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The distinction between positive and negative rights in the law

My friend and UCLA colleague Eugene Volokh responded to the preceding post with a post denying the utility of a distinction between positive and negative rights. I find Eugene's position unpersuasive for the reasons set forth in the preceding post. I also find his position tremendously puzzling, given how basic the positive versus negative rights distinction is to our constitutional framework. Consider, for example, Chief Justice Rehnquist's statement in DeShaney v. Winnebago County Dep't of Soc. Servs., 489 U.S. 189, 195 (1989), that:

But nothing in the language of the Due Process Clause itself requires the State to protect the life, liberty, and property of its citizens against invasion by private actors. The Clause is phrased as a limitation on the State's power to act, not as a guarantee of certain minimal levels of safety and security. It forbids the State itself to deprive individuals of life, liberty, or property without "due process of law," but its language cannot fairly be extended to impose an affirmative obligation on the State to ensure that those interests do not come to harm through other means. Nor does history support such an expansive reading of the constitutional text. *196 Like its counterpart in the Fifth Amendment, the Due Process Clause of the Fourteenth Amendment was intended to prevent government "from abusing [its] power, or employing it as an instrument of oppression," [citations omitted]. Its purpose was to protect the people from the State, not to ensure that the State protected them from each other. The Framers were content to leave the extent of governmental obligation in the latter area to the democratic political processes.

Or what about Chief Judge Richard Posner's statement in Jackson v. City of Joliet, 715 F.2d 1200, 1203 (7th Cir. 1983), that:

First, it could be argued that the liberties secured by the [due process] clause include not only the traditional negative liberties--the right to be let alone, in its various forms--but also certain positive liberties, including the right to receive the elementary protective services that the state routinely provides users of its highways. ... The problem with this argument is that the Constitution is a charter of negative rather than positive liberties. ... The men who wrote the Bill of Rights were not concerned that government might do too little for the people but that it might do too much to them. The Fourteenth Amendment, adopted in 1868 at the height of laissez-faire thinking, sought to protect Americans from oppression by state government, not to secure them basic governmental services. Of course, even in the laissez-faire era only anarchists thought the state should not provide the type of protective services at issue in this case. But no one thought federal constitutional guarantees or federal tort remedies necessary to prod the states to provide the services that everyone wanted provided.

Eugene's argument seems to gloss over this basic distinction. Eugene may be correct, in some hyper-technical sense, that judicial or police enforcement of someone's negative rights as against interference by some other private party has a positive component. But so what? There is a big difference between the government telling you to stop trespassing on my property and the government telling you to pay your employees a living wage. Why?

Eugene has failed distinguish between claims for positive rights and claims that the government should provide public goods, such as law enforcement, public roads, and defense. He says, for example, that the government protects "our property (for instance, by arresting trespassers)." Here, the government is providing the public good of law enforcement. He also says that the government should "enforce our contracts (for instance, by seizing the property of people who breached contracts and were held liable for damages)." Here, as I argued in my earlier post, the government is acting as a facilitator of private ordering, but it is doing so by providing the public good of a dispute resolution system whose judgments are backed by the power of law enforcement. The failure to distinguish between government provision of public goods and a positive right to government provision of private goods is especially well-illustrated in Eugene's comment that:

More broadly, I think even most conservatives would conclude that people have a positive right to police protection more broadly — even poor people should get it, even if they're too poor to pay for it via taxes. Some may say the same about fire protection, though some libertarians would part ways on that. But it's only the anarchists who just oppose all "positive liberty" claims, I think. In the view of others, there are certain benefits, such as police or fire protection, that a good government ought to provide to all people, even at the expense of taxpayers (whether the "ought" stems from some moral rights to government benefits, or from pragmatic concerns).

These are all public goods! There's not a single positive right, as the term is conventionally used, in the bunch.

To say that the government ought to provide public goods is not the same thing as saying that the government should provide positive rights to private goods (such as a job and, arguably, education). This is a distinction that welfare economics has long drawn.

It is precisely that distinction that is implicit in Rehnquist's and Posner's argument. Eugene's failure to acknowledge that difference thus blurs the distinction they draw between negative rights that protect against coercion by state government and positive rights that demand that the state use its powers to coerce some of its citizens to provide services to others.

My TCS Column on Reagan

In this column, I discuss Reagan's legacy as a defender of negative rights, and critique Reagan's critics as purveyors of a flawed vision of positive rights.

Update: I have a lot of respect for my friend and UCLA colleague Eugene Volokh, but I find Eugene's response to my TCS column on Reagan's legacy vis-a-vis negative rights unpersuasive. Eugene's basic point is that the "negative/positive rights distinction doesn't really do the work that most conservatives or even moderate libertarians would want it to do -- because private property and freedom of contract (as generally understood) themselves involve positive rights."

Obviously certain negative rights, such as private property, have a positive component. Yet, as I am sure Eugene knows, the positive v. negative rights dichotomy is an outgrowth of the Cold War debate over human rights. The positive rights dialectic, which is the tradition in which Saletan's column clearly falls, claims that government should create certain affirmative rights -- such as the "right" to a government-provided education or the "right" to a government-provided job. In contrast, the idea of negative rights is mainly a right to be left alone. A right to have government kept out of one's affairs. The first and highest purpose of a right to private property rights thus is a right against government takings of that property. The first and highest function of freedom of contract is preventing the government from interfering with bargains struck through private ordering.

