Is GM “hiding behind bankruptcy”?

This claim, which appears in many news articles, should sound strange to a bankruptcy lawyer. Owners of defective cars manufactured before GM’s bankruptcy in 2009 have claims again Old GM, which no longer exists, not New GM. In fact, as is standard in large corporate bankruptcies, a new entity was created, a pot of money that victims of Old GM can sue. That entity is called Motors Liquidation Co. I don’t know the details, but it appears–and this is standard–that some of Old GM’s assets were put in ML, so that victims who discover themselves as such post-2009 can collect damages against somebody. Of course, those victims (probably) cannot collect 100 cents on the dollar, but that is always what happens in bankruptcy.

Old GM’s shareholders were wiped out; New GM’s shareholders are Old GM’s creditors or people to whom those creditors sold their shares. There is no reason to hold any of these people liable for the sins of Old. An easy way to think about this is to imagine that Old GM had been liquidated, its Ion and Cobalt factories sold to investors. It would make no sense to make those investors liable for defects in cars manufactured in those factories before they bought them.

But this creates an odd situation. New GM might inspect its records or receive complaints and realize that those old Ions and Cobalts are defective. Does it have an obligation to alert the owners of cars manufactured by some other company (that is, Old GM)? To fix the cars? It appears that some such obligation exists in federal regulatory law. There is an interesting question here what would happen if GM had been liquidated and these lines of cars discontinued, and its assets divided among multiple companies. I suppose in such a case, no one would bear the obligation to recall and fix. Such a rule would make liquidation more attractive to creditors than reorganization, all else equal, which is not a good thing.

So what of the claim that New GM is hiding behind bankruptcy law? Maybe the argument is that New GM delayed the recalls because any fines levied on it by NHTSA would be minimal, less than the cost of fixing the cars, while tort liability is zero thanks to the bankruptcy. This wouldn’t surprise me. But it seems like a hole in the law that Congress should patch, and the way to patch it is not self-evident–again because burdening new firms with liabilities arising from the activities of predecessors will make reorganization unattractive relative to liquidation. It is not clear that that New GM has acted in a blameworthy fashion by minimizing its responsibility for liabilities that belong to Motors Liquidation.

Can Russia oppose U.S. bank sanctions through the WTO?

The Russian government is mulling it over (or pretending to):

“The WTO gives us some additional possibilities,” Ulyukayev was quoted by Interfax as saying on Wednesday. “We at the WTO council in Geneva talked about the possibility of filing lawsuits against the U.S. over the sanctions against Russian banks and we hope to use the mechanism of the WTO to keep our partners in check regarding this issue.”

I know little about this topic so I emailed a colleague who had this to say (I edit slightly):

There is the purely doctrinal question whether the sanctions can be interpreted to contravene some GATS banking commitment by the US respecting market access or non-discrimination.  Even if yes, and I do not know the answer, there is still Art. XIV bis on national security exceptions that applies for measures to protect “essential security interests” in “war or other emergency in international relations.”  That arguably applies although there is no case law.  Add that a WTO case would take three years, by which time all of this is presumably old news anyway.

The broader question of to what extent sanctions can be used under WTO law has received some attention, but is of dubious practical significance.  We have embargoed Cuba (a GATT member) for 50 years.  No one worried much about GATT during apartheid in South Africa, either.

Russian stock prices, Jan.-Apr. 2014

russia stock market 2This year is the 105th anniversary of the publication of Norman Angell’s The Great Illusion, which argued that states act against their self-interest by going to war. While its timing was poor (the book was published in 1909), the argument is actually ingenious: Angell argues that if Germany conquered England, it would simply deprive itself of a debtor and trading partner, while obtaining in return only some minerals, the Elgin marbles and a few other treasures, and an unhappy population. Germany would do far better for itself by instead continuing to trade with England.

People are now making exactly the same argument about Russia. Because the economy of Russia depends on an export market for its oil and on foreign investment, and a few slivers of Ukraine will most likely be a burden rather than a benefit, Russia’s self-interest should direct it to leash the dogs of war. But the graph above suggests that there is less at stake for the Russian economy than might first appear.

Dignity as a Value in Cost-Benefit Analysis by Rachel Bayefsky

This very good student note examines how “dignity” has played a role in regulatory impact assessments produced by regulatory agencies. President Obama’s executive order 13,563, which renewed a longstanding requirement that regulators conduct cost-benefit analysis of major regulations, famously introduced a new provision allowing  regulators to consider the effect of a regulation on “human dignity.” Implicitly, at least, regulators were thus authorized to issue a regulation that fails a formal cost-benefit test if it advances this value. (I briefly discuss the order here.)

Many commentators worried (or hoped) that the human dignity requirement would allow regulators to issue expensive rules that failed cost-benefit analysis. Couldn’t the EPA, for example, say that pollution of all types send people to hospitals, where they undergo procedures that violate their dignity? Or could the Department of Transportation impose expensive new safety requirements on cars because people who are maimed in accidents lose their dignity? In fact, Bayefsky cites an EPA analysis that suggested that a pollution regulation would be justified in order to avoid or minimize the indignity of a protracted death “involving prolonged suffering and loss of dignity and personal control.” If such a step were to be taken, there would be little left of cost-benefit analysis.

Yet there are numerous regulations that seem to advance values relating to dignity where the benefits would be hard to quantify. Bayefsky provides a number of examples: regulations that increase access to facilities like bathrooms to people with disabilities (who might otherwise need personal assistance), reduce the incidence of prison rape, and protect patients’ health information. Can the “dignitary” benefits associated with these regulations really be monetized?

Bayefsky says no. I suspect the answer is yes, at least sometimes. The paper is well worth reading for anyone interested in this topic.

(The image is from Wikipedia.)

The “civil war” in Ukraine

From Bloomberg:

“Blood was spilled once again in Ukraine,” Russian Prime Minister Dmitry Medvedev said on Facebook today. “There’s a sense in the country that a civil war could break out.” Putin “is getting many requests” from eastern Ukraine “to intervene in one way or another,” his spokesman, Dmitry Peskov, told reporters yesterday.

It’s significant that Medvedev invokes “civil war.” No civil war exists in Ukraine–there is a bit of unrest, possibly a near-insurgency. But if a civil war did exist, it would help pave the way for a Russian intervention. Strictly speaking, foreign countries are supposed to stay out of civil wars under international law. But, in practice, they never do. If Russia does intervene, Putin will be sure to cite U.S. involvement on the side of the rebels in the Syrian civil war. An even better precedent is U.S. aid to the Contras in Nicaragua in the 1980s, where the U.S. played a facilitating role similar to Russia’s in Ukraine.

Still, if and when a civil war breaks out, it will break out in large part because of Russian encouragement and indeed leadership, so we will need to put into the category of “hubris” any future Russian argument that it must intervene because a civil war has broken out in a neighboring country. Yet if that happens, it will increase Russia’s bargaining power with the west, because Russia is in the best position to broker, monitor, and enforce a peace agreement between Kiev and the “rebels.”


Reply to my post on Social Security overpayments, and a reply to the reply

A former student who works for Social Security responds to yesterday’s post:

I read your blog post today on Social Security overpayments and wanted to respond briefly (in my personal capacity, of course, and so my opinions don’t necessarily represent Social Security’s official policy on the matter). I think you’re seriously mistaken about the source of the agency’s claim to recoup alleged overpayments. Rather than a common-law argument of unjust enrichment, the Social Security Act and implementing regulations offer specific authority to collect overpayments using a variety of methods, including tax refund offsets.

The source of authority for collecting overpayments from claimants who received Title II benefits lies in Section 204 of the Social Security Act (codified at 42 USC 404). That statute allows Social Security to prescribe regulations to implement the overpayment process. 20 CFR 404.502 details the specific means by which the agency may collect overpayments. 20 CFR 404.502(b) covers situations when the individual overpaid dies before the adjustment is made, and 404.502(b)(3) specifies that such adjustment can be made by “withholding a lump sum or monthly benefits due any other individual on the basis of the same earnings which were the basis of the overpayment to the deceased overpaid individual”. In the case of the Post story, both Sadie Grice and Mary Grice were entitled to benefits based on the father’s earnings record (some combination of widow’s benefits, mother’s benefits, or child’s benefits, I would guess, though I don’t know for sure and have no personal knowledge of the case other than what’s in the Post article). Therefore, 404.502 would arguably allow collection of the overpayment from Mary because she received benefits on the same earnings record as Sadie did, and Sadie was mistakenly overpaid. 20 CFR 404.520 then permits the overpayment to be referred to the Treasury if the debt is certain in amount, past due, and legally enforceable, for a tax refund offset.

If the benefits in question were child’s benefits that Mary was entitled to solely because she was a minor child of an insured individual (20 CFR 404.350), that’s her entitlement, not her mother’s even though her mother acted as her representative payee because she was 4 years old when she gained the entitlement. I’m a little more unclear on how it would work if Sadie was receiving mother’s benefits (20 CFR 404.339) because of the minor children, but that presumed she wasn’t entitled to widow’s benefits in her own right. In any case, while the propriety of trying to collect such old debts is arguable and the agency should certainly be held to prove the overpayment occurred on the stated earnings record in the specified amount, I feel certain the agency is not relying on a common-law theory of unjust enrichment to do so.

Point taken, but I still believe that this program would not be upheld in court (and perhaps the author of the email agrees in part). I haven’t look at the regulations, but the regulations must be consistent with the statute, and 42 USC 404(b) contains this provision:

In any case in which more than the correct amount of payment has been made, there shall be no adjustment of payments to, or recovery by the United States from, any person who is without fault if such adjustment or recovery would defeat the purpose of this title or would be against equity and good conscience. In making for purposes of this subsection any determination of whether any individual is without fault, the Commissioner of Social Security shall specifically take into account any physical, mental, educational, or linguistic limitation such individual may have (including any lack of facility with the English language).

So the common law (or technically, equity) is relevant after all. And this means, among other things, the doctrine of laches would apply (even if Congress has suspended the statute of limitations); and equity would frown on (as they say) recovery from Mary on account of payments that Sadie may not have no turned over to her, may have spent on herself or the other kids, and so on. Clearly, as a four-year old, Mary was without fault; and the last sentence of the provision would seem to further strengthen her argument. Finally, consider again the policy of going after the oldest child alone for overpayments that benefited all the children if at all; this too is not explicitly authorized by the statute, and would, I am fairly certain, not be considered equitable by a court.

Can the government recover from children on account of Social Security overpayments to their parents?

According to a report in the Washington Post, the government does just that.

A few weeks ago, with no notice, the U.S. government intercepted Mary Grice’s tax refunds from both the IRS and the state of Maryland. Grice had no idea that Uncle Sam had seized her money until some days later, when she got a letter saying that her refund had gone to satisfy an old debt to the government — a very old debt.

When Grice was 4, back in 1960, her father died, leaving her mother with five children to raise. Until the kids turned 18, Sadie Grice got survivor benefits from Social Security to help feed and clothe them.

Now, Social Security claims it overpaid someone in the Grice family — it’s not sure who — in 1977. After 37 years of silence, four years after Sadie Grice died, the government is coming after her daughter. Why the feds chose to take Mary’s money, rather than her surviving siblings’, is a mystery.

If, as I think, the government’s claim is based on common law principles (as opposed to specific statutory authorizations), it’s claim is probably invalid. The issue is not the age of the claim–as the article notes, Congress eliminated the statute of limitations for government claims of this sort. Nor is this a case of a child inheriting the debts of a parent. In a way, this is a run-of-the-mill unjust enrichment case. Consider this simplified version.

The government overpays Sadie on account of her Social Security benefits. Sadie, unaware of the error, cashes the check and gives the proceeds to Mary. Neither knows of the error. The government is entitled to obtain restitution from Sadie or Mary.

Putting aside the time lag, this is our case. But there is a problem for the government. It has no evidence that Sadie spent the money on Mary, as opposed to her other children, or for that matter on herself. (Maybe the law required Sadie to spend the money on her children, but if she didn’t, the government has a (defunct) claim against Sadie, not against the children.) According to the Washington Post:

The government doesn’t look into exactly who got the overpayment; the policy is to seek compensation from the oldest sibling and work down through the family until the debt is paid.

I can almost imagine why this crazy policy was (presumably) approved by government lawyers. If you have a valid restitution claim against multiple people, you can go after whoever you want; you don’t have to go after all of them. The purpose of the payments was to benefit the children, and so overpayment would have benefited all of them, if it was spent on them. And so if it’s easiest to start with the eldest sibling, that’s a policy judgment that is consistent with the law.

But under the principles of unjust enrichment, the government needs to prove that Mary actually received money from Sadie, or that the money was spent on her in a way that made her better off. It can’t.

More Than You Wanted to Know

bookjacketHave you read your iTunes contract–the one that Apple asked you to read and accept before using the service? No? Neither have I. It’s 55 pages long. How about the mortgage disclosures that accompanied your last refinancing? In Illinois, you would need to read 49 disclosure forms spread out over 101 pages. When I refinanced my mortgage, the huge stack of disclosures induced a faint bout of nausea but no wisdom. A professor who teaches contract law and banking law, I quickly gave up trying to understand what I was reading.

The law overflows with disclosure mandates even though it is pretty obvious to everyone that they hardly do any good. Instead, they confuse and frustrate buyers. In this terrific book, Omri Ben-Shahar and Carl Schneider exhaustively describe this phenomenon. Mandatory disclosure is law’s biggest and phoniest panacea, as they amply demonstrate.

The appeal of mandatory disclosure laws is easy to understand. They seem like a good way to protect buyers without interfering with the seller’s power to choose terms that protect its interests–an early form of “nudge.” And while in certain circumstances they can do good, they more often cause the seller to game the system by reducing quality along dimensions that the disclosure mandate does not cover, leading the government to force the seller to disclose more and more. The upshot is that consumers are overwhelmed with information they can’t understand.

In a kind of infinite cycle to hell, courts strike down contracts because buyers can’t pick out a key term among the Borges’ library of information, and sellers protect themselves by pointing out the most important terms and demanding that buyers initial them. I can’t remember how many terms I was required to initial in my mortgage but it was surely dozens. (I didn’t read any of them as an act of defiance and self-preservation.) Eventually, people will be required to initial every sentence of 100-page contracts and be required to take exams that test their understanding before being allowed to go home with their toaster or space heater. We will understand every last detail of everything we buy but have no time to use it.

Originalism: my dialogue with Will

Below are links to posts written by me and Will Baude while we co-taught our seminar on originalism.

Date Author Title and Link
January 7 Eric Posner Originalism Seminar Class 1:Heller
January 8 Will Baude Heller as an Advertisement for Originalist Methodology
January 10 Eric Posner Originalism: History vs. Law
January 14 Will Baude Printz, Commandeering, and the Federalist
January 14 Eric Posner Originalism Class 2: Printz As A Paean To The Living Constitution
January 21 Eric Posner Originalism Class 3: Precedent
January 22 Will Baude Precedent is not a threat to orignalism
January 29 Will Baude Does originalism justify Brown, and why do we care so much?
January 30 Eric Posner Originalism Class 4: Brown
January 31 Will Baude Originalism, the bear principle, and the reading of entrails
February 2 Will Baude Originalists need not be naïve perfectionists
February 3
Eric Posner Response to Will’s Response to my Class 4 Comments
February 5 Eric Posner Originalism Class 5: Noel Canning
February 6 Will Baude Recess appointments and the size of government
February 6 Eric Posner Reply to Will on Noel Canning
February 6 Eric Posner Originalism and precedent: Baude v. Sunstein
February 7 Will Baude Originalism, false dichotomies, and the question of who decides
February 12 Will Baude Reasons for being an originalist
February 12 Eric Posner Class 6: Reasons for being an originalist
February 14 Will Baude Originalism in our legal culture: The case of the Ground Zero mosque
February 19 Eric Posner Originalism Class 7: The Evolving Constitution
February 19 Will Baude Originalism and Its Critics: The Critics’ Turn
February 27 Will Baude Originalism and ‘Accounting for Change’
February 27 Eric Posner Originalism Class 8: Accounting for Change
March 3 Will Baude Originalism and the rule that government actors don’t change the Constitution
March 5 Eric Posner Is there a rule that government actors don’t change the Constitution?
March 6 Will Baude When a change in constitutional practice is legally invalid
March 6 Eric Posner Originalism Class 9: Between Phony and Naive
March 7 Will Baude Originalism: the theory and the politics

Is the GM recall scandal an “availability cascade”?

I have dug deeper into the numbers and have found nothing to cause me to change my mind about my conclusion yesterday that GM may well have acted reasonably, and certainly that it is premature to conclude that it acted in a scandalous, criminal, or unreasonable fashion. A student of mine produced this spreadsheet, which makes clear that GM’s culpability depends on how soon it understood the problem. If within the first few years, then yes. If after 5 or 6 years, then probably not. (Her spreadsheet is based on my assumptions from yesterday, which are–caveat emptor–possibly dubious, plus she extends the time frame out another 10 years to consider cars manufactured just before the recall. She also treats this as an NPV exercise based on expected tort liability rather than a cost-benefit analysis but the conclusion would be the same assuming that the assumed tort awards reflect statistical valuation of life.) Until it is clearer who knew what when, one cannot determine whether GM acted wrongfully (in the sense of causing harm to people; it’s impossible to deny that their cars are crappy however safe they may be). I’m afraid it probably won’t be clear for years, until after lawsuits and investigations are concluded.

