No CrossRef data available.
Article contents
Toward New Research on Lawyers and the Economy
Published online by Cambridge University Press: 27 December 2018
Abstract
An abstract is not available for this content so a preview has been provided. Please use the Get access link above for information on how to access this content.
- Type
- Rejoinder
- Information
- Copyright
- Copyright © American Bar Foundation, 1992
References
1 Some respondents also seem to doubt the value of aggregate statistical analysis to refute Magee. It seems to me, though, that no amount of micro-level research on lawyers/work could answer Magee's claim that there is a relationship between lawyer populations and economic growth at the macro level. Statistical analysis of that claim, therefore, was necessary.Google Scholar
2 See Epp, Charles R., “DO Lawyers Impair Economic Growth?” 17 Law & Soc. Inquiry 585, 587–92 (1992).Google Scholar
3 See id at 618.Google Scholar
4 Positing that since 0% taxation and 100% taxation both produce no government revenues (the latter because productivity is stifled), there must be a clear point where the taxation level is at an optimum, neither taking too little nor becoming prohibitive.Google Scholar
5 Martin Gardner, “The Laffer Curve and Other Laughs,” 245 Sci. Am. 18 (Dec.1981). I am grateful to Peter Siegelman for suggesting this point.CrossRefGoogle Scholar
6 Frank Cross points out other problems with Magee's notion of a lawyer curve; see his “Law versus Economics?” 17 Law & Soc. Inquiry 653 (1992).Google Scholar
7 See Heinz, John P. & Laumann, Edward O., Chicago Lawyers: The Social Structure of the Bar (New York: Russell Sage Foundation, 1982).Google Scholar
8 Magee, Stephen P., “The Optimum Number of Lawyers: A Reply to Epp,” 17 Law & Soc. Inquiry 667 (1992) (“Magee, ‘Reply’“); Mancur Olson, “Do Lawyers Impair Economic Growth? A Comment,” 17 Law & Soc. Inquiry 625 (1992) (“Olson, ‘Comment”‘). Mageesuggests that I have misunderstood his use of Mancur Olson, because I focused on Olson's logic of collective action rather than on his theory about national economic decline. Olson's theory of economic decline, of course, is predicated on his theory of collective action and interest group conflict. Some countries decline economically, according to Olson, because their economies have become overloaded by predatory, rent-seeking organized interests. Magee believes that the legal profession is one such interest, and that U.S. economic problems may be traced to the legal profession's capture of our political and economic system. I see no reason, therefore, why asking whether the legal profession is such an interest, and whether it has Olsonian collective action capabilities, is focusing on the “wrong Olson. “In fact, I am a bit perplexed that Magee does not recognize the close relationship between the two books, since Olson devotes a chapter to that relationship in his book on national economic decline; in fact, he clearly states that “the present book is an outgrowth of The Logic of Collective Action and in large part even an application of the argument in it” (The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities 18 (New Haven, Conn.: Yale University Press, 1982).Google Scholar
9 See Epp, 17 Law & Soc. Inquiry 589 at note 14. As I noted there, 33 states have “unified bars,” which are legal requirements that all lawyers within the state must be members of the state bar association. A simple test of whether the collective power of those professional associations affects the economic growth of their states is to introduce a dummy variable indicating whether or not a state's bar is unified into the standard equation in my article. The unified bar variable had no significant association with state-level economic growth rates. This does not entirely resolve the matter, since some unified state bar associations are more active than others. It does allow us to reject the simple claim that a bar association, because it has compulsory membership and hence commands significant resources, acts to shape law in a way that impairs economic growth.Google Scholar
10 Halliday, Terence C., Beyond Monopoly: Lawyers, State Crises, and Professional Empowerment (Chicago: University of Chicago Press, 1987).Google Scholar
11 I have serious doubts about Magee's means for creating his 1975 lawyer numbers. See my discussion here at note 19.Google Scholar
