Category: Law

Driverless car update

Getting lawmakers in the seat of a self-driving Prius has become Google’s M.O., according to Matthew Newton, editor of DriverlessCarHQ.com, a site dedicated to covering autonomous cars. “Google has been giving free rides to policymakers in California, Nevada and Florida,” Newton told Wired from his home base in Melbourne, Australia. “So it makes sense that they would do it in D.C.”

Eric Cantor, for one, was given a ride.

How to find good food in American bars

Jacob Grier has an excellent post on this topic (which I do not cover), here is just one part of a longer discussion:

Reading An Economist Gets Lunch inspired me to think explicitly about how to find good food in American bars. Here are a few general suggestions based on my own experience:

Avoid places with lots of vodka and light rum. These can be bought cheaply and are easy to dress up in crowd-pleasing ways with liqueurs, fruit, and herbs. If these are what the customers are demanding than the food may be equally designed for broad appeal.

In contrast, look for ingredients that signal a knowledgeable staff and consumers. Italian amari, herbal liqueurs, rhum agricole, quality mezcal, batavia arrack, and – lucky for me – genever are good indicators. If I see a bar stocked with these I’ll want to see the food menu.

Go into the city. The density of consumers with expendable income, knowledge of food and drinks, and access to transportation that doesn’t require them to drive is in urban areas.

Laws matter. In some states regulations require that places selling spirits also serve food. Where these laws don’t exist, many of the best cocktail destinations won’t bother much or at all with food, so one might plan to eat and drink separately. (These laws are bad news if you just want to drink, since your drink prices may be covering the cost of an under-utilized cook and kitchen or bars may simply close earlier to save on labor. Virginia’s law creates particularly perverse incentives.)

Markets in Everything: Torturer

 Media Images Torturer2 525At left is an ad that ran in the Guardian newspaper. “The government of a Middle Eastern state is recruiting a senior torturer to work in a well-equipped prison. Our ideal candidate would be prepared to inflict extreme pain and suffering… Candidates will be expected to inspire a small but enthusiastic team.”

No, I don’t think the ad is real. Alas, I am sure the job is real.

Hat tip: Boing Boing.

Incentives matter

Divorce lawyers and wedding planners have been gearing up for the Facebook IPO, waiting for the influx of wealth in Silicon Valley to stir up drama in romantic relationships, for better and for worse.

“When Google went public, there was a wave of divorces. When Cisco went public there was a wave of divorces,” says Steve Cone, a divorce attorney based in Palo Alto, near the social network’s Menlo Park headquarters. “I expect a similar wave shortly after Facebook goes public.”

There is more at the link.

Solomon’s Knot and Gray Markets

Solomon’s Knot: How Law Can End the Poverty of Nations has received less attention than some of other recent big books on development but I found it to be rich in institutional detail, wisdom and practical advice. The authors, Robert
Cooter and Hans-Bernd Schafer, are law professors and as befits their expertise they spend less time on why institutions differ and more on the details of how institutions differ–there is more in Solomon’s Knot, for example, on issues like relational finance, venture capital, joint-stock companies, contract law and bankruptcy law than in other books with a similar theme.

Here is one idea that I had not previously considered, should judges enforce contracts in the gray market?

…businessmen and workers must violate many regulations in order to get things done, especially in poor countries. Thus a builder in Cairo violates building restrictions, a worker and employer in Brazil evade employment taxes, and a manufacturer in Russia runs a factory without a permit to do business.

Throughout the world, much of the economy operates in the “grey market”…a survey of 145 countries estimated that gray
markets activities produce between 30% and 40% of GNP (gross domestic
product). The gray market’s share of total employment is even higher than its
share of GNP.

Judges in many countries will not enforce contracts in the gray market considering them null and void due to the extra-legality. Even when the contracts might be enforced, participants fear that they will be otherwise punished if they make use of the legal system. Cooter and and Schafer argue, however, that such contracts should be enforced and a strict separation be kept between law and regulation. They point to Germany as an example:

…Unlike many developing countries, German legal doctrine and practice avoid this
result. German regulatory violations seldom void contracts, and German
prosecutors seldom act on regulatory violations revealed in a civil trial. Thus a
gardener in the German gray market who does not pay taxes can sue an
employer for unpaid wages without fear of triggering regulatory prosecution.
And a customer who buys a restaurant meal at an hour when law requires the
closing of restaurants still has to pay his credit card bill. The same applies for a
construction contract that violates zoning regulations, or a credit contract that
violates banking regulations. Although seldom discussed in constitutional law,
separating the civil courts from the regulators and police is an important part of
the separation of powers, especially in countries with a large gray market.

