Focus on Fairness, Efficiency, and the Law: Response. An Integration of Equity and Efficiency

Swygert and Yanes, in an article in this issue of the Washington Law Review, suggest a means to achieve this integration. In this Article, I first discuss the shortcomings of the approach suggested by Swygert and Yanes. Next, I suggest a more practical approach for integrating efficiency and equity that relies on benefit cost analysis. Finally, I consider some of the cases to which Swygert and Yanes apply their analysis. The fundamental shortcoming of the Swygert and Yanes approach is that it offers little for deciding practical cases. The authors combine two abstract and heuristic proposals and quite naturally end up with an abstract approach that is uncertain in its application. In this response, I show that benefit cost analysis, a well-established technique for determining whether a decision is efficient, is also applicable to equity considerations. Indeed, I show that the distinction between efficiency and equity is artificial. The expanded efficiency approach I suggest remedies the defects in the Swygert and Yanes approach and offers a more practical alternative for integrating efficiency and equity

More Lessons From Japan: End Industrywide Collective Bargaining?

The number of books and articles discussing Japanese management techniques with an eye to transplanting them to the United States is staggering. Americans understandably are impressed by Japanese efficiency and like to think the adoption of some of their techniques will aid our own industries. Often these proposals seem fanciful and fail to recognize the many differences between the two countries, their economic systems and cultures

Reducing Unions\u27 Monopoly Power: Costs and Benefits

There is a fundamental conflict between labor law and antitrust law. The antitrust laws reflect the powerful idea that competition should usually dictate the way our economy is organized, to the benefit of the economy as a whole, including workers. But the labor exemption to the antitrust laws suggests a different policy: workers should have the right to eliminate competition for wages, hours, and working conditions

The Role of Rights in Benefit Cost Methodology: The Example of Salmon and Hydroelectric Dams

Benefit cost analysis is a well-established technique for assessing the impacts of proposed actions. Accurate benefit cost analysis is essential to making informed decisions through an understanding of the trade-offs involved in alternative actions. This Article presents a methodology for improving current benefit cost techniques and hence the usefulness of benefit cost analysis to decisionmakers. The proposed methodology is based on recognition of the roles of legal rights and psychological expectations in benefit cost analysis. Proper consideration of these rights and expectations is critical to an accurate determination of how benefits and costs are measured and whose interests are included in the analysis. Addressing these issues will provide more accurate and comprehensive information to decisionmakers. Application of the proposed methodology may significantly affect the outcome of a benefit cost analysis and hence impact the decisionmaking process

More Lessons From Japan: End Industrywide Collective Bargaining?

The number of books and articles discussing Japanese management techniques with an eye to transplanting them to the United States is staggering. Americans understandably are impressed by Japanese efficiency and like to think the adoption of some of their techniques will aid our own industries. Often these proposals seem fanciful and fail to recognize the many differences between the two countries, their economic systems and cultures

Reducing Unions\u27 Monopoly Power: Costs and Benefits

There is a fundamental conflict between labor law and antitrust law. The antitrust laws reflect the powerful idea that competition should usually dictate the way our economy is organized, to the benefit of the economy as a whole, including workers. But the labor exemption to the antitrust laws suggests a different policy: workers should have the right to eliminate competition for wages, hours, and working conditions

Anticonsumer Effects of Union Mergers: An Antiitrust Solution

Should unions and corporations be treated identically under the antitrust laws? This article explores this provocative question by examining whether union mergers should be subject to the antitrust laws. Currently unions and corporations are treated very differently. Large corporate mergers are blocked if their effect may be substantially to lessen competition, or to tend to create a monopoly . They are permitted if they are likely to be benign, procompetitive, or proconsumer. Collective bargaining, by contrast, enjoys a broad exemption from the antitrust laws. If they follow appropriate procedures, unions - even unions that, when taken together, cover all workers within a given industry - are permitted to merge or to coordinate their activity. There is no review of these mergers or of this coordinated activity to determine whether monopoly power, cartel-type behavior, or other anticompetitive or anticonsumer activity will result. This Article asks whether mergers or joint conduct between labor unions should be examined under a standard similar to that used to scrutinize corporate activity. This piece outlines an alternative proposal that would allow workers within individual companies to form a union or otherwise coordinate their bargaining, but then subjects all proposed mergers or other alliances of these units to the provisions of the antitrust laws. We take Congress\u27 concerns in the area as a given and demonstrate that Congress could substantially have reached its primary goals in a better way. An approached that treated union activity identically to corporate activity might very well reduce the anticompetitive potential of unions without ignificantly sacrificing their protective and efficiency-enhancing aspects. This Article focuses upon some of the implications and practical consequences that could arise from this alternative policy

Anticonsumer Effects of Union Mergers: An Antiitrust Solution

Should unions and corporations be treated identically under the antitrust laws? This article explores this provocative question by examining whether union mergers should be subject to the antitrust laws. Currently unions and corporations are treated very differently. Large corporate mergers are blocked if their effect may be substantially to lessen competition, or to tend to create a monopoly . They are permitted if they are likely to be benign, procompetitive, or proconsumer. Collective bargaining, by contrast, enjoys a broad exemption from the antitrust laws. If they follow appropriate procedures, unions - even unions that, when taken together, cover all workers within a given industry - are permitted to merge or to coordinate their activity. There is no review of these mergers or of this coordinated activity to determine whether monopoly power, cartel-type behavior, or other anticompetitive or anticonsumer activity will result. This Article asks whether mergers or joint conduct between labor unions should be examined under a standard similar to that used to scrutinize corporate activity. This piece outlines an alternative proposal that would allow workers within individual companies to form a union or otherwise coordinate their bargaining, but then subjects all proposed mergers or other alliances of these units to the provisions of the antitrust laws. We take Congress\u27 concerns in the area as a given and demonstrate that Congress could substantially have reached its primary goals in a better way. An approached that treated union activity identically to corporate activity might very well reduce the anticompetitive potential of unions without ignificantly sacrificing their protective and efficiency-enhancing aspects. This Article focuses upon some of the implications and practical consequences that could arise from this alternative policy

An Aggregate Measure for Benefit-Cost Analysis

The Kaldor-Hicks (KH) criterion has long been the standard for benefit-cost analysis, but it has also been widely criticized for ignoring equity and, arguably, moral sentiments in general. We suggest replacing KH with an aggregate measure called KHM, where the M stands for moral sentiments. KHM simply adds to the traditional KH criterion the requirement that any good for which there is a willingness to pay or accept count as an economic good. This suggested expansion of KH, however, must confront objections to counting moral sentiments in general and non-paternalistic altruism in particular. We show that these concerns are unwarranted and suggest that the KHM criterion is superior to KH because it provides better information.