Monthly Archives: October 2009

Some Thoughts on Scalia’s Comment About the Supply of Lawyers

Ilya Somin over at the Volokh Conspiracy discusses Justice Scalia’s comments that many of our best and brightest minds end up wasted in the practice of law. Somin notes one serious argument against this claim, specifically that high prices for legal services are indicative of the high demand for those services. I think that there are two things that need to be added: first, as a tangent, that Say’s Law applies here (supply creates its own demand) and second, that the market for legal services is huge and the market clearing price for legal services is often way to high for many consumers. This interview with Jay Moses of the Center for American Progress details some elements of the supply and demand for legal services amongst the poor; this article in McClatchy details, among other things, an 11 million jump in the number of people eligible for free legal services since 2007. And this piece of advocacy from Diller and Savner is rich in detailing the extent of current legal services. Diller and Savner interestingly suggest that subsidizing legal aid for the poor also increases the quality of democratic representation, since it reduces the search and transfer costs of information about that sector of the population, allowing politicians to be more informed about the policy preferences and needs of their constituency. In shorter, more precise language one could say that subsidizing legal services for low-income users has positive informational externalities that increase the quality of democratic government (a public good).

But the second half of Somin’s argument is all too true: we have way too many laws. I recall a statistic (in a Krugman editorial perhaps?) noting that the massive body of federal criminal law implies that over half the population are de facto felons. Certainly the most egregious example is the terminally useless War on Drugs but there are far more insidious examples; there are plenty of excessively broad laws and regulations that felonize trivial things like failing to appropriately label chemicals or animal parts.

Tagged , , ,

Great Lines in Economics, Everquest Edition

From the abstract to “Virtual Worlds: A First Hand Account of Market and Society on the Cyberian Frontier“, a December 2001 paper by economist Edward Castranova, this gem:

In March 1999, a small number of Californians discovered a new world called “Norrath”, populated by an exotic but industrious people. About 12,000 people call this place their permanent home, although some 60,000 are
present there at any given time. The nominal hourly wage is about USD 3.42 per hour, and the labors of the people produce a GNP per capita somewhere between that of Russia and Bulgaria.

Norrath, for those not in the know, is the land where the online massive multiplayer online roleplaying game (MMORPG) Everquest take place. For reference, Bulgaria’s GNP per capita in 2000 was $5,560; Russia’s was $8010 (source, Bureau of the Census 2002, L/N). Castranova’s paper is currently the second most downloaded economics paper on SSRN.

Tagged , , ,

Great Moments in Nuclear Game Theory

This article by Nicholas Thompson in Wired is titled “Inside the Apocalyptic Soviet Doomsday Machine‘. I excerpt this:

Permissive Action Links

When: 1960s
What: Midway through the Cold War, American leaders began to worry that a rogue US officer might launch a small, unauthorized strike, prompting massive retaliation. So in 1962, Robert McNamara ordered every nuclear weapon locked with numerical codes.
Effect: None. Irritated by the restriction, Strategic Air Command set all the codes to strings of zeros. The Defense Department didn’t learn of the subterfuge until 1977.

Tagged ,