[Andrew Morriss (guest-blogging), August 17, 2005 at 8:18am] Trackbacks
More on state support for legal education:

Commentators on my last post on state support for law schools offered some additional rationales I didn't include: 1) Having attorneys familiar with local law. 2) Contributing to a viable state legal culture. 3) Cronyism, patronage and institutionalized graft. 4) the library, at least, is a public resource. 5) providing a middle class subsidy. 6) making money for the university. 7) "pride in the great state school" as a benefit to residents. 8) assistance to the legislature and judiciary. 9) general externality of more education.

Some comments: 1) Local law knowledge: This is probably inversely related to the U.S. News ranking of the law school - the more prestigious the school, the less local it becomes. Moreover, funding a state-owned law school (which I am tempted to call the Stalinist mode of production, since it has the state owning the means of production) (which is akin to state ownership of an electric utility plant) - a commenter rightly criticized me for using the term Stalinist - is an inefficient means of doing this. Subsidizing only courses with primarily local content, and doing so at all law schools in the state, would be more efficient (although it would also be susceptible to faculty slacking by sneaking other content into the course, it doesn't seem worse in this regard than the slacking that occurs from just setting up a school generally). I can see an argument by the local judiciary and bar that they would like to see the state fund production of local legal knowledge. I don't see why that requires the state to own and operate a law school.

2) Local legal culture: Why (other than excluding lawyers from other states) do we want a local legal culture? If local legal culture means quirky ways of doing things, it is just a barrier to entry. If it means having relationships among members of the bar that promote good professional behavior, state law schools seem a really indirect way to achieve this, since we're spending a lot of money on people who don't stay in the state. Without being entirely tongue-in-cheek, it would probably be a more cost-effective means of producing that kind of bonding to send the local bar white water rafting for a few days each year than to run multiple state-owned law schools.

3) Cronyism, etc. An argument that explains but doesn't justify.

4) Library: a great point in 1950. Not so great now. A better use of state resources is a database of court opinions, statutes, regs, etc. available for free via the web. If more is needed, hiring some reference lawyer-librarians to help the public would enhance the service. A subsidy of print-oriented law libraries in fixed locations doesn't do most of the state's residents much good.

5) A subsidy for the middle class. An argument that explains but doesn't justify.

6) Making money for the university. An argument that explains but doesn't justify. State owned and subsidized businesses shouldn't be competing with private businesses. (Allowing public libraries to compete with businesses like Blockbuster and Netflix, for example, through DVD rentals is problemmatic too.) I am not sure this does explain it, however, since many state law schools undercharge the market rate. (That might be a subsidy for the faculty, who like the prestige of a higher ranked law school more than they like generating income for the university.)

7) "pride" as a benefit for residents. I suppose this exists, although presumably the football program ranks higher as something the public demands. Is this important enough to justify creating (UNLV is a recent example) and maintaining state law schools? I am very dubious about that.

8) Helping out the legislature and judiciary. Good point, although both branches of government have legal staffs (law clerks, staff attorneys, etc.) Again, no need to own the means of production, however, to secure this. Law professors can be hired for specific projects and drawing on a national pool would give the state more to choose from. Perhaps there is some value to having legal academics in a state, to offer free-lance critiques. I'd like to see some evidence of those critiques having a beneficial influence before I accept that as an argument. And, since most states have multiple private law schools, it isn't clear why the state needs to own more.

9) Education is good generally. True enough. But owning the means of production still seems to be an inefficient way to get it (more principal-agent problems, etc.)

Finally, Frank Cross raises a really interesting point about transition costs. I'm going to have to think about that one - perhaps the justifications to support creating state law schools existed in 1890 but no longer do. Does that mean we should close them now? More thought is definitely required on how to respond to that.

