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Call for Papers: Leading From The South: Politics Of Gender, Sex And Sexualities

The South-North Exchange on Theory, Culture and Law (SNX) – LatCrit invite you to submit proposals to participate from its 2016 Conference: Leading From The South: Politics Of Gender, Sex And Sexualities to be celebrated in Santo Domingo, República Dominicana from May 19-21, 2016.

To be considered for participation, please send an abstract (500-600 words) and your contact info by February 15, 2016 to: snx.latcrit@gmail.com. Decisions will be announced February 29, 2016.

We invite papers across disciplinary boundaries and from all constituencies, on how the global South has been leading current shifts in the politics of gender, sex and sexualities. Specifically, we seek to examine and explore past and present South-North relations regarding the legal treatment of subjects in terms of their sex, gender and sexual identities. We seek to establish a fruitful interdisciplinary dialogue that would proffer a holistic perspective on how certain policies have shaped and will shape the social and legal regulation of subjects based on their gender, their bodies and their desires. For that reason we seek papers on: Marriage, Families, Adoption, Labor, Violence, Child Rearing, Children’s Rights, Reproductive Rights, Poverty, Immigration, Discrimination, State Protections, State Criminalizing Practice, Emerging fields of State Regulation, and Health (among others).

The conference’s proceedings will be held in Spanish and English (with simultaneous translation). For more detail see the official Call for Papers attached.

Follow us on Facebook! (www.facebook.com/snxlatcrit)

If you have any questions, email Prof. Aníbal Rosario Lebrón at: arosario-lebron@law.howard.edu.CFP

 

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Beyond Law and Economics: A Review of Guido Calabresi’s “The Future of Law and Economics”

Any book by Guido Calabresi is self-recommending. Not only is he among the founders of modern (that is, the second great movement in) Law and Economics; his carefully wrought and nuanced work marks him as among the most important and influential scholars and jurists of the past half-century (at least). His new book, The Future of Law & Economics: Essays in Reform and Recollection (Yale 2016), provides, as his subtitle announces, both a glance backward to the historical evolution of Law and Economics and issues some challenges for 21st century economists to make their work more relevant to real-world policy dilemmas.

Judge Calabresi begins by reminding readers that Law and Economics has never been monolithic, despite what some of its critics believe. His own brand of Law and Economics has always been decidedly different from Chicago-school thought; but, at the same time, it was never outside the mainstream of economic thinking. Which is to say that Judge Calabresi’s approach to Law and Economics, as reflected in works such as The Cost of Accidents (Yale 1970), his famous Cathedral article with A. Douglass Melamed, and “The Pointlessness of Pareto” (100 Yale L.J. 1211 (1990-1991)) consistently offered an alternative perspective on Law and Economics to the “economic analysis of law” approach advocated by Richard Posner, William Landes, and others (not including Ronald Coase) at the University of Chicago. Instead of engaging in economic analysis to determine the efficiency properties of alternative legal rules – with a decidedly normative goal of ridding society of inefficient legal rules – Judge Calabresi’s approach has always been to use economics to explain or understand the real world of law as it is.

To take a simple example from Calabresi’s own work, when a property entitlement is protected by a “liability rule” (money damages) rather than a “property rule” (injunctive relief), a Chicago-school scholar would simply ask whether the one remedy is more efficient than the other. By contrast, Judge Calabesi (and his co-author Melamed) first sought to understand the economic meaning of the alternative remedies – a liability rule results in a forced sale of an entitlement from plaintiff to defendant at a price set by the court, while a property rule informs the defendant that if she must enter into a voluntary market transaction with the plaintiff in order to acquire the entitlement. Then, they explained why such a remedy might have a legitimate role in circumstances where transaction costs might impede efficient market transfers.

In his new book, Judge Calabresi calls for an “expanded economic theory” to better explain certain social and legal realities that cannot be explained by simple “economic analysis of law.” Those realities include the persistence of a healthy non-profit sector (as just one example of a preference for some amount of altruism and beneficence in society), the legal protections provided for the admittedly ambiguous and potentially very large category of “merit goods,” and, more broadly, the diversity of tastes and preferences of aggregations of social actors. While aware of the great challenge this poses for economists, Judge Calabresi expresses great optimism that economic theory can meet the challenge. After all, he observes, way back in 1937 Ronald Coase was able to explain a preference for certain hierarchically organized command-structures (that is, firms) within markets, based on the implicit costs of using the market mechanism for organizing production in certain sectors.

