Faculty Chapters

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  UniqueWorks/Unique Challenges at the Intellectual Property/Competition Law Interface

  Rochelle C. Dreyfuss

  In the past quarter century, competition law has significantly relaxed its position on intellectual property. In the United States, for example, licensing strategies that were once considered No-No’s—per se illegal—are now analyzed under the rule of reason, with the result that many practices that were once attacked as anticompetitive are now commonly utilized. To a great extent, the new attitude can be understood within the frame of antitrust enforcement generally, where it can be attributed to increased reliance on microeconomics, including a focus on the probable behaviour of rational actors and on institutions. For intellectual property, however, the change also emerges from the realization that usually, patented inventions have substitutes, that copyrighted material can be re-produced through independent creation, and that these alternatives constrain the ability of rights holders to set high prices or limit output. As the fallacy of thinking of intellectual property rights as monopolies has become evident, competitive concerns about how they are exploited have receded. The question for today is whether this relaxed attitude has gone too far. As important as these new analytical approaches have been, it can be argued that they are now too readily applied. There are advances protected by intellectual property laws that are (what might be termed) unique works and works that become unique. Examples include human genome sequences and computer operating systems. The former are intrinsically unique because, as the building blocks of the human organism, they are required in the study of human biological functioning. Works can become unique through, among other things, marke forces. For instance, network, lock-in, and tipping effects can select from a multitude of possible operating systems, one particular system; the features of that system then become necessary to develop the complementary products that consumers wish to buy. Obviously, assumptions of substitutability do not hold for these works. More subtly, the scientific and market forces that create uniqueness can also undermine assumptions about rational exploitation. Thus, there is significant danger that rights in these works could be exercised in ways that impede innovation and impair consumer welfare. Unfortunately, intellectual property law lacks the capacity to deal with these problems effectively. While the power associated with rights over unique works could be diminished by enhancing the criteria for receiving protection in the first instance or by redefining the reach of protection, these approaches would reduce incentives to innovate across the board. In contrast, competition law applies ex post. It has the analytical tools to assess the effect of specific practices on consumer welfare and can be read to require those who allege improper use of the power conferred by intellectual property rights to demonstrate competitive harm. As a result, competition law is arguably better suited than intellectual property law to curb excesses effectuated with these rights. In this paper, I describe what I mean by unique works, why their prevalence is increasing, the difficulties they can create, and the problems intellectual property law has for dealing with them internally. Then, as a non-specialist, I gesture at ways that competition law might be adapted to respond to potentials for abuse.

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  Harmonization without Consensus: Critical Reflections on Drafting a Substantive Patent Law Treaty

  Rochelle C. Dreyfuss and Jerome H. Reichman

  One can readily understand why proposals to further harmonize domestic patent laws at the international level1 have recently attracted considerable attention. As the component of intellectual property in global trade continues to grow, the costs of worldwide protection and enforcement have soared. Patent holders have accordingly begun to search for ways to acquire and maintain their exclusive rights more efficiently in an integrated world marketplace. They are also increasingly frustrated by the need to pursue multiple actions for infringement in cross-border disputes. Under the bedrock principle of territoriality, successive litigations can trigger different applications of domestic and international patent norms to the same set of facts, and lead to conflicting judgments and irreconcilable outcomes. Governments have responded to the upswing in patent applications by searching for techniques that would allow them to share examination responsibilities and costs. Important procedural advances have been embodied in the Patent Cooperation Treaty and in various regional agreements, such as the European Patent Convention. However, these instruments are seldom the product of true harmonization exercises, in part because the outcome of examinations conducted within these frameworks is typically a set of individual national patents that remain separately enforceable under local laws. In 1994, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), which incorporated the 1967 text of the Paris Convention for the Protection of Industrial Property, took a major step toward substantive patent law harmonization. It established a set of minimum international standards of protection for some 150 participating countries. Yet this Agreement, which did not attempt to create a uniform or deeply harmonized global patent regime, left ample room for national variations and approaches that are often collectively deemed the TRIPS flexibilities. The effort by the World Intellectual Property Organization (WIPO) to organize a thorough exploration of the possibilities for further harmonization is therefore a welcome development to much of the patent community. Under the aegis of WIPO's Standing Committee on the Law of Patents (SCP), the Draft Substantive Patent Law Treaty (SPLT) 15 represents an attempt ‘to pursue a “deep harmonization” of both the law and practice’ concerning not just the drafting, filing, and examination of patent applications, but also cornerstone requirements of patentability, such as novelty, non-obviousness, sufficiency of description, and drafting and interpretation of claims. Notably, through the efforts of the so-called Group of Friends of Development, this initiative is also being tested against the drive for a more development-friendly agenda at WIPO, with a view to ensuring consideration of the needs of all nations, whatever their technological capacities may be. Despite the promise such an effort holds, we believe that it is unwise to move to deep substantive harmonization at this time. Barely ten years have passed since the TRIPS Agreement elevated patent standards universally, challenging the technological catch-up strategies of all the developing countries, and saddling these countries with social costs that they are still struggling to absorb. As the endless controversies surrounding pharmaceutical patents make clear, higher standards of global protection—whatever their incentive effects—also generate severe and unintended distributional consequences for the developing world. A further round of harmonization will likely aggravate these and other unresolved problems without producing any offsetting user rights or concessions for these countries. On the contrary, the dynamics of TRIPS and the post-TRIPS trade agreements teaches that even a development-sensitive negotiation process is likely to produce an instrument that furthers the interests of developed countries at the expense of poorer, less powerful participants. More controversially, we contend that higher levels of harmonization will harm even the developed countries, including those that are most aggressively pressing for yet another round of multilateral intellectual property negotiations. The domestic patent laws as currently practiced were largely formulated for the inventions of the Industrial Revolution, and they still largely reflect the technological premises and concepts of the creative sectors as they were then structured. Yet, in this post-industrial information age, with knowledge-intensive inventions emerging from new kinds of research institutions, creative entities are organized non-hierarchically and along continuously-changing lines. New players, such as universities and scientific research entities, now routinely patent their output, and whole new sectors have emerged, including biotechnology and information technology. Until the operations of these and other new technical communities are better understood, there is greater need for legal experimentation at the substantive level than for harmonization. In the absence of any international governance infrastructure capable of interpreting and amending the law (rather than freezing it prematurely), the argument for delaying harmonization becomes especially compelling. Deep harmonization is particularly inappropriate until other methods for improving the efficiency of a global patent system have been fully explored. In what follows, we survey the implications of deep harmonization for developing countries in Part I, and for developed countries in Part II. In Part III, we suggest that the appropriate goal for the progressive development of world intellectual property law after TRIPS is to nurture an ‘incipient transnational system of innovation’, which can, in turn, provide the appropriate template for validating global patent norms over time. Our final conclusions are summarized at the end of the chapter.

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  ProCD v. Zeidenberg: Do Doctrine and Function Mix?

