Coase’s Conception of Production Factor Costs (and the Coasean Challenge)

Here I want to lay out Coase’s conception of production factor costs as articulated in The Problem of Social Cost.  Coase’s conception of production factor costs has very significant implications for what might be called the “Coasean Challenge”–a challenge which in my view has been all but ignored by Chicago Law and Economics.  We start with the Coasean Challenge and then show how Coase’s conception of production factor costs greatly amplifies the difficulties of that challenge.

The Coasean Challenge

In The Problem of Social Cost, Coase deals with the “harmful effects” that result from conflicting resource use (e.g. cattle ranching and farming).  In his article, Coase identified the then-dominant “Pigouvian” approach, as follows:   First, the harm from resource conflict is identified as an “externality” (Coase did not use the term for good reason) and second some sort of government regulation (a tax, a liability rule, etc.) is imposed.

Coase was highly critical of this approach.  He argued that harmful effects can be addressed in a number of ways–not simply, government regulation, but by the market or internally by the firm.  In The Problem of Social Cost, Coase deftly showed that at least sometimes, government regulation would be less desirable economically, then doing nothing and letting the market and the firms fashion their own arrangements.

It is clear both in terms of Coase’s general orientation and the tenor of The Problem of Social Cost that Coase was trying to correct what he perceived to be an overly enthusiastic endorsement of government regulation by economists. As he put it: “All solutions have costs and there is no reason to suppose that government regulation is called for simply because the problem is not well handled by the market or the firm.” (Coase pp. 18–19.)   Right.  But Coase was a scrupulous thinker and thus he recognized that, on some occasions, regulation might be preferable. In a passage which could not possibly be quoted enough (and probably ought to be committed to memory) Coase wrote:

There is no reason why, on occasion, such governmental administrative regulation should not lead to an improvement in economic efficiency. It is my belief that economists, and policy-makers generally, have tended to over-estimate the advantages which come from governmental regulation. But this belief, even if justified, does not do more than suggest that government regulation should be curtailed. It does not tell us where the boundary line should be drawn. This, it seems to me, has to come from a detailed investigation of the actual results of handling the problem in different ways.(Coase pp. 18-19 ).

This brings us within reach of the Coasean Challenge.   This challenge is simple enough to elaborate (somewhat harder to resolve).  For Coase, in any situation where there are conflicting resource use problems and thus attendant harmful effects, there are three major solutions available: the firm, the market, and government regulation.

Recall Coase’s rancher/cattle hypothetical. If the cattle are not restrained in some way, they will eat the farmers crop. This is what Coase calls a “harmful effect.”  What to do?  Answer–at  least according to Coase: There are  three systems of coordination available.  (Today we would list more, but never mind).  Here they are:

1.  The Firm: If somehow the rancher and farmers were subsumed in a single firm (merger, buyout, etc.) then the firm’s profit maximization incentive would push toward an efficient solution. If it was more remunerative to allow free-range for the cattle, the firm would do that. If instead, protecting the crops from the cattle were more attractive, the firm would build a fence and do that.   The upshot here is that one solution to a conflicting resource problem is to subsume the two conflicting activities within a single firm.

2. The Market: Another option (not unrelated to the first one) is to allow the market actors (ranchers and farmers) to strike a deal on the market. Coase’s notion of opportunity costs means that each actor has to consider the possible receipts not just from its own respective productive activities, but from each other. Hence, the farmer may increase receipts by curtailing farming in exchange for a payment from the rancher. Or vice versa. If transaction costs are too high, however, and they cannot afford to strike a deal, whatever the law establishes as the baseline or default legal regime (Rancher liability for harm to crops? No liability? Something else?) will remain the final one.

3. Government Regulation: Yet a third option is to use law or government regulation to address the harmful effects problem. The effort is to try to decide what would be the optimal arrangement and impose it through law–taxes, liability rules, mandatory rules, etc.

In the Coasean world, these are the basic options.  Coase at times writes as if these coordination systems were analytically distinct. But one should not make too much of this: His key point is that each has effects upon and is dependent upon the others.   And indeed, it is obvious at this late date that 1) each is always attended and affected by the others and 2) there are a rich panoply of options or mixes of these different coordination system. (Note in this respect that Sunstein’s and Thaler’s “nudges,” Ian Ayres “altering rules” and the ubiquitous sticky/non-sticky defaults are simply some of the currently more popular or at least most visible elaborations of this point.)

And now we can articulate Coase’s Challenge: How are we to choose among the three coordination systems?   Which ones should we tinker (or not tinker) with?    More specifically: Should we leave well enough alone (the do-nothing strategy) and let the market and/or the firms adjust? Should, we instead use the law to tinker with the market (perhaps enable a market to emerge)?   Should we tinker with the law so as to induce the firms to reorganize (i.e. consolidate ranching and farming activities)?  Should we decide that transaction costs are such that there is nothing to expected from changes in the markets or the firms and thus we should impose some tax, liability rule, new property definitions, etc.? Or should we decide to the contrary that even though we cannot expect the market or the firms to reorganize (no matter what we do with the law) we would be better off nonetheless doing nothing?

Coase was keen on making sure we understood this last point (this is the main lesson of his train sparks hypothetical), just because we have a harmful effect and neither the firm nor the market handle it well, this does not mean that we will necessarily be better off with government regulation.  It may be that in terms of economic performance, the best thing to do is to let the harmful effect occur.  This (perhaps surprisingly) brings us to the notion of “production factor cost.”

Coasean Production Factor Costs

In neoclassical economics, a production factor cost is basically the cost of an input in production—usually, conceived as land, capital, and labor. Sometimes economists suggest additional categories (e.g. technology, education, knowledge, entrepreneurship) and then a debate ensues (one I don’t wish to join) about whether these are in fact distinct production factor costs or whether they really are aspects of the original big three (land, capital, and labor). For our purposes, a production factor cost is the costs of inputs in a production enterprise.

Now, the interesting thing is that Coase offers a different take on production factor costs—different at least from most of his fellow economists at the time.  Specifically, Coase recognizes the role that law plays in deciding what is a production factor cost of what?  Economists, he argues, should think of production factor costs less as the costs of physical things and more in terms of legal entitlements.

