Tuesday, December 16, 2008

Suing you to tell you what's on our minds

I was reading the article to which the title of this post links (9/11 Fallout: The Next Round, by Anna Stolley Perksy, in the December 2008 issue of the ABA Journal) and I saw a quote by Michael Martinez, who argued for exempting US government from legal repercussions for their crimes and evil deeds (torts) with the line that "We want them to make decisions that are the best for all of us."  

Well yes, we do.   I don't feel like arguing with that.

But, I ask, what is best for all of us?

There is no universally accepted answer that is constructive.  Making us happy might help, but merely begs the question of how to make us happy. 

Here's my relatively straightforward response then.  Hell yes I want government officials "making decisions with one eye toward possibly getting sued".  I'm well aware that they "often have to make quick decisions that are of major import."  Many of us do.  Doctors do.  Lawyers do.  Parents do.  Drivers do.

Is Mr. Martinez such a strong believer in theidea that the threat of a lawsuit distracts people from what is important that he would argue that airline pilots should be immune from suit.  Maybe only when they're full of people and over major metropolitan areas so their decisions are of "major import"?  Maybe potential criminals about to unleash a hail of gunfire should be immune, because they're in the process of making a quick decision of major import.  Maybe executives and traders should be so immune.

All of these people generally must make quicker decisions that a government official.  Arguably (but I won't argue that here) some of their decisions are as important to me as the most important decisions of government officials.

Moving back to where I started: what's best for all of us?  Given that there's probably no perfect answer for any given situation, we answer based on our values and the information we have.   Let's ignore values and turn for a second to the information at hand.  

How does our government official know what she's about to do is not in our best interests?  It's against the law!  It harms people to the extent that they'll sue you!  The threat of lawsuit is an information transfer device.  If a gov't official believes there's a credible threat of lawsuit, that government official will indeed take that into account.  And should.  Because it means the decision is against the law or is likely  to inflict legally cognizable harm on someone.

Do some elements of society not like it -- do they want government officials to be able to authorize or allow the beating of Muslims simply because they're Muslim?  Do some elements of society want government officials to be able to tax millionaires at a 90% marginal rate or to seize assets in blighted areas or to summarily halt all government expenditures other than the military, all without fear of lawsuit?

Sure they do.  But the threat of a lawsuit, reasonably regulated by pleading standards, is a reminder to that government official that such behavior certainly isn't in all of our best interests.  

Go ahead, beat, tax, seize, or halt.  But do so knowing that in addition to living with yourself, you'll have to live with a lawsuit.


Wednesday, December 10, 2008

Possible Paper on Monopolies, Government Funding, and "Welfare States"

Some rough thoughts:

1. Monopolies
The intuitive idea of a monopoly is something that I have that you don't have and that you can't get: possession.  Colloquially, we say that someone has a "monopoly on good ideas" or is "monopolizing my time".  We mean that someone is the only source of good ideas in the accessible universe and that someone is consuming all of my available time, leaving me none to interact with other people or accomplish other tasks.

So a monopoloy is an intuitive idea.

Attempts to further define this or capture it with definitional rules are really nothing more than attempts to model this intuition.  A perfect model might perfectly capture the entire intuition, but it might be over or under inclusive in certain respects.  This is especially true when what is being modeled is subjective: I might think that a person consuming all my office time is monopolizing my time, while someone else might say they're just "keeping me busy" and my time is monopolized only if all my time, both in and out of the office, is consumed by that person.

2. Legal Views of Monopolies
Antitrust law definition.

This tries to capture the commercial sense of monopoly.  Let's play out the intuition.

A shopowner has, in some sense, a monopoly on that shop.  no one else can sell things in that actual shop.  We don't really worry about this, because in most cases someone else can set up a nearby shop or there already are others shops people can go to.  In some instances, even this might be a problem: shops on army bases, shops in airports and other closed environments where one can't easily leave.