  Richard A. Epstein

  The purpose of this essay is to recount with some particularity the philosophical, economic, and legal issues raised in one of the most important contract cases of the past generation. ProCD v. Zeidenberg explores in a new technological context two critical and recurrent issues of contract law: how the formal rules of offer and acceptance apply to shrinkwrap and clickwrap transactions, and whether an otherwise valid contractual provision is preempted by federal law. The 98 first issue concerns the application of the perennial rules of offer and acceptance to the brave new world of computer software. It conveniently breaks into two parts. The initial inquiry is whether two parties have entered into any agreement at all. Then if it is established that the parties made some agreement, which terms proposed by either side are included or excluded? The particular contracts involved in ProCD were formed between the “seller” of computer software and the ultimate “buyer,” who purchased the software package through a retailer who was conveniently allowed to drop out of the picture. At issue in this case was how the rules of offer and acceptance, as captured in the Uniform Commercial Code, apply to shrinkwrap contracts where the seller seeks to impose restrictions on how particular products may be used. The second question in ProCD arises only if the plaintiff overcomes the initial hurdle and persuades a court that the parties have indeed entered into an agreement that contains the seller’s desired provisions. Phase two asks what types of substantive limitations the vendor may place on its product use that are consistent with public policy. More concretely, does the copyright law of the United States place any federal limits on the use restrictions that the software seller may impose on its buyer with respect to the data that has been transferred (or licensed) to the buyer? The issue is technically described as one of federal preemption: Does the command of a valid federal statute block, expressly or by implication, the use of certain contractual terms otherwise allowable under state law? ProCD raises both issues in vivid fashion because it is twice blessed by two strong opinions that point in opposite directions. Judge Barbara B. Crabb of the Western District of Wisconsin held that Zeidenberg had purchased the software free of ProCD’s effort to restrict his use of the transmitted data. Judge Frank H. Easterbrook, writing for himself and Judges John L. Coffey and Joel M. Flaum, ruled foursquare for the plaintiff on both the contract interpretation and the copyright preemption issues. The two contrasting opinions reflect a profound difference in the role economic analysis plays in influencing the legal analysis. That difference is encapsulated in the distinction between doctrine versus function: Judge Crabb is the faithful doctrinalist and Judge Easterbrook the ardent functionalist.

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  Merger Simulation: A Simplified Approach with New Applications

  Roy J. Epstein and Daniel L. Rubinfeld

  In recent years there have been significant developments in the use of empirical economic methods to study the likely competitive effects of mergers. These developments have been shaped by the increased use of unilateral effects analyses by the competition authorities, as is expressed in part in the 1997 Horizontal Merger Guidelines. Such analyses evaluate the ability of the post-transaction firm to raise the prices of some or all of its (often differentiated) products through unilateral decisions and without resort to overtly collusive activities. Unilateral effects analyses encompass a broad set of issues that arise when the differentiated brands produced by the merging firms constitute the first and second choices for some group of customers. Absent de novo entry or product repositioning, a unilateral price increase may become profitable as the result of a merger if a substantial number of customers who previously would have been lost to competitors can now be retained because the merged firm also offers the customers' second choice. If, however, this “1-2” customer group is relatively small, then at best only a minimal price increase will be profitable. In essence, the forgone profits from the lost sales to diverted customers would be roughly comparable to the incremental profits from price increases to customers that do not switch. The technique known as “merger simulation” has emerged as a promising framework for this analysis. Simulation uses economic models grounded in the theory of industrial organization to predict the effect of mergers on prices in relevant markets. There is a common theoretical core to all simulation approaches in use today, although the details of a given simulation will depend on data availability and on the mathematical characterization of the market or markets at issue. While merger simulation is not a panacea for all of the economic issues that arise in a difficult transaction, it nonetheless can offer assessments of competitive effects and remedies that are beyond the reach of other methods of inquiry. For example, simulation has been used to evaluate the likelihood that potential merger-specific efficiencies (associated with reductions in the marginal cost of production) are sufficiently great to offset predicted price increases. Simulation can also be used to analyze the competitive effects of product repositioning and de novo entry. Finally, simulation can help one to evaluate the adequacy of proposed divestitures. With time, we believe that simulation techniques will be better understood and more widely used by antitrust lawyers and economists. A variety of different economic models can be utilized as the basis for a simulation analysis. When sufficient data are available, demand models can be estimated econometrically. When these estimated-demand simulation models are not feasible, models requiring less data can be valuable if one is willing to make additional assumptions about the nature of demand. The logit demand model and “PCAIDS”—a new model to be introduced in this article-both fit into this calibrated-demand simulation model category. We will suggest that PCAIDS offers advantages over a number of other calibrated-demand models. We have undertaken this review and update of work on merger simulation with a number of goals in mind. First, we offer a relatively non-technical description of the principles of merger simulation-principles that are consistent with the methodologies currently in use by the competition authorities. Second, we describe PCAIDS, the new calibrated-demand merger simulation methodology. Third, we present examples that apply PCAIDS, including some applications that to our knowledge have not previously appeared in the literature on merger simulation. Fourth, we suggest how simulation analyses might be used to evaluate the safe harbors of the Merger Guidelines. Calibrated-demand models are relatively easy to implement and make detailed simulation feasible for nearly any transaction because they require neither scanner nor transaction-level data. The PCAIDS model, in particular, requires only information on market shares and reasonable estimates of two elasticities. Estimates of these elasticities often can be obtained from marketing information or, when appropriate, through demand estimation. As with any calibrated-demand simulation model, one can test the sensitivity of the PCAIDS results to changes in the values of the estimated elasticities and to other simulation parameters. We believe that calibrated-demand simulation models can offer valuable screening devices for “quick looks” by enforcement agencies and by merging firms. The models can be used to review the potential antitrust exposure resulting when unilateral effects issues are raised but sufficient information is not available to estimate reliably a full set of cross-price elasticities. The models also can offer a useful means of working out the implications of the range of qualitative judgments an analyst might make based on documentary and interview evidence, and to test the sensitivity of competitive effects predictions to plausible variations in those assumptions. The analyses may be particularly useful for weighing opposing forces, as when comparing the potential anticompetitive loss of localized competition to the procompetitive gain relating to merger-specific efficiencies and product repositioning. The balance of this article is organized as follows. Part II discusses the economic fundamentals of merger simulation. Because the pros and cons of merger simulation have been extensively debated elsewhere, we do not undertake such a treatment here. In Part III we introduce the PCAIDS approach to modeling demand. We explain how a key assumption about the relationship between market shares and the diversion of lost sales from price increases can be used to calibrate the PCAIDS model. Part IV offers some examples of merger simulation with PCAIDS that includes comparisons with other simulation models. In Part V we show how PCAIDS can be applied to the analysis of product repositioning and entry. Part VI presents an analysis of the Merger Guidelines's safe harbors using PCAIDS simulation, and Part VII contains some brief concluding remarks. We have relegated the more technical mathematical details to the Appendix.

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  The Story of NLRB v. Washington Aluminum: Labor Law as Employment Law

  Cynthia Estlund

  Employment law is emerging as an important practice area. This title provides behind-the-scenes descriptions of the landmark cases; the litigants, the lawyers, the strategy; that helped shape this growing field. This account of emerging law is designed to help the student understand that, well before appellate judges are involved, the basic narrative and the doctrinal and policy potential of the case have been set by the decisions of litigants and their representatives. Several chapters are also devoted to the story behind some of the principal statutes in the area.