Hence, there is a significant difference between the government functioning as a facilitator of private ordering and as a regulator. To the extent negative rights have positive aspects, those positive aspects relate principally (if not solely) to the former function of government. In examples Eugene cites, for example, the government is acting - primarily through common law courts or criminal sanctions based on old common law principles - as an impartial arbitrator to facilitate achievement of a Coasean bargain in settings where high transaction costs preclude effective private ordering. In contrast, where the government seeks to create positive rights of the sort that Saletan invoked as being part of "liberty," the government almost always does so through regulation and legislation. In such cases, the government is rarely seeking to facilitate private ordering; to the contrary, creation of these sorts of positive rights requires government intervention to override existing regimes created by private ordering. (As Eugene's post suggests, government also has a role in providing public goods; although I don't think he can demonstrate that provision of basic public goods entails the same sort of positive rights that Saletan was seeking to defend.)

The distinction between government as facilitator and government as creator of new rights is basic to a system of ordered liberty (Russell Kirk talked about this, albeit not in economic terms, in The Roots of the American Order). Eugene's post thus: (1) fails to root his argument in the debate between Saletan and myself, but rather goes off in his own direction; (2) disregards the historical context of the debate between Saletan and myself; (3) fails to take into account the differentiation I've drawn here between the various roles of government.

Update 2: Be sure to also check out Jane Galt's post on Saletan.

Update 3: I've got a further response to Eugene in my post The distinction between positive and negative rights in the law.

Was Reagan Dumb?

Christopher Hitchens is his usual genial self:

The fox, as has been pointed out by more than one philosopher, knows many small things, whereas the hedgehog knows one big thing. Ronald Reagan was neither a fox nor a hedgehog. He was as dumb as a stump.

Nonsense. Nobody who has ever read Reagan, In His Own Hand could possibly make that assertion with a straight face:

A top advisor to Ronald Reagan once remarked of his boss: "He knows so little and accomplishes so much." Reagan, in His Own Hand will show that the 40th president knew far more than some people have given him credit for. It collects Reagan's recently discovered writings from the late 1970s, when he delivered more than a thousand radio addresses. He wrote about two-thirds of these himself, in longhand on yellow legal paper. "In writing these daily essays on almost every national policy issue during the 1970s, Reagan was acting as a one-man think tank," suggest the editors. This edition reproduces everything faithfully, right down to the spelling mistakes and crossed-out words. And it offers a compelling look at the ideas and principles that animated one of the most important Americans of the 20th century.

These texts reveal a thoughful visionary who had carefully planned many of the key events of his Presidency long in advance, including (as illustrated by the draft of a 1980 campaign speech), his strategy for defeating communism. Facts are inconvenient things; as usual, Christopher Hitchens does not allow them to get in his way. If you want to decide for yourself, buy the book.

The Economist Misrepresents Reagan's Economic Legacy

The usually reliable Economist magazine grossly misrepresents Reagan's legacy in the economic sphere:

The dramatic tax cuts of his first year did not bring the swift soaring of production, and therefore of revenues, that he had been led to expect; instead, it was the budget and trade deficits that soared—a trend that is once again fashionable under George W Bush. Reagan’s presidency ended with inflation down but public spending taking almost as big a share of GDP as eight years earlier. No Reagan revolution here, it seemed.

In an even worse slap in the face, the Economist then gives Reagan credit mainly for setting the stage for Bill Clinton:

Reagan persuaded his opponents that his goals should be their goals too—an economy wedded to enterprise, not corporatism, a flexible labour force, and a welfare policy the next generation would be able to afford. The revolution had come, after all, and had converted its enemies. Reagan made safe the way for Bill Clinton, just as in Britain Margaret Thatcher did for Tony Blair.

Stuff and nonsense. Let's check the record. Yes, the deficit went up on Reagan's watch and that was (probably) a bad thing. Yet, consider what Reagan accomplished while Bill Clinton was still chasing skirts back in Arkansas trailer parks:

1. Presiding over what was then the longest peacetime expansion in US history.
2. Ending the long period of stagflation: inflation dropped from 10.4% to 4.2% on Reagan's watch, while unemployment dropped from 7% to 5.4%.
3. Setting into motion the free trade talks that led to NAFTA.
4. A real dollar reduction in the rate of annual growth in federal spending from 4.0% under Jimmy Carter to 2.5% under Reagan.
5. A fairer and flatter tax system.
6. A then-record annual increase of 3.8% in manufacturing productivity.

Perhaps all that doesn't qualify as a revolution; but, as someone who lived through it, I sure wouldn't mind repeating it.