Take the familiar example of a steel factory emitting smoke that damages nearby commercial activities (e.g. a laundromat). Coase’s point is that if the steel factory is prohibited from emitting smoke by regulation then smoke abatement (or cessation) becomes a production factor cost of producing steel. If by contrast, emitting smoke is allowed with no legal consequence, the smoke damage becomes a cost of any activity potentially damaged by such smoke. In other words, the law (the way it is structured and organized—liability, no liability, tax, regulation, etc.) effectively decides, in many cases what is a cost of what. Coase makes the point very clearly in the concluding sections of The Problem of Social Cost:

A final reason for the failure to develop a theory adequate to handle the problem of harmful effects stems from a faulty concept of a factor of production. This is usually thought of as a physical entity which the businessman acquires and uses (an acre of land, a ton of fertiliser) instead of as a right to perform certain (physical) actions (Coase pp. 43-44).

This moment is huge.   It is huge because it is an affirmation that law plays a crucial role in establishing production factor costs—the kind of costs (identity—e.g. cost of abatement, cost of relocation, cost of…) and their magnitude (dollar amount). Coase, a free market proponent (at least in inclination) is corroborating what many of us who grew up on the Robert Lee Hale–Duncan Kennedy axis of economics believed all along—namely, that law plays a crucial role in establishing the costs of goods (of all kinds).  Law (common law, constitutional law, etc.) is undeniably and intimately involved then in the disbursement of penalties and subsidies (deciding what is a cost of what?) to various activities.

I say penalties and subsidies in the sense that we are socializing the costs of private activities through law and we have no neutral baseline available to tell us across the multitude of existing and potential markets which markets and which activities we should subsidize or penalize how much when.

Now, if we can bring in the Coasean Challenge, as described above, the question arises: in cases of conflicting resource uses, what aspects of the coordination systems should we tinker with—let the firms and the market deal with it? Change the law in some way? Do nothing? Notice that this was a daunting question even before we started thinking about the Coasean conception production factor costs.  Now that we are confronted with Coase’s legalist conception of production factor costs, the challenge has become even more difficult. Why? Because it now looks like when we change the law (or keep it the same) we are unavoidably affecting the size and magnitude of the production factor costs of various private production activities. So how much should we subsidize or penalize them (size) and what costs should we, in fashioning our law, impose on them (magnitude)?   There is even the further question–fodder for a later post: what kind of cost is to be allocated to which coordination system: the firm, the market, the law?  But bracket that for now.

It is perhaps surprising, but Coase has effectively shown that law (common law, constitutional law, etc.) is in effect a socialization of costs.   Such socialization is unavoidable.  Even the most libertarian or laissez-faire regimes are involved in such socialization of costs.

The only question worth arguing after Coase then is how to talk about this socialization of costs.  For that purpose the broad-gauge and deeply cliched disputes about “big government” versus “the free market” or “individual freedom” versus “command and control ” (or even “nudge” versus “mandatory rules”)  are rather crude.    Rather we should face up to much more circumspect, interesting, and important questions on which we might actually make some headway (or at least carry out some useful experiments): which costs and whose costs do we want to socialize when for how long by what means?   This, of course, is an obviously political question (the distributive justice stakes are high)… but my point… is that it is also inexorably an economic question as well and that the failure to confront this question yields not only bad politics, but bad economics.   Coase Minus the Coase Theorem contains the full argument.

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Coase’s Critique of the Neoclassical Model–Coase Minus the Coase Theorem

Coase Minus the Coase Theorem, is among other things an attempt to retrieve the meaning of Ronald Coase’s famous article, The Problem of Social Cost, 3 J. L. & Econ. 1 (1960) As I try to show, Coase advanced a serious critique of the neoclassical model in that piece–namely, the notion that the neoclassical model, by excluding law from its ambit, is hopelessly flawed. That main point and Coase’s considerable argumentative support have been lost throughout the years in ways that have seriously compromised economic analysis of law–in particular Chicago L&E.

Perhaps it is not surprising that the most cited article in American legal thought has been so persistently and repeatedly misunderstood, but Ronald Coase’s The Problem of Social Cost, has. Things got off to a bad start early with Stigler’s formulation of the “Coase Theorem.” This made its way into print in 1966 with the publication of the third edition of George Stigler’s “Theory of Price.” Stigler underscored what he took to be the key insight of Coase’s article, namely that with zero transaction costs, the allocation of legal entitlements would not affect efficiency.

Over the decades, the overwhelming majority of lawyer-economists came to accept, (however wrongly) that this was the major contribution of Coase’s article. Still how odd. After all, Coase nowhere mentions the “Coase Theorem” in the article (the closest we get is page 8). As for transaction costs—it is defined in one paragraph on page 15. If that’s the punch line, what then is the rest of the article about? (More on that later.)

Having reduced Coase’s broadly-ranging article to a mere theorem, Stigler compounded the problem by focusing on the wrong branch of the theorem—opining that (owing to zero transaction costs) law often has no effect on efficiency. For a very brief moment, some pioneers of law and economics followed through on this idea, championing the notion that insofar as most exchange situations were characterized by zero transaction costs, the best thing law could do was to “leave matters alone”—that is to say, avoid imposing positive transaction costs through interference with contractual exchange. “Void as against public policy”—that was precisely the sort of legal imperative to be avoided. This laissez-faire approach did not have much of a future. Not only was it predicated on false assumptions, but it did not provide much in the way of a research agenda: Indeed, there wouldn’t be a whole lot for law and economics scholars to say if the compulsory refrain was: “Stop this law thing! Create property rights and leave things well enough alone!” To be sure, you can get a few readable articles out of that. Maybe 30 or so. After that, diminishing returns set in fast.

So, of course reversal was imminent. It happened quickly. Soon positive (in fact, prohibitive) transaction costs were seemingly everywhere. Enter then Kaldor and Hicks and “hypothetical markets” and the sustained attempt to model laws on what bargained-for exchanges would have produced in the absence of transaction costs. This was the famous and once omnipresent “replicate the outcomes reached in a zero-transaction cost world” iteration of the Coase theorem. This misunderstanding of Coase’s work has lasted quite a while. It spawned a capacious research agenda. Not only was there the need to identify all possible transaction costs—a task which, if one read Coase carefully would be nearly endless (notice that language itself is, inter alia, a transaction cost)—but there was the need to identify all those bargained-for exchanges that were not happening yet would be, but for the presence of prohibitive transaction costs. This was, for the reasons just stated, an ambitious research agenda with a long future. But it too was built on a foundational mistake. For an extended description of the misunderstandings of Coase’s work in this regard, see my Appreciative Comment on the Coase Theorem—A View from the Left. Coase, for his part came to reject explicitly the “replicate the zero transaction cost world” approach. As he put it in 1988: There’s not much point in dedicating ourselves “to a detailed study of the world of zero transaction costs, like augurs divining the future by the minute inspection of the entrails of a goose.”