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  Working Together Under Antidiscrimination Law: Paradoxes and Possibilities

  Cynthia Estlund

  The fiftieth anniversary of Brown v. Board of Education in 2004 celebrated the beginning of the dismantling of legalized segregation of American society. But the occasion reminded us of just how far we had not come in the integration of elementary and secondary education, the immediate object of the Brown decision. That same year, with far less fanfare, we also celebrated the fortieth anniversary of the Civil Rights Act of 1964, a centerpiece of which was the equal employment mandate of Title VII. Although the express purpose of Title VII was not to create integrated workplaces but to promote equal opportunity in the job market, the law has helped to bring about more significant and steadier progress toward workplace integration than we have seen in the public schools. As an almost incidental by-product of the antidiscrimination laws, the workplace has become the single most promising sight of integration, and of cross-racial cooperation and camaraderie, in American society. Still, the promise of both equality and integration at work is far from fulfilled, and the potential contribution of antidiscrimination law is far from exhausted. The ability of Title VII to promote workplace integration and equality depends on how the law interacts with and influences the attitudes and decisions of supervisors and managers, potential complainants, and their co-workers. It depends on who files suit, when, and why; how the law assesses the motives and causes of employment decisions; and how litigation and the prospect of litigation affects attitudes, decisions, and interactions within the workplace. All of these conditions depend, in turn, on aspects of human psychology that are only beginning to make their way into our understanding of discrimination law. In this chapter I seek to trace some effects of discrimination law and litigation on workplace demographics and dynamics in light of evidence about the nature of bias and intergroup relations. It is well to begin with the now-familiar fact that Title VII has become primarily a "wrongful discharge" statute. That is, the incidence of discrimination litigation, and the risk of a discrimination claim, is vastly greater at the discharge, or exit, stage than at the entry, or hiring, stage. This "entry-exit gap" is coupled with an "at-will gap" between the expected cost of firing or laying off members of "protected groups"-as to which there is a risk of costly litigation-and the cost of firing "non-protected" employees who are essentially subject to discharge at will. These facts yield some predictions about the impact of discrimination law, many of which have been usefully drawn out by Ian Ayres, John Donohue, and Peter Siegelman, among others. The plot thickens once we fold in the role of unconscious biases and other cognitive tendencies that are especially well chronicled in the legal literature by Linda Krieger. I argue here that, given the "entry-exit gap," the "at-will gap," and the expected influence of hidden and unconscious bias, Title VII can be expected to produce some counterproductive employer incentives as well as divisive tensions among employees. It may lead employers to be more lenient, at least superficially, toward minority employees in contemplation of discharge or layoff, but to disfavor minority applicants in hiring. It may encourage minority employees to look for discrimination in any case of adverse treatment. And it may lead other employees, themselves exposed to the full brunt of the at-will regime, to see both preferential treatment of minority employees and unjustified claims of discrimination where there may in fact be an inadequate remedy for discrimination and superficial efforts by the employer to avoid litigation and liability. The implication is not that antidiscrimination law does more harm than good; the main effect of antidiscrimination law is to discourage discrimination, especially overt or intentional discrimination. But the claims advanced here do suggest that we should look for ways to make the law a more effective instrument of workplace equality and integration. We might begin by finding ways to narrow both the "entry-exit gap" and the "at-will gap." I conclude by looking briefly at some employer practices and some proposals for reform that fit that prescription.

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  The Story of Gilmer v. Interstate/Johnson Lane Corp.: The Emergence of Employment Arbitration

  Samuel Estreicher

  Employment law is emerging as an important practice area. This title provides behind-the-scenes descriptions of the landmark cases; the litigants, the lawyers, the strategy; that helped shape this growing field. This account of emerging law is designed to help the student understand that, well before appellate judges are involved, the basic narrative and the doctrinal and policy potential of the case have been set by the decisions of litigants and their representatives. Several chapters are also devoted to the story behind some of the principal statutes in the area.

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  Conversability and Deliberation

  John A. Ferejohn

  Suppose that Congress is to decide whether to enact a statutory scheme, such as, for example, establishing a cabinet department for Homeland Security. Presumably the reasons in favor of the statute would be more or less directed to considerations of welfare or public safety. But the new department may be authorized to behave in ways that may sometimes infringe some people’s rights. Whether or not such an agency should be set up and authorized to suspend rights would seem to be a matter of balancing the advancement of a shared interest in public safety against the particular rights violations that such advancement may entail. And, presumably, the appropriate balance should somehow be responsive to arguments, both on behalf of those whose rights are likely to be suspended as well as from those who think that public safety may be inadequately protected.

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  Concentrated Power: The Paradox of Antitrust in Japan

  Harry First and Tadashi Shiraishi

  In his essay about the Antimonopoly Law in the 1963 edition of Law in Japan, Yoshio Kanazawa observed that enforcement of Japan’s Antimonopoly Act “is anemic today” and, although the act could be resuscitated, “there is, of course, no immediate prospect of this happening.” Kanazawa pointed to the “negative attitude toward the underlying philosophy” of the law exhibited by recently appointed commissioners of the Fair Trade Commission (JFTC), to the many exemptions from the Antimonopoly Act that had followed its adoption in 1947, and to the growth of what has come to be called administrative guidance by the ministries, particularly the Ministry of International Trade and Industry (MITI). He concluded by wondering whether the Antimonopoly Act “serves a useful function in the social and economic environment of Japan.” Although he hoped that the JFTC would “revitalize itself and assume a positive role in the administration of the law,” he also thought that the Antimonopoly Act should be better fit to its “social environment” so that it would “permit restrictive practices when they demonstrably benefit the Japanese economy or society as a whole.” Kanazawa’s account of antitrust in Japan was written only sixteen years after the enactment of the Antimonopoly Act. We write some forty years after Kanazawa, fifty-five years after the statute’s enactment. Much has changed in that time. There have been substantial legislative changes in the act, strengthening its provisions rather than narrowing them. There has been substantial scholarly attention paid to the act, both in Japan and elsewhere, exploring the importance and effect of antitrust enforcement in Japan. The policies behind the act have even come to be embraced by government policy makers. In the late 1980s and early 1990s increased antitrust enforcement was seen as important in Japan and elsewhere as a way of curing United States–Japan trade problems and opening Japan’s markets. In the early 2000s antitrust enforcement has come to be seen in Japan as a way to improve the operation of a sluggish and overregulated economy. Even the prime minister has pronounced on the importance of strong antitrust enforcement. And yet, doubts remain about antitrust in Japan, similar to the doubts expressed by Kanazawa. These doubts are not addressed to the utility of antitrust in today’s economy in Japan. They are more addressed to the perceived lack of antitrust enforcement by the JFTC. As one commissioner expressed it, the JFTC is often viewed as “a watch dog that does not bite.” Indeed, the very acknowledgment that the JFTC needs to be strengthened is an indication that it is perceived as too weak to be an effective enforcer of the antitrust laws. The actual record of antitrust enforcement in Japan is, of course, more complicated than can be expressed in a political catchphrase. Unlike the record when Kanazawa wrote, enforcement has turned out to be not quite anemic, nor has the JFTC been without bite. Nevertheless, it would also be difficult to characterize the commission’s enforcement record as robust. There are many reasons for the relatively weak performance of the commission over time, including Japan’s often negative view of the utility of antitrust as economic policy and the position of the JFTC in relation to other government ministries. One area that has been overlooked as an explanation for weak antitrust enforcement in Japan, however, is the very concentration of enforcement authority in the JFTC. The Antimonopoly Act follows the model of concentrating enforcement in an apparently powerful single administrative government agency and, as a result, only a small number of private litigants invoke antitrust protections. This concentration, we believe, has actually led to weaker antitrust enforcement than might otherwise have occurred in Japan. It is, we think, the paradox of antitrust in Japan. Our chapter proceeds as follows. We begin with a description of Japan’s antitrust enforcement system, with a particular focus on the current position and activities of the JFTC. We then compare that to the antitrust enforcement system that has evolved in the United States. Our review of the U.S. system is not so much to detail that system as to provide the contrast of a system where enforcement is much more deconcentrated and enforcers operate in a networked environment rather than a hierarchical one. We conclude with three suggestions for opening up antitrust enforcement in Japan: increase the networking of the JFTC and other ministries with regard to competition matters, strengthen the support structure for private litigation, and have the JFTC participate fully in the growing internationalization of antitrust enforcement.