Last Night's Sopranos & The President

Slate's "Mob Experts on the Sopranos" feature has been a real kick this season. In the last installment, however, two of the contributors (mob mouthpiece Jerry Shargel and Slate TV critic Dana Stevens) both equated Tony Soprano and President Bush. Somewhat surprisingly, at least to me, their fellow contributor Jeff Goldberg spanked them but good:

Are you equating a well-meant (and if you read Woodward, you'll see this is true) effort to liberate oppressed people (yes, most Iraqis actually wanted to be liberated from Saddam's regime), and to pre-empt a rogue dictator's attempts to re-acquire the sorts of weapons he already used to murder thousands, to Tony Soprano's desire to maintain control over the New Jersey strip-club industry? I'm like most of the rest of the pro-invasion crowd; I can't believe no one thought to plan for the day after, and I find the administration's arrogance disconcerting. But I don't think that George Bush needs to feel morally conflicted about liberating Iraq in the same way that Tony Soprano needs to feel moral doubt over, oh, murdering his cousin, for example.

I'm an ambivalent agnostic on the invasion, but I agree with Goldberg that there is a big moral difference between Tony and W. Unfortunately, the bulk of the left (both here and, especially, abroad) has come completely unhinged due to their inability to acknowledge that Bush has any moral legitimacy.

As for the show, I liked it a lot better than the Slate analysts did. I'm a big fan of David Chase's character-driven slice of life approach. It doesn't especially bother me when some plot lines peeter out without resolution (although, yes, I too wonder whatever happened to that Russian out in the woods). Instead, I relish tiny moments of wit and power. The scene in which Tony and Carmela come to grips with AJ's potential career in event planning, for example, was just priceless. Ditto the moment we thought the bear was coming back. Ditto Christopher's great line about Adrianna: "She was willing to rat me out because she couldn't do five years? I thought she loved me." Sure it was slow paced and the ending too contrived, but at the end of the hour I thought watching the show had been time very well spent. Other than World Poker Tour, there isn't much on TV these days about which I would say that.

Interesting Law Review Behavior

The Social Science Research Network has become an incredibly important part of legal scholarship. Hundreds (thousands?) of law professors publish working papers online at SSRN, which sends out email notices of new papers to subscribers and also offers a reasonably powerful search engine for exploring the archives. These days, much of my professional reading and research is done through SSRN rather than the traditional law reviews, in large part because the law review publication process is so slow (it can often take 6 months to a year between the time an article accepted and when it is published; shockingly, sometimes it can take even longer).

Law reviews are reacting in a couple of ways. Some are requiring authors to remove an article from SSRN when it is accepted; this phenomenon seems especially widespread among top tier journals. These journals have very lucrative contracts with Lexis and/or Westlaw, pursuant to which the final article, as published, is archived in their databases. Apparently Lexis and Westlaw perceive SSRN as a competitor and pressure the law reviews. Yet, as Dan Hunter showed in a widely-disseminated open letter to the California Law Review, this argument is bogus:

The subscribers to online legal databases are largely confined to law firms and law schools. Since law schools have free access to these services, then the only meaningful market for commercial legal databases is in law firms. The articles on SSRN are in pdf format and therefore not fulltext searchable, and moreover they are generally preliminary drafts. Your argument therefore is that practicing attorneys will spend hours searching through the SSRN database for unfinished articles in preference to the easily-searchable, published version on the commercial databases. Even given the ridiculous sums charged by these providers, it is entirely implausible that SSRN competes with Westlaw/Lexis/Hein in this market.

Interestingly, law reviews at schools below the first tier recently have struck out in a different direction. On May 27th, I posted an article, Abloishing LLC Veil Piercing to SSRN. In the intervening two weeks, I have received two unsolicited offers of publication from good (albeit not top 30) law reviews. As it happens, this article already has found a home. Yet, I find it very interesting that at least some law reviews are now using SSRN as an early-warning system to find new articles. By then offering the author a bird in the hand, the journals may be able to induce risk averse academics (or those who need an immediate offer of publication for tenure or promotion purposes) to publish with them. It'll be interesting to see if it works. I'm doubtful that it will, since there is so much pressure on authors to at least try to land your article in a top 30 journal. Kudos to the law reviews involved, however, for some creative, out-of-the-box thinking.

Carnival of the Capitalists is Up

Window Manager did a great job. Lots of good posts. My contribution looks at how hard it is to pass down a family owned business using the Mondavi wine family as a case study.

The Great Communicator

If you want proof of Reagan's greatness as a communicator, you must read:

Speech at Pointe de Hoc, June 6, 1984

Behind me is a memorial that symbolizes the Ranger daggers that were thrust into the top of these cliffs. And before me are the men who put them there.

These are the boys of Pointe du Hoc. These are the men who took the cliffs. These are the champions who helped free a continent. These are the heroes who helped end a war.

Gentlemen, I look at you and I think of the words of Stephen Spender's poem. You are men who in your 'lives fought for life...and left the vivid air signed with your honor'... .

You all knew that some things are worth dying for. One's country is worth dying for, and democracy is worth dying for, because it's the most deeply honorable form of government ever devised by man. All of you loved liberty. All of you were willing to fight tyranny, and you knew the people of your countries were behind you.