12 Magee challenges my results showing that the removal of Chile from two equations erodes the significance of the lawyer variables. On this point, minor differences in our datasets may be responsible for the difference in result. Such problems could have been solved had Magee not refused to release his data set, which seems a bit unreasonable given the degree of publicity gained by his conclusions from it. I have tried to reconstruct Magee's data set, but I imagine there may be a small number of differences between my reconstruction and his set. Several differences have just come to light. 1 now find that Magee uses a lawyer figure for Uruguay that is different from the figure listed in his 1989 publication, on which I had relied in reconstructing his data. Also, Magee chides me for using a lawyer figure for Japan that he says he abandoned (Magee at 672), yet the source he told me here lied on for Japan gives a figure comparable to the one 1 had used: but he now assures me chat he has a different source with a higher figure. In short, there are likely to be a number of small deviations between our two data sets, which may produce the difference in our results regarding the removal of Chile.Google Scholar
13 Again, it is possible (though I think unlikely) that minor differences between the data employed by Professor Magee and those I used are the source of my failure to find persuasive empirical support for his theory with 1975 lawyer data.Google Scholar
14 Magee suggests that I may be unable to find support for his theory in my statistical analysis because I focus on a short period of economic growth, and that the effects of lawyers become evident over a longer time span (Magee at 679). If that is so, we should expect to find strong corroboration using his 1965 lawyer data in analysis of economic growth from 1965 to 1985. That exercise, as fig. 1 it lustrates, provides no support for his theory.Google Scholar
15 Magee admits that his 1965 lawyer data do not produce results consistent with his theory when used in analysis of economic growth from 1960 to 1985.Google Scholar
16 See Epp at 596–97 for an extended discussion of the problems with Magee's data.Google Scholar
17 Magee also criticizes the Galanter data because for some countries they give two different numbers from different sources. That fact illustrates the profound difference between Magee and Galanter on the matter of data validity and reliability. Where Galanter found more than one number reported for a country, he listed both; where he could determine which of several numbers had greater validity, he identified it. In my use of the Galanter data, I used the numbers he identified as the most valid. l do not understand how my decision not to use a number because it is either not reliable or not valid, according to better sources, as I did in the case of Brazil, can be a source for criticism from Magee. His only criticism of lawyer numbers-those for Brazil and the Soviet Union-are for numbers I did not use. See Magee at 668, 680–81.Google Scholar
18 The 1978 source is Rhyne, Charles S., ed., Law and Judicial Systems of Nations (Washington: World Peace through Law Center, 1978). That publication is not plausibly a source of data on lawyer populations; see my comments in Epp at 598.Google Scholar
19 In constructing the 1975 data, Magee seems carefully attentive to some potential problems but completely inattentive to others. Consider three examples of problems in the 1975 data. The first is that in using Rhyne's numbers, Magee carefully adjusts them to 1975 if their source year is before or after 1975, but he simply assumes that the 12 of 20 numbers that have no listed source year are from 1975; that is a troublesome assumption. Even more troublesome is that the adjustment to 1975 for some of the countries appears to have a systematic effect on the results: in my attempt to reconstruct Magee's 1975 data, the adjustment to 1975 for Egypt has the effect of moving that country's position from the right of the United States to its left in fig. 2 above, thus allowing for a downward curve through the United States. A second example is Magee's 1975 number for the Philippines (33,277),which is listed by Rhyne as the number of lawyers admitted to the bar in the Philippines since 1899 (see id at 581). Rhyne also lists a lower, apparently current, number, so I assume that Magee or his research assistant accidentally recorded the wrong number. Whatever the explanation, the inattention to problems with the data is troubling. A third example is that Magee's lawyer numbers for most of the other Rhyne countries appear to count only lawyers engaged in private practice, not government service. For Portugal, Magee intentionally excluded from his lawyer figure (2,960) the number of solicitors (390) and government attorneys (292) listed by Rhyne, and for Sierra Leone he ignored Rhyne's explicit note that the lawyer figure excluded government lawyers (most of the other numbers in Rhyne are explicitly listed as counting only lawyers in private practice). See id at 608 for Portugal, at 637 for Sierra Leone; see also at 288 for Guatemala. My description of Magee's choice of numbers from Rhyne is based on a private communication with Magee.Google Scholar