Cass Sunstein and Timur Kuran wrote a fine paper in 2007 that discusses regulatory panics based on what they call “availability cascades”–where some high-profile corporate misfeasance that feeds into people’s anxieties causes an enormous scandal despite no evidence that it harmed anyone. The most famous case is Love Canal, which harmed no one. Another is Alar. Also read this paper on the  Ford Pinto scandal by Gary Schwartz.The Pinto case was another regulatory panic where fears greatly outstripped the real harm and wrongdoing. The common elements in all these examples are (1) sympathetic victim groups who effectively work the media, (2) opportunistic politicians and commentators, and (3) lazy journalists.

The GM scandal: a little math

The House Committee on Energy and Commerce is holding a hearing on whether GM delayed too long before recalling cars with defective ignition switches. It was revealed at the hearing that the cost of the replacement part is only 57 cents, and this has led to calls for the heads of those responsible. This, from Michael Moore, is typical:

I hope the criminals at General Motors will be arrested and made to pay for their premeditated decision to take human lives for a lousy ten bucks. The executives at GM knew for 13 years that their cars had a defective ignition switch that would, well, kill people. But they did a “cost-benefit analysis” and concluded that paying off the deceased’s relatives was going to be cheaper than having to install a $10 part per car.

The $10 figure is from a Washington Post article; the 57 cent figure can be found in other sources.

I was curious about whether it is true that GM’s decision to install the switch (rather than replace it with a better switch) or not to recall the car in 2007 really would have failed a cost-benefit analysis. Here are some back-of-the-envelope calculations, based on (still murky) details from a House report and newspaper stories.

Let’s suppose that back in 2005, which was the model year for the first car with the ignition switch problem, GM knew that it would install that switch in 2.6 million cars (the eventual number that would be recalled). Those cars were sold over the next 9 years. If we assume a constant number of cars sold per year, we get 290,000 cars sold per year. A little additional math shows that this amounts to 13,050,000 car-years, by which I mean the number of years in which a car with the ignition switch was owned and driven by someone.

During this period, the switch problem caused accidents that caused 13 deaths, or 0.000001 death per car-year. It is worth noting parenthetically that the probability of an average person in an average car being killed in any year is 0.0000556. So the effect of buying a GM car with an ignition switch problem increased the risk from 0.0000556 to 0.0000566.

Still, no one wants to take an unnecessary risk of death, however small. But how much would you be willing to pay to reduce the risk of dying from a car accident by 0.000001 in one year? One way to get the answer is to use the U.S. government’s valuation of a statistical life, which was around $6 million when these decisions were made. (That number is based on data that measures how much people are willing to pay to avoid very small risks of death, as in our example.) Another is to look at tort awards, which at the time averaged about $3 million for deaths. Let’s call it $4.5 million. And assume that the average buyer drives the car for 10 years. Multiplying these numbers together, a person should be willing to pay about $45 to avoid this risk of death ($4.5 million * 0.000001 per year * 10 years).

Now if GM could have fixed the problem by using a 57 cent or $10 switch at the time of manufacturing, it should have. But it appears not to have recognized the problem until most of the cars were on the road. The Washington Post says that repairing the car would take less than an hour. Let’s call it half an hour, and assume $100 per hour in labor costs, which is roughly consistent with the CEO’s testimony that it would have cost GM $100 million to  recall the 2.6 million cars on the road. If all this is true, the decision not to recall–saving $50 to avoid an expected cost of $45 per car–seems reasonable, although as we have seen the proper measurement of a loss of life is controversial. The bottom line is that GM could very well have complied with a reasonable cost-benefit analysis; if not, it was probably close. To know the truth, we need more data than are publicly available. So why the headlines? (That’s a rhetorical question.)

Are my calculations or assumptions wrong? If you see an error, please contact me here.

Chutzpah award, Ukraine edition

Alexei Miller, the head of Gazprom, has explained that the reason for raising gas prices for Ukraine is in part that Ukraine no longer is entitled to discounts that it received in return for leasing the Black Sea fleet base. According to Bloomberg:

In Kharkiv in 2010, Ukraine agreed to extend Russia’s lease to the Black Sea Fleet base in Crimea from 2017 to 2042 in exchange for cheaper gas. Russia has no need for the accords after the peninsula’s accession, Prime Minister Dmitry Medvedev said last month, calling for Ukraine to pay about $11 billion lost to Russia’s budget.

Of course, the lease is void because Russia now owns Crimea! The original purpose of the contract has been frustrated, as a contract lawyer would say. You can’t lease property from yourself. But shouldn’t Russia compensate Ukraine for the loss of a chunk of its territory, if we’re going to be legalistic about this? (Miller’s better argument is that Ukraine forfeited its discount by failing to pay prior debts.)

Joseph Blocher and Mitu Gulati argue that Putin should have bought Crimea rather than taken it:

Perhaps if Mr Putin had negotiated to buy Crimea instead of taking it over, Ukraine could have negotiated for both debt relief and multiple years of cheap gas in exchange. Russia might even have helped the current Ukrainian government track down some of the funds that the members of the prior government supposedly absconded with. On the flip side, there would not have been any need for all the chest beating, troop movements, and so on. And the international community surely would’ve been more likely to bless the result—a result for which Russia might be willing to pay some premium.

But why pay for something that you can take for free? Anyway, the chest beating seems to have been the major benefit for Putin. And if a sale was really in everyone’s interest, there is nothing in international law that would have blocked it.

The IPCC report and climate justice

As the magnitude of the harms from climate change becomes clearer, poor countries have redoubled their efforts to achieve “climate justice”–large sums of money from rich countries, at least $100 billion, to compensate them for the harm caused by climate change. As the New York Times puts it,

Countries like Bangladesh and several in sub-Saharan Africa that are the most vulnerable to the effects of climate change say the report strengthens their demand for “climate justice” — in other words, money, and plenty of it — from the world’s richest economies and corporations, which they blame for the problem.

But there’s a problem: President Obama and Secretary of State Kerry

know there is no chance that a Congress focused on cutting domestic spending and jump-starting the economy will enact legislation agreeing to a huge increase in so-called climate aid. Since 2010, the Obama administration has spent about $2.5 billion a year to help foreign countries adapt to climate change and adopt low-carbon energy technology.

It will be a stretch even to continue that level of spending.

And not just for the United States. Other developed countries are also not likely to give much aid to poor countries.

So what’s to be done? The answer is pretty clear: countries will need to negotiate a climate treaty that does not redistribute wealth from rich countries to poor countries. You can have a climate treaty, but you can’t have climate justice, and the sooner everyone realizes this, the sooner a treaty will be negotiated.

I have made this argument (at greater length) in several places, including this book, this article, and this column.

McCutcheon as a tax on millionaires

McCutcheon was a victory for gazillionaires, right? Yet what do we make of the headline of a striking article in Politico: Big donors fear shakedown after decision? (The article is dated April 2, not April 1.) And here are some choice quotations:

“I’m horrified, planning to de-list my phone number and destroy my email address,” said Ken Kies, who, along with his wife, has bumped up against the federal political contribution limits. “What I was really hoping for is a ban on lobbyists making contributions entirely.”

Podesta said for those donors, the new rule “eliminates an excuse that people have to say I’m done for the cycle and I can’t do anymore, which means that people who do max out will end up giving more money than they used to to candidates.”

“We were already getting drained before, now it’s another means to suck out more cash without any actual return on value,” said one GOP lobbyist.

“For the lobbying community, it increases the cost of doing business,” said David Rehr, a former association executive.

While Democrats publicly bashed the decision, they were far more positive in private. One top Hill Democrat suggested Democrats had larger number of donors, and they can now go back and ask these supporters for even more money.

Consider two models of campaign donation. In model 1, the donor gives a donation in return for a favor. McCutcheon improves the well-being of the donor in model 1 because the donor can give more donations and receive more favors in return. In model 2, the politician threatens the donor with a bad outcome (for example, delay in regulatory approval) unless the donor coughs up a donation. McCutcheon hurts the donor by giving politicians the power to make more threats and receive more donations in return. The difference between model 1 and model 2 is the difference between a bargain and extortion.

Which model is correct? Probably both describe some of the reality. Caro’s biography of LBJ provides a clear example of model 2 where LBJ threatened to delay a bank merger unless (if I recall correctly) the owner of the bank held off criticism of LBJ in a newspaper he also owned. The Politico quotes also support model 2 (though I suspect some of those quotes were tongue-in-cheek). But if model 2 were correct, it is hard to understand why Congress agreed to campaign finance limits in the first place. And it is hard to understand why the billionaires oppose donation limits, though it would not surprise me if people like McCutcheon himself, who espouse a crude libertarianism, never take the second step and ask how they fare if others are freed from the limits that frustrate them. Indeed, even under the more benign model 1, the lifting of donation limits can just lead to auctions in which the politician, who has quasi-monopoly power, can demand higher payments from those who seek favors. So while the donor still gets something of value for his money, he must pay more than in the past. Think of McCutcheon as a decision that imposes a tax on millionaires.

Koskenniemi on human rights

I have posted at SSRN a short paper on Martti Koskenniemi and human rights, written for an edited volume on his work. Koskenniemi is a distinguished Finnish international law scholar who has argued in several books that international law is indeterminate, and so tends to get harnessed to various political agendas even while its practitioners claim that international law is “neutral.” Koskenniemi focuses on the rhetoric of international legal scholarship; in my paper, I link his indeterminacy arguments about human rights law to the practices of states. If Koskenniemi is right, it would be surprising if states obeyed international human rights law, wouldn’t it?

Is Ukraine doomed?

I mean doomed to lose its autonomy as a nation-state, whether or not its borders remain formally in place. Here are some reasons for thinking that it is:

1. Russia has placed 40,000 troops along its borders. The West has made clear that Ukraine is not worth a war. In the president’s words:

Of course, Ukraine is not a member of NATO, in part because of its close and complex history with Russia. Nor will Russia be dislodged from Crimea or deterred from further escalation by military force.

2. NATO is “suspending cooperation” with Russia, meaning:

Russia could not participate in joint exercises such as one planned for May on rescuing a stranded submarine, a NATO official said.

But, never mind–

Russia’s cooperation with NATO in Afghanistan - on training counter-narcotics personnel, maintenance of Afghan air force helicopters and a transit route out of the war-torn country – [will] continue.

3. Ukraine is deeply in debt to Russia among other countries, and is on the brink of economic ruin. Russia has just increased natural gas prices for Ukraine from $268.50 per 1,000 cubic meters to $385.50.

4. The $18 billion IMF package will help Ukraine pay its debts to Russia, and pay for gas from Russia, at the newly high prices. Think of the IMF package as a subsidy to Russia that counteracts the picayune sanctions.

5. Russia has announced an economic development plan for Crimea that ethnic Russians in eastern Ukraine will look at with envy.

6. Ukraine is deeply divided between East and West. Russia has argued that Ukraine should be given a “federalist” structure, and this proposal may be sensible. As Ilya Somin explains:

Federalism has often been a successful strategy for reducing ethnic conflict in divided societies. Cases like Switzerland, Belgium, and Canada are good examples. Given the deep division in Ukrainian society between ethnic Russians and russified Ukrainians on the one hand and more nationalistic Ukrainians on the other, a federal solution might help reduce conflict there as well by assuring each group that they will retain a measure of autonomy and political influence even if the other one has a majority in the central government. Although Ukraine has a degree of regional autonomy already, it could potentially would work better and promote ethnic reconciliation more effectively if it were more decentralized, as some Ukrainians have long advocated.

But it is predictable that a federal system in which Ukraine effectively consists of two regions–a Ukrainian region and a Russian region–will produce a weak country whose eastern half is dominated by Russia and whose western half will be isolated and alone.

7. Most important, Ukraine has never shown itself able to exist as a viable independent nation. Throughout nearly all of its history, it has been a province of Russia, or divided between Russia and other neighbors. The major period of independence from 1991 to the present–a blink of an eye–has been marked by extreme government mismanagement that has resulted in the impoverishment of Ukrainians relative to Poles, Russians, and other neighbors. In the 1990s, many experts doubted that Ukraine would survive. Now that Russia is back on its feet, their doubts seem increasingly realistic.

Russia has considerable leverage; it will use it.

The Human Rights Council and defamation of religion

hrc defamationYesterday I claimed that governments do not take the Human Rights Council seriously. The most famous example is the effort by that body to advance a right against “defamation of religion.” In 2010, a resolution supporting this right was passed by a vote of 20 to 17 with 8 abstentions. (There have been other votes in favor as well, both in the Human Rights Council and the General Assembly.) The graph showing the breakdown of votes by Freedom House score is above. The question for international lawyers is whether western governments like that of the United States are required to recognize a right against defamation of religion because a bunch of authoritarian countries think it should. If not, how exactly should we understand the legal status of the Human Rights Council?

The Human Rights Council and the role of authoritarian countries

hrc dronesLast week the UN Human Rights Council approved a resolution that requires states

to ensure transparency in their records on the use of remotely piloted aircraft or armed drones and to conduct prompt, independent and impartial investigations whenever there are indications of a violation to international law caused by their use.

Ryan Goodman discusses the implications of this vote for international law. My view is that it has no implications. The views of the Human Rights Council are rarely taken seriously by governments. To see why, click on the graph pasted above. It reflects a pattern in votes of this type: that the apparently “progressive” resolution is in fact supported by (mainly) authoritarian countries like China and Saudi Arabia, while opposed by liberal democracies. Freedom House ranks countries based on their political rights from 1 (best) to 7 (worst). The average score of the resolution’s backers (the blue bars in the graph) is 4.1, while the resolution’s opponents (red) average 1.5, and the abstainers (green) average 2.7.

Anyone who thinks that resolutions like this one reflect a conscientious effort to interpret international human rights law doesn’t understand how the Human Rights Council operates. I will provide another example tomorrow.

Crimea, sanctions, and secession

In Slate I argue (once more) that the West can’t do much about Crimea. This time I focus on the ineffectiveness of economic sanctions against a large country, and I touch on the question of whether, and how much, the annexation harms western interests or principles. In short, the costs of sanctions are high and the benefits low. If Russia invades the rest of Ukraine, the calculus may change.

The European Court of Human Rights and Freedom House Ratings

echr fh

This graph (you may need to squint) shows Freedom House political rights scores for countries that belong to the European Court of Human Rights. The blue bar shows their score at the time of accession (if a FH score is available; they go back only to the 1970s), and the orange bar shows the score in 2014. I was curious about how countries have fared in light of Russian and Turkish backsliding, and of a general sense that international human rights is stagnating, but most countries have improved or not changed. A score of 1 is best; 7 is worst. Note that countries are arranged in the order that they joined the Council of Europe; the original members joined in 1949; Portugal in 1976; and Montenegro in 2007.

Jeffrey Sachs on the “crisis of international law”

Sachs argues that there is a crisis in international law, based not only on Russia’s actions in Crimea but on the general disregard of use of forces rules by the United States and other western countries:

As frightening as the Ukraine crisis is, the more general disregard of international law in recent years must not be overlooked. Without diminishing the seriousness of Russia’s recent actions, we should note that they come in the context of repeated violations of international law by the US, the EU, and NATO. Every such violation undermines the fragile edifice of international law, and risks throwing the world into a lawless war of all against all.

Sachs’ argument raises a number of questions:

(1) Is there a crisis in international law? And if so, did it start with Russia’s intervention in Crimea (as some people might argue), or earlier with U.S. and European actions going back 10-15 years?

(2) Sachs traces the crisis back to the 1999 Kosovo intervention. But the sorts of illegal uses of forces he describe go back very far, for example, the 1989 intervention in Panama, or the 1983 intervention in Grenada, or the 1979 Soviet invasion of Afghanistan. There is a sense in which the use of force rules have been in crisis since their (modern inception) in the UN charter in 1945. Why draw the line at 1999?

(3) Sachs implies that western illegality paved the path to Russia’s violation of international law. Is it true that if (for example) NATO had not illegally intervened in Kosovo or Iraq, then Russia would not have illegally intervened in Crimea? Is international law a “fragile edifice” that can be undermined by violations, or do the violations just tell us that existing rules are not well tailored to states’ interests? What of the argument that the Kosovo intervention, while illegal, stopped an even worse form of illegality, the ethnic cleansing of thousands of civilians?

(4) What does it mean for international law to be “in crisis”? That it is ignored? A better definition might be that states hold onto the law, they refuse to declare it defunct and try to rationalize their actions as legal, but they frequently violate it. A crisis exists not just because the rules are violated but because states can’t agree on a set of rules to replace them, generating uncertainty and misaligned expectations that could lead to war.

Sachs concludes that the United States should turn to the Security Council to address the Crimea crisis. But note the paradox: Because Russia enjoys the veto, it can immunize itself from Security Council action, and thus continue to violate international law without facing a (formal) legal sanction. The route to peace might circumvent the Security Council. It may be that you can have law or peace, but not both.


Should Ukraine have kept its nuclear weapons?

After the collapse of the Soviet Union, Ukraine inherited a huge nuclear arsenal, which it subsequently gave up. In return it received assurances from Russia,  the United States, and the United Kingdom that its territorial integrity would be respected. These assurances were embodied in the Budapest Memorandum of 1994. While the United States and the UK complied with that agreement by not invading Ukraine, Russia did not.