Related posts

Andrew, most newer opinions, as well as statutes and regulations are available online; it isn't these things that public patrons necessarily need when they come into the library. What they need are the secondary sources, such as ALR, CJS &AmJur, which explain the law (something we librarians can't &don't want to do.) And that stuff isn't online for free. Not to mention citators.
8.17.2005 9:43am
My guess is that this will come down to some sort of public choice problem. I find compelling the arguments that there are likely to be much more efficient and targeted ways of achieving all the plausible goals of a state-owned law school. But without the law school as an anchor, is it plausible that these programs will actually be given adequate funding through the mechanisms of state governments?
8.17.2005 9:46am
Simon (391563) (mail) (www):

Is there some limiting principle that limits your argument to public law schools? Or should we abandon all public education as a unnecessary foray into Stalinist modes of production?

8.17.2005 10:04am
Grant Gould (mail):
Allowing public libraries to compete with businesses like Blockbuster and Netflix, for example, through DVD rentals is problemmatic too.

I'm a bit confused by this. Libraries were loaning DVDs before Netflix; doesn't this argument mean that if I started a business in book rentals, it would become problematic for libraries to loan books?

The whole argument that "state subsidized X shouldn't compete with private X" is really only compelling if the state got into the business late. I don't think too many private law schools are being blindsided these days by the sudden appearance of state-funded competitors.
8.17.2005 10:37am
Craig Oren (mail):
poor Gene -- he's going to have to hunt for an honest job instead of being subsidized by the good people of California.
8.17.2005 11:03am
Kate Litvak (mail):
You are essentially asking why the government should disperse resources in-kind (via subsidized law schools), rather than in-quasi-cash (via vouchers) or in-cash (grants). A broader way of asking the same question: Why do/should we have *anything* state-owned and state-operated? All schools (including K-12); all parks; all libraries; all roads; and yes, the army and the police.

I am afraid, I won't be able to contribute to the voluminous academic literature on this subject in this modest comment.
8.17.2005 11:06am
SteveL (mail) (www):
The only real reason is the prestige of the local state univeristy. In Massachusetts, UMass is clearly in the shadow of UConn (which has the only public law school in New England, and a better academic reputation), not to mention Harvard, BC, BU, Yale, Dartmouth, Brown, and countless others. The Univeristy thought a law school was the answer, but the state shot it down due to cost and lack of need.

So it helps the presitige of both U-Michigan and U-Virginia that their law schools are well regarded. And one could argue that it helps the residents of the state that they can attend a prestigous school at lower cost that non-residents and much lower cost than private school.

To me the whole issue begs the question, should any level of education, from pre-school through professional school, be state owned and operated? I would certainly prefer that all education was private at all levels and the savings passed on to tax payers or in the form of vouchers.
8.17.2005 11:23am
Non-elite scholar (mail):
In these days of declining state funding (rejoice if you're inclined in Andrew's direction; mourn if you lean the other way), state "owned" "operated" or "funded" are often misnomers. Many state law schools now get less than 50% of their support from the state--in fact some are well below 30%. At that point the proper term is "state subsidized." The point is more than one of mere semantics since *all* law schools receive government subsidies (government backed student loans enable high tuition, scholars receive government grants, etc.). Government subsidy just becomes a matter of degree. I'm willing to wonder (but not enough to try to determine either way) whether a prestigious "private" school might receive more government support than lower tier "state" school.
8.17.2005 11:48am
Trenchard Gordon:
I'm a bit confused by this. Libraries were loaning DVDs before Netflix; doesn't this argument mean that if I started a business in book rentals, it would become problematic for libraries to loan books?

I suspect it's irrelevant who got into the act first. If the state had been the first to provide food, cars or clothing, would it therefore follow that it ought to remain in that business and continue to crowd out private providers?

On a related note, here is an interesting little piece on the rise of public libraries at the expense of private ones.
8.17.2005 12:38pm
Anderson (mail) (www):
Is there some limiting principle that limits your argument to public law schools? Or should we abandon all public education as a unnecessary foray into Stalinist modes of production?

Right---beware the argument that proves too much.
8.17.2005 1:12pm
Dilan Esper (mail) (www):
I agree with what others have said about law libraries-- there is a lot of stuff that you need to prosecute or defend cases that isn't online, either because it is copyrighted (such as treatises) or because nobody has yet deemed it economical to put it online (such as judicial decisions in a number of states, many municipal and local laws, opinions of attorneys general, etc.). Also, even when things are online, they aren't always easily accessible.

