Clifford Winston, an economist at the Brookings Institution and someone whose work on economics I highly respect, sent me an email about some recent SCOTUS decisions. I told him that I think very differently about these issues and asked his permission to quote him. He responded that he wanted to add some words for clarity but if my quotes included these additions, I could do so. By the way, the words he added caused me to disagree with him less than I did, but I still disagree with some of his statements. Here are the five paragraphs I have permission to quote. He added the words in bold.
I won’t respond to everything below, but I will respond to some of the issues on which Cliff and I most disagree.
Posner made two critical points that are central to current discussions. First, he argued that because justices do not share a commitment to a logical premise for making decisions (for example, cost-benefit analysis), they must be ideological because they cannot be anything else. Note, the point is not that judges should decide cases based solely on cost-benefit analysis or explicitly ignore unambiguous rules and laws. However, cost-benefit analysis should be a consideration with experts providing guidance on identifying and estimating the costs and benefits, which judges would hopefully consider.
Second, Posner was a pragmatist and he pointed out in an NYT interview that “A case is just a dispute; forget about the law—see if a recent Supreme Court precedent or some other legal obstacle stands in the way of ruling in favor of that sensible resolution. And the answer is that’s rarely the case, or when you have a Supreme Court case or something similar, they’re often extremely easy to get around.”
To that end, what would a pragmatic approach suggest about how to think about resolving the recent cases? The web designer may benefit by exercising her religious preferences, but I suspect that she will lose a lot of business when her behavior is publicized, and certain consumers boycott her services. Consumers will lose if she offers a superior service that they eschew. So, is a lose-lose outcome a sensible resolution? Wouldn’t society be better off if market behavior was not used to suppress output? Of course, the economic benefits of greater output should be compared with the costs of not allowing the web designer to exercise her religious preferences.
The education loans and college admissions cases raise the fundamental questions of: (1) What are we trying to accomplish as a society by suspending the loans and allowing race to be a factor in college admissions?; and (2) What is the best way to accomplish that goal? The answer to the first question is presumably that we want to help groups that will be disadvantaged in life by their financial debt and that have been disadvantaged by their race and ethnicity in various ways throughout their life. Note, whether those are worthy goals is ultimately determined by the democratic process. In any case, it would be helpful to have a thoughtful discussion about the best way to achieve those goals. If people who are relieved of certain debts respond by accumulating new debts and if certain races and ethnic groups are better able to gain admission to certain colleges but the earnings gap between those races and ethnic groups and other groups is not affected, then SCOTUS arguably made sensible decisions, which are not impeding the aforementioned goals. But I would like to see the evidence to back that up and I would still like to identify the best approaches to solving those problems (e.g., before individuals approach college age).
As noted, economics and cost-benefit analysis should not be the entire basis for SCOTUS decisions, but those modes of analysis certainly should not be excluded. I argue in the attached paper that lawyers are siloed in their training and professional careers and that they would more likely to have a broader perspective in their rulings if the legal profession were deregulated. Importantly, SCOTUS would be more likely to be receptive to expert panels, which could greatly help them to reach more sensible resolutions of disputes.
First, he argued that because justices do not share a commitment to a logical premise for making decisions (for example, cost-benefit analysis), they must be ideological because they cannot be anything else.
Either Cliff is misquoting Posner or Posner is wrong. He leaves out the possibility of looking at the Constitution, seeing what it says, and judging accordingly.
Now comes the part I most disagree on. And I disagree not only on the law but also on the economics.
To that end, what would a pragmatic approach suggest about how to think about resolving the recent cases? The web designer may benefit by exercising her religious preferences, but I suspect that she will lose a lot of business when her behavior is publicized, and certain consumers boycott her services. Consumers will lose if she offers a superior service that they eschew. So, is a lose-lose outcome a sensible resolution? Wouldn’t society be better off if market behavior was not used to suppress output? Of course, the economic benefits of greater output should be compared with the costs of not allowing the web designer to exercise her religious preferences.
