Category: General Law

2

A “Renewed Appreciation” for the Wal-Mart Brand

Much ink has been spilled over Wal-Mart, particularly ink related to the benefits and drawbacks of its impact not only on local communities and their economies, but also on the broader economy.   Nevertheless, I found interesting a recent Wall Street Journal story about how the economic downturn has turned former Wal-Mart opponents into advocates.

As the story notes, Wal-Mart has been in a long battle to expand into Chicago–extending at least as far back as 2004, when, as the Wall Street Journal put it, the city “rebuffed its efforts.”  Apparently its expansion efforts met with a wall of resistance from those concerned about Wal-Mart’s wages, benefits, and its potential impact on local businesses.  Recently, this wall has begun to crumble.   Wal-Mart itself has tried to turn the tide, producing studies reflecting its positive impact on communities, workers and families.  However, it has been the economy that appears to have made the difference in attitudes.   The recession has “softened skepticism” of those who opposed Wal-Mart’s expansion efforts as recently as last  year, or at the very least that skepticism has been outweighed by “the need for jobs and tax dollars.”  As a Wal-Mart manager notes, the economy has given both customers and community members a “renewed appreciation for the Wal-Mart brand.”  That sentiment is clearly understandable, especially given the unemployment rate in Chicago and other cities.

To be sure, while some do seem to have a renewed or better appreciation for Wal-Mart, others give their support reluctantly.

Despite this reluctance, and the opposition Wal-Mart still faces in this area, the company  has been looking to enter cities like Chicago.   This is because Wal-Mart “has begun saturating suburbs.”  Hence, Wal-Mart “sees Chicago as a potential testing ground for approaches it could use in other big cities.”  Thus, whether one has positive or negative feelings about Wal-Mart, as the Wall Street Journal points out, the push into cities like Chicago is an important one.

5

The Road to More Minority Partners?

This past weekend, I spoke at Georgetown Law Journal’s symposium on post-racialism. It was a great symposium. Congratulations to the student editors!

The scheduled roundtable discussions during the event focused on diversity in law firms. One of the issues discussed was the low number of minority attorneys, especially partners, at law firms. At many firms, there are no or just one or two minority partners within each racial group (Only 20% of all partners are women.). Even at firms with a more sizeable number of minority associates, those associates tend to leave the firms by the fourth or fifth year. Read More

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Equity or Non-Equity, That Is The Question

Over the past two years, the National Association for Law Placement (NALP) has tried to obtain information regarding the breakdown of equity and non-equity partners by gender and race at law firms. The majority of NALP’s law firm members refused to hand over the information, and NALP eventually gave in on February 12.

The Executive Director of NALP, Andrew Leipold, indicated that most firms cited privacy concerns for not divulging the details of their equity and non-equity partnership breakdowns. According to Leipold, small firms especially worried that providing such information would allow non-equity partners to be easily identified and stigmatized. Read More

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International Economic Law in a Time of Change

Back on the international front, some readers may be interested in the biennial conference of the International Economic Law Interest Group, of the American Society of International Law.  Chaired by Susan Franck and Greg Shaffer, they are planning what should be a wonderful conference, at the University of Minnesota, from November 18-20, 2010.

Under the theme of International Economic Law in a Time of Change: Reassessing Legal Theory, Doctrine, Methodology and Policy Prescriptions, they have issued the following call for papers:

The start of the second decade of the twenty-first century is witnessing a confluence of events affecting international economic law that calls for re-evaluation. The international context has radically changed. Most analysts contend that we are shifting toward a multi-polar world in light of economic transformations in China, India, Brazil, and other developing and transitional countries, coupled with economic stagnation in the United States and Europe which are beset by a financial crisis and embroiled in foreign wars and security concerns. These developments have arguably complicated international economic governance, yet other factors–such as the current financial crisis–press consideration of new forms of international economic governance, such as the G-20. Global economic interdependence, exemplified by global production and supply chains, calls for sustained attention to international economic law and institutions.