As this is a review rather than a summation – you should definitely read the book for yourself – I will not recount the specific analyses and arguments found in Judge Calabresi’s very rich book. Instead, I will offer a few observations, some of which will challenge certain of the judge’s claims, others of which will offer additional support for his claims or put his claims into a broader context.

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“The Future of Law and Economics”

41h5puOXxSL._AA320_QL65_This week CoOp will be hosting a symposium on Guido Calabresi’s new book entitled The Future of Law and Economics.  I hope you enjoy the posts, which will come from guest bloggers and regulars. The guests are:

Ken Abraham–UVA

Ian Ayres–Yale

Dan Cole–Indiana University, Bloomington

Lee Fennell–University of Chicago

Carol Rose–University of Arizona

Arden Rowell–University of Illinois

 

 

 

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William Crosskey’s Unconventional Ideas

I just finished reading the first two volumes of William Crosskey’s magnum opus on Poiltics and the Constitution.  It’s a stimulating book, in part because he pays almost no attention to conventional wisdom on anything.  I thought I’d outline his themes:

1. Congress was given a police power by the Framers.

This is Crosskey’s central argument.  He was fiercely opposed to interpretative theories that embraced states’-rights, and argued that those who took that view–especially Madison–were just supporters of slavery who should be disregarded.

2.  The enumeration of Congress’s powers was meant to express that the President lacked those powers.

Given Crosskey’s first point, he needed some explanation for the enumeration of Congress’s authority.  His answer was that the list should be understood as limits on executive authority.

3.  Most of the Bill of Rights was originally meant to bind the states.  (In other words, Barron v. Baltimore was wrong.)

He argues that Congress intended the First Amendment to apply only to the Federal Government and made that clear by including the word “Congress.” The other amendments, except for the 7th, were general and thus should be read as applying to everyone.

4.  Madison’s Notes on the Constitutional Convention were a fraud.

This, of course, has some truth to it, as Mary Bilder’s new book says.

On all of these issues, Crosskey was a prophet, which is not the same as saying that he was historically accurate.  Still, his historical claims on these issues are very interesting, not to mention some of his other points (for example, Erie was wrongly decided and judicial review of Acts of Congress was not part of the original understanding).  He was a true iconoclast.

 

 

 

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B Corps for Bankers

Claire Hill and Richard Painter’s new Better Bankers, Better Banks aims to find a way forward by looking backward – and by casting a few sidelong glances as well. It is valuable for what it has to say about the view in all directions.

Begin from where we are – the point from which Hill and Painter would like to see forward movement. Where we are now is a world in which, even seven years out from the crash of ’08, banking scandal is near boring in its ubiquity. From Libor in 2012 to Euribor, forex, commodity and precious metal cornering thereafter, the story of financial markets of late seems an unending parade of horribles.

How do we get out of this seeming cesspool? Here is where Hill and Painter look backward and sideways.

First let’s look back. Time was when ‘bankers’ – Hill and Painter employ the term broadly to cover all folk who hold ‘other folks’ money’ – invested not only our money, but their money too. By organizing as general partnerships whose partners were jointly and severally liable for losses, they kept, as the current idiom has it, ‘skin in the game.’ This of course aligned their interests with client and institutional interests – to some extent, anyway. (Names like ‘Jay Gould’ should remind us that ‘some extent’ wasn’t the ‘full extent.’) And so there were limits on how much by way of other folks’ money the bankers were likely to fritter away.

Now let’s look sideways. There appears to be growing consensus, in the face of such scandals as those just rehearsed, that our regulatory and law enforcement regimes’ penchant for penalizing banks rather than bankers just isn’t cutting it. Compared to the gains to be had from wrongful behavior unlikely to be caught, even five or twelve billion dollar settlements between banks and their regulators are chump change. Oughtn’t we, then, focus our efforts upon the human agents through whom the banks act? After all, five billion – or five years in jail – are more likely to pinch if you’re human.

Hill and Painter like what they see in both directions. They find limitations, however, in how effective the enforcement of finance-regulatory provisions can be. These, they believe, are just too easy to game – a fact that might partly account for regulators’ going after the banks rather than the bankers in the first place. Why not, then, take yet another sidelong glance in another direction – that of contemporary moves to simulate better regulation through private ordering? Are there not means, for example, of appealing to socially responsible investors by committing to operate as a socially responsible business – e.g., as a ‘B Corp’ or ‘Benefit Corp’?