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  Antitrust in Times of Globalization

  Eleanor M. Fox

  The story of international antitrust is a story of law, economics and politics. This essay, with which I honor Carl Baudenbacher, traces antitrust from times of protected national markets to times of more nearly open trade; from times when international antitrust seemed possible, even inevitable, to modem times when a uniform world antitrust is hardly a twinkle in anyone's eye and the world antitrust community has settled into informal horizontal networks. This essay will trace the history and evolution of antitrust-within-borders to a vision of antitrust-without-borders, and to a resolution, more or less stable, of world antitrust by network.

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  Article 82 ECT and Section 2 of the Sherman Act: Convergences, Divergences, and the Impact of Economics: When Economics Does Not Answer the Question

  Eleanor M. Fox

  Section 2 of the US Sherman Act prohibits monopolization and attempts to monopolize. Article 82 of the EC Treaty of Rome prohibits abuse of a dominant position. Both provisions were informed by a mixed set of socio-political-economic goals. Section 2 was adopted as a means to combat aggregations of power that left the “little man” helpless before them. Article 82 (then 86) was adopted to regulate dominant firms lest they harm powerless market actors - buyers, suppliers, competitors, consumers, or undermine the quest to achieve an integrated common market. Both provisions had the possibility to protect inefficient competitors at the expense of consumers, efficiency and competitiveness; and at times they did. For many years and especially in the 1960s, the United States antitrust law respected diversity, dispersal of power, economic opportunity for firms and entrepreneurs without power, and governance by markets, not powerful firms. The law did much to cultivate robust markets by keeping channels open to mavericks, discounters, and others who challenged tradition and the stodgy status quo. But the law also handicapped efficiency, requiring dominant firms to pull their punches lest they trample upon their smaller rivals. The 1980s was a time for change. The question was the form that change would take. The change was dramatic. A new paradigm was introduced for antitrust. The old eclecticism was replaced by an economic model that led the way to a much reduced antitrust purview for all but cartels. There was to be no antitrust enforcement unless the conduct or transaction diminished consumer surplus and (in most cases) had no good business justification. Pre-1980s US antitrust law was roundly criticized as ‘protecting competitors, not competition’; and the charge “You protect competitors, we protect competition” was soon to be leveled, disparagingly, at the EU. The development of Article 82 (ex 86) has had many similarities with the development of the Sherman Act. Article 86 was adopted against a background of numerous state-owned firms that had reached their positions of power by privilege not merit. Case law applying Article 86 was even more explicit than US law in placing a special responsibility on dominant firms to refrain from distorting the playing field to the detriment of less advantaged players. Many violations entailed acts of dominant firms that tended to exclude smaller firms from “free” access to markets, and violations were often found without regard to the efficiency of the acts. Moreover, regarding refusals to deal and duties to deal, the EU law was always less reluctant than US law to require “dealing.” EU law took on board the tradition of a number of continental European countries to condemn refusals to deal with traditional customers, absent justification. Globalization and the imperative of competitiveness pressured changes in EU law, just as it had in the United States, but with a difference. Goals of fairness to smaller firms were squeezed out by goals of efficiency. Tough questioning of EU precedents by prominent US officials may have played some role in sounding a wake-up call to assure that, in competition analysis, ‘sound economics’ is applied. More importantly, several reversals of European Commission decisions by the Court of First Instance, particularly in Airtours, was a spur to the Competition Directorate to hire a chief economist and to set up a system for vetting proposed initiatives and decisions for their economic soundness. The Competition Directorate's review of Article 82, the commissioning of a report by an economic advisory group, and the Fordham speech by Competition Commissioner Neelie Kroes (23 September 2005), all reflect the determination to bring EU law in line with sound economics. As is now well known, Commissioner Kroes declared that Article 82 analysis must be based on ‘effects in the market’; that ‘Enforcement Agencies should be cautious about intervening in the functioning of markets unless there is clear evidence that they are not functioning well’; that EU needs ‘an economically sound framework’; and that, just as Section 2 of the Sherman Act moved from fairness concerns to consumer welfare concerns, there is ‘no reason why a similar development could not take place in Europe’. Commissioner Kroes said: ‘First, it is competition, and not competitors, that is to be protected. Second, ultimately the aim is to avoid consumers harm’. Does this mean that Article 82 is becoming a shadow or mirror of Section 2? Not necessarily. Article 82 has its own footprint.

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  GE/Honeywell: The U.S. Merger that Europe Stopped—A Story of the Politics of Convergence

  Eleanor M. Fox

  “One chilly day in late February [2001], John F. Welch Jr. flew into Brussels on a vital mission: General Electric Co.'s chairman and chief executive had come on his corporate jet to urge the European Union's top antitrust regulator to give GE's bid for Honeywell International Inc. a speedy blessing [as the American authorities had done].” Mr. Welch was disappointed. The European Commission enjoined the merger, which would have been the largest industrial merger in the world's history, combining two American giants, General Electric Company, of jet engine fame, and Honeywell, with avionics expertise. American officials were disappointed also. Treasury Secretary Paul O'Neil called the European prohibition “off the wall” and described the European Commission as "the closest thing you can find to an autocratic organization that can successfully impose their will on things that one would think are outside their scope of attention.” Senator Ernest Hollings, Chairman of the Senate Commerce Committee, accused the European Commission of “an apparent double standard by swiftly approving mergers involving European companies and holding up those of US groups.” He said: “EU disapproval gives credence to those who suspect that the EU is using its merger review process as a tool to protect and promote European industry at the expense of its US competitors.” U.S. antitrust authorities were also among the outraged. They gave the European authorities “an unprecedented and extraordinarily direct public scolding” for mistaking an efficient merger for an anticompetitive one. Later, they would take credit for causing the EC law to look more American. Was the European prohibition against this largest-ever, pan-world merger really so extraordinary? What is the place of GE/Honeywell in the story of merger law? In the story of conglomerate mergers with leveraging effects that shift market share to powerful firms? What is its place in the puzzle of governance in the new world order in which law is national, transactions are international, more than a few jurisdictions claim the right to regulate the same transaction, and dominant players nudge other nations' laws to converge with theirs? GE/Honeywell is predominantly a story about sovereignty and the political dance of convergence. Nesting within this picture are nuts and bolts of conglomerate merger analysis, and a small cast of characters that, in retrospect, seemed programmed to bring on a clash of cultures, to stake out claims of “right law” and “right economics,” and then to return to the congenial mode of cooperation and business as usual. The antitrust story of GE/Honeywell begins with GE's Jack Welch setting his sights on Honeywell. It proceeds to the U.S. antitrust clearance of the deal; to the European prohibition; to internal reform and economic modernization within the European Commission's Competition Directorate, and eventually to the European appellate court's judgment affirming the Commission's prohibition on narrow horizontal grounds, while disclaiming any duty of deference to the United States. GE/Honeywell is a story of six years in the life of convergence. To set the stage, I give a short background of the not-always-parallel development of U.S. and EC merger law, and especially the law governing major firms' uses of leverage and other strategic practices such as bundling to shift market share to themselves. I then recount the evolution of the case. Finally, I comment on the case's implications for the law of leveraging and bundling by dominant firms, and I explore the politics of antitrust interdependence in a globalized world.