Tear Down this Wall

Behind me stands a wall that encircles the free sectors of this city, part of a vast system of barriers that divides the entire continent of Europe. From the Baltic, south, those barriers cut across Germany in a gash of barbed wire, concrete, dog runs, and guard towers. Farther south, there may be no visible, no obvious wall. But there remain armed guards and checkpoints all the same--still a restriction on the right to travel, still an instrument to impose upon ordinary men and women the will of a totalitarian state. Yet it is here in Berlin where the wall emerges most clearly; here, cutting across your city, where the news photo and the television screen have imprinted this brutal division of a continent upon the mind of the world. Standing before the Brandenburg Gate, every man is a German, separated from his fellow men. Every man is a Berliner, forced to look upon a scar.

President von Weizsacker has said, "The German question is open as long as the Brandenburg Gate is closed." Today I say: As long as the gate is closed, as long as this scar of a wall is permitted to stand, it is not the German question alone that remains open, but the question of freedom for all mankind. Yet I do not come here to lament. For I find in Berlin a message of hope, even in the shadow of this wall, a message of triumph. ...

General Secretary Gorbachev, if you seek peace, if you seek prosperity for the Soviet Union and Eastern Europe, if you seek liberalization: Come here to this gate! Mr. Gorbachev, open this gate! Mr. Gorbachev, tear down this wall!

Gorbachev Says What the New York Times Would Not

In today's NY Times, President Ronald Reagan's editorial obituary gives him grudging and only partial credit for ending the Cold War:

Mr. Reagan's stubborn refusal to accept the permanence of Communism helped end the cold war. He was fortunate to have as his counterpart Mikhail Gorbachev, a Soviet leader ready to acknowledge his society's failings and interested in reducing international tensions.

In contrast, said Mikhail Gorbachev is far less begrudging in his praise:

I don't know whether we would have been able to agree and to insist on the implementation of our agreements with a different person at the helm of American government. True, Reagan was a man of the right. But, while adhering to his convictions, with which one could agree or disagree, he was not dogmatic; he was looking for negotiations and cooperation. And this was the most important thing to me: he had the trust of the American people.

In other words, while the Times editorial board implies that it was Gorbachev's role that was the critical one, Gorbachev himself acknowledges that Reagan's role was equally - if not - more critical. Kudos to Gorbachev for being sufficiently self-effacing to say what the Times could not bring itself to acknowledge.

Further kudos to Gorbachev for his kind words in memory of the man who defeated communism:

I have just sent to Nancy Reagan a letter of condolence for the passing of Ronald Reagan. The 40th president of the United States was an extraordinary man who in his long life saw moments of triumph, who had his ups and downs and experienced the happiness of true love. ... The personal rapport that emerged between us over the years helped me to appreciate Ronald Reagan's human qualities. A true leader, a man of his word and an optimist, he traveled the journey of his life with dignity and faced courageously the cruel disease that darkened his final years. He has earned a place in history and in people's hearts.

I wish I'd said that

Lileks on Reagan:

I am reminded of the thrill I got when I heard the words “Mr. Gorbachev, tear down this wall.” Because you can sum up Reagan’s legacy by polling any random high-schooler and reading that line.

“What wall?” they’d probably ask.

The wall, kid. You know: The Wall. The fortified gash. The thin lethal line that stood between tyranny and freedom. I mean, we lived in a time when there was a literal wall between those concepts, and we still didn’t get it.

The Europeans Protesting Bush

As expected, segments of the European street are frothing at the mouth over President Bush's visit. Bush did a credible job of responding during an interview with Tom Brokaw. It reminded me of one of Ronald Reagan's old lines. In his famous "tear down this wall" speech, Reagan noted the protests against his visit to Europe and, in particular, Berlin:

I have read, and I have been questioned since I've been here about certain demonstrations against my coming. And I would like to say just one thing, and to those who demonstrate so. I wonder if they have ever asked themselves that if they should have the kind of government they apparently seek, no one would ever be able to do what they're doing again.

The Europeans apparently still are unwilling to ask themselves that hard question. Oh well. They were wrong about the cold war and they're wrong again about the war on terror. And Kudos to Bush for saying:

I'm not trying to be popular. What I'm trying to do is what I think is right. And what is right is to fight terror. And what is right is to spread freedom. And what is right, to stand on the the values that my country and our country upholds. And I will continue to do so.

Noonan on Reagan

Peggy Noonan was Ronald Reagan's greatest speechwriter and one of his abelest biographers, so it comes as no surprise that her op-ed remembering President Reagan is inspiring and even beautiful:

In his presidency he did this: He out-argued communism and refused to accept its claim of moral superiority; he rallied the West, rallied America and continued to make big gambles, including a defense-spending increase in a recession. He promised he'd place Pershings in Europe if the Soviets would not agree to arms reductions, and told Soviet leaders that they'd never be able to beat us in defense, that we'd spend them into the ground. They were suddenly reasonable.

Ronald Reagan told the truth to a world made weary by lies. He believed truth was the only platform on which a better future could be built. He shocked the world when he called the Soviet Union "evil," because it was, and an "empire," because it was that, too. He never stopped bringing his message to the people of the world, to Europe and China and in the end the Soviet Union. And when it was over, the Berlin Wall had been turned into a million concrete souvenirs, and Soviet communism had fallen. But of course it didn't fall. It was pushed. By Mr. Know Nothing Cowboy Gunslinger Dimwit. All presidents should be so stupid. ...

