Law and Economics ECON B330-001 Fall 2021 (August 23 – December 17)

Class hours: Monday, Wednesday, Friday from 12:30-1:20 p.m. Course Location: MI 208

Instructor: Dr. Walter E. Block Office Location: Miller Hall 318 Phone: (504) 864-7934 Email: [email protected]

Office hours: Wednesday: 2:00 p.m. - 5:00 p.m. In addition to these formal office hours, I will be available most days of the week. If by odd chance none of these hours are convenient, a mutually agreeable appointment can always be made. I am very available for student consultation and willing to give as much time as is needed for questions, discussion, dialogue.

Terms of Use A student's continued enrollment in this course signifies acknowledgment of and agreement with the statements, disclaimers, policies, and procedures outlined within this syllabus and elsewhere in the Canvas environment. This Syllabus is a dynamic document. Elements of the course structure (e.g., dates and topics covered, but not policies) may be changed at the discretion of the professor.

College of Business Mission Statement The mission of the Loyola College of Business is to educate and empower ethical innovators who work with and for others to solve local and global problems. We teach conceptual, technical, and professional skills through engaging experiences that leverage New Orleans’ community and creative spirit.

Course Description This course is an economic analysis used to consider the effects of legal rules upon people’s actions. Alternative rules are considered, with particular attention paid to the differing effects each is likely to have on the structure of incentives, and thus on human actions.

The goal of this course will be to explore the various schools of thought regarding the field of law and economics. Included in our purview are the following: Marxism, left communitarianism and feminism (e.g., the Critical Legal Studies movement), conservatism, modern liberalism, 1 classical liberalism and libertarianism. This is a course in economics, not law; I am an economist, not a lawyer. This course might have been called “Topics in microeconomics.” It will be in effect an intermediate course in microeconomics, where virtually all of the examples emanate from the field of law. Prerequisites: ECON B200 and ECON B201 with grade of C or better in both

Expected Student Course Learning Objectives • understand the tragedy of commons • distinguish between positive and negative externalities • apply supply and demand analysis to economic issues • analyze the effect of government policy on the market • distinguish between normative and positive economics

The Canvas System & Technical Help

You MUST be familiar with Canvas. It is your responsibility to learn how to navigate Canvas and to check it daily. Students should use their own secure login and password for Canvas to complete all coursework and assignments on an individual basis. You must check Canvas daily for any updates and announcements. Canvas keeps accurate records and all claims are verified with the Canvas Administrator. False claims, such as false Canvas issues, are considered cheating and will be pursued to the maximum extent possible.

You are responsible for your computer and internet connection. A faulty internet connection or computer system crash does not excuse you from completing assignment or exam. You MUST check the connection and functionality of your computer before you begin working on assignment, exam, or other coursework.

For Canvas help, you can chat with Canvas Support (Student) or call Canvas Support Hotline (866-932-6945) by clicking Help on the global navigation menu in your Canvas account. Please see the screenshot below.

You can also visit Canvas Student Guide page, or Canvas video tutorials for students, or contact Loyola's Online Learning Team (OLT) by sending an email to [email protected].

Grades: Your term grade will be determined on the basis of total points scored

Midterm Exam 100 Edit Term Paper (of buddy) 30 Term Paper 70 Class Presentation 20 Homeworks, Quizzes 50 Final Exam 100 ------___ Total 370

For the Fall 2021 semester, we are scheduled to meet face-to-face on campus in the classroom, ordinary written exams will be given during this time. Otherwise, if the course is moved online via Zoom for any reason throughout the semester, all exams will be given in a one to one Zoom meeting between me and a student, one at a time. Students editing each other’s papers will only be instituted if we are meeting on campus face-to-face in the classroom.

Grading Scale:

I use the following grading scale: A 93-100; A-90-92; B+ 88-89; B 83-87; B-80-82; C+ 78-79; C 73-77; C-70-72; D+ 68-69; D 60-67; F 59 and below. I do not send or discuss your grade by email. I do not discuss your grade unless your grade is a result of calculation error.

Note: The points you may see on Canvas may not always align with the Instructor’s actual gradebook.

