Showing papers by "Eric A. Posner published in 1997"

Symbols, Signals, and Social Norms in Politics and the Law

Abstract: This article uses a signaling model to explain the role of symbols in people's behavior and beliefs, with special attention to legal manipulation of symbols. It is argued that certain actions become symbolic because they have the proper cost structure and because they are, for historical or psychological reasons, focal. The cost structure enables people to obtain advantages by revealing information about themselves in separating equilibria. The focal character of the action removes ambiguities about the motives for engaging in it. The government can in theory use standard legal instruments (which mainly affect the cost of the signal) to change equilibrium behavior and belief. The use of the law in this way is likely to have unpredictable effects because of multiple equilibria and of the sensitivity of behavior to parameters, but it occurs frequently because lobbying and other actions that influence law making can become signals themselves, and the law is simply an equilibrium outcome. The analysis is used to discuss flag desecration, censorship, voting, and anti-discrimination laws.

The Political Economy of the Bankruptcy Reform Act of 1978

Abstract: This article examines the legislative history of the Bankruptcy Reform Act of 1978, the source of modern bankruptcy law. The conventional academic view of the 1978 Act is that it serves the public interest in an orderly mechanism for resolving disputes between creditors and defaulting debtors. Against this view, this article argues that the 1978 Act reflects the interests of organized lobbyists, such as banks and other large creditors, lawyers, bankruptcy judges, and Article III judges, and the institutional interests of members of Congress, and that the 1978 Act does not reflect the influence of unorganized individuals, such as debtors. The article makes three main arguments. (1) The administrative structure introduced by the 1978 Act -- characterized by a strict division of labor between judges and trustees, elevation of the status of bankruptcy judges, and the creation of a federal agency to control trustees -- resulted from an effort by Congress to seize patronage opportunities from local governments and from the judicial branch of the federal government and to increase the value of these opportunities. (2) The exemption rules in the 1978 Act resulted from an effort by Congress to seize control over exemption policy from the states -- an effort, however, that the states resisted with partial success. (3) The law of reorganization resulted from the successful lobbying of large creditors and bankruptcy lawyers to increase their control over reorganization proceedings enough to enable them to freeze out small creditors and non-management equityholders. It is further argued that interest group pressures of the sort described above account for many of the provisions of the Bankruptcy Code that are the source of current dissatisfaction.

The Political Economy of the Bankruptcy Reform Act of 1978

Abstract: Why do we have a bankruptcy law? The conventional story is that bankruptcy law reflects two requirements of a modern commercial economy: a method for the orderly payment of debts owed to multiple creditors and a means to ensure that individual debtors retain sufficient assets and rights to maintain a dignified or at least nonpenurious existence. No doubt this story contains elements of the truth, but it also has many limitations. The story does not explain many significant attributes of the Bankruptcy Code, including the administrative structure it establishes, its reliance on a mixture of federaland state-determined rights, and its balancing of interests between creditors and debtors.