With this backdrop, the November conference will organize sessions that address the full range of international and transnational economic law. We encourage scholars to submit papers or panel proposals related to trade, investment, international financial regulation, transnational private law, and development law, as well as their intersection with social regulation such as over global warming, labor rights and consumer safety. This call for papers welcomes submissions that provide new analytic frameworks, reassess legal theory, evaluate developments in legal doctrine, engage in empirical analysis of the way international economic law operates, and provide guidance for policymakers, regulators and adjudicators in this time of international economic change.

Paper and panel proposals should be submitted by July 30, 2010, to 2010IELconference@gmail.com.  More information available here.

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Go Butler!!

I live three blocks from campus and walk to home games at Hinkle Fieldhouse, so this is unbelievably exciting.  Do you believe in miracles?  I’m starting to.

Now returning you to legal topics . . .

4

Brooks and the New Economics

Apropos of Larry’s recent post (and paper) on economic analysis, David Brooks had an interesting op-ed in yesterday’s New York Times, under the headline “The Return of History“.  In the piece, Brooks offers a history of the discipline of economics, in five acts, culminating in the following:

Economics achieved coherence as a science by amputating most of human nature. Now economists are starting with those parts of emotional life that they can count and model (the activities that make them economists). But once they’re in this terrain, they’ll surely find that the processes that make up the inner life are not amenable to the methodologies of social science. The moral and social yearnings of fully realized human beings are not reducible to universal laws and cannot be studied like physics.

Once this is accepted, economics would again become a subsection of history and moral philosophy. It will be a powerful language for analyzing certain sorts of activity. Economists will be able to describe how some people acted in some specific contexts. They will be able to draw out some suggestive lessons to keep in mind while thinking about other people and other contexts — just as historians, psychologists and novelists do.

In something of that spirit, I might flag a recently completed (and submitted) paper of mine, entitled Beyond Individualism in Law and Economics.  In it, I argue that law and economics – and, in a sense, economics more generally – must recognize important challenges to its methodological orientation to individuals, just as it has recognized, over the last twenty years, the limits of its assumption of rationality.  Once the discipline does so, I suggest, it will invite far broader insights, akin to those offered by the behavioral revolution in psychology and economics.

The abstract, for those interested, is below the fold.

Read More

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Traditional v. Economic Analysis and Cardozo v. Posner

Scholars continue to debate the merits of traditional legal analysis compared to contemporary economic analysis of law. Each has virtues and both pose trade-offs. Adding to the extensive discourse, now available on SSRN is my new article probing the comparative appeal of these two approaches.

I offer a novel approach to the longstanding debate. I focus on judicial opinions of Benjamin Cardozo and Richard Posner. I use the context of tort law, where economic analysis has enjoyed most impressive success. I chose these two judges because their opinions appear more often than any other judge’s in current torts casebooks and they epitomize the competing methods.

My analysis led me to conclude that Cardozo’s traditional approach has the better of Posner’s economic approach. I would be delighted to hear criticism of the paper and its conclusions.

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Dispatches from the International Front

I write from the 104th annual meeting of the American Society of International Law, on the theme of International Law in a Time of Change.  I’ve only just arrived, so can’t yet report on much of substance.  As to the most important dimension of conference attendance, on the other hand, I’ve already seen previous Concurring Opinions guest bloggers Bill Burke-White and Anupam Chander, and am now sitting across a table (in the bar, of course) from David Zaring – who is furiously typing on his laptop, presumably writing a post for The Glom.

Elsewhere on the international front, Jim Maxeiner recently posted (to the Comparative Law listserv) the following quote from Chief Justice Roberts:

“I like my wine French, my beer German, my vodka Russian, and my judicial system American.”

Apparently, Roberts stated as much – not at a cocktail party – but at a panel discussion at the University of South Carolina.  It was clearly intended, as such, for public consumption.

Perhaps I’m over-reacting, but does this seem like the guy who said he was just a neutral umpire, who would call them like he saw them?

1

Top 10 Books

I thought I’d join in on the thread going around asking people to name the ten books that influenced them. I’ll leave legal books out to make this more interesting.

1.  Inside the Third Reich (Albert Speer) – The best book about evil ever written, precisely because Speer (one of Hitler’s close friends and ministers) tries so hard to explain his actions without admitting that he knew about the Holocaust.  This requires more reading between the lines than any other book.