In that same year, Coase complained trenchantly that the Coase Theorem was getting all the attention much to the detriment of the latter half of his article. At about that time, I noticed something rather odd about Chicago’s “replicate the market” use of the Coase Theorem—namely, that at the level of form, this approach repeated exactly the same mistakes that Coase originally detected in the Pigouvian approach. How was this possible? I wrote another piece to show how Chicago L&E had managed to repeat exactly the same mistakes. This was The Problem of Transaction Costs.

It was not until I reread Frank Knight’s Some Fallacies in the Interpretation of Social Cost and delved seriously into the work of Robert Lee Hale (and then Wesley Newcomb Hohfeld) that I focused on the full significance of Coase’s critique against the neoclassical model. And, of course, I wrote another piece: Coase Minus the Coase Theorem–Some Problems with Chicago Transaction Cost Analysis, which came out a few months ago. Following through on the earlier pieces, the argument focuses on the three main points that Coase argued in The Problem of Social Cost. These are conveniently found in the concluding section of his article:

 1.   The mistaken presumptions of the Pigouvian approach                                                  2.  The fallacies of the neoclassical model (notably its presumption that pricing markets work costlessly)                                                                                                              3.  The need to rethink factors of production in legal (not physical) terms.

The bottom line of Coase Minus the Coase Theorem is that Coase came to realize in a Hohfeldian way that law and laws play a crucial role in establishing the identity and magnitude of production factor costs. This recognition is, according to Coase, fatally missing from the neoclassical model with its assumptions of zero transaction costs—its assumption, in other words, that pricing markets work costlessly. This was the core of what Coase was saying. He was most certainly NOT saying that…

1.  the real world is often characterized by zero transaction costs,
2.  we should try to approximate the outcomes parties would reach in a zero transaction cost world.

Coase’s corrective to the erroneous neoclassical assumption of costless pricing markets is to recognize that law and laws must be taken into account in ascertaining the efficiency of market arrangements. For that purpose, and this is the kicker that undermines conventional Chicago law and economics, the neoclassical model is not up to the task. It is not up to the task precisely because it always already fails to take law and laws into account. Playing catch up by trying to apply the model to law (that is Chicago L&E key agenda) is not a viable option: The model is not equipped to adjudicate the efficiency of law and laws because the model is always ab initio lacking a sound method to the analysis—to wit, an economic account of law and laws on the identity and magnitude of production factor costs.

Demsetz agrees with Coase that the neoclassical model excludes law and its institutions from the model. But, Demsetz wants no part of Coase’s effort to acquaint the neoclassical model with law and laws.  On the contrary, wishing to preserve the integrity of the neoclassical model, Demsetz contests Coase’s efforts to include law and its effect into an assessment of economic performance. Whatever help this may provide the economists (they do after all use the model for a variety of purposes) it will not help the lawyer-economists who are concerned with the economic performance of law and laws.

Did Coase have anything constructive or prescriptive to say on that issue? Yes he did and this is the last part of the puzzle—the clincher so to speak: The mystery is that Coase’s constructive suggestion is so strikingly modest and so sketchy.    The question is why?  Why so abstract, so sketchy, so lacking in technical specificity?    The answer is that Coase had uncovered a problem he was not then (or later) able to resolve.   Neither was anyone else.

What Coase advised was to abandon the widespread Pigouvian (one might almost substitute “microeconomic” for “Pigouvian” here) effort to compare an actual state of affair to the neoclassical model’s idealized mage of pricing markets (decentralized, divisible goods, etc.). Instead Coase counseled a kind of opportunity cost approach. Specifically, Coase advised abandoning evaluation of economic performance according to an actual-ideal model (i.e. how well does the actual approximate the ideal?) in favor of a more free-ranging comparison of the present “social arrangement” (his words) with proposed improvements. In other words: Is a proposed change in the present “social arrangement” likely to lead to better or worse economic performance?

Notice that elliptical term “social arrangement.” What is a social arrangement you might reasonably ask? It is a particular mix of the usual Coasean social coordination systems—to wit, a particular mix of market, firm, and government. How then you might ask are we supposed to evaluate whether a proposed change in the mix is better or worse according to Coase? That’s the ten thousand dollar question as we use to say. It’s not just a question of what standard to use (i.e. willingness to pay) although Coase has interesting things to say about that. It’s also (and more problematically) a question of making an evaluation according to some presumably unitary model of the behavior of firm, market, and law? Uhm… what model is that? Don’t have one. Hence, Coase’s heuristically helpful though methodologically empty suggestion that we compare different “social arrangements.”  Now, please note that I am not knocking Coase in my article. Coase is on the right track. I am merely pointing out the methodological modesty of this stance. I don’t know that Coase thought this was a modest stance. I am not sure he appreciated—maybe he did/maybe he didn’t—the magnitude of the problem he uncovered. It’s just that relative to the confident claims to knowledge of Chicago L&E, Coase’s constructive suggestion emerges less an answer than a very tentative and abstract sketch of what such an answer might look like. (More on that later.)

For now, it would be fair to say that Coase…

1.  Made some devastating arguments against the neoclassical model
2.  Perceptively diagnosed the sources of its flaws
3.  Offered an insight about the kind of analysis that ought to be developed….

… the latter remaining to this day incomplete, underspecified, and surprisingly (given all the work performed in the meantime under the aegis of L&E) virtually nowhere.

Now, my understanding of Coase departs so much from the received wisdom that it can be difficult to grasp.  I can sum up the point of my latest effort succinctly (trusting the reader to glean for herself or himself the nuance and the details from the article itself). Here goes:

1. In order to perform a valid economic analysis of law using the neoclassical model, that model needs to be repaired along the lines that Coase suggested. That is to say, that some means must be found to supplement the model with the effects of law and laws on the magnitude and identity of production factor costs. Without such supplementation the model remains, per Coase, inadequate to perform economic analysis. It fails to account for a huge variable (law and laws) in the setting of the identity and magnitude of production factor costs.