Required Readings:

Rothbard, Murray N. 1982. "Law, Property Rights, and Air Pollution," Cato Journal, Vol. 2, No. 1, Spring; reprinted in Economics and the Environment: A Reconciliation, Walter Block, ed., Vancouver: The Fraser Institute, 1990, pp. 233-279. http://www.mises.org/rothbard/lawproperty.pdf

Robin Paul Malloy, Law and Economics Isbn 0-314-72586-5 Here is a review of this book: http://repository.law.ttu.edu/bitstream/handle/10601/194/weninger6.pdf?sequence=1&isAllowed =y

Lysander Spooner, No Treason http://www.lysanderspooner.org/notreason.htm isbn 0-87926-017-3

Frederic Bastiat, The Law http://mises.org/story/2060#1; http://mises.org/books/thelaw.pdf

Kinsella, N. Stephan. 2001. “Against Intellectual Property,” Journal of Libertarian Studies, Vol. 15, No. 2, Winter, pp. 1-53; http://www.mises.org/journals/jls/15_2/15_2_1.pdf

Coase, Ronald H. 1960. "The Problem of Social Cost," Journal of Law and Economics, 3:1-44 http://www.sfu.ca/~allen/CoaseJLE1960.pdf; http://64.233.179.104/search?q=cache:uK41D38mFE0J:www.sfu.ca/~allen/CoaseJLE1960.pdf+ The+Problem+of+Social+Cost&hl=en

Recommended Readings:

I. Here is a five-part debate over property rights (the underpinning of all law and economic issues, at least according to one of the perspectives we shall be discussing this semester) which is supplementary to the Coase and Rothbard papers:

1. Block, Walter. 1977. "Coase and Demsetz on Private Property Rights," The Journal of Libertarian Studies: An Interdisciplinary Review, Vol. I, No. 2, Spring, pp. 111-115, http://www.mises.org/journals/jls/1_2/1_2_4.pdf; reprint translation: “Coase y Demsetz sobre el derecho de propiedad privada,” Libertas 37, octubre de 2002, año XIX, pp.5-20.

2. Demsetz, Harold. 1979. "Ethics and Efficiency in Property Rights Systems," in Time, Uncertainty and Disequilibrium: Explorations of Austrian Themes, Mario Rizzo, ed., Lexington Mass.: D.C. Heath and Co. 4

3. Block, Walter. 1995. "Ethics, Efficiency, Coasean Property Rights and Psychic Income: A Reply to Demsetz," Review of Austrian Economics, Vol. 8, No. 2, pp. 61-125, http://www.mises.org/journals/rae/pdf/rae8_2_4.pdf; reprint translation: “Ética, eficiencia, derechos de propiedad Coasianos e ingreso psíquico: una respuesta a Demsetz,” Libertas 37, octubre de 2002, año XIX, pp. 71-210

4. Demsetz, Harold. 1997. "Block’s Erroneous Interpretations," Review of Austrian Economics, Vol. 10, No. 2, pp. 101-110; http://www.mises.org/journals/rae/pdf/rae10_2_6.pdf

5. Block, Walter. 2000. “Private Property Rights, Erroneous Interpretations, Morality and Economics: Reply to Demsetz,” Quarterly Journal of Austrian Economics, Vol. 3, No. 1, Spring, pp. 63-78; http://www.mises.org/journals/qjae/pdf/qjae3_1_8.pdf

II. Hate speech: http://www.guardian.co.uk/commentisfree/2013/jan/02/praise-vallaud-belkacem-hate-speech- twitter

III. Naming laws http://news.yahoo.com/icelandic-girl-fights-her-own-name-074758814.html

IV. Newspaper releases names of pistol permit holders http://cityroom.blogs.nytimes.com/2013/01/02/readers-divided-on-news-sites-map-of-gun- permit-holders/

V. Gun control, Second amendment

Lott, Jr., John R. 1998. More Guns, Less Crime: Understanding Crime and Gun Control Laws, Chicago: University of Chicago Press

VI. Free speech, First amendment

Mill, John Stuart. 1947 [1859]. On Liberty, Northbrook, IL: Ahm Publishing, especially p. 36; http://www.bartleby.com/130/; starting with this quote: “Even in natural philosophy, there is always some other explanation possible of the same facts; some geocentric theory instead of heliocentric, some phlogiston instead of oxygen; and it has to be shown why that other theory cannot be the true one: and until this is shown, and until we know how it is shown, we do not understand the grounds of our opinion.”