What if Ukraine had retained its nuclear arsenal? It seems more than likely that Russia would not have invaded Crimea. Putin might have calculated that Ukraine would not have used its nuclear weapons in defense because then Ukraine would itself have surely been obliterated by Russia. But the risk of nuclear war would have been too great; Putin would have stayed his hand. (However, it is possible that Ukraine would have been forced to give up its nuclear weapons one way or the other long before 2014.)

So between meaningless paper security assurances and nuclear weapons, the latter provides a  bit more security. One implication of the Crimea crisis may be the further unraveling of the nuclear nonproliferation efforts that President Obama has made the centerpiece of his foreign policy.

My non-testimony at the PCLOB

Last week, I was supposed to testify before the Privacy and Civil Liberties Oversight Board, but wasn’t able to because of a flight delay. My written statement is here. My panel was asked to answer two questions.

1. Does International Law Prohibit the U.S. Government from Monitoring Foreign Citizens in Foreign Countries?

I said “no.” The U.S. government has long taken the position that the relevant treaty–the International Covenant on Civil and Political Rights, which includes a right to privacy–does not apply to conduct abroad, based on article 2(1), which says “Each State Party to the present Covenant undertakes to respect and to ensure to all individuals within its territory and subject to its jurisdiction the rights recognized in the present Covenant.” Some NGOs and other countries disagree, but even if they’re right, it’s hard to imagine that surveillance targets like foreign citizens or government officials, fall within U.S. “jurisdiction.” And then the ICCPR doesn’t define “privacy,” and the treaty has never been understood to block monitoring of this type, as far as I know. That is why the Germans have recently proposed a new treaty, an optional protocol to the ICCPR, that would limit surveillance.

2. Should the United States Afford All Persons, Regardless of Nationality, a Common Baseline Level of Privacy Protection?

“No” again. Why should it? No other country that has the capacity to engage in surveillance respects the privacy of Americans. If nothing else, read this statement by Christopher Wolf, who describes the foreign surveillance laws and policies of other countries. Here is an excerpt about French law:

The 1991 [French] law is comparable to FISA in that it provides the government with broad authority to acquire data for national security reasons. Unlike FISA, however, the French law does not involve a court in the process; instead, it only involves an independent committee that only can recommend modifications to the Prime Minister. In addition, France’s 1991 law is broader than FISA in that it permits interceptions to protect France’s “economic and scientific potential,” a justification that is lacking in FISA.

The Kosovo precedent

There are actually two Kosovo precedents: (1) the 1999 war, and (2) the 2008 declaration of independence. Putin cites both–the first for the military intervention in Crimea, the second for the subsequent secession/annexation of Crimea.

Focusing on the first, much of the debate has turned on whether Crimea is like Kosovo, with western critics arguing that the Kosovo intervention was justified by humanitarian considerations not present in Crimea. The problem with this argument–if understood as a legal argument–is that no one believes that the Kosovo intervention was legal. The U.S. government has not made such a claim. Here is an account from a state department lawyer named Michael Matheson:

NATO decided that its justification for military action would be based on the unique combination of a number of factors that presented itself in Kosovo, without enunciating a new doctrine or theory. These particular factors included: the failure of the FRY to comply with Security Council demands under Chapter VII; the danger of a humanitarian disaster in Kosovo; the inability of the Council to make a clear decision adequate to deal with that disaster: and the serious threat to peace and security in the region posed by Serb actions.

This was a pragmatic justification designed to provide a basis for moving forward without establishing new doctrines or precedents that might trouble individual NATO members or later haunt the Alliance if misused by others. As soon as NATO’s military objectives were attained, the Alliance quickly moved back under the authority of the Security Council.  This process was not entirely satisfying to all legal scholars, but I believe it did bring the Alliance to a position that met our common policy objectives without courting unnecessary trouble for the future.

Matheson could have argued that the UN Charter’s flat ban on the use of military force should be interpreted away, perhaps in light of the Charter’s reference to human rights or some such thing. The UK would make such an argument. The U.S. never did. It still does not. The translation of Matheson’s exquisitely tortured statement is that we broke the law; we won’t do it again; and you better not, either.

Putin may be forgiven his skepticism about the “we won’t do it again” claim. The U.S. would do it again in 2003 (Iraq) and (arguably) 2011 (Libya). It did it before in 1989 (Panama) and 1983 (Grenada). Jack Goldsmith says, plausibly, “International law drops out because both actions were illegal, leaving only a fight over ‘legitimacy,’ which is even more in the eye of the beholder than legality.”

We can go farther. The U.S. did not advance a humanitarian intervention exception to the ban on the use of force because it did not believe that such an exception served its interests. It would open the door to other countries intervening whenever they believed humanitarian considerations justified intervention, leading to a surely impossible debate about what conditions constitute a humanitarian emergency and depriving the Security Council veto of its value. Russia and China also rejected the humanitarian intervention exception. So it could never become a part of international law.

Can the United States nonetheless argue that, while it broke the law in Kosovo and never paid a penalty, now, henceforth, it and everyone else must follow it? The problem with this argument is that the current use of force rules embodied in the UN charter can be mutually acceptable to all countries only in fact if all countries follow them. If only the United States can break them by citing “pragmatic” considerations, the United States alone possesses a veto. Russia, China, and the rest need to decide whether Kosovo was a one-off event or not. They appear quite rationally to have concluded that it was not one-off, and that the United States doesn’t take seriously the UN rules. And so they will not, either.

The reverse sanctions on Russia

Did I say that the sanctions imposed on Russian officials would end up rewarding them by enhancing their public standing? Well, here, from AFP, is the evidence:

US lawmakers ‘proud’ to be blacklisted in Russia row

Washington — US lawmakers scoffed at sanctions imposed on them by Russia Thursday, saying it was a point of pride to be on President Vladimir Putin’s blacklist.

…”Proud to be included on a list of those willing to stand against Putin’s aggression,” Boehner wrote on Twitter.

“It doesn’t have to be this way, but if standing up for the Ukrainian people, their freedom, their hard earned democracy, and sovereignty means I’m sanctioned by Putin, so be it,” he [Robert Menendez] said.

And Senator John McCain, a fierce Kremlin critic who says Putin has long aimed to rebuild the Russian empire, also chimed in.

“I’m proud to be sanctioned by Putin — I’ll never cease my efforts & dedication to freedom & independence of #Ukraine, which includes #Crimea,” tweeted McCain, who visited Ukraine last weekend with other senators.

Now just imagine the corresponding article in a Russian newspaper.


Obama, the realist

Stephen Walt, the distinguished Harvard proponent of “realism” in international relations argues that the Crimea debacle confirms the value of realism by showing how Obama’s liberal internationalist instincts led him astray:

To be sure, ousted president Viktor Yanukovych was corrupt and incompetent and the United States and the European Union didn’t create the protests that rose up against him. But instead of encouraging the protesters to stand down and wait for unhappy Ukrainians to vote Yanukovych out of office, the European Union and the United States decided to speed up the timetable and tacitly support the anti-Yanukovych forces. When the U.S. assistant secretary of state for European and Eurasian Affairs is on the streets of Kiev handing out pastries to anti-government protesters, it’s a sign that Washington is not exactly neutral. Unfortunately, enthusiastic supporters of “Western” values never stopped to ask themselves what they would do if Russia objected.

Walt makes a number of astute points–the chief one being that Russia has strong security interests in Ukraine while the United States does not–but his conclusion is exactly backwards. The West in fact did virtually nothing to encourage democratic forces in Ukraine. The United States offered virtually no aid–$1 billion in loan guarantees, which is pocket change. And the reason was that the United States did not care what happened in Ukraine, for all the reasons Walt gives. The West could not have “encourag[ed] the protesters to stand down”–that would have been politically impossible–and even if it had, and they had, Putin would still have seized Crimea. To believe otherwise, you would have to take seriously Putin’s claim that he objected to the illegality of the removal of Yanukovych, when in fact what he really cared about was losing Ukraine to the West.  If handing out pastries to protesters was our way of showing support for democracy, then I rest my case.

And while it is hard to call the annexation of Crimea a foreign policy “success,” the do-nothing response of the United States is exactly the correct response from Walt’s realist perspective. If we have little interest in Ukraine, we have literally zero interest in Crimea, a poor, out-of-the-way place. In fact, as Walt hints, it is most likely that Russia has violated realist tenets, not the United States, with Putin reacting to domestic political pressures or perhaps acting recklessly by risking war for a peninsula that Russia already effectively controlled. And so our major goal should be to ensure that we respond rationally rather than emotionally to the annexation by not letting it interfere with areas of potential cooperation with Russia. By imposing meaningless sanctions on Russia, that is what Obama, a Waltian realist, is doing.

Vladimir Putin, international lawyer

From his speech to the Duma (with my annotations in brackets):

However, what do we hear from our colleagues in Western Europe and North America? They say we are violating norms of international law.  Firstly, it’s a good thing that they at least remember that there exists such a thing as international law – better late than never. [So there!]

Secondly, and most importantly – what exactly are we violating? True, the President of the Russian Federation received permission from the Upper House of Parliament to use the Armed Forces in Ukraine.  However, strictly speaking, nobody has acted on this permission yet.  Russia’s Armed Forces never entered Crimea; they were there already in line with an international agreement.  True, we did enhance our forces there [without entering?]; however – this is something I would like everyone to hear and know – we did not exceed the personnel limit of our Armed Forces in Crimea, which is set at 25,000, because there was no need to do so. [But Russian forces appear to have roamed about Crimea in violation of this agreement as well as the UN Charter.]

Next. As it declared independence and decided to hold a referendum, the Supreme Council of Crimea referred to the United Nations Charter, which speaks of the right of nations to self-determination [true]. Incidentally, I would like to remind you that when Ukraine seceded from the USSR it did exactly the same thing, almost word for word. Ukraine used this right, yet the residents of Crimea are denied it. Why is that? [Why indeed?]

Moreover, the Crimean authorities referred to the well-known Kosovo precedent – a precedent our western colleagues created with their own hands in a very similar situation, when they agreed that the unilateral separation of Kosovo from Serbia, exactly what Crimea is doing now, was legitimate and did not require any permission from the country’s central authorities. Pursuant to Article 2, Chapter 1 of the United Nations Charter, the UN International Court agreed with this approach and made the following comment in its ruling of July 22, 2010, and I quote: “No general prohibition may be inferred from the practice of the Security Council with regard to declarations of independence,” and “General international law contains no prohibition on declarations of independence.” Crystal clear, as they say. [I'm afraid so.]

I do not like to resort to quotes, but in this case, I cannot help it. Here is a quote from another official document: the Written Statement of the United States America of April 17, 2009, submitted to the same UN International Court in connection with the hearings on Kosovo. Again, I quote: “Declarations of independence may, and often do, violate domestic legislation. However, this does not make them violations of international law.” [Right.] End of quote.  They wrote this, disseminated it all over the world, had everyone agree and now they are outraged. Over what? The actions of Crimean people completely fit in with these instructions, as it were. For some reason, things that Kosovo Albanians (and we have full respect for them) were permitted to do, Russians, Ukrainians and Crimean Tatars in Crimea are not allowed. Again, one wonders why.

We keep hearing from the United States and Western Europe that Kosovo is some special case. What makes it so special in the eyes of our colleagues? It turns out that it is the fact that the conflict in Kosovo resulted in so many human casualties.  Is this a legal argument? The ruling of the International Court says nothing about this. [True; it is legally irrelevant.] This is not even double standards; this is amazing, primitive, blunt cynicism. One should not try so crudely to make everything suit their interests, calling the same thing white today and black tomorrow. According to this logic, we have to make sure every conflict leads to human losses. [The U.S. position is that forcing Kosovo's population to remain a part of a country whose government tried to massacre it would be wrong, and numerous efforts were made to broker a compromise before secession took place. Putin argues that it would be ridiculous to make Crimea wait for its population to be massacred before seceding.]

I will state clearly – if the Crimean local self-defence units had not taken the situation under control, there could have been casualties as well. [This is doubtful, as there were no massacres anywhere else in Russian-speaking Ukraine that did not benefit from "local self-defense units".] Fortunately this did not happen. There was not a single armed confrontation in Crimea and no casualties. Why do you think this was so? The answer is simple: because it is very difficult, practically impossible to fight against the will of the people. Here I would like to thank the Ukrainian military – and this is 22,000 fully armed servicemen. I would like to thank those Ukrainian service members who refrained from bloodshed and did not smear their uniforms in blood.

Other thoughts come to mind in this connection. They keep talking of some Russian intervention in Crimea, some sort of aggression. This is strange to hear. I cannot recall a single case in history of an intervention without a single shot being fired and with no human casualties. [But because the military force was overwhelming.]


Like a mirror, the situation in Ukraine reflects what is going on and what has been happening in the world over the past several decades. After the dissolution of bipolarity on the planet, we no longer have stability. Key international institutions are not getting any stronger; on the contrary, in many cases, they are sadly degrading. [True] Our western partners, led by the United States of America, prefer not to be guided by international law in their practical policies, but by the rule of the gun. [Hmm] They have come to believe in their exclusivity and exceptionalism [ahem], that they can decide the destinies of the world, that only they can ever be right. They act as they please: here and there, they use force against sovereign states, building coalitions based on the principle “If you are not with us, you are against us.” To make this aggression look legitimate, they force the necessary resolutions from international organisations, and if for some reason this does not work, they simply ignore the UN Security Council and the UN overall. [Hmm]

In other words, we did not act illegally but if we did, you did first. The subtext, I think, is that the United States claims for itself as a great power a license to disregard international law that binds everyone else, and Russia will do the same in its sphere of influence where the United States cannot compete with it.

The toothless sanctions on Russia

The U.S. and EU imposed asset freezes and travel bans on a handful of Russian and Ukrainian officials connected to the Crimean secession. Most of them are mid-level people; a few are Putin aides. They did not impose asset freezes and travel bans on Putin or other big shots, nor did they impose sanctions on Russia itself.

Why not? You can easily imagine that if Putin had been sanctioned, he would not be able to back down or make concessions–because then it would look as if he betrayed Russia for personal financial reasons. But the same logic applies to the mid-level people, who now must redouble the aggressiveness of their stance on Ukraine. And because the sanctions were imposed on a handful of people rather than all of Russia, the Russian government can easily compensate the sanctioned individuals for any losses that they have sustained. Indeed, probably their public standing has increased as the sanctions will make them look important to the Russian public who are probably learning the identities of some of them for the first time.

So the sanctions aren’t even toothless: they reward rather than punish the wrongdoers. They are best seen as a signal, the weakest possible signal, one that indicates that we will accept Crimea if you go no farther. I suspect that it would have been more sensible to send this signal by imposing a weak sanction on all of Russia than to single out these people who  will be perceived as heroes who have made sacrifices for the motherland.

Easterly’s The Tyranny of Experts

William Easterly argues that efforts to help poor countries achieve economic growth have gone astray because western experts impose top-down recipes for growth (a kind of Stalinist approach that mixes hubris and incompetence):

The conventional approach to economic development … is based on a technocratic illusion: that the belief that poverty is a purely technical problem amenable to such technical solutions as fertilizers, antibiotics, or nutritional supplements.

The problem, as Easterly shows in this book and in his previous books (including the terrific White Man’s Burden), is that these technical solutions fail because western experts rarely understand the intricacies of the local environment, and, more important, the politics and institutions in the countries they seek to help. Often, technically flawless development projects fail because of corruption and abuse in the country that is being helped. The gleaming power plant operates for a few years and then falls into disrepair because the absence of an effective legal system that enforces property and contract rights makes it impossible to collect bills or protect against squatters.

The solution? It turns out to be human rights:

What you can do [about global poverty] is advocate that the poor should have the same rights as the rich…. This assertion of the rights of the poor is needed now more than ever…. This books argues [that] an incremental positive change in freedom will yield a positive change in well-being for the world’s poor.

Easterly does not explain what any of this means. Which rights should we advocate? How should we insist that they be implemented? What should we do to governments that refuse to take our advice? I suspect that if he gave these questions some thought, he would realize that any serious effort to compel or bribe poor countries to recognize rights would look like the development activities that he criticizes. Indeed, his bête noir, the World Bank, famously tried to implement “rule of law” projects that were supposed to enhance rights. These projects failed for all the reasons that all the other development projects failed.

Easterly provides no evidence that if we advanced human rights in poor countries, well-being in those countries, or even respect for rights, would improve. In fact, there isn’t any.

Fragile by Design, by Calomiris & Haber

Fragile by Design, by Charles Calomiris and Stephen Haber, is a great book. The authors argue that the stability and efficiency of financial systems in different countries depend on political bargains that set the rules of the game. Authoritarian countries produce inefficient state-owned banking systems because governments cannot commit not to expropriate. But democracies produce a wide range of outcomes, depending on the configuration of constituencies and interest groups. The United States is cursed with a highly unstable banking system because local interests have been able to ensure a huge number of local unit banks that were insufficiently diversified. This system finally broke down thanks to the inflation of the 1970s, but our further misfortune was a political bargain between activist groups and large banks in the 1990s that resulted in a system where banks were encouraged to reduce underwriting standards so as to extend credit to low-income people. Meanwhile, countries like Canada were lucky enough that the initial political bargain at a national level led to a small number of stable and efficient banks that weathered the financial crisis of 2008.

