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Harold J. Berman – Law and Revolution, The Formation of the Western Legal Tradition

Harold J. Berman – Law and Revolution, The Formation of the Western Legal Tradition

Berman’s thesis is beyond my ability to state succinctly. This is in part because he thinks in a spectrum of grays and colors rather than a simple binary black-and-white. Unlike many scholars, Berman admits that many things are multi-causal, and defy simplistic explanation. His goal is to explain why legal systems look the way they do, and where they come from. Berman’s thesis ties into the larger rise of modernity itself and the modern economy we enjoy today, but intentionally confines himself to the law, his area of expertise. To highlight some of Berman’s main themes, which all intertwine:

  • Modern legal systems are a result of competing jurisdictions. Just as the U.S. has separation of powers and federalism, Europe had church and state competing against each other, as well as kings and nobles squabbling among themselves, free cities adding another sovereign unit to the mix. Eventually, nation-states emerged as a major unit as well.
  • The rise of trade also played a role. If two traders had a dispute, it was difficult to determine which legal authority had jurisdiction. The king of the origin country? The destination country? Traders responded by developing their own mercantile law over time. This spontaneous order competed with both church and state laws, adding another element of competition.
  • Berman doesn’t use the term, but scholars from Elinor Ostrom to David Friedman call such legal systems “polycentric” (many-centered).
  • This process pre-dates the Reformation, which is where most scholars place the beginning of modern legal systems as we know them today. Berman instead dates the key event as the Papal Revolution, a multi-generation movement which peaked in the 1170s.
  • This marked the rise of the church as a major source of trans-national legal authority. For the first time, it competed directly against kings and nobles, and on equal footing. Church and state had separate but overlapping jurisdictions, and competed with each other to attract “clients” and patronage.
  • The competition was not always peaceful.
  • Berman doesn’t operate on a strict back-and-white, church-vs.-state axis. Nothing in history is that simple. There are many other important factors in play.
  • This isn’t quite a market process in action, but there are similarities.
  • This was a process, not an on-off switch. Even when change was at its fastest, the change would only be noticeable over the course of an entire lifetime. It was not centrally directed or planned, and it did not happen suddenly.
  • Nor was the process unidirectional. There were reactions against it, and there were countless other factors in play. Berman doesn’t go this far forward in history, but the French Revolution is an excellent example of such a reaction. The Revolution swept away the ancien regime and was secular, so on the surface it appeared to weaken both church and state. Its intellectual underpinnings rejected hodge-podge evolutionary polycentrism in favor of a more orderly, centralized, and aesthetic top-down legal ethos. Think the Napoleonic Code-vs.-common law debate that continues today.

This is a deep and dense work, and I have almost certainly not done it justice in this capsule review. But it is a rewarding read, and as someone who works on regulatory issues and institution-level reforms, this book was a game-changer. It changes how I view where today’s debates, legal conventions, and implicit assumptions come from, how they evolve over time, and where needed reforms might fit into larger historical trends.

Berman, who passed away in 2007, also wrote a sequel, Law and Revolution II: The Impact of the Protestant Reformations on the Western Legal Tradition. When I am feeling ambitious, I hope to one day attempt it.

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Andrew Roberts – Napoleon: A Life

Andrew Roberts – Napoleon: A Life

This recent Napoleon biography has quickly garnered a stellar reputation. It strikes a healthy balance between telling the story of the person and the story of the times, tending a bit more towards the personal side.

The justification for writing yet another Napoleon biography in a flooded market is that Roberts is the first biographer to be given access to more than 33,000 pieces of Napoleon’s written correspondence, and he draws on them heavily. He gives new details and insights from these primary sources about Napoleon’s relationship with Josephine, his thoughts before and after critical battles and inflection points in his career, and more. Unlike most other biographers, Roberts also traveled to the island of St. Helena. His portrait of Napoleon’s final exile is all the more vivid as a result, and even a little touching.

Adam Shepard – Scratch Beginnings: Me, $25, and the Search for the American Dream

Adam Shepard – Scratch Beginnings: Me, $25, and the Search for the American Dream

After graduating from college, Shepard tried an experiment. He traveled to Charleston, South Carolina with nothing but $25, and gave himself one year to meet a goal of having $2,500 in savings, a car, and an apartment. Among the rules he set for himself was he was not allowed to take advantage of his college education or take help from his family. He spent about two months in a homeless shelter, working odd jobs, learning the city, and looking for an apartment. By the end, he found a stable job and met his goals, and almost seemed pretty happy. Unfortunately, a family member’s health meant he had to return home and care for them. Good on him for knowing what’s important, and he still accomplished his goal of refuting the class-based hopelessness he found in Barbara Ehrenreich’s book Nickel and Dimed.

