I contributed an article on the effect excessive and poorly chosen corporate and securities laws have on the viability of US business to a recent volume entitled The American Illness. The volume has now received a positive review from an English barrister named John Holbrook:
Against a litigious background on both sides of the Atlantic, it is refreshing to come across a collection of essays that puts the US legal system in the dock and subjects it to the sort of forensic analysis that lawyers usually reserve for others. The 20-plus contributors to The American Illness focus on the relationship between law and economics and ask whether and why the US legal system has contributed to the country’s long postwar decline. ...
Several authors draw attention to the harm that several decades of expanding liability is now causing the American economy. Whereas low levels of liability boost investments in novel technologies, product innovation is harmed at very high levels of liability. Nowadays, American consumers are effectively required to purchase product-liability insurance with everything they buy and producers have been turned into general insurers. This constitutes a deadweight cost that makes American producers less competitive in the international marketplace. Neither do consumers benefit because, apart from paying higher prices, the burdens imposed from a safety first-and-foremost regulatory framework reduces consumer choice.
The book’s strength is its compelling analysis of the relationship between law and economics. Too many lawyers, academic and practising, see law as a discipline to be understood on its own terms. Yet The American Illness makes clear that too many lawyers can be positively harmful for an economy. The recognition of the legal system as a means of making the economy work more efficiently is also welcome, not just because it is true but because it also raises this question: at what point does the legal system cease to be a force for good and become a force for harm?
When addressing this issue, the contributors demonstrate the need not just for an appreciation of economics and law, but also for an understanding of the overriding importance of politics. The argument that there can be an optimum number of lawyers per head of population is a technical approach to the issue that goes nowhere because it all depends what those lawyers do. Neither can it be right that increasing liability is merely a response to increasing wealth and consumer demand, as another contributor remarks. ...
By drawing attention to the significant economic harm that litigation is causing America, The American Illness is a welcome contribution to a debate that needs to be had. But if the safety first-and-foremost approach of legislators and judges is to end there needs to be a much wider debate about the political and moral values that fuel a blame-and-claim culture.
Kindly go read the whoile thing. Oh, and don't forget to buy the book.