Buffett on Family Business: Beat the Third Generation Curse

warren buffettWarren Buffett is very good at spotting great family businesses. What does he look for? How can his filters help family businesses prosper?

For one, they can mitigate one of the greatest dangers: the third generation “curse.” This refers to how few family businesses survive beyond the third generation, let alone prosper.

An under-appreciated fact about Berkshire Hathaway, the conglomerate Buffett built: virtually all its family businesses boast second or third generation descendants who rival or outshine previous generations. That is rare among family businesses.

So while every family and business situation differs, Berkshire’s two dozen family companies are a good place to look for insight about multi-generational prosperity in the family business.

Studying Berkshire’s family businesses, I found that they are united by the following values. These values are important factors in their success, in the founding generation and subsequent ones.

Family business members, and their professional advisors, whether in law, accounting, or other fields, would do well to ponder these points.

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Tribute: A Liberal in the House of Harry Jaffa (1918-2015)

Harry Jaffa (credit: Ohio State University)

Harry Jaffa (credit: Ohio State University)

1-14-15: 1:03 a.m. My mind races. How does one pay tribute to someone with whom one disagreed on several important issues? – issues about life and law and other things that matter. That question confronts me as I sit down to pay tribute to Harry Jaffa, someone who taught me much and always treated me kindly.

It’s rather late. I page through my tattered copy of Crisis of the House Divided: An Interpretation of the Lincoln Douglas Debates (1959). I first read it in 1968 or thereabouts. It’s by Harry V. Jaffa, the noted conservative political philosopher. He died recently. I found out by way of a New York Times obit by Robert McFadden. (Jaffa died on the same day as Walter Berns, another political theorist.)

I stare at the black-and-white pic of the young Jaffa taken years before I met him. I peer into his distant eyes. What was he thinking at that moment in 1959 / in that bookstore / next to his newly released book / finely clad / grinning confidently / with a book of the poet C.C. Cummings lingering behind his left shoulder?

* *  * *

“Since the first and most successful enterprise of the Fathers was to produce disobedience to an ancient established order, it would have been peculiarly difficult for them to inculcate reverence.”

Screen Shot 2015-01-14 at 3.35.05 AMI marked that passage – one from a chapter titled “The Teaching Concerning Political Moderation.” It is one of many such markings.

I think more and more about Professor Jaffa as I glance at the row of books in my library bearing his name. Formally speaking, I never studied under him, though I did know him. We met in the 1970s at Claremont College where he taught with the noted constitutional historian Leonard W. Levy (1923-2006). I read Levy’s books, too, though I was never one of his students. But I knew both men rather well. Levy was quite liberal (my stripes), Jaffa was quite conservative. Both strong personality types and both friends (as far as I know).

The Students of Strauss

When I first encountered Professor Jaffa, the philosopher Leo Strauss had recently visited Claremont. Back in those days Jaffa was friendly with many of his colleagues who, like him, had been students of Strauss. There was, for example, Martin Diamond and Allan Bloom. Of them he wrote this in his Crisis book: “I owe much to the enthusiastic interest of Professors Allan Bloom . . . and Martin Diamond . . . .”

That was in the days before the name “Strauss” became politicized. It was also before Jaffa parted company (sometimes fiercely) with so many of his former friends and colleagues, including Diamond and Bloom. There was still peace in that valley, that intellectual oasis where so many young students like myself came to learn how to read and appreciate the great works of Western political thought.

I studied under other students of Strauss (Michael Ormond and Thomas S. Schrock) and thereby came to read many works by the famed University of Chicago scholar – works such as Strauss’ Persecution and the Art of Writing (1952), Natural Right and History (1953), On Tyranny (1963), and The City and Man (1964), among other books.

photoOf course, one of the mainstays of my liberal education back then was History of Political Philosophy (1963), a collection of thoughtful and carefully crafted essays on noted political philosophers from Plato to Dewey. Strauss and Joseph Cropsey edited the volume. There was a long essay in it on Aristotle written by Jaffa (removed in the 3rd edition at H.J.’s insistence, I believe). I studied that essay and learned much from it, so much that I set out to read more by him. In time I came to Crisis of the House Divided, which I spent many an hour savoring . . . but never as required reading.

