Why does capitalism triumph in the West but fail almost everywhere else? Elegantly, and with rare clarity, Hernando de Soto revolutionizes our understanding of what capital is and why it has failed to benefit four-fifths of mankind -- and explains the solution. 'A revolutionary book ...may not be in the class of Das Kapital, Adam Smith's Wealth of Nations or Keynes's General Theory. But if the criteria for joining that exclusive club is a capacity not only to change permanently the way we look at the world, but also to change the world itself, then there are good grounds for thinking that this book is surely a contender.' Donald Macintyre, The Independent 'Few people in Britain have heard of Hernando de Soto ...but The Mystery of Capital has already led the cognoscenti to put him in the pantheon of great progressive intellectuals of our age.' Mark Leonard, New Statesman 'A crucial contribution. A new proposal for change that is valid for the whole world' - Javier Perez de Cuellar (Former Secretary United Nations)

http://capeyorkpartnership.org.au/wp-content/uploads/2015/07/The-Mystery-of-Capital_Hernando-de-Soto-book-review-by-Noel-Pearson.pdf

The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else

In 1974 an article appeared in Science magazine with the dry-sounding title “Judgment Under Uncertainty: Heuristics and Biases” by a pair of psychologists who were not well known outside their discipline of decision theory. In it Amos Tversky and Daniel Kahneman introduced the world to Prospect Theory, which mapped out how humans actually behave when faced with decisions about gains and losses, in contrast to how economists assumed that people behave. Prospect Theory turned Economics on its head by demonstrating through a series of ingenious experiments that people are much more concerned with losses than they are with gains, and that framing a choice from one perspective or the other will result in decisions that are exactly the opposite of each other, even if the outcomes are monetarily the same. Prospect Theory led cognitive psychology in a new direction that began to uncover other human biases in thinking that are probably not learned but are part of our brain’s wiring.

Thinking fast and slow.

Scholars of culture, humanities and social sciences have increasingly come to an appreciation of the importance of the legal domain in social life, while critically engaged socio-legal scholars around the world have taken up the task of understanding "Law's Empire" in all of its cultural, political, and economic dimensions. The questions arising from these intersections, and addressing imperialisms past and present forms the subject matter of a special symposium issue of Social Identities under the editorship of Griffith University's Rob McQueen, and UBC's Wes Pue and with contributions from McQueen, Ian Duncanson, Renisa Mawani, David Williams, Emma Cunliffe, Chidi Oguamanam, W. Wesley Pue, Fatou Camara, and Dianne Kirkby. This paper introduces the volume, forthcoming in late 2007. The central problematique of this issue has previously been explored through the 2005 Law's Empire conference, an informal but vibrant postcolonial legal studies network.

Law's Empire

We document the widespread existence of antisocial punishment, that is, the sanctioning of people who behave prosocially. Our evidence comes from public goods experiments that we conducted in 16 comparable participant pools around the world. However, there is a huge cross-societal variation. Some participant pools punished the high contributors as much as they punished the low contributors, whereas in others people only punished low contributors. In some participant pools, antisocial punishment was strong enough to remove the cooperation-enhancing effect of punishment. We also show that weak norms of civic cooperation and the weakness of the rule of law in a country are significant predictors of antisocial punishment. Our results show that punishment opportunities are socially beneficial only if complemented by strong social norms of cooperation.

/pdf/antisocial-punishment-across-societies-45ue2he7yk.pdf

Antisocial Punishment Across Societies

A substantial literature over the past thirty years has evaluated tradeoffs between money and fatality risks. These values in turn serve as estimates of the value of a statistical life. This article reviews more than 60 studies of mortality risk premiums from ten countries and approximately 40 studies that present estimates of injury risk premiums. This critical review examines a variety of econometric issues, the role of unionization in risk premiums, and the effects of age on the value of a statistical life. Our meta-analysis indicates an income elasticity of the value of a statistical life from about 0.5 to 0.6. The paper also presents a detailed discussion of policy applications of these value of a statistical life estimates and related issues, including risk-risk analysis.

/pdf/the-value-of-a-statistical-life-a-critical-review-of-market-4vq0tnp3xu.pdf

The value of a statistical life: A critical review of market estimates throughout the world

From stigmatizing publicity to coerced gestures of public contrition to ritualized debasement ceremonies, shaming penalties are on the rise in American law. This paper considers the feasibility and value of such penalties for federal white‐collar offenders. It develops a theoretical model that connects the deterrent efficacy of such penalties to their power to signal the undesirable propensities of wrongdoers and the desirable propensities of citizens who shun wrongdoers. It also considers how the efficiency of such penalties is affected by their power to express publicly valued social meanings. Finally, it examines practical issues relating to the incorporation of shaming penalties into the Federal Sentencing Guidelines.

Shaming white-collar criminals: a proposal for reform of the federal sentencing guidelines*

PAnelists: AlyA GusevA / AssociAte Professor of socioloGy, Boston university cAthie Jo MArtin / Professor of PoliticAl science At Boston university AnD Director of the center for the stuDy of euroPe, Boston university JAMes reBitzer / Peter AnD DeBorAh wexler Professor, AnD chAir of MArkets, PuBlic Policy, AnD lAw, Boston university MoDerAteD By: Ashley MeArs / AssociAte Professor of socioloGy, Boston university

Radical Markets: Uprooting Capitalism and Democracy for a Just Society

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.

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

Conventional theories of contract law do not satisfactorily account for laws that restrict contractual freedom, such as usury laws, the unconscionability and related doctrines, and certain bankruptcy laws. Arguments that these laws protect consumers against fraud or that they redistribute wealth founder on a variety of well-known shoals. Indeed, economic theories agree that courts should enforce voluntary contracts, and wealth redistribution should occur through the welfare system. This article argues that this view overlooks distortions produced by the welfare system. The provision of welfare in a free market produces perverse incentives to take excessive credit risks, which both drive up the cost of the welfare system and undermine its goal of poverty reduction. The laws against usurious or unconscionable contracts are desirable because they deter this risky, socially costly behavior. The article also investigates evidence for the argument as a descriptive claim.

Contract Law in the Welfare State: A Defense of the Unconscionability Doctrine, Usury Laws, and Related Limitations on the Freedom to Contract

Nearly everyone thinks that judges are underpaid, but theory and evidence provide little support for this view. Theory suggests that increasing judicial salaries will improve judicial performance only if judges can be sanctioned for performing inadequately or if the appointments process reliably screens out low-ability candidates. However, federal judges and many state judges cannot be sanctioned, and the reliability of screening processes is open to question. An empirical study of the high court judges of the 50 states provides little evidence that raising salaries would improve judicial performance. The case for a pay raise has not been made.

/pdf/are-judges-overpaid-a-skeptical-response-to-the-judicial-3jpd279ed2.pdf

Eric A. Posner

Papers

Shaming white-collar criminals: a proposal for reform of the federal sentencing guidelines*

Radical Markets: Uprooting Capitalism and Democracy for a Just Society

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

Contract Law in the Welfare State: A Defense of the Unconscionability Doctrine, Usury Laws, and Related Limitations on the Freedom to Contract

Are Judges Overpaid?: A Skeptical Response to the Judicial Salary Debate