Adam Levitin, The Servicing Settlement: Banks 1, Public 0:

[The settlement] cover[s] robosigning and overbilling in foreclosures. Given the relatively narrow scope of this settlement, it’s not surprising that the dollars involved are quite small compared to the overall harms created by the housing bubble and aftermath.

The formal price tag for the settlement is $25 billion, although it is projected to accomplish up to $40 billion in relief. Only $5 billion of that is hard cash contributed by the banks. Let me repeat that. [...]]]> Today, Jon Walker tweeted that “No one man has done more to protect the power of the financial elites than President Obama.” Is that a fair assessment? Here are some views expressed on the mortgage settlement today:

Adam Levitin, The Servicing Settlement: Banks 1, Public 0:

[The settlement] cover[s] robosigning and overbilling in foreclosures. Given the relatively narrow scope of this settlement, it’s not surprising that the dollars involved are quite small compared to the overall harms created by the housing bubble and aftermath.

The formal price tag for the settlement is $25 billion, although it is projected to accomplish up to $40 billion in relief. Only $5 billion of that is hard cash contributed by the banks. Let me repeat that. The five banks involved in the settlement, which have a combined market capitalization of over $500 billion, are putting in only $5 billion. That’s less than 1% of their net worth. And they are admitting no wrongdoing. To call that accountability is laughable. . . . $32 billion of the settlement is being financed on the dime of MBS investors such as pension funds, 401(k) plans, insurance companies, and the like—-parties that did not themselves engage in any of the wrong-doing covered by the settlement.

William K. Black, How Liberals are Getting Spun in the Mortgage Settlement Debate:

The Obama administration’s record of prosecuting elite financial frauds is worse than the Bush administration’s record, which is a very large statement. This fact is demonstrated by a November report by Syracuse University’s Transitional Records Access Clearinghouse (TRAC), “Criminal Prosecutions for Financial Institution Fraud Continue to Fall.” The truth is that neither administration has prosecuted any elite CEO for the epidemic of mortgage fraud that drove the ongoing crisis, in contrast to over 1,000 elite felony convictions arising from the Saving & Loan debacle in the 1980s.

Yet today’s ongoing crisis caused losses more than 70 times greater than the S&L debacle, and the amount of elite fraud driving this crisis is also vastly greater. Bank CEOs leading what I call “accounting control frauds” now do so with impunity. . . . The [staffing level of the current Obama administration] working group does not pass even the most generous laugh test. No one who has ever been involved in a successful, complex criminal investigation of a large organization could take it seriously.

Robert Kuttner, The Mortgage Deal with the Devil:

Ideally, we