Somehow I came to meet Professor Jaffa personally, though I do not quite remember how. By 1974 I knew him well enough to solicit something from him to publish in my law school’s law review. It was titled “Equality as a Conservative Principle,” 8 Loyola, Los Angeles, Law Review 471 (1975), reprinted in Jaffa’s How to Think About the American Revolution (1978).

Our Dialogues

In the years and decades that followed, from time to time I visited Professor Jaffa at his home with his wife Marjorie. They were routinely gracious. The talk: almost always about Plato or Aristotle or Machiavelli or Hobbes or De Tocqueville or Lincoln or Churchill or Strauss or the Declaration or the Constitution. I steered away from partisan politics. Why? Well, because what I admired about him, what was most important to me, were his talents as a teacher, someone who had carefully studied the great thinkers and was committed to teaching others how to appreciate their words and thoughts. Ideas mattered more to me than ideologies, so I veered away from Republican-Democrat talk, though I listened nonetheless when Jaffa ventured off into those worlds. Sometimes even that talk gave me pause, made me rethink a few of my own views. Then again, sometimes not.

If you would know the Harry Jaffa I knew as a mentor and a friend, read his Crisis or his Thomism and Aristotelianism: A Study of the Commentary by Thomas Aquinas on the Nicomachean Ethics (1952) or his book with Allan Bloom, Shakespeare’s Politics (1964), or his essay “The Case for a Stronger National Government,” in A Nation of States: Essays on the American Federal System (1963) edited by Robert A. Goldwin.  There is, to be sure, more, but I will lay my cards there.

∇ ∇ ∇

In these ideologically torn and tormenting times, it is ever more difficult to be objective and open-minded. Friends flee. Few wish to be Socratic, open-minded, and receptive to reconsidering their gospels. Such one-directional thinking wars with the basic tenets of philosophy, properly understood. But if the ideal of liberal education still means something, and if our commitment to being an open society still stands, then it is only just to be fair — even if it means cracking open the doors of our partisan minds enough to see what we would not otherwise see. There is, after all, no truth in blind denial.

I hope I have answered the question with which I began. However that may be, kindly permit me to close with a few words by Leo Strauss, from his Liberalism: Ancient & Modern (1968):

“Liberal education, which consists in the constant intercourse with the greatest minds, is a training in the highest form of modesty, not to say of humility.”



My Next Book

I’m happy to announce that my next book, tentatively titled The Heart of the Constitution:  How the Bill of Rights Became the Bill of Rights, will be published by Oxford University Press.  Check back with me in two or three years when it’s done.


Vanderbilt Law Review En Banc Roundtable: Williams-Yulee v. The Florida Bar

Vanderbilt Law Review En Banc, the online companion to the Vanderbilt Law Review, recently published its Roundtable on the upcoming case, Williams-Yulee v. The Florida Bar, set to be argued before the Supreme Court on January 20, 2015. In Williams-Yulee, the Court considers whether a rule of judicial conduct that bans judicial candidates from directly soliciting campaign funds violates the First Amendment. The case has important implications, as currently thirty-nine states elect at least some of their judges and at least twenty have adopted rules of judicial conduct that prohibit candidates for judicial office from personally soliciting campaign funds. Beyond an obvious split among both federal and state appellate courts, Williams-Yulee presents a conflict between the scope of protection afforded by the First Amendment of political speech and the need for judicial impartiality and integrity. Authors Robert O’Neil, Ruthann Robson, Chris Bonneau, Shane Redman, David Earley, Matthew Menendez, Stephen Ware, Charles Geyh, Burt Neuborne, Michael DeBow, and Brannon Denning tackle these questions and more in their contributions.

Roundtable: Williams-Yulee v. The Florida Bar

Screen Shot 2015-01-11 at 1.12.09 AM

FAN 43 (First Amendment News) The ACLU making (more) First Amendment news

If you venture to San Francisco’s famed City Lights Bookstore you will see a big notice in the window; it is the same one you see above. Why this notice? Because more than all the rest Albert Bendich came to the First Amendment rescue of Lawrence Ferlinghetti (the noted poet, publisher & bookseller) a half-centuryor so ago. Sure there were others — namely Jake Ehrlich and  Lawrence Speiser — but the one who made the biggest difference was a young Boalt Hall graduate and ACLU lawyer, Al Bendich.