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  Industrial Policy and Competition–Developing Countries as Victims and Users

  Eleanor M. Fox and Dennis Davis

  Developing countries are double targets. They suffer the impact of developed countries' selective protective industrial policies (antidumping, subsidies), and they are deeply criticized when they apply protective industrial policy in their own internal markets. We argue that competition policy and protectionist industrial or trade policy are related antagonists; that the relationship all too often goes by default, in part because specialist professionals are trained or disciplined to avoid the issue. We argue that the costs to competition from protectionism need to be better documented and highlighted, and that the inverse relationship, including better practices for trade-offs, needs to be worked out. We believe that the costs to developing countries' competition should especially be better documented, for this information is a necessary guide to appropriate policy in a globalized world. This article explores the use and impacts of certain industrial policies on developing countries—their own policies and their trading partners'. This is a vast subject, and we have chosen to carve out a certain domain. First, for most of this paper we do not focus on the “bright side” industrial policies designed, for example, to cure market failures by supporting research and development (although such support is implicated on one of our examples). Principally, we treat policies that are protective. Second, we focus on the world. We have two framing hypotheses. The first begins with the observation that the world is the market (often literally, always figuratively). Developing nations, when designing policies to enhance their economic well-being, must have regard to the world. They are induced, at least by the rhetoric of the developed nations, to liberalize their economies and participate in world trade and competition. But world trade and competition is pock-marked by illiberal policies of the developed nations whenever it so serves the developed nations, inducing in return illiberal policies of developing nations. Second, developing countries face not only the demons from without but the demons from within. These include cronyism and corruption, as well as past legacies of statism and discrimination. In this short paper, we observe these problems by examples. Most, but not all of our examples, are about protectionist policy that either obstructs the world trading system or obstructs the integration of developing countries with the world economy; but two examples—from South Africa and China (attacking internal protectionist policy)—involve positive stories of adjustment to the world. First, we address the world trade Doha Development agenda, its recognition that prior trade rounds have especially helped the developed world, and its thus far failed attempt to shift that balance. Second, we examine certain trade and competition issues of China; namely (1) the interplay of U.S. antidumping laws that keep low-priced Chinese goods out of the United States, and U.S. antitrust laws that punish the Chinese response (agreeing to higher prices), (2) China's and its provinces' own industrial policy to protect incumbents against outsiders, and (3) China's merger and foreign investment law; and we consider certain other aspects of China's Anti-Monopoly Bill that incorporates industrial policy in ways that are representative of certain antitrust measures in a number of other nations. Third, we examine the case of South Africa, which uniquely has a moral obligation as well as an economic imperative to provide opportunity for the long-excluded black majority, and to open up channels for competition that were blocked not only directly by the measures of apartheid but indirectly by the economic boycott designed to pressure apartheid's downfall. Also, we examine ramifications for South Africa's competition law of its financing incentive packages designed to enhance exports and jobs. Fourth, we examine a particular trade/competition/industrial policy issue that blossomed into the first WTO antitrust case—a claim of the United States against Mexico for snuffing out competition on cross-border telecom termination fees, which Mexico (not its Competition Commission) defended unsuccessfully as necessary to carry out industrial policy to build infrastructure in poor areas. Fifth, completing the circle, we note the separation of antitrust and industrial policy in the United States, and the always continuing politics of protectionism. Finally, we make recommendations for trying to break the vicious circle of protectionism breeding protectionism.

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  Crime Control and Social Order

  David W. Garland

  This three-volume set of original (classic and contemporary) readings is designed to reveal the broad range of crime control strategies typically encountered in criminal justice systems worldwide. Such a collection is particularly timely not only because of growing concerns over the development of `new punitive' responses to offenders (mass incarceration; new cultures of control, surveillance and security; naming and shaming) but also because of the imperative to unravel the impact that the emergence of supranational legal orders and international standards is likely to have on questions of national sovereignty and the democratic accountability of the nation state. Volume One - outlines the many and varied competing conceptions of justice in national and international settings. Volume Two - explores the varied means of punishment and correction that currently make up the penal landscape. Volume Three - examines how crime prevention, risk assessment and crime science strategies are significantly extending the reach of criminal justice into everyday lives.

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  Death, Denial, Discourse: On the Forms and Functions of American Capital Punishment

  David W. Garland

  The death penalty in America today is a peculiar institution for which we lack an adequate sociological account. The institutional arrangements that have grown up there over the last 40 years appear to put the state, law and lethal violence into a new and strange relation. Yet, our standard explanations are borrowed from historical accounts that were generated to explain the role of capital punishment several centuries ago. We have not yet developed analyses that can explain the distinctive forms and functions that define the contemporary institution. The theoretical frameworks that predominate in the sociology of punishment have little to tell us about the particulars of contemporary capital punishment. When sociologists write about capital punishment, they mostly draw on the work of historians such as Vic Gatrell or Douglas Hay, who write about the eighteenth and nineteenth centuries, or else upon the theoretical ideas of Emile Durkheim, which associate capital punishment with pre-modern penal regimes. Above all, they draw upon the work of Michel Foucault, which, as I will argue, is singularly ill fitted to understanding the modern American institution. The effect of this theoretical orientation is to produce an implicit conception of contemporary capital punishment (where it still exists in the developed world) as a vestigial phenomenon. The modern death penalty is regarded as a relic of an earlier age, a near-extinct practice, badly adapted to its environment, teetering on the edge of extinction. For some American commentators, this anachronistic, residual, status is what accounts for the apparent dysfunctions and irrationalities of the institution. If capital punishment persists in a few modern democratic societies, it does so as a result of some kind of inertia or lag effect. It is a product of the past, not the present, and its destiny is soon to disappear. That this view fits comfortably with the normative sentiments of most sociologists ensures that its underlying assumptions are not too often questioned. The consequence of this neglect is that a number of explanatory puzzles await our attention. Look, for example, at the ‘violence’ of American capital punishment. It is real enough, and lethal. Individuals are put to death, killed by judicial order. An execution must count as a pretty serious form of violence. But the death penalty's form, its techniques, and its performative characteristics tend to work against that connotation. The death penalty is administered in ways that seek to deny its violence, to disguise its force, and to efface its physicality. Executions are represented as painless medical procedures. Their bodily aspects are minimized, their intrinsic violence obscured. But even if we insist, against the grain of the institution, on exposing the execution's violence (and opponents insist that even the lethal injection entails severe physical pain which is all the worse for being invisible—see Hill v. McDonough 2006), we have to admit that this violence is actually a minor part of what one might call the practice of capital punishment. For the most part, American capital punishment is not about executions (which are now relatively rare—more Americans are killed each year by lightning). It is about mounting campaigns, taking polls, passing laws, bringing charges, bargaining pleas, imposing sentences, and rehearing cases. It is about threats rather than deeds, anticipated deaths rather than actual executions. What gets performed, for the most part, is discourse and debate. From the point of view of the system, the discreet violence of the execution is a necessary underpinning, but not the thing itself. Capital punishment is like a credit system with a high volume of circulating value underwritten by a gold standard that is only occasionally cashed out. Look, as well, at ‘the state’ in the capital punishment process. This is another defining element that is somehow hidden beneath the surface of things. If one attends to events, to spoken and written discourse, even to symbols and rhetoric, it turns out that ‘the state’ (in the proper, European sense of the term) is virtually absent. One sees, instead, the repeated invocation of 'the law' and of ‘the people’. Capital punishment is all about the law, the Constitution and the jury, or else it is about the electorate, public opinion, and democracy. When it comes to judicial executions, America's killing state is nowhere to be seen. And what about the institution's social function? Can we suppose that the American death penalty is undertaken as an instrument of crime control and social ordering? Is it a means of reducing crime, upholding law, and keeping Americans orderly? That seems unlikely. Even if one were to accept, for the sake of argument, that penal institutions play a substantial role in the reproduction of social order, it is hard to believe that a penalty which affects so few people could have a major structural impact of that kind. Only a tiny minority of homicide defendants ever face capital charges and only about 120 are now sentenced to death each year. Compared to the tens of millions of offenders who are sentenced to imprisonment or penal supervision each year, capital punishment's impact on social order is liable to be vanishingly small. These, it seems to me, are paradoxes that should invite sociological attention.