There are a huge number of moving parts and epicycles (why was our unstable system so stable from 1936-1980?, and what explains the success of activists like ACORN?), but the book is nonetheless enormously illuminating, and contains the most powerful and concise account of the causes of the 2008 crisis that I have seen.

Goodbye, Crimea

It doesn’t matter that the referendum did not allow voters to express a preference for the status quo, that many of the 90+ percent who favor annexation by Russia (according to (possibly questionable) exit polls) may have been trucked in, that international election monitors were not used, that ballot boxes may have been stuffed, that Tatar groups refused to participate, that the public debate was drowned out by pro-Russian propaganda, and that Russian soldiers and/or pro-Russia militias roamed the streets. It is sufficient that there wasn’t violence, that western journalists were free to move about and interviewed plenty of ordinary people who strongly favored annexation, that there were enthusiastic public demonstrations in favor of annexation and celebrations after the result was announced, and that the outcome is consistent with demographic realities and what seems plausibly (to us ill-informed westerners) the preference of most Crimeans. Unless large groups of Tatars and ethnic Ukrainians take to the streets to protest the referendum and are clubbed by riot police, any western effort at this point to try to rescue Crimea from the invaders it embraces will be not only pointless but ludicrous. The West is now in the impossible position of being pro-democracy and arguing that Crimea should be returned to Ukraine against the will of the people. Even if the referendum was all theater, it was effective theater.

The image above, from Wikipedia, shows the demographic composition of Ukraine as of 2001. Blue means an area where the majority speaks Ukrainian; red means an area where the majority speaks Russian. Doesn’t this suggest a forgone conclusion once Putin made his move?

The Crimean secession vote

In an earlier piece, I said

If a fair vote is held, and Crimeans vote overwhelmingly to join Russia, then any Western effort to stop them will be seen as an attempt to thwart the will of the people, a violation of their right to self-determination, which is enshrined in the U.N. charter and multiple human rights treaties.

I didn’t actually think it likely that a fair vote would be held; I was instead trying to avoid discussing the more complicated case where a a fair vote is not held. (Some might call this qualification lawyerly; others, weaselly.) In any event, it is becoming increasingly clear that a fair vote will not be held, as discussed in this NYT article and this National Interest piece by former ambassador to Ukraine, John Herbst. I also received this illuminating email from a Ukrainian-American student in the United States (who continues to visit and do work in Ukraine):

If you follow the Russian and Ukrainian language press as well as Crimean groups on social-networking sites (such as SOS_Krym), you already realize that large scale attempts at voter fraud are under way. Several of my friends in Crimea (this has been verified by reports throughout the peninsula) have been visited by unidentified individuals who either make off with their passports or damage them. This just so happens to coincide with an announcement by Sevastopol city authorities that any form of photo ID will be accepted during the referendum, given what has been happening to passports. This is a clear invitation to “Russian tourists”, many of whom have already created problems in Donetsk and Kharkov.

Interestingly, this is voter fraud on TOP of voter fraud since the ballot itself, absurdly, presents residents of Crimea with two options – join Crimea or seek independence – without any space for a “no” vote on either of those options. All under the watchful eye of Russian special forces and “local self-defense militias.” Does that sound like a legitimate referendum to you? How can this referendum be legitimate if it doesn’t accurately reflect the will of the people, and how can it accurately reflect the will of the people when it is being carried out under these types of circumstances?

MOREOVER, the government which is calling for this referendum was installed by those very same Russian spetsnaz and approved by Yanukovych (at that point no longer in charge of anyone or anything). Aksyonov, the current head of the Crimean administration, leads a party called “Russian Unity” and received 4% of the vote in the last elections. He is a fringe figure and I can assure you (as someone who worked in the region) that before all of this started, Aksyonov and his ilk were regarded as nothing more than a joke by domestic and international observers alike. Is a referendum planned by an illegitimate government with no support…legitimate?

Finally, I would urge you to rethink the implication of the following: “Crimea’s ties with Russia go back centuries. It was transferred from Russia to Ukraine only in 1954 while both countries were regions of the Soviet Union. This transfer reflected a top-down administrative judgment, not the sentiments of the Ukrainian or Crimean peoples.” Your implication leads to a slippery slope because, as you well know, Crimea belonged to the Crimean Khanate (present day Crimean Tatars) long before the Russian Empire controlled the region. If we’re going all the way back to the 1950s, why use 1783 as our historical reference point? If historical precedent is what we’re really looking at, perhaps we should transfer the land to the descendants of the Scythians? Or the descendants of the Romans – the Italian state? Crimea has passed hands so many times that attempting to find a legitimate government somewhere in the folds of time is a futile endeavor, at best.

… One more thing – I’m not sure if the Western press has published anything about this, but the leader of the Crimean Tatar Mejlis (the Mejlis is described by Crimean Tatars as a “body of local self-government” in Crimea – the Mejlis has offices in nearly every corner of the Crimea and lays claim to representing the interests of Crimean Tatars) called on Crimean Tatars to boycott the referendum. Refat Chubarov (leader of the Mejlis) voiced many of the same concerns I did about Russian tourists coming to Crimea and voting in the referendum. He also deemed this referendum illegitimate due to ballot design and the fact that 400,000 more ballots have been printed than there are residents in Crimea. This is all in addition to the fact that the government of Crimea is not legitimate and that the referendum is taking place under the watchful eye of Russian special forces, but that goes without saying. So, in effect, anywhere from 12-15% of Crimea’s population will most likely be boycotting this referendum.

So the political and international-law implications of an unfair referendum cannot be avoided. I hope to address them after the referendum has been held, and the extent of the unfairness can be gauged.

Goldman on Bitcoin

Business Insider exaggerated when it announced that Goldman completely obliterates Bitcoin in a new report. The report includes interviews with Bitcoin supporters. And while the Goldman analysts are skeptical that Bitcoin could serve as a currency—the view of nearly everyone nowadays—they do not rule out a role in the payments system. Currently, merchants pay 2-3 percent of purchase price to accept electronic payments. Bitcoin service providers charge 1 percent. But as the Goldman analyst notes, much of the cost of the current payment system is attributable to security and legal requirements that Bitcoin providers will eventually need to confront. Merchants who use bitcoin pay an additional 1 percent to exchanges in order to avoid exchange rate risk. Traditional payments system will also reduce costs in response to competition from Bitcoin. However this all works out, the long-term effect of Bitcoin will not be anarchist utopia but slightly lower prices—you may end up paying $100 rather than $101 for an item you buy over the web.

Other thoughts:

Bitcoin miners with 51 percent of the computer power over the Bitcoin network control the supply: they can decide to increase it. Question: don’t they have strong incentives to undersupply bitcoins—that is, to vote against increasing the supply to the social optimum while hording bitcoins—in order to maximize their profits, like De Beers?

Bitcoin’s legal problems are just beginning. An interview with a pair of lawyers reveals a potentially huge regulatory web that legitimate bitcoin institutions will need to navigate. Once bitcoin futures come into existence in sufficient volume, the CFTC will step in. We already know about money laundering laws, which require bitcoin services to keep tabs on customers and report suspicious transactions. The SEC has gotten into the act because of efforts to combine Bitcoin and securities. State regulatory agencies may require Bitcoin-related companies to obtain licenses akin to those that money transmitters like banks must obtain, which are costly. It also seems likely that Bitcoin services will, like existing money transmitters, be required to keep funds on hand to compensate customers if their bitcoins are lost—a further cost. Not discussed, but also worth considering, is the possibility that people will try to manipulate the bitcoin market—as I suggested above—necessitating another layer of regulatory scrutiny.

Kahan & Rock on Symbolic Corporate Governance Politics

Marcel Kahan and Edward Rock have posted a paper on SSRN that asks why “the rhetoric around a variety of high profile corporate governance controversies … cannot be justified by the material interests at stake,” while at the same time “shareholder activists are oddly reluctant to pursue issues that may have a more material impact.” The answer was anticipated by the legal realist Thurmond Arnold, who argued that a great deal of law is supposed to reflect certain myths and taboos believed by the public but that couldn’t practicably be enforced:

We celebrate our ideals of chastity by constantly engaging in wars on vice. We permit prostitution to flourish by treating it as a somewhat minor crime and never taking the militant measures which would actually stamp it out. The result is a sub rosa institution which organizes the prostitutes after a fashion, at least to the extent that there never seems to be any shortage in our large cities. …

Thus in those days anyone who attacked the “Trusts” could achieve the same public worship as a minister of the gospel who had the energy to attack vice. It was this that made Theodore Roosevelt a great man. Historians now point out that Theodore Roosevelt never accomplished anything with his trust busting. Of course he didn’t. The crusade was not a practical one. It was part of a moral conflict and no preacher ever succeeded in abolishing any form of sin.

Kahan and Rock add:

Arnold seems to have saved his most savage (and sincere) condemnation for those poor well-meaning fools who would endeavor to make us live up to our articulated principles because doing so would destroy necessary institutions and cause serious social harm.

They conclude that the myth of corporate governance is that shareholders control firms when in fact they cannot, which means that we must trust managers with billions of dollars and hope for the best. Any attempt to constrain managers would render the corporate form unworkable because shareholders cannot, practically, manager the corporation. Activists maintain their pay and prestige by keeping corporate governance battles in the public eye but in fact no one should hope that they succeed, and perhaps they don’t wish to succeed themselves.

As Kahan and Rock presented their enjoyable paper at a corporate governance conference last week, I couldn’t help thinking: isn’t this the story of originalism?

The rise and rise of human rights scholarship in law reviews

hr articlesEveryone complains that law professors write too much about constitutional law, and not enough about areas of law that actually matter–antitrust, securities regulation, and criminal law. A similar complaint can be directed against international law scholars. On the evidence of the Westlaw database, international law scholars think that human rights deserve vastly more attention than (say) trade law or even the United Nations. In truth, human rights law is of limited practical importance in international relations, and virtually all of this literature–which nearly uniformly argues in favor of more human rights and stronger human rights institutions–will be ignored. If you want evidence that much of what academics do doesn’t matter, and that there is no mechanism for self-correction, see the graph above.

Mitu Gulati: Ukraine’s odious debts

Mitu Gulati, the world’s expert on the odious debt doctrine, writes in:

It is a treat to guest post here at  It is an even bigger treat to be invited to disagree with Eric on the pages of his own blog! Eric has been blogging about the Ukraine situation, but has yet to engage the question of what is to become of the Ukraine’s debt, a large portion of which is likely owed to Russian entities. Of particular interest are the debts owed by Ukraine directly to the Russian state.  This includes Ukraine’s most recent Eurobond issue (December 2014) for roughly $ 3 billion that was purchased entirely by the Russian state as part of its subsidization of the prior Ukrainian regime.

However, Ukraine may have an argument for escaping liability on that last $ 3 billion (and likely more).  That argument comes from an antiquated doctrine of international law, the doctrine of Odious Debts, that briefly got resuscitated about a decade ago in the context of Iraq’s post-Saddam era debt restructuring. The relevant bit of international law here is the doctrine of state succession.  Under this doctrine, democratic governments that succeed dictators are not allowed to disclaim the debts of the prior regime, no matter how odious it may have been.  There may be a narrow exception, however, for what one might call Corrupt Debts.

That is where the lender knew or should have known that the money it was lending was going to line the personal coffers of a state leader.  There, the lender can fairly be said to have made the loan to the personal account of the corrupt leader, rather than to the state.  In the case of Ukraine, the current regime has vociferously accused Mr. Yanukovych and members of his regime of stealing the proceeds of prior state borrowings.

Assuming that is true, it should not be difficult to argue that the Russian lenders knew or should have known of the kleptomaniacal tendencies of Mr. Yanukovych’s government.  In that case, Uncle Vlad would no longer be able to collect from the Ukraine; instead, he would have to look directly to his friend, Mr. Yanukovych, for recovery of the $3 billion.

The case law is sparse. But there is a famous case on point, involving a 1923 arbitration between Great Britain and Costa Rica.  Cribbing now from an article with the godfather of sovereign debt, Lee Buchheit, “The Dilemma of Odious Debts”:

In 1917, the government of Costa Rica was overthrown by Frederico Tinoco. Tinoco’s government lasted two years.  Before he left the country, Tinoco borrowed some money from the Royal Bank of Canada. That money also left the country . . . in the company of Mr. Tinoco.

In a subsequent arbitration, Great Britain claimed that the successor government of Costa Rica was bound to honor the loans. US Supreme Court Justice (and former President) William Howard Taft refused to order Costa Rica to repay the Tinoco loans. These were, Taft said, not transactions “in regular course of business” but were “full of irregularities.” Taft explained that “[the] bank knew that this money was to be used by the retiring president, F. Tinoco, for his personal support after he had taken refuge in a foreign country. It could not hold his own government for the money paid to him for this purpose.”

Sounds an awful lot like Uncle Vlad’s purchase of Ukrainian Eurobonds a couple of months ago. The question may eventually come down to this — will the new administration in the Ukraine feel itself obliged, as a matter of law or morality, to repay a loan extended to a prior regime that they have already branded as kleptomaniacal by a lender (Russia) that they have already accused of lopping off a large part of Ukrainian territory (the Crimea) in violation of international law?

Eric, what do you think? You’ve been skeptical of the doctrine of odious debts in the past.  Would you consider the scenario above to be an exception?  One where that doctrine should apply to excuse the Ukrainians?

[Since you asked: Without knowing more facts, it is hard to know what will happen, but my guess is that Yanukovych skimmed off only a part of the proceeds, most of which ended up in the Ukrainian treasury—if so, the bill must be paid, while Ukraine would have a (no doubt unenforceable) claim against Yanukovych personally. – EP.]

Would Russia’s annexation of Crimea violate international law?

No. The U.S. government claims that annexation would violate international law and the Ukrainian constitution because Ukraine has not given its consent to the referendum. But Russia is not bound by the Ukrainian constitution. Nor does any international law prohibit two countries from merging together.

The real question is then whether Crimea’s secession–which you might think of as a legally separate act that (conceptually) precedes the annexation–violates international law. As I explained before, there is no law against one territory seceding from another. In fact, the right to self-determination is enshrined in the UN charter and several human rights treaties. Ukraine could certainly try to stop its territory from seceding–just as the United States fought to prevent the South from seceding–but if it fails, it can’t complain that the secession violates international law. Ukraine’s best argument is that the secession was driven by Russian meddling–Russia’s invasion of Crimea did violate international law, and the occupation violates Ukraine’s sovereignty. But if the referendum is free and fair, that argument will lose much of its force. Perhaps, Ukraine is owed some remedy by Russia (good luck), but that remedy could not be an injunction on Crimean secession, which would injure the Crimeans themselves.

U.S. officials note that Scotland’s secession vote was approved by the UK government. But the more pertinent analogy is Kosovo. Kosovo’s declaration of independence was not approved by the Serbian government. Kosovo’s secession was abetted quite significantly by the United States through military and diplomatic means.

Originalism class 9: between phony and naive

In our last class, we discussed Jack Balkin’s paper, Why Are Americans Originalist?, which I interpret as a sly debunking exercise. Balkin’s most interesting argument is that the turn to originalism in the 1980s was akin to Martin Luther’s repudiation of the Catholic Church’s monopoly over Biblical interpretation, with the Supreme Court playing the role of the Church. (You might think of the habit among libertarians of carrying around a pocket-sized constitution as the modern version of biblical translation into the common language.) Originalism is a political strategy that became attractive because the founding-era meaning of the text coincided (very roughly) with the political goals of conservatives while at the same time appealing more broadly because of the patriotic, anti-elitist message that the Constitution contains the wisdom of the founders and we can all read the Constitution for ourselves. The students were pretty skeptical.

But I do sympathize with conservatives of the 1970s and 1980s who saw the Warren Court as an ideological apparatus, and were contemptuous of the law professors at the time who sought to rationalize its liberal holdings with phony constitutional theories. The problem was that the alternative they came up with rests on a mythical self-image, or at least encourages people to treat mythology as fact, with all kinds of weird consequences for constitutional law. It’s as if the Germans repudiated their Basic Law and decided to derive constitutional norms from the myths of the Nibelungen. Or–to be fairer–from whatever archaeological research might reveal about the customs of Germanic tribes at the time of Tacitus.

We polled students again–they polarized, which makes sense since they are more informed about what originalism means now than they were at the start of the course. But it bodes ill for the project of originalism itself since originalism can prevail only if that is what the people want.

Can Crimea secede from Ukraine?

Flag of Crimea.svgThe Crimean parliament has scheduled a referendum for March 16 asking whether Crimea should secede from Ukraine and join Russia. From the standpoint of international law (Ukrainian law may be different), it is not illegal for a territory of a country to attempt to break away and form a new state. But there is a great deal of controversy over when a breakaway territory should be considered a state, which entitles it to enter treaties, join the UN, and so on. One view is that Crimea becomes a state just when other countries regard it as a state. So even if Crimea achieves de facto independence and has a government that controls it, the United States and other countries could block it from being a state just by refusing to recognize it as a state.

On another view, a breakaway territory is lawfully a state based on objective facts–basically, whether it has a government that controls the people who live on it, and is not itself subject to a superior government, as in a federalist system. In practice, these two views tend to converge. Sooner or later, foreign countries will recognize a de facto state as a de jure state because if they want to deal with the people who live in the territory (for example, trade with them), it must go through their government. That’s what happened with East Germany, for example. The west refused to recognize it as a state for many years because they considered its creation illegal but eventually gave in.

