Vol. 16 No. 10 (October, 2006) pp.775-779

 

LAW AND CLASS IN AMERICA: TRENDS SINCE THE COLD WAR, by Paul D. Carrington and Trina Jones (eds).  New York: New York University Press, 2006. 488pp.  Cloth. $60.00.  ISBN: 0814716547.

 

Reviewed by Joshua Hall, Kendrick Fellow in the Department of Economics, West Virginia University.  Email: johall [at] mail.wvu.edu.

 

LAW AND CLASS IN AMERICA: TRENDS SINCE THE COLD WAR is part of the Critical America series published by NYU Press. The series aims to provide cutting edge research on race and law in America, and this volume is no exception. In this edited volume, Duke University law professors Paul Carrington and Trina Jones have brought together twenty-one informative essays on the question of class and the law in contemporary America.

 

In the introductory essay, “Law Made in Skyboxes,” the editors explain that the motivation behind the book is to bring together essayists in a variety of legal fields to consider the question of whether the United States is entering into a second Gilded Age. More precisely, they are concerned with how the law may have become less protective of the disadvantaged in recent decades. The volume is organized into four parts, each part revolving around a different theme related to law and class.

 

Part I of LAW AND CLASS IN AMERICA features four essays that focus on the regress of the courts, legislatures, and the bar. In Chapter 2, Sanford Levinson provides examples of how Republican Supreme Court Justices such as Charles Evans Hughes and Potter Stewart showed concern for the poor in their opinions. He argues that the writing of such opinions is important, even in areas where redistribution through judicial means is proscribed, because it sends a message to policymakers and citizens.

 

Burt Neuborne examines, in “Money and American Democracy,” the influence that the American voting system has on class participation in our democracy. He concludes that, although formal barriers to voting have been removed, the poor still face high transaction costs to voting. Combined with the growing influence of money in politics, Neuborne argues that political inequality is the same as it has always been. The nice thing about this chapter is that he provides pros and cons to several interesting electoral reforms. While I think mandatory voting is inefficient from an economic perspective because the net benefits from voting will be negative for many individuals (otherwise you would not need to make it mandatory), his arguments are well-thought out.

 

In Chapter 4, Judith Resnik details the shift judges have made from focusing on the process “due” to emphasizing dispute resolution through contract and arbitration. Terming the old framework “Due Process Procedure” and the new arbitration framework “Contract Procedure,” she lays out the costs and benefits of each approach. Contract procedure, for example, results in outcomes being resolved at a lower cost, [*776] but with less transparency than due process procedure.  This is an excellent article on this important change in civil process.

 

Marc Galanter concludes the section by outlining the rise in what he calls “skybox lawyering,” or providing legal services through large law firms for corporate America. This essay is about the bifurcation of the legal profession between those who work in large law firms or for large organizations and those who represent private individuals. Galanter argues that more and more legal services are provided to the corporate sector and, as a result, fewer legal services are provided for the poor.

 

Part II, “Consequences: More for Those in Skyboxes,” focuses on how changes in the law have benefited the well-off. James Cox begins this section with his essay, “Fair Pay for Chief Executive Officers,” where he details the rise in CEO compensation in the United States. A primary reason for rising CEO compensation, according to Cox, is the increasing use of stock options. This chapter is one of the best in the volume because Cox does an excellent job tracing the reasons behind the rise of stock options, such as the unintended consequences of laws intended to limit executive salaries. 

 

In “The Antitrust ‘Revolution’ and Small Business” Thomas Kauper sketches an outline of the history of antitrust law. Like Cox, Kauper does a good job trying to explain the reasons behind recent changes in U.S. antitrust policy. Ideas, people, politics, and globalization all have contributed to antitrust policy becoming more focused on efficiency and less focused on preserving small businesses. Kauper correctly concludes that, while this change has not been particularly good for small businesses, it has been good for consumers. 

 

In Chapter 8, David Callies and Paula Franzese discuss the rise of private, sometimes gated, homeowners’ associations. The authors correctly note that, although exclusivity is one of the reasons behind the rise of gated communities, zoning often accomplishes the same thing. They suggest that the real problem is elitism underlying both zoning and homeowners’ associations, because it eliminates the development of any real sense of community.

 

Lawrence Zelenak discusses the declining progressivity of the federal income tax in Chapter 9.  The chapter is a nice introduction to how tax cuts are framed, and the author shows how the same tax cut can be described as progressive, proportional, or regressive, depending upon the approach taken. It should be noted that he only analyzes the nature of changes themselves, not the system as a whole. Thus, the Bush tax cuts could be regressive in that most of the benefits go to the wealthy, but the federal income tax could still be progressive on the whole since the average tax rate rises with income.

 

The estate tax has been a recurring federal policy issue in recent years. Richard Schmalbeck looks at citizen opinion against the estate tax in “Class War and the Estate Tax: Have the Troops Gone AWOL?” Schmalbeck [*777] provides five possible hypotheses for why polls show a majority of respondents favoring the estate tax. Although the author provides a good summary of reasons why individuals might be in favor of estate tax repeal, I think he gives an incomplete picture of the efficiency argument against estate taxes. For example, he states that it is a sign of relative efficiency that people can undertake activities to avoid the tax. The fact that the estate tax changes people’s behavior is actually a sign of inefficiency because it distorts individuals’ behavior and wastes resources as people expend time and money to avoid the tax. Although these costs are difficult to quantify, they do exist and should be acknowledged in any discussion of the efficiency of the estate tax.