What an era his was. What a life he lived. He changed history for the better and was modest about it. He didn't bray about his accomplishments but saw them as the work of the American people. He did not see himself as entitled, never demanded respect, preferred talking to hotel doormen rather than State Department functionaries because he thought the doormen brighter and more interesting. When I pressed him once, a few years out of the presidency, to say what he thought the meaning of his presidency was, he answered, reluctantly, that it might be fairly said that he "advanced the boundaries of freedom in a world more at peace with itself." And so he did. And what could be bigger than that?

Go read the whole thing. Please.

I Guess I'm Just Chopped Liver

With respect to the Blankley kerfuffle, Mark Kleiman writes:

I'm still waiting for a non-Jewish conservative to agree, or a hint of complaint from the RNC or its allies.

And Kevin Drum writes:

Blankley's transparently racist imagery hasn't caused much of a ripple. Eugene Volokh has an extremely mild rebuke, but that's about it. Nada from Instapundit, Sullivan, The Corner, Den Beste, or LGF, despite the fact that anti-Semitism is part of their regular beat.

In my earlier post on the subject, which Kleiman linked for other reasons, I said "that Blankley's remarks were unfortunately phrased" and went on to agree with Eugene Volokh's statement that "it certainly hints at broader hostility to Jews." I guess it isn't enough for Kleiman and Drum that I think Blankley's comments were unacceptable and raised very troubling questions; I guess I'm also supposed to think Soros belongs in the same pantheon as Mother Theresa or something. (Ed.: Retracted.) Sorry, but I don't think the one follows from the other. In my view, it is possible to think that Blankley said some very suspect things, while also thinking that Soros is a bad dude with some very suspect opinions who is trying to buy this election.

Bonny Doon Le Cigare Volant (California) 2000

A blend of four Rhone varietals: Grenache, Mourvèdre, Syrah and Viognier. Needed double decanting and some breathing time to really open up. Once it did, it proved to be a tasty blend of warm, jammy, almost candied cherries, black currants, and cranberries. Grade: B

R.I.P President Reagan

I deeply admired Ronald Reagan, and thus am greatly saddened to hear of his passing today. Yet, having known sufferers from Alzheimer's, I also am glad that he is finally released.

I treasure a memory of seeing President Reagan in about 1998, long after he went into seculsion, sitting in a park in Holmby Hills watching children playing. You could tell he was out of it, but he seemed content and happy nonetheless. I'll light a candle for him at Mass tomorrow.

Volokh and Kleiman Omit the Soros Backstory

My friend and colleague Eugene Volokh seconds our fellow UCLA professor/blogger Mark Kleiman's criticism of something Tony Blankley said on Hannity and Colmes on June 3. Both accuse Blankley of anti-Semitism (although Volokh dances around it a bit). Here's part of what Blankley said:

BLANKLEY: This is a man who has blamed the Jews for anti-Semitism. ... This is a man who, when he was plundering the world's currencies, in England in '92, he caused the Southeast Asian financial crisis in '97 --

[...]

BLANKLEY: He said that he has no moral responsibility for the consequences of his financial actions. He is a self-admitted atheist, he was a Jew who figured out a way to survive the Holocaust.

I don't deny that Blankley's remarks were unfortunately phrased, especially the second set. As Eugene aptly observed of those remarks, "when a person just trots out someone's Jewishness (or whiteness or blackness) in a context where it seems to make very little sense (the first Blankley reference to his Jewishness does make sense, but the second does not), it does at least suggest that the person is more focused than he should be on who's a Jew and less on the merits on the debate -- and it certainly hints at broader hostility to Jews." I agree. In any event, I have no interest in defending Blankley from Volokh's and Kleiman's very proper criticism.

I was, however, curious about the bolded preceding comment. And did a bit of research. It turns out that Blankley was referring to a November 2003 speech by Soros that many interpreted as blaming Jews themselves for anti-Semitism:

In November 2003, for the first time ever, the billionaire spoke to a Jewish audience at the conference of the Jewish Funders Network. Many people were dismayed by his call for “regime change” in the United States, his talk of funding projects in “Palestine" and the Geneva Accord, and his ideas about the cause of anti-Semitism.

Soros said European anti-Semitism is the result of the policies of Israel and the United States. “There is a resurgence of anti-Semitism in Europe. The policies of the Bush administration and the Sharon administration contribute to that,” Soros said. “If we change that direction, then anti-Semitism also will diminish,” he said. “I can’t see how one could confront it directly.”

Soros also said that he has personally contributed to anti-Semitism. Soros believes that Malaysian prime minister, Mahathir Mohammad, was referring to people like Soros when he said, “Jews rule the world by proxy.” Soros' projects and funding have influenced governments and promoted various political causes around the world.

Soros' comments were called “absolutely obscene" by Abraham Foxman, national director of the Anti-Defamation League.

“Let’s understand things clearly: Anti-Semitism is not caused by Jews; it’s caused by anti-Semites,” said Elan Steinberg, senior advisor at the World Jewish Congress. “One can certainly be critical of Bush policy or Sharon policy, but any deviation from the understanding of the real cause of anti-Semitism is not merely a disservice, but a historic lie.”

