Friday, September 27, 2013
Peter Huang recently published a review of Leo Katz’s “Why the Law Is So Perverse” in 63 Journal of Legal Education 131 (you can download the paper via SSRN here). I have only briefly skimmed the paper, but I believe there is much of value here for corporate law scholars. The following excerpt is from the introduction:
This book is an imaginative tour of legal paradoxes that are related to the field of social choice, which studies the aggregation of preferences. In a non-technical and accessible way, Katz discusses many complex and subtle ideas, using the language of legal cases, doctrines and theories. As he notes on page 6, some legal scholars have applied social choice theory to analyze diverse and fundamental legal issues. Two recent examples are how social choice illuminates the reasonable person standard in torts and other areas of law and the notion of community standards underlying the doctrine of good faith performance in contract law…. Katz's book explicates four fundamental legal paradoxes as the logical consequence of the perspective that legal doctrines entail multi-criteria decision-making. This means that each of these foundational doctrines is logically related to a voting paradox and its corresponding literature in social choice. Katz aptly describes the four legal puzzles he analyzes by choosing as titles to the four parts of his book these four questions: Why does law prohibit certain win-win transactions? Why are there so many loopholes in the law? Why does so much of law have a dichotomous nature? Why does the law not criminalize all that society morally condemns?
Importantly, Peter adds a valuable appendix entitled, “A Brief Social Choice Primer for Legal Scholars,” which he describes as follows:
This appendix provides legal scholars a guide to social choice in general and four distinguished impossibility theorems in particular. It offers motivating examples and precise statements of those impossibility theorems. The conventional interpretations for these theorems and the field of social choice are negative in the sense that most commentators view social choice theory as mathematically proving that no voting procedure is fair. These commentators include legal scholars applying impossibility theorems and concluding that difficulties are unavoidable with all collective or group decision-making processes. There is a vast social choice literature full of extensions and refinements of these and other impossibility theorems. Current social choice research tends to be philosophical or technical. Katz's book mostly eschews the technical and emphasizes the philosophical. This appendix does the opposite, while still avoiding mathematical details and emphasizing conceptual understanding. Additionally, it highlights research by Donald Saari and his coauthors that explains what goes wrong in these impossibility theorems and provides benign interpretations and positive versions of them.