2. The situation is not and cannot be ameliorated by applying the flawed neoclassical model to the evaluation of law and laws. It may be that this enterprise is looking for the right thing (the thing that it is missing—surely that is right) but it is still looking for it with a flawed model—one that cannot, as a theoretical matter, deliver the right analysis. (That this model may in an ad hoc way deliver the right results on occasion is not to be denied, but then again that is neither here nor there).

 

 

 

 

 

 

 

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Earth Day, Dog Whistles, and Zero Sum Politics

The Supreme Court’s decision today in Schuette v. Bamn would seem to have little to do with Earth Day. The Court, in a fractured majority decision, upheld Michigan’s voter-enacted ban on race based affirmative action programs in state institutions, including the State’s public universities and colleges. The ban, which came in the form of an amendment to Michigan’s state constitution, was passed in the wake of extensive litigation that eventually affirmed the constitutionality of narrowly tailored uses of race to promote diversity in higher education. The Michigan ban has analogues in California, Florida, and Washington, and represents the political front of an ideological battle to eliminate affirmative action throughout the country.

The Court’s decision today is of a piece with its long march away from anti-subordination principles, and its embrace of a mythic and ahistorical color-blind nation. Much has been written justly critiquing the Court’s approach on a number of fronts, and Justice Sotomayor, in her dissent joined by Justice Ginsburg, sums it up as well as anybody. After reviewing the grave difficulties that states have faced in remedying the severe drop in African-American and Latino student admissions and matriculations at public universities and colleges after voter-enacted affirmative action bans, Justice Sotomayor writes:

These statistics may not influence the views of some of my colleagues, as they question the wisdom of adopting race-sensitive admissions policies and would prefer if our Nation’s colleges and universities were to discard those policies altogether. . . . More fundamentally, it ignores the importance of diversity in institutions of higher education and reveals how little my colleagues understand about the reality of race in America.

The reality that Justice Sotomayor alludes to is far too expansive to summarize briefly here. Nonetheless, a short list will serve as a reminder of what our country has done to create a racial caste system that today is reflected in our prison populations, our neighborhoods, our health care system, and our public schools. The short (and incomplete) list follows: the federal government’s post-WWII “red-lining” of neighborhoods to exclude Black and integrated areas from federally backed loans, which devalued Black property, caused White flight, and increased segregation; the federal government’s subsequent refusal to enforce its own civil rights laws to remedy segregation in housing and public education; state laws that tie public school funding to property values, compounding the problems of segregation and devalued property; and state and local governments’ obsessive and racially inflected focus on criminal laws to police and further isolate Black and minority communities. And of course, there is the long list of better-known state actions, such as Jim Crow laws and their post-civil rights era incarnations.

Justice Sotomayor’s reality also presumably includes all the ways in which our racialized history is, today, obscure to many. Outright racial and ethnic discrimination still exist, but have been pushed underground and complemented by a more insidious version, a way of talking and referring to certain issues that calls up those same Other-fearing reactions without naming them. Ian Haney Lopez has aptly labeled today’s racialized rhetoric “Dog Whistle Politics,” a racism that does not have to speak its name to call out the dogs.

So what does any of this have to do with Earth Day? The narrative of anti-affirmative action and color-blindness is a narrative of scarcity: There are only so many spots in institutions of higher education, and it is not fair to exclude people from those precious spots on the basis of their (White) race. The racialized narrative of educational (and job, scholarship, etc.) scarcity is a zero sum narrative: if that Latino or Black or Native kid gets in, the White kid does not get in. Excluded from the story is the fact that the White kid might not have gotten in because of the legacy kid, the football kid, the violinist kid, and so forth. (The racialized scarcity narrative is perpetuated in an insidious way by an app that applicants can use to see what their chances are of getting into their favorite school if they manipulate their race, gender, and ethnicity. It might be a helpful antidote to develop an app to see how good your chances are of getting into prison based solely on changing your race or ethnicity.) The racialized scarcity narrative diverts us from the larger structural and class-based inequalities in our country, which become increasingly stark every year, and renders extremely difficult a cross-racial and ethnic politics of radical reform of our systems of taxation and funding of public institutions. The scarcity and zero sum narratives are the dog whistles that divide people along racial lines, and distract us from options that might lead to excellent, public, and equal educational opportunities for all of our children. They distract us from seeing that affirmative action policies are not the problem; they are a limited but still necessary measure to ensure a degree of racial and ethnic diversity.  The problems are an inadequate and underfunded system of public education, the still unfinished business of remedying our long and continuing history of racial discrimination, and our increasingly stratified distribution of wealth and networks of privilege.

Meanwhile, we do have an actual scarcity problem. The Earth and its systems need our help. Climate stability, the nitrogen cycle, species diversity, and other planetary-scale systems that have kept us in the Holocene (the era that has proven felicitous for human flourishing) for thousands of years have been put to the human test, and they are not passing. We still have time to use our technological and organizational brilliance to manage our planetary home in a way that allows as many of us as possible to live with dignity and opportunity in the company of non-human nature. We are unlikely to go that route, however, if socially constructed narratives of economic scarcity continue to make it impossible to build a racially and economically egalitarian society. Instead, we may head toward a future of increasingly extreme racial and economic inequality, where the plutocratic elites who are most responsible for the degradation of the Earth nonetheless have the best access to what remains of nature’s magic. Another way to put it is that the Supreme Court is fostering a very pernicious scarcity—namely, a scarcity in the communal solidarity necessary to make the tremendous effort that will be required to attend to the Earth. If it seems like a stretch to link today’s Supreme Court decision to this dystopian vision, cast your eyes a bit wider. What has the Court done lately to further plutocratic control of politics? What has the Court done lately to hamper environmental regulation? What are moneyed and ideological interests, including the Koch brothers and others, doing to undermine renewable energy policies and climate change science and policies? Where do they stand on affirmative action? These issues do not have to be linked politically and ideologically, but today in the US they are. If we don’t hear the dog whistles on Earth Day, we may never hear them.

