Sunday, January 04, 2015

Is Legal Scholarship a Public Good? If So, What On Earth are We Doing?

I have often wondered on this blog what the public good rationale is for legal education. Is there a free rider problem when it comes to legal education? I do not see how. So, perhaps the rationale is that there is a need for legal assistance that is not reflected in the market because people just cannot afford it. There is a "need demand" but not an "economic demand." I've always suspected that publicly supported legal education is less about subsidizing less affluent potential clients than it is about a system for keeping legal fees lower for those who actually do have money and property -- sort of a reverse Robin Hood deal.

But what about legal scholarship? A huge amount is invested in it each year. From the public good perspective the logic would have to be that it would be "under produced" if it were not subsidized. The typical argument would be that no one would invest in legal scholarship even though it is beneficial because others could free ride off the legal research of others. So, everyone would sit around doing nothing while waiting for someone else to write about some critical issue and in the meantime all is lost.

Of course the public good logic has two steps. The first is that something is produced that actually has a positive impact on others. The second is that, since the writer cannot internalize the benefit of that positive externality, he or she will shut it down and the positive benefits will not come into existence.

My impression is that legal scholarship is very weak on both steps. I feel certain that some legal research does create positive externalities. But even here there are two problems. A positive externality probably depends on whether you agree with the information in the article. For example, I do not regard the massive amount of legal (and economic) research that led  the Supreme Court to reverse its view on Resale Price Maintenance as the source of a positive externality. Others certainly do. These are not externalities like cleaning the air or water. Their positiveness is in the eye of the beholder. The other problem is that the decision about what scholarship should be done that will lead to positive externalities and, therefore, justify the subsidization is made by narrowly educated people who in most instances have only a very limited feel for what investment in scholarship is most needed.  Instead they want to be noticed by other scholars.

On the second point, if legal research were not subsidized would it go undone? Some would but massive amounts would still get done. For example, where there is money to make by winning a case, convincing a legislature, or and administrative agency, the backing would be there. In fact, even huge and well funding non profit groups would finance legal research to support whatever cause they favor.

I certainly could be wrong on this but it would be only on the matter of degree, What I am sure of is it makes no sense to spend $300 million a year on research that should 1) generate positive externalities
and 2) would not otherwise get done and allow law professors to decide how it is to be invested.

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