Value Competition

Applying Kahan to Kahan

I believe Dan Kahan is doing excellent work in blending social psychology and law.  In particular, I find myself deeply in sympathy with his proposal that judicial resolutions of culturally contested matters be done if posssible in a way that affirms the worth of different cultural stances rather than judicially taking sides with one position over another.

In that spirit, a proposal: Kahan over the years has called the stance that more or less corresponds to modern conservatism "hierarchical individualism."  I believe that's a term that's likely to provoke in many conservatives exactly the sense of science being used in a biased, culturally partisan fashion that Kahan is concerned about.  How about "meritocratic individualism" or "desert-oriented" individualism?  Either term works better than "hierarchical" as one that conservatives are likely to accept as a self-description.   If Kahan wants to emphasize a traditionalist component in conservatism as opposed to liberalism, then "traditionalist individualism" would work fine, I believe.

I suspect part of the problem here is that Kahan has kept the same terms for cultural stances for years, even as his view of conservatism has become less negative over time (and/or his concern about both sides respecting the other has increased).

Compare "hierarchical individualism" with its more than faintly pejorative associations to "egalitarian communitariansm,"  the term Kahan usually uses for the stance similar to modern liberalism.   If you wanted to emphasize the culturally modernizing side of liberalism, you might pick another name, like "modernizing communitarianism (or egalitarianism)."  But the label Kahan uses (like the alternative labels) is not likely to be seen as pejorative, and corresponds pretty well, I believe, to the self-understanding of liberals in a way that "hierarchical individualism" does not, or so I believe, for conservatives. 

 

 

My Dodd-Frank Presentation

Off to Rutgers Law School shortly to do a talk for the Rutgers Business Law Journal and RLS Alumni Association...

An outline:

A.  What caused the great financial crisis of 2008?

B.  One answer: Uncontrolled speculation in enforceable derivatives, as legalized by the 2000 Commidity Futures Modernization Act; by 2007, over $670 trillion in such bets, including around $67 trillion in CDS bets, up from $88 trillion in derviative contracts in the late 1990s;

C.  The source of argument I'm presenting: UCLA law professor Lynn Stout and her working paper, The Legal Origin of the 2008 Credit Crisis;

D.  The story, per Stout:

           1.  Common law--no enforcement of speculative derivative contracts; hedging contracts enforceable;

           2.  Commodities Exchange Act (1906)--made non-exchange derivative contracts illegal; value of exchanges in managing risks of speculative derivatives--members had to stand behind contracts made by member;

           3.  Liberalization with respect to interest rate swaps in 1993--Wendy Gramm--Orange County pension fund and Long term Capital Management failures ensue;

            4.  CFMA (2000)--supported by Greenspan, Rubin, Summers; defeat for CFTC head Brooksley Born who proposed re-regulation of derivative contracts; first time ever enforceability of speculative derivative contracts;

            5.  Speculative bubble--order of magnitude increase in derivatives mkt;

            6.  Major failures associated w/ derivatives--Enron, Bear, Merrill, Lehamn, AIG--TARP necessary to rescue other major fiancial institutions; 

            7.  Dodd-Frank title VII--reinstitutes CEA requirement that speculative derivatives be traded through an exchange; may solve problem for future, but...

            8.  Technical issues/possible loopholes--CFTC can grant exemptions; customized swaps not exempt from clearing requirement in final version but language is confusing--impt issue because many swaps can be described as customized;

D.  Merits?

            1.  Stout's market-failure argument strikes me as basically right when add'l risks from derivatives are i) not diversified; and ii) held by systematically imp't firms;

            2.   Counter-arguments--

            a) liquidity facilitated by speculative derivatives--housing mkt in US from 2000 on suggests that may be true--more lending facilitated by derivatives--but results poor in the end;

            b) price discrovery facilitated by speculative derivatives--bubble in housing might have popped sooner because of short speculation by Goldman, Paulson, etc. than it would have w/o the shorts;

            c) Newark as a test case--substantial building in bubble era--derivatives-fueled bubble perhaps worth it in Nwk if not in NJ as a whole or nationally;

E.  Significance of lawyers, law--strongly agree with Stout on that--problems if economists take over in regulation and policy-making and lawyers' perspectives are lost.

