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The Collected Works of Henry Manne

The Liberty Fund has announced the publication of a three volume set of the collected works of one of my personal heroes, Henry Manne:

As the founder of the Center for Law and Economics at George Mason University and dean emeritus of the George Mason School of Law, Henry G. Manne is one of the founding scholars of law and economics as a discipline. This three-volume collection includes articles, reviews, and books from more than four decades, featuring Wall Street in Transition, which redefined the commonly held view of the corporate firm.

Volume 1, The Economics of Corporations and Corporate Law, includes Manne’s seminal writings on corporate law and his landmark blend of economics and law that is today accepted as a standard discipline, showing how Manne developed a comprehensive theory of the modern corporation that has provided a framework for legal, economic, and financial analysis of the corporate firm.

Volume 2, Insider Trading, uses Manne’s ground-breaking Insider Trading and the Stock Market as a framework for many of Manne’s innovative contributions to the field, as well as a fresh context for understanding the complex world of corporate law and securities regulation.

Volume 3, Liberty and Freedom in the Economic Ordering of Society, includes selections exploring Manne’s thoughts on corporate social responsibility, on the regulation of capital markets and securities offerings, especially as examined in Wall Street in Transition, on the role of the modern university, and on the relationship among law, regulation, and the free market.

Manne’s most auspicious work in corporate law began with the two pieces from the Columbia Law Review that appear in volume 1, says general editor Fred S. McChesney. Editor Henry Butler adds: “Henry Manne was an innovator challenging the very foundations of the current learning.” “The ‘Higher Criticism’ of the Modern Corporation” was Manne’s first attempt at refuting the all too common notion that corporations were merely devices that allowed managers to plunder shareholders. Manne saw that such a view of corporations was inconsistent with the basic economic assumption that individuals either understand or soon will understand the costs and benefits of their own situations and that they respond according to rational self-interest.

Fred S. McChesney is James B. Haddad Professor of Law at the Northwestern School of Law, focusing on business and antitrust law and their intersection with economic theory. He has been an associate director for policy and evaluation at the Federal Trade Commission.

Henry N. Butler, editor of volume 1, is Executive Director of the Searle Center on Law, Regulation, and Economic Growth at Northwestern University School of Law.

Stephen M. Bainbridge, editor of volume 2, is William D. Warren Professor of Law at the UCLA School of Law.

Jonathan R. Macey, editor of volume 3, is Sam Harris Professor of Corporate Law, Securities Law, and Corporate Finance and is deputy dean at Yale Law School.

I was tremendously honored to be asked to edit Volume 2. Henry's contributions to our understanding of insider trading have been invaluable, as I explained in the introduction to my volume (which you can download here):

Henry Manne’s 1966 book INSIDER TRADING AND THE STOCK MARKET ... ranks among the truly seminal events in the economic analysis of law. One exaggerates only slightly to say that Manne stunned the corporate law academy by daring to propose the deregulation of insider trading. As we will see, the response by all too many traditionalist scholars was immediate and vitriolic.

Although Manne’s policy prescriptions have found neither legislative nor regulatory acceptance, history has vindicated Manne’s daring in at least one important respect. Although it is hard to believe at this remove, corporate law scholarship was moribund during much of the middle decades of the last century. Manne’s work on insider trading played a major role in ending that long intellectual drought by stimulating interest in economic analysis of corporate law. Whether one agrees with Manne’s views on insider trading or not, one therefore must give him due credit for helping to stimulate the outpouring of important law and economics scholarship in corporate law and securities regulation in recent decades.

If you want to order the set and support my blog at the same time, you can do so via my Amazon Associates store by clicking the following link: COLLECTED WORKS OF HENRY G. MANNE 3 VOL CL SET, THE

Or you can do likewise by ordering Henry's Insider Trading and the Stock Market

And, of course, there's always my book: Securities Law: Insider Trading (Turning Point Series)

A Look Back in Horror: The Best Red State Updates of the Naughts

The boys from RSU show their true colors in this look back at their best of the Naughts:



Happy New Year's Eve!

Top Delaware Cases of 2009

Francis Pileggi provides a very useful year end roundup of the leading Delaware corporate and commercial law cases of the last year.

Pileggi Interviews Steele

Francis Pileggi interviews Delaware Chief Justice Myron Steele

Antonia Fraser, Faith and Treason: The Story of the Gunpowder Plot

Few tales better illustrate the old saw, "truth is stranger than fiction," than the story of the Gunpowder Plot. In 1605, Catholic militants disappointed by James I's failure to move towards toleration (allegedly) tried to blow up Parliament by piling gunpowder in a basement. The (purported) plot was discovered in the nick of time. England still celebrates Guy Fawkes' Day to celebrate the failure of the Gunpowder Plot and, among other things, Beefeaters still search the basements of Westminster (in full regalia, no less).