VII. Tampering with condoms http://www.lifesitenews.com/news/canada-court-consensual-sex-sex-assault-if-you-tamper-with- the-condom ws.nationalpost.com/2013/01/03/craig-jaret-hutchinson-loses-sexual-assault-appeal/ 5 http://thechronicleherald.ca/novascotia/38938-man-sentenced-18-months-piercing-condoms

VIII. Legality of no-fly list http://news.nationalpost.com/2013/01/04/first-man-on-canadas-no-fly-list-denied-legal-funding- for-court-fight/

IX. http://libertycrier.com/government/kansas-seeks-to-undermine-lesbian-couples-parental- status-demands-that-sperm-donor-pay-child- support/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+LibertyCrier +%28Liberty+Crier%29

X. drugs: http://libertycrier.com/government/obama-administration-throwing-medical-marijuana- patients-into-federal-prison-at-unprecedented-rate/

Block, Walter, Stephan Kinsella and Roy Whitehead. 2006. “The duty to defend advertising injuries caused by junk faxes: an analysis of privacy, spam, detection and blackmail.” Whittier Law Review, Vol. 27, No. 4, pp. 925-949; http://www.walterblock.com/wp- content/uploads/publications/block-etal_spam_whittier-2006.pdf; http://www.walterblock.com/wp-content/uploads/2009/06/faxesduty.pdf

Block, Walter E. 2006. "Coase and Kelo: Ominous Parallels and Reply to Lott on Rothbard on Coase," Whittier Law Review, Vol. 27, No. 4, pp. 997-1022; http://www.walterblock.com/wp- content/uploads/publications/block-coaselott-2006.pdf

Block, Walter and Gary Anderson. 2001. “Blackmail, Extortion and Exchange,” New York Law School Law Review, Vol. 44, No. 3-4, pp. 541-561; http://www.walterblock.com/publications/blackmail_extortion_exchange.pdf

Murphy, Robert P. 2019. “Austrian School vs. ‘Law & Economics’ on Product Safety.” October 11; https://mises.org/wire/austrian-school-vs-%E2%80%9Claw-economics-product-safety

Calendar

First day of class August 23 Abstract of term paper (50 - 100 words) October 8 Midterm exam October 15 First draft term paper is due to editor (copy to me) November 12 Editors give edited paper to me and copy to buddy November 19 Last day of class December 10 Final version of term paper due on day of final exam December 15

Important Dates

Last Day to Drop September 3 Labor Day Holiday September 6 6

Fall Break Holidays October 11-12 Last Day to Withdraw November 19 Thanksgiving Holidays November 24-26

Academic Honesty

All students are expected to practice academic honesty in and out of class. Instances of academic dishonesty can result in a student receiving a grade of F for the course and referral to University judicial organizations, for possible expulsion. Academic dishonesty includes, but is not limited to, plagiarism, cheating on exams, and obtaining unauthorized assistance in completing exams and assignments.

Student Handbook

Students are urged to familiarize themselves with all policies listed in the Student Handbook. This handbook, along with the present syllabus, and other such documents, are in effect a contract between Loyola and the student; these specify the rules upon which we operate.

Attendance Policy

No attendance is required. However, you are paying quite a bit for the privilege of attending; you might want to enjoy what you (and/or your parents) are paying for. If you miss a surprise quiz, you get a zero for it. I can almost but not quite guarantee that if you miss most classes, you will fail the course. I go further: I expect a positive and statistically significant relationship between the grade you earn and the number of class sessions you attend. With the possibility of further issues related to Covid-19, class meetings may be moved to the online environment at the discretion of the professor.

COVID 19 GUIDELINES. Students must comply with any directive from University and government officials with regards to public health directives. Students should keep at least six (6) feet of distance between themselves and others at all times including while outdoors, in common areas, and in classrooms. All individuals must wear a face mask covering their nose and mouth while in all buildings except when that individual is alone (e.g., personal residence hall rooms). For more information consult https://studentaffairs.loyno.edu/sites/default/files/2020-07/student-code-of-conduct-section-10-2019- 2020.pdf. Individuals who cannot wear a face mask because of health reasons or functional reasons should contact the Office of Accessible Education to determine other accommodations. Everyone should regularly wash their hands and avoid touching their face, touching others, and sharing items. Students should immediately call Student Health Services (504-865-3326) if they experience symptoms of COVID-19, test positive for COVID-19, and/or become exposed to someone with COVID-19.