Whether or not he recognizes it, Cliff is playing to the narrow stereotype of economists. My wife told me that when she told someone that her husband is an economist, the person said, “Oh, he studies money.” She replied, “No, he studies human behavior.” We are motivated by more things than money. It’s not a lose-lose outcome. The woman who wanted not to be forced to express herself in ways that she disagreed with surely understood that she would be giving up business: that’s the whole point. So giving up this business she didn’t want, although it would make her less profitable, would cause her to gain, not lose. Cliff adds, “Of course, the economic benefits of greater output should be compared with the costs of not allowing the web designer to exercise her religious preferences.” But that’s exactly what she’s doing. We don’t need a government agency, whether a court or a regulatory agency, to do that. If a government agency were to require her to trade, we know that there would be net losses: the loss to her from being forced to trade would be greater than the gain to the consumers who miss out on the trade. If that weren’t so, they could raise their offer and she would accept.
The education loans and college admissions cases raise the fundamental questions of: (1) What are we trying to accomplish as a society by suspending the loans and allowing race to be a factor in college admissions?; and (2) What is the best way to accomplish that goal? The answer to the first question is presumably that we want to help groups that will be disadvantaged in life by their financial debt and that have been disadvantaged by their race and ethnicity in various ways throughout their life. Note, whether those are worthy goals is ultimately determined by the democratic process.
Accomplish as a society? I remember one federal judge, in rebuking George W. Bush in a case involving a prisoner at Guantanamo, stating, “The president is not a commission.” Similarly, Joe Biden is not a society. He’s one guy. He’s the one who suspended the loans. That’s where rules come in. Cliff seems to recognize this with his last sentence above. It’s not one I agree with: it gives way too much power to “the democratic process” instead of to people’s rights. But Cliff’s the one advocating it. Given that, he should recognize that the democratic process–I assume he means Congress–didn’t see fit to suspend the loans.
“We want to help groups that will be disadvantaged in life by their financial debt.”
Then help them. There’s nothing stopping people from giving their own resources to help them. But, by the way, the tough love solution is to insist that they pay their debts; it will help them learn a lot about responsibility. They might be much more disadvantaged if they don’t learn that.
“and that have been disadvantaged by their race and ethnicity in various ways throughout their life.”
If being black per se disadvantages people, why do white people often wish they could claim, on college admission applications, that they are black?
“As noted, economics and cost-benefit analysis should not be the entire basis for SCOTUS decisions, but those modes of analysis certainly should not be excluded. ”
I agree.
“I argue in the attached paper that lawyers are siloed in their training and professional careers and that they would more likely to have a broader perspective in their rulings if the legal profession were deregulated. ”
I agree that the legal profession should be radically deregulated. I’m not sure that lawyers as judges would have a broader perspective in their rulings, but my agreement on deregulation doesn’t hinge on that.
Where I fundamentally disagree with both Cliff Winston and Richard Posner on is the role of judges. Both seem to see judges as central planners. In that way lies peril.
READER COMMENTS
Airman Spry Shark
Jul 3 2023 at 1:22pm
Presumably that would be the ideology of “Constitutionalism” or something, in their framework.
Mark Z
Jul 3 2023 at 1:50pm
This seems like an ‘act utilitarianism’ vs. ‘rules utilitarianism’ dispute. Posner and Winston are saying judges should take a more act utilitarian position. There are very good reasons why most jurists have usually rejected Posner’s ‘pragmatism’ in making decisions. We’re all better off in a society where laws are written and enforced in a clear and consistent manner, even in cases where doing so is utility decreasing. But when the legality of your actions will ultimately be determined after the fact by some judge’s back-of-the-envelope cost-benefit analysis, then you never really know what’s legal or what isn’t. Economic activity becomes much more risky when every contract you make with someone could eventually be nullified if it leads to a dispute where the judge decides the other party could use the money more than you could. That Posner and Winston are probably wrong about the cost-benefit analysis of these particular cases only shores up the perils of giving judges and expert panels license to make judicial decisions based on cost-benefit analysis. These questions are often too complicated to confidently compute costs and benefits, and I suspect most judges and experts will just end up deferring to their political priors.
Kevin Dick
Jul 3 2023 at 2:23pm
This!
steve
Jul 4 2023 at 11:12am
“We’re all better off in a society where laws are written and enforced in a clear and consistent manner,”
“I suspect most judges and experts will just end up deferring to their political priors.”
I think your two statements here are both correct. We would be better off if we had judges who enforced the law in a clear and consistent manner, but we dont. We have judges who defer to their political (and personal) priors. In that context I dont actually know if it makes much difference if they pretend to follow written laws or are pragmatic. (It certainly doesnt help that a lot of our laws are poorly written.)