 

 

 

You are Elvis: Who Is Chuck Berry (and Who is Pat Boone)?

Rereading "Roll Over Beethoven," Duncan Kennedy and Peter Gabel's old article, for the AOM paper I'm rushing to meet the submission deadline on made me think about interdisciplinary work in which the author is translating one genre of scholarship into another in a creative, inspiring fashion, or at least so the author must believe--i.e., the author is Elvis as opposed to Pat Boone.  For the critical legal studies project of translating Continental philosophy into American legal scholarship in which Kennedy was the central figure and Gabel was a reasonably significant one, Kennedy was Elvis and Gabel a reasonably important white 1950s rocker--Jerry Lee Lewis, to be generous to Gabel.  Old Left American law professors who had tried with mediocre results to import Marx or another part of the world of Continental philosophy were Pat Boone, and figures like Hegel, Marx, Nietzsche, and Sartre were Chuck Berry.

How about my own matrix project of translating game theory into something of interest for humanists? Though I can think of some other possibilities, my own 1990s work can serve as Pat Boone.  Chuck Berry is John Nash.

Different Kinds of Ideologue

Our modern image of the ideological personality is dominated by political ideology, with religious faith as a secondary theme.  It is possible, though, that political ideology and religious faith are simply two outlets for a high-intensity, highly competitive personality type that manifests itself differently in different domains.  The table below lays out some conjectures about ideologues in four different practical and academic domains--politics, law, business ethics, and management.

For a number of the categories, there are different evaluations on the systemic versus the individual level.  For example, on the flexibility dimension, politicians are described as highly flexible at the systemic level and variable at the individual level.  The thought is that a competent politician in a democratic system by necessity appeals to multiple belief systems, including those identified with the other side, but that politicians differ widely in whether they revel in doing so (think Bill Clinton) or convey a sense of being coerced when they do so (think Barack Obama in his recent press conference on extending the Bush tax cuts).   Another illustration: On the same flexibility dimension, academics in business ethics are classified as highly flexible in drawing on multiple belief systems at the systemic level and as often flexible at the individual level.  The idea there is that the pro-CSR, pro-private ordering, Aristotle-Kant-Bentham mainstream of academic business ethics draws on different belief systems at the systemic level, and that individual business ethicists frequently (more so than democratic politicians, if the table's conjecture is right) do so as well.  A final illustration on the same dimension: Managers are classified as highly flexible at both the systemic and individual levels.  The thought there is that a competent manager needs to draw on multiple managerial belief systems such as Taylorism and human relations both at the systemic level of how contemporary American firms are organized and as an individual manager dealing with other individuals.

Hypotheses about Ideologues in Politics, Law, Business Ethics, and Management--

Characteristics of the Ideologue	Politics (practical)	Law (academic, judicial)	Business Ethics (academic)	Management    (practical)
High reliance on belief systems	Yes—Liberal and conservative political ideologies;  very high tacit reliance on  libertarian and communitarian ideologies	Yes-Legal belief systems—e.g. originalism, interpretivism; very high tacit reliance on political ideologies	Yes--Ethicalbelief systems—e.g., deontology, utilitarianism, virtue ethics;high tacit reliance on political ideologies	Yes--Managerial belief systems—e.g., scientific management, human relations; some tacit reliance on political ideologies
High flexibility-- adopting elements of multiple belief systems	Yes, at systemic level—varies at individual level	Yes, at systemic level—varies at individual level	Yes, at systemic level—often at individual level	Yes, at systemic and individual levels
High acceptance of parity between belief systems	Yes, at systemic and individual levels	Yes, at systemic level—varies at individual level	Yes, at systemic level—often at individual level	Yes, at systemic and individual levels
High acceptance of value conflict	Yes, at systemic and individual levels	Yes, at systemic and individual levels	Yes, at systemic level; often  at individual level	No,  at systemic level;  varies at individual level
High acceptance of interpersonal conflict	Yes, at systemic level—varies at individual level	Yes, at systemic level—varies at individual level	Unclear systemically; varies individually	Yes, at systemic and individual levels
High competitiveness	Yes, except for ideological allies	Yes, in regard to political ideology; less so  in regard to legal belief systems	Fairly often,  in regard to political ideology;  less so in regard to ethical belief systems	Yes, in regard to competitors; no in regard to political ideology and managerial  belief systems
High altruism	Yes, in regard to groups not identified with ideological opponents	Often, in regard to groups not identified with ideological opponents	Fairly often, in regard to groups not identified with ideological opponents	Yes, in regard to groups within organization
High in-group loyalty and ability to follow leaders	Yes, in regard to ideological allies	Often, in regard to ideological allies	Fairly often, in regard to ideological allies	Yes, in regard to organization
High moral disapproval of out-groups	Yes,  in regard to groups identified with ideological opponents	Often, in regard to groups identified with ideological opponents	Fairly often, in regard to groups identified with ideological opponents	Not especially