Indeed there are, and though they do not discuss these new business forms, Hill and Painter valuably adapt, in effect, the idea behind them to financial firms. Herewith the authors’ novel suggestion to introduce a practice of what they call ‘Covenant Banking.’ The idea is for financial firms whose owners or managers are comfortable with the idea to undertake ‘skin in the game’ commitments on the part of their managers. Managers would voluntarily assume some liability for losses, thereby partly replicating the ancien regime of pre-corporate partnership banking. Investors could then choose between what kinds of institutions through which they invest – the more risk-averse perhaps working through covenant banks, the more risk-cavalier working through today’s more familiar casinoish firms.

It would be hard not to like this proposal. What’s not to like? Like recent proposals for Wall Street voluntarily to maintain ‘naughty lists‘ of bankers who have gotten themselves into trouble, it imposes nothing, yet offers something – the prospect of ‘better bankers,’ hence ‘better banks,’ for at least some investors. It simply expands the field of choice, and who in these times doesn’t like choice?

If I have any reservations about Hill and Painter’s proposal or their brief in its favor, they have to do with the prospect of some people’s possibly taking the authors to claim or to promise more than they actually intend.

To begin with, we should note that wrongs such as those alleged in connection with Libor, Euribor, forex, and commodity and precious metal cornering are not wrongs of excessive risk-taking. They are wrongs of sheer fraud and manipulation. It isn’t the case that ‘skin in the game’ on the part of the relevant fraudsters in these cases ‘would’ have helped; the ‘skin’ seems to have been at the core of the ‘game’ from the start, and was indeed part of the problem – the fraudsters profited precisely by illicitly betting their own money on what they controlled. Hill and Painter, then, should not be taken to be targeting this form of market abuse through their proposal.

A distinct but related point has to do with the lead-up, not to 2012 and after, but to 2008. It is still common to hear that year’s cataclysm blamed upon venal behavior or ‘excessive risk-taking’ by ‘bankers.’ And such behavior clearly occurred – it always does. But a very strong case can be made – I think I and others have made it – that the principal causes of 2008 were more radical than mere vice or recklessness on the part of some bankers. They are endemic to capitalism itself absent serious and sustained effort on the part of the polity to distribute capital’s returns – or capital itself – far more equitably than we’d managed before 1929 or between 1970 and 2008. ‘Better bankers’ would certainly be better than worse bankers; better still would be better distributions of that with which bankers bank.

Finally, there is a danger in underselling what proper law enforcement, adequately funded and staffed, can do where finance-regulation is concerned. When Wall Street contributes more to political campaigns than most other industries, when DOJ officials openly admit to having feared to prosecute bankers for fear of rattling markets, and when regulators like the CFTC and the SEC are chronically understaffed and underfunded, we should be skeptical of suggestions that ‘gameability’ of the rules is the sole – or even principal – reason for old fashioned law enforcement’s not having eradicated rulebreaking by financiers. Indeed, as Hill and Painter themselves note, a rule change at the NYSE in 1970 played a critical role in the move from partnership to incorporated form among Wall Street investment banks. If that is so, could a legal re-imposition of some variant of the old rule not itself make for ‘better bankers’?

None of these caveats should be taken as more than what they are – mere caveats. There is much, much to be learned from a reading of Hill and Painter, and much is quite plausibly promised by their Covenant Banking. And since, as before noted, their proposal is made in effect to the banks rather than the polity, it seems to be all upside, no down. Let, then, those bankers intrigued by the Hill/Painter proposal give it a go. One might even imagine some funds offering their services in A and B flavors, so to speak – in Covenant and Noncovenant forms. In such case consistently better performance by one kind over the other might in future foment a stampede to the winning kind, and with it a privately worked transformation.

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The Mis-Education of the Banker

More than eighty years ago, Carter G. Woodson—the historian-educator known as the “Father of Black History Month”—published his most enduring work, The Mis-Education of the Negro (1933). That book, among the most important education scholarship ever written, reveale

Carter G. Woodson. The Mis-Education of the Negro was the culmination of teaching work he began as a young man.

d with unassailable precision a fact that seems like pedestrian common sense when its evidence is laid out: The U.S. education system educates learners about much more than reading, writing, and arithmetic. Rather, in its structures, schedules of reinforcement, and other curricular choices, it determines an individual’s place and value in society and the understanding of that situation. Education—in all its forms—is a profoundly identity-constituting mechanism. Woodson was among the first to engage this epistemological and ontological power. With Better Bankers, Better Banks, Hill and Painter make this same type of invaluable contribution.