Steve
Dylan
Jul 3 2023 at 2:29pm
I agree with almost everything you wrote in this piece, but I want to highlight one where I think your implication is wrong.
Sure, lots of people might wish they could claim they were black on a college application, one area where being black has explicitly been an advantage (all other things equal). That doesn’t imply that they wish they could be black in the rest of their lives. Would those same people want to be black in a job interview? When being pulled over by the police? Would they have wanted to have more than double the chance of being born into poverty than they would have as a white person?
David Henderson
Jul 3 2023 at 2:36pm
Good point. Yes, I over-generalized.
Physecon
Jul 3 2023 at 2:41pm
Does Dr Winston not understand the difference between internalized and externalized costs?
This all reads like he is being tongue in cheek…at least I hope. There’s so many basic fallacies in his reasoning.
David Henderson
Jul 3 2023 at 4:20pm
I know Cliff’s thinking pretty well. He presented ideas like this at an event we both spoke at. So not tongue in cheek.
Michael Sandifer
Jul 3 2023 at 4:04pm
“If being black per se disadvantages people, why do white people often wish they could claim, on college admission applications, that they are black?”
Sorry, but this is an absolutely absurd statement. There aren’t affirmative action programs in most areas of life. And affirmative action programs didn’t only benefit black people, or women, but even white men on some compuses where they were under-represented.
Affirmative action is one factor that helps earn admission, not an actual degree. It’s an opporunity. I find it interesting that there’s not the same energy to end special legacy advantages in admission, for example.
David Henderson
Jul 3 2023 at 4:20pm
You’re right that I badly overstated. See my response to Dylan above.
Michael Sandifer
Jul 3 2023 at 9:39pm
Yes, we all make mistakes. Sorry to pile on. I should have read some of the other comments first.
David Henderson
Jul 5 2023 at 5:08pm
Thanks, Michael.
David Seltzer
Jul 3 2023 at 4:54pm
“What are we trying to accomplish as a society by suspending the loans and allowing race to be a factor in college admissions?” Interesting. Quotes from Pierre Lemieux’s The Vacuity of The Political “We”. “The truth is that this collective “we” has no scientific meaning.” “In other words, individual preferences cannot be aggregated into consistent and “democratic” social preferences. The political “we” is, indeed, either inconsistent or dictatorial. “We” does not exist, or if it does, it’s the royal “we.” If individual preferences cannot be aggregated, I suspect the court would find it difficult to execute a CBA.
David Henderson
Jul 5 2023 at 5:09pm
Nicely said.
Monte
Jul 3 2023 at 6:00pm
In spite of our reluctance to admit it, black privilege does exist beyond just the college admissions program. Being today black confers a number of advantages. They are vastly over-represented in T.V. commercials, public assistance, affirmative action, professional sports, media portrayals of poverty, etc.
This isn’t a complaint or a defense of past injustices, it’s just reality. And one, I think, that stems from a conscious effort to imitate oppressed minorities. “Victim status is treasured in America, and black skin guarantees automatic victim status thanks to America’s history” according to Ben Shapiro. “In America’s racist heyday, [BIPOC] attempted to pass for white in order to escape destitution and persecution; today, white people attempt to pass for [BIPOC] — or appropriate culture — to win popularity.” It’s a deliberate attempt by people like Rachel Dolezal, Shaun King, and Elizabeth Warren to “get under the skin” of minorities of their choosing in order to exploit any benefits that might accrue to them, including a seat on the moral high ground of any real or imagined systemic racism.
john hare
Jul 4 2023 at 5:17am
One downside is that when dealing with people of color, one is not certain in advance if they gained the position through competency or race. This is a disadvantage to some of the black people and immigrants that I know. Competent people that are lightly suspected of gaining a position through favoritism. I know second hand of them not getting jobs because of the potential race problems if they are fired.
I don’t know if I wrote that clearly. I am white and my crew is black and brown immigrants. I often have to deal with the clients personally on minor items that my guys could have handled.
steve
Jul 4 2023 at 11:25am
That largely avoids the fact that for hundreds of years racial preferences all favored whites. Sports were all white for a long time. Commercials favored whites until a few years ago. I dont really understand why being poor enough to qualify for public assistance is an advantage but you need not try to explain that one.