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  Penal Strategies in a Welfare State

  David W. Garland

  This three-volume set of original (classic and contemporary) readings is designed to reveal the broad range of crime control strategies typically encountered in criminal justice systems worldwide. Such a collection is particularly timely not only because of growing concerns over the development of `new punitive' responses to offenders (mass incarceration; new cultures of control, surveillance and security; naming and shaming) but also because of the imperative to unravel the impact that the emergence of supranational legal orders and international standards is likely to have on questions of national sovereignty and the democratic accountability of the nation state. Volume One - outlines the many and varied competing conceptions of justice in national and international settings. Volume Two - explores the varied means of punishment and correction that currently make up the penal landscape. Volume Three - examines how crime prevention, risk assessment and crime science strategies are significantly extending the reach of criminal justice into everyday lives.

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  Rethinking the Symbolic-Instrumental Distinction: Meanings and Motives in American Capital Punishment

  David W. Garland

  This chapter uses Kit Carson’s article, ‘Symbolic and Instrumental Dimensions of Early Factory Legislation’ as a critical tool with which to discuss the use of ideas of ‘the symbolic’ and ‘the instrumental’ in the literature on American capital punishment in the contemporary period. Carson’s 1974 article follows Joseph Gusfield in arguing for the importance of the symbolic aspects of criminal law and legislative campaigns. Carson insists that the symbolic and instrumental dimensions of law-making are not only co-present, as Gusfield had observed, but also intermeshed and interactive. Thus, social groups who initially support a piece of legislation for ‘instrumental’ reasons (e.g. because they anticipate that the new regulations will bring them economic benefits) may come to oppose that legislation if its evolving ‘symbolic’ meanings come into conflict with the groups’ values and self-conceptions—if, for instance, the law comes to be seen as inhumane or associated with disreputable groups. Carson argues that symbolic meanings are an emergent property of the legislative process rather than an intrinsic one. According to his account, symbol-formation occurs in the context of an interactive struggle of interpretation and counter-interpretation, against a background of pre-existing conflicts and cultural commitments that provide a basis for reference and association. The symbolic meanings of an issue are not the basis for social struggles as much as their unplanned outcome. History matters. The symbolic meanings of a law or a policy are not given in advance and fixed for all time. Issues take on new meanings and associations in the course of events. Like Clifford Geertz and Max Weber, Carson takes symbolic meanings to be mutable and formed in the course of social interaction rather than pre-given and static. He argues for the importance of detailed historical analyses to trace the events, contingencies and convergences out of which new symbolic meanings take shape. His essay is an exemplary piece of work in which theoretical and historical analysis go hand-in-hand in an argument that is developed with elegance, subtlety and sophistication. In the 30 years since Carson published his essay, the tendency to think about the symbolic aspects of action has become well established in social science and in socio-legal studies. The ‘cultural turn’ has re-oriented sociology, historical work has focused more than ever on matters of culture and actors’ meanings and expressive theories of law have become prominent in the legal academy. This re-orientation has made the study of symbols and symbolic action much more common but also somewhat less precise. The subtlety and care of Carson’s work are not always in evidence, nor is the precision with which he defined his concepts and applied them to his material. Thirty years on, we have followed Carson’s lead but have not always fully absorbed the lessons that he has to teach us. This chapter will discuss a field of research in which symbolism in general and the symbolic/instrumental distinction in particular are frequently invoked by socio-legal scholarship—the study of capital punishment in the United States. It will use Carson’s analyses as a point of departure in an attempt to identify the problems to be explained, to clarify the conceptual issues involved and to refine the kind of analysis that ought to be brought to bear. It will also carry forward Carson’s call for historical and theoretical specificity by suggesting that we must forge new conceptual tools if we are to properly understand the various ways in which ‘the symbolic’ and ‘the instrumental’ (as well as other forms of action and communication) feature in the institution of capital punishment. An inquiry of this kind seems timely. In recent years, it has become commonplace to discount the ‘instrumental’ efficacy of capital punishment and to consider America’s capital punishment laws and litigation as largely ‘symbolic’ in motive and character. Commentators point to the death penalty’s limited impact as an instrument of crime control; to the limited protections of legal rules that are designed to provide the ‘reassuring symbolism of legal doctrine’ rather than to confer any more robust rights to the defendant; to the restricted role of instrumental (as opposed to symbolic) considerations in shaping public attitudes and to the marked contrast between public enthusiasm for enacting death-penalty statutes and institutional reluctance to enforce them. These observations frequently prompt the conclusion that the system is oriented to symbolic rather than to instrumental ends—that capital punishment is all symbol and no substance.