The problem with counting only lawyers in private practice for most countries is that doing so introduces a systematic bias into the data because U.S. lawyer figures always include all lawyer categories; the result is an artificial inflation of U.S. numbers relative to other countries' numbers.Google Scholar
20 If Spain, Pakistan, and Venezuela are removed from my sample, the Galanter data are associated with prior economic growth, as Magee asserts.Google Scholar
21 Olson emphasizes that his contrast between the stability of the rule of law and lawyer-induced instability is only an abstract, theoretical point; but apparently that contrast is based in part on an interpretation of developments in U.S. tort law in the past 30 years.Google Scholar
22 Olson also implies that we know with great certainty that organized interests erode economic productivity; he chides me for citing studies that throw doubt on that conclusion. Let me reply only that his degree of conviction on the matter is not matched by empirical evidence. Olson's empirical evidence for his argument in The Rise and Decline of Nationsrelied on variations in economic growth among the states; other researchers have found that evidence seriously lacking (for a brief review, see Epp at note 12).Google Scholar
23 See Joseph, Raz, “The Rule of Law and Its Virtue,” 93 Rev, Law Q. 195 (1977). Raz develops a very limited, positivist conception of the rule of law, emphasizing certainty as a core element of the concept. Nonetheless, even he argues that procedural fairness also is part of the concept.Google Scholar
24 Ronald Dworkin is the most famous proponent of that view. See his “Political Judges and the Rule of Law,” in A Matter of Principle (Cambridge, Mass.: Harvard University Press, 1985). Most characterizations of the conception of the rule of law in the United States include some element of rights content. See the special edition “The Constitution in American Life,” 74 J. Am. Hist. (1987), and in particular Hendrik Hartog, “The Constitution of Aspiration and ‘The Rights That Belong to Us All,’“ 74 J. Am. Hist. 1013 (1987),and Haskell, Thomas L., “The Curious Persistence of Rights Talk in the ‘Age of Interpretation,’“ 74 J. Am. Hist. 984 (1987).Google Scholar
25 That is the conclusion of a number of scholars, including James Willard Hurst, Law and the Conditions of Freedom in the Nineteenth Century (Madison: University of Wisconsin Press, 1900); Friedman, Lawrence M. & Jack Ladinsky, “Social Change and the Law of Industrial Accidents,” 67 Colum. L Rev. 50 (1967); Scheiber, Harry N., “Public Economic Policy and the American Legal System: Historical Perspectives,” 1980 Wis. L. Rev. 1159; id., “Public Rights and the Rule of Law in American Legal History,” 72 Calif. L. Rev. 217 (1984);Morton J- Horwitz, The Transformation of American Law, 1780-1860 (Cambridge, Mass.: Harvard University Press, 1977); G. Edward White, Tort Law in American History: An Intellectual History (New York: Oxford University Press, 1979); id., “Tort Reform in the Twentieth Century: An Historical Perspective,” 32 Rev, Villanova L. 1265 (1987); Mc, Charles W.Curdy, “Field, Stephen J. and Public Land Law Development in California, 1850-1866:A Case Study of Judicial Resource Allocation in Nineteenth-Century America,” 10 Law & Soc'y Rev. 235 (1976); Scheiber, Harry N. & Mc, Charles W.Curdy, “Eminent Domain Law and Western Agriculture, 1849-1900,” 49 Agric. Hist. 112 (1975). See also Lawrence Friedman, “Opening the Time Capsule: A Progress Report on Studies of Courts over Time,” 24 Law & Soc'y Rev. 229 (1990), and id, “More Civil Wrongs: Personal Injury Litigation,1901-1910,” 34 Am. J. Legal Hist. 295 (1990).Google Scholar
26 Max Weber drew a similar conclusion from his comparison of the growth of capitalism under the English and German legal systems. Capitalism developed earlier in England than in Germany, yet the English legal system afforded less legal certainty than the German. See Weber, Max, Economy and Society (Berkeley: University of California Press, 1978); Trubek, David L., “Max Weber on Law and the Rise of Capitalism,” 1972 Wis. L. Rev. 3.Google Scholar
