As a student at the LSE in the late Seventies, I quickly realized that one of the most urgent questions facing students of Law or Economics, or Coase/Posner style Law & Economics, is 'where is the toilet?' This question must be clearly distinguished from inquiries regarding how to go potty. If you are asking the 'where' question, it is likely that you already know the answer to the 'how' question. Equally, if you don't know the answer to the 'how' question, the 'where' question has little salience for you.
One may say that the 'how' question is 'outside' the system. The 'where' question is that of an insider. However, there are some people who leave the toilet in a disgraceful condition. We may need to create incentives or penalties to ensure such people use the facilities in a proper manner. In particular, it is important to aim your piss or shit inside, not outside, the toilet bowl. This is an ideographic, not a nomothetic, matter. Nevertheless, from the perspective of legal positivism, it is an 'inclusive' or 'insider' issue because rules in respect to 'how' a thing is to be done may be expressed as moral injunctions which will be interpreted differently in different historical milieus. We understand that, as civilisation progresses, manners become refined ; the gilded mask of civility must, with glad eyes, smile equally upon all though the skull underneath remain hideous and intent on repression or rapine.
H.L.A Hart, it seems to me, confused the issue by suggesting there was an insider or emic as opposed to etic or external perspective when, the truth is, hypocrisy is apparent to even apes and Yahoos. True, he wrote under the supposition that there was a separate 'Science of Law' as opposed to just 'Law'. The truth is the Law isn't a Science. It can have no representation as a deontic logic. It is a 'liberal' profession. True, there are Law Professors who don't practice Law but that is because they are stoooopid.
Because the Law is a profession it has its own 'terms of art' whose interpretation differ between jurisdictions or contexts. Other disciplines- e.g. econ or anthropology- may use the same word but as a term of its own art. An example would be capital which means different things to economists than to accountants or judges.
The trend in England has been for Judges to simplify their language and to find their own way to elucidate ratios without reliance on jargon. A complicating factor, for the UK, was its having to create a Supreme Court to comply with EU requirements. Post-Brexit, with a Labor Party barrister in Number 10, it is unclear how UK law will evolve. Much depends on the future course of devolution or, in the case of Scotland- the possibility of Independence. At that point, there will need to be greater clarity on issues of dual sovereignty, priority of Treaty law, doctrine of political question etc. But this is because of Knightian Uncertainty. It is pointless to speak of paradoxes involving determinacy when possible states of the world are not known.
Eric A. Posner & Adrian Vermeule take a different view. Back in 2013, they published a paper titled 'Inside or Outside the System?'.
The abstract reads-
In a typical pattern in the literature on public law, the diagnostic sections of a paper
if a medical or legal or accountancy outcome is bad, it may be because the dude concerned is doing something unhealthy or illegal or contrary to current standards of professional practice. Thus, the diagnosis and prescription have to do with changing bad behavior which in turn may have to do with changing motivation.
draw upon political science, economics, or other disciplines to offer deeply pessimistic accounts of the motivations of relevant actors in the legal system.
i.e. having an incentive to do something you shouldn't- e.g. my incentive to eat cake coz it is tasty even though I'm at risk of diabetes.
This is mere common sense.
When doing 'mechanism design'- i.e. reverse game theory- we need the payoff matrix to be stuff the players actually want- e.g. money, fame, winning rather than losing etc. This is because people like participating or even just watching such games. We don't to watch a wrestling match where rival players braid each other's hair and offer each other gratuitous rape counselling- though no doubt that will be the fate of Indian wrestling under Rahul Raj.
The prescriptive sections of the paper, however, then issue an optimistic proposal that the same actors should supply public-spirited solutions.
Players have an incentive in making the game more fun or better suited to fit a public purpose. This may involve getting rid of perverse incentives which result in individual rationality conflicting with what is collectively rational. Consider 'doping'. If nobody does it, everybody is better off. If the thing is legal, then all players an incentive to endanger their own health. This is 'incentive incompatibility'.
