concentrated benefits

The Legal Labor Cartel

by on April 24, 2010 @ 1:42 pm · 1 comment

in Political Correctness, Private Security & Law, Protectionism, The Basics

“The truth is that legislatures and Courts have made lawyers a privileged class, and have thus given them facilities, of which they have availed themselves, for entering into combinations hostile, at least to the interests, if not to the rights, of the community – such as to keep up prices, and shut out competitors. The natural result of such combinations also is, that the mass of the members will do more or less to screen individuals from suspicion. The consequence is, that the people have imbibed an extreme jealousy towards them…. Now if the profession were thrown open to all, lawyers would no longer be a privileged class – they probably could no longer enter into combinations that would be of any avail to them, and the jealousy of the people towards them would be at an end.” Lysander Spooner, To the Members of the Legislature of Massachusetts, August 26, 1835.

Lawyers, like doctors, are part of a class of people who must join what amounts to a labor cartel in order to lawfully ply their trade. Bar associations have territories, and they drive up the price of legal services in those territories by limiting entry by service providers. Talk of the lawyer’s “professional responsibility to provide legal services to those unable to pay” stems from guilt about this anti-competitive status quo in the legal services market. Why should lawyers owe anyone relief if they didn’t first create the burden to be relieved? [Keep reading…]

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Name That Principle

by on April 13, 2010 @ 11:21 pm · 10 comments

in Anti-Statism, Language

It’s not merely important to have principles, it’s important to name them.

Name them well.

One of the central insights of the French Liberal School of economics — and, since that school’s heyday, all of free-market economics — has not, to my knowledge, been given a technical name. Or, at least, a technical term that’s good enough. The principle in question is that of overlooking the unseen effects of an event or a policy in favor of the immediate, positive effects on the chief beneficiary. Bastiat wrote about it in “That Which Is Seen and That Which Is Unseen.” Classic essay.

The basic notion has been recently described in a fairly rigorous way as the problem of dispersed costs and concentrated benefits. Surely someone has called this The Principle of Dispersed Costs and Concentrated Benefits, or somesuch. But I’m not aware of a pithier academic formulation that sticks. In my head, anyway.

And, getting it to stick is important. People forget, otherwise. And what’s the use of a principle that people forget?

So I’ve reformulated the problem as a cognitive bias [Keep reading…]

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