Law

There is a new paper (pdf) by Nicola Gennaioli and Hans-Joachim Voth, forthcoming in The Review of Economic Studies:

Powerful, centralized states controlling a large share of national income only begin to appear in Europe after 1500. We build a model that explains their emergence in response to the increasing importance of money for military success. When fiscal resources are not crucial for winning wars, the threat of external conflict stifles state building. As finance becomes critical, internally cohesive states invest in state capacity while divided states rationally drop out of the competition, causing divergence. We emphasize the role of the “Military Revolution”, a sequence of technological innovations that transformed armed conflict. Using data from 374 battles, we investigate empirically both the importance of money for military success and patterns of state building in early modern Europe. The evidence is consistent with the predictions of our model.

The pointer is from Mark Koyama.

Oakley, Mi. is barely a town at 300 people, only one streetlight and, until recently, one police officer. The one cop was good at his job, reports Vocativ’s M.L. Nestel, until he was forced to step down after getting caught stalking a teenage girl.

In 2008, new chief Robert Reznick made some changes: he hired 12 full-time officers and started an enormous volunteer officer program which allowed lawyers, doctors and football players (from other towns) to work toward upholding the law.

One qualifies for this prestigious program simply by paying $1,200 to the police department. In return, you’ll get a uniform, bullet-proof vest and gun. For an additional donation, you’ll get a police badge and the right to carry your gun basically anywhere in the state, including stadiums, bars and daycares.

There is more here, via Larry Rothfield.

Some Good News on Patents

by on October 29, 2014 at 12:45 pm in Economics, Law | Permalink

Further evidence of a dramatic slowdown in patent litigation activity in the United States is provided today in data published by Unified Patents, the entity whose business is based on helping SMEs fight frivolous patent suits. According to the research, which covers the third quarter of this year (June to September),  there was a 23% drop in the number of suits filed compared to the second quarter, and a 27% year-on-year reduction.

The findings come just weeks after data released by Lex Machina showed that there had been a 40% fall in patent suits in September 2014 as compared to the same month in the previous year. Commenting to IAM on the reasons for the decline, Lex Machina founder Professor Mark Lemley claimed that much of it could be attributed to the Supreme Court’s Alice v CLS decision. The Alice judgment was handed down towards the end of June.

More here.

Alice has made a difference as well as the cheaper post-grant challenge procedure in the AIA. Once the first software patents make it through, however, there will be an uptick as people learn the new system. Still this is good news especially for software patents but we have a way to go on the larger issue of IP, including copyright.

Here is the updated “Tabarrok curve“.

Tabarrok Curve

The theme of a study by Melanie Manion is that China’s approach to fighting corruption hearkens back to Maoist campaigns of the 1950s, with the same undesirable effects: campaigns are too frequent, do not last long enough to enlist public confidence, and undermine the growth of long-term institutions of surveillance and enforcement…

That is from Alan Heston and Terry Sicular in this very useful 2008 book.  The Melanie Manion book is here.

While American universities debate whether “civility” is an appropriate way to evaluate faculty members, a British institution has faced intense criticism for punishing a faculty member for sighing, unfriendly body language and the use of irony.

…Docherty’s suspension was revealed by Times Higher Education, which reported that the university said he was undermining the authority of his department head (who has since stepped down) by making “ironic” comments during job interviews, sighing and using negative body language. The suspension had Docherty banned from contact with anyone on campus, and even from writing a book preface.

Charges were just dropped, so could I request to be interviewed by this guy?  I think I would enjoy the experience.

It is from Japan:

The Yokohama District Court sentenced a former Japanese college employee on Monday to two years in prison for producing guns with a three-dimensional printer.

Yoshitomo Imura, 28, a former employee of the Shonan Institute of Technology, was found guilty of violating laws that strictly restrict the possession of guns and large knives and the production of weapons. The prosecution had demanded a 42-month prison term.

Imura’s actions were “vicious” because he made it easy to imitate his production method, presiding Judge Koji Inaba said, noting that Imura had released 3-D design data for his guns on the Internet.

The story is here, the pointer is from the excellent Mark Thorson.