Where the analyst makes inconsistent assumptions about the motivations of actors within the legal system, equivocating between external and internal perspectives, an inside/outside fallacy arises.
Nope. This is just a story about improving mechanism design to get rid of incentive incompatibility and thus make everybody better off.
We identify the fallacy, connect it to an economics literature on the "determinacy paradox," and elicit its implications for the theory of public law.The “determinacy paradox” was the brainchild of Brendan O’Flaherty and Jagdish Bhagwati who thought that '(for example) economists’ efforts to persuade governments to lower trade barriers were inconsistent with economists’ theories about why governments raise trade barriers'.
This is nonsense. Economists are welcome to point out that all Governments can benefit by agreeing to a change in the rules. There is a collective action problem. Sadly, if the decision space for a multi-lateral Trade treaty is rendered 'multi-dimensional' (e.g. there are security or human rights considerations in addition to purely economic ones) then McKelvey chaos, or agenda control, may prevail.
It is obvious that under certain circumstances (e.g. ability to massively retaliate against the other party's reneging) progress can be made in a unilateral manner. Thus one country may unilaterally drop Trade barriers in the belief that others will follow suit. If failure to reciprocate is massively punished, a new 'repeated game' has been unilaterally established. Similarly, in a Bench of a particular composition unilaterally observes some obviously desirable self-denying ordinance in the hope that this will become customary, then a new constitutional principle is established iff there is indeed an adequate threat-point against subsequent Benches of a different ideological slant. This may become the case if Judges feel that the Legislature will consider any deviation from the new constitutional principle to be grounds for changing the composition of the Bench or taking other such action.
I suppose one could say that a person who claims to be an Economist of the 'Efficient Markets' school who nevertheless uses 'Chartist' methods (i.e. assumes ergodicity does not obtain because the Muth rational solution is either unknown or ignored) is acting inconsistently. We may even say there is a decision theoretic paradox or cognitive bias. But that has nothing to do with the Law or even Legal Scholarship. Why? Nobody in the legal profession is expected to be a crude 'utility maximiser' of a mercenary type. Rather, the assumption is that they all wish to gain the reputation of a Solon or a Solomon wise in judgment.
Imagine a paper about constitutional theory that offers the following argument: "All officials are ambitious, and thus prone to maximize their power. To solve the problem, judges should adopt the following rules of constitutional doctrine . . . ."
This follows if there is a penalty for breaking that rule. In speaking of a coordination game, when the Schelling focal solution changes, an agent who doesn't understand or accept the change will lose power, reputation or influence because they now appear to be acting in a maladroit manner. People think they are senile or have gone over to the Dark Side.
The natural reaction would be to ask whether the diagnosis in the first sentence covers the judges as well; if it does, the prescription in the second goes wrong by assuming public-spirited motivations on the part of the judges who are asked to supply socially beneficial rules.
Judges are in a special position because of stare decisis. True, this won't bind a subsequent Supreme Court but, by long usage, a customary practice comes to be seen as a fundamental constitutional principle and thus a Bench which tampers with it may face Legislative action which curbs its power or which changes its composition. Even if this does not happen, still there could be a counter-productive result in terms of a party losing elections or a stronger version of impugned laws being pushed through.
Parallel questions arise, mutatis mutandis, if the diagnosis is not that officials are ambitious, but that they are self-interested in some other way, or are partisan, or ideological. There are two ways of understanding what has gone wrong in this sort of argument. One might say that the problem is one of incentive compatibility: the diagnosis rests on an account of the officials' motivations that is inconsistent, at least prima facie, with the motivations that must be present if the theorist's solution is to be supplied by those very officials.
There is no such inconsistency. We may have at one and the same time, a dominant strategy under a particular payoff matrix as well as a preference for a different payoff matrix for all players. My dominant strategy may be to take steroids so as to compete with other players who take steroids but I may prefer that nobody in the sport takes steroids. Also, it would be nice if we all got paid a lot more. There is a collective action problem here which features coordination games.