 

Part III features nine essays revolving around the theme of “And Less for Those in the Cheap Seats.” In “Trade Law, Labor, and Global Inequality,” David Trubek and Lance Compa look at the impact of globalization on labor. Trade creates winners and losers in the short run, and they want to show that workers are harmed as a result of globalization of manufacturing. Trubek and Compa do a good job of detailing the legal issues surrounding international labor standards and attempts to enforce them through trade agreements. They are weakest in their claim that workers lose as a result of globalization. While domestic workers may face job loss or reduced wages from globalization, in order to assess their overall welfare one must also factor in benefits on the consumption side as workers enjoy cheaper products produced abroad. Once that is done, it may be true that domestic workers are still worse off as a result of globalization, but that cannot be determined without a look at both sides of the picture.

 

The decline of collective bargaining is discussed in Chapter 12. Julius Getman examines how relatively recent changes in labor law have shifted the balance of power between unions and management to favor the latter.  Getman argues that collective bargaining has disintegrated because those who interpret the National Labor Relations Act (judges and National Labor Relations Board members) have generally not come from working class or union backgrounds and thus undervalue the importance of collective bargaining. While I learned a lot about the specific case law and the important role that interpretation of the Act plays in the power of unions, I would prefer to see some specifics on how changes in board or court membership have contributed to anti-union rulings and interpretations.     

 

In Chapter 13, Richard Speidel considers changes in the American contract system over the past fifty years. In this very interesting article, he explains that, although the content of American contract doctrine has changed very little over the past fifty years, four subtle changes around the doctrine have given more power to “strong parties”1) the use of standard forms; 2) the lack of movement on defining when an “adhesion contract” is unreasonable; 3) the movement toward arbitration which limits application of the protective doctrine; and 4) interest groups working [*778] on behalf of strong parties have no countervailing opposition.

 

Harvard University law professor Elizabeth Warren examines changes in bankruptcy law in “Congress and the Credit Industry.” Her experience on the National Bankruptcy Review Commission gives her important insights into the political economy of bankruptcy law “reform,” as she saw first hand the lobbying that accompanied change in bankruptcy laws in favor of the credit industry. She correctly notes that there exists a “profound asymmetry” in the resources creditors and debtors bring to the political arena.

 

I have one small quibble with the article, however. She states that “73 percent of all families have not one dollar in the stock market” (p.291). This is only true if you look at direct stock holdings. If you look at direct and indirect holdings, the number of families with money in the stock market rises considerably. For example, Poterba (1998) estimates (using an earlier version of the survey that Warren cites) that 48.8 percent of households were stockholders in 1998 once indirect ownership is taken into account. 

 

In Chapter 15, Paul Castle discusses “The Misfortunes of the Family Farm.” Using a case study of the poultry industry, he demonstrates how poultry farms have become entangled in what amounts to a feudal relationship with large chicken producers such as Tyson Foods. Castle does a good job of laying out the economic relationship between the large poultry integrators and the small farms with which they contract to keep and raise chickens, although I get the sense from reading the article that this problem is likely to be a short-term phenomenon. If things are as bad for the small poultry farmer as Castle says, I suspect that the industry will become completely vertically integrated in the long run.  

 

Jeffrey O’Connell and John Linehan address changes in accident law in Chapter 18. In addition to providing a good history of tort law, they outline the interest groups on both sides of recent tort reform battles. O’Connell and Linehan also lay out a new statutory regime to replace the current system of accident law, which they call “neo no-fault.”

 

Chapters 16 and 17 and 19 discuss recent changes in the areas of health care, higher education, and welfare, respectively. While all three of these articles are full of useful information and do a good job explaining the effect of broad policy changes on different economic classes, I finished the chapters on health care and higher education wanting a little more focus on the specifics of the legal changes that occurred during the period.   

 

Part IV concludes the volume with two essays on the theme of “The Hierarchy in Criminal Law.” The first essay, by Margaret Berger, shows how evidence law has changed over the past twenty-five years in favor of defendants. Berger argues that, since most plaintiffs are aggrieved have-nots, changes in evidentiary rules have made it hard for the poor to challenge the status quo.  Former police chief Joseph McNamara [*779] finishes the book by making a case against U.S. drug policy in “America’s Misguided War on Drugs.” He provides a useful history of U.S. drug policy and shows how federal policy has always had a disparate impact on the poor and minorities.

 

I learned a lot from reading this book, as it takes a very different perspective than I generally see on these issues (I am an economist by training). The authors are all very knowledgeable about their fields and the individual essays seem to work together, reflecting good editing by Carrington and Jones. The one thing I would like to have seen is more emphasis on trying to explain why the law has become less protective of the disadvantaged. While some essays, such as Richard Schmalbeck’s on the estate tax, do a good job providing reasons for why laws have changed in an area, some essays ignore causation altogether to focus on effects.

 

While it is important to detail the changes in the law and their impact on society, I would like to see more essays address the question of why the laws have changed.  Did changes in the law cause the structure of American society to change or does causality flow the other way? It is certainly conceivable that the law in many instances merely reflects changes in the ideology of citizens.

 

I raise this point because I think that the relationship between the law and inequality is a difficult issue to tease out and that the assembled authors might have been able to shed some light on the causal relationship. It is not the case that I wish the assembled authors had written different essays but I do wish they had spent a little time sharing their thoughts about why these changes occurred. For individuals wishing to influence public policy, the question of causality is important because individuals interested in reversing recent legal trends need to know where to start.

 

REFERENCES:

Poterba, James. 1998. SHAREOWNERSHIP 1998: BASED ON THE 1995 SURVEY OF CONSUMER FINANCES. New York: New York Stock Exchange.

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© Copyright 2006 by the author, Joshua Hall.