So there's a strong case for state-subsidized law libraries. However, there may be a better argument for Mr. Morriss' position, which is, there's no reason why state-subsidized law libraries should be located at law schools. In other words, the people who really need law libraries are pro se litigants and lawyers who need to access materials that they do not have access to in their office libraries or by computer. Thus, the places where you need to locate such facilities are where the users of such facilities tend to congregate, i.e., near courthouses.
8.17.2005 3:20pm
Andrew Morriss:
On "my position" - I'm a skeptic about public funding of things in general, but here I really am just asking for arguments for state funding to see what they are. I haven't heard many good ones before this thread, so it is a real request for information.

Slippery slope arguments are OK - but "proving too much" isn't a response. I do think that we ought to periodically ask why the state is funding any particular activity, especially if it does it via owning the means of production. But that isn't the question here - which is why fund legal education by owning the means of production. That the state makes other bad choices (owning golf courses, for example) with its limited resources, why does that excuse this particular choice from being examined?

Let's put this into the context of a specific comparison - why should Ohio fund state law schools rather than put the money into K-12 education (in whatever form suits your fancy - vouchers, higher teacher pay, or whatever) when (a) there are lots of private law schools in Ohio and (b) Ohio's public school funding seems to be a major and ongoing crisis.
8.17.2005 3:37pm
Why have any public education? I mean, we don't want to be unjustifiably subsidizing the middle class, do we? Trash the whole concept, who needs it?
8.17.2005 4:01pm
Simon (391563) (mail) (www):

Is it consistent with your goal "for arguments for state funding to see what they are" to tie public education — or, indeed, almost any public expenditure — to Stalinism? I'm surprised that when you grasped for a way of describing public spending you couldn't find a term throughout the long history of public works — dating back to the back to the very beginning of recorded history — more appropriate or accurate than a twentieth century ideology responsible for the deaths of tens of milions of people. Nope, only "Stalinism" would help clarify the debate.[1]

But on the merits of the argument (keeping focused on schools):

1) Why should we accept your premise that privately-funded schools would be any more cost effective than public ones? (Or that the solution to a funding crisis among public schools in Ohio is to strip them of even more (or all) funds?)

1a) A specific example: Forget about transition costs, what about transaction costs? What are the costs to the state or private law schools of complying with this panoply of grants, incentives, and vouchers? Do you have any data, or are you just guessing that your approach will result in a cost savings?

2) Why should we accept your premise that the cost of a particular good is the only measure by which we should judge whether it should be run by public or private entities?


[1] I'm going to set aside the whole issue about whether you've even used the term correctly when discussing a market as varied as legal education.
8.17.2005 4:10pm
In line with Simon, we might see a public law school as akin to a specialized agency responsible for purchasing and managing all the various goods (library books, experts-on-call, and so forth). Perhaps such an agnecy would end up lowering transaction costs, monitoring costs, and so forth. Or perhaps not ... but we are at least sketching out the argument.
8.17.2005 4:54pm
Andrew Morriss:
OK, "Stalinism" was over the top - although I would offer in my defense that it was the economic, not the mass-murdering aspects that prompted the analogy.

But let's call it "public ownership of the means of production" as the description of public funding.

In response to Simon I'd suggest that (1) there is a presumption that private sector provision of goods is more efficient than public sector provision. It isn't conclusive, but it ought to be there. Moreover, there is very few areas where U.S. governments have opted to own the means of production. Consider electric plants: in many countries electric plants are owned publicly. That is pretty rare (although not unheard of) in the U.S. We opted for a regulated monopoly instead. That puts, I think, the burden on proponents of public ownership of the means of production to justify the initial move into public ownership. (And, I will get back to transition costs later, but I think we're making progress on the initial issue and so I want to keep them separate for now). I do think we have a reasonable basis to conclude that the private sector is more likely to be efficient at producing any particular good.

On Simon's second point, I am not sure what other measure we have than cost. Perhaps he can elaborate? What kind of other data might we have to evaluate the public / private choice?