At a deeper level, however, the problem is that the theorist is skipping back and forth between two different perspectives: an external perspective that attempts to explain the behavior of actors within the constitutional order as an endogenous product of self-interested aims, and an internal perspective that assumes the standpoint of the judge and asks how the judge ought to behave so as to promote the well-being of the constitutional system and the nation.
This is not the case. Everybody involved in any legal process can make mutually beneficial agreements. All sorts of unwritten rules or norms enable the smooth working of the system.
In cases of this sort, the analyst is not doing ideal theory, which asks simply what well-motivated officials should do.
Fuck officials. Good mechanism design is about not requiring 'officials'.
Rather the analyst is combining ideal with nonideal theory in an incoherent way,
If you are combining shite with shite, you are welcome to be as incoherent as shit.
positing nonideal motivations for purposes of diagnosis and then positing idealized motivations for purposes of prescription.
Nothing wrong in that. A guy who has a hang-over, probably drank way too much last night. We suggest he take a break from the booze. Why not play squash rather than go the pub every night? You will lose weight and maybe get a g.f you'd be proud to introduce to your parents.
Posner & Vermeule's paper is divided into 4 parts. The argument advanced in each is vitiated by the authors failure to understand that laws are merely a subset of juristic focal solutions to coordination games which, however, give rise to discoordination games such that there is arbitrage between the two. In other words, both their Econ and their Law is partial and incomplete. It can't feature a general or reflective equilibrium. In more stochastic environments, it won't generate an evolutionarily stable strategy.
In the first part of their paper, P&V speak of
"Madisonian" judging, in which judges act as impartial regulators or referees of the competitive system, attempting to promote an ongoing system of checks and balances over time.
If a judge is considered corrupt or partisan, firstly his judgments may be challenged or, if the judiciary as a whole is corrupt or partisan, courts may be disintermediated or actively opposed.
Madison favored the disestablishment of the Anglican Church in Virginia and wanted not just tolerance but 'equal entitlement' for all sects. It was in this context that an ideal of judicial impartiality was introduced but because sectarian conflict did not in fact become an important part of American politics, a super-human impartiality such as would be required to adjudicate between competing Divine claims was never actually required.
Justice is a service industry, just like Education. If it is shitty it may be reformed or there may be 'exit' from it. Either way, those providing a service have an incentive to make it appear that the Service is fit for purpose. This involves pretending those who dispense Justice are themselves just while those who dispense Education are themselves educated. This is one reason soldiers try to appear disciplined and physically fit.
The quotation marks indicate that, in our view, the argument is fallacious, a kind of category mistake.
Judges should not be 'Madisonian'. They should appear illiterate bigots greedy for bribes.
Judging of that sort may or may not be defensible on other grounds, but cannot be justified on the basis of Madison's invisible-hand theory of checks and balances.
Judges who appear corrupt may be killed or beaten or otherwise intimidated till he provides the called for judgment gratis. A check on greed or bigotry is being killed by even more greedy or bigoted people.
Any attempt to do so will end up committing the inside/outside fallacy
The 'invisible hand' for Madisonian judging had to do with challenges to or exit from the jurisdiction of shitty judges. Everyone knew what had happened to Judge Jeffries and his patron King James II. America might well have a second, bloodless, Glorious Revolution against corrupt Judges or a Legislature which prolonged its own life.
The Framers, socialized in the traditions of English law in which all judges were at least in theory the Crown's judges, had only a hazy conception of the distinction between executive and judicial power;
Nonsense! Judges have no executive power. Even the King or Governor could not hang a criminal whom he caught red-handed. The matter had go before a Court.
The 13 Colonies had different methods of appointing Judges and other officials. To this day, different states chose different methods of appointing Judges. Some are elected in a partisan and others in a non-partisan manner while in other states the Governor makes the appointment.