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  The Culture of Control: Social Change and Social Order in Late Modernity

  David W. Garland

  The crime control changes of the last twenty years were driven not just by criminological considerations but also by historical forces that transformed social and economic life in the second half of the twentieth century. For our purposes it is useful to distinguish two sets of transformative forces: First, the social, economic, and cultural changes characteristic of late modernity: changes that were experienced to a greater or lesser extent by all Western industrialized democracies after the Second World War and which became most pronounced from the 1960s onwards. Secondly, the political realignments and policy initiatives that developed in response to these changes, and in reaction to the perceived crisis of the welfare state, in the USA and the UK from the late 1970s onwards. These changes in social and economic policy—a combination of free-market 'neo-liberalism' and social conservatism—had echoes in other states such as New Zealand, Canada, and Australia. But they were developed in their most thoroughgoing form in America under the Reagan and Bush administrations (1981-92) and in Britain under Prime Minister Thatcher (1979-92) and they have continued in more muted forms in the New Democrat administrations of Bill Clinton (1993-2000) and, in Britain, under the Conservative government of John Major (1992-7) and the New Labour government of Tony Blair from 1997 onwards. Leaving aside for a moment the national differences that distinguished the American experience from that of Britain, one can summarize the impact of these developments as follows: The first set of forces—the coming of late modernity—transformed some of the social and political conditions upon which the modern crime control field relied. It also posed new problems of crime and insecurity, challenged the legitimacy and effectiveness of welfare institutions, and placed new limits on the powers of the nation-state. The second set of forces—the politics of post-welfarism—produced a new set of class and race relations and a dominant political block that defined itself in opposition to old style ‘welfarism’ and the social and cultural ideals upon which it was based. Without this political realignment, the most likely response to the critique of correctionalism would have been incremental reform, improved safeguards, enhanced resources, the refinement of procedures. Instead, what occurred was a sharp reversal of policy and opinion and a remaking of the whole crime control field. This chapter will argue that the tunt against penal-welfarism took a ‘reactionary’, all-encompassing form because underlying the debate about crime and punishment was a fundamental shift of interests and sensibilities. This historical shift, which had both political and cultural dimensions, gave rise to new group relations and social attitudes—attitudes that were most sharply defined in relation to the problems of crime, welfare, and social order. These new group relations—often experienced and expressed as highly charged emotions of fear, resentment and hostility—formed the social terrain upon which crime control policies were built in the 1980s and 1990s. The causes of this historical shift had little to do with criminal justice, but that did not prevent it from being massively consequential in its criminological effects. Broad social classes that had once supported welfare state policies (out of self-interest as well as cross-class solidarity) came to think and feel about the issues quite differently. Changes in demography, in stratification and in political allegiance led important sections of the working and middle classes to change their attitudes towards many of these policies—to see them as being at odds with their actuarial interests and as benefiting groups that were undeserving and increasingly dangerous. In this new political context, welfare policies for the poor were increasingly represented as expensive luxuries that hard working tax-payers could no longer afford. The corollary was that penal-welfare measures for offenders were depicted as absurdly indulgent and self-defeating. If the searing experience of Depression and war had been the social surface on which the welfare state and penal-welfarism were built in the 1930s and 1940s, by the early 1980s that matrix of politics and culture was a dim historical memory. The politics of the later period addressed a different set of problems—many of which were perceived as being caused by welfarism rather than solved by it. I will argue that the gradual formation of new class interests and sensibilities came about in response to the crisis of the welfare state and the transforming dynamics of late modern social life, but I will also insist that this response was the result of political and cultural choices that were by no means inevitable. In the following pages I give an account of this social and political realignment. This account looks at the social and historical processes that have reconfigured the way that we live in the last third of the twentieth century and the ways in which we have come to think and act in relation to crime. It is the story of the development of late modernity, our political and cultural reactions to it, and the implications that these have had for crime, crime-control, and criminal justice. My account is not intended as a history of the period, but rather as an exploration of social changes that influenced, or posed problems for, the crime control field. Much of what follows will be familiar to the reader—part of ‘what everyone knows’ about the late twentieth century. But it is important to recall it nevertheless. By calling to mind some of the great social facts of out recent history, I hope to unseat the ‘presentist’ mindset that so often dominates out discussions and diagnoses. All too often we tend to see contemporary events as having only contemporary causes, when in fact we are caught up in long-term processes of historical change and affected by the continuing effects of now-forgotten events. Our present-day choices are heavily path dependent, reflecting the patterns of earlier decisions and institutional arrangements, just as our habits of thought reflect the circumstances and problems of the periods in which they were first developed. The theory of historical change I bring to bear in what follows is an action-centred, problem-solving one in which socially situated actors reproduce (or else transform) the structures that enable and constrain their actions. My substantive claim is that the political, economic and cultural supports that had previously underpinned modern crime control were increasingly eroded by late modern social trends and the intellectual and political shifts that accompanied them. These trends, in turn, posed novel problems, gave rise to new perceptions, and shaped a variety of practical adaptations, out of which gradually emerged the crime control and criminal justice practices of the present period. The theory assumes that the emergence of these practices is typically the outcome of practical problem-solving and of political and cultural selection. In consequence, it is a complex process in which competing accounts of problems and solutions are always in play, different interests and sensibilities are always at issue, and the capacity to select solutions on the basis of hard information is only ever partial at best.

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  Preapproved Boilerplate

  Clayton P. Gillette

  This chapter explores the case in favor of preapproved boilerplate—standard forms that, if approved by the government, would accord their users immunity from invalidation doctrines such as unconscionability. Although a safe harbor can be a useful device in this context, Gillette is skeptical whether the bureaucratic approval process can yield better monitoring of contracts than judicial and market mechanisms.

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  Child Abuse

  Martin Guggenheim

  TLawyers often broadly refer to laws related to child abuse and child neglect as “child protection” legislation. The principal purpose of neglect and abuse laws is to protect children from future harm. A person’s past behavior is relevant in child protection only to the extent that it reflects on his or her capacity to raise children adequately in the future.

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  What Is the Mishneh Torah? On Codification and Ambivalence

  Moshe Halbertal

  In the Introduction to his Mishneh Torah, Maimonides describes one of the accomplishments of his work as having made halakhah (Jewish law) into a transparent, accessible system. Talmudic legal literature had developed as an uncontrollable organism, laden with disputes and fragmented give-and-take recorded in Aramaic, a language no longer used in daily life; as a result, the halakhic material had become unapproachable. Even one who had labored to attain a degree of mastery over the literature could not be assured of the ability to extract practical legal rulings from the talmudic morass. He would always remain justifiably concerned that he had failed to understand the complex debate, that he had chosen wrongly among the wealth of opinions cited in the discussion, or, most of all, that he had missed a reference to his subject elsewhere in the Talmud, in some remote, unrelated context—a distinct possibility, given the Talmud's free-wheeling structure—and that the overlooked reference might have fundamentally changed the picture. These difficulties flow from the talmudic literature itself; to them, Maimonides added his gloomy historical account of the decline of Torah centers in his day, centers that, in the past, had produced halakhists qualified to extract sound, straightforward halakhah from the tangled talmudic literature. By omitting the disputes and debates from his presentation of the halakhah in the Mishneh Torah, by organizing the halakhah in a treatise structured around an orderly and focused arrangement of subjects encompassing all areas of halakhah, whether or not applicable in practice, and by writing the treatise in clear, simple language, Maimonides made the halakhah in its entirety transparent and accessible. As he puts it in the Introduction: “so that all the rules shall be accessible to young and old, whether these appertain to the pentateuchal precepts or to the institutions established by the sages and prophets.” As noted, the emphasis is on “accessible”: what had previously been concealed and convoluted was made bright and lucid, even to novices unfamiliar with the complex literature underlying these rulings. The adjective “accessible” is preceded by the no less important term “all the rules,” which characterizes the treatise as exhaustive as well as accessible. But Maimonides does not stop with this characterization of his treatise as a grand attempt at clarity and comprehensiveness; in the immediately following sentence, he adds the most daring and presumptuous statement ever written by a halakhist about himself: “…so that no other work should be needed for ascertaining any of the laws of Israel…a person who first reads the Written Law and then this compilation will know from it the whole of the Oral Law, without having occasion to consult any other book between them.” Whatever the precise import of this passage-a matter to be considered below—one can readily understand the harsh reactions it elicited along with the powerful hopes to which it gave rise. Beneath this transparency, however, lies an intense ambiguity bearing on the nature of Mishneh Torah itself as a tract and on the concept of authority that underlies it. Every line of the work is, indeed, a spectacular model of clarity, but the work overall is affected, from the outset, by a profound ambivalence that allows for strikingly varied understandings of its nature. The marvelous transparency of the tract's content compels the premise that any lack of clarity regarding its character is no happenstance, no mere failure of expressive skill or analytical clarity. On the contrary, the author himself has drawn a curtain of smoke, leaving his work's character an open question. As I shall try to show, this thick cloud is the intended result of Maimonides' ambiguous formulations in the Introduction to the Mishneh Torah and his contradictory statements in various letters in which he comments on the nature of the tract. At first glance, the question “What is the Mishneh Torah?” has a clear and simple answer: it is an effort to create a comprehensive halakhic code. But the term “code” is itself vague, allowing for a wide range of meanings. The purpose of this article is to uncover and clarify the various possible ways of understanding the Mishneh Torah's character as a text, by examining how Maimonides himself formulated the complex alternatives. As far as I know, this fundamental question has not been considered in any study of the Mishneh Torah. In addition, repeated examination of Maimonides' self-perception has left that question unresolved. The key to the various meanings of the work and to the reasons for that meaning's ambiguity is to be found in a close reading of Maimonides' Introduction. A close reading of the Introduction will produce two radically different understandings of the Mishneh Torah. The first option, the moderate one, perceives the Mishneh Torah as the representation of halakhah, and the second option, the more radical one, perceives the Mishneh Torah as the halakhah. The clarification of these two options and their far-reaching implications will be dealt with in this article. But before raising these options it is important to deal with a prior question—the role of the history of halakhah as Maimonides described it in his Introduction in supplying a precedent and a proper context of the Mishneh Torah. The explication of the history of halakhah in the way Maimonides outlines it will be the focus of the first sections of the article and it will provide the background for the presentation of the alternatives in understanding Maimonides' own conception of the Mishneh Torah.

