Author: Nate Oman


A Modest Defense of Allowing Firms to Execute Junior Associates

Getting a job is difficult, particularly in a down economy. One way in which one sees this is in the use of unpaid or poorly paid intern labor. Many people at the bottom of the employment ladder are willing to work for minimal compensation as a way of learning the ropes and getting their foot in the door. Internships do two things for employers. First, they provide a pool of cheap – if unskilled – labor. Second, they shift the costs of training from the employer to the employee. In effect, the employer holds off on hiring the employee until he or she has expended her own resources in the form of time and labor acquiring skills that the employer desires. Internships are thus much like professional education — a training cost that is bourn mainly by employees rather than employers.

Here’s a question: Why is the military different?

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Three Defenses of Markets

Broadly speaking, I think that there are three families of arguments that can be made in defense of markets. Most commonly within the legal academy markets are defended on the basis of efficiency. The central question is distributive: How do we move resources to agents in such a way as to maximize the aggregate welfare? Markets, so the argument, do this very well. Expressed preferences are the coin of the realm in market transactions, and we assume that expressed preferences are the best guide to welfare. Indeed, on some theories welfare simply IS the satisfaction of expressed preferences. Provided that we can have a regime that insures that transactions are voluntary, externalities are internalized, and transaction costs are overcome, markets will allocated resources better than any competing social institution. Thus the efficiency argument.

The second defense of markets is libertarian. This looks a lot of like the efficiency argument but is actually quite different, notwithstanding the fact that libertarians frequently confuse the two. In the libertarian argument what matters is not welfare but freedom. Freedom is taken as a good in and of itself, even if choices might result in reductions of welfare for the chooser. Paternalism is bad because is shows a disrespect for the autonomy of market participants. Depending on how one conceptualizes welfare the libertarian and efficiency arguments very nearly merge with one another. If welfare simply IS the satisfaction of expressed preferences then choice and welfare are very nearly synonymous. Notice, however, that there is nothing about the structure of the libertarian position that requires that one take such a position on the meaning of welfare. One might acknowledge the reality of welfare-reducing choices, while prioritizing choice over welfare normatively. Notice that in this argument there is nothing special about markets. They are simply a locus of choice, but so are many other institutions and practices from love affairs to soccer clubs. Thus the libertarian argument.

The third argument is a defense of markets as markets. Read More


A Contracts Chestnut for Tort Theorists

Of late I have been reading and thinking about the theory of private law, mostly torts. This is a bit odd as I am generally a “contracts guy” not a “torts guy.” What interests me for now, however, are those features that contract shares with tort, in particular the bilateralism of damages (wrongdoers pay victims) and private standing (the law empowers victims to act against wrongdoers rather than providing third-party enforcement or the like). One of the big debates in this area is between corrective justice theorists — like Ernest Weinrib and Jules Coleman — who see tort law as vindicating a duty compensation and civil recourse theorists — like Ben Zipursky, John Goldberg, and my soon-to-be colleague Jason Solomon — who see tort law as providing a means for victims to act against tortfeasors. I tend to think that the civil recourse folks have the upper hand in this debate. Indeed, I have even offered a modified civil recourse theory of contractual liability based on the dismemberment of goats. It occurs to me that a venerable debate from contract theory might be of use to the torts guys. Read More


Evidence that Academia is an Aristocratic Country

Academics make less money than they would probably be able to make were they not academics. This is certainly true for the vast majority of law professors, most of whom were educated at elite law schools and often have had professional experience in the upper levels of the legal profession. Yet despite the fact that they make less money than their non-academic professional peers, law professors still work hard (although not as hard as say junior associates at Skadden). This morning I was reading De Tocqueville, and I came across this passage, which could be applied, I think, to much of academic work: Read More


Book Review: Gordon S. Wood, Empire of Liberty

Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815 (New York: Oxford University Press, 2009)

This is a big book by one of the greatest living scholars of the early Republic. It is worth reading. Gordon Wood, of course, is the author of The Creation of the American Republic and numerous other works on the founding period. Empire of Liberty weighs in at 738 pages and is part of the not yet complete Oxford History of the United States. This volume covers the period from the adoption of the Constitution to the end of the War of 1812. It is a marvelous synthesis of contemporary scholarship on the period and a well-spent career by a careful and imaginative scholar. Enough with the superlatives and adjectives.

