Friday, September 18, 2009

Are We Worse than Thieves? What Rents are Law Professors and Law Schools Seeking?

In his classic 1967 article on rent-seeking (which does not actually use the term because it had not been coined at that time) Gordon Tullock explained that the cost of theft was not that one person's property was taken by another. In fact, that transaction in isolation may increase welfare. The social costs were the reactions of those attempting to avoid theft and those refining their skills. Richard Posner extended the analysis when he wrote about the costs of monopoly. Again, it was not that some became richer at the expense of others but that enormous sums were invested in bringing about the redistribution. In neither case do the rent seeking, social-cost-producing efforts create new wealth.

Still, in the case of Tullock and Posner the social costs were at least about something. There was a "there" there in the form of a chunk of wealth to bicker over. But now we come to law professors and law schools.

Law professor efforts to self-promote have exploded. Included are repeated visits to the Dean asking for one thing or another, resume padding, massive mailings of reprints, posting SSRN download rankings, or, even better, emailing 200 friends asking them to download a recently posted article, churning out small symposia articles because deans often want to see lines on resumes as opposed to substance, playing the law review placement game, and just plain old smoozing ranging from name dropping to butt kissing. Very little of this seems designed to produce new wealth. If fact, think of the actual welfare-producing activities that could be undertaken with the same levels of energy -- smaller classes, more sections of needed courses, possibly even research into areas that are risky in terms of self promotion but could pay off big if something new or insightful were discovered or said. But this is the part that puzzles me. Whether the thief in Tullock's case or monopolist in Posner's, the prize is clear. What is the prize for law professors? Are these social costs expended to acquire rents that really do not exist or are only imagined? What are the rents law professors seek?

Law schools make the professors look like small potatoes when it comes to social costs. Aside from hiring their own graduates to up the employment level, they all employ squads of people whose jobs are to create social costs (of course, most lawyers do the same thing), produce huge glossy magazines that go straight to the trash, weasel around with who is a first year student as opposed to a transfer student or a part time student, select students with an eye to increasing one rating or another, and obsess over which stone is yet unturned in an effort to move up a notch. I don't need to go through the whole list but the point is that there is no production -- nothing socially beneficial happens. That's fine. The same is true of Tullock's thief and Posner's monopolist. But again, and here is the rub. What is the rent the law schools seek? Where is the pie that they are less interested in making bigger than in just assuring they get the biggest slice possible? What is it made of?

At least thieves and monopolists fight over something that exists. And they often internalize the cost of that effort. Law professors and law schools, on the other hand, may be worse. They do not know what the prize actually is; they just know they should want more; and the costs are internalized by others.


Blogger Ani Onomous said...

I find this exasperating. It is the MoneyLaw methodology which, as we have discussed, supposes that there is a single metric along which schools can compete (assuming that they do not presently do so effectively, or fairly). As we discussed, this method has never come close to identifying the terms on which competition takes place, let alone how schools can improve their capacity to compete. Instead it consists of various principal-agent gripes against law schools and professors.

What do law professors want? Various things, like any individual -- monetary reward, professional standing and opportunity, friendships, respect, a feeling of accomplishment. More than many, they want to help educate others, but that is not their only goal. They deserve scrutiny, but it is not because their objectives are multitudinous or depart from contact hours. You might just as well write indignantly that firefighters do not maximize the number of burning buildings they enter.

What do schools seek? Again, many things, and probably some of them are too close to what the faculty wants and too far from what students need. They make many mistakes and need to be scrutinized constantly. But someone seeking to promote the idea of a competition -- be it for students, faculty, funding, whatever -- would be completely unrealistic, in the absence of a tournament or season, to suppose that it takes place without publicity and ratings. Without USNWR and its ilk, you wouldn't have the game this blog presupposes.

9/21/2009 10:16 PM  
Blogger Jeffrey Harrison said...

It could be that I have not made my point very clearly. There are two kinds of competition. Some of it gives law professors and schools what they want while also making students and the public better off. It creates "wealth." And some of it is just about the professors and the schools without regard for anyone else. I think we have way too much of the former and way too little of the later.

9/21/2009 11:46 PM  
Anonymous Clayton Jones said...

Did you get that last sentence backward?

9/22/2009 10:36 AM  
Blogger Cato Renasci said...

And, here I thought this article would be about law schools rent-seeking in trying to capture the entire consumer surplus by raising tuition rates ... even though most graduates of Second through Fourth Tier Law Schools will not see any significant increase in their income for the hundreds of thousands they've spent (and foregone) to get a law degree.

9/22/2009 10:39 AM  
Blogger JT said...

Are law professors worse than thieves? Well, I guess there are two types of thieves, the ones who sneak in your home at night and make off with goods, and the ones who smile in your face, make you think they are doing you a favor and rob you blind while you are looking. Id say that LPs are similar to the latter. And, the prize that LPs seek are the hopes and dreams of bright eyed youth hoping to find a better life through an education that is basically a scam.

9/22/2009 11:13 AM  
Blogger Jeffrey Harrison said...

Thanks Clayon the last sentence is backwards.

Thanks Cato, certainly another version of rent seeking especially for private schools and increasingly for public schools.

Thanks JT, my reference to thieves, as you probably understood, was to the social cost creating propensity of law profs not to the offering of a service that may or may not be worth what students think.