Medis suggests that perhaps a public law school might reduce transactions costs for managing the provision of a variety of goods that come from law schools (library services, education, experts). Why might that be?

It certainly lowers contracting costs to bring all those functions into a single firm, assuming the firm has good governance provisions to handle its own principal-agent problems. Universities may not be the best case for that, especially professional schools where the profession gets to rent seek through accreditation standards too.

What kind of data would we need to test this? Perhaps some sort of cost data on public vs. private universities?
8.17.2005 6:26pm
I'm not sure how to test these propositions. But what I had in mind is the difference in costs between something like one state organization doing all the purchasing, and a number of different programs that would still require state administration (providing legal documents and services to the public for free, providing subsidies for legal education (perhaps with a local-content preference), contracting for legal experts to provide services, and so on). So, it doesn't seem like the public/private university data is what we want. But it also does not seem like just any firm data will do, because obviously schools aren't quite firms.

Incidentally, exactly how far are "public" law schools from the regulated industry model? Sure, they are technically non-profit, but that is that really an important distinction when the managers are paying themselves quite handsomely?
8.17.2005 6:58pm
Simon (391563) (mail) (www):
Several thoughts:

1) I'm still not convinced why we should presume, if not conclude, that private actors are more efficient than public ones. This is often asserted (and assumed), but I've never once seen a "return on [ ]" measure for a public law school (or any other governmental enterprise). Perhaps I am not reading in the right places, although I suspect that such calculations, and by extension such comparisons, would be difficult to tease out because public entities oftentimes operate under rules far more restrictive than their private counterparts, and to make the evaluation honest we would have to know how much those rules were "worth." I suspect the next study quantifying the value (not the cost) of the Hatch Act will be the first, for instance.

2) Any general discussion of what sorts of activities ought to be administered by a public versus private actor will soon run afoul of what I would call the fallacy of inherent governmental function. The concept of "inherent governmental function" is vacuous. Given enough time we can reach back into history and find examples of almost everything a public actor administers being handled by a private one, including a whole host of things courts, law enforcement, military, you name it. Governments most often entered these "markets" because private administrators failed by some measure or another.

3) To answer Andrew's question about what sort of other goals we want to achieve, I would offer a three quick examples: res publica, academic and intellectual freedom, a local legal culture (yes, it is important, and no, it isn't attainable simply through a few weekend excursions, or even a couple "local law" classes). I'll skip discussing the first for now, and third, I'm sorry to say, is almost self-evident. As to the second: as perverse as it sounds, for instance, I think its pretty clear that teachers at public schools have more academic freedom, at least as an initial matter, than those at private schools. (Depending on the issue, of course, that observation may be reversed when applied to the schools themselves.) To the extent then that we want to protect the friction between teachers and their superiors, public schools are advantaged.

4) Now a bit more on transaction and administrative costs. I will concede that it is possible to envision a world where the government and private actors, through a series of laws, grants, vouchers, and contracts, recreates every benefit offered by state administration. (Imagine a privatized police force and judiciary that through contract guarantees every criminal procedure right announced by the Supreme Court). I think it obvious that the administrative and transaction costs associated with such a world (notice now I'm not talking about transitional costs) are crippling, and would protest vigorously the usual attempt to assume them away. The Marquis of Queensbury would be aghast at the idea that one side leaves its corner burdened by the weight of the world as it is while the other side carries on its shoulder only the weight of the world as some wish it might be.

8.17.2005 8:02pm
Bruce Hayden (mail) (www):
I think that you can use the public enterprises cost more in many areas, but not sure it works that way in higher education. Right now, it almost seems like that is one area that is almost immune from economics, with tuition costs rising significantly above inflation (yes, health care costs do too, but at least there we have some good excuses, including transfer payments and litigation costs, both malpractice and excess diagnostics).

Maybe I am a bit biased here in CO, as we are currently watching the downside of public higher educational employment with the Ward Churchill scandal. Normal tenure would have made him somewhat secure, but the fact that he is also a state employee makes him all but unfirable.

