Tuesday, October 27, 2015

Theory of Second Best in Law Schools: Maybe

The theory of second best may be the most overlooked concept in economics and in life. That's a good thing because it can make things very complicated. As far as I know, it originated in economics but as a general matter it stresses the interdependence of things. In economics it might work like this. There is a legal monopolist raising prices and restricting sales to a group of scattered buyers. The buyers then decide to band together and say they will buy nothing at all unless prices are lower (as in closer to competitive levels). Now a do-gooder antitrust enforcer come along and thinks, not out loud I hope, "I can't do anything thing about that monopoly but at least I can put a stop to that price fixing." Or, "I cannot do anything about that monopoly but the second best thing I can do is stop that price fixing." He or she does and things are worse than if there were price fixing. In reality the actual  best solution is to  turn a blind eye to the price fixing by buyers.

Or how about his one. You gather all the ingredients together to make cup cakes. You realize you are missing an ingredient and you think "So they won't be perfect but I have almost everything. I won't have perfect cup cakes but these will be almost as good."  Your cup cakes are a disaster but you could have made some damn fine cookies. Making cookies might have seemed like second best to you but they were actually first best.  You neglected the fact that that missing ingredient pulled everything together like the Dude's rug.

So, does any of this apply to law schools? I am not sure but consider this. You want to have a externship program. You say it is so students will be more employable and will get "real world experience." (Actually come to think of it, it is a real world experience -- they are not paid.) In fact, not only are they not paid but they must pay the law school for the right to receive credit for working for nothing. (No, I am not making this up.) To get your hypothetically-working-full-time-but-otherwise-not-that-interested faculty to arrange externships you pay them based on the number of externs they can line up. Where do they find the time? ( Remember law faculty often fall in the category of working full capacity while having excess capacity.)

Call it faculty welfare -- students (the ones working) are taxed and the money is transferred to faculty (the ones kinda working)   Pretty soon you are paying hundreds of thousands of dollars to support the students-work-free-and-keep-others-from- being-paid-but-professors-rake-in-the-dough-while-not-writing-or-teaching Program.

Not every catastrophe is the result of making a decision without considering all the variables that must be in sync to assure a good outcome.  In this case, starting an externship program might have made sense if all your assumptions about faculty willingness to participate held. Once that was not true, your second best solutions was to pay them. But, given all that, paying may not  have been the best solution. In fact, the funds might have been used for a completely different endeavor that would have benefitted students even more. (deb, we need to stop meeting like this.)

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