The University of Chicago Law School Faculty Blog

Liberal Values

For most of the past four decades, “liberals” have been in retreat. Since the election of Richard Nixon in 1968, Republicans have controlled the White House 70% of the time and Republican presidents have made 86% of the Supreme Court appointments. In many quarters, the word “liberal” has become a pejorative. Part of the problem is that liberals have failed to define themselves and to state clearly what they believe. As a liberal, I find that appalling. In that light, I thought it might be interesting to try to articulate ten propositions that seem to me to define “liberal” today. Undoubtedly, not all liberals embrace all of these propositions, and many conservatives embrace at least some of them. Moreover, because ten is a small number, the list is not exhaustive. And because these propositions will in some instances conflict, the “liberal” position on a specific issue may not always be predictable. My goal, however, is not to end discussion, but to invite debate.

Hacking Starbucks

In my secured transactions and bankruptcy classes, when I teach the Modigliani-Miller theorem—or, as we think of it at the University of Chicago, Miller-Modigliani—I describe it as focused on the consequences of home-brewed arbitrage. Investors outside of a firm can buy or sell debt or equity to replicate or counteract steps taken by a firm to create an optimal debt-equity ratio. Hence the theorem’s core point about the irrelevance of capital structure under certain highly-stylized conditions.

But apparently home-brewed arbitrage has taken on another meeting, as the Chicago Tribune detailed in an interesting if fluffy article yesterday about Starbucks and the bootleg latte. As the Tribune describes it, Starbucks's pricing creates a doppio-latte arbitrage opportunity. But the article raises interesting points about an item of ongoing interest for me, namely, under what circumstances can users deviate from the intended uses of producers? For regular readers of this blog, you will recognize that this once again takes us back to questions relating to digital rights management and the Digital Millennium Copyright Act (see posts here and here).

Sunstein Podcast: Libertarian Paternalism

On Tuesday, October 3, Cass Sunstein delivered the first lecture of the academic year in the 5th Annual "Chicago's Best Ideas" series. His title was "Nudge: The Gentle Power of Libertarian Paternalism." The room was packed, as usual for Cass, and the discussion was lively. The topic was quintessential behavioral law and econ, and was quite interesting (even to a layperson). Well worth your time, but we think all CBIs are, so you shouldn't trust us - you should check it out for yourself. As always, podcast instructions are here, and the blurb for the talk is below the fold.

Thankfully, Linking to Someone Else's Vodcast Isn't Stealing Their IP...

Richard Epstein recently delivered the Keynote address at the Progess & Freedom Foundation's Aspen Summit on the subject of "The Structural Unity of Real and Intellectual Property." Mildly interested? Read the press release here. Very interested? Read the piece here.  Miss listening to Professor Epstein talk? See the video here. Have comments? Leave them in the comments section.

The Tale of Stephen Hilbert

The Law School, like others around the country, was abuzz yesterday with the start (or false start thanks to the Jewish holiday) of the new Supreme Court term.  While no opinions were handed down yesterday, the Court did make a decision of interest to corporate types: it turned away the petition of Stephen Hilbert, the founder of the insurance firm Conseco.  This case is interesting not so much for the legal issues in Hilbert’s petition or the lower court opinions, but for what it reveals about how firms use (or, rather, used) deferred compensation of various sorts to discipline management. 

The Humanitarian War Myth

More than 40,000 Iraqi civilians have been killed since the American-led invasion of Iraq in 2003, and the rate at which civilians die has been increasing in recent months. Many thousands of innocent Iraqis have been detained, and some have been abused by American troops. Many others have been tortured or killed by Iraqi police. Basic services have been lacking in large portions of the country for three years. Civil war looms, conjuring memories of the 16-year Lebanese civil war, during which more than 100,000 people were killed out of a population of fewer than 4 million.

Yet, if the United Nations were to have its way, the Iraqi debacle would be just the first in a series of such wars -- the effect of a well-meaning but ill-considered effort to make humanitarian intervention obligatory as a matter of international law. Today Iraq, tomorrow Darfur.

Mortality Salience and Politics

(This is a mildly revised and updated version of a post of mine from the New Republic website, a while back.)

Some intriguing social science evidence, with implications far beyond the coming election, strongly suggests that the politics of terrorism touches a chord that produces much more support for Republicans than for Democrats: our own mortality. One question is whether the underlying dynamics will continue in their present form.

A little background: A focus on mortality--which voters obviously associate with terrorism--seems to have a quantifiable effect on our beliefs and our judgments. How, for example, are you likely to be affected if you are asked to think, for just a moment, about the fact that, at some point, you are going to die? An interesting body of psychological research tries to answer that question. Organized around the idea of "mortality salience," this research finds that, if people are reminded of their own mortality, their views and behavior tend to change. Once so reminded, ordinary people are significantly more likely to show racial and religious prejudice. (Note that after 9/11, there was a significant increase in hate crimes against Muslims in Chicago.) Once so reminded, people show more physical aggression toward other people with different political beliefs. Once so reminded, even judicial behavior changes: In one study, judges who were reminded of their own mortality gave stiffer sentences to nonviolent criminals (prostitutes). An understanding of mortality salience, and its effects, helps to illuminate a great deal of behavior in the legal domain, including the decisions of juries.