The Gunpowder Plot has long been highly controversial. Catholic apologists have claimed that the whole thing was invented by Robert Cecil, Earl of Salisbury, King James' chief minister, and master of a vast intelligence network, with the assistance of Sir Edward Coke as Crown Prosecutor. Protestant apologists claim the Plot was real, the danger was real, and only narrowly averted (by God's special favor).

Antonia Fraser is a leading popular historian of the Tudor and Stuart periods of English history, as well as an accomplished novelist. She writes well, tells stories lucidly, and has a demonstrated command of the period. In Faith and Treason, she strikes a balanced note. Yes, there was a plot. But the danger was not very real -Salisbury discovered the plot early, the gunpowder was defective, and Salisbury left it in the basement to be dramatically discovered so that the discovery would have maximum political effect. She makes a compelling case.

Fraser is sympathetic to the Catholic plotters, recognizing that they had been pushed too far, but she also doesn't hesitate to call them traitors and terrorists. This is a fair and balanced account, written with the verve and style of a novel. Highly recommended.

Obama's Vacation and Silence

1. There's fighting in the streets in Iran
2. A terrorist nearly succeeded in blowing up a US-bound airplane, even though US authorities had been alerted by the man's own father that he was a danger and he had been barred from the UK. Despite all of which, Obama's Homeland Security Secretary Janet Napolitano has the unmitigated gall to claim that "the system worked."

And Obama's on vacation playing golf in Hawaii? Taken together, these events may not amount to 9/11, but surely they justify Obama taking a break from his vacation to say something. How about words of support for regime change in Iran and thanks to the passengers and crew who acted promptly?

At the very least, one hopes the people who for years have criticized George Bush for finishing reading The Pet Goat on 9/11 will take adverse note of Obama's silence. If it's a strategy, it's a pretty stupid one.

I'm in agreement with Althouse on this one:

On to Marc Ambinder:

In his Farenheit 9/11, filmmaker Michael Moore juxtaposes images and words of a terrorist attack in Israel with President Bush's first words about the incident, spoken to a press pool on a golf course, with him leaning casually against a tree.

Ah, my association was the same as Ambinder's. Ambinder goes on to tell us thatObama has been golfing in Hawaii. And he went to the gym right after he was briefed about the attack. But Ambinder offers his usual pro-Obama spin:

There is a reason why Obama hasn't given a public statement. It's strategy....

[A]n in-person Obama statement isn't needed; Indeed, a message expressing command, control, outrage and anger might elevate the importance of the deed, would generate panic....

In a sense, he is projecting his calm on the American people....

So was Bush. It wasn't effective. Obama has had the opportunity to learn from Bush. 

It's a tough and novel approach....

It's not novel, because Bush did it too. The only thing novel about it is doing it after Bush did it... ineffectively. 

Ole Timey Country Simple Christmas

I can't think of a better way to wish you a merry Christmas than to go full red neck:




Gawd I'm glad I live in LA.

Need Last Minute Christmas Ideas?

Here's another video full of X-mas gift ideas from the guys at Top Gear m(wait through the Aston-Martin clip).

Or you can visit ProfessorBainbridge.com's Amazon interweb store to buy someone you love one of my books or any number of other goodies.

Greatest Newspaper Headline of All Time

"Beavers battle Cougars in Sin City"

Still Shopping for Christmas?

If so, the guys from Top Gear have some motoring-related suggestions:

Of course, you can also visit the ProfessorBainbridge.com Amazon store for all sorts of goodies.

New NYSE Corporate Governance Standards

The SEC has approved new NYSE corporate governance listing standards. The new rules, John Olson reports, are principally intended "to update the NYSE’s corporate governance listing standards in light of the SEC’s 2006 adoption of Item 407 of Regulation S-K, which requires disclosure about director independence and certain other aspects of a company’s corporate governance practices." Olson provides a detailed analysis of the new rules, which will be helpful for corporate counsel, securities lawyers, and those few odd law professors who inflict listing standards on their suffering students (like me).

Worst Decade Ever

We ought to rename the Aughts as the Naughts. The WSJ reports that:

In nearly 200 years of recorded stock-market history, no calendar decade has seen such a dismal performance as the 2000s.

Investors would have been better off investing in pretty much anything else, from bonds to gold or even just stuffing money under a mattress. Since the end of 1999, stocks traded on the New York Stock Exchange have lost an average of 0.5% a year thanks to the twin bear markets this decade. 

Security and Serfdom

In the comments section to James Joyner's post Health Care Reform: How Bad Is It?, commenter anjin-san responds to James' arguments in favor of limited government with the following:

Hopefully you and you wife will enjoy smooth career paths, and never suffer an unanticipated layoff. The fall from being a well paid professional to being unemployed is a long one indeed, and I don't know too many people in today's economy who don't have to worry about it.

If you read the comments in toto, those that favor Obamacare tend to focus a lot on security. They want to be protected from risk. And who can blame them?

The problem is that, as Ben Franklin observed, "They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety."