Competing Antitrust Ideologies

Over at Liberty Fund’s EconLog, Pierre Lemieux has a thoughtful post on antitrust and ideology:

That antitrust legislation was a product of the first populist era (the end of the 19th century) and the succeeding progressive era (the beginning of the 20th) should raise a red flag.

A more general question can be asked: Isn’t as blindly ideological to claim that the market is nearly always efficient as it would be to claim that government intervention is nearly always efficient? This is a valid question, but I would argue the negative.

Read the whole thing.

James S.A. Corey – Persepolis Rising: The Expanse, Book 7

James S.A. Corey – Persepolis Rising: The Expanse, Book 7

As every generation gets older, it tends to grouse about young peoples’ shrinking attention spans. Pop culture these days shows that charge not to be true. Now that the media market is more diversified and less formally structured—something antitrust activists should keep in mind—people are flocking away from easy-to-digest 22-minute network sitcoms. When given a choice, many people are choosing complex shows in a serial format with large casts, nuanced characters that evolve and change over time, well-developed minor characters, and multi-season and multi-book story arcs with multiple moving parts. It is hard for someone with a short attention span to enjoy fare such as Breaking Bad, Game of Thrones, or The Expanse. Much as I continue to enjoy short attention span fare such as Seinfeld or The Simpsons, it is an unabashed good that people who want more thoughtful, complex fare now have that in abundance, too.

Which brings us to book 7 of The Expanse. Thirty peaceful years have passed since book 6. Earth, Mars, and the Belt are finally allies, and the colonies in the 1,300 solar systems accessible through the ring gates are reaching populations in the millions. Mars is lending Earth its terraforming technologies to help the planet recover from the extinction-level meteor strikes launched by Marco Inaros, the villain from the last story arc. The Belt has evolved from its hodgepodge of a legitimate government, the Outer Planets Alliance (OPA) and its squabbling IRA and Hezbollah-style factions into a unified, more formal customs union. Its job is to aid traffic through the gates and back, and the process is going surprisingly smoothly, with less infighting and fewer abuses than this economist thinks plausible.

Captain James Holden and Naomi Nagata, both with some gray hairs at this point, are ready to retire together, and sell their shares of their now-aging ship The Rocinante to Bobbie Draper, a former Martian marine and longtime crew member.

Then the trouble starts. The new villain is Winston Duarte, who previously appeared in book 5. He led a mutiny in the Martian military that stole the last remaining sample of the alien protomolecule, a third of Mars’ navy fleet. He and his followers fled through one of the ring gates to found the colony of Laconia, and haven’t been heard from since—the authors probably had this plotline drawn up long ago.  He reappears at this point as High Consul of a totalitarian government, with designs on personally becoming emperor of each of the 1,300 known solar systems, including sol system. He backs it up with a new, unstoppable navy with advanced protomolecule technology, and handily defeats the EMC (Earth-Mars Coalition) and Transport Union forces in battle. He has also apparently been attempting to grant himself immortality using protomolecule technology, which should be an interesting development going forward.

The protagonists put up an underground-style resistance as best they can, allowing the Belters’ OPA roots to re-emerge, this time as good guys. The characters also deal with the still-incomplete fallout from Holden and Naomi’s retirement and the change of command. After the big naval battle falls short, the crew lead an escape of the resistance forces, presumably to regroup for Duarte’s major denouement in book 8. Holden is also taken prisoner and taken to Laconia, which should also lead to some interesting situations.

Antitrust Basics: Misleading Herfindahl-Hirschman Index

This is the third entry in the “Antitrust Basics” series. See below for previous posts.

Market concentration is the most common reason for antitrust intervention. If a company has too large a market share, it can abuse that market power to raise prices, restrict output, and engage in all manner of anti-competitive business practices. A merger that would create a dominant player or significantly reduce the number of competitors is likely to be blocked. But how should market concentration be measured? Should it be by number of firms? Or by how much market share the biggest players control?

The Herfindahl-Hirschman Index (HHI) accounts for both factors. It also gives analysts a single numerical score they can work with, ranging from 0 to 10,000. It is also easy to calculate; the Justice Department shares the HHI formula here. A market with a large number of companies, in which each has an equally small market share, will have a low score. A market with few companies and one dominant player will have a high score.

For example, imagine two different markets, each with four companies. In one case, each company has an equal 25 percent market share. This market has an HHI score of 2,500. In the second case, one company has a 97 percent market share, and the other three each have a one percent market share. This yields a 9,412 HHI score, and quite possibly an antitrust case.