In addition to his unhelpful ideas, Soros has given scant money to Jewish causes. Soros said he has not given much to Jewish or Israel-related causes because Jews take care of their own, so that his financial clout is better directed elsewhere.

Granted, some have defended Soros, typically by arguing that he is an anti-Likudite or, at worst, an anti-Zionist rather than an anti-Semite. Perhaps so. Yet, I think this back story is relevant. Sean Hannity said:

Tony, I think you're right. He is trying to buy the election, we have a right to know who he is, and the Democrats who support him are only doing it for money.

Given the amount of money Soros is pouring into this election, we do need to find out more about him. As far as I'm concerned, the more I hear, the less I like.

Update: My friend Howard Klein just emailed with this comment:

Indeed, it is the actions of Soros, not the words of Blankley, that endanger world Jewry and its two great sanctuaries: the US and Israel. That makes Soros an anti-Semite in my view, regardless of the accident of his ancestry.

Well said.

Schramsberg J. Schram (Napa Valley) 1992

The 1992 J. Schram is a classic aged sparkling wine. (Indeed, in my view, no California sparklers age as well as those from Schramsberg.) A lovely gold, with a noticeable salmon hue suggesting a substantial proportion of Pinot Noir in the blend. Continuous streams of very fine bubbles, but far from fizzy. A delightful nose of toast, almonds, pears, and apples. The palate follows, adding the yeasty flavors of newly baked bread. Dry with good acidity. Will hold. Grade: A

Redskins Report

Interesting debate at CNN-SI over whether Tom Coughlin or Joe Gibbs will have the biggest impact this year. As a lifelong Washington Redskin fan, I'm obviously hoping it'll be Gibbs. Yet, for reasons I've documented before, I'll be content if Gibbs' Redskins win just one game this season:

A 72-year streak links the victory or defeat of the Washington Redskins on the eve of election day with the presidential race. If the Redskins go down to defeat or tie, the sitting president's party loses the White House. That leaves the fate of President Bush squarely on the shoulders of Redskins head coach Joe Gibbs. Hometown hero Gibbs, who led the team to three Super Bowl titles, retired after the 1992 season and now has returned to the team's helm.

The Redskins face off against the Green Bay Packers at FedEx Field on Oct. 31 — the last game before the election Nov. 2. ...

The Redskins' performance has aligned with the presidential outcome in the last 18 elections — a probability of 1 in 263.5 million, according to Dave Dolan, an assistant professor of statistics at the University of Wisconsin-Green Bay.

Ponnuru on Spitzer

In the cover article of the latest National Review (apparently unavailable online), Ramesh Ponnuru calls NY Attorney General Eliot Spitzer "the most destructive politician in America." Wow! Regular readers know that Spitzer-bashing is a regular feature of this blog. Yet, Ponnuru takes it to a new level with a careful and thoughtful analysis of Spitzer's impact in a host of areas ranging from finance to guns and beyond. In addition, Ponnuru takes on a very important issue: how can conservatives balance their commitment to federalism and their antipathy towards Spitzer's activism (a topic I took on in Can you be a Competitive Federalist and still want Spitzer to shut the #@!% up?). It's a great analysis - by itself, it justifies going out and buying a copy of National Review.

Any Idaho Readers?

I'm just editing the section of my forthcoming agency and partnership treatise in which I discuss Gorton v. Doty, 69 P.2d 136 (Idaho 1937), which is one of my favorite cases on the definition of an agency relationship. OnSeptember 21, 1934, the Soda Springs (Idaho) High School football team was to travel to Paris (Idaho, not France) to play its arch-rival. The team planned to travel in private cars rather than by bus. School teacher Doty subsequently related a conversation she had with team Coach Garst, as follows: “I asked him if he had all the cars necessary for his trip to Paris the next day. He said he needed one more. I said that he might use mine if he drove it. That was the extent of it.” Garst thereafter in fact borrowed and drove Doty’s car. On the way home from the game, Garst caused an accident in which Richard Gorton, one of his passengers/players, was injured. Gorton sued.

Gorton did not sue the coach, who had died in the accident. Gorton did not sue the school, presumably because the school at that time (1937) could have invoked some form of sovereign immunity defense. Instead, Gorton sued Doty, who must have been very surprised indeed. Doty must have been even more surprised, however, when a trial court held (and the Idaho supreme court affirmed) that Garst was her agent and that she was liable for his negligence.

Are you surprised by the result? (So are my students.) I'll explain it below. In the meanwhile, however, maybe you can help me out. I would dearly love to know whether Soda Springs had won the game or not. But how do I find out the result of a 70 year old Idaho high school football game? Ideas? Email me.

Continue reading "Any Idaho Readers?"

The Anglo-American Relationship

With President Bush in Europe, and getting a bit of a rough welcome apparently, I was interested by this column by George Kerevan on the US-UK relationship. He concludes:

Regardless of who wins the US election, Washington will still lean on Britain. Equally, no matter who replaces Mr Blair - and especially if Mr Brown does - do not expect relations with the US to deteriorate over the long run. In fact, a Kerry-Brown axis might be stronger than a Bush-Blair one, with our Gordon even attending Tartan Day.