The case for separation is strongest for gray markets because the underlying acts are not per se illegal but could the argument be extended even to black markets? Jeff Miron and Miron and Zweibel (JSTOR) argue that one reason that drug prohibition increases violence is that when courts are unavailable, violence becomes the least costly method of dispute resolution. What Cooter and Schafer suggest, however, is that it is at least conceivable to have a situation where the act remains illegal but the actors can resolve disputes in court. Imagine, for example, a drug user taking a dealer to court for cutting the product or a prostitute suing a john for not paying.

It seems naive to expect that we would enforce a rule not to use information from civil court to prosecute illegal behavior. Yet there is a precedent; if a police officer obtains evidence illegally, even without intent, then we throw such evidence out of court. A very strange incentive system. Nevertheless, if we can let murderers go free because the evidence against them was obtained illegally then perhaps we could also let drug dealers bring their contract disputes to court without on that basis prosecuting them for drug dealing.

Addendum: Here is a good interview of Cooter by Nick Schulz and an excerpt from the book.

Greece fact of the day (but how many bullets did they fire?)

More than half of all police officers in Greece voted for pro-Nazi party Chrysi Avgi’ (Golden Dawn) in the elections of May 6. This is the disconcerting result of an analysis carried out by the authoritative newspaper To Vima (TheTribune) in several constituencies in Athens, where 5,000 police officers in service in the Greek capital also cast their ballot.

Here is more, via Chris F. Masse.

The culture that is Germany

According to Germany’s Der Spiegel, German police shot only 85 bullets in all of 2011…As Boing Boing translates, most of those shots weren’t even aimed [at] people: “49 warning shots, 36 shots on suspects. 15 persons were injured, 6 were killed.”

In some cases the United States police manage to best that number while firing at a single suspect.  The short article is here, the German-language source is here: “Unsere Polizisten sind keine “Rowdys in Uniform”.  Of course not, they are too busy counting.

The Growth of Justice

Justice is a key ingredient for economic growth. People will not invest if they fear that their life, liberty and property may be subject to arbitrary seizure and destruction. The rule of law and limited government provide a sphere of liberty within which individuals can make decisions with confidence that the fruits of their labor will not taken by the more powerful.

Justice is not just about legislation, however. Public and private discrimination diminish a person’s ability to individuate and develop, an ability that drives innovation and growth in the artistic, economic and scientific realms. In India the caste system binds many people to the lives of their ancestors regardless of desire, talent or will. In parts of the world half the population is subjugated and bound to a limited vision of their life, a vision which is not of their own making. Similar if less extreme forces have limited women and blacks in the United States.

In a pathbreaking paper, The Allocation of Talent and U.S. Economic Growth, Jones, Hsieh, Hurst, and Klenow connect a micro allocation model to a macro growth model to estimate that the lifting of much discrimination in the United States since 1960 has had a large effect on economic growth:

In 1960, 94 percent of doctors were white men, as were 96 percent of lawyers and 86 percent of managers. By 2008, these numbers had fallen to 63, 61, and 57 percent, respectively. Given that innate talent for these professions is unlikely to differ between men and women or between blacks and whites, the allocation of talent in 1960 suggests that a substantial pool of innately talented black men, black women, and white women were not pursuing their comparative advantage. This paper estimates the contribution to U.S. economic growth from the changing occupational allocation of white women, black men, and black women between 1960 and 2008. We find that the contribution is significant: 17 to 20 percent of growth over this period might be explained simply by the improved allocation of talent within the United States.

In other words, the United States has benefited greatly from the growth of justice.

First license for driverless cars

…on Monday, Nevada became the first to approve a license for “autonomous vehicles” — in other words, cars that cruise, twist and turn without the need for a driver — on its roads.

The license goes to Google, the Silicon Valley technology giant known more for its search engine and e-mail service that nonetheless has been known to dive into other big ideas such as space elevators to Internet-enabled glasses.

