Professor Bainbridge...on law, politics, religion, culture & food

Loyalty versus Noble Purposes

Scheherazade writes:

One of the persistently loveable snarky political lefties over at Bad Attitudes speculates that John Kerry might be privy to some of G.W. Bush's most private secrets, because they were in the same secret society at Yale. They see this access as an asset to the Democratic campaign, should the political debate sink to smear tactics (something they don't doubt will happen).

That gives me pause. If, hypothetically speaking of course, which is the only way these things could ever be discussed, I had been in a secret society while at Yale, would I use something I knew from those days to prevail over a political adversary, to achieve a cause I truly believed was Noble? I pose the question as though it's something to ponder but in fact it's not a dilemma to me, it's just a moral temptation. I wouldn't tell. No way. And I'd be a little bothered if either candidate did, even to win for an urgent, Higher Social Purpose, which no doubt everyone who is running thinks they have access to.

Lately Sherry has been broadening the scope of her blog to draw connections between the larger world and her personal and professional choices. It's made an already fabulous blog even better. Personally, I would find it difficult to resolve the moral issue she raises without having due regard for the consequences. One can imagine a cause sufficiently noble to justify betraying both group loyalties and personal confidences. On the other hand, the precise situation Sherry conjures up is further complicated by the introduction of self-interest. If Kerry is self-aware, he knows that his assessment of the nobility of his cause is inevitably tainted by the personal advantage to be gained from disclosure. Unfortunately, as former Delaware Chancellor Allen aptly noted, albeit in a rather different context, "human nature may incline even one acting in subjective good faith to rationalize as right that which is merely personally beneficial." City Capital Associates Ltd. Partnership v. Interco Inc., 551 A.2d 787, 796 (Del. Ch. 1988).

Bush’s WMD Panel

Given the composition of the WMD commission as named by President Bush, it will be difficult for the Democrats to blast the Commission as a Bush lapdog or pre-determined whitewash (which won't stop them from doing it, of course). The Democrats named - Chuck Robb, Lloyd Cutler, and Pat Wald - are all serious people. Wald is a particularly interesting choice. Her long experience on the DC Circuit Court of Appeals and the International Criminal Tribunal for the Former Yugoslavia gives her considerable expertise in assessing evidence and international law. Appointment of maverick GOP Senator John McCain was an interesting choice too. It's doubtful whether he's carrying a torch for George Bush, after all! Update: As I predicted, the Dems are blasting the panel. Refutation here.

Mises Blogger Jeffrey Tucker on Drug Patents

He writes:

Milton Friedman ... believes the US ought to prevent drug reimportation so that domestic drug manufacturers can continue to charge very prices [Ed.: sic.] to capture the costs associated with gaining FDA-drug approval. In the dynamics of interventionist logic, this is going exactly the wrong direction.

Many issues here: including the monopoly of patents (if they exist, they do imply world government), the specifics of the reimportation case, ... , and this case as part of an overall protectionist program of the Bush administration. [Ed: links omitted.]

Wow. Could we be any more paranoid (world government)? Even rabid libertarians ought to recognize that the patent system provides significant economic benefits. It probably won't do any good, but let me try explaining it: The readily appropriable nature of information makes it difficult for the developer of a new idea to recoup the sunk costs incurred in developing it. If an inventor develops a better mousetrap, for example, he cannot profit on that invention without selling mousetraps and thereby making the new design available to potential competitors. Assuming both the inventor and his competitors incur roughly equivalent marginal costs to produce and market the trap, the competitors will be able to sell their traps at a lower price because they have not incurred the sunk costs entailed in developing the trap. Because would-be inventors will therefore anticipate that they will be unable to generate positive returns on their up-front costs, they will be deterred from developing socially valuable information. Accordingly, society provides incentives for inventive activity by using the patent system to give inventors a property right in new ideas. By preventing competitors from appropriating the idea, the patent allows the inventor to charge monopolistic prices for the improved mousetrap, thereby recouping his sunk costs. Trademark, copyright, and trade secret law all can be justified on similar grounds. If being a libertarian requires one to disavow state protection of property rights in information, count me out.