Unlike the liberal, the conservative recognizes that one cannot have government-provided security without risk to personal liberty and economic prosperity.

The point is well-captured in an essay by John Attarian on the economic thought of conservative icon Russell Kirk:

Like his defense of the free economy, Dr. Kirk’s rejection of statism combined philosophical and economic considerations. Keenly aware of human imperfectibility and reality’s constraints, he categorically rejected all utopian economic schemes. Utopia, he reiterated, means Nowhere. Only incremental improvements in the human condition are possible—and the only real progress is within individual characters and consciences.^[17]

Prudence, too, argues powerfully against statism. “Society is not a machine,” Kirk saw, but rather “a delicate growth or essence,”^[18] with causality running between economy, society, and culture in complex ways. Prosperity makes a flourishing culture possible; but Rome’s decline shows that government economic mismanagement “may undo a high culture.”^[19] Also, “our industrial economy, of all systems man ever created, is that most delicately dependent upon public energy, private virtue, and fertility of imagination.”^[20] Hence the need for caution, lest government disrupt the economy and exact unforeseen forfeits. For example, while government cannot create ability, statism can extirpate it. “The thing has been done before.”^[21] Better that we not meddle with things we don’t understand.

Furthermore, imperfect people cannot be trusted with much power. Kirk exploded both statists’ moral pretensions and democratic ideologues’ crass error of confusing democracy with liberty:

To say that the “democratic” state would not deprive anyone of liberty is to play upon words. The democratic state, like any other, is directed by individuals, with all the failings to which humanity is heir, especially . . . the lust for power. To suppose that the mass-state would be always just and generous toward its slaves is to suppose that there would exist, upon all its levels, a class of philosopher-kings superior to human frailty, purged of lust and envy and petty ambition. But in modern America we have no such class to draw upon; indeed, often we seem to be doing what we can to abolish that sense of inherent responsibility and high honor which compensates a patriarchal or feudal society for its lack of private liberty.^[22]

A command economy is not only unfree, it stifles individual growth: providing for people’s wants and making their choices for them keeps them in “perpetual childhood,” thus discouraging “full development of mind and character.”^[23]

Desire for security inspired much of modernity’s drive to statism, but Kirk warned that swapping freedom for security is “a devil’s bargain.” Political freedom, individual rights, and economic freedom stand or fall together. And once the free market’s ordinary rewards for ordinary integrity disappear, economic performance inevitably declines. “In the modern industrial world, it really is not possible to buy economic security at the price of liberty.”^[24]

...

Dr. Kirk was a scathing critic of Social Security. Centralized, compulsory, wielding ever-expanding arbitrary power, it “bears nearly all the marks of a remorseless collectivism.”^[27] While acknowledging that some people wouldn’t save on their own, he maintained that it would be better “morally and economically” to let them make their own mistakes and to provide voluntary charity, than to embrace forced saving. He argued that Social Security’s stated motive, provision for the poor elderly, is disingenuous; the real reason for Social Security’s expansion is that it gives the government access to “a vast reserve of money and credit,” and is “disguised taxation,” evading opposition to new taxes.^[28] Kirk’s robust moral denunciation of Social Security, as tyrannical and mendacious, towers over today’s conservatives’ ingratiating endorsement and proposals to “save” it.

17.   See, e.g., Kirk, Intelligent Woman’s Guide, pp. 16-17; Reclaiming a Patrimony (Washington, D.C.: The Heritage Foundation, 1982), p. 9.

18.   Kirk, A Program for Conservatives, p. 181.

19.   Russell Kirk, The Wise Men Know What Wicked Things Are Written on the Sky (Washington, D.C.: Regnery Gateway, Inc., 1987), p. 17.

20.   Kirk, A Program for Conservatives, p. 210.

21.   Ibid., p. 180.

22.   Kirk, Intelligent Woman’s Guide, p. 107.

23.   Kirk, The American Cause, pp. 106-107.

24.   Ibid., p. 107.

25.   Kirk, Economics, p. 243.

26.   Ibid., p. 244.

27.   Kirk, A Program for Conservatives, p. 160.

28.   Ibid., p. 161.

Epstein on the Senate Health Bill

It would be impossible to summarize U Chicago law prof Richard Epstein's lengthy article on the economics and constitutionality of the Reid health care bill that's about to pass the Senate. Just go read it. And maybe send it to your Senator.

(HT: Ribstein)

Virginia Snow

Although there are times when I think I should have lived in Edwardian England (see, e.g., my post Modern Port), I'm mostly content to be a 21st Century Angeleno. I'm especially happy to live here in LA today. My mom lives in Virginia and reports having been house bound by two feet of snow. My friend Larry Ribstein is blogging from his vacation home in Virginia, with pictures of the 17+ inches of snow they've had.

I hate snow. I hate being cold.

I'm sitting on my deck, sipping some American Honey liqueur and smoking a Dunhill Peravia cigar. It's 65 degrees with a mild wind at 11 PM on December 19th.

God, I love LA.