The analysis leading to that conclusion is well worth reading, especially if you share my mild Anglophilia.

I Want my Sopranos Uncensored

I am not unsymapthetic to William Bennett's argument that our relationship to the culture is like that of a fish to its ocean. Cultural pollution poisons society by helping define deviancy down. Yet, one man's poison .... The answer is for us as individuals to make wise choices rather than for government to regulate decency, yet grandstanding politicos seem intent on getting the government into the business of censorship:

Building on the momentum of the new indecency witch hunt that is driving many talk shows hosts off broadcast radio, and has television shows like E.R. altering their content to keep censors happy, lawmakers are now putting cable and satellite programming in their crosshairs. There are discussions taking place in Congress today about "codes of conduct" for cable TV, and even a government-approved "family-friendly" tier on cable systems. Joe Barton (R., Tex.), chairman of the House Commerce Committee, which oversees media industry regulation, recently told a crowd of cable-industry officials that censorship of pay TV is "an issue whose time is coming. I think we're approaching the time when whatever we apply to the broadcasters, in some way, voluntarily or involuntarily, is going to be applied to cable."

Step back for a moment and think about what this means for popular cable programs such as FX's The Shield, Comedy Central's South Park or The Daily Show, Showtime's Queer as Folk or The L Word, or any of the amazing programs that have aired Sundays on HBO in addition to The Sopranos (Sex and the City, Curb Your Enthusiasm, Six Feet Under, and Deadwood.) Are we worse off for having these shows in this world? Some policymakers apparently think so and have — in the name of "protecting the children" — put the creative community on notice that they no longer have the artistic freedom to make such programs on their own terms. And Americans who have grown to love such shows will be forced to live with sanitized version of these programs. (Would a bleeped, "kiddie-approved" version of The Sopranos even be worth watching?)

No, it wouldn't be worth watching at all.

It has been said that when Democrats start talking about children, it's time to hide your wallet; when Republicans start talking about children, it's time to TIVO the good stuff for posterity. To paraphrase Niemöller, "First they came for Howard Stern ...."

Passing the Family Business On: The Sad Example of the Mondavi Family

Fascinating article in today's WSJ ($) on the turmoil within the Mondavi family:

For decades, Robert G. Mondavi worked with his brother for their family's Charles Krug Winery, where they argued regularly. Robert wanted to expand the business while Peter was more conservative. In 1965, Robert punched Peter during a dispute over a mink coat. Seeking a resolution, the Mondavis forced Robert to take a paid leave. When he returned, Robert left the family firm and founded what would become Robert Mondavi Corp., a Napa Valley pioneer that helped transform an agricultural backwater into a world-class wine-producing region. Desperate to ensure the tensions bedeviling his generation wouldn't be repeated, Robert, who is now 90 years old, spent 30 years planning how he would transfer control of the company to his two sons.

But last year, Robert's son, Timothy, 53, abruptly left his job as "winegrower," took a six-month sabbatical and went to Hawaii where he shaved his head. In January, Robert helped oust his other son, Michael, 61, as chairman of the company. Michael and Timothy, following the tradition set by their father and uncle, had paralyzed the business by fighting over details large and small, from whether Mondavi should go public to the design of its labels.

For the first time, there is no Mondavi family member managing the winery, and Michael is starting to branch out on his own. Many in the industry think Mondavi, the U.S.'s sixth-largest wine company -- ranked by volume -- and valued at nearly $600 million, may be broken up or sold.

In my experience, there is almost nothing harder than successfully passing a family-owned business from one generation to another. It becomes even harder when the business is publicly held. You lose some of the legal devices that allow you to fine tune control of the corporation, such as shareholder agreements constraining director discretion, which are available only to close corporations. You pick up outside investors, to whom you owe fiduciary duties. You become subject to SEC disclosure rules, which limit your ability to keep family business confidences. (I discuss the relevant legal issues in the chapters on close corporations and going public in my Corporation Law and Economics treatise.)

To be sure, there is a whole consulting industry designed to help family business plan successions, of which the Mondavis seem to have made use:

In building the company, Robert devised mechanisms to tackle the family's problems. He hired a team of family-business specialists, including a psychologist and a psychiatrist, which created an annual "family council." Once a year, the council invited family members to a retreat that usually took place in June or July.

Vis-à-vis outside investors, they used dual class stock so that the family could maintain voting control (I'm going to post separately on that issue.) Yet, despite their best efforts, the Mondavis seem to have failed.

There is probably something hardwired in all of us that wants to pass our empire, such as it may be, on to our heirs. Yet, it rarely works. Often the founders are control freaks who can't let go, which seems to be part of the Mondavis problem:

Friends of Robert and his second wife recall being invited to private tastings at Mondavi's Oakville winery. Robert, Michael and Timothy, hosting these events together, would interrupt each other or grab the microphone in order to get in the last word on the style or the taste of a wine. Usually, Robert won the battles. "You'd walk out of there and shake your head," recalls a longtime Mondavi friend.