Make-up Exam Policy

No make up exams will be given. I follow this policy because it is difficult for me to assess the relative difficulties of an official exam and a make up one. If you miss the midterm exam, I’ll double the points you score on your final.

My Philosophy of Education

John Stuart Mill (http://www.bartleby.com/130/) said this in his On Liberty:

“But when we turn to subjects infinitely more complicated, to morals, religion, politics, social relations, and the business of life, three-fourths of the arguments for every disputed opinion consist in dispelling the appearances which favour some opinion different from it. The greatest orator, save one, of antiquity, has left it on record that he always studied his adversary's case with as great, if not with still greater, intensity than even his own. What Cicero practiced as the means of forensic success, requires to be imitated by all who study any subject in order to arrive at the truth. He who knows only his own side of the case, knows little of that. His reasons may be good, and no one may have been able to refute them. But if he is equally unable to refute the reasons on the opposite side; if he does not so much as know what they are, he has no ground for preferring either opinion. The rational position for him would be suspension of judgment, and unless he contents himself with that, he is either led by authority, or adopts, like the generality of the world, the side to which he feels most inclination. Nor is it enough that he should hear the arguments of adversaries from his own teachers, presented as they state them, and accompanied by what they offer as refutations. That is not the way to do justice to the arguments, or bring them into real contact with his own mind. He must be able to hear them from persons who actually believe them; who defend them in earnest, and do their very utmost for them. He must know them in their most plausible and persuasive form; he must feel the whole force of the difficulty which the true view of the subject has to encounter and dispose of; else he will never really possess himself of the portion of truth which meets and removes that difficulty. Ninety- nine in a hundred of what are called educated men are in this condition; even of those who can argue fluently for their opinions. Their conclusion may be true, but it might be false for anything they know: they have never thrown themselves into the mental position of those who think differently from them, and considered what such persons may have to say; and consequently they do not, in any proper sense of the word, know the doctrine which they themselves profess. They do not know those parts of it which explain and justify the remainder; the considerations which show that a fact which seemingly conflicts with another is reconcilable with it, or that, of two apparently strong reasons, one and not the other ought to be preferred. All that part of the truth which turns the scale, and decides the judgment of a completely informed mind, they are strangers to; nor is it ever really known, but to those who have attended equally and impartially to both sides, and endeavoured to see the reasons of both in the strongest light. So essential is this discipline to a real understanding of moral and human subjects, that if opponents of all important truths do not exist, it is indispensable to imagine them, and supply them with the strongest arguments which the most skilful devil's advocate can conjure up.”

I plan to discuss this passage in our first class session. Please read it carefully.

Term Paper

I have had some luck in the past in getting student term papers published in law reviews and refereed journals. If you wish to have me consider your term paper for this student publication program, send your term paper by e-mail attachment, and sign and send me this letter:

(Date)

Dr. Walter Block, Ph.D. Harold E. Wirth Eminent Scholar Endowed Chair and Professor of Economics College of Business Administration Loyola University New Orleans 6363 St. Charles Avenue, Box 15, Miller 321 New Orleans, LA 70118 c.v.: http://www.cba.loyno.edu/faculty.html office: (504) 864-7934 dept: (504) 864-7944 fax: (504) 864-7970 [email protected] WWW.WALTERBLOCK.COM

Date

Dear Dr. Block:

I hereby give permission that you edit my term paper for the purpose of seeking publication for it in a magazine, or as an article in a refereed scholarly journal. I realize that, at your discretion, you may add material to it and co-author it with me, and/or may combine it with the term paper(s) of other students, into a multiple authored paper.

Yours truly,

Sign here.

Term paper suggestions, requirements, explanations:

Title page needed; to preserve double blind refereeing. Do NOT put your name on any page after that, let alone on every page.

Use spell check; I can’t spell to save myself. Thank God for spell check, otherwise my writing would look pathetic. Yours too? 9

Word overuse. Don’t use the same word, if you can help it, 3-4 times in the same sentence, a dozen times in the same paragraph. Well, that’s ok for the first draft. But, when you look over what you’ve written, delete a few uses, employ some synonyms. I won’t correct every instance of this; extrapolate from what corrections I’ve made

Singular and plural must match. This is no good: “Should a Federal Reserve Bank depositor wish to redeem its deposits, they are paid in Federal Reserve Notes.” It should be changed either to this: “Should a Federal Reserve Bank depositor wish to redeem his deposits, he is paid in Federal Reserve Notes.” Or to this: “Should Federal Reserve Bank depositor wish to redeem their deposits, they are paid in Federal Reserve Notes.”