9/22/2009 11:42 AM  
Blogger Ani Onomous said...

As always, thanks for the civil reply. Here was my point, which I think is germane to your clarification as well. You ask repeatedly what goal/rent law schools and professors are pursuing other than that which enhances wealth, but you really never define what wealth you would have them maximize -- nor, for that matter, how you think law schools (and professors) might serve it through competition, and the means by which that competition would take place.

You also complain about presumptively self-interested activities, but the examples on the laundry list are either less clear than you suppose (e.g., circulating published work to peers) or marginal ("butt kissing"). Putting aside the fact that we don't know what is rent-seeking if we don't know what the legitimate objective is, and putting aside the one-sided nature of the summary, I think this lacks any sense of proportion, and that the comparison to a rent-seeking monopolist doesn't even make it out of the starting gate.

In point of fact, one reading of your posts is that you would be happier in a world where there was a sharply limited number of schools (perhaps only those run by the state) and *no* competition among them, so leaving them to pursue more purely some goal which remains unspecified -- but which I think involves the benevolent administration of an educational trust for students selected by some means that entails less competition for their affinity. I'm kind of with you, but I would hardly invoke a monopolist metaphor to make my case, nor would I claim that the solution is for schools to pursue MoneyLaw techniques.

9/23/2009 12:01 AM  
Blogger Some Schmuck said...

Doesn't this action just go to prove the saying that faculty politics are so vicious because so little is at stake?

9/23/2009 5:27 AM  
Blogger Jeffrey Harrison said...

Ani: Not sure we are talking about the same thing. If there is competition to write the best articles or the make sure the students are as well instructed as possible I am all for it. Self-promotion for the benefit of the individual or even a school is simple rent seeking and produces nothing new. It may mean that school A gets some students to apply that would have gone to school B but nothing new happens to increase overall welfare.

Schools have plenty of opportunities to compete that are wealth producing not simply rent seeking.

Circulating one's work may be a good idea. Publicizing the number of times it has been read or efforts to make it seems it is more important than it is hardly creates more welfare. It just burns resources and time.

9/23/2009 8:42 AM  
Blogger eric said...

JT's comment reminds me of Woody Guthrie's astute observation (in the song "Pretty Boy Floyd"), that "Some rob you with a six-gun, and some with a fountain-pen."

9/26/2009 12:38 PM  
Blogger Jeffrey Harrison said...

In response to JT and Eric, I am not inclined to blame law professors for the fact that adults choose to buy a legal education and hope for the best. I do think, however, that having bought the product, students should be provided with what will best ensure their success. There is where law professors and law schools are failing.

9/27/2009 9:26 AM  
Anonymous Anonymous said...

"In response to JT and Eric, I am not inclined to blame law professors for the fact that adults choose to buy a legal education and hope for the best."

Can they be blamed if their institution provides misleading information regarding job outcomes and they do nothing to stop it?

Suppose that professors know (or should know) that their school is a "poor deal" for most students, in the sense that most students will not recoup their investment. Now, I know that definition is limited--perhaps students lose money but gain satisfaction. Let's say the majority don't recoup their investment and do not make up for the financial loss in satisfaction. I believe that many lower tiered schools would fall in this category. Do professors bear obligation to students to stop them from making a mistake? Are the professors just businesspeople providing a service? I thought they were something other than that. Is the law school just a business selling a service, buyer beware? Isn't it a non-profit corporation with a supposed charitable mission?

10/01/2009 12:29 AM  
Blogger Jeffrey Harrison said...

Actually, it's as complicated a question as you suggest and even more. Do law professors have an obligation to inform applicants that law school is a bad investment? I actually don't know that they can do that. It is a bad investment for some and a great one for other. For some it is financially a bad investment but fulfilling in other ways.

On the other, false advertising about placement rates and salaries are clearly off limits as is admission of students with little hope of graduating or even encouraging applications from those with little chance of admission.

Somewhere in all that is a requirement that law profs and their schools be open and honest but not intrude into the decisions that are best left to others.

10/01/2009 4:25 PM  
Blogger Mark said...

In my sense it is a complex a question as you suggest and even more. Do law professors have an obligation to inform applicants that law school is a bad investment? It is a bad investment for some and a great one for other. It is seen that for some it is financially a bad investment but fulfilling in other ways. What do schools seek? Again, many things, and probably some of them are too close to what the faculty wants and too far from what students need. Many mistakes made by them and need to be scrutinized continuallyMedical Negligence.

2/05/2010 6:04 AM  
Anonymous Claims Helpline said...

Often, we find the top law schools in the US offering reduced tuition for law students, if they do a stint with the government. In other words, if they become government lawyers for at least five years after they graduate. This is quite scary for several reasons but let me tell you my opinion on the subject. First of all, it is my opinion that the top law schools in the country are producing some of the most liberal, socialist graduates in the entire world. Okay, let me explain my premise:

When these young law students graduate, most of them do not have any real experience in business, they've never had to make a payroll in their lives, many of them haven't even had jobs except for maybe a couple of intern positions. And yet these same graduates from these top law schools will be working and the regulatory bureaucracy at all levels of government; City, County, State, and Federal.

8/26/2011 12:20 AM  

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