Concepts in Law and Economics: A Guide for the Curious

306 Pages·2015·2.583 MB·English

by  Jim Leitzel

Title Pages
University Press Scholarship Online
Oxford Scholarship Online
Concepts in Law and Economics: A Guide for the
Curious
Jim Leitzel
Print publication date: 2015
Print ISBN-13: 9780190213978
Published to Oxford Scholarship Online: September 2015
DOI: 10.1093/acprof:oso/9780190213978.001.0001
Title Pages
(p.i) Concepts in Law and Economics (p.ii)
(p.iii) Concepts in Law and Economics
(p.xxi) Concepts in Law and Economics (p.xxii)
(p.iv)
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Title Pages
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Library of Congress Cataloging-in-Publication
Data
Leitzel, Jim, author.
Concepts in law and economics : a guide for the
curious / Jim Leitzel.
p. cm.
Includes bibliographical references and index.
ISBN 978–0–19–021397–8 (hardback)
1. Law and economics. 2. Law—Economic aspects
—United States. I. Title.
K487.E3L45 2015
330—dc23
2015014995
1 3 5 7 9 8 6 4 2
Printed in the United States of America on acid-
free paper
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Title Pages
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Dedication
University Press Scholarship Online
Oxford Scholarship Online
Concepts in Law and Economics: A Guide for the
Curious
Jim Leitzel
Print publication date: 2015
Print ISBN-13: 9780190213978
Published to Oxford Scholarship Online: September 2015
DOI: 10.1093/acprof:oso/9780190213978.001.0001
Dedication
(p.v) To Hilary and Saul, with love (p.vi)
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Acknowledgments
(p.xi)
University Press Scholarship Online
Oxford Scholarship Online
Concepts in Law and Economics: A Guide for the
Curious
Jim Leitzel
Print publication date: 2015
Print ISBN-13: 9780190213978
Published to Oxford Scholarship Online: September 2015
DOI: 10.1093/acprof:oso/9780190213978.001.0001
Acknowledgments
(p.xi)
Almost thirty years ago, I took a class on Law and Economics,
taught by Dan Graham at Duke University. Subsequently, I
wrote a Law and Economics-style PhD thesis under Dan’s
guidance. About that time Mike Meurer, who was the first
person I knew who held both a law degree and a PhD in
economics, joined Duke’s faculty; Mike proved inspirational in
spurring and directing my early efforts. Dan and Mike have
much to answer for.
Part of the underappreciated fallout from the collapse of the
Soviet Union was the derailing of my budding career in Law
and Economics, as I was drawn to study the Russian economic
transition. After the Russian economy was, er, sorted, I came
to the University of Chicago. Law and Economics pervades the
atmosphere at Chicago, and I proved susceptible to its
influence. Chicago gave me the opportunity to teach Law and
Economics, which I have been doing for more than a decade.
This book is one result of those pedagogical efforts, and it has
been much improved by countless interactions with my Law
and Econ students and teaching assistants over the years.
George Papava, Ravi Gupta, and Petr Barton merit special
mention, but without detracting, I hope, from the manifest
contributions of many others.
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Acknowledgments
(p.xi)
My longtime friend (and occasional co-author) Mike Alexeev of
Indiana University teaches Law and Economics, too, and his
economic insight and enduring kindness are ideals that I look
to emulate. I would feel that way even if he didn’t teach Law
and Economics—but the fact that he does teach Law and Econ,
and that he is very generous, has allowed me to correct some
of the grosser errors in the manuscript version of this book.
Phil Cook of Duke University, another long-time friend and
occasional co-author, helped keep me in the greater Law and
Economics arena by recruiting me to work on gun control, and
later, by involving me in studying kidney donation. In the
interim, Phil stimulated me to work on vice policy, which also
provided kindling for the Law and Econ flame. Thanks, Mike
and Phil.