Lawrence Ferlinghetti

Lawrence Ferlinghetti

The history of HOWL (that great Beat poem) and the right to publish and sell it were very much shaped by the work Bendich did when a case involving the poem went to trial in 1957. The verdict in this obscenity case was a grand victory for poetry and publishing. And it was a proud moment for the ACLU in its successful defense of political poetry — that rebellious kind of verse that knocks the jambs off the doors of outmoded mores.

Later this week Ferlinghetti will post a statement on the City Lights blog to honor his former lawyer and longtime friend. And today the New York Times has an obituary by Margalit Fox about the remarkable life of this remarkable man — a skilled lawyer, a thoughtful scholar, and a man with a philosopher’s eye for the longview of life and law. Ferlinghetti is quoted in that obit. And one more thing: Al was a kind and generous man who was secure enough to be quite humble.

If we as citizens don’t know what our government is doing, how can we have an opinion of it and how can we call ourselves self-governing? What is the appropriate relationship for us as citizens and the people we elect as our government? Are they our servants or are we their servants? The First Amendment says Congress shall make no law abridging the freedom of speech. There’s a reason for that absolute. — Al Bendich (2014)

In ACLU offices across the country the name “Bendich” is now being explained to a new generation of civil liberties activists. Long may it be remembered.

Al Bendich’s ACLU work on free speech, privacy, and equality may be fifty years old, but it laid the foundation for the rights we have now.Abdi Soltani (Jan. 12, 2015)

See also Sam Whiting, “Albert Bendich, attorney and defender of free speech, dies,” SF Gate, Jan. 13, 2015

ACLU’s Laura Murphy leaving

Laura W. Murphy, First Amendment freedom fighter.

Laura W. Murphy

The American Civil Liberties Union has announced that “Laura W. Murphy will step down as director of its Washington legislative office effective January 31, 2015. After serving 17 years as the director of that office, Murphy plans to reestablish her private consulting business, Laura Murphy & Associates. She will also return to school to as a student at Georgetown University’s Institute for Transformational Leadership.”

Commenting on Murphy’s leave, ACLU Executive Director Anthony D. Romero said: “Laura’s tremendous work on the First Amendment, national security, racial justice, and criminal justice reform has earned her a reputation as one of the most tenacious and effective advocates for civil liberties in the nation. . . .”

Indeed, Laura has been a stalwart defender of free speech freedoms, which is never easy, especially in these highly charged ideological times. May her replacement continue that proud ACLU tradition with that same kind of passionate commitment that was her calling card. Meanwhile, may some of the best of Laura’s life ride be yet to come. Ride on!

Oregon ACLU’s Dave Fidanque to step down 

“In his 20 years as Executive Director of the ACLU of Oregon, and his 31 years on the ACLU staff, he has been instrumental in protecting and advancing freedom in this state and nationwide.” Candace Morgan (2013)

David Fidanque has served as the director of the American Civil Liberties Union of Oregon since 1993. He joined the ACLU in 1982. Prior to that he worked as a reporter for KEZI in Eugene and before that for Congressman Jim Weaver from 1977-1981. As noted in a Bend Bulletin news story, Fidanque will step down as director on March 31, 2015.

David Fidanque

David Fidanque

For those who know him, Fidanque has long led the charge on everything from gay rights to the rights of the criminally accused. In March 2013, he received the ACLU of Oregon’s highest honor, the E.B. MacNaughton Civil Liberties Award, this in commemoration of his 20th anniversary as Executive Director.

Like Laura Murphy, Fidanque is a staunch defender of free speech freedom and has worked hard to champion free expression rights not only under the First Amendment but also under the Oregon Constitution (see e.g. State v. Robertson).

In 1986 the Oregon ACLU, under Fidanque’s direction, challenged the state’s obscenity law as applied to the owner of an adult bookstore. The claim was brought under Article I, section 8 of the Oregon Constitution. After hearing the case, the Oregon Supreme Court unanimously ruled that the law challenged violated the state constitution. Consistent with the ACLU arguments advanced in the case, the Court ruled: “In this state any person can write, print, read, say, show or sell anything to a consenting adult even though that expression may be generally or universally ‘obscene.'” The case was State v. Henry (1987).