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Travels in America, Part One

I was on the Atlanta-Greensboro leg of a trip to Wake Forest University for a conference on Law and Violence.  The man seated next to me and I struck up a conversation, starting with the usual small talk. “What takes you to Greensboro?”  “Work. I have a conference at Wake Forest. How about you?”  “I’m visiting my nieces. I’ve got three of them there.” “You are a nice uncle to make a trip just to visit your nieces.”  “Well, they’re great and we’re very close. So what kind of work do you do?” “I teach at a law school.” “You’re a professor? Really? You don’t look old enough to be a professor. I would guess…. You are in your thirties.”  “That is very kind! But I’m 49, so more than 20 years older than most of my students now.”  Then he asked me, “How old do you think I am.”  I turned so I could see him straight on. He was African-American, with dark skin and a smooth complexion, but some small wrinkles around the eyes. “I would say, in your thirties?”  “No, I’m just a few years younger than you—44.” “Well we’re just the mutual admiration society then!” I said, and we laughed about that, and then settled in a bit.  I took out my book and started reading. He opened a magazine. At some point we started chatting again. (Some flights are like that. People are open and friendly. Others are not; everyone dives into a book or device and pretends they are not in elbow to thigh proximity.)

He told me he was from Milwaukee. I told him I grew up in New Jersey, but now lived in Colorado. I asked him about his work, and he told me that he is a general contractor and works mostly on renovations. He had been a realtor in Atlanta, but when the market crashed he left and had to start over. He asked me if I had ever traveled outside of the country.  I said yes, including recently to Rome.  He said he would love to go to Rome some day. Two years ago he visited Finland and Latvia, and caught the travel bug.  “Really? Latvia?” I asked.  “I was there once too, but ages ago.”  “No kidding!  I was in Riga, you know, the capital.”  “That’s where I was!”  We agreed it was a beautiful city, with its cobblestone streets and medieval European look. “I loved it,” he said. “It was cool, and the food was good.” This surprised me, I told him, because the food in the former USSR was uniformly awful when I was there decades ago. He laughed and said, “Well it’s good now. And I’ll tell you what. They have hardly any Black people there, and so that was interesting.”  I asked him about that.  “What was that like? Was that kind of refreshing, because they don’t have all of our baggage? Or was it weird?”  “No, it was great. Because the only Black people they see are the ones on television, the Michael Jordans, Will Smiths, and so they think we are all rich and famous!  They see me and think… ‘he must be like Jay-Z.’”  This made us both laugh, and then he said, “But the coolest thing, and I’m going to tell you this because you seem like you get it, was that I walked out of a night club at 2:00 in the morning, and a group of women, White women—because they were all White women there—was coming toward me.  And they walked right by me without even blinking, without crossing the street.  And I saw a cop too, and same thing. He just nodded and said hello.” So I said something like, what a relief that must have been, and what a drag that he had to come home to the same old racist treatment here. And from then on, he started leaning in to talk to me, whispering almost, because he didn’t want all the (White) people around us to hear.  And what he talked about was, in short, the vast gap between what his life is like as a Black man in America and what most White people think his life is like. At one point I asked him if he thought things were better or worse now than when he was younger, or could he tell. And he leaned in close again and said, “I’m going to be completely honest with you, because I can tell you care. Things are not better but they are different. They are more underground, you know what I’m saying? But are they better? They are not going to get better because people like to hang on to what they have. And I’ll tell you something, this goes way back. In the South, they made poor white people feel better by making them think that at least they weren’t Black.  And that’s where it all starts, dividing up people by making some people feel, well at least I’m better off than they are.” No historian or social theorist could put it any more concisely or clearly than this man sitting next to me on a flight from Atlanta to Greensboro.

We talked for the rest of the short trip, quietly and intensely, about race in America, but other things too. He asked about my family, and I asked about his, and we talked about all of it, from the mundane to the personal to the deeply political. And when the plane was landing I told him that I hoped he would travel to Rome someday, as he said he wanted to, and wished him the best. He said he hoped I had safe travels, and that it was good to meet me and to talk, to really talk. We shook hands. I got off the plane feeling deeply sad about my country and its color line that has never been erased, and yet at the same time filled with wonder and a small flame of hope. Hope fueled by the sense that, despite the embedded structures of racism that divide us, strangers can connect, at least for a short while on an airplane where we are crammed elbow to thigh and provided an opportunity, if we choose to take it, to talk, to really talk.

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The Anthropocene: Everything and Nothing New

We have been kind of quiet here at brazenandtenured. Maybe it’s better that way. A friend of mine once disclosed that his goal as a professor was to write as little as possible as well as possible. Most of the world, and especially the professoriate, is going the other way. Prose–good, bad, and indifferent–flies at us from all directions. So maybe our recent silence has been a welcome counterbalance. If so, then I apologize for starting back up.

I couldn’t resist because it appears that a term that I have been using for a few years now in my writing (including in a chapter in an edited volume published by Cambridge University Press) has taken off (not at all because of me, I should add.) The term is the Anthropocene, coined by Eugene Stoermer and Paul Crutzen. It stands for the era of ubiquitous human influence on the planet. Climate change is the number one example, and all the more so now that the world’s leading scientists have prescribed a carbon budget for the planet, which we are likely to exceed in the coming decades. But there are several other indicators as well. We humans and our marks are everywhere. What does this mean? Should it change the way we think about our obligations to one another, other species, and future generations?

I am now immersed in working on a book on these questions, which fold in many others, including more than a few legal ones.  Here is an excerpt from the preface and introduction. (All the usual copyright protections apply.)

Parenting the Planet DRAFT

Preface

Like more than half of the people in the world, I did not grow up in a pastoral, rural, or remotely wild setting.  Englewood, New Jersey, where I was raised, is one of hundreds of tightly clustered suburban towns that fan out from New York City. To provide one highly idiosyncratic measure of the region’s density, from the front door of my childhood home, I could do several different eight to ten mile runs that took me through at least three other towns. The closest thing to a trail run was the route that my high school track coach called the Manhattan Touch, which went up the hill to Englewood Cliffs, through the trash-strewn strip of trees on the Palisades overlooking the Hudson River (I think this was some kind of park or protected space), into Fort Lee, across the George Washington Bridge, and then reversed course back home. For me and my tri-state peers, the night sky had just a handful of stars. Wild animals lived in zoos. Food came in packages, often in the form of miraculous powders that became pudding, coffee, or Kool Aid.