Michela Giorcelli and Petra Moser have a new paper, the abstract is this:

This paper exploits variation in the adoption of copyright laws within Italy – as a result of Napoleon’s military campaign – to examine the effects of copyrights on creativity. To measure variation in the quantity and quality of creative output, we have collected detailed data on 2,598 operas that premiered across eight states within Italy between 1770 and 1900. These data indicate that the adoption of copyrights led to a significant increase in the number of new operas premiered per state and year. Moreover, we find that the number of high-quality operas also increased – measured both by their contemporary popularity and by the longevity of operas. By comparison, evidence for a significant effect of copyright extensions is substantially more limited. Data on composers’ places of birth indicate that the adoption of copyrights triggered a shift in patterns of composers’ migration, and helped attract a large number of new composers to states that offered copyrights.

For the pointer I thank the excellent Kevin Lewis.

The Ebola risk premium

by on October 19, 2014 at 1:48 am in Current Affairs, Economics, Law, Medicine | Permalink

Underpaid or overpaid?:

They’re looking for the few, the proud — and the really desperate.

For a measly $19 an hour, a government contractor is offering applicants the opportunity to get up close and personal with potential Ebola patients at JFK Airport — including taking their temperatures.

Angel Staffing Inc. is hiring brave souls with basic EMT or paramedic training to assist Customs and Border Protection officers and the Centers for Disease Control and Prevention in identifying possible victims at Terminal 4, where amped-up Ebola screening started on Saturday.

EMTs will earn just $19 an hour, while paramedics will pocket $29. Everyone must be registered with the National Registry of Emergency Medical Technicians.

The medical staffing agency is also selecting screeners to work at Washington Dulles, Newark Liberty, Chicago O’Hare and Hartsfield-Jackson Atlanta international airports.

There is more here, via Matthew E. Kahn.  How much does the regular (non-Ebola) staff earn?

So argues a new paper (pdf) by Ekrame Boubtane, Dramane Coulibaly, and Christophe Rault, the abstract is here:

This paper examines the causality relationship between immigration, unemployment and economic growth of the host country. We employ the panel Granger causality testing approach of Konya (2006) that is based on SUR systems and Wald tests with country specific bootstrap critical values. This approach allows to test for Granger-causality on each individual panel member separately by taking into account the contemporaneous correlation across countries. Using annual data over the 1980-2005 period for 22 OECD countries, we find that, only in Portugal, unemployment negatively causes immigration, while in any country, immigration does not cause unemployment. On the other hand, our results show that, in four countries (France, Iceland, Norway and the United Kingdom), growth positively causes immigration, whereas in any country, immigration does not cause growth.

This result reflects two broader lessons.  First, at the margin the major benefits from migration are to the migrants.  Second, again at the margin, most policy changes matter less than you think they will.

Hat tip goes to Ben Southwood.

Here is a very good piece by The Mitrailleuse, though I do not agree with all of it.  Here is the conclusion:

In summary, the libertarian discussion surrounding immigration shouldn’t be viewed as an all or nothing proposition and as Sanandaji has argued, it should take real world empirical patterns into account rather than assume away voting, the public sector, and social externalities. Libertarians should adopt the same skeptical economist’s view they apply to all other subjects when weighing questions about immigration to determine if we can actually affect the changes we would like to make.

It is perfectly acceptable for libertarians to disagree on such a complex subject and to hold opinions in favor of more marginal change. There are plenty of modest ways libertarians can criticize the existing immigration system without being in favor of open borders. These libertarians shouldn’t be vilified for their humility and prudence. There is no academic consensus on the subject and the issue is too complex and contextual for there to be a clear-cut libertarian position. The burden of proof lies on advocates of open borders to engage these criticisms.

For the pointer I thank Andrea Castillo.

California’s Water Shortage

by on October 16, 2014 at 7:30 am in Economics, Law | Permalink

In the 1970s the US faced a serious shock to the supply of oil but the shortage of oil was caused by price controls. Today, California is facing a serious water drought but the shortage of water is caused by price controls, subsidies and the lack of water markets. In an excellent column, The Risks of Cheap Water, Eduardo Porter writes:

Water is far too cheap across most American cities and towns. But what’s worse is the way the United States quenches the thirst of farmers, who account for 80 percent of the nation’s water consumption and for whom water costs virtually nothing….

