Posts from the ‘Old Print Archives’ Category

"History Will Be Heard": An Appraisal of the Seattle/Louisville Decision

By GOODWIN LIU

The Supreme Court’s recent decision on voluntary school desegregation can be read at many levels. Doctrinally, the Court adopted a stringent view of narrow tailoring that forbids the use of racial classifications to integrate public schools except as “a last resort,” even as five Justices agreed that school districts have a compelling interest in “avoiding racial isolation” and in “achiev[ing] a diverse student population.” As a practical matter, the Court has made racial integration more difficult for school districts, although the efficacy of the race-conscious strategies left open by Justice Kennedy’s controlling opinion remains to be seen.

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Understanding the "Corporate" in Corporate Social Responsibility

by Aaron K. Chatterji and Barak D. Richman

As progressives confront the problems of the twenty-first century, be they global poverty and increasing income inequality, the scourge of HIV and other diseases, educational disparities, or climate change, an increasingly popular strategy is to enlist corporations in the effort. Even as some progressives continue to launch attacks on corporate misbehavior, often excoriating corporations for causing and exacerbating the world’s greatest ills, many progressives also understand that corporations can be part of the solution, not just the problem.
The growing popularity of corporate social responsibility (“CSR”) is premised on the belief that modern corporations have the financial resources, human capital, and global influence to advance progressive causes.1 And though corporations themselves initiate CSR voluntarily—whether to add value to the company’s brand, attract targeted consumers, forestall regulation, or develop a particular corporate culture—a significant fraction of CSR is a response to political and consumer campaigns by progressives. Indeed, progressives have invested considerable energy and resources to target corporations as potential agents for change.

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Reclaiming Corporate Law in a New Gilded Age

by Kent Greenfield

Corporate law matters. Traditionally seen as the narrow study of the relationship between managers and shareholders, corporate law has frequently been relegated to the margins of legal discussion and political debate. The marginalization of corporate law has been especially prevalent among those who count themselves as progressives. While this has not always been true, in the last generation or so progressives have focused on constitutional law and other areas of so-called public law, and have left corporate law to adherents of neoclassical law and economics. To the extent that the behavior of businesses has been a matter of concern, that concern has been aimed at adjusting the rules of environmental law, administrative law, employment law, and the like.

The time has come to reclaim corporate law as a topic of wide debate and progressive concern. Instead of being a narrow discipline with limited implications, corporate law determines the rules governing the organization, purposes, and limitations of some of the largest and most powerful institutions in the world. By establishing the obligations and priorities of companies and their management, corporate law affects everything from employees’ wage rates (whether in Bakersfield or Bangalore), to whether companies will try to skirt environmental laws, to whether they will tend to look the other way when doing business with governments that violate human rights. Corporate law also determines whether corporations will look at the long term or the short term, whether they will see themselves as owing any responsibilities to stakeholders other than shareholders, and indeed whether they consider themselves to be constrained by law at all.

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On Fairy Tales

by CASS R. SUNSTEIN

Consider the following tales:
1. In the Great Society, government ofªcials are well-informed, well-motivated, and very wise. They are not vulnerable to the power of self-interested private groups. They are fully able to correct market failures, to produce optimal redistribution, and to promote public aspirations.

2. In Olympus, federal judges are especially good at moral and political philosophy. When they are asked to think about the rights that people have, they are unerring. They understand that self-government is among the relevant set of rights. They always respect self-government, properly understood.
3. In Benthamville, regulators have hedometers; they are able to measure with perfect accuracy the welfare effects of various policies. In a neighboring city, Aristotleton, regulators have eudiameters, with which they can measure with perfect accuracy the effects of regulatory policies on human nourishing.

4. In Paretoville, people do not lack information or suffer from bounded rationality. Their willingness to pay (WTP) for a speciªc good perfectly captures the welfare that they would receive from that good. The citizens of Paretoville certainly care about the well-being of others, especially their own children, and their WTP fully rejects their concern. In Paretoville, there are no externalities and no collective action problems.

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Wasting Away in Paretoville: A Reply to Cass Sunstein

by LISA HEINZERLING & FRANK ACKERMAN

In his article in this issue, Professor Sunstein asks a provocative series of questions. What are the limits of the traditional approaches to welfare economics, which focus on the Pareto optimality of market outcomes and the use of willingness to pay (WTP) as the measure of the value of government regulation? What does equity, an inescapable concern in an unequal world, have to do with these market-oriented theoretical constructs? Does the recent empirical literature on subjective well-being, and on psychological anomalies, challenge our understanding of welfare?

The questions are excellent; the answers are less satisfying. While presenting selected useful pieces of a solution, Sunstein repeatedly falls short of assembling them into a coherent alternative to traditional welfare economics. If, as Emerson put it, a foolish consistency is the hobgoblin of little minds, then there are ample traces of a large mind at work here. Our comments, which are organized as responses to his four principal sections, generally argue for a more complete departure from the conventional economic theories which Sunstein (too gently and too partially) criticizes. We offer the comments in the spirit of Sunstein’s own libertarian paternalism: we will not force him to accept the logical consequences of his own convictions, but we will try to nudge him in that direction.

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Law and Economics for a Warming World

by LISA HEINZERLING & FRANK ACKERMAN

Authors’ Note: As this Article went to press, the Supreme Court handed down its decision in Massachusetts v. EPA. By a vote of 5-4, the Court rejected all of the legal arguments we discuss here as potential impediments to addressing the problem of climate change.

