Wednesday, January 21, 2009

Thanks to Larry Solum for the shoutout

That was very nice of Larry Solum to post a mention of my new paper, The Assumptions Behind the Assumptions in the War on Terror, on the Very Great Legal Theory Blog. Even nicer of him to call it highly recommended! Alas, I’m not so sure I highly recommend it, though. I picked an easy target and then scattered shots all over the place. There are some important things in there, but I don’t think it’s the best organized or written thing I’ve done.

But I think the topic is hugely important, and I plan to pursue it in a series of articles or some kind of venue.

One perhaps overlooked part of the article, however, is the comparison of cost benefit analysis comparisons in private business settings versus public governmental settings. As the article notes, in the private firm setting, the comparisons are automatically self-constraining - meaning that you don’t wind up comparing completely wacko things, or in other words, private firms automatically tend to limit their comparisons to things that are in some real sense comparable - because they have no special obligation or necessity to be involved in any particular line of business.

Government, on the other hand, doesn’t have that luxury - it must be involved in radically different forms of comparison because it has to be involved in the provision of things that involve different and plural values. The mechanisms of comparison developed for private firms, however, tend to be developed - NPV, etc. - within a constrained universe of things to be evaluated and compared, in a way that is not true of public institutions. This isn’t exactly news, of course; public management theory has recognized this difference between it and private firm management decision theory for a long, long time. But I don’t see the distinction showing up so much in the law and economics literature as I would have thought.

This is one of those observations that tends naturally to occur to someone like me, of that small subset of people who do both finance law and national security and public international law. There is something peculiar, at least to a finance professor like me, to seeing a technique that has a routine, less than transcendental meaning within the world of private business, ratcheted up to be a kind of philosophical talisman to be applied to, well, everything. Tools like NPV have meaning - says this finance law professor - only within bounded universes in which something else sets the terms of what can be meaningfully compared. NPV depends upon exterior concepts of meaning; it does not generate them itself.

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