In the Crimea case, there are a number of relevant considerations. Favoring secession, one can point to the fact that the Crimea has long enjoyed a great deal of autonomy from Ukraine; that Crimea has long been part of Russia (or the Soviet Union) and was handed over to Ukraine only in 1954; and that, if the referendum succeeds, then the Crimean people themselves wish to secede.

Going the other direction, Crimea is currently occupied by Russian troops, and the question of secession was (as far as I know) put on the agenda only because of Russia’s illegal intervention. Unlike places like Quebec, the Basque Country, and Scotland, the question of secession is entirely new; there was never a live secession movement that sought reunification with Russia. Ukraine itself does not appear to favor secession of Crimea. The world ought to be skeptical about the Crimean Parliament’s intentions, but if a fair referendum is held, and there is overwhelming sentiment in favor of unification with Russia, then a major geopolitical victory will be within Russia’ grasp.

Update–maybe for this reason, President Obama has declared that the referendum would violate international law. On what basis? Perhaps that it would violate Ukrainian sovereignty, especially if the Russians are behind the scenes. But it wouldn’t be a violation of international law for Illinois to hold a referendum on whether to secede from the Union, and so I don’t see how it could be a violation of international law for Crimea to vote to secede.

Ukraine: Odds and Ends

1. Douglas Cox discusses the Panama analogy.

Consent was a central U.S. justification for intervention in Panama that was just as, if not more, thin than the paper on which Yanukovych’s invitation to Putin is written. The U.S. position was that it had never recognized the Noriega regime as the legitimate government in Panama and, just before Operation Just Cause began, the U.S. government purported to swear into office — on a U.S. military base — Guillermo Endara as the President of Panama, who then invited U.S. forces into his country. As the U.S. Army’s Law of War Manual later described “concurrent with the invasion, Mr. Endara was sworn in as President of Panama in the U.S. Southern Command Headquarters one hour before the invasion occurred; forces were already airborne en route” (see p.82).

 2. Ryan Goodman argues that Ukraine should join the ICC because that will deter Russian troops from committing war crimes on Ukrainian soil, assure the Russians that the Ukrainian government will not massacre ethnic Russian civilians who live in Ukraine, and provide a forum in case the legitimacy of the Ukrainian government is ever questions. But ICC involvement so far has made governments pretty unhappy–countries that have invited it in and western governments who dislike its interference. The institution is too new, too unpredictable, too hard to control–and it eliminates the valuable option of amnesty. An ICC prosecution of, say, a Russian soldier who was captured in Ukraine and sent to the Hague would create a completely unnecessary global crisis.

3. Ashley Deeks publishes a reader’s legal defense of the Russian intervention. This is the most carefully argued defense I have seen; however,  I disagree with it for reasons I give here.

The 1997 Black Sea Fleet Agreement Between Russia and Ukraine

Russia’s UN ambassador, Vitaly Churkin, apparently cited a 1997 treaty between Russia and Ukraine as a source of authority for Russian troop movements in the Crimea:

We have an agreement with Ukraine on the presence of the Russian Black Sea fleet with a base in Sevastopol, and we are acting within the framework of that agreement.

The treaty, called Agreement Between the Russian Federation and Ukraine on the Status and Conditions of the Russian Federation Black Sea Fleet’s Stay on Ukrainian Territory, was extended in 2010. Through the heroic efforts of the University of Chicago law librarian, Lyonette Louis-Jacques, I have gotten my hands on an English translation of that treaty. (The Russian version is available on the web, and you can use Google translate on it if you dare.)

As has already been reported, the treaty unsurprisingly does not give Russia the authority to conquer the Crimea. Nor does it give Russia the discretionary authority to move troops around the Crimea. It gives Russia the authority to locate troops on its bases in the Crimea, and to move them between those bases and Russian territory. But the troops must follow Ukrainian law and respect Ukrainian sovereignty. I paste some of the relevant articles below.

russia ukraine agreement


Taken from J.L. Black, ed., Russia & Eurasia Documents Annual 1997: The Russian Federation, vol. 1, p. 129 (Academic International Press, 1998).

Is there a rule that government actors don’t change the Constitution?

Will Baude says there is:

At an empirical level, I think it is certainly possible for constitutional change to occur through mini-revolutions or political evolution. But there remains the question of one, whether those changes are valid under our current legal rules, and two, whether they really occurred. I would say our current legal rules honor an important relevant principle in the text: government agents are not authorized to make constitutional change. They take an oath, and it is an oath to apply “this Constitution” that we have, and that reflects an important limit on the power that we the people have delegated to them. The people may well have a right to ignore the Constitution, but the government officials who happen to be their agents do not.

I can’t make sense of this passage. How can constitutional change through a mini-revolution or political evolution occur and not be “valid under our current legal rules”? Doesn’t constitutional change of this sort just mean that the rules aren’t valid or are incomplete? Isn’t that what happened in 1789? No one cares that the 1789 text is invalid under the Articles of Confederation.

Will then goes on to make a distinction between the “people” ignoring the Constitution and government officials. But this brings us back to 1789. Should government officials have declined to obey the 1789 text because they are “officials” rather than “the people”?

It may be that Will is focused on government officials acting without the people’s blessing. But what if they in “good faith” (quoting Will again, as he suggests in another passage that justices act in good faith) believe that the people have chosen to change the Constitution? Aren’t they then obligated to defer to the will of the people? And note on this view limited government prevails: government officials can change the Constitution (or, I would say, recognize a change in the Constitution) only if they believe in good faith that the people have changed the Constitution. The oath clause argument is circular: the question is whether it refers to an unchanging text or evolving norms.

Will’s first sentence is a large concession that is hard to square with originalism. Even if he thinks that no such evolution has occurred, he seems constrained to acknowledge that if it can occur, justices and other government agents should be on the lookout for changes in the people’s constitutional understandings, and should act accordingly if such changes occur.

Have the use of force rules reduced the frequency of war?


Source: Kristian Skrede Gleditsch & Steve Pickering, Wars Are Becoming Less Frequent (2013).

Burcu Bayram at Duck of Minerva echoes Peter Spiro’s skepticism about my skepticism:

Yet mere breach does not mean international law is epiphenomenal. The international community has condemned Russia’s action. Sanctions from the U.S. are already in effect. G7 suspended preparations for the G8 meeting in Russia. Eurozone countries seem committed to isolating Russia if a diplomatic solution cannot be found promptly even though they-especially Germany- are particularly dependent on Russia for gas and oil. All this indicates that international law is consequential.

As I explained earlier, I have never claimed that international law is inconsequential. For example, trade law seems to matter. But it is always an empirical question whether a specific rule affects state behavior or not, and in a meaningful rather than trivial way. Anecdotal evidence gets one only so far.

To address this problem, scholars use statistical methods–basically, event study methodology, to test whether state behavior changes in the predicted fashion after the state ratifies a treaty. This approach has been productively used in the area of trade (yes) and human rights (generally, no). It helps in these areas that different states ratify the treaties at different times. Unfortunately, the use of force rules came into effect all at once for everyone in 1945, so there is not enough variation to do a real test. (Many countries joined the UN system later, but usually when they came into existence, or for other unusual reasons that cannot be controlled for.)

Still, I thought it would be interesting to take a look at the incidence of interstate war, and I found the graph I reproduce above in Kristian Skrede Gleditsch & Steve Pickering, Wars Are Becoming Less Frequent (2013), which seems like a carefully written paper. The bars show the number of interstate wars (excluding civil wars) with at least 1,000 battle deaths in a given year. Note that the 2011 Libya war is excluded because the data set ends in 2010, and the 2008 Russo-Georgian war is excluded, presumably because of insufficient battle deaths.

One can certainly detect a decline in the frequency of interstate wars (as shown by the various trendlines). But it would be very hard to attribute any causal influence to the 1945 UN charter. If you trust the linear time trend, 1945 just falls in the middle of a long-term decline. If you take one of the nonlinear time trends, it falls before an increase in the number of wars. If one is looking for causes, the end of the cold war with the onset of U.S. hegemony seems like the most plausible–the infrequent warfare over the last 20 years pulls down all the time trends. However, all in all it is hard to find any causal pattern at all.

If you want to, you can find reasons for giving causal effect to  the 1945 law. You can say that it took a while for the a new norm to work itself through the system, or that the cold war or decolonization was an anomaly that interrupted what would otherwise have been a smooth pattern of causal influence. Maybe. But it seems to me that if one makes such claims, one needs to acknowledge a low level of confidence.

Putin’s tu quoque defense

Here’s Putin:

We are often told our actions are illegitimate, but when I ask, “Do you think everything you do is legitimate?” they say “yes”. Then, I have to recall the actions of the United States in Afghanistan, Iraq and Libya, where they either acted without any UN sanctions or completely distorted the content of such resolutions, as was the case with Libya. There, as you may know, the resolution only spoke of closing the airspace for government aircraft, while it all ended with bomb attacks and special forces land operations.

Our partners, especially in the United Sates, always clearly formulate their own geopolitical and state interests and follow them with persistence.

The U.S. military intervention in Afghanistan could be defended as self-defense on the theory that the Taliban government harbored Al Qaeda, and it was later ratified by the Security Council. But Putin is right that the 2003 Iraq intervention was clearly illegal, and that the military intervention in Libya went beyond the terms of the Security Council authorization.

Tu quoque (“you too”) defenses are not recognized in international law; but they can be effective as appeals to fairness and ground arguments that the law is unjust and should be abandoned. But Putin does not go on to argue that because the United States violated the use of force rules, Russia can as well. Instead, he says:

Our approach is different. We proceed from the conviction that we always act legitimately. I have personally always been an advocate of acting in compliance with international law. I would like to stress yet again that if we do make the decision, if I do decide to use the Armed Forces, this will be a legitimate decision in full compliance with both general norms of international law, since we have the appeal of the legitimate President, and with our commitments, which in this case coincide with our interests to protect the people with whom we have close historical, cultural and economic ties. Protecting these people is in our national interests. This is a humanitarian mission.

And so it turns out that even if the United States is an international lawbreaker, Russia chooses to take the high road and comply with international law, or so Putin claims. The reason for this approach is surely that Putin sees an advantage in the current system that grants Russia a veto in the Security Council even if this means that Russia must gin up a feeble legal rationale for its unilateral intervention in Ukraine.

Did Ukraine consent to its own invasion?

Sending troops into a foreign country does not violate international law if that country gave its consent. Is this Russia’s legal justification for its incursion on Ukrainian territory?  According to Bloomberg:

Vitaly Churkin, Russia’s ambassador to the United Nations, said today the crisis is creating serious risks to Russian security and to the safety of millions of Russian-speaking compatriots in southeastern Ukraine. Former Ukrainian President Viktor Yanukovych wrote to Russian President Vladimir Putin requesting a military deployment, Churkin said.

 “It’s completely legitimate under Russian law, and given the extraordinary situation in Ukraine, this threat and the threat to our compatriots, Russian citizens and the Black Sea Fleet,” Churkin told a meeting of the UN Security Council in New York, reading out loud the March 1 letter from Yanukovych.

[Update: and here is Putin: "As you may know, we have a direct appeal from the incumbent and, as I said, legitimate President of Ukraine, Mr Yanukovych, asking us to use the Armed Forces to protect the lives, freedom and health of the citizens of Ukraine."]

It’s a unclear whether Churkin is making a consent argument, a humanitarian intervention argument, a self-defense argument, or all three. But assuming a consent argument is involved, is it valid? After all, Yanukovych was the elected president of Ukraine, and he was never unelected. He was driven out of office after being “impeached” by the Parliament. My understanding is that the impeachment did not follow constitutional procedures. If so, he was removed by a coup. That is, in fact, his view and Russia’s position.

Suppose that is the case. The international law is murky but the rule in these situations is that even when a government is illegally deposed, the successor government inherits its legal authority under international law as long as it controls the territory–the basic idea being that if foreign governments want to trade or otherwise deal with the population, then they must go through whatever entity controls them. There is some doubt about how much the government in Kiev controls the territory, but it certainly exerts greater control over it than Yanukovych does, whose whereabouts are unknown. The new government is also treated as legitimate by many (most?) foreign governments (in contrast to the government that came to power after the controversial coup in Honduras in 2009), and that too contributes to its authority under international law.

Russia disagrees, but even if we therefore conclude that Ukraine currently lacks a legitimate government under international law, it doesn’t follow that Yanukovych, who is now a private citizen, has the authority to invite Russia in. He doesn’t.

And here is Chris Borgen on this topic.

Ukraine and The Limits of International Law

Peter Spiro (and/or someone else operating the Opinio Juris twitter account) accuses me of “gloating” about the military intervention in Ukraine, being a “realist,” committing something called the “perfect compliance fallacy,” and believing that “international law is a chimera.” These accusations are false.

Julian Ku and Erik Voeten have already provided partial rebuttals. For the record, here are my views:

1. I am not a “realist” in the political science sense. I believe that countries cooperate when they can achieve mutual gains; that cooperation can benefit from sophisticated institutional arrangements; but that cooperation must be self-enforcing, meaning that it must be in the individual interest of the relevant countries not to defect from their arrangements (what economists sometimes call the “participation constraint”). Although few (albeit an increasing number) law professors take this approach to international law, many (although certainly not all or even most) political scientists do. Realism, as I understand that term, emphasizes security competition among countries; it has little value for understanding international law.

2. Spiro is right that you can’t infer anything from a single data point if that’s what he means by the “perfect compliance fallacy.” However, I never said that because Russia violated international law in Ukraine, international law is a “chimera.” Nor did I say anything that could be construed in such a way.

My writings about international law have been devoted to explaining it, not denying that it exists like the mythical beast invoked by Spiro. However, I am more skeptical than most international law scholars, who are frequently advocates, cheerleaders, or aspiring diplomats. The arguments I have made in The Limits of International Law, Economic Foundations of International Law, and elsewhere implied that international law is most effective at solving coordination games and managing bilateral cooperation, and not so good at solving collective action problems. So I have expressed skepticism about some types of international law–including collective security and human rights–but not others (trade law, for example). I have also argued that some areas of international law work under certain conditions but fail under other conditions–claims that are resisted by legal scholars but are familiar in political science (for example, James Morrow’s examination of the laws of war).

3. The evidence for the weakness of the use of force rules has been gathered and analyzed by many people, including Michael Glennon. The debate is too complicated to reproduce here. All I will say is that it is sufficient neither to point out that countries sometimes violate the law nor to point out that countries sometimes comply with the law. One needs to imagine the counterfactual world in which the UN system does not exist and ask how states would act differently. In such a world, would Russia have also invaded Armenia? Would the United States have invaded Canada? Countries have reasons other than law not to attack each other.

Ukraine: will “international law matter a lot down the road”?

Erik Voeten writes in The Monkey Cage that “international law and institutions look pretty weak now, but they will matter a lot down the road.” Let’s take a look at some of these institutions.

The Council of Europe and The European Court of Human Rights. If Russia commits human rights violations in Ukraine, the victims can brings claims before the ECHR. Russia has already lost many cases before the ECHR, paid the tiny awards, but has not brought its laws into conformity with the ECHR’s interpretations of the European Convention on Human Rights. Indeed, Russia has steadily deprived its people of their freedoms since it joined the Convention in 1998. The Council of Europe “enforces” the Convention and the Court’s judgments but actually has no coercive power, as Erik notes, and history amply demonstrates.

NATO. NATO is an institution, of course, but not in the sense that law professors mean. It does not have any legal powers. It is simply an alliance of countries. NATO can certainly put pressure on Putin, far more than any legal institution like the ECHR. But Ukraine is not a member of NATO, and NATO’s own charter would thus not compel countries to come to its aid. It seems unlike that NATO will become a vehicle for countering Russia’s move to Ukraine because it’s a military alliance and no one wants to go to war with Russia.

The laws of war. Erik thinks the laws of war will influence the way Russian soldiers prosecute military hostilities if such hostilities occur. Maybe if the Ukrainians put up token resistance, but not otherwise. Russia committed numerous atrocities–the clearest possible violations of the laws of war– during the two Chechen Wars. What reason would they have for acting differently this time around if Ukraine put up stiff rather than token resistance? And don’t say those were internal conflicts and therefore not governed by the Geneva Conventions. Russia (unlike the United States) ratified Protocol II in 1989, thus subjecting itself to the laws of war for “non-international” armed conflicts. If it can disregard this international treaty with impunity, why couldn’t it disregard the rules that would apply to the interstate conflict with Ukraine?

International Criminal Court. Russia is not a member of the ICC; Ukraine seems to be thinking about joining it. But the fact is that the ICC is an extremely weak institution, and if it ever hands down any indictments, this means at most that some Russian soldiers, officers, or politicians will be unable to travel to European countries. If you read David Bosco’s fine book on the ICC, you will see that even the west would not welcome the ICC blundering into this conflict.

The European Union and multilateral sanctions. Erik is right that the EU could imaginably exert meaningful economic sanctions on Russia. I don’t know whether this is plausible; maybe it is. But the main point here is that the EU, like NATO, is not a legal institution but an alliance (or something closer to a confederation) that may be able to aggregate the power of its members so as to counter Russian influence.

