On Hearsay

I need to place the remarks that follow in context. And that means I need to acknowledge a number of heresies: I don’t like legal jargon; I don’t like the complexity of legal jargon; I don’t like the legal profession’s indifference to brevity; I don’t like the tendency of lawyers and judges always to be looking to the past for answers to novel questions; and I don’t consider law to be a science or remotely like a science. I want law to be simple and commonsensical and forward-looking. I take my judicial credo from a poem by the great Irish poet William Butler Yeats: “And I grew weary of the sun / Until my thoughts cleared up again, / Remembering that the best I have done / Was done to make it plain.” Or, in the words of another though lesser known poet, Ezra Pound, “MAKE IT NEW!

On Hearsay

I need to place the remarks that follow in context. And that means I need to acknowledge a number of heresies: I don’t like legal jargon; I don’t like the complexity of legal jargon; I don’t like the legal profession’s indifference to brevity; I don’t like the tendency of lawyers and judges always to be looking to the past for answers to novel questions; and I don’t consider law to be a science or remotely like a science. I want law to be simple and commonsensical and forward-looking. I take my judicial credo from a poem by the great Irish poet William Butler Yeats: “And I grew weary of the sun / Until my thoughts cleared up again, / Remembering that the best I have done / Was done to make it plain.” Or, in the words of another though lesser known poet, Ezra Pound, “MAKE IT NEW!

A Critique of the Odious Debt Doctrine

Choi and Posner indicate that it is unclear whether the doctrine will improve the welfare of the population that might be subject to a dictatorship in terms of the odious debt doctrine. The traditional backward-looking defense of the odious debt doctrine, which suggests that the doctrine is costless because it releases a suffering population from an unjust debt, is seriously incomplete. Although in specific cases the benefits of loan sanctions may exceed the costs, the defenders of the doctrine have not made the empirical case that the net benefits are sufficiently high in the aggregate as to warrant routine application of loan sanctions to odious dictators. Therefore, in the absence of such a showing, there is no reason to think that the odious debt doctrine would be a desirable rule of international law

Social Costs of Monopoly and Regulation

When an industry is monopolized, price rises above and output falls below the competitive level. Those who continue to buy the product at the higher price suffer a loss, but this loss is exactly offset by the additional revenue that the monopolist obtains by charging the higher price. Other consumers, who are deflected by the higher price to substitute goods, suffer a loss, that is not offset by gains to the monopolist. This is the "deadweight loss" from monopoly, and in conventional analysis the only social cost of monopoly. The loss suffered by those who continue to buy the product at the higher cost is regarded merely as a transfer from consumers to owners of the monopoly seller and has not previously been factored into the social costs of monopoly. However, the existence of an opportunity to obtain monopoly profits will attract resources into efforts to obtain monopolies, and the opportunity costs of those resources are social costs of monopoly, too. Although the tendency of monopoly rents to be transformed into costs is no longer a novel insight, its implications both for the measurement of the aggregate social costs of monopoly and for a variety of other important issues relating to monopoly and public regulation (including tax policy) continue to be ignored. The present paper is an effort to rectify this neglect. Part I introduces the material. Part II presents a simple model of the social costs of monopoly, conceived as the sum of the deadweight loss and the additional loss resulting from the competition to become a monopolist. Part III uses the model to estimate the social costs of monopoly in the United States, and the social benefits of antitrust enforcement. Part IV explores the implications of the analysis for a variety of issues relating to monopoly and public regulation, such as public policy toward price discrimination and the choice between income and excise taxation.

The Law of Other States

The question whether courts should consult the laws of "other states" has produced intense controversy. But in some ways, this practice is entirely routine; within the United States, state courts regularly consult the decisions of other state courts in deciding on the common law, the interpretation of statutory law, and even on the meaning of state constitutions. A formal argument in defense of such consultation stems from the Condorcet Jury Theorem, which says that under certain conditions, a widespread belief, accepted by a number of independent actors, is highly likely to be correct. It follows that if a large majority of states make a certain decision based on a certain shared belief, and the states are well motivated, there is good reason to believe that the decision is correct. For the Jury Theorem to apply, however, three conditions must be met: states must be making judgments based on private information; states must be relevantly similar; and states must be making decisions independently, rather than mimicking one another. An understanding of these conditions offers qualified support for the domestic practice of referring to the laws of other states, while also raising some questions about the Supreme Court's reference to the laws of other nations. It is possible, however, to set out the ingredients of an approach that high courts might follow, at least if we make certain assumptions about the legitimate sources of interpretation. Existing practice, at the domestic and international levels, suggests that many courts are now following an implicit Condorcetian logic.

The Law and Policy of Judicial Retirement

Lifetime tenure maximizes judicial independence by shielding judges from political pressures, but it creates problems of its own. As is widely known, judges with judicial independence may implement their political preferences or shirk in other ways. Less attention has been given to another problem: that judges will remain in office after their abilities degrade as a result of old age. The U.S. federal system addresses these problems in an indirect way. When judges’ pensions vest, they receive a full salary regardless of whether they work or not; thus, the effective compensation for judicial work falls to zero. Judges can retire, receive their pension, and obtain paying work elsewhere. This approach limits some of the harmful effects of judicial independence by encouraging judges to vacate their offices when they reach a certain age, and by causing judges who lack talent, and therefore find their work burdensome, to self-select themselves out of office. But this solution is hardly perfect. Wealthier judges will be insulated from the financial incentives, and judges with strong partisan preferences can time their retirement for political purposes. We test the potential benefits and costs of this system using a database of federal district judges