27 Galanter and Rogers place the new business litigation within the context of rapid economic change and “competition among firms, product specialization, turnover of parties to deals, the number of parties to and complexity of deals, spatial and cultural dispersion of parties, instability in prices, high-stakes transactions, the rate of economic change”; they suggest that the greater openness of the U.S. economy to world markets, beginning in the 1970s, may explain the degree of economic change. I am not sure that it is necessary to add Gilson's speculation to this list to have a plausible explanation for the increase in business litigation. See Marc Galanter & Joel Rogers, “A Transformation of American Business Disputing? Some Preliminary Observations,” Disputes Processing Research Program Working Paper DPRP 10-3, Institute for Legal Studies, University of Wisconsin, Madison (1991), at 40–41 (“Galanter & Rogers, ‘Transformation’“). I do not mean to imply that Gilson is not aware of this. He suggests that some account of the changing role of lawyers is necessary because of their pervasive sense that their “professionalism” has declined. Concerns about declining professionalism, however, are fairly common in the history of the US. legal profession.Google Scholar
28 Chicago Lawyers, cited in note 3.Google Scholar
29 See also Richard Sander & E. Douglass Williams, “Why Are There So Many Lawyers? Perspectives on a Turbulent Market,” 14 Law & Soc. Inquiry 435 (1989).Google Scholar
30 The 164% growth rate excludes lawsuits for recovery of overpayments (usually filed by the federal government), which grew at a much faster pace. Calculated from Administrative Office of the United States Courts, Annual Report, 1971, 1986.Google Scholar
31 That assumption, for example, animates Mancur Olson's contribution to this symposium.Google Scholar
32 See Galanter, Marc, “Law Abounding: Legalisation around the North Atlantic,”55 Rev, Mod L. 1 (1992); Mauro Cappelletti, “Repudating Montesquieu? The Expansion and Legitimacy of ‘Constitutional Justice,’“ 35 Catholic U.L Rev. 1; Holland, Kenneth M., ed., Judicial Activism in Comparative Perspective (New York: St. Martin's, 1991); Alec Stone,The Birth of Judicial Politics in France (Oxford: Oxford University Press, 1992); Volcansek, Mary L., “Politics, Courts and Judges in Western Europe,” presented at 1992 Annual Meeting of the American Political Science Association, Chicago; but for an argument that legal developments are different in kind in the United States than elsewhere, see Kagan, Robert A., “Adversarial Legalism and American Government,” 10 J. Pol'y Analysis & Mgmt.369–406 (1991).Google Scholar
33 “The First Thing We Do, Let's Kill All the Economists: An Empirical Evaluation of the Effect of Lawyers on the United States Economy and Political System,” 70 Tex. L. Rev. 645 (1992).Google Scholar
34 Kritzer, Herbert M., The Justice Broker: Lawyers and Ordinary Litigation (New York: Oxford University Press, 1990).Google Scholar
35 See Dezalay, Yves, “Territorial Battles and Tribal Disputes,” 54 Mod. L. Rev. 792 (1991), and id., “The Big Bang and the Law: The Internationalization and Restructuration of the Legal Field,” 7 Theory, Culture 8 Soc'y 279 (1990).Google Scholar
36 Dezalay, 7 Theory, Culture & Soc'y at 287.Google Scholar
37 “Transformation” (cited in note 27).Google Scholar
38 7 Theory, Culture & Soc'y at 287, referring to “various critical changes” that eroded networks of business leaders. “It is no coincidence,” he writes, “that, throughout Europe, the legal big bang followed straight after the financial big bang”; (referring to the 1986 elimination of barriers between trading, stockbroking, and financial advising) (id at 281).Google Scholar
39 US. lawyers have played a role in the increasing legalization of business relations in Europe, according to Dezalay; but even in his account, the legal changes are responses to economic changes; see note 35.Google Scholar
40 Kritzer, Herbert M., W. A. Bogart, & Neil Vidmar, “The Aftermath of Injury: Cultural Factors in Compensation Seeking in Canada and the United States,” 25 Law & Soc'y Rev. 499 (1991).Google Scholar
41 For a review of those studies, see id Google Scholar
42 Cross, “Law versus Economics?” 17 Law & Soc. Inquiry 653 (1992); id, 70 Tex. L. Rev. (cited in note 33).Google Scholar