Which gets me to the University of Colorado problem in general. Average teaching load across the University for tenured full professors is somewhere around two classes a year. That is one a semester, with summers off. I assume that their law school is better, as it would seem to be harder to get research grants there that would excuse this, but don't know. In any case, this is part of the downside of a state school - in the long run, accountability is almost invariably lost.
8.17.2005 9:05pm
Why have state law schools? Because government has shown that it can run law schools at least as well as the private sector. If government does something well, why change it?

And what would the transitition be? Closing law schools? Selling them? If so, to whom? What makes us think the buyer would do a better job?

As to local law, that's already taught by the private sector. It's called BarBri.
8.18.2005 9:49am
Trenchard Gordon:
Governments most often entered these "markets" because private administrators failed by some measure or another.

I believe this is wrong both historically and in terms of sound economic theory. Socialization of industries has almost always been followed by higher prices and lower quality outputs, due to the state's inability to make use of the diffuse information that only market prices can provide.

This effect is somewhat blunted for U.S. law schools who must still compete in the national market for students. Being less removed from the information and incentives of the marketplace, they don't fail as badly as, say, public elementary schools where shopping around carries higher opportunity costs.

Curiously, it is California, that seems to allow the most market latitude for law schools, since it allows graduates of unaccredited schools to sit for its bar exam. Some of the small schools that have sprung up in response to this freedom have been fly-by-night losers that go out of business quickly. Others, however, offer living proof that with a little innovation, legal education can be provided effectively, at low cost, by the private sector. One such school, plucky little Pacific Coast University, has been graduated California lawyers for 78 straight years. Current annual tuition: $3,000.
8.18.2005 3:19pm
Being less removed from the information and incentives of the marketplace, [state law schools] don't fail as badly as, say, public elementary schools where shopping around carries higher opportunity costs.

What evidence do you have that state law schools are any worse than private law schools?

I've seen a lot of pure theory about why the state shouldn't run law schools, but I haven't seen any evidence that the private sector does it any better. To the contrary, a few people have argues that in at least one state, Ohio, the "government" school is the best one in the state.
8.18.2005 3:57pm
I see that the comparison to Stalinism has been crossed out. Nonetheless, to this outsider, the law review paper strikes me as having a tone that is less than fully temperate. For one thing, my own concept of the limited role of judiciary is somewhat startled by the idea that the judiciary should adopt a particular theory of social organization and judge all social institutions by their adherence to that one theory. For another, support for the theory struck me as limited — there seemed to me to be more invective than reasoned argument, and much of the argument struck me as being essentially ideological rather than empirical in character.

I'm just a vistor here, but I must say I was personally left doubtful about the claims made. If all of human life should be regarded as being a commercial business, it is not clear to me why the Framers granted the Federal goverment limited powers, since the Commerce Clause alone would seem to encompass everything.

Moreover, any of the substantive problems found with the ABA's current approach, many no doubt legitimate, could be corrected by less radical means. Diverse approaches could be tried out, and experiments held to see which approach works out best, without the sort of competition in which every law school regards every other as the enemy, and educational methods are treated as business trade secrets and not shared. I have always thought of a profession as combining commercial and non-commercial elements, and it strikes me that it is possible to find the non-commercial elements important without being a Stalinist.

Marriage strikes me as a good example. Perhaps life would be better if we left matters to prostitutes, artificial insemination clinics, and day care centers. No doubt the Gross National Product would be greater if we did this, and economists would no doubt treat the change as a switch from economically unproductive to economically productive tasks.

But it seems to me something would be lost by such a change. Traditional society treats such human emotions as love, loyalty, integrity, and pride/shame as motivations which, in many human beings, are to this day at least as important as money.

People who wish others to be motivated only as they would have them be frequently denounce older forms of motivation in loud terms, as immoral, treasonous, sacriligious, shameful. Perhaps the very purpose of the academy is to permit sober reflection, rather than invective or salesmanship, to guide reasoned change. The treatise does not give me comfort that treating educational institutions as pure businesses would best further that purpose.
8.18.2005 11:53pm