The story is here, and for the pointer I thank John Chilton.  I am curious to see how liability evolves.

Cambodian motorbike protectionism

The [motorcycle taxi] drivers want a blanket ban on motorbike rentals for foreign tourists.

“We don’t want [tourists] to rent motorbikes, because foreign tourists don’t know Khmer habits when driving; they don’t comply with the law, and some drive by keeping on the left side, so that causes traffic accidents,” Heng Sam Om said.

The story is hereWill Koenig writes to me:

As someone who lived and worked in Cambodia for years, I find this hilarious. Traffic laws in Cambodia are rarely enforced, and “motordopes,” or motorcycle taxi drivers, are stereotyped as the worst drivers — including driving on the wrong side of the road. But they have formed a union and want to protect their market.

Signaling credibility in Spain

A deal announced last week between the Spanish government and the soccer league (LFP) aims to force soccer clubs…to pay off the 752 million euros they owe in taxes, along with a further 600 million euros in social security payments by 2020. Those that fail to follow the guidelines face expulsion from competition, says the LFP.

It may not be easy:

José María Gay…says that the 20 clubs in Spain’s top division had total combined debts of about 3.53 billion euros at the end of the 2010-11 season, up from 3.48 billion euros the previous year. Much of the debt dates back to before the first of Spain’s most recent two recessions began in 2008, and is linked to disputes the clubs lost against tax authorities, he says.

“A good start.”

The Southern District of New York recently became the nation’s first federal court to explicitly approve the use of predictive coding, a computer-assisted document review that turns much of the legal grunt work currently done by underemployed attorneys over to the machines. Last month, U.S. Magistrate Judge Andrew J. Peck endorsed a plan by the parties in Da Silva Moore v. Publicis Groupe — a sex discrimination case filed against the global communications agency by five former employees — to use predictive coding to review more than 3 million electronic documents in order to determine whether they should be produced in discovery, the process through which parties exchange relevant information before trial.

The task of combing through mountains of emails, spreadsheets, memos and other records in the discovery process currently falls on a legion of “contract attorneys” who jump from one project to another, employed by companies like Epiq Systems. Many are recent grads who are unable to find full-time employment, or lawyers laid off during the recent recession.

Here is more, and for the pointer I thank Fred Smalkin.

*The Great Inversion and the Future of the American City*

The author is the excellent Alan Ehrenhalt, here is one bit:

Walking the streets of the Financial District today, one can’t help but think that it is, indeed, a throwback to an earlier version of the city’s life.  But not to the Wall Street of a century ago: That was an economically segregated one-use neighborhood, with offices and virtually nothing else, no residents, hardly a place to shop, only a handful of restaurants to cater to the financial workforce.

But look back farther than that, and you begin to see a resemblance.  In some ways, lower Manhattan in the early twenty-first century has come to resemble lower Manhattan in the late eighteenth and early nineteenth: brokers, investors, and insurance agents who live in the neighborhood and walk to work; a social life that does not disappear at quitting time, the way it did twenty years ago; a modest but growing number of families with young children.  Ron Chernow offers a picture of this early lower Manhattan in his biography of Alexander Hamilton, who lived there both as a college student and as a young lawyer.

Recommended, you can buy it here.

Technology and human rights

President Obama will issue an executive order Monday that will allow U.S. officials for the first time to impose sanctions against foreign nationals found to have used new technologies, from cellphone tracking to Internet monitoring, to help carry out grave human rights abuses…Although the order is designed to target companies and individuals assisting the governments of Iran and Syria, they said, future executive orders could name others aiding other countries through technology in crackdowns on dissent.

Here is more, and I thank a loyal MR reader for the pointer.

Tabarrok on the Alyona Show (“Debtors’ Prisons”)

I believe it was Brad DeLong who once said that people who can look into the camera and emote as if they are talking to a person will one day rule the world. It’s a very unnatural thing but ironically it makes you look much more natural on television (when you look at the person it looks as if you are not looking the viewer in the eye and worst of all is the shifty-eyed switch between looking at the camera and the person or their image which makes you look untrustworthy). I am getting the knack but still have other tics to work on.

Interview below, here is my original post.