(p.xii) Hilary Arnow and Saul Arnow generously formed a
family (Artzels?) with me, leading to much happiness,
companionship, love, and family-plan cell phone savings on my
end. Thanks for all of your support, Hils and Saul. The taking
in of the lost became a habit for Hilary and Saul, when Rocky
later joined us, despite the lack of phone plan advantages for
canine members of the household. If this acknowledgments
section seems rushed, it is because I must walk Rocky. If it
seems inadequate, it is because I owe more than I can say to
Saul and Hilary; this book is dedicated to them.
I am originally from Baltimore, and my Baltimore family,
though immeasurably diminished by the loss of both my
parents in the past few years, also has been steady in their
support: thanks to Janet, John, Susan and Dan, Scott and
Travis.
Public Policy Studies in the College at the University of
Chicago has been my academic home for a decade and a half,
and there’s no place like home. Richard Taub, now nominally
retired, remains the iconic figure in Public Policy, and I am
grateful for his wise counsel and years of encouragement. Lee
Price has ably handled the day-to-day running of Public Policy
on a year-to-year basis and put up with some of my
procrastinations—thank you, Lee. Sabina Shaikh, Chad
Broughton, Betty Farrell, Woody Carter, Ray Lodato, Debra
Schwartz, Clayton Harris III, and Christa Velasquez are the
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Acknowledgments
(p.xi)
sorts of colleagues who make academia rewarding. Dean John
Boyer continues to improve the College and Public Policy,
while Professors Lis Clemens, Adam Green, and Jim Sparrow,
temporarily seconded into Mastering the Social Sciences in
the College, have been friends to me and to Public Policy, too.
Kenyatta Futterman, Kathleen Kish, and Shawn Hawk are
other Harper denizens who have eased my path. Thanks to all.
The Economics Education and Research Consortium (EERC)
has been a sort of second home for more than fifteen years.
EERC sponsors two workshops annually in Russia or Ukraine,
and the overlap between frequent workshop participants and
my academic and personal friends is staggering. This pleasant
intersection includes Mike Alexeev, Rick Ericson, Shlomo
Weber, Diana Weinhold, Gary Krueger, Judy Thornton, Olena
Nizalova, Tom Coupé, Irina Murtazashvili, Oleksandr
Shepotylo, David Brown, Ted Gerber, Russ Pittman, Natalya
Volchkova, Victor Ginsburgh, Vladimir Popov, Denys Nizalov,
John Earle, Eric Livny, Volodymyr Vakhitov, and David Tarr.
Iryna Sobetskaya and Natalia Bystrytska have administered
the EERC with care and grace; their tireless efforts and their
cheerful presence have made the EERC the welcoming place
that it is.
I suffer from law professor envy. Besides Mike Meurer, other
law professors whom I can’t help admiring, personally and
professionally, include Will Baude, Mary Anne Case, and Jeff
Stake. Their whereabouts can be traced through CDC data on
outbreaks of law professor envy.
(p.xiii) Many other old friends, including some whom I have
frightfully neglected to my shame and detriment, also have
helped me stay more-or-less on track. They include Jed
Samuels, Chris Scheidt, Julius Scott, Nina Alexeeva, Geoff
Renshaw, Betsy Glennon, Janice Hall, April Harding, Bob
Conrad, Cliff Gaddy, Barry Ickes, Stuart Shaw, Chris Young,
Steve Smith, Vitaly Yermakov, Vladimir Treml, Vladimir
Pantyushin, Will Pyle, and Randy Beard, none of whom have
the good sense to live in Chicago. (Randy also has served as a
gracious guide through organ donation policy; some of the
fruits of his labors appear in chapters 5 and 6.) Phoebe Rice,
Brad Henderson, Deidre Ferron, George Tolley, Victor Lima,
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Acknowledgments
(p.xi)
Joselyn Zivin, Allen Sanderson, Ari Adut, Dimitriy Masterov,
Janet Sedlar, Yuval Weber, Judith Miller, Will Baude,
Margrethe Krontoft, Andrea Althoff, Rovana Popoff, and
Nikkie Eitmann have, at least at times, had the good sense to
live in Chicago.