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  State Autonomy in Germany and the United States

  Roderick M. Hills Jr. and Daniel Halberstam

  With feedback from adopters, editor Laurence O’Toole retains important classic selections from earlier editions while freshening this volume with new selections that cover not only the impact of recent fiscal developments and international influences on U.S. intergovernmental relations, but also explore the key role of the Supreme Court in shaping the system’s evolution in such areas as homeland security, interstate relations, and local finance. Judicious editing of essays and substantial part introductions make American Intergovernmental Relations an invaluable text and an engaging read.

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  Making Sense of Liberal Imperialism

  Stephen Holmes

  Can a militarily irresistible foreign power help establish a lastingly democratic form of government in a country with no history of democracy? That a powerful military can more easily oust a dictator than erect a democracy has been demonstrated, if it needed demonstrating, by the U.S. invasion of Iraq. But one misbegotten experiment should not be allowed to disgrace and discredit the very possibility of democracy promotion in a previously undemocratic country by a foreign and therefore, by definition, undemocratic power. That is why it may be worthwhile to reinterrogate John Stuart Mill. Did the greatest nineteenth-century theorist of social improvement and liberal democracy believe that foreign rulers could foist this particular forward step on what he called “backward populations”? Why would foreign powers try? Is it rational for them to undertake such a project? Can there be too much democracy from their point of view? What are the principal reasons why foreign democratizers may fail? In his general discussions of democratization, whether homegrown or imposed, Mill tried to occupy a middle position between voluntarism and fatalism. Liberal democracy has specific preconditions and cannot be established, at the crack of a whip, anywhere anytime. On the other hand, originally absent but essential preconditions of liberal democracy can themselves, at least occasionally, be conjured, intentionally as well as inadvertently, out of existing raw materials. This is why Mill repudiates determinism, concluding emphatically that “institutions and forms of government are a matter of choice”. What is true of forms of government in general is also true of liberal democracy. A species of tree may be unknown in a given geographic area and may not materialize there spontaneously. Nevertheless, if implanted by a wandering arborist, a nonindigenous tree may survive, flourish, and reproduce. Analogously, a country that has long lived under autocracy and has not sprouted democratic government spontaneously may, if democracy is implanted by itinerant democratizers, become enduringly democratic. This is roughly Mill’s position. Societies and cultures are complex and malleable enough to support a variety of political institutions different from those that currently exist. Production technology, such as the cotton gin, is easier to transplant than interaction technology, such as banking law. But even production technology has “cultural” preconditions. Workers must possess the skills needed to make the machinery function properly. With time and training, indigenous workers can familiarize themselves with novel technology, imported from abroad, and hone the skills necessary to operate it successfully. Something similar is true about legal and political institutions. Citizens of one country can learn to “work” institutions borrowed from another country. Legacies of a society’s past, according to Mill, are far from negligible. They can hinder and even derail political reform. But they also underdetermine present and future behavior: “People are more easily induced to do, and do more easily, what they are already used to; but people also learn to do things new to them” (CW XIX: 379). Human beings chronically underestimate their own capacity to adapt successfully to change. Students of human behavior, instructed by hindsight, should not commit the same mistake.

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  The EMU and Fiscal Policy in the New European Community: An Issue for Economic Federalism

  Robert P. Inman and Daniel L. Rubinfeld

  As the countries of Western Europe move to a more centralized economic order, questions of federalism abound. A primary issue within the European Community (EC) relates to the often-used concept of subsidiarity: the guiding principle that government structure should internalize all economic externalities to the smallest level of government possible. To what extent should economic powers in the EC be centralized, and to what extent should they remain decentralized at the Member State level? This paper examines the general issue of federalism, or subsidiarity of economic policy, by evaluating the possible allocation of monetary and fiscal policy within the new EC. To determine whether a policy-making function should be centralized or decentralized, three questions must be answered. First, does decentralizing policy-making to the level of the Member States generate substantial economic spillovers between states? Second, if the answer is yes, we then ask whether a market mechanism or negotiated exchanges (i.e., Coasian bargains) will overcome the potential inefficiencies from these policy spillovers. If the answer here is no, we then turn to the possibility of centralized policy-making and ask, finally, can a central government perform the policy function more efficiently than individual Member States, recognizing that private politics, not social welfare, will be the driving motive behind central government decisions? Only if the answer to this third question is yes can we recommend centralizing government policy-making.

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  A Cosmopolitan Judge for a Cosmopolitan Era: An Essay in Honor of Carl Baudenbacher

  Samuel Issacharoff

  Sometimes the visual images seem to capture it all. My memories of many conversations with Carl Baudenbacher are always shaped by the surroundings. A glass of wine amid the brilliant sunlight of Austin, Texas. An elegant drink at a cloistered Viennese watering hole. A sausage sandwich over an open fire in the Swiss hills. A comfortable after dinner gathering in New York. Each image differs in its national setting. But in each there is the unmistakable level of comfort and intimacy, shared among people accustomed to a world where ideas, friendships, and engagements have long ceased to honor formal borders. And so it is that a Swiss law professor, sitting as a representative of Liechtenstein, living in Luxembourg, should find himself passing on the legality of North Sea fishing arrangements, or Icelandic alcohol sales, or the introduction of vitamins and other additives to the food supply of Norway.