 

 

Respectful Communication

I gave a presentation the other day to the Toastmasters Club of MBA students on the topic of winning through respecting the other side.  What triggered the presentation was a realization that's been growing on my over the last years as I've moved a lot of my teaching and my intellectual energy toward business ethics. 

In my business law classes, I teach a style of advocacy that is not exactly mean but is aggressive.  Legal advocacy assumes an adversary system, with advocates for both sides hitting the other side with their best shots.  in ethics and in business more generally, on the other hand, advocacy often should be less aggressive, and in many cases should be friendly to the other side.

Two key reasons why the soft touch can be the winning touch: First, it's often true that there is no final winner or loser in a business situation.  If you can present your position in a way that is more respectiful of the other side's concerns, higher management has a good reason to favor your team controlling the situation going forward compared to the other team.  Second, by skillfully acknowledging the human, emotional factors that cut in favor of the other side, you can buttress your case that the rational decision to make is the one that favors your side.

The recent hit movie "The Social Network" provides an array of business situations that can be used to illustrate the principle that respectful persuasion may work better than flat-out argument.  For example, instead of arguing to Mark Zuckerberg that his attempt to cut his former best friend Eduardo's share in Facebook to .03% is unethical--which is most unlikely to appeal to Mark, who thinks Eduardo's 30% share is completely out of proportion to his minimal current contribution--it is likely much more effective to start by acknowledging the validity of Mark's feeling that Eduardo's share is out of line as a prelude to trying to get Mark on board for a less slash-and-burn approach to dealing with his old friend.

Once you start thinking that way, opportunities for winning through respectful persuasion emerge everywhere.  As much as business demands hard-edged, hard-nosed skills, it also demands the proverbial soft skills, including skill in showing you can understand the other side better than they can understand you.  Given that reality, I'm glad to see an active and successful club like the RBS MBA Toastmasters, with its mission of improving the soft, human-side communication skills that are a fundamental part of business success. 

 

 

 

Reconciliation and Shared Crimes

A utilitarian argument for torture that strikes me as more interesting than the standard ticking time bomb-type claim: After a struggle against a political foe who tortures or commits criminal acts worse than torture, a time for reconciliation may well come.  If so, there is better hope for reconciliation coming to pass if neither side has clean hands than if one side has credibly maintained its virtue. 

"We torture," ANC leader Oliver Tambo told Albie Sachs.  In his book, Judge Sachs--who was the victim of apartheid state terror that cost him an arm--discusses how he worked with Tambo and others to change the ANC's policy.  Good for him and for South Africa--but I suspect it was the ANC"s own dirty hands, not just a morality of forbearance embodied in Sachs' efforts against torture--that fostered the later success of the Truth and Reconciliation Commission and the moving on by South Africa from its tortured past.

Another example: It seems plausible that the success of the U.S. occupations of Germany and Japan after World War II was possible partly because the massive conventional bombings of both countries and the atomic bombings of Japan created an atmosphere for reconciliation that would not have existed if the only killers of innocent civilians had been the Germans and the Japanese.

