s presence and can never return. God will no longer rule over them directly. Practical governance in the real world, if it is to exist at all, must be administered by flesh-and-blood human beings. The question posed is whether theocracy, an excellent form of government in a society directly ruled by God, is also the most desirable system in a society ruled by human beings?
I will skip over Miller's analysis of the theocratic approach to political ordering in the accounts of Moses, Aaron, and Gideon. With the advent of Samuel, Israel experiences a brief, legitimate theocratic interlude that ultimately ends in failure for institutional reasons: theocratic rule through an individual does not provide a foundation for administration of the powers of civil government beyond the narrow reach and short (from a national point of view) life of the theocratic ruler. Miller concludes by observing that the account of theocracy in the Hebrew scriptures for the actual world is negative:
In the real world, where rule is exercised by flesh-and-blood human beings, theocratic government is subject to shortcomings. Its institutions do not deliver the benefits of government over the long term. It is subject to abuse because theocratic leadership is intrinsically autocratic. The person chosen as the theocratic ruler may not receive genuine revelations from God and may not rule according to God’s wishes. Theocratic rule all too easily degenerates into apostasy. And theocratic rule performs badly as a guarantor of national security. Overall it is not optimal as a model for governing a substantial nation.
The lack of knowledge of institutional and administrative matters among theologians is vast. From the Right or the Left, most don't know more about civil administration than your average talk-show host. Simple-minded conclusions drawn from a few scriptural texts fall short as a source of valid prescriptions for governing the modern nation state.

(For more along this line see my multi-part review of "Law and the Bible" ending here.)

24 November 2014

Another Factor Causing Municipal Bankruptcy

With confirmation of the plans of adjustment of the two largest cities to have filed Chapter 9 bankruptcy, Stockton and Detroit, municipal bankruptcy may be about to drop from the news. It's not too late, however, to consider the reasons why these cities resorted to bankruptcy relief and thus predict what cities may follow.

Go here to read Swimming Upstream: Struggle Firms in Corrupt Cities in which the authors demonstrate a correlation between municipal corruption and higher borrowing costs in the private sector. In other words,
A corrupt local environment amplifies the effects of financial distress. Following regional spikes in financial misconduct, credit becomes both more expensive and harder to obtain for nearby borrowers -- even those not implicated themselves. This is particularly harmful for cash-constrained firms, which cut investment more sharply and lay off more workers during industry downturns. Moreover, we find that local waves of financial misconduct are a risk factor for bankruptcy.
Ecclesiastes 5:8 comes to mind.