By the time I became aware of the awesome beauty and complexity of non-human nature, it had just been pronounced dead.  I was 23 when Bill McKibben wrote the End of Nature, an early assessment of climate change and its ubiquitous influence on planetary systems. Missing out on the good times, the peak, the in-thing, is endemic to my generation. We were born in the sixties, but came of age during the eighties, the decade of yuppies and conspicuous consumption.  For labeling purposes, we warranted only an X. You would think we would be used to it, this business of being always too late.  But barely missing out on nature? That’s pretty harsh, even for the generation weaned on rap, disco, and punk. Of course I didn’t realize I had missed it until much later. Little did I suspect that as I learned to love sleeping under a glittering night sky, scrambling through obscure canyons, and walking for days without seeing asphalt, I was falling in love with a zombie: Nature, the Walking Dead. By the time I got the news, I was already smitten.  As a result, in part this book is about how to stay in love with a damaged planet. My generation and the ones after, having only had the opportunity to get to know the Earth in its compromised state, may be best situated to figure out how to move forward, soberly yet playfully, without doomed illusions of restoring the past.

There is more to it than that though. Another effect of being embarrassingly oblivious to the environment (a word that stands in for nothing less than “the physical world that sustains us”) throughout my alienated suburban youth was that I came to know nature after I came to know politics. The great discussions in my household and social circles were about civil rights, poverty, and injustices of race, class, and gender.  The issues that motivated me to become a lawyer and then to pursue a career in legal services for low-income clients were steeped in the political, legal, and social structures that caused and perpetuated inequality and injustice among human communities. For a long time, even as I became increasingly green in my personal life, including in terms of causes I supported and individual actions I took, I could not quite marry the environmentalist with the lawyer/activist. Surely my immaturity and naiveté prompted my reactions at the time, which were that environmental law was a somewhat a-political, highly technical field that did a lot of important things, but was the province of earnest hikers, the kids who joined the outdoor activity club in college instead of the protests against apartheid.

Then I lived on the Navajo Nation and witnessed two phenomena up close.  The first was the intimate, deep, and genuine connection that Navajo and Hopi people had to their lands and waters, notwithstanding that their homelands could hardly be described as pristine or untouched.  The second was the myriad ways in which laws, policies, and cultural forces aimed, in the present and for centuries before, to sever that connection. From those experiences, a way of understanding how to connect the dots between social injustice, racial subordination, and environmentalism emerged.  There is no formula for it.  The dots, even when connected, do not create a template, a grid, or a table.  At best, they illuminate patterns, beneath which lie very complicated strata of human and natural history.  The key, however, is a very simple insight.  There is no nature free of human politics. This is a very different observation from Mckibben’s, though the two can live together.  To recognize that, as a physical matter, we have influenced the course of natural phenomena everywhere on Earth is different from concluding that we have always interacted with and ordered our relations with nature according to politics.  To highlight the difference, before or during the early stages of the industrial revolution, at least some parts of the planet (deep oceans, the atmosphere, some far flung patches of tundra and rain forest, etc.) had not been permanently altered by human activity. Yet even then, human access to, understanding of, and use of nature’s physical resources (the ones we could and did reach) were mediated through power, law, and culture. A couple of well-known examples should illuminate the point. The “frontier” that was so famously pronounced to be closed in 1890 by Frederick Jackson Turner only existed because the intertwined forces of law, culture and military might created it in the first place.  The western United States was not a terra nullius—a vast empty space—when the first non-indigenous explorers, trappers, and miners stumbled on it.  It became one because of their individual and collective interests, and the pervasive presence of indigenous peoples was rendered invisible by law and violence.  Similarly, two of our earliest and most famous National Parks, Yellowstone and Yosemite, were withdrawn from “settlement” (meaning from homesteading by non-Indians) to protect their natural aesthetic qualities, notwithstanding that indigenous peoples occupied and used both areas regularly. The Yosemite people were forcibly removed from Yosemite Valley, and the Shoshone, Bannock, Sheepeater and Crow from Yellowstone. As historian Mark David Spence put it, “uninhabited wilderness had to be created before it could be preserved.” In other words, even before human actions irreversibly altered the physical course of the planet, our interactions with non-human nature took place in a space mediated and constructed by us rather than by purely physical or scientific criteria. Physical nature may still have existed separate from human influence, but what we described and valued as “natural” was constructed by law, politics, and culture.

Many prominent scholars, William Cronon foremost among them, have long made this point about the political and social construction of nature and wilderness. For a time, some saw it as an argument that threatened the more objective (i.e. scientific) bases for protecting non-human nature, and therefore tried to distinguish or marginalize its import. But today, now that the End of Nature has met the Construction of Nature, perhaps there is more room to see that science, while crucial to the effort to understand, enact, and often guide our values, does not constitute them in the first place.  We may love and want to protect Yosemite, the Mojave, and the Alaska National Wildlife Refuge today in large part because of their ecology, but their ecology did not automatically dictate their protected status.  (If it worked that way, many more places would have the same protected status.) Nature cannot command us to protect it; it has always been just us humans making the commands.  To pretend otherwise only obscures the rocky political and social path that leads to legally protected designations.

So this book, in addition to being about how and why to love a damaged planet, describes how our efforts to protect (or exploit) non-human nature have always taken place within the contested world of politics and power. In a world indelibly altered by human activities, the recognition that we have always constructed the meaning of nature can become liberating instead of straitjacketing.  Given that it is up to us, why not continue to try to save the pika, the polar bear, and even the braken bat cave meshweaver (an obscure species of blind spider)? There are many reasons to do so, including but not limited to scientific ones.  If nature did not command us to preserve these non-human life forms in the first place, the end of nature is not a reason for us to stop trying.  Seeing that ideas about nature derive from ideas about politics and culture also provides all the more reason to marry questions about how to treat each other with how to treat the environment. The dualism that haunts western thinking about nature and the environment has long masked the ways that access to natural resources, whether to exploit or preserve them, has perpetuated (and sometimes also caused or at least exacerbated) existing inequalities within human communities.  As long as nature, this thing other than us, seemed to command us to do certain things (whether exploit or preserve it) we could avoid seeing that these questions arise always in the context of larger webs of political and social ordering. Now that Nature is Us, perhaps we can see that we approach these questions, and have always done so, within existing political and cultural structures and frameworks. We can therefore approach questions about how to create a sustainable world in ways that weave political and social goals together with ecological ones from the outset. We can engage in acts of promoting democracy, freedom, anti-subordination, and human flourishing simultaneous to protecting and nurturing the non-human world that sustains us, instead of treating either set of goals as after-thoughts or appendages to the other. This does not mean, of course, that we will choose this path, or even if we do that we will succeed.  But given what’s at stake, which is nothing less than all of our intertwined fates as creatures on a shared planet, a vision of vibrant, democratic, free, egalitarian, and ecologically sustainable communities is worth aiming for, even if it’s always just beyond our grasp. And in aiming for it, we will be more likely to create the worlds, damaged though they will be, that we would like to inhabit. These, at least, are the paradoxically utopian and tragic thoughts of this Gen-Xer from New Jersey, raised in the shadow of New York City, come of age in the West and on the Navajo Nation’s high desert plateau, now writing from the foothills of the Rocky Mountains in the midst of a changing human/natural landscape.

