While this may be a little tangential to the normal run of posts here, to me managing regulatory risk is one of the things that any good risk manager has to do. Understanding the abilities and restrictions that the law has is an important part of that.
Over the last few months I have been putting the occasional post up here on what I feel is wrong with a lot of the regulatory framework. Skepticlawyer, being the very good lawyer she is, has done it better.
Legislation has two limits. One is practical (call it a ‘means-end’ limit). The other is principled (call it a ‘normative’ limit). Most philosophers spend all their time arguing over the latter: John Stuart Mill’s ‘harm principle‘ represents an attempt to get at what a principled limit on the powers of legislation may look like. This is philosophically interesting and forms a major part of my DPhil thesis here at Oxford. In the case of conservatives and social democrats, however, both groups engage in major legal wish-fulfillment: they think they can ignore ‘means-end’ limits. That is, they seem to think that passing a law will make it so. If wishes were horses, people, beggars would ride. They think they will, for example, be able to make abortion illegal (or greatly restrict access to it) with no social or economic comeback, or impose salary caps on business executives without hemorrhaging talent overseas or to other industries.
This is in the context of a piece on the Left in Australia – but the second half of the piece goes on to more general issues and it is this section of the post I would encourage you to read. It starts at the third paragraph after the blockquote in her piece.
7 comments
30 September, 2009 at 01:42
skepticlawyer
Thanks for your very kind words. It’s nice to know that not everything in my thesis is dross!
30 September, 2009 at 10:32
Andrew
Hardly likely, SL. I am looking forward to you finishing that degree and then writing some very good stuff on this area. Those in favour of more rules (both on the Left and the Right) have had the intellectual playing field too clear for too long. I believe you can add in a worthwhile manner to the contrary argument.
30 September, 2009 at 10:57
ABOM
Please look at Rothbard and Hoppe for more good work on the intrinsic “costs” of enforcing “good” laws.
30 September, 2009 at 13:05
Alice
Skeptic lawyer
Well I dunno about you and your suggestion that “talent is going to hameorrhage overseas” if you dont cap exec salaries somehow and let me say it BUT, just how long do these fabulously remunerated execs last before they haemorraghe their own bodies on a plane anyway. Not bloody long.
Talent? What talent did Trujillo have and how long did he last?
How the hell you are going to stop the mad speculation of the US financial system, with the Fed involved, without regulation is beyond me. I totally disagree with more of the no regulation garbage (especially over banks).
Listen to this man, manager of a hedge fund in the US. Even he is saying the US government has got itself in one big hole of a mess by sitting back and allowing the speculation to get way out of hand.
Mark this day and remind me that I told you so…if it helps skeptic lawyer stop dreaming about de-regulation and recognise who actually needs de-regulation (small business and individuals) and who needs lots of regulation and preferably strong regulation (large global financial institutions and there is one thing in the way of de-regulation I would suggest for them – get them out from under the federal banks skirts – no-one is too big to fail).
But to even come out with that trite comments “we will haemorrhage talent overseas” by not doing something about the obscenity that executive remunerations has become (blatant blatant greed and theft of shareholders money – )…is naive in the extreme.
Andy and Skeptic lawyer… what a disappointment. We really dont need this right now. You both need to think long and hard who specifically needs de-regulation instead of just “any de-regulation is good”. Crap it is.
Id rather hear what Julian Robertson has to say and you both should as well.
http://grandich.agoracom.com/2009/09/hege-fund-legend-julian-robertson-paints-the-case-for-gold-serious-inflation-us-armageddon-if-chinajapan-stop-buying-debt/
30 September, 2009 at 15:35
Andrew
Alice,
If you are addressing that to SL you may want to put it on her blog.
30 September, 2009 at 16:06
Alice
What blog? Ill look for it. I am addressing it to skeptic lawyer. Ive just read the govs draft legislation on exec pays and it is SO STUPID (only if it gets voted down two years in a row by 20% or more of shareholders will the board have to resign). Its SO stupid Andy Im almost becoming libertarian and small damn govt when they are that stupid! Every second year?? NOTHING will change. So they just get away with paying themslves a motza every second year to make up for the year they cant.
Insane Andy, Insane.
30 September, 2009 at 16:19
Andrew
I linked to her full piece, on her blog, above.