Thereafter, in 1994 and 1995 there were proposed ballot measures to reverse Henry and other rulings. Fidanque and the Oregon ACLU successfully fought back those measures.

Still, an array of civil liberties issues continue to keep its director and the Oregon ACLU quite busy. Is Oregon the land of progressive promise? “That all depends on the issue,” Fidanque commented in a recent interview. That said, he welcomes the challenge and returns time and again to the ring to fight another day like a determined Rocky Balboa. I wish him well in all his future bouts.

 See also Anna Staver, “Longtime director of Oregon ACLU to retire,” Statesman Journal, Jan. 12, 2015

* * * *

What Al Bendich did as a young ACLU lawyer representing howling poets and publishers like Ferlinghetti and Ginsberg continues to serve as a model and inspiration for our current advocates, a model embraced by our tried and true First Amendment champions Laura Murphy and David Fidanque. Defending the freedom of speech of rebel poets and other free spirits will always be part of the ACLU’s core mission. Moving into the future, we will remember Al as we carry on with his work. – Susan Herman, President, ACLU

ACLU Lawsuit: PA Law to Silence Offenders’ Speech Violates First Amendment 

The Pennsylvania ACLU has gone to federal court to contest the state’s Revictimization Relief Act, which authorizes crime victims and prosecutors seeks a civil injunction to prevent speech that a could cause “a temporary or permanent state of mental anguish” to the victim or otherwise “perpetuate the continuing effect of the crime” on the victim.

The law came in response to a recorded commencement speech given by Mumia Abu-Jamal, who was sentenced to life in prison for murdering Philadelphia police officer Daniel Faulkner.

ACLU Complaint

ACLU Motion for Preliminary Injunction

The ACLU of Pennsylvania complaint was filed “on behalf of journalists, news outlets, advocacy organizations, and community leaders who were formerly incarcerated, seeking to block enforcement of a recently passed state law that stifles the free speech rights of thousands of individuals and organizations.”

→ Counsel for Plaintiffs: The plaintiffs are represented by Witold Walczak and Sara Rose of the ACLU-PA, Amy Ginensky and Eli Segal of Pepper Hamilton’s Philadelphia office, Tom Schmidt and Tucker Hull of Pepper’s Harrisburg office, and Seth Kreimer of the University of Pennsylvania Law School. Prison Legal News is also represented by Lance Weber and Sabarish Neelakanta of the Human Rights Defense Center.

ACLU files amicus brief in judicial campaign solicitation case — some “past leaders” file opposing brief

The battle between the current ACLU counsel and some its past luminaries continues.

On the one hand, the National ACLU has weighed in on Williams-Yulee v. The Florida Bar by filing an amicus brief in the case. Robert Corn-Revere of Davis Wright Tremain is the counsel of record.

On the other hand, and as in some past campaign finance cases (see my book with David Skover, When Money Speaks), an amicus brief has been filed on the other side by Norman Dorsen, Aryeh Neier, Burt Neuborne, and John Shattuck. In that brief they list themselves as “Past Leaders of the American Civil Liberties Union.” Burt Neuborne (of the Brennan Center, which also filed its own amicus brief on behalf of the Respondent, see below) is counsel of record.

 An amicus brief in support of the Petitioner was also filed by the Thomas Jefferson Center for the Protection of Free Expression.

 Briefs filed in support of Respondent Florida State Bar were filed by, among others, the following groups: The American Bar Association, the Conference of Chief JusticesPublic Citizen, Professors of Law, Economics, and Political Science (including Prof. Lee Epstein), and Professor Jed Shugerman (author of The People’s Courts: Pursuing Judicial Independence in America ).

 The Brennan Center for Justice also filed an amicus brief in support of the Respondent on behalf of the following groups: Common Cause, the Center for Media and Democracy, Lamda Legal Defense & Education Fund, Justice at Stake, the Campaign Legal Center, and Demos.