The book is organized as a narrative, with a nice mix of a somewhat gossipy treatment of elite politics interspersed with chapters on social history. On the social history front, the book is strong on economics and (thankfully from my point of view) religion. If there was one subject where I wasn’t entirely impressed, it was his treatment of military history. Having gone through a Civil War history phase as an adolescent, however, I suspect that I probably have a higher tolerance for the analysis of troop movements, battles, and logistics than the ordinary reader. Also, the volume has a good bibliographic essay, which is extremely useful as a scholar from another discipline who might be interested in using some of the literature on this period.

Wood has two chapters that will be of special interest to lawyers and legal scholars. The first is “Law and an Independent Judiciary” and the second is “Chief Justice John Marshall and the Origins of Judicial Review.” Both of these chapters are heavily weighted toward federal constitutional law and the rise of the Supreme Court. However, in comparison to Howe’s What Hath God Wrought (the next volume in the Oxford History and another book that is worth reading), Wood has a more in depth discussion of legal developments beyond the Supreme Court. His discussion of the intellectual roots of judicial independence in eighteenth-century English legal thought is excellent, as is his discussion of the politics of debtor-creditor law in the early Republic. Finally, while I feel called upon to carp at the way that developments in the common law consistently get relegated to second place vis-a-vis constitutional law in most histories, I was fascinated by Wood’s discussion of Marshall’s maneuverings against Jefferson. My employer is pleased to claim both men as alums (although the claim is stronger in the case of Jefferson than Marshall), but as between the two, Marshall comes across as the more pleasant, canny, and ultimately wise man.

In terms of political history, Wood organizes his narrative around the rise of Jeffersonian democracy. It’s a story in which the losers are, to my mind, ultimately much more interesting than the winners. One of the ways that Wood illustrates this story is through a series of portraits of middling political figures — congressmen, unsuccessful senators, successful grandees in state legislatures, and the like — which make for a nice contrast to a story dominated by Washingtons, Adamas, Jeffersons, and Hamiltons. I found myself sympathizing — if not entirely agreeing — with curmudgeonly Federalists like James Fenimore Cooper who had to live on in the increasingly crass and democratic society that Jefferson helped to midwife even if it was not ultimately his creation. Indeed, at the end of the book Wood provides a striking portrait of Jefferson in retirement, increasingly crotchety, disoriented by the grasping hucksterism of nineteenth-century America, and, perhaps most pathetically, more and more apologetic for slavery while still desperately clinging to the increasingly threadbare mantle of enlightenment prophet of human freedom. Indeed, Wood ends the volume with a peroration on the evil of slavery and its blight on the nation. It is, I think, the least compelling prose in the book, but there is no denying the evil that it condemns or the way in which it came to warp so much of American political, social, and intellectual life.


Epstein, Tort, and Sticking it to BP

Richard Epstein mounts a defense of tort liability in today’s WSJ. I wish that a defense of civil liability was a stronger element of free-market politics in this country, so I’m happy to see Epstein make the case for tort in a place such as the WSJ. Epstein calls for “a no-nonsense liability system that fastens full responsibility on the parties who run dangerous operations, no excuses allowed.” I am not a tort aficionado, but I wonder whether drilling for oil counts as an ultrahazardous activity exempt from the ordinary regime of negligence liability or if this is simply Epstein advancing his preference for a regime of strict liability. He goes on to write:

A tough liability system does more than provide compensation for serious harms after the fact. It also sorts out the wheat from the chaff—so that in this case companies with weak safety profiles don’t get within a mile of an oil derrick. Solid insurance underwriting is likely to do a better job in pricing risk than any program of direct government oversight.

I agree with Epstein that insurance companies coping with the risk of a tough liability regime are likely to be much better monitors than government agencies coping with the risk of political embarrassment. I do think, however, that Epstein’s article is rather too optimistic that tort can so easily serve the multiple purposes that he assigns to it. By providing victims with what amounts to a form of insurance through the tort system we create another kind of moral hazard, one that is less easy to manage through the kind of monitoring that private insurance provides because the relationship between insured and insurer in the tort regime isn’t contractual. Furthermore, as a system of compensation tort law has a tendency toward feast and famine for victims. This may mitigate concerns about moral hazard, but if we are interested in compensation for victims (as opposed to plaintiff’s lawyers) this is a problem.

There is an important aspect of tort liability that doesn’t make an appearance in Epstein’s argument. Liability does more than provide compensation and internalize costs, laudable as those goals are. As Benjamin Zipursky and John Goldberg have argued it also gives those who have been harmed a way of acting against those that have harmed them. Tort lets those who have been hurt by BP strike back, asserting themselves are more than passive objects of harm or compensation. If the proponents of civil recourse theory are to be believed — and I find myself more than a little persuaded — this is a goal worthy of attention in its own right.