First, the Court held that petitioners had standing to complain about the EPA’s refusal to regulate greenhouse gases because they met the core requirements of injury in fact, causation, and redressability. Focusing on petitioner Massachusetts, the Court found that the state already had experienced injury from rising sea levels and that “the severity of that injury will only increase over the course of the next century.” On causation, the Court concluded that, “[j]udged by any standard, U.S. motor-vehicle emissions make a meaningful contribution to greenhouse gas concentrations and hence, according to petitioners, to global warming.” Last, the Court found redressability because the risk of “catastrophic harm” from climate change would be reduced “to some extent” by the relief petitioners sought.

The Court also rejected arguments that EPA’s refusal to regulate greenhouse gases was unreviewable agency inaction. Instead, the Court found that EPA erred by citing a “laundry list” of reasons why it preferred not to regulate, rather than grounding its decision in the statutory criterion of endangerment of public health and welfare.6 Even if the agency found the science of climate change uncertain, the Court held, it could not refuse to regulate greenhouse gases unless the science was so profoundly uncertain that the agency could not even form a judgment as to whether greenhouse gases were endangering public health or welfare. “The statutory question,” the Court said, “is whether sufficient information exists to make an endangerment finding.”

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Willingness To Pay vs. Welfare

by CASS R. SUNSTEIN

Consider the following cases:
1. Jones, who is wealthy, is willing to pay $1,000 and no more for a new television set. Jones would enjoy a new television set, but he already has a good television set, and he would not, in fact, gain a great deal from a new one. But because he is so wealthy, he would be better off with the television set than with $1,000.

2. Smith, who is poor, is willing to pay $75 and no more for a new television set. Smith would greatly enjoy a new television set; he does not now have one. He would be better off with the television set than with $75. But because he is poor, he would be worse off with the television set at a price in excess of $75.

3. Jenkins, who is poor and disabled, is willing to pay $20 and no more for a workplace accommodation that will enable her to work. The cost of the accommodation to her employer is $150. If the accommodation is made, Jenkins will gain far more in terms of welfare than the employer (and its customers) will lose.

4. Wilson, who is a very wealthy New Yorker, would be willing to pay $1,000,000 for a summer home in Aspen, Colorado. It turns out that if Wilson bought that summer home, she would not much enjoy it, and in the long run she would not use it. She would miss her friends and her life in New York. In the end, she would be better off with $1,000,000 than with the summer home in Aspen.

5. Andrews, who is poor, is not willing to pay $600 for a health insurance plan. It turns out that if Andrews bought that health insurance plan, her life would be much better; she would be far healthier and her chronic back problem would be greatly improved. For her, the loss of $600 would be much smaller than the gain, in terms of welfare, from purchase of the health insurance plan.

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Foreword: Blue State Federalism at the Crossroads

Blue state federalism is at a crossroads. The reason? Progressives advocating for more state and local policymaking power may have been too successful for their own good. In the eyes of many, the 2006 congressional elections, in which Democrats made major gains in the House and Senate, presaged the transformative election of November 4, 2008. But the roots of this seemingly seismic shift in American politics may be traced back even further—to the work done over the last eight years in state houses and city councils across the country. As the two essays presented in this volume amply demonstrate, on issue after issue over this period of time, it was state and local leaders who often took the lead in proposing creative, progressive responses to the nation’s most pressing problems. And, on issue after issue, it was national government actors who often stepped in to thwart them.

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When First Responders Are Victims: Rethinking Emergency Response

by Elaine C. Kamarck

By now most Americans are familiar with the federal government’s hapless response to Hurricane Katrina. A sample of what went wrong in the aftermath of one of the worst natural disasters to hit the United States shows a system trapped in a dangerous bureaucratic gridlock. The Federal Emergency Management Agency (FEMA), the agency responsible for the federal response, would not let doctors practice medicine on the hurricane victims because they were not licensed in Louisiana; denied local officials’ requests for rubber rafts needed to rescue the victims;1 issued a press release telling ªrst responders in neighboring states not to respond to the hurricane without being requested and lawfully dispatched by state and local authorities;2 turned away trucks ªlled with water and refused to accept much needed generators; did not allow food to be delivered to New Orleans by the Red Cross; and left 20,000 trailers that were needed to shelter the homeless sitting in Atlanta. Then there were the 91,000 tons of ice cubes that were hauled back and forth across the nation but never reached New Orleans, where they were needed to cool food, medicines, and victims sweltering in the 100 degree heat.3 No wonder Senator Fritz Hollings once called FEMA’s administrators “[t]he sorriest bunch of bureaucratic jackasses I’ve ever known.” No wonder tourist shops in New Orleans sell T-shirts that say “FEMA—Federal Employees Missing in Action.”

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Do We Still Owe Iraq?

by Zaid A. Zaid

Noah Feldman’s book What We Owe Iraq1 is a unique contribution to the ongoing discourse—mainly amongst academics, former military personnel, and diplomats who served in the Coalition Provisional Authority (CPA)—regarding the past, present, and future of Iraq. In 2004, I served as the liaison from the CPA to the Iraqi Governing Council and now join the discussion from that vantage point. After discussing Feldman’s primary points, this review confronts the central issue in his book: whether the United States should remain in Iraq given the deteriorating political and security situation there. Feldman argues that the United States has a moral and ethical obligation to remain in Iraq until there is a viable government with a monopoly on the use of force, i.e., when Iraqis are exercising full political and military sovereignty over the country. Although What We Owe Iraq has weaknesses, mainly its failure to address implications of civil war and American public opinion, I agree that the United States should not withdraw until it is clear that Iraq’s institutional structure can sustain a viable democracy. The United States must help Iraqis maintain control of their country. Contrary to Feldman, however, I argue that the United States should remain in Iraq not because it has a moral or ethical obligation to do so, but because remaining in Iraq is in the national interest of the United States. The United States has an obligation, but it is not to Iraq. It is an obligation to the American people, to do what is in our national interest, whether or not it coincides with Iraq’s national interest. Ideally, these interests will converge, but the United States’ own citizens must have priority.

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