Law and Ideology

Some research issues:

1.  Dichotomous versus multi-polar judicial politics;

2.  Degree of connection between substantive/group-based and procedural judicial ideology;

3.  Degree of group-based consistency in judicial voting;

4.  Degree of procedural consistency in judicial voting;

5.  Degree of consistency in substantive principles in judicial voting. 

Management and Legal Scholarship over Time--HLR

Volume 122 of the Harvard Law Review in the 2008-2009 year featured the following major articles or comments by academics; brief deontological and utilitarian framings of the articles follow, with my reading of the article's actual thrust indicated by an asterisk:

1.  No. 1--Demosprudence through Dissent--Lani Guinier--Supreme Court Foreword.  Oral opinions by judges, whether formally dissents or not, can make a valuable "demosprudential" contribution to popular movements.  Justice Breyer's oral dissent from Roberts' majority opinion ruling out race-conscious approaches to enhance school integration is cited as a good example of demosprudence in the Court's 2007-2008 term; Guinier also assesses oral dissents by conservative Justices, such as Scalia, as potential exercises in demosprudence. 

DEONT*--Oral opinions of a certain kind are good.   UTIL--Oral opinions of a certain kind are effective.

2.  No. 1--Heller case comment--Akhil Reed Amar.  Amar offers qualified support for Scalia's originalist interpretation of the Second Amendment and his finding of a qualified individual right to gun ownership; missed opportunities by Scalia as well as other Justices to offer stronger originalist justifications of their positions are noted.

DEONT*--A certain kind of originalism is good.  UTIL--?

3.  No. 1--Heller case comment--Reva Siegel.  In an essentially positive rather than normative piece, Siegel contends that Heller illustrates popular constitutionalism in the form of a law and order interpretation of the Second Amendment that arose in opposition to the Warren Court.  The reader may suspect that Siegel's effort to unmask Scalia's professed originalism implies a preference on her part for the dissent's position, but the article does not articulate a normative case against the decision.

DEONT*--It's good to recognize the actual nature of one's actions as a judge.   UTIL*--Popular constitutionalism works.

4.  No. 1--Heller case comment--Cass Sunstein.  Heller is neither Lochner (legal academic shorthand for a decision that amounts to highly controversial politics masquerading as law) nor a straightforward exercise in originalism.  It is best seen as a desirable form of judicial minimalism that reflects a national consensus by striking down a local law that is an outlier; seen that way, the decision portends modest, case-by-case scrutiny of other gun legislation rather than a sweeping rejection of gun control.

DEONT*--Heller as minimalism is appropriate.  UTIL--?

5.  No. 2--Causal Inference in Civil Rights Litigation--D. James Greiner.  The courts should move away from reliance on regression coefficients, which are ill-suited to causal analysis, to the use of the "potential outcomes" paradigm of causal inference that relies on randomized experiments.  The ideological valence of Greiner's proposed method, which he applies to capital punishment, employment discrimination, and voting rights claims, is unclear; what is clear is the methodological, law and economics focus of his argument.

DEONT*--Potential outcomes is a better approach than regression.  UTIL*--Potential outcomes works better than regression for certain purposes.

6.  No. 2--Treaties as Law of the Land--Carlos Manuel Vazquez.  Treaties should be understood as "self-executing"--that is, as enforceable under the Constitution--unless they contain explicit language indicating that they require further legislative action.   Traditional legal analysis of various kinds is deployed by Vazquez in support of his argument.

DEONT*--Treaties should be understood in a certain way.  UTIL--Understanding treaties in recommended way has certain advantages.

7.  No. 3--Whose Eyes Are You Going to Believe?--Dan Kahan, David Hoffman, and Donald Braman.  The video of a speeding motorist that the Supreme Court majority posted to support its opinion in favor of the actions of a police officer who rammed the motorist is interpreted quite differently based on ideology and race.   The authors argue that although the Court's ruling is defensible on certain bases (for example, the need for a readily enforceable Fourth Amendment rule to govern police chases), its treatment of the video as self-evident proof of its conclusion demonstrates an unwarranted "cognitive illiberalism" that excludes certain groups who disagree with the majority.

DEONT*--It's wrong to cognitively exclude a minority.  UTIL*--Different groups see the world differently.