I think the issue is that we as a country were pretty happy with, or at least accepted, racial preferences as long it favored whites. Once we mostly outlawed racial preferences against blacks we were suddenly all “equal”, but not really as white people had all of the money, education, positions of authority, human capital. In general, when someone has unduly caused economic harm to someone we expect that to be paid back. So instead of calling it affirmative action it should have been called deliberate temporary racism against white people to try to enable black people to catch up a bit.
Of course some people would claim it is unfair. They didnt participate in hiring black people. It was their parents or someone else’s parents. That could be true. However, it was unfair to all black people. There is no “fair” way to catch up some of that human capital and searching for the “fair” response would have meant doing nothing.
Steve
Casual Observer
Jul 4 2023 at 12:11pm
Fine, yes, in the past laws were made to favor whites and? It does not mean that we need to have affirmative action or any such laws to have “blacks catch up”. Honestly, as an immigrant to America from a predominantly black country it baffles me how it often feels that me being black is some form of disability. That no matter how hard I try, study, practice, etc, I just won’t make it and be able to contribute to society.. Is this really the way to see black people? (Note I am not saying YOU see black people this way)
Furthermore, everywhere we look it is blacks make less than whites, blacks have less wealth than whites, blacks score lower than whites, the list goes on and on and on… You know what this does to a group of people? To continuously be told that you are just not up to snuff? Would you continuously remind your own child that they are just not as good as another child? A silly example, but I want to make the point that you wouldn’t….
In any case, I apologize if this comes off a bit ranty/rambly. It just upsets me that we live in a world where my blackness seems to be seen as condition that just won’t allow me to fully reach my potential in society, therefore I need privileges upon privileges to help me “catch up” even if it comes as a cost to other groups who also face their own set of challenges (Asians)… What ever happened to leaving people alone and getting out of their way??
Note per the CDC is “A disability is any condition of the body or mind (impairment) that makes it more difficult for the person with the condition to do certain activities (activity limitation) and interact with the world around them (participation restrictions).”
Monte
Jul 4 2023 at 3:34pm
Your reply captures the essence of what it means to be an American, regardless of race, color, or national origin. A splendid attitude that we should all strive to live up to. God bless you, sir, and happy Independence Day!
steve
Jul 4 2023 at 10:38pm
I think what you describe is pretty common among black immigrants, especially recent ones. I think the idea is that human capital is pretty fragile and once destroyed it takes a long time to redevelop. People willing and able to immigrate here from oversea generally bring a lot of human capital with them. I also think it was long past time to do away with affirmative action. It may have had a place for a while but at this point it mostly helps well off minorities or immigrants.
I do wonder if you would have felt differently if you had immigrated here say in the 50s and no matter what level of merit you had your prospects would have been limited? Then when legal racism against black peole was mostly removed would you have felt that for the economic damages you suffered should there have been some compensation.
Steve
Casual Observer
Jul 5 2023 at 1:05am
Thanks for the response. Full disclosure I was brought here by my folks in the earrly 2000s as a child, so yes I definitely came to America well after civil rights. It was stated:
”
I do wonder if you would have felt differently if you had immigrated here say in the 50s and no matter what level of merit you had your prospects would have been limited? Then when legal racism against black peole was mostly removed would you have felt that for the economic damages you suffered should there have been some compensation. ”
Well we really can’t know can we? All I can say is that over the years I guess I’ve become a bit principled in my belief that past damages don’t justify future ones, so if that “compensation” came at the expense of someone else, especially at the expense of people who weren’t even responsible for economic damages, then said compensation should be abolished.
Cheers for a good chat!
nobody.really
Jul 4 2023 at 2:03pm
The Wall Street Journal likes to refer to people earning $12,000 or less as “lucky duckies.” And let’s celebrate that–America, land of diverse viewpoints!
Monte
Jul 4 2023 at 4:12pm
Nevertheless, I’ll try. What immediately comes to mind is that poverty doesn’t discriminate. Public assistance shouldn’t be over-represented by any race. 13 million people are disconnected from the social safety net, most of them are white.
Yes, and for that we should be ashamed. We should be equally critical of racial preferences that favor BIPOC. Let’s stamp out preferences altogether.
You’re right, of course. That’s why many favor of reparations. I’m don’t for the simple reason that they’ll only serve to further divide this country and, IMO, take us down that road to hell paved with good intentions.
steve
Jul 4 2023 at 10:42pm
I oppose reparations now as there is no good way to accomplish it to help those harmed. Reparations, as commonly talked about, was probably appropriate in 1870 but not now. However, a limited period of affirmative action to help people get into better schools for a while starting in 1970 shortly after Civil Rights Laws were enacted makes at least some sense. It’s pretty clear that blacks had suffered economic harm while whites had benefitted.