As a work of legal genealogy, historiography, psychology, sociology, diagnostics, etc. (the authors’ bricolage is impressive and enviable), the book offers wholly persuasive arguments and evidence (1) that the culture of banking and, at least some, bankers presents systemic problems in the industry that have economy-wide consequences and (2) that changes in the banking industry are at least partially implicated in the proliferation, persistence, and repetition of these problems. However, how all this happens remains locked in a black box Hill and Painter mark “culture,” “incentives,” “ethos.” But culture, incentive, and ethos are not formed by accident, happenstance, or default. Instead, they are part of the same type of curriculum Woodson charted in his work. The Mis-Education of the Negro revealed that school-based curricula shape students’ understandings of themselves and the society in which they live. As Woodson explained with respect to the implementation of social ordering of African Americans through schooling,“If you can control a man’s thinking you do not have to worry about his action. When you determine what a man shall think you do not have to concern yourself about what he will do. If you make a man feel that he is inferior, you do not have to compel him to accept an inferior status, for he will seek it himself. If you make a man think that he is justly an outcast, you do not have to order him to the back door. He will go without being told; and if there is no back door, his very nature will demand one.” In other words, the curriculum imparted will lead to predictable and self-sustaining results.

Elsewhere, I have suggested that law functions as a societal pedagogy. As John Dewey defined it, pedagogy is just a purposeful process that “shapes, forms, or molds” peoples’ behavior, activity, and thinking. This is what law does. Indeed, the evidence Hill and Painter offer powerfully illustrates that the same educative forces identified by Woodson are at play in the banking industry. The curriculum, obviously, is different than the one Woodson critiqued. But, centralize, say, risk-taking and winning (among core themes in the curriculum latent in the Hill-Painter banking narrative), and you will find problematic behavior in the banking industry.

Hill and Painter clearly show, that banking law (or the lack thereof) is part of an identity-forming process for bankers and that process is shaping problematic behavior, activity, and thinking within the industry. What is missing from Better Bankers, Better Banks, then, is a pedagogical account of the banking industry and the law that structures and regulates it. I want to know how the ethos, incentives, and culture are internalized. I want to understand the content, structure and form through which the ethos, incentives, and culture are imparted. These types of questions are explored in the academic field of education. And I want to read the curriculum of banking law.

Silence on the question of pedagogy is not surprising. A large body of socio-legal scholarship, for example, reveals the educative function of law, leaving the specific processes and mechanisms of the pedagogy unexamined. However, without a comprehensive pedagogy of banking, I am unable to determine whether the Hill-Painter “skin-in-the-game” covenant banking solution is as promising as it sounds. I am inclined to think that the limitations of the approach—readily acknowledged to exist by the authors—include pedagogical deficiencies that, were the model to be widely adopted, would result in our discussing Better Bankers, Better Banks 2.0 some years from now. That is, I intuit that, were it to be revealed, we would find a pedagogy of banking law steeped in the autonomy of limited regulation, the flexibility of contract, the security of economic interdependence, and the hegemony of certain ways of economic thinking. Such a pedagogy of “free market rule making insured by systemic safety nets” for for the privileged banking class—if it were identified as the problem—may be reinforced rather than undermined by covenant banking, which is predicated upon the institution of contracts (even in the sub-ideal regulatory version of covenant banking Hill and Painter address). This is not meant as an attempt to join the “vampire squid” school of banking analysis. Rather, I merely hope to emphasize that if we do not map more than the why and the what of modern banking culture to capture the how—to unveil its curriculum—we just don’t know what ideas will effect the change we seek…

My call for a pedagogy of banking is not a critique of Hill and Painter. Covenant banking is a proposal that actually looks at the problem in a nuanced fashion and proposes a nuanced solution that is responsive to the problem and not merely its symptoms. That is exciting. Moreover, as of today, there is no field called law and pedagogy on which they could have drawn to enrich their already robust work. So, I can offer no greater praise of their work than that it constitutes one of the best proofs of the value of the pedagogical analysis of law. Carter Woodson’s work spawned more than eighty years of constructive, proactive examination of and experimentation on the education of African Americans. I hope Better Bankers, Better Banks spurs the same for banks.

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Better Bankers Symposium, June Carbone

Thanks to everyone who participated in the Better Bankers Symposium.