Farmers in California’s Imperial Irrigation District pay $20 per acre-foot, less than a tenth of what it can cost in San Diego….This kind of arrangement helps explain why about half the 60 million acres of irrigated land in the United States use flood irrigation, just flooding the fields with water, which is about as wasteful a method as there is.

Tyler and I discuss water subsidies in Modern Principles:

Farmers use the subsidized water to transform desert into prime agricultural
land. But turning a California desert into cropland makes about as much sense
as building greenhouses in Alaska! America already has plenty of land on which
cotton can be grown cheaply. Spending billions of dollars to dam rivers and
transport water hundreds of miles to grow a crop that can be grown more cheaply
in Georgia is a waste of resources, a deadweight loss. The water used to grow California cotton, for example, has much higher value producing silicon chips in
San Jose or as drinking water in Los Angeles than it does as irrigation water.

The waste of subsidized water is compounded by over 100 years of rent-seeking and a resulting legal morass that makes trading water extremely difficult (see Aquanomics for a good analysis). A water trading system is slowly taking form in the American West but the political transaction costs are immense. Australia, however, faced similar difficulties but has managed to develop a good water trading system and Chile has long had a robust market in water. Subsidies to farmers are politically sustainable when everyone has as much water as they want but when faced with continued shortages and an ever-intrusive water Stasi consumers and industry may eventually demand a more rational, less wasteful system based on incentives, markets and prices.

From the headline it is easy to see what is going on here:

 Thailand’s traffic policemen will get money in return for refusing bribes, police said on Thursday, part of the junta’s efforts to combat what it has called an ingrained culture of corruption within the force.

two policemen were recently awarded 10,000 baht ($310) for refusing a $3 bribe.

The full article is here, and the pointer is from James Crabtree.

A New York appeals court will consider this week whether chimpanzees are entitled to “legal personhood” in what experts say is the first case of its kind.

For Steven Wise, the lawyer behind the case involving a chimp named Tommy, it is the culmination of three decades of seeking to extend rights historically reserved for humans to other intelligent animals.

On Wednesday, a mid-level state appeals court in Albany will hear the case of the 26-year-old Tommy, who is owned by a human and lives alone in what Wise describes as a “dark, dank shed” in upstate New York.

Wise is seeking a ruling that Tommy has been unlawfully imprisoned and should be released to a chimp sanctuary in Florida.

A victory in the case could lead to a further expansion of rights for chimps and other higher-order animals, including elephants, dolphins, orcas and other non-human primates, Wise said.

“The next argument could be that Tommy … also has the right to bodily integrity, so he couldn’t be used in biomedical research,” the Boston attorney said.

The full article is here, via Charles Klingman.

I’ve noticed in Hong Kong that exiters are not accorded absolute priority.  That is, those entering the elevator can push their way through before the leavers have left, without being considered impolite, unlike in the United States.  In part, Hong Kongers are in a hurry, but that does not itself explain the difference in customs.  After all, exiters are in a hurry too, so why take away their priority rights?  Perhaps we should look again to Coase.  If some people who wish to enter are in a truly big hurry, they can barge forward.  Furthermore, an exiter who is not in a hurry at all can hold back, knowing that someone will rush to fill the void, rather than ending up in the equilibrium of excessive politeness where each defers to the other and all movements are delayed.  That is not an equilibrium you see often in downtown Hong Kong.

There is another positive effect from the Hong Kong method.  If you will be exiting the elevator, you have to step forward early on and be ready to leave promptly, to avoid being swamped by the new entrants.  That means the process of exit takes place more quickly.  And so the entrants who are in a hurry actually do get on their way earlier than would otherwise have been the case.

#smallstepstowardamuchbetterworld

John Oliver on Civil Asset Forfeiture

by on October 6, 2014 at 1:04 pm in Law | Permalink

A case study in how quickly incentives can warp the rule of law.

Hat tip: Daniel Lippman.