And, very often, the kids turn out not to have the entrepreneurial or managerial skills possessed by the founding generation. (Indeed, in their book The Company: A Short History of a Revolutionary Idea, John Micklethwait and Adrian Wooldridge attribute the rise of professionally managed corporations in the 1800s in part to precisely this problem.) Again, this appears to be an issue for the Mondavis. Under Robert, there were few California wineries making better or more influential wines. Under Timothy and Michael, by contrast, there have been a series of oenological and managerial mistakes:

Timothy's winemaking style came under fire. Influential critic Robert Parker Jr. blasted the company's 1998 and 1999 vintages in his newsletter as, "indifferent, innocuous wines that err on the side of intellectual vapidness." Wine Spectator critic James Laube said the wines were "not terribly inspiring." [I've noted this myself.]

The market was changing as consumers became enamored of so-called cult wines from boutique vineyards and inexpensive foreign imports pushed by low-cost retailers such as Costco. It wasn't easy for Mondavi, which was caught between these two trends, to adapt. "Michael's exuberance caused the company to bite off more than it could chew," says Gayle Dargan, a former senior vice president at the winery.

And so now things are starting to sound like a Falconcrest episode (boy will that allusion date me):

In January, the family and outside directors voted to replace Michael as chairman of the company. In his place, they installed Ted Hall, a former McKinsey consultant who owned a nearby farm and had been recruited to the board just one month earlier. The company says the vote was unanimous. Robert played a role in the ouster of his eldest son. According to Robert's nephew Mr. Ventura, and friends of the family, Robert sided with the company's advisers who argued the business needed to be run by professionals and that the two sons should be given time off.

What a sad outcome it will be for what was probably the most influential Napa winemaking family of the latter half of the 20th Century if they end up as both a TV movie and a business school case on how not to manage family succession.

Lifson on Interstate Wine Shipments

Thomas Lifson of the fabulous Sunset Cellars (which I love) and the equally fab American Thinker blog posts on the Supreme Court's forthcoming decision on the validity of interstate wine shipments:

As matters currently stand, small wineries [full disclosure: I am a partner in a small winery] can only gain access to the markets of many states by working with a distributor with a license issued by the state government. If no distributor is willing to take on the winery’s products, the winery is frozen-out of the market. A number of states permit direct sale to consumers by shipping-in from out of state, but many states do not.

The state regulatory barriers create many obstacles for small wineries to grow into large wineries, and strengthen the bargaining hand of the distributors, some of whom are extremely large corporations. It is not in the least uncommon for the distributor’s and retailer’s gross margin on a bottle of wine to be as large or larger than the producer’s gross margin. In other words, if wineries are able to ship direct to consumers, they can more than double their profit margin on the bottle.

I've got a TCS column coming out on this issue (assuming Nick takes it!), which inadvertently failed to link Thomas' post. Sorry about that!

Missed it by 17

Cathy Siepp (of Cathy's World fame) explains how she picked the members for a recent panel discussion entitled "L.A. Bloggers Take on Politics and the Media":

I don't know why the harsh, marketplace reality is so difficult to understand, but if you want to attract an audience to a panel event, you need panelists who more than a few people have actually heard of. Little Green Footballs has just over 3,000 links; Kevin Drum's Washington Monthly blog just under 2,000; Roger Simon has 745 links; Mickey Kaus, 657; Moxie has over 500 links; and Matt Welch, whose own blog has around 500 links, also posts to Reason's Hit & Run blog, which has over 900. To put this in perspective, one of the loudest complainers was an obscure leftist blogger with just 18 links, who was furious I hadn't invited him to be a panelist. (And also that none of the featured panelists link to him.)

You won't hear me complaining about having been left off the list of invitees. No sir. Who am I to quibble with the dictates of a market economy, after all, unabashed capitalist that I am? Instead, I take some comfort in the fact that (as of today) I'm apparently only 17 links shy of an invite. Heh. (As somebody famous would say.)

On paying taxes

Entertainer Arthur Godfrey once remarked: “I’m proud to be paying taxes in the United States. The only thing is—I could be just as proud for half the money.” In contrast, fellow entertainer Will Rogers thought few of us share Godfrey’s pride: “The income tax has made more liars out of the American people than golf has.” Judge Learned Hand confirmed one’s entitlement to minimize one’s tax burden, at least so long as one stops short of Will Roger’s approach: “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.”

Professional Service Income in LLCs and Partnerships

In doing some research for my forthcoming book and agency and partnership law, I ran across a statistic that I found both interesting and, at least initially, rather puzzling. According to the IRS, in 2001 there were 64,985 partnerships in the professional and business services industry classification (with a total of 183,475 partners). Those partnerships had net total income of over $18 billion. In contrast, there were 99,006 LLCs in that industry group (with 373,336 members), but the much larger number of LLCs pulled in less than $8 billion in total income. Why are per firm and per member income so much lower in LLCs than partnerships?

Upon reflection, I suspect the answer is that many large and potentially high revenue professional services firms (such as law firms) are opting between the old fashioned general partnership and the newer limited liability partnership, rather becoming LLCs. Indeed, in some states (I believe California is still one), professional services firms like law and accounting cannot organize as LLCs. There's a very good discussion of the choices law firms are making Baker & Krawiec, The Economics of Limited Liability: An Empirical Study of New York Law Firms.