2.  On War (Carl Von Clausewitz) — This unfinished work captures certain fundamental concepts about politics in a way that no other does.

3.  I, Claudius (Robert Graves) — I’ve always identified with the main character for some reason.

4.  Moby Dick (Herman Melville) — “All visible objects are but as pasteboard masks.”  Plus, there are whales.

5.  Julius Caesar (William Shakespeare) — Maybe this shouldn’t count because it’s a play, but Antony’s funeral oration is one of the few speeches that I can recite from memory.  (Though I also love Caesar’s “I am constant as the Northern Star” speech right before he gets hacked to pieces.)

6.  Extraordinary Popular Delusions and the Madness of Crowds (Charles Mackay) — Still the best book on economic bubbles.

7.  The English Constitution (Walter Bagehot) — Well, OK this is a law book, but Bagehot was not a lawyer, so I’m making an exception.

8.  Titan (Ron Chernow) — This biography of John D. Rockefeller Sr. is a model for how I want to write my biography of John Bingham.  (More on that soon.)  Chernow’s biography of Alexander Hamilton deserves an honorable mention.

9.  Don Quixote (Miguel de Cervantes)  — There’s something oddly compelling about it.

10.  Lend Me Your Ears (William Safire) — Sure, it’s just an anthology of great speeches, but the study of rhetoric is underrated and you can’t do better than this volume.

1

Madoff and Affinity Fraud

It looks like Bernie Madoff is back in the news.  This Wall Street Journal story  not only discusses the alleged physical assault against Madoff who is serving a 150-year prison term, but also indicates that at least one inmate has gotten investment advice from Madoff–apparently Madoff advised the inmate to diversify and stay away from day trading. . . 

Earlier this month, GW hosted a conference entitled Madoff One Year Later: What Have We Learned?  The conference brought together some of the key players and commentators in the Madoff scandal, including one of Madoff’s lawyers, Ira Sorkin.    As you can imagine, there was a lot of engaging discussion about what happened, why it happened, and strategies to prevent future happenings. 

There also was a lot of discussion about trust in general and affinity fraud in particular.  The SEC describes affinity fraud as an investment scam that preys upon members of identifiable groups (such as religious or ethnic communities), and that is perpetrated by someone who is a member of the group or who claims to want to advance the groups’ interests.   Affinity fraud preys upon the trust within such groups, relying on the notion that “you can trust me because I am like you.”  I have written a couple of articles on affinity fraud and am planning to write a book on the subject, and hence the discussion about affinity fraud as it relates to the Madoff scheme was particularly intriguing to me.   Although Madoff’s case involved significantly more money than other affinity scams, it had some of the key hallmarks that have made such scams so successful. 

 Three things in particular worthy of note.  First, relying on group trust is often so powerful in overcoming people’s skepticism that both the financially unsophisticated and the seemingly sophisticated fall victim to the scam.  As one of the conference participants noted, most investors, from retail to hedge funds, are just looking for someone to trust so that they don’t have to worry or otherwise pay attention.  By relying on the trust common to many groups, affinity fraud makes people feel like they have found that someone.  Second, it is not at all unusual for affinity fraud scams to last significantly longer than other frauds.  This is because once the trust is established, not only are investors less likely to fully investigate the scam, but they also are less likely to believe they have been defrauded–and even when they do believe, less likely to report outside of the group.  To be sure, they are exceptions–including like in the Madoff case where someone sought to blow the whistle early on.  Nonetheless, as the Madoff case revealed, it usually takes quite a while for these scams to come to light.  Third, affinity fraud perpetrators often incorporate some element of charitable giving.  Thus, investors are often told that some portion of their investment will enable them to “give back” to their community.  Moreover, very often perpetrators of these scams establish their own credibility by reference to their track record of charitable giving.  That was true in the case of Madoff.  Hence, while greed certainly plays a role in these kinds of investment schemes, it is not the only motivator for investors.

In the end, affinity fraud confirms the power of trust in general, and group trust in particular, in overcoming people’s skepticism and pulling them into fraudulent and sometimes outlandish investment schemes.  Not that perpetrators of affinity fraud needed any confirmation of this fact.