According to the Justice Department and Federal Trade Commission’s joint Horizontal Merger Guidelines, an HHI of over 2,500 constitutes a highly concentrated market. The HHI is usually used in mergers to decide whether or not to allow a deal to go through—under the Hart-Scott Rodino Act of 1976, all mergers over a certain size have to be reviewed by regulators before they can be consummated.

According to the guidelines, Mergers in a moderately concentrated market (HHI score of 1,501 to 2,500) that increases HHI by more than 100 points “potentially raise significant competitive concerns and often warrant scrutiny.”

Mergers in a highly concentrated market (HHI of more than 2,500) raising HHI by more than 200 points “will be presumed to be likely to enhance market power.”

These guidelines are not binding. The decision to block such a merger can vary with which party holds power, if a company is receiving bad publicity, or any other factor besides a predictable law. This uncertainty can have a chilling effect on deals that could benefit consumers.

This kind of quantitative analysis makes it easier for the Justice Department or the Federal Trade Commission to decide whether or not to bring a case against a company, or to block a proposed merger.

The HHI has a fatal flaw, though: the relevant market fallacy. The person crunching the numbers can define the relevant market any way they please, and can thus come up with nearly any HHI score they desire. This makes it analytically useless. In fact, during the fact-finding phase of a merger investigation, opposing counsel routinely fight over the relevant market size to be used in that case’s HHI calculations. Whatever decision is reached is arbitrary, and often depends more on the judge’s political views than anything else.

The fact that the Herfindahl-Hirschman Index is so easy to game is by itself fatal. But that is not its only significant problem. As Judge Richard Posner observed in the second edition of his book “Antitrust Law,” “There is no sound basis in economic theory for thinking that if there are just a few major sellers in a market, competition will disappear automatically.” That is an empirical question, and one that regulators are incapable of answering.

This is not necessarily their fault; no one can predict the future. Even the merging companies themselves are unsure how their deal would work out. AOL and Time Warner found this out the hard way. By giving the illusion of quantitative rigor, the HHI often fools regulators into thinking they have solved the knowledge problem that vexes so many policymakers’ plans. This false confidence is dangerous to consumer welfare.

The Herfindahl-Hirschman Index is useless in answering the question of whether a merger or a given level of concentration would cause consumer harm. It should barred from use in antitrust cases.

For more, see Wayne Crews’ and my study, “The Case against Antitrust Law: Ten Areas Where Antitrust Policy Can Move on from the Smokestack Era.” Further resources are at antitrust.cei.org.

Previous posts in Ryan Young’s “Antitrust Basics” series:

Brian Switek – My Beloved Brontosaurus: On the Road with Old Bones, New Science, and Our Favorite Dinosaurs

Brian Switek – My Beloved Brontosaurus: On the Road with Old Bones, New Science, and Our Favorite Dinosaurs

A good part of the early part of this book is about taxonomy, which though a useful discipline, fails to excite much interest. This book’s title comes from a famous example of why. The Brontosaurus species we all remember from our childhoods turns out to have been made from mismatched body and skull fossils. When scientists corrected the error, they decided on a name change as well, to Apatosaurus. They could have just as easily kept the old name; there is no solid argument one way or the other. Much species designation is improvised and arbitrary.

Readers more interested in taxonomy than I am would profit from the chapter in Richard Dawkins’ The Blind Watchmaker on the subject, which defends a tree-of-life organizational scheme based on genes, rather than the old Linnaean scheme based on physical features, which can classifying distant relatives too closely based on convergent characteristics that evolved separately.

Switek’s larger goal with this book is to convey his boyish enthusiasm for dinosaurs and paleontology, and here he does inspire interest. Also, perhaps in an effort to be provocative, he repeatedly insists that dinosaurs never went completely extinct. Today’s birds and crocodiles are descended from dinosaurs, and should be considered dinosaurs. Again, this is an arbitrary distinction without an objectively right or wrong answer. Switek also gives considerable space to similar controversies regarding triceratops, in which a newer species was arbitrarily folded back into the original, and a few other species, including the allosaurus, a Jurassic precursor to the tyrannosaurus rex.

There are some amusing throwaway lines, as when he remembers thinking about the Thanksgiving dinosaur in the oven one holiday season, or describing a Las Vegas museum’s not-very-tasteful rendering of a feathered deinonychus as “a Cretaceous version of Robert Smith from the Cure.”

The bulk of the book is a tour of various facets of dinosaur biology, with from reproduction, anatomical changes throughout their life cycles, social lives and hunting strategies, parenting, diet, dentition, how they got so big (lightweight bones helped), health problems, and more. Switek’s tour is interesting enough to make it worth the useless semantic arguments he keeps going back to, but the book would have improved with fewer of them.