At the other extreme, if someone corners the market we usually do think of that as a monopoly: it's probably the paradigmatic example.  If someone buys all of the silver in the world or owns all of the diamonds, they have a monopoly.  A counterarugment might go along the lines above: you might not be able to get silver, but do you really _need_ silver for anything in particular?  Can't you find a substitute?  In many cases, the answer is probably no.  But in some cases, the answer is yes.  For example, someone may corner the market in light bulbs with GE printed on them (namely, GE may corner that market).  But we have an intuitive judgment that there's nothing particularly wrong with that, and if someone acutally values the GE label on their lightbulbs then they can suffer the monopoly price.

This is how we see intellectual property law (which protects rights by preventing others from using them) with antitrust law (the law of monopolies).

3. Comparison of intuition and the law
My suggestion is that we can easily do what the law does: identify a monopoly first and then determine, on the fact, whether it's good or bad (legal or illegal).  The intuition is a monopoly that doesn't harm the public is probably okay, where harm the public is just another level of indirection to intuition.  If it's reasonable for someone else to compete, or if the monopolized good isn't too expensive (which is basically a function of how easy it is to compete, how important that good is, and my own notion of 'too expesnsive') then the monopoly is okay.

4. what should government do.

could argue that government should only do those things that would otherwise be monopolies and where competition would be artificial.  IE, gov't out of road construction/repair.  Stays in policing, military, national security, and 'welfare' as defined below.  Stays in grant making and research (part of nat'l security?). 

could argue that government funding should be pay as you go for all things that could otherwise be provided by the free market.  that is, if the government choses to provide services that others can readily compete with (USPS) then users of that service should not be 'entitled to it for free because it's a gov't service' but should have to pay per use. (stamps).

could argue that general tax dollars should go to inspect and police minimum standards (how defined?) and avoid corruption (how defined?) in those areas where the goverment is not the service provider.    This is redistributive in that it protects the users more than the non-users, but is probably only mildly distributive in most cases.

could argue that general tax dollars should also go to subsidize the market price for those who can't otherwise afford necessities (health, food, school, child care, housing).  This is clearly redistributive.  Also, what defines a necessity.

conclusion: much more intensive gov't trust busting and regulation.


Saturday, July 19, 2008

The Eruv of Golf

"But Wie, according to Witters, had already walked outside the roped-off
area around the tent
. At that point, the mistake was final." From golf.com.

Bolding is mine. To highlight that the LPGA subscribes to Eruv theory.

Friday, June 20, 2008

Diamonds: Luxuries Because They Are

The New York Times has a couple of paragraphs here about 'manufactured' diamonds becoming ever-more indistinguishable from 'natural' diamonds. The article mentions the fact (there ought to be a word for a fact that's presumed to be generally unknown but is actually well known to many people --- to the extent that sharing it won't impress that many people that you'd want to impress. I'll work on finding such a word.) that diamonds are not particularly rare, but are expensive because people think they're rare.

In one of my papers (currently titled Luxury Markets, Antitrust, and Intellectual Property: An Introduction), I refer to the idea (not my own!) that luxuries are not necessarily expensive because they're inherently rare, but are rare because they're expensive. There are a couple of ways to apply that notion to diamonds. If diamonds were easy to come by in the natural world and many people could sell them, then they'd most likely be relatively affordable. If sellers of diamonds had a way to distinguish their diamonds from the diamonds of other sellers, then some sellers might choose to market their diamonds as luxuries: to jack up the price so that only an elite few could afford them and hope that those elites would buy the arbitrarily expensive diamonds so that others would respect them and their elite status. But diamonds are, basically, fungible. It's not as if someone can stick a logo on a diamond or, with the possible exception of proprietary cutting techniques, make a diamond identifiable as coming from a particular seller. So what's happened instead is that we have a cartel that stifles competition. In a nutshell, almost all naturally occurring diamonds are controlled by a small number of private companies or government-backed entities who agree to set high prices and limit the number placed on the market. There is little competition.