An alternative, more independent method would be a Collegium system. The elements of this did exist in the UK where barristers with high earnings were more likely to be elevated to the Bench. My point is American lawyers were 'socialized' in a heterogenous judicial system. But there could easily be 'exit' from corrupt jurisdictions and entry into good jurisdictions. Court and other revenues would shrink in the former while rising in the latter. That, by itself, is an invisible hand and it always operates. People vote with their feet to exit badly governed places.
there is no reason to think that Publius expected the judiciary branch to behave differently, from the standpoint of institutional self-defense, than the executive branch.
It would be jealous of its privilege.
The true Madisonian perspective, then, is the external standpoint of a designer of the constitutional system, who must also perforce be an analyst of politics.
A constitution could be seen as a 'contract'. Self-interested people can still accommodate each other's interests sufficiently so as to frame a good enough contract. Because of Knightian uncertainty, it must be incomplete. This means it should be regret minimizing, not expected utility maximizing. This is what Posner doesn't understand. Since most future states of the world are unknown, there is no probability distribution and thus the maximum uncertainty principle applies. The best you can do is 'Hanan consistent' regret minimization or some sort of multiplicative weighting update algorithm- except it won't be an algorithm. It will be non-deterministic.
From that standpoint, the judiciary is just another of the branches struggling to encroach upon the others or to aggrandize itself at the expense of the others; judges are just part of the invisible-hand system, not some sort of external regulator of the system.
The Legislature and the Executive are both 'checks' on the Judiciary. Biden has a Presidential Commission on SCOTUS. If Harris becomes POTUS, she might actually take action on this issue. However, she will be mindful that it was the Bench's reversal of Roe v Wade which contributed to her victory. In other words, judicial over-reach can be, all things considered, counter-productive for their own agenda.
Indeed, the paradoxical logic of the true Madisonian perspective is that the invisible-hand system may work well only if judges, presidents, or legislators do not consider the overall welfare of the system, but instead attempt to aggrandize the power of their respective branches.
In other words, if one is lazy or utterly shit, a different branch can take over some of the relevant functions. Thus if the Legislature won't tackle wedge issues- e.g. abortion or Civil Rights or Homosexuality- the Bench may supply the deficiency. Equally, if the Bench is reactionary, this may lead to voters backing a more Progressive POTUS who uses executive authority to push the country down a more radical path.
P&V consider a situation where the Legislature and Judiciary are more 'Royalist than the King'. This is possible. A country can certainly decide to put all power in the hands of the Executive. Under some circumstances- e.g. the prosecution of a total war- this may be the best way forward.
What actually worries P&V is Judicial decision making 'without application of mind'- e.g. rules based competition policy. But this can always be remedied by the legislature. Essentially, if the Bench says there is capacious 'political question', then it is the politicians who have to change the rules. Nothing less will do.
But it is a serious complication for "Madisonian" judging that judicial attempts to stand outside the system, as an impartial referee or antitrust regulator, might make things worse, not better, from the very standpoint of preventing aggrandizement.
It would be a serious complication if your plumber or dentist or Uber driver 'attempts to stand outside the system as an impartial referee' on whether mankind should have teeth or should shit into toilet bowls which then need unclogging or should take cabs to get from one place to another.
Partisanship
As I write this, there is a Twitter storm of condemnation of the Indian Chief Justice who recently invited the PM to a Hindu religious ceremony at his residence. Does this prove that the Judiciary in India is no longer independent. Has the country become a Hindu Theocracy. No. The Chief Justice is acting pre-emptively to gain popular support for the Collegium system from the ruling Party's own core constituency. This was because a previous Law Minister, who is Buddhist not 'caste' Hindu, had been critical of Judicial usurpation of authority which the Constitution had reserved for the Legislature.
P& V write
Political parties illustrate the Coasean vulnerability of the Madisonian system.