My two cents worth it that the current system does not just reward “greed,” it create a Gresham’s dynamic where those most motivated not just by self-interest, but a preference for short term financial rewards, drive out others who see their self-interest defined in other ways.  Market discipline may produce boom and bust cycles that put firms like Lehman Brothers out of existence, but the corrections of the market often either overcorrect (Akerlof’s references to lemons’ markets) or do so at very high cost (the financial crisis).  This is because greedy individuals (those motivated by short term gains) have managed to create an opaque system in which market responses kick in only after individuals have a chance to leave the companies they undermined, with their outsized individual bonuses intact.

Better Bankers thinks more creatively about how self-interest can be marshalled to police such activities before they get out of control.  It seeks to restore the identity of interests between bankers and banks.  It thus seeks to create a system in which self-interest includes interests broader than short term financial incentives, and in which private market mechanisms can become more effective.  The old joke is “how many economists does it take to change a lightbulb?  None, the market will do it if it needs to be done.”  Hill and Painter’s answer is that it requires a design and it requires the will to create the conditions where the more intelligent design is likely to be adopted because it advances the common good at the expense of individuals who would like to be able to continue to game the system.  Let’s hope their proposal finds fertile ground.
JUNE CARBONE
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Better Bankers Symposium: Appreciation and Quasi-Response by one Better Bankers author

I want to start out by thanking Naomi and June, who organized this symposium, and all the contributors. I also want to thank the blog itself and those who run it for giving us this opportunity. There is something deeply thrilling about having one’s ideas taken very seriously — and to have them taken seriously by people of this caliber is an almost indescribable honor.

One of my motivations for writing the book was to respond to people who think that the “greed is good” variety of self-interest is either descriptively accurate, normatively desirable (“rational”), or both. The book is my way of shouting “No. It’s not. And saying that it is is part of the problem.” Getting caught up an arms-race competition for more — more money, more status, more “points” –- is, for many (I think probably, for most) people who engage in it, not a recipe for happiness or satisfaction. My own view- again, I don’t want to attribute this to my co-author– is that the extent to which what people want, and what they think is acceptable and unacceptable behavior — is more malleable than is commonly appreciated, that attempts to influence preferences and behavior are pervasive, and that making such attempts expressly, to try to get people to be more mindful of the societal effects of their behavior, is a good thing.

Another one of my motivations was to see what happened when we proposed that some–even many– bankers might in fact want to get out of the arms race, making a concrete suggestion as to how they could do so. Would we be denounced as naïve dreamers?

The reaction, on this blog and generally, has been very heartening. Maybe we are naïve dreamers but we are apparently fairly persuasive or at least endearing in our naivete. Would many banks want to become covenant banks? Here, I think I can speak for my co-author when I say that we very much look forward to trying to persuade bankers, regulators, judges, shareholders, creditors, policymakers, and others in a position to move covenant banking forward to do so, and commentators generally, including readers of this symposium, to take the idea seriously, propose ways to make it better, and join with us in trying to make bankers, and banking, more responsible.

Claire Hill

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The Arc of Covenant Banking: Hill & Painter’s Better Bankers, Better Banks

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University of Minnesota law professors Claire Hill and Richard Painter do a great service in their new book, Better Bankers, Better Banks, by focusing concretely on an issue that many have discussed but few have offered to change: how to align the incentives of bankers and banks.

They argue that “bankers [should] be personally liable from their own assets for some of their banks’ debts” for money owed due to insolvency, fines, or fraud-based liability. Thus, they propose formal, liability-creating contracts—which they call “covenants”—between banks and bankers: “Covenant banking operates directly on bankers’ monetary rewards” because, under their proposal, “highly paid bankers would bear some personal liability if their banks become insolvent, are fined by regulators, or are found liable in civil cases involving fraud. The liability would not be unlimited, but should potentially adversely affect the banker’s standard of living.”

The Hill/Painter proposal is valuable and interesting both in its own right, and for the harder questions that it raises.

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“Yes, Prime Minister” on Last Night’s Debate

Clock.tower.from.westminster.br.arp.750pix_(squared)

“This is how you deal with questions. If you have nothing to say, say nothing. Better still, have something to say and say it, no matter what they ask. Pay no attention to the question. Just make your own statement.  If they ask the question again, you say, ‘That’s not the question’ or ‘I think the real question is’ and then you make another statement of your own.”

Prime Minister Jim Hacker