8.  No. 4--Trimming--Cass Sunstein.  Trimming--the pursuit of a clear compromise between opposing poles such as left and right--is related to and distinguished from Sunstein's own favored approach, minimalism, which also avoids a clear across-the-board commitment to one side or another but prefers limited holdings relying on open-ended standards to comprehensive holdings relying on rules that are favored by the trimming approach.

DEONT*--Trimming is all right, though less good than minimalism.  UTIL--?

9.  No. 4--Our Schmittian Administrative Law--Adrian Vermeule.  American administrative law contains "black holes" and "gray holes" to allow for executive action in case of emergency; these exceptions to the rule of law are inevitable, and aspirations to eliminate them are utopian.

DEONT*--Gaps in law are necessary and hence appropriate.  UTIL--?

10.  No. 5--Intimate Discrimination--Elizabeth Emens.  "Intimate discrimination" in choice of partners by gender, race, and disability should remain a litigation-free zone, but it should not be law free.  The state can play a useful role in countering hierarchies and opening broader access to intimate relations.

DEONT*--As it says... UTIL--?

11.  No. 5--Adjusting Alienability--Lee Anne  Fennell.  By comparison with liability and property rules, inalienability rules have been understudied in law and economics.  Creatively applied, inalienability rules can be effective devices for influencing the incentives of potential resellers.

DEONT*--Inalienability rules are good in some cases.  UTIL*--inalienability rules work in some cases.

12.  No. 6--Foreseeability and Copyright Incentives--Shyamkrishna Balganesh.  Like other areas of the law, copyright law should consider foreseeability; creators' protections should be limited to forms of copying that were foreseeable by the creator. 

DEONT*--As it says...    UTIL*--Foreseeability-based copyright has certain advantages.

13.  No. 6--Anti-Inquisitorialism--David Alan Sklansky.  Opposition to a Continental inquisitorial approach to criminal procedure is a long-standing but questionable theme in Supreme Court criminal procedure decisions.

DEONT*--Don't rely on anti-inquisitorialism, judges.  UTIL--?

14.  No. 7--Law for States--Jack Goldsmith and Daryl Levinson.  The infirmities that are widely seen as afflicting international law also apply to constitutional law; the real distinction is not between international law and other law but between public law, embracing both international law and constitutional law, and ordinary domestic law.

DEONT*--One should be skeptical of or accepting of both con law and intl law rather than one or the other.  UTIL*--Intl law and con law work or not in similar ways.

15.  Federalism and the Generality Problem in Constitutional Interpretation--John Manning.   Freestanding federalism that protects state's rights without a clear connection to any constitutional provision reflects a mistaken interpretation of the Constitution; current statutory interpretation cases that support the role of compromise in legislation can be applied to support the proposition that federalism should be linked to specific constitutional provisions rather than freestanding.

DEONT*--Freestanding federalism is wrong.  UTIL--?

16.  The Conservative Insurgency and Presidential Power--Stephen Skowronek.  The essay is a positive analysis that interprets conservative advocacy of the unitary executive as the latest in a series of creative constitutional interpretations that over time have ratified and fostered the expansion of presidential power.

DEONT*--One should be aware of what is really going on underneath the surface of originalism.  UTIL*--Different kinds of arguments work to justify presidential power.

Utilitarian and Deontological Framings

Compare the renowned trolley problem and its many variations(Thompson, 19xx, xxx, Mikhail 200x)--in which the central issue is whether the means used to save five people at the cost of one other person dying are appropriate--to another, less renowned set of problems that we might call "hunt problems," after the game-theoretic story of the stag hunt (Baird, Gerter, and Picker 1994), in which the central issue is whether the means used to maximize the value of either stag or hare taken are effective.   The assumption here--or working hypothesis, if you prefer--is that trolley problems, much as they call forth consequentialist responses in some scenarios by a large majority of people and in many scenarios by a minority of people, presuppose in their formulation--their moral grammar--a deontological, Kantian frame of reference in which the decision-maker consciously or otherwise is attempting to act according to a universal principle.  The assumption or working hypothesis here is that hunt problems, much as they might bring forth deontological responses in some scenarios by many or most people (e.g., in a case in which the issue is whether to act "irrationally" by punishing selfish hunters who go after hare for themselves instead of stag for the clan), presuppose in their moral grammar a utilitarian, Benthamite frame of reference in which the decision-maker is consciously or otherwise trying to act so as to produce the best consequences.  