Erik is right that foreign countries, acting individually or in cooperation, can make Russia pay a price for violating international law. Whether or not they do so depends on their power and interests. If they are divided, or don’t care much about Ukraine, then Russia will get away with its illegal act. I am skeptical that any free-standing international legal institution with the responsibility for enforcing international law will “matter a lot down the road.” But only time will tell.

Will Russia make a legal argument to justify its intervention in Ukraine?

So far, Russia has not (as far I have been able to find) made an official legal argument to justify its incursion in Ukraine. As I explained in exhaustive detail yesterday, it doesn’t have an argument, at least not a good argument. But that won’t stop it from making the best argument it can; what will it be?

In searching for precedents, the best one I can think of is the Kosovo intervention in 1999. Then, NATO forces led by the United States attacked Serbia in order to rescue Kosovo from “ethnic cleansing” by Serbian troops and paramilitaries. The United States, like Russia now, lacked UN authorization. The United States, like Russia now, refused to provide an international-law justification at the time of the intervention. Later, a quasi-official justification was ginned up: the invasion was “illegal but legitimate” (according to one source) because of its humanitarian purpose. Still later, some efforts (mainly by the UK) were made to create a customary-law exception to the UN use-of-force rules, one that permits humanitarian military interventions despite the absence of UN authorization. These efforts failed to change the law but nonetheless helped reconcile westerners to the idea of unilateral humanitarian interventions, helping George W. Bush to elicit liberal support for his intervention in Iraq in 2003, which also lacked UN authorization. Yet it is also clear that part of the motivation for the intervention was geopolitical: the U.S. and Europe sought to enhance control over the Balkans and in the process diminish Russian influence.

Another semi-precedent was the not-quite intervention in Syria by the United States in 2013. President Obama was prepared to use military force to punish Syria for using chemical weapons against civilians, again based on a mix of legal and interest-based motivations–to strengthen a norm against using chemical weapons, to protect civilians, and to weaken the Syrian government. Putin famously scolded the United States for disregarding international law, and Obama abandoned the plan–most likely because of the absence of domestic and international support, not because of the absence of a legal justification which he knew of in advance.

Putin could thus argue for an implicit or “evolving” exception to the rules against use of force when humanitarian concerns are at issue. To avoid contradicting his position on Syria, he can argue that the distinction is that he is responsible for protecting ethnic Russian inhabitants of Ukraine, and that the mixture of populations in Ukraine could fuel a civil war unless Russia moves quickly and firmly. In Syria, the civil war was already in process, and the United States did not even pretend that its intervention could end it. Punishing the Syrian government to deter other states from violating the chemical weapons taboo in the future was remote from the humanitarian goal of protecting civilians in Syria, and thus provided a weaker justification than was advanced in Kosovo. Moreover, the U.S. has frequently justified interventions in foreign countries to protect Americans. No Americans in Syria needed our military protection; millions of Russians live in Ukraine. And while we mean American citizens while the “Russians” in Ukraine are ethnic Russians who are citizens of Ukraine, this distinction may be lost on those with strong nationalist feelings. There is a long if somewhat disreputable history of countries claiming the right to protect co-ethnics who live as minorities in foreign countries, which draws on powerful nationalist emotions.

All that said, the factual basis for the Russian argument does not exist: as far as we know, no one is ethnically cleansing Russians, and if civil war occurs, it will mostly likely occur because of the Russians not despite them. So Putin may want to hold off on this justification for the time being and, like Bill Clinton, keep his mouth shut until the facts are more amenable to a legal justification. If atrocities against Russians ever take place, he can claim that he anticipated a humanitarian crisis. If they don’t, he can claim to have prevented one.

These thoughts were stimulated by this piece by Chris Borgen.

Getting Incentives Right by Cooter and Porat

This is a very good book, which milks insights out of two dead-ish fields–torts and contracts–and one that has never come to life–restitution. I’m impressed by the creativity of the authors. My favorite of their many ideas is “anti-insurance”–where two contract parties agree that if the promisor breaches, he must pay damages to a third party (who pays for the privilege) rather than to the promisee. This mechanism prevents the promisee from relying excessively on performance while preserving the promisor’s incentive not to breach unless efficient to do so. It’s called anti-insurance because it eliminates the promisee’s right to damages (a kind of insurance) in case of breach.

Originalism class 8: accounting for change

Will argues that the distinction between sense and reference rescues originalism from the charge that it can’t account for change. This strikes me as an interesting but odd argument. Odd because some defenders of originalism tout it precisely because it cannot account for change. If change is necessary, then Article V (or, as Will cheerfully observes, revolution) provides the mechanism.

Moreover, one of the chief normative justifications for originalism is that it binds judges. In making this argument, Scalia cites the “reference” of the cruel and unusual punishment clause–the practice of capital punishment at the time shows that the ratifiers could not have been thinking about (“referring to”) the death penalty when they wrote down that clause. Thus, we know that the death penalty is not cruel and unusual. I don’t think Scalia made a philosophical mistake: the reference is obviously relevant when we are trying to figure out sense (or the “test,” as Will puts it) even if it does not exhaust the meaning. If following Will, we agree that reference should be discounted or ignored, then originalism loses some of its determinateness. Indeed, I don’t see the founding-era “sense” of “cruel and unusual” as being any different from what non-originalists think it should mean.

Well maybe this doesn’t matter, and if it doesn’t, the dispute between originalists and non-originalists reduces almost to a question of what rhetorical flourishes we should ask supreme court justices to attach to their opinions. I say “almost” because some modern constitutional rights (for example, abortion rights) are impossible to reconcile with the sense of any provision in the Constitution. Or take the commerce clause. So, in the end, I don’t think the sense/reference argument–which is really just an argument that we give less weight to founding-era understandings than we might otherwise–saves originalism from its inability to account for change. I think Will’s argument is rather simply that originalism requires interpreters to interpret reasonably rather than unreasonably, and at least on that issue we find common ground. But I remain puzzled why, if Will believes that constitutional change can occur through revolution, it can’t occur through “mini-revolutions,” like Ackerman’s moments or even ordinary political evolution that results in new constitutional norms but does not repudiate the existing system altogether.


The bitcoin paradox

The implosion of Mt. Gox exposes a paradox about bitcoin, which I have been groping for in some writings. Assume that the bitcoin software works perfectly (though there is some question about this) or can be made to work perfectly (as advocates argue). Bitcoin still has a problem with the “joints”–the gap between the network itself and the ordinary (non-expert) users without which it could never be more than a marginal phenomenon. Ordinary people will need to rely on institutions–exchanges like Mt. Gox and other services–and they will not rely on them unless they can trust them. But, unlike bitcoin itself, these institutions are run by human beings who can make mistakes or engage in fraud. Hence the need for regulation. Thus, bitcoin will prosper only if it is integrated into the regulatory infrastructure, but that means that it cannot operate as a decentralized currency outside of government control. Yet it is that feature that makes bitcoin so attractive to its most ardent supporters. I expect that legitimate investors and merchants who may benefit from it will push the government to normalize bitcoin by regulating the intermediary bitcoin institutions, at which point it will no longer be an autonomous currency but just a useful piece of software.

N.B.: journalists reflexively describe bitcoin as a means of transferring value without using an intermediary, but for ordinary consumers that is the case only in the sense that it is true for currency as well. You could put a bunch of dollars into a wheelbarrow and wheel them to the store. Banks exist because this is impractical, and in the same way bitcoin intermediaries like Mt. Gox exist because it is impractical for most people to wheel around bitcoins on their own.

Ted Eisenberg

Some revolutions take place with a bang. The empirical revolution in legal studies–and by this I mean rigorous data analysis–was hardly perceptible at first but now empirical work is everywhere. Much of the most interesting work being done right now in the legal academy–in such diverse fields as civil procedure, bankruptcy, international law, and constitutional law– reflects the rigorous statistical methods that Ted championed. At least 5 members of my faculty are trained in statistical methods, and several others do statistical work via collaborations. Twenty years ago hardly anyone did. Ted provided important institutional support for empirical legal scholarship but, most important, served as a model for those who followed him. I’m not sure he received sufficient recognition for his important methodological contributions to legal scholarship in his lifetime. Our paths crossed only a few times but each time it was terrifically rewarding for me. He will be sorely missed.

The Empty Call for Benefit-Cost Analysis in Financial Regulation by Jeffrey Gordon

Jeffrey Gordon has posted a paper arguing that applying cost-benefit analysis to financial regulation is a “serious category mistake.” He makes the arresting claim that CBA works best for the real economy, which is governed by the laws of chemistry and physics, but not for the financial economy, which is a “constructed system.” The bulk of the paper is devoted to showing the law of unintended consequences in action. Rules developed in the 1970s to permit money market mutual funds ended up harming S&Ls, which could not compete for funds, with the result that they were deregulated, whereupon they self-destructed. Etc.

Gordon is strongest in showing the sheer unpredictability of financial regulation. But is this problem worse than in other areas of regulation? Perhaps. Possibly connected to the idea that the financial economy is a “constructed system,” arbitrage seems to be a great deal easier in the financial world–limited only by imagination and computer power–than in the real world, where it can be hard to retool factories and move power plants. Still, I remain optimistic. Gordon’s is a nice companion piece to Coates’ paper, which I discussed here.

Law professor mentions in the New York Times

law prof mentionsAt The Monkey Cage, James Fearon checked to see whether political science has become increasingly relevant to public debate, as measured by the number of mentions in the New York Times. It has. The trend for law professors (I searched for “law professor” or “professor of law”, but the trend is similar for “law professor”-only searches as well) is even stronger. You can read his post for the various caveats–he’s the social scientist, not me.

What Courses Should Law Students* Take?

harvard pollThis image is from a paper by Fried, Coates, and Spier. They surveyed employers of Harvard Law School alumni, and found that employers believe law students should take accounting and corporate finance above all (5 is extremely useful for an associate to have taken; 1 is not at all useful)–even students who go into litigation. This chimes with my experience. I tell students that they should take as many finance-related courses as possible, including advanced courses in the business school. Math-anxious law students normally shy away from classes like these, only to find that they are expected to understand what a collateralized debt obligation or credit default swap is on the first day of practice. And, unlike the case of, say, antitrust, a good understanding of finance is not something one can pick up from practice. One might learn to fake it, but one needs a deep understanding. Every other big case these days seems to have a large finance component, and lawyers who are comfortable with finance can contribute more than those who aren’t.

*As several people rightly pointed out, law students who plan to practice in a large law firm in New York, Chicago, or other big city.


Originalism class 7: the evolving constitution

We read papers by Bruce Ackerman, David Strauss, and Jeremy Waldron. I was familiar with this work, but rereading these articles after the originalism pieces, it was easier to appreciate Ackerman’s argument that common-law constitutionalism doesn’t come to terms with the role of popular sovereignty in American political culture. Who ever talks about the common law anymore? Or of great common-law judges? But then Ackerman’s “originalism,” according to which public deliberation takes the place of the Article V process, founders on ambiguity as to what counts as an amendment. I tend to think that the justices implement their ideological preferences subject to some real but hard-to-specify institutional constraints about which they are (sometimes) willing to hear argument, above all precedent. If that is common-law constitutionalism, I suppose I’m on board.

But I prefer Waldron’s view that judicial review should be junked altogether, a view that has the happy consequence of making it unnecessary to take an interpretive stance toward the text. Some students thought that under such an approach, rights would no longer be protected, but it is plain that Congress and state legislatures do far more to protect rights than the Court does. Alas, Waldron’s position is as remote from American reality as Mars. For we could add to the four empirical premises of his argument (1–democracy, 2–responsible judiciary, 3–people care about rights, 4–people have good faith disagreements about rights), a fifth: 5–people think courts should resolve those disagreements.

Offsetting Benefits

Ariel Porat and I have posted a new paper to SSRN, which discusses how courts should determine damages when a wrongful act that harms someone also creates a benefit. Consider two examples:

  • A driver causes an accident that injures a pedestrian who then writes a bestseller that details her recovery.  Should damages equal medical  expenses and the like, or should the court offset the royalties, which, after all, would not have been generated but for the accident?
  • A driver causes an accident in the course of swerving to avoid another pedestrian or while rushing an injured person to the hospital. Should the gains to the third party be offset from the damages the driver owes to the victim?

These are not easy questions, and courts give inconsistent answers. We argue that if one focuses on the social costs of the behavior in question, it will often be appropriate to net out the benefits. However, complex problems of causation, measurement, and related issues often suggest that the general bias against offsetting benefits in the law is justified.

Voting Squared: Quadratic Voting in Democratic Politics

squareGlen Weyl and I have posted a revised draft of Voting Squared on SSRN. We argue that quadratic voting can and should play a role in democratic decisionmaking.

Quadratic voting is a voting procedure where people are allowed to buy votes for or against a proposal (or candidate) by paying the square of the number of votes they cast (e.g., 3 votes cost $9). The votes are totaled up and the majority prevails. Quadratic voting enables people with strong interests in an outcome to exert influence in proportion to the strength of their interest, so a passionate numerical minority of voters may be able to outvote an indifferent majority. Weyl shows  in another paper that with a sufficiently large population (say, a few dozen), a proposal will win a quadratic vote if and only if the aggregate gains to the winners exceed the aggregate losses to the losers in willingness-to-pay terms.

The main point of our joint paper is that conventional voting rules (for example, one-person-one-vote with majority rule) do a very bad job because they provide people with no way to exert influence on outcomes in proportion to the intensity of the effect of those outcomes on their well-being. This leads to the familiar tyranny-of-the-majority problem. We then discuss all the ways that have been developed to address this problem–judicial review, cost-benefit analysis, supermajority rule, and so on–and show that they do worse than quadratic voting would if it were implemented.

Finally, we address the objections to quadratic voting for democratic politics, including:

  • It would favor the rich.
  • It would violate a taboo against vote-buying.
  • It would lead to political instability.

We show that these objections are mistaken.

Does Regulation Kill Jobs?

This book, edited by Cary Coglianese, Adam Finkel, and Christopher Carrigan, is out. My copy arrived and I have been paging through it. I became interested in this topic several years ago, and wrote a paper with Jonathan Masur arguing that regulators should monetize the expected costs from job loss caused by proposed regulations when they conduct cost-benefit analyses. Agencies have never done this, perhaps because in standard economic models, a job loss is not actually a social cost–the unemployed worker just gets another job, or capital shifts to a less regulated sector of the economy where new people are hired. But recent empirical work suggested that the social costs of a job loss could be high–in the neighborhood of $100,000–because human capital is destroyed, among other effects.

So we wrote this paper and were subsequently invited to participate in this conference, where a very strong group of people delivered papers collected in this book. Many papers dealt with the important but age-old question of whether regulation itself destroys jobs (maybe). I was more interested in whether people thought it would make sense for regulators to treat job loss as a cost in cost-benefit analysis . It looks like a maybe-to-yes with a great deal of cautious skepticism. One worry, which is a real one, is that agencies just can’t handle it. Agencies aren’t very rigorous in their existing cost-benefit methodology, and requiring them to look at job-loss effects may be too much. Still, I hope to see some experimentation in government. OIRA asked for comments on this topic a while back; I don’t know if anything came of it. There will be resistance from people who fear that our approach would reduce the amount of regulation.

Class 6: reasons for being an originalist

Will’s position on the role of normative arguments in the debate is unclear. He seems to think that they play some role, but what exactly? If the “conceptual” argument for originalism is strong, are the normative issues irrelevant? Are they some kind of tie-breaker? I would like to know more.

Let us turn to the conceptual argument. Will likes Alexander’s and Lawson’s argument that courts are supposed to enforce the Constitution, and so they need to interpret the Constitution so that they know what they are trying to enforce, and interpreting the Constitution means figuring out what the original understanding was. But this is merely a semantic argument. Alexander, Lawson, and Will just define “Constitution” to mean “the text” rather than the set of norms that structure and restrict the government. That’s like saying that antitrust law is the Sherman Act rather than the body of norms that courts have created under the authority of that Act. This statement is either plainly wrong or based on idiosyncratic definitions.

Steve Sachs’ argument is more sophisticated. Sachs is a positivist and he believes that, as a purely empirical matter, we Americans believe that our constitutional law consists of the original understanding, and any legal norms that appear to deviate it are invalid unless they can be derived from continuity rules that existed at the founding. If that’s what we believe, that’s the law, and if the justices have a duty to obey the law, then they should be originalists.

Sachs does not actually cite any evidence about Americans’ beliefs, and for this reason stops short of claiming that originalism is right. Will does think that such evidence exists. Yet Americans seem to think that they have constitutional rights that protect all sorts of things that are not part of the original understanding. Will thinks that if forced to confront these inconsistencies, people would choose the original understanding over their favorite rights, just as people accept legal judgments about statutes and common law that turn out to violate strongly held moral intuitions about what the law is or should be. My view is that people continue to accept the authority of the Constitution and the Supreme Court precisely because the Court has recognized popular rights. In Sachs’ terms, our “continuity rule” recognizes the power of the Supreme Court to effectuate “amendments” to the text under certain conditions. I would add that it recognizes the authority of the other branches to do so as well.