* * *

Introduction (excerpt)

Since the first trip to the moon, we have seen images of planet Earth as a big blue marble, something any child could hold in one hand. The image is often invoked to instill a sense of our obligations to our single and shared home.  Today, the marble metaphor might also evoke a more worrisome thought: the Earth is under our thumb. Global warming is the latest example of how human activity has reached every nook and cranny of the earth’s natural systems, but it is not the only one.  The effects on the ozone layer, the collapse of fisheries throughout the world, and the accelerated species extinction rate, among many other phenomena, indicate the planetary scope of human impacts.   As Nobel prize winner Paul Crutzen has put it, we have entered the “Anthropocene,” the era of ubiquitous human influence on the earth’s geological systems. Physicist Robert Socolow similarly has suggested that today we might think of ourselves as “planetarians,” due to our wide ranging impacts.

This stage, the Anthropocene, the Planetarian, or whatever label we choose to apply, provides the occasion to reconsider our relationship with the natural world.  Just as importantly, it provides the occasion to dwell on what it means to be human and whether our capacities for moral thought and action can match our physical imprint. While there is a desperate need for sophisticated technological and legal solutions to address climate change and other global environmental challenges, ultimately our decisions will reflect our moral and ethical commitments to other humans and to the natural world, even if they will not reflect them perfectly.  Our decisions will mirror our ideas about what matters, what constitutes a good and meaningful life more than they will enable humanity to restore, preserve, or conserve (insert any number of environmental verbs here) nature as it was. This is so for two reasons.  First, our ideas about nature have always been a reflection of our ideas about society and culture, even when vast parts of the planet remained relatively unaffected by human actions.  Second, now that we are in the Anthropocene, the physical aspects of nature are and will continue to be profoundly affected by human activity regardless of the choices we make to manage, protect, regulate, or do nothing.

We should think hard about this double-whammy of “it’s all about and dependent on us.” Doing so will not lead us inexorably to shared conclusions about what actions to take any more than the image of the Earth as a blue marble automatically evokes feelings of global responsibility. To the contrary, realizing that we are the adults in charge may only sharpen the differences among us about which values should guide our decisions and actions. If nothing else, however, a fleeting glance at the awesome responsibilities of the Anthropocene may unsettle us into seeing our values clearly, reflecting on them for a moment, and, for some, jostling the recognition that the sum total of a life is nothing more or less than the effort to live in accordance with those values.

This book attempts to take that fleeting glance. It explores examples of human communities attempting to implement moral, ethical and legal commitments that reflect concern for social justice, other species, natural systems, and future generations in contexts that highlight the unavoidable challenges of the Anthropocene.  A recurring theme is that conventional notions of progress are not sufficient to evaluate whether these efforts are worthwhile.  This may sound utterly counter-intuitive.  Since the industrial revolution, progress has gone hand-in-hand with technological innovation.  For roughly the past forty years (dating from the early 1970’s, when many of the United States’ major federal environmental laws were passed), technology has, in significant measure, also allowed us to rein in some of the negative environmental consequences of industrialization.  The western developed world made substantial progress towards addressing, for example, air and water pollution through a mix of regulation and technology.  Even in less obviously technology-dominant areas such as species preservation, the combination of scientific knowledge and human ingenuity resulted in important conservation victories, such as bringing the Bald Eagle, the California Condor and other less telegenic species back from the brink of extinction.  The goals and measures of environmental law have been oriented, quite understandably, toward success that is quantifiable.

More recently, technological frames of thought, including welfare economics, market liberalism, and other rationalist/individualist approaches, have monopolized politics and decision-making in much of the western developed world. These frames have in common an outlook of perpetual economic growth that is dependent on unstated assumptions about boundless resources and/or our technological capacity to overcome any resource limitations. They also tend to instantiate a highly refined type of utilitarian calculation, often in the form of cost-benefit analysis, as their method. This has taken the notion of quantification as the measure of progress to a whole new level.   The idea is that if we reduce everything in the world that has (or detracts from) value to a fungible measure, we can calculate our way to optimal decisions, environmental and otherwise. We thereby avoid messy and contested discussions about which core values should form the bases for our actions, and instead simply run the numbers and await the optimal and efficient operating instructions.

Other writers have skillfully parried assumptions about boundless resources and cost benefit methodology. Doug Kysar in particular has challenged the concept of a value-free starting point for implementing these forms of utilitarianism. This book relies on these important contributions for its inquiry, which involves exploring a conception of how we relate to the planet, its human and non-human constituents, in ways that might supplant the dominant frames with a timelier and yet also enduring vision of ourselves and our obligations. The starting point is not value-free. There is a core normative assumption, and it is simple: we should take care of where we live. The human capabilities that accompany that assumption immediately render it more complicated, however. As human beings, we have the intellectual capacity to understand that “where we live” is both very nearby, and at the same time expands across space and time. In the Anthropocene, we live locally, yet our effects are planetary and enduring. Taking care of where we live therefore includes connecting our daily actions to their planetary effects. Yet it also implies that how we live with one another is just as important as the end goal of a healthy and sustainable planet, in no small part because we may not achieve the planetary goal, and at any rate will certainly not know in our lifetimes whether we will or not. To foster the norm of taking care of where we live in the Anthropocene, we need political institutions and legal arrangements that connect local and egalitarian resource governance with the planetary scale of environmental challenges.

* * *

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The New Normal

So is this the New Normal?   The question gets asked about lots of things—Washington politics, the economy, terrorism, infrastructure, the financial markets.   And the question gets asked anxiously because as a normal—as a baseline—this new normal (whatever it may be) is less than entirely believable.   To be sure, the New Normal is recognized in conversation—as in “Well, you know, this could be the new normal.”   But most often, it’s offered as a theoretical possibility acknowledged, but then quickly bracketed, because not quite believable.