Faneuil’s Credibility

On paper, Douglas Faneuil ought not to be a very credible witness. According to the WSJ ($) report, Faneuil dramitized his performance to the point that a defense lawyer asked whether he had taken acting lessons. If you believe his version of events, Faneuil admits that he lied for months. Why should the jury take the word of an admitted liar? Especially an admitted liar who cut a deal with the prosecution and now has every incentive to sing the song written for him by the prosecutors? And he's a doper who feared drug prosecution. (Did the prosecution tell him that he'd be charged with drug offenses if they don't like his testimony?) Curiously, however, the press reports seem to indicate that he came across as credible to those who were in the courtroom. According to Henry Blodget: "Based on Douglas Faneuil's credible, dramatic testimony—as well as his survival of the first two hours of cross-examination—Martha Stewart's chances of conviction rise from 18 percent to 28 percent." BusinessWeek says: "For all his admissions of wrongdoing, Faneuil comes across as a strangely fascinating, sympathetic figure on the stand." Curious. And possibly very bad news for Martha. My bet is that the odds of a conviction go way up if the jury finds Faneuil credible and go to essentially zero if it doesn't.

Law review editors

I have occasionally noted the frustrations of a law professor dealing with student law review editors (e.g., here). In an amusing and thoughtful post with a great story about legal giant Charles Alan Wright, Beldar observes:

How aggressively we student editors wielded our colored pencils (in those pre-PC, typewriter-dependent days) had quite a bit to do with whether we were editing manuscript from a student writer, a junior law faculty member, or an acknowledged superstar of the celestial legal-academic firmament. We were keenly aware with whom we had leverage — and the leverage was (a) inversely proportional to how badly we wanted that author's work in our journal and (b) directly proportional to how badly that author needed to be published by us.

I suspect that's still true today. One of the nice things about my station in life these days is that there aren't many journals that I need to be published by. Harvard Law Review and Yale Law Journal editors, however, are welcome to rewrite my stuff as much as they want! (Heh!)

I hate litigators

Some nutjob has found some bottom-dwelling lawyer to file a law suit against Viacom and CBS over the Janet Jackson boob tube incident. It's a class action on behalf of "all American citizens who watched the outrageous conduct." What do they have against the illegal aliens who watched the halftime show? And, since the Super Bowl was broadcast to hundreds of countries, what about all the poor offended foreigners who watched it? Sheesh.

Professor Bainbridge in the News

LA Times (R):

The continuing litany of new fund cases threatens to undermine confidence in the industry, said Stephen Bainbridge, a UCLA securities law professor. Until now, investors have fled from individual funds and companies implicated in wrongdoing. But "the question is: Will a point come when investors give up on the industry as a whole rather than give up on individual funds?" Bainbridge said.

"As bad as Enron and WorldCom got, out of the thousands of publicly traded corporations there weren't that many where we found serious fraud," he said. With mutual funds, "it looks at the very least that it's pervasive and it's going to erode investor trust in the industry as a whole."

Insight on the News:

Sarbanes-Oxley ... also is displacing the traditional role of states in regulating corporate governance and may signal what University of California-Los Angeles law professor Stephen Bainbridge has called in Regulation magazine, "The creeping federalization of corporate law."

Lincoln on Judicial Activism

With the Dred Scott case, decided four years before he took office, President Lincoln faced a judicial decision that he believed was terribly wrong and badly misinterpreted the U.S. Constitution. Here is what Lincoln said: "If the policy of the government upon vital questions affecting the whole people is to be irrevocably fixed by decisions of the Supreme Court, the instant they are made in ordinary litigation between parties in personal actions the people will have ceased to be their own rulers, having to that extent practically resigned their government into the hands of that eminent tribunal."