Steve
nobody.really
Jul 4 2023 at 5:50am
I support Mark Z’s characterization of this discussion as a dispute between fact utilitarianism and rules utilitarianism—mostly. Should judges make cost/benefit analyses? Well, first a judge should consider whether using this style of analysis will result in costs and benefits for the credibility of democracy, the judiciary, and the rule of law. I suspect that doing so may lead a judge to conclude that, in most cases, legislatures are better equipped to make the relevant trade-offs than are courts. But some circumstances may justify more judicial cost/benefit analysis than others.
Mark Z cited contract law. In that field, law students often study the case of Groves v. John Wunder Co.. Defendant contracted to use plaintiff’s land and then restore it to it’s prior condition. Defendant admits that he failed to restore the land, and offers to pay the plaintiff the difference between the value of the land in a restored condition and the value of the land in its torn-up condition. The judge rejects this, concluding that the measure of damages should be the cost to fulfill the contract—even if that cost would exceed the market value of the benefit. In short, it’s not the judge’s job to do a cost-benefit analysis. The parties are free to conduct that analysis in negotiating a settlement—and arguably it helps the negotiations if the parties can anticipate that neither party could gain an advantage by asking a court to impose a settlement on them. This is the advantage of predictable rules—and the central insight of rules utilitarianism.
Note, however, that contract law typically focuses solely on the interests of the parties to a contact—parties that had the opportunity to protect their interests while the contract was being formed. Not all law has this quality. Consider property law or tort law (e.g., private compensation for a fender-bender). Often courts decide such cases based on common law—that is, not based on terms agreed to by the parties nor rules adopted by elected representatives, but rather on principles articulated by prior judges. As you might imagine, judges exercise some discretion in picking among the conflicting principles articulated by prior judges. I sense these were the kinds of cases Posner focused on.
What does rules utilitarianism say about this? Arguably a judge could strive to impose the outcome that all parties might have predicted, thereby contributing to the stability of the law and channeling people’s discontent into pursuing legislative innovations rather than judicial ones. Still, this is a tough judgment to make. The decision that railroads should be liable if their trains emit sparks that cause fires—that decision might render railroads uneconomic to operate. Under common law, a lease gives a tenant a property right to land—which is to say, to dirt—but nothing more. So when tenants bring suit arguing that the landlord wrongfully locked them out of their 10th floor apartment, should a judge shrug and say, “Hey, you can still access the dirt upon which the apartment building sits, so you have no cause for objection…”? If everyone agrees that people’s true expectations in litigation are that members of subordinated social classes will lose, regardless of the merits, should a judge seek to conform to these expectations? Again, all these outcomes might have the salutary effect of causing people to channel their frustrations into the legislative process, but they might result in a lot of hardship in the meantime.
Finally we come to issues of public law—e.g., enforcement of civil rights laws or affirmative action. These topics have such diffuse externalities that people refer to them as “social issues.”
To the extent that a given public law derives from specific constitutional provisions/statutes/rules/etc., most SCOTUS judges have turned to a school of interpretation/construction called originalism, which asks judges to interpret a text as people would have understood the text when it was adopted. This looks a bit like rules utilitarianism—striving to anchor a text’s meaning at a point in time, and channeling people’s frustration with that text toward the legislative process.
Originalism strikes me as reasonable in theory, but it leaves judges in the role of amateur historians. Judges may not be well trained for that pursuit, and in the absence of such training, history becomes “like a child’s box of letters, with which we can spell any word we please. We have only to pick out such letters as we want, arrange them as we like, and say nothing about those which do not suit our purpose.” James Anthony Froude, English historian (1818 –1894).
In sum, judicial cost/benefit analysis has its shortcomings—but is it worse than the alternatives?
Ken Costello
Jul 5 2023 at 6:23pm
I think it is presumptuous to say that the web designer would lose business by exercising her religious beliefs. While she would surely lose business from gay couples and some others who wouldn’t want to do business with her because of those beliefs, there may be others who have the same beliefs as she does that would give her their business for that reason. It would seem to depend on the political and religious beliefs of the folks who are her potential customers.
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