No. They 'internalize externalities'. Members of SCOTUS may be rewarded in some way by the Party for advancing the interests of its legislators or Gubernatorial or Presidential candidates. A separate, self-selecting, juristic caste might continually clash with a separate, self-reproducing, executive caste.
Parties, on this perspective, are coalitions of actors who implicitly bargain to reallocate powers among themselves, regardless of the long-run power or interest of the institutions they happen to temporarily control. If, for example, Congress and the presidency are both controlled by the same party, there is no reason to expect vigorous institutional competition between the branches.
Members of Congress want to get re-elected and thus want things for their constituencies which the White House, considering the larger National interest, might not want.
The individual interests of legislators will be tied to the interests of their partisan coalition, not to those of Congress as an institution;
Nonsense! If you are a member of an Institution, you don't want it to smell of piss or be regarded as a joke. The reason an Institution would want to recruit at a least a few people of the right class or allegiance is so that the powers that be have an incentive to ensure the place doesn't smell bad and become the scene or hobo orgies.
the "interests of the man" will come untethered from "the rights of the place."
This can always happen just as a drunk guy may fail to piss or shit inside the toilet bowl or else decide to do so on principle. Did you know that billions of starving Palestinians don't have access to clean toilets? Is it not our duty to shit on the floor as a protest against Zionism, Patriarchy and Neo-Liberalism.
There is no reason to think that partisan interests will or will not systematically or routinely correlate with long-run institutional interests,
There is no reason to think 'partisan' people may not be stupid, evil, and in the habit of shitting on the floor. If you want an Institution to continue to be respected focus only on entry and exit. If smart, respectable, peeps are entering and crazy shitheads are exiting, the Institution will get better. If the reverse happens, it will turn to shit.
although they may do so fortuitously and in the short run. In the legal literature, Professors Daryl J. Levinson and Richard H. Pildes have offered an important and clarifying argument that the US system is one of "Separation of Parties, Not Powers."
This is a hypothesis about what assumptions historical actors made two hundred years ago. It may be of academic interest- but only to very stupid academics. The fact is, 'separation of powers' reinforces the legitimacy of all branches concerned more particularly if it permits passing the buck.
Consider a narcissistic entrepreneur. He still gains by appointing an independent auditor and getting some people of proven integrity onto the board. He may actually do some actual philanthropy which is independently verified so as to get awards which even his detractors can't say are worthless tinsel.
To be sure, our system displays both separation of parties and separation of powers.
It also displays Preference Falsification, Strategic Voting, Agent-principal hazard, McKelvey Chaos & agenda control etc. etc. So what? That's life mate.
In the configuration of divided government, in which Congress and the presidency are controlled by different parties,
influenced not controlled
partisan interests happen to align with institutional divergence, producing institutional conflict and competition that may if anything be all too vigorous.
Or only appear to be so as to delay decisions on 'wedge issues'.
. When Professors Levinson and Pildes say things like, "we might use legal rules and institutions to prevent strong parties from unifying government so thoroughly as to threaten Madisonian values,"
Not to mention the values of would be adulterers registered on Ashley Madison.
one wants to ask who this "we" is supposed to be. We act principally through parties, or so Professors Levinson and Pildes have argued, and the question is why parties would have any incentive to listen to such advice or to adopt it.
Parties solve a coordination problem. But people 'hedge' on 'discoordination games'. This gives rise to income effects as well as arbitrage of various types.
In a future post I will show how using two simple concepts
1) regret minimization under Knightian Uncertainty
2) coordination and discoordination games
to update the Econ side of Law & Econ gets rid of any so called 'fallacies'.
Fuck that. I just bored myself.
The Law side, on the other hand, needs a category theoretical notion of 'naturality' or non arbitrariness. The underlying math is beyond me. It may actually be 'dialectical' a la Lawvere. I suppose, as AI's take over more and more Legal stuff, there will be good enough 'univalent foundations' for this. Hopefully, I'll be dead by then.
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