But with the world of high quality manufactured diamonds an interesting possibility arises. What if there were a way to make a diamond that had all the physical attractiveness of a natural diamond, but actually was branded or marked? Maybe there are little logos on each of the facets, or maybe deep inside there's some symbol, or maybe when you move it in certain ways or expose it to certain light a particular effect presents.

If this can happen, then the natural diamond cartel may be in trouble: manufactured diamonds that are absolutely indistinguishable from natural ones will create competition in the 'generic' diamond market. There may still be genuine prices differences depending on size and quality and the relationship between consumers and vendors, but there will be a vast supply: a diamond will be little different from any other bauble.

Manufactured diamonds, on the other hand, will also be able to be marked and made differentiable from other diamonds (both natural and manufactured). A properly marketed luxury artificial diamond (not natural diamond) might be able to obtain luxury prices similar to, if not more than, what today's diamonds command. After all, if people pay a premium for a Tiffany diamond that is exactly the same as a diamond you could get from Blue Nile, imagine what they'd pay if Tiffany had a way to mark their diamonds so that their customers would know that society would be able to recognize that the expensive-looking diamond actually was expensive, and that the person wearing it was thus worthy of respect (or at least their bank account was).

I'm trying to think of examples of product categories where natural and some manufactured versions compete on one level, and some manufactured versions are marketed as luxuries. It's late, I'm tired, and I'm drawing blanks. Oh. Water! Maybe it's not quite the same, because there are some natural waters that are priced pretty exorbitantly, but if you consider distilled water to be 'manufactured' and spring water to be 'natural', I think that some aspect of the phenomena I hypothesize is playing itself out in the bottled water market.

Anyway, it was fun to write on something that had little to do with the Bar.

Just Because I Don't Read About Enough Illegal Acts While Studying for the Bar

Rick Seaney reminds us, with a convenient chart that he promises to update, of all the fees (over and above your ticket price) that airlines hit you with these days.

Thursday, June 12, 2008

A Link to a Paper I Wrote

At the Antitrust & Competition Policy Blog, D. Daniel Sokol posted a link to one of my (as yet) unpublished papers (Luxury Markets, Antitrust, and Intellectual Property: An Introduction). I would like to publish it, and am willing to rework as necessary. If anyone's interested :-).

Wednesday, June 4, 2008

School CAN teach creationism

Some nutjobs insist on harming the United States by keeping our children ignorant of science, as the New York Times reports.

The reporter writes that courts "prohibited the outright teaching of creationism and intelligent design".* He is wrong (or should be). Schools can teach pretty much any topic they want. They can teach reading, writing, mathematics. They can teach band. They can teach arts and crafts. They can teach gym. They can teach civics. They can teach religion. They can teach history. They can teach politics. They can teach creative writing.

Let's compare history and creative writing. A history class teaches what happened in the past. It might begin with a section on the tools and methods of history and discuss some criticisms of mainstream history. And then it will move on to present history. A creative writing class might teach methods of writing and the characteristics of a good story. It might also involve reading a lot of pieces of creative writing and discussing them, or even writing a number of creative pieces and discussing those.

Creationism and science can be analogized to lots of different things. But I'll compare science to history and creationism to creative writing. Schools teach the science we have, not that science we wish we had. Schools can teach the creationism we wish we had, just like they can teach the creative writing we wish we had. Schools can't teach creationism as true, or as science, because it's not. But they can teach it as an example of propaganda, or creative writing, or politics. It can be studied and critiqued. It can even be taught as a historical phenomenon, as could, for example, the publication of 1984. But the contents of 1984 are not historical truth, and the substance of creationism is not science.

Schools can teach just about anything. In the right context.

* I like to put the punctuation outside the quotes because I'm not quoting that punctuation. It's my own.

Wednesday, May 14, 2008