I want at least five substantive footnotes and at least five text references Here is an example of a substantive footnote.1 Here is an example of a text reference (Jones, 1999, p. 3). With this sort of text reference, I expect to see the full cite for the Jones publication in the bibliography, or reference section, which is required, with at least 5 entries.

Your first footnote should be used to thank your editing buddy, and anyone else who helped you write your term paper.

I can only accept what I think are the very best papers for my publication program. This is usually about 25% of all term papers.

“As I said above” is usually an indication of poor organization. You should say things only once, with a possible exception being your concluding paragraph.

Number your pages. Run out your paper double spaced. This facilitates editing.

Stet coupled with four dots (….) indicates I have changed my mind in editing.

A check mark (v) means I agree with the editor. A question mark (?) means either I’m not sure of who I go along with, the author or the editor, or I think it is a tie: what is written by the author and the editor in correcting him, is equally good, in my opinion. A cross out (x) means I reject the editor’s correction, and favor what the author said.

“Awk” means awkward. I am asking the author to rephrase.

The final version of your paper is due to me, by e mail attachment in word, on the day of the final exam. Please send me only ONE attachment, with everything in it: title page, paper, reference section.

1 A substantive footnote is an aside, a parenthetical remark. It consists of a sentence or two or three. It may but need not include a text reference. 10

Every statistic must have a source. If you quote from someone else, place quote marks around what you write. It is considered plagiarism if you fail to do this. All quotes must have a source.

Hints for classroom presentation:

I do not want you to read your talk. If you read, I’ll give you a zero. I want you, instead, to speak extemporaneously. I suggest you bring notes up to the podium at the front of the class. If you are very tall, write BIG, so that you don’t have to lean over to see your notes. The talk should last from 5-6 minutes. It might be a good idea to practice on your friends, roommates, so as to get the timing down. (Hey, if you can’t exploit friends and roommates, who can you exploit?)

I’ll be looking for several things as I evaluate your presentation:

Accurate content coverage of the material you are elucidating. Spend at least 1-2 minutes giving your own views of the subject matter.

Be enthusiastic.

Eyes: look at your audience. If need be, just look at one person in the audience; better to look at them all, as you speak.

Hands: as they say in boxing, let your hands go. Don’t clasp your hands together, don’t put your hands in your pockets, don’t clutch the podium, don’t hold on to a book (if you need to quote from a book, Xerox the material, so that it stays flat on the podium).

Feet: stand on two feet. Not one, not three; two. If you stand on only one foot, you’ll tend to waver, and clutch the podium for balance, and thus not be able to let your hands go free.

Course Calendar:

Week 1: Introduction

Weeks 2, 3, 4:

Weeks 5, 6, 7: Robin Paul Malloy, Law and Economics Isbn 0-314-72586-5 Here is a review of this book: http://repository.law.ttu.edu/bitstream/handle/10601/194/weninger6.pdf?sequence=1&isAllowed=y

Weeks 8, 9: Lysander Spooner, No Treason http://www.lysanderspooner.org/notreason.htm isbn 0-87926-017-3

Weeks 10, 11, 12: Frederic Bastiat, The Law http://mises.org/story/2060#1; http://mises.org/books/thelaw.pdf

Weeks 13, 14: Kinsella, N. Stephan. 2001. “Against Intellectual Property,” Journal of Libertarian Studies, Vol. 15, No. 2, Winter, pp. 1-53; http://www.mises.org/journals/jls/15_2/15_2_1.pdf

Week 15 Coase, Ronald H. 1960. "The Problem of Social Cost," Journal of Law and Economics, 3:1-44 http://www.sfu.ca/~allen/CoaseJLE1960.pdf; http://64.233.179.104/search?q=cache:uK41D38mFE0J:www.sfu.ca/~allen/CoaseJLE1960.pdf+The+Pro blem+of+Social+Cost&hl=en

Week 16 Conclusion, Review