If Will’s position has any force, it derives from the fact that the public does seem to venerate the 1789 text and the founding generation; and, moreover, that Supreme Court justices do not openly acknowledge that they have the power to amend the text on their own. I have two responses:

First, there is an important ceremonial aspect to our political and legal culture. Common law judges also say that they “find” law rather than “make” law, even though all sophisticated observers know that the opposite is true. Justice Roberts says that he calls balls and strikes, and again no sophisticated person believes him. When Justice Breyer says that he enforces the “spirit” of the 1789 text rather than that he makes pragmatic judgments or enforces precedents (though he says that also), he is giving a ceremonial bow to the founders, and not committing himself to the original understanding. (The ceremony is a strong, persistent, but strange part of our political culture, and is temporarily suspended when we remember that many founders were slave owners but otherwise remains in full force.)

Second, I think Will gets our legal culture wrong. Originalism is a minority position supported by only two justices on the Supreme Court who practice it inconsistently, and hardly any others throughout our entire history. Continuity-to-the-last-generally-accepted-change-in-constitutional-norms is not the same thing as continuity-to-the-founding. Numerous justices and judges–Breyer is just one–have criticized originalism in the clearest of terms and have suffered no adverse consequences, no blast of public outrage of the sort that would occur if a justice said (to use Sachs’ examples) that we are bound by the French constitution or Klingon law or the Articles of Confederation. When President Obama said that he wanted an “empathetic” Supreme Court justice, everyone understood what he meant, and while plenty of people criticized him, his two choices have been confirmed.

My last point is if we really think that the case for originalism is empirical (I have my doubts, but for another time), then there must be an empirical way to test it. There are all kinds of confounding problems–who is the relevant audience, for example, and how much do they need to know, and how large does a consensus have to be. But a simple starting point is a survey question that forced the respondent to choose between an originalist outcome and a popular one. Here’s one.

In the course of searching a person’s home pursuant to a valid warrant, the police discover that the person owns birth control pills. The legislature of the state in which the search took place has recently passed a law making it a criminal offense to own birth control pills. This statute conflicts with Supreme Court precedent; however, the precedent itself is inconsistent with the original understanding of the Constitution in 1789, which does not mention contraception. Should the police arrest the owner of the birth control pills based on probable cause that she violated the statute? Should she be tried and convicted?

I realize that some originalists believe that precedent matters. But under the continuity version of originalism described by Sachs, this seems like a straightforward test case. Or if not, I’d be pleased to hear a better one.


Originalism, false dichotomies, and determinateness

Will accuses me of setting up a false dichotomy by focusing on two extreme versions of originalism–originalism that requires judges to ignore precedent and originalism that licenses living constitutionalism. His response:

Originalism sometimes produces living constitutionalism, depending on how abstract a provision is, how clearly its meaning is known, and how much that meaning was intended to evolve. Originalism sometimes permits precedent, depending on how clearly a precedent can be shown to conflict with original meaning, certain forms of reliance, etc. When originalism permits precedent, the original meaning sometimes “plays a role” by helping judges figure out whether the precedent should be extended or distinguished in future cases. In each of these cases, the originalist answer can only be figured out by actually doing the work.

Well, okay, but this pretty much eliminates one of the major defenses of originalism–advanced forcefully by Scalia among others–which is that it dictates determinate case outcomes. This is crucial for Scalia because he fears that otherwise judges will allow their ideological preferences to influence interpretive outcomes.

It is ironic that in the next paragraph Will argues precisely that what is distinctive about originalism is that the interpreter doesn’t always get what he wants. But if the decision to overturn precedent on originalist groups relies on judgment–a weighting of competing factors that are often elusive and difficult to articulate–then the kind of cognitive dissonance reduction that Scalia worries about will creep back in. We saw this with the Printz case. Scalia might have been right to dismiss originalist arguments because of the strength of precedent, but he certainly did not provide much of a defense. I suspect that this was because he did not want to acknowledge that this is what he was doing. (N.B.: Scalia’s statement in Originalism: The Lesser Evil that he would never hold that flogging is a constitutional punishment, regardless of the original understanding of the eighth amendment, is at variance with this idea that the interpreter doesn’t always get what he wants, isn’t it? [It was subsequently pointed out to me that Scalia revoked his earlier statement about flogging. Maybe that is tied to his statement in the same interview that he doesn't care what his intellectual legacy is.])

Finally, Will says that his theory of originalism offers “safety valves,” including amendment and illegality. I hope to learn more about why one should think that the Article V procedure offers an acceptable safety valve. What are the criteria for determining whether a safety value is acceptable or not? His endorsement of “illegality”–presumably the idea that the justices or other political actors should simply disregard the original understanding when it produces unacceptable outcomes–suggests that Will doesn’t think that Article V is in fact adequate on its own. The illegality safety value raises anew the question of determinacy: how, except by falling back on discretionary and contestable judgments about moral and political values, can one justify ignoring the original understanding? How can originalism ever rule anything out if illegality remains a morally valid option for interpreters and other agents?

Originalism means not always getting what you want

That is, for Will Baude, one of the major virtues of originalism, which distinguishes it from other interpretive theories. And he says that this is the fundamental disagreement between him and me:

Originalism suggests that somebody other than the interpreter gets to make important policy decisions, even if that other somebody might sometimes choose to delegate back to the interpreter in the end. Hence, there is no guarantee the interpreter will like the answers, though it is also a mistake to assume that the interpreter will hate them.

He has made this argument before, and I’m afraid I disagree. All alternative interpretive methodologies I can think of provide no guarantee that the interpreter will like the answers. This was one of the points that Randy Barnett made in his debate with Sunstein, who was trying to debunk originalism by showing that it would permit racist and sexist laws. Barnett responded that Sunstein’s preferred approach, minimalism, also does not guarantee (for example) that the Supreme Court will order the government to provide welfare to poor people, an outcome that Sunstein presumably would approve of (according to Barnett). Another appealing interpretive methodology–Thayerianism–obviously would give the interpreter no recourse if Congress decided to abolish the national bureaucracy.

Originalism is itself a choice. Proponents of originalism must make arguments on behalf. And this creates a paradoxical problem for its defenders like Will, who says “if you are intellectually honest, signing on to originalism is signing on to a theory of authority where you can’t be guaranteed in advance that you’ll like what you find.” He’s right that originalism won’t get off the ground if it just advances the political preferences of a small group of people. As I said, the same is true for other methods. The question is what does it get us beyond that? And to answer that question, he must show that it is superior to other methods, presumably by advancing institutional values that everyone or nearly everyone shares. In this respect, originalism is no different from other methods.

Imbalance of power

ratio fed employees

This graph shows the ratio of federal (civilian, non-post office) employees to legislative employees (Congress and its staff) from 1815 (executive = 938, legislative = 243,) to 2010 (executive = 1,360,000, legislative = 31,000), or from a ratio of 3.9 to 43.9.

The rise in executive power is inexorable; you’ll see the same pattern in the states and in foreign countries. It reflects deep forces that are unresponsive to ideological swings. It shows that with the passage of time the executive’s influence on policy outcomes increasingly outstrips that of Congress.

What is the committed originalist to make of this pattern? I can see two responses. The formalist will say that it doesn’t bother him as long as the rules were obeyed. If they weren’t, then the entire edifice of the modern legal-bureaucratic state must be dismantled, whatever the cost. (I realize now that there are moderate originalists who don’t take such a position, but I am at a loss to understand the practical implications of their originalism.)

A non-formalist originalist might argue that, regardless of whether the rules were obeyed, the legal-bureaucratic state must be dismantled if it is inconsistent with whatever substantive goals the founders sought to achieve for government structure. I find it impossible to believe that anyone at the founding would have believed that our system is consistent with their goals. (They did not express admiration for the centralized national bureaucracies of the time like France’s, or historical bureaucracies in Imperial Rome and Byzantium, as far as I know.)

Most critics of originalism focus on the problems that this methodology poses for current equality-related values, e.g., race relations. The problems that originalism poses for government structure are even greater.

Let me anticipate Will’s response, which I expect will be that originalism doesn’t necessarily preclude modern government structure. That is something to be determined. But my view is that any methodology that could even possibly entail that we must return to a government structure appropriate for a small agrarian society, a structure that exists nowhere in the world today, is off the table.

Here is a response from Michael Ramsey to my earlier post on precedent.

Reply to Will on Noel Canning

Will misses the point of my graph, though that’s my fault, as I didn’t supply much of an explanation. My point was not that it’s a shame that 3 NLRB members don’t get appointed, or an NLRB order is vacated. Nor is it my view that the government should be as large as possible. My point was instead that the rules that the founders developed to address government structure reflect a different world, and hence are unlikely to be reasonable for our purposes.

The founders tried to establish what they called a “republican form of government,” in which most policy would be made through public deliberation and debate. Whatever the merits of such a position in the 18th century, it is completely wrong today. We live under what might be described as a bureaucratic-legal system. Nearly all policy is determined by the bureaucracy subject to very general control by elected officials and judges. This is inevitable in any large country. I can’t think of a single historical or modern example of a large country (aside from failed states) that does not use a vast bureaucracy to determine and implement policy. The only real exception is the U.S. federal government in its first few decades, and that is because in the early years local interests were not yet ready to yield power to the center, and a largely agrarian with mostly local markets did not need national regulation. It may be reasonable to believe that the U.S. government is too big today. But does anyone think the right size is 938 employees (actually the 1816 figure, the earliest I could find)?

Will says he’s “inclined to say that [originalism] provides a benefit by giving us a baseline set of institutions from which we can depart if we marshal sufficient consensus.” But we have marshaled such a consensus; it is reflected in 200 years of institutional development that has been ratified over and over by different configurations of political interests.

It is not my view, contrary to Will’s suggestion, that I know best how the government should be structured, and my views should be implemented by the Supreme Court. My view is that as between the originalist baseline (which Will is confident is correct) and the status-quo baseline, the status-quo baseline is a better one. My position does not require any special “confidence.” Will is just smuggling in a bias for originalism by arguing otherwise.

Originalism and precedent: Baude v. Sunstein

Will criticizes Cass Sunstein for attacking an extreme form of originalism that Will says that no sophisticated originalists believe. Sunstein says that originalism threatens to destabilize the U.S. constitutional system by throwing into doubt apparently fundamental principles that are inconsistent with the original understanding (in such areas as equal protection, freedom of speech, and takings, among others). Or if it doesn’t–if one is a “faint-hearted” originalist who accepts precedent–then one isn’t an originalist at all. Will responds that sophisticated originalists do give weight to precedent, and thus Sunstein is attacking a straw man. Similarly, in response to an earlier post of mine, he said that an originalist might believe that the original understanding requires courts to defer to precedent; thus, originalism is not necessarily inconsistent with stability.

I’m skeptical of Will’s defense. For one thing, there is a confusion here between originalism-as-justification and originalism-as-interpretive-methodology. The debate–to the extent it has any practical relevance–is over the latter. If you persuade yourself that the original understanding justifies the methodology of the “living constitution,” and then you want to decide cases like Justice Brennan, Sunstein is not terribly worried about you. It’s like a theologian who argues against science by claiming that God chooses to make everything act according to the laws of physics and otherwise never intervenes. He preserves God but otherwise gives away the game.

Similarly, Sunstein will have little problem with originalists who give weight to precedent for other reasons, as long as they give enough weight to precedent that the original understanding itself rarely or never plays a role in actual judicial decision-making. Will is never very clear who the originalists are who take such an approach, but I, at least, haven’t found very many. Will himself appears to believe that the Supreme Court should revisit settled doctrine if new evidence of the original understanding emerges. If so, and he is certainly a sophisticated originalist, then Sunstein is not criticizing a straw man.

Will has a “big tent” theory of originalism that allows originalism to survive attacks like Sunstein’s because within that tent there is always a moderate version that critics like Sunstein have no problem with. (For another example, see here.) Since they remain standing, “originalism” survives. Will himself commits the fallacy of mood affiliation by suggesting that the extreme versions are unobjectionable because they occupy the same tent as the moderate versions that lack the features that Sunstein objects to.

Originalism class 5: Noel Canning

fed employees 2Noel Canning is the cleanest test for originalism you could ask for. The class (or most of it) seemed to agree that the most natural interpretation of the recess appointments clause, in founding-era context, is that the president can fill an office only if the vacancy opens up during a recess, and probably an intersession recess. I would qualify this point in the following way. In the years after ratification, government officials who sought to make sense of this clause thought of it in this way; at the time of ratification, there is little evidence that anyone gave it much thought. In any event, it seems likely that the Supreme Court will rule for Noel Canning.

If so, that’s a shame. For my reasons, see the graph above.

Source: Census.

The case against “socialized law”

In The New Republic, Noam Scheiber advocates price regulation and subsidization of legal services, so as to counter the advantages that the rich enjoy in our legal system. I criticize his argument here. My argument begins:

In days of old, litigants would hire champions to assert their claims in trial by battle. The rich could afford more skilled warriors, and so were more likely to win their lawsuits (and less likely to lose their heads). One could imagine proto-liberals at the time proposing, quite sensibly, that everyone receive a champion of equal quality. Whether this would have improved justice is another matter.

Thomas McGarity’s Freedom to Harm

Mine Safety and Health at a GlanceVia a helpful review by Daniel Farber, I found out about this book, which is a much-needed one. I have searched in vain for some time for an overall assessment of deregulation in the United States. Unfortunately, if the remit of McGarity’s beloved Consumer Protection Safety Commission extended to books, this one would have to be recalled.

McGarity argues that the deregulation movement arose from a conspiracy between business interests and right-wing intellectuals, who hoodwinked Congress and the public. In fact, deregulation was largely a bipartisan movement that started in the Carter administration, and reflected an emerging consensus that many (but not all) regulations did more harm than good–in particular, rate regulation.  McGarity barely discusses or discusses not at all airline, trucking, and railroad deregulation of the 1970s, which generally has received high marks, or the resistance of business interests to some forms of deregulation–all of this contrary to this thesis. He is certainly right that a lot of deregulation went too far–notably financial deregulation–but because he refuses to provide a realistic baseline for determining whether deregulation benefits or harms the public, he provides no reasonable method for distinguishing between good deregulation and bad deregulation or, for that matter, good regulation and bad regulation.

Instead, he resorts to  anecdotes. One of the weakest chapters discusses transportation safety, and he includes some distressing anecdotes of terrible accidents that he blames on deregulation. But transportation safety has greatly improved over the period of deregulation. Numerous studies show that railroads, airlines, passenger vehicles, and other modes of transportation are vastly safer today than they were in the 1970s. McGarity acknowledges some of these statistics at the beginning of the chapter, but by the end he has forgotten them, and instead pronounces deregulation a disaster for safety. Nor does he acknowledge the economic benefits from transportation deregulation, which have been extensively documented by economists.

Similar points can be made about other chapters, for example, the chapter on workplace safety, which provides a tendentious picture of mine safety being utterly neglected, when in fact safety has steadily improved (as shown by the graph above). The fatality rate dropped from 0.200 (1970) to 0.059 (in 1980) to 0.016 (in 2010) fatalities per 100,000 workers in coal mines. Certainly, stricter regulation would have caused the fatality rate to drop even further, but would it have been worth the cost? No answer is provided.

Another lurking question is the extent to which deregulation actually took place. As Farber notes, the evidence is often equivocal. The sheer number of rules has greatly increased; budgets are a more complex story, but private rights of action have also become more important. When rate regulation in the railroad and telecommunications sectors were eliminated, it was also thought necessary to introduce regulations to ensure free entry, leading to quite complex regulatory regimes. Airline safety was never deregulated; the fear was that price competition would lead to less safe airlines. What exactly deregulation is, and whether it has had good or bad effects, are important questions. We’ll need to wait for another book for the answers.

Response to Will’s response to my class 4 comments

Will’s post is here.

1. Will has on several occasions argued that when a critic points out a particular defect X or Y in originalism, the critic must also show that some other interpretive methodology does not suffer from that defect, or is not otherwise inferior to originalism. It takes a theory to beat (or outrun) a theory.

This is not exactly right, though it contains an element of truth. Some theories are so bad that one can condemn them without comparing them to others. The theory that justices should consult the Zodiac in order to resolve disputes is one. At some point, we will need to examine alternative theories and see how they measure up to originalism. But in the meantime, it is pragmatically implausible to insist that one must constantly juggle all the theories at once (how many?) in order to be justified in pointing out a problem with one of them.

2. Will says “I see our government strictly following the founding-era document a huge amount of the time.” The modern system of governance in this country is vastly different from what existed in the eighteenth and nineteenth centuries. If it is consistent with the text, that can only be because the text is so vague and full of holes, undefined terms, and so on. Any style of originalism that can accommodate the current system of government has hardly any constraining force at all.

3. Will says “I think many (though not all) invocations of originalism are sincere.” Frank Cross’ book is the most rigorous effort to test this hypothesis and he finds no evidence that originalism constrains justices. It may be, as Cross suggests, that this reflects motivated reasoning rather than insincerity, but the effect is the same. This is also a problem for Will’s claim in a more recent post that originalism can constrain judges.



Ancient Roman religious practices: a correction

Marcus Aurelius sacrificingI received an email from a former student with the promising subject line “entrails.” It reads:

You mentioned in your post on Originalism class 4 that Roman priests would examine bird entrails in preparation for great political events. Actually, a Roman haruspex would examine the entrails (usually the liver) of any particular sacrificial animal, which could have been poultry if the offeror was poor, but was most commonly sheep. An augur’s method of divination, by contrast, involved watching the skies and interpreting the birds’ flight paths– most famously, when Romulus and Remus determined that Rome was to be founded on the Palatine hill rather than the Aventine when Romulus saw twelve auspicious birds in the sky, while Remus saw only six.