Put more simply, one of the reasons we want tort law is so that those who it has hurt can stick it to BP for the harm they have suffered.


The Founders and the Tea Party

I’ve found it interesting to see the way in which the tea party movement (and some of my neighbors who are involved in it) invoke the Founders and the constitution. Without exception every law professor with whom I have talked treats these tropes with derision, seeing the tea party movement as a bit of reactionary hysteria or worse. I think, however, that there is a deep affinity with some of the ways of political thinking one sees among at least some tea partiers and the political thinking of the founding generation.

First, many tea partiers invoke the constitution in political debate. This may seem unremarkable, but it does gesture toward a certain view of politics that is both genuinely congruent with the founders political thinking and, I believe, deeply mistaken. Gordon Wood has written about what he calls the “adjudicative politics” that were held up as an ideal by the American revolutionaries and the politicians of the early republic. In this vision, there is a single, unitary public good and the job of statesmen is to act as kind of super-adjudicators, applying known principles of good government to particular issues. As Wood documents, this vision of politics broke down in the 1790s and 1800s as it became clear that there was no widespread agreement on the meaning of the public good. Rather politics, far from being an exercise in adjudication, consisted of a continuous debate about the content of the public good and – more unsettling to the adjudicative model – the bargaining between constituencies over claims to political power.

So what does this have to do with the tea partiers? Read More


Suppressing Speech and Suppressing Dueling

Of late I have been doing some research on the relationship between dueling and litigation in the 18th and 19th centuries. An integral part of the Code Duello was the practice of “posting someone a coward.” If a gentleman refused to give satisfaction on the field of honor to a gentleman he had offended, then the victim would print broadsides or take out newspaper advertisements announcing that so-and-so, previously thought a gentleman was in fact a coward. In an effort to suppress the practice of dueling, the Texas legislature adopted the following law:

If any person or persons hall, in any newspaper, or handbill, written or printed, publish or proclaim any other person or persons as a coward or cowards, or use other opprobrious and abusive language for not accepting a challenge, or fighting a duel, such person or persons so offending shall, on conviction, be punished by a fine not exceeding five hundred dollars, and imprisonment in the common jail of the county not exceeding sixty days, at the discretion of the court.

I haven’t seen anything about convictions under this law. Notice, that it is drafted so that it probably sweeps up more than simply “posting” someone for refusing a challenge. Journalists wishing to comment on the courage of Texas politicians refusing a challenge should proceed cautiously.


The Unbearable Lightness of Empathy

As Kagan progresses through the Kabuki of the confirmation process we can expect to hear her supporters invoke the idea of empathy as a kind of liberal counterpoint to Roberts’s umpire analogy. The more I think about empathy and judging, however, the less I think that it has any substance at all.

In the case of Sotomayor, empathy was associated with identity politics. There was some ineffable something about being a wise Latina that gave Sotomayor special insight into the way that the law effects “ordinary people.” In Sotomayor’s case one could at least construct a facially plausible story about her biography in which her experience provided some insight into “ordinary people” outside of her legal expertise.

Not so with Elena Kagan.

There is nothing in her biography to suggest any special insight into the lives of “ordinary people.” The Upper West Side (my experience with native New Yorkers is that some non-trivial percentage of them take a positive pride in NOT understanding America beyond the five boroughs), prep school, Princeton, Oxford, Harvard Law School, a Supreme Court clerkship, work at an elite law firm, the University of Chicago, the Clinton White House, HLS again, and the Solicitor General’s office. There’s nothing in there that screams, “Special connection with the poor and the downtrodden, or even with the middle class and doing fine.” From what I’ve seen, Kagan is an intelligent and decent person. She may well be able to see the world from the perspective of “ordinary people,” but if she does so it is by an act of imagination rather than memory.

None of this will keep folks from lauding Kagan’s “empathy.” If empathy is no longer tied to biography and identity politics is there anything left of it? The answer, it seems to me, is “Not much.” When empathy is invoked in contemporary debates about the judiciary, I think it’s best to simply see it as a gesture toward a set of substantive positions. To be empathetic is to be solicitous of the state in its role as regulator but less so in its role as defender of national security. It means a somewhat more pro-defendant position on criminal procedure. It means a preference for national rather than state government. Above all else, I suspect that it means holding the kinds of opinions that we all expect Elena Kagan to hold on the various cultural arguments — gay rights, abortion, etc. — that form the detritus of the sexual revolution. None of this, however, really has to do with empathy. Rather, it simply strikes me as a substantive vision of the relationship of the state to individuals, businesses, and local communities.