Julia Mahoney, Will Baude, Mark Kleiman, and Mary Anne
Case kindly provided some helpful comments at various
stages; thanks to all for their generosity and insight.
Oxford University Press was kind enough to recruit some fine
anonymous referees, both law professors and economics
professors . . . or so I am led to believe. Their discerning
comments led to a much better book. Thanks both to the
referees and to Scott Parris and Cathryn Vaulman for their
help. Scott’s stewardship of this book has been inspiring,
though I still would like to sneak “fardel” into the text. Any
errors that remain in the book are my responsibility, of course,
though Law and Economics does indicate many circumstances
in which it is desirable not to impose damages upon parties
who fail to meet their responsibilities.
J.L. (p.xiv)
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Introduction
(p.xv)
University Press Scholarship Online
Oxford Scholarship Online
Concepts in Law and Economics: A Guide for the
Curious
Jim Leitzel
Print publication date: 2015
Print ISBN-13: 9780190213978
Published to Oxford Scholarship Online: September 2015
DOI: 10.1093/acprof:oso/9780190213978.001.0001
Introduction
(p.xv)
Jim Leitzel
The Original of Laura
Toward the end of his life, the famed writer Vladimir Nabokov
began working on a new novel, which came to be titled The
Original of Laura.1 Vladimir had instructed his wife Vera to
destroy the unfinished manuscript in the event of his death.
Nabokov passed away in 1977, with The Original of Laura in a
far-from-complete state: the “manuscript” consisted of 138
handwritten index cards. Vera did not get around to
destroying the cards before she died in 1991. The manuscript
next passed into the control of Dmitri Nabokov, the son of
Vera and Vladimir. In 2008, Dmitri, by then in his seventies,
acknowledged a pressing duty to decide whether to accede to
his father’s wishes and do away with the manuscript or to
preserve The Original of Laura and make it more generally
available.
Imagine for a moment that Vladimir Nabokov’s direction to his
wife about destroying his unfinished novel had been duly
recorded in a legal document, his will. Should the law require
the executor of the Nabokov estate to heed the unambiguous,
written instructions or should the law allow the executor to
override the decedent’s wishes and release the manuscript?
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Introduction
(p.xv)
After all, The Original of Laura could bring pleasure and
enlightenment to millions of people for generations to come.
How can anyone justify destroying the draft just because its
now deceased creator/owner was a purist about not making
incomplete work available to public view? In terms of overall
human flourishing—economists might say “efficiency”—it
seems as if the decision is between having a world with the
additional Nabokovian proto-novel or a world without it. As it
safely can be assumed that the manuscript, if released, would
do no direct positive harm (scandalized critics of Lolita
notwithstanding), then the world with the novel should be
superior to the world without it. So if the only issue were the
isolated case of the Nabokov novel, overall well-being would
call for the release of the manuscript. (p.xvi) Even in its
incomplete form, The Original of Laura exists, so why not
make it available?
Laws have effects not just when they are formulated but also
into the future. Of course, many of the gains from preserving
The Original of Laura will arise in the future (in the form of
pleasure for future readers)—but so will the incentives
fostered by the “law” created or applied in the Nabokov case.
How will future authors behave if they know that, should they
die, their wishes to have their incomplete manuscripts
destroyed will not be honored? Frail novelists might not
bother to initiate new projects, understanding that they will
not have the final word on dissemination of their writings.
Aging authors themselves might destroy unfinished work
prematurely, fearing (perhaps wrongly) that they might not
survive an acute sickness. On (what turned out to be) his
deathbed, Adam Smith (1723‒1790), the Scottish father of the
economics discipline, asked some friends to destroy most of
his unpublished documents. When they dawdled, Smith
personally superintended the burning of sixteen volumes of his
papers.2
A law that permits (or requires) the executor to override
Nabokov’s wishes ensures the dissemination of The Original of
Laura. This benefit must be weighed against the possibility
that other, perhaps even more worthy literature, will fail to be
produced in the future as a consequence. It is hard to know
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