In one of his lesser known letters, Cicero told of an augur who complained that haruspices lacked empathy. A haruspex who overheard the comment angrily dismissed augury as “legalistic argle-bargle.”

How much has executive power increased?

federal register pagesAs Andrew Rudalevige notes, in response to fellow Monkey Cage inmate, Erik Voeten, presidents do not exercise power only through executive orders. Moreover, many executive orders are trivial while others are important, so one can learn only so much from their absolute numbers. For that reason, it is important to look at other measures of executive power. The graph above shows the number of pages in the Federal Register each year to provide a rough sense of regulatory activity of the executive branch. For many reasons, this measure is extremely crude, but it reinforces two important points: that executive power has increased dramatically since World War II, and that in recent years any particular president such as Obama or Bush does not act much differently from his predecessors.

Originalism class 4: Brown

Will says that he’s not sure whether Brown is right or wrong as a matter of original meaning, and even if it is wrong, this kind of problem–a popular case being inconsistent with an interpretive theory–is not unique to originalism. Moreover, it is a mistake to judge an interpretive theory by its moral goodness, he says.

The last point is in tension with the first, and the first point is in tension with one of originalism’s supposed advantages–that it produces determinate results. But time and again, the original meaning turns out to be obscure, and so either courts must be willing to continually reevaluate precedents as new historical research is produced (which is unacceptable from the standpoint of judicial economy and legal stability) or the original meaning loses its ability to exert influence on legal outcomes as precedent accumulates. Will says in response to Klarman’s criticisms of McConnell that it’s really hard to determine what the original meaning of the 14th Amendment is, and new evidence and analysis constantly appear more than a century later, so maybe eventually we’ll agree that Brown is consistent with the original understanding after all. But this is a defect of originalism, not a virtue.

An interpretive method that can’t account for Brown, or treats it as an epicycle, is  useless. It provides no guidance to people as they decide what laws to pass and how to plan their lives, or any guidance to judges who seek conscientiously to extend the constitutional tradition.

And this is why originalism must be based on moral considerations, as all constitutional theories must be–at least, if the goal is to persuade justices to overturn precedents and citizens and politicians to support those goals. A successful constitutional theory must appeal to institutional values that people (or enough people) share; otherwise, it is a purely theoretical construct with no practical relevance. (Originalism has done as well as it has because of the support it receives from conservatives and libertarians, who find the quasi-libertarian political culture of the founding era appealing.)

I’m not sure how otherwise one derives a justification for an interpretive methodology. From some readings and some of Will’s comments, I see two possibilities. First, originalism is right just because Americans are originalists. I don’t think that’s true. Americans support Brown and will continue to do so regardless of what historians eventually show.

Second, originalism is right because we are bound by a written constitution; it’s simply the consequence of a larger commitment to constitutionalism. But the constitution in practice is just what the various branches of government agree are the rules of the game at any given time. In their hands, the founding-era document is little more than a rhetorical flourish, used strategically. That is our political culture, one that happens to require ritual obeisance to the founders. Thus would the Roman priests examine the entrails of birds in preparation for a great political event. How long would one of those priests have lasted if he really thought he could discover in those entrails the will of the gods?


A strange debate about executive power

File:Jupiter Smyrna Louvre Ma13.jpgAs I note in a comment on NYT’s Room for Debate, the “executive order” imbroglio coming out of the State of the Union speech is strange. The White House told newspapers before the speech that the president planned to sling about executive orders like Zeus with his thunderbolts, and they duly reported it on their front pages. Republicans duly exploded with outrage. The speech itself has a single mention of executive orders (“I will issue an executive order requiring federal contractors to pay their federally-funded employees a fair wage of at least $10.10 an hour”). The president continues in this vein, saying that he is going to do a bunch of other extremely minor things using his existing statutory authority, though it would be better if Congress would chip in with some legislation. The resulting controversy about presidential power is entirely manufactured–by both sides. Maybe the president’s strategy was to look fierce to his supporters while not actually doing anything that might get him in trouble with Congress.

Charles Barzun replies on inside/outside

Here is Charles Barzun, who gets the final word. The original paper is here; Charles’ response; my reply; Adrian’s reply.

In my response to their thought-provoking paper, I argued that the supposed fallacy that Eric and Adrian identify depends on empirical claims about judicial behavior in a way that they denied.  My point was that although the targets of their critique may make different assumptions about what motivates judges and what motivates political actors in the other branches, those assumptions are not necessarily “inconsistent” if the different treatment is justified by the different institutional norms and constraints that operate on judges, as compared to other political actors (which I consider to be at least in part an empirical question).  Neither this point – nor any other one I made – depends on controversial claims about the nature of truth or logical consistency, postmodern or otherwise.

In their brief rejoinders, Eric and Adrian continue to insist that their argument does not depend on any empirical claims about what motivates judges.  But in so arguing, each of them contradicts himself and concedes my original point in the process.

Adrian first says of the kind of argument they were examining that “it is caught in a dilemma — it can survive filter (1) only by taking a form that causes it to be weeded out by filter (2).”  I take Adrian to mean here that the argument can avoid the charge of inconsistency (filter (1)) but only at the cost of making implausible empirical assumptions about how judges act (filter (2)).  But then he goes on to say that by the time we are considering the empirical question (filter (2)), “the fallacy has already dropped out by that point; it is not affected at all by whatever happens in the debate at the second stage.”  But how can it be that the fallacy is “not affected” by what happens at the second stage if, as he has just said, it can “survive filter (1)” by making empirical claims that filter (2) then “weeds out”?

Eric makes the same error in even more efficient fashion.  He says, “we sometimes argue that they escape the problem only by making implausible arguments.  But the inside-outside problem does not depend on our skepticism about these specific arguments being correct.”  Eric’s second sentence contradicts his first.  He acknowledges that the targets of their critique can “escape the problem” (of inconsistency) by making what he considers to be implausible empirical arguments.  But then he insists that their charge of inconsistency does not depend on those empirical arguments about judicial behavior being implausible.  But how can that be the case if, as he has just said, the scholars can avoid inconsistency if those empirical arguments are correct?

I don’t think I’m the postmodernist in this debate.

Adrian Vermeule responds to Charles Barzun on the inside/outside fallacy

I generally follow Johnson’s advice never to respond to critics, but this is the season for breaking resolutions. So let me offer a brief rejoinder to Charles Barzun’s response to the Posner/Vermeule paper on the Inside/Outside Fallacy; both are recently published by the University of Chicago Law Review.

Eric and I suppose that successful arguments (in constitutional theory, inter alia) must pass through two separate, independent and cumulative filters: (1) a requirement of logical consistency (the inside/outside fallacy is one way of violating this requirement); (2) a requirement of substantive plausibility (not ultimate correctness).

With respect to some of the particular arguments we discuss in the paper, we say that the argument is caught in a dilemma — it can survive filter (1) only by taking a form that causes it to be weeded out by filter (2). Now in some of those cases, I take it, Charles disagrees with us that the argument fails the second filter. He is of course entitled to his views about that. But the inside/outside fallacy — which is the first filter — is strictly about the logical consistency of assumptions, not their plausibility. Thus the fallacy has already dropped out by that point; it is not affected at all by whatever happens in the debate at the second stage. It’s just a muddle to say that because Eric and I do happen to have substantive views about what counts as plausible for purposes of the second filter, we are therefore smuggling substantive content into the first filter. Not so — unless one subscribes to the postmodern view that logical consistency is itself a substantive requirement, thereby jettisoning the distinction between validity and truth. (In some passages, Charles seems willing to abandon himself utterly to that hideous error, but for charity’s sake we ought not read him so, if we can help it).

So when Charles says that the inside/outside fallacy smuggles in substantive assumptions, I think that’s a confusion that arises from failing to understand the distinction between the two filters. The reader of Charles’s piece should be alert for skipping to and fro between these distinct questions of logical consistency and plausibility.

Adrian Vermeule

(And see Eric’s earlier reply.)

Voting rules in international organizations

International organizations use a bewildering variety of voting rules. Courts, commissions, councils, and the General Assembly use majority rule. The WTO, the International Seabed Authority, the IMF, the World Bank, and the Security Council use various types of supermajority rule, sometimes with weighted voting, sometimes with voters divided into chambers that vote separately, sometimes with vetoes. The voting rules in the EU defy any simple description. Al Sykes and I try to bring some order to this mess in our new paper.

Melissa Schwartzberg’s Counting the Many

This book provides a nice history of the evolution of voting rules, with emphasis on supermajority rules, but is less successful in its attempt to argue that supermajority rule should presumptively be replaced with majority rule. Schwartzberg simultaneously argues that majority rule is superior to supermajority rule because the latter creates a bias in favor of the status quo, and acknowledges that a status quo bias is justified so that people can plan their lives. Her solution–what she calls “complex majoritarianism”–is the manipulation of majority rules so that they are applied to favor–the status quo. For example, she favors constitutional amendment requiring a temporally separated majority vote in the legislature (plus subsequent ratification), but the effect is just bias in favor of the status quo except in the unlikely event that preferences don’t change. She argues that this approach advances deliberation but deliberation can be encouraged in other ways and in any event the status quo bias is not resolved.

The book is right to emphasize historical, empirical, and institutional factors as opposed to the sometimes tiresome analytics of social choice theory–as emphasized by this enthusiastic review here–but Schwartzberg’s argument against supermajority is ultimately analytic itself, based on abstract considerations of human dignity, rather than grounded in history or empiricism. The empirical fact that the book doesn’t come to terms with is that supermajority rule is well-nigh universal, not only in constitutions but virtually every organization–clubs, corporations, civic associations, nonprofits–where people voluntarily come together and use supermajority rules to enhance stability and to prevent situational majorities from expropriating from minorities.

Response to Simon Caney on feasibility and climate change justice

climate change justiceSimon Caney argues, in a welcome departure from the usual claims in this area of philosophy, that negotiating a climate treaty is not just a matter of distributing burdens fairly, but also requires a climate treaty that countries are actually willing to enter–”feasible,” to use the word that David Weisbach and I use in our book Climate Change Justice.

But he rejects our argument that the only feasible treaty is one that makes every state better off by its own lights relative to the world in which no treaty exists, and that if advocates, ethicists, and (more to the point) government officials insist that a treaty be fair (in the sense of forcing historical wrongdoers to pay, redistributing to the poor, or dividing burdens equally), there will never be such a treaty.

He says that if a government refuses to enter a fair but burdensome treaty because it knows that voters will punish it for complying, then that just means that voters have a duty not to punish the government, and instead to compel the government to act according to the philosopher’s sense of morality. But because voters don’t recognize such a duty, we are back where we started. His underlying assumption seems to be that voters will cause governments to act morally; ours is that voters will (at best) acquiesce in a treaty that avoids harms that are greater than the costs of compliance. So while, unlike many philosophers, he recognizes a feasibility constraint, he waters it down beyond recognition.

The EU’s recent backpedaling on climate rules shows once again that feasibility, not ethics, should be a necessary condition for proposals for distributing the burdens of a climate treaty.

Reply to Barzun on Inside/Outside

madisonCharles Barzun argues that Adrian Vermeule and I smuggled substantive assumptions into what we characterized as a methodological criticism about legal scholarship and judging. I don’t think he’s right. Our major example is the judge who says that he may settle a dispute between the executive and legislature based on the Madisonian theory that “ambition must be made to counteract ambition.” In appealing to Madison, the judge implicitly puts into question his own impartiality, as Madison was referring to the judiciary as well as the other branches. We didn’t argue that judges should never resolve disputes between the executive and the legislative, just that the judge (or, more plausibly, an academic) must supply a theory that does not set the judge outside the system.

Barzun thinks that we make “controversial claims about the nature of law and how judges decide cases,” in particular, that we make excessively skeptical assumptions about judicial motivation. I don’t think we do, but the major point is that our argument in this paper does not depend on such claims.

For example, suppose the judge responds to our argument by saying that he is in fact public-spirited, and only presidents and members of Congress are ambitious. That may well be so, but then he must abandon Madison’s argument and make his own as to why these are plausible assumptions about political behavior. If one shares the judge’s optimism about human nature, one might believe that the president and members of Congress are also public-spirited, in which case judicial intervention in an inter-branch clash may not be warranted. The judge can also, of course, make arguments about different institutional constraints, public attitudes, and so on, which may justify judicial intervention. But that is a different theory, different from the Madisonian theory that he and many scholars propound.

In the course of describing the various ways that scholars respond to the inside-outside problem, we sometimes argue that they escape the problem only by making implausible arguments. But the inside-outside problem does not depend on our skepticism about these specific arguments being correct, and our real point is that most of the time scholars and (especially) judges do not try to make such arguments but instead ignore the contradictions in which they entangle themselves.

David Bosco’s Rough Justice

David Bosco‘s new book tells the history of the International Criminal Court. It is nicely done and will be a reference for everyone who does work in this area. The conclusion will not surprise any observers: the ICC survived efforts at marginalization by great powers but only by confining its investigations to weak countries. Thus, the ICC operates de facto according to the initial U.S. proposal, rejected by other countries, to make ICC jurisdiction conditional on Security Council (and hence U.S.) approval.

Bosco seems to think this equilibrium can persist, but the book only touches on (perhaps because it is too recently written) the growing resentment of weak countries, above all African countries, which have woken up to the fact that the Court is used only against them, and have begun to murmur about withdrawing. The Court now faces political pressure to avoid trying not only westerners, but also Africans. Meanwhile, the Kenya trials are heading toward debacle, while the ICC is unable to address international criminals like Assad. The Court’s room to maneuver is shrinking rapidly, and one wonders whether it can sustain its snail’s pace (one conviction over a decade) much longer. The book might have been called “Just Roughness.”

Originalism class 3: precedent

What should originalists do about precedent? If they respect it, then the original meaning will be lost as a result of erroneous or non-originalist decisions that must be obeyed. if they disregard it, then Supreme Court doctrine is always up for grabs, subject to the latest historical scholarship or good-faith judicial disagreement (as illustrated by the competing Heller opinions). One can imagine intermediate approaches: for example, defer only to good originalist precedents, or defer only when a precedent has become really really entrenched. But while such approaches may delay the eventual disappearance of original meaning behind the encrustation of subsequent opinions, they cannot stop it, sooner or later. Our readings–Lawson, McGinnis & Rappaport, Nelson–provide no way out that I can see. (Lawson dismisses the problem, while the others propose intermediate approaches.) Originalism has an expiration date.

Another issue is raised by McDonald–the gun control case. In Heller, Scalia disregards precedent in order to implement what he thinks was the original understanding of the Second Amendment. In McDonald, he writes a concurrence that cheerfully combines Heller with the anti-originalist incorporation decisions. Why doesn’t he feel constrained to revisit those decisions? Instead, he joins a holding that generates constitutional doctrine that in practical terms is more remote from the original understanding (gun rights that constrain the states) than he would have if he had gone the other way in Heller (no gun rights at all), given the greater importance for policing of the state governments both at the founding and today. This is akin to the second-best problem in economics: partial originalism–originalism-and-precedent–may lead to outcomes that are less respectful to original understandings than non-originalist methodologies would.

*** Will responds; his VC colleague David Bernstein’s post about the clause-by-clause problem is also worth reading.

A simple (and serious) puzzle for originalists

 All originalists acknowledge the “dead hand” problem, and so all agree that the normative case for originalism depends on the amendment procedure being adequate for keeping the constitution up to date. Or at least all of the originalists I have talked to (n=1). Yet it can be shown that the Article V amendment procedure is unlikely to be adequate, and the probability that it is adequate across time is virtually nil.

The reason is that outcomes produced by voting rules depend on the number of voters (and also the diversity of their interests but I will ignore that complication since it only reinforces the argument). An easy way of seeing this is to consider the strongest voting rule—unanimity—and imagine that people flip a coin when they vote (the coin flip reflects the diversity of their interests, not a failure to vote their interests), and can agree to change a law only when all voters produce heads. The probability of achieving unanimity with a population of 2 is 1/4 (only one chance of two heads out of four possible combinations), with a population of 3 is 1/8, and so on.

For a more rigorous formulation, consider a spatial model from 0 to 1, with a 2/3 supermajority rule. The status quo is chosen randomly (on average 1/2), and the population chooses whether to change it. If the population is 3, voters will change the outcome with probability of (near) 1, because 2 of the 3 people will draw an outcome greater than or less than 1/2 with probability of (near) 1. If the population is 6, there is now a non-trivial probability that 3 of the 6 people will be on one side of 1/2, and 3 people on the other side, so a 2/3 majority (4 people) will be unable to change the status quo.

The U.S. population has increased from 4 million at the time of the founding to 300 million today. If the amendment rules were optimal in 1789, they are not optimal today. If they are optimal today, then they won’t be optimal in a few years. Originalism with a fixed amendment process can be valid only with a static population.

This argument comes from Richard Holden, Supermajority Voting Rules; and Rosalind Dixon and Richard Holden, Constitutional Amendments: The Denominator Problem (who supply empirical evidence).

There is a related argument that one can make based on the Buchanan/Tullock analysis of optimal voting rules. Thanks to Richard for a helpful email exchange.


Kirkland and Ellis Distinguished Service Professor, University of Chicago Law School