Oral arguments in sign ordinance case Read More

The Black Box Society: Interviews

My book, The Black Box Society, is finally out! In addition to the interview Lawrence Joseph conducted in the fall, I’ve been fortunate to complete some radio and magazine interviews on the book. They include:

New Books in Law

Stanford Center for Internet & Society: Hearsay Culture

Canadian Broadcasting Corporation: The Spark

Texas Public Radio: The Source

WNYC: Brian Lehrer Show.

Fleishman-Hillard’s True.

I hope to be back to posting soon, on some of the constitutional and politico-economic themes in the book.


A National University

One proposal that was in many early Annual Messages was that Congress should create a National University in the District of Columbia.  George Washington, James Madison, and John Quincy Adams endorsed this idea, but nothing happened.  (Locating the University within the District would have satisfied concerns about the constitutional power of Congress to create a university.)

I wonder how higher education in the United States would have been different if Congress had acted.  A National University would have wielded a great deal of influence over higher education (you would think) and might have led to a more centralized approach to education more generally.  Whether this would have been a good thing is hard to say.  One could argue that higher education in the United States is strong precisely because it is not dominated by one or two places (I’m talking to you–Oxford and Cambridge), but critics of our system (especially of its cost) might argue otherwise.


Call for Papers–Unamendable Constitutional Provisions

The link is here.  Here is the Abstract of the conference, to be held on June 9th in Istanbul:

Modern constitutions today commonly entrench at least one unamendable constitutional provision. An unamendable provision is impervious to the formal amendment rules that authorize alterations to the constitutional text. The Afghan Constitution (2004), for example, makes Islamic Republicanism unamendable, as does the Tunisian Constitution (2014). The Brazilian Constitution (1988) and German Basic Law (1949) both make federalism unamendable. Under the Portuguese Constitution (1976), political pluralism is unamendable, and the same is true of secularism in the Turkish Constitution (1982).

Are unamendable constitutional provisions undemocratic or do they reflect a deep respect for the true democratic foundations of constitutionalism? What are the functions, limits, uses and abuses of such provisions in modern constitutions? What are the optimal conditions under which they achieve the intent of their designers? What circumstances frustrate their intended purposes? This workshop invites abstracts for papers examining any issue related to unamendability, including both formal and informal forms.


Giving Cabinet Members Seats in Congress

A surprise in my review of presidential Annual Messages is that there was a serious push in the late 19th and early 20th centuries to give members of the Cabinet non-voting seats in the House of Representatives.  A congressional committee issued a favorable report on this in the 1880s, and President Taft endorsed the idea in his 1912 Annual Message.  Basically, this was designed to foster closer congressional/executive relations a la the British system, though Taft acknowledged that the Constitution prohibited giving Cabinet officials voting rights in Congress.  Nevertheless, non-voting Cabinet Members could participate directly in the drafting and discussion of legislation.

There was a significant drift (at least in our intellectual circles) towards the British constitutional model after the Civil War.  Woodrow Wilson tried to import British practices into the United States (as a scholar and as President), and this proposal suggests that others were on this bandwagon.  I have other examples in mind, but let me save that for another post.

UPDATE:  Justice Story also endorsed this idea in his Commentaries on the Constitution.


FAN 42.1 (First Amendment News) High Court denies cert in 2 campaign finance cases

Earlier today the Supreme Court issued its orders. Those orders included a denial of cert. in Stop This Insanity Inc Employee Leadership Fund et al  v. Federal Election Commission and in Vermont Right to Life Committee, et al v. Sorrell [ht: Ilya Shapiro]


Review Granted

  1. Elonis v. United States (argued on 12-1-14)
  2. Williams-Yulee v. The Florida Bar (to be argued 1-20-15)
  3. Reed v. Town of Gilbert (argued on 1-12-15)
  4. Berger v. American Civil Liberties Union of North Carolina (license plate case) (no date set for OA)
  5. Walker v. Texas Division, Sons of Confederate Veterans (license plate case) (no date set for OA)

Review Denied

  1. Pregnancy Care Center of New York v. City of New York 
  2. City of Indianapolis, Indiana v. Annex Books, Inc.
  3. Ashley Furniture Industries, Inc. v. United States 
  4. Mehanna v. United States
  5. Stop This Insanity Inc Employee Leadership Fund et al  v. Federal Election Commission
  6. Vermont Right to Life Committee, et al v. Sorrell