Well, why isn’t the New Normal believable?

One reason, of course, is that it flies in the face of deep-seated American myths about collective and personal progress—about things getting better because well… things are supposed to get better.  Problems are supposed to get fixed.  Solutions are supposed to be found.  That’s the way it’s always been (not true) and that’s the way it always will be (surely not).

A second and more interesting reason that this New Normal isn’t quite believable is that we recognize that things are going to change.   Quantitative easing can’t go on forever.   Climate change will get worse.  Infrastructure, if we do nothing, will not remain at a D+.    Structural corruption of politics is self-compounding.  MOOC’s really are waiting in the wings to displace the traditional university.  Meanwhile in almost every field, (journalism, politics, business, etc.) the people who lead really are, for the most part, mediocre.  And unfortunately for us—it’s systemic: The triage, certification, and screening mechanisms designed to promote excellence and ward off decadence are themselves decadent—incapable of controlling for self-promotion effects, image manipulation or other forms of gaming.  More broadly, the mechanisms we usually rely upon to recognize, name, and correct for institutional breakdowns (e.g. mechanisms such as law, politics, journalism) are themselves broken.

The upshot?  Well, the affirmation that this is the New Normal really isn’t believable.   Unless, of course, the New Normal is defined as 1) a precarious state of affairs that will soon change radically but 2) in ways that are utterly out of our control (and out of the control of our institutions).   Now this “dynamic” conception of the New Normal, arguably does capture the moment—the recognition that things are slated to change, but in ways utterly out of our control.

And so we are waiting—essentially spectators waiting to see what is going to happen to our collective lives (and thus our individual lives).  It’s not apathy or indifference.   Nor is it that jaded 80’s or 90’s sense of postness—that everything worth happening already has.   It’s more a sense that we are profoundly irrelevant—except, perhaps in our own micro-activities.   It’s also a sense that the mindsets of the people who are relevant (think for example: Supreme Court Justices) are so historically askew to our times, so outdated in their frames, their preoccupations, their concerns, that they couldn’t possible help.

What then is this?  Full circle: It is the recognition that we are a very (very) old society and that the institutions and practices we have created over the decades (the  centuries) are too exhausted to deal with what they have wrought.   They are incapable of naming and comprehending—they have neither the language nor the motivation to register and articulate—the cultural, political, and economic forces and agencies that our constructing us and our world.    And so they just drone on (Supreme Court opinions) or they foment angry self-referential tirades (the media blogosphere) or pose and posture (Congress) or document the trivial with exacting rigor (academia) or… and so on.   And so meanwhile, we (who are also them) wait, wistfully wishing for a return to the old normal and yet knowing it’s not going to happen.

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Notes in Support of the Liberal Arts Law School

Here are a few ideas for how law schools that are not in the top ten (or not in the fifteen that are in the top ten) might respond to the structural forces bearing down on legal education. For those who haven’t been keeping up, the structural forces include: defunding of public education; rising tuition (in part due to defunding of public education but also for other reasons); increasing student debt loads; diminishing job opportunities; diminishing pay; and changes to the format and delivery of legal services. These forces have unearthed some longstanding shortcomings in legal education, and also have brought new pressures to bear. When law schools, particularly public law schools, were cheap, students did not have to worry much about how their legal education was or was not serving them.  They also did not have to worry much about landing a legal job.  The credential was helpful for a variety of career paths, and most options remained open financially. Now, students have to think very seriously about whether to go to law school and incur significant debt, and therefore become channeled into narrower career options, if they have options at all.

The top 10 or so schools will likely be able to continue with a law school business-as-usual scenario, with the possible exception that they will be engaged in global competition for students and faculty. Otherwise, a few tweaks to financial aid and loan forgiveness and a few nods to improving the quality of the educational experience should do it for them. The schools in the lowest tier will likely face an equally foregone, though diametrically opposite, future. The pressure will be great to dramatically decrease faculty scholarship and emphasize skills training and bar prep approaches to teaching. Many schools will follow this vocational-technical route in order to remain cost efficient and therefore survive.

What about the schools in the middle?  Can they, and should they, pay for faculty to write articles and books?  Can they, and should they, continue to teach theory, jurisprudence, and critical approaches to law?  Can they, and should they, pay for expensive in-house clinics where students can acquire skills in the context of intensive feedback accompanied by opportunities for critical reflection?  Here is a short outline, a sketch really, of an argument in support of the answer “yes.”  A significant caveat exists, however.  It is this:  yes, if at the same time these schools can increase the value of legal education by requiring higher quality teaching and in other ways demanding more of their faculty, without doing so in unimaginative ways that lead solely to a vo-tech model.  Law teaching can continue to be one of the last great jobs, but only if faculty can respond constructively to the changes facing us and our students.

The Case for the Feisty Liberal Arts Law School, in Outline Form:

–Our society is riddled with law, and will continue to be so indefinitely.

–People, poor and rich, will always need excellent lawyers when things go wrong (divorce, death, catastrophic injury, foreclosure, injustice, etc.)

–The top ten schools cannot produce enough excellent lawyers for all of society.

–Excellent lawyers not only have the best skills, they understand how to dissect arguments and to cut through layers of obfuscation and preconception.  They are, in other words, interpreters and translators.

–The ability to interpret and translate requires critical thinking skills and a deep understanding of the structures of language and argument.

–Excellent lawyers also know how to make their arguments resonate with deeply held beliefs.

–Knowledge of history, including legal and intellectual history, is necessary to speak in a register consonant with people’s deeply held beliefs.

–A legal liberal arts education, along the lines of what is available at all good law schools, provides access to professors (both clinical and non-clinical) who can teach critical thinking, legal and intellectual history, and legal theory, all of which are necessary to produce excellent lawyers as described above.

–Professors inclined to teach in these ways can add knowledge to the world (through their scholarship), that most judges, lawyers, and law-makers cannot.  Academics can take the time to study a field of law in its historical sweep. They can dissect the moves and unearth the assumptions in a line of legal argument that have, sometimes dangerously, been left unexamined. Not all of what academics do will illuminate or enlighten, but much of it will.  And if the machinery of law grinds along, with no one minding the gaps, all the skills in the world will do nothing for those who might be crushed in its wake.

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