If the hypothesis of deontological and utilitarian framings is correct, there should be some testable empirical consequences.  One important one is that certain basic utilitarian concepts such as opportunity costs should be highly important in how people respond to hunt problems, but not to trolley problems.   Suppose the payoffs are changed in a hunt problem, so that instead of it taking an equal one hour to either hunt stag cooperatively or hunt hare individually it now takes five hours to hunt stag together but only half an hour to hunt hare alone.  Although it may well be the case that most people cannot articulate the concept of opportunity costs effectively and miss many applications of the concept (Frank, 19xx), it is also reasonable to infer that most people will apply the concept in the simple scenario just given, and will be considerably less likely to engage in hunting stag when doing so has a much higher opportunity cost relative to hunting hare.  To put it another way, in hunt problems it is plausible to hypothesize that people act like intuitive economists who apply the concept of opportunity costs, whether or not they can explain it.

Now consider an opportunity cost variant on the trolley problem.  In this variant, instead of an instantaneous decision over whether to pull the switch to divert the trolley to the side track and save the five at the cost of losing the one, we have to sit at a desk and hold the switch for five hours if we want to divert the trolley.  Otherwise, the trolley goes straight ahead and kills the five.  If the working hypothesis of deontological framing is correct, the 90% or so of respondents who say they would pull the switch in the original trolley problem (Mikhail 200x) will be predisposed in the variant scenario to say that will hold the switch for five hours.  While the responses in hunt problems, with their utilitarian framing, are expected to be sensitive to opportunity costs, the pattern of responses in trolley problems, with their deontological framing, is expected to be much less sensitive to such costs.  In other words, the very same people are intuitive economists in the hunt problems will become intuitive anti-economists--Kantians--in trolley problems.

A second important consequence that would follow if the framing hypothesis is true is that certain basic deontological considerations that are critical in trolley problems, such as the separate moral significance of means, will be much attenuated in hunt problems.   Consider first a trolley variant in which five stag rather than five people are on the tracks below, and one docile stag is next to you on the footbridge.  Should you push the one stag off the bridge in order to stop the trolley and save the five stag?   The guess here is that some substantial portion of respondents, fewer than the 90% of so who will not push a person off (Mikhail 20xx)  but nevertheless considerable, will not want to use the one stag as a means to save the other five.  By contrast, if the issue is whether to pull the switch to kill the one and save the five, one would expect a very high proportion of people to do so in the stag scenario, just as in the basic trolley problem.

Now compare a hunt problem scenario in which the first version involves whether to shoot one stag or six, knowing that one of the additional five shot will turn out to be inedible.  Presumably a high portion of respondents--essentially, everyone who is not rebelling against the hunt framing--will favor shooting all six.  In the variant version, you have to decide whether to shoot one stag that is known to be inedible (its inedibility signaled, let us say, by the configuration of its antlers) as a means to make the other five stag skittish and start moving so their white tails are visible and your group of hunters can shoot them.  If you do not shoot the inedible stag, you will not get the other stag.   Assuming the framing hypothesis is correct, a deontological concern about using one stag as a means will not constrain as high a proportion of people in the hunt problem as in the comparable trolley problem.

The Languages of Law and Management

Compare a California judge who is deciding whether same-sex marriage is required under the state and federal constitutions' equal protection clause to a California manager who is deciding whether a firm's gay employees should receive the same benefits as the firm's heterosexual employees.  The judge is required to do more than communicate a yes or no result.   The manager, on the hand, can simply take action without explaining his or her decision.   Whatever the underlying bases of the judge's decision may be, it must be explained in terms of generally applicable principle rather than local expedience.   On the other hand, the managerial decision on benefits may well be more readily justified in terms of immediate convenience--"this is the best call for us under the circumstances, without saying that it would be right for another firm"--than in principled terms--"it is simply wrong for our gay employees to be denied benefits that our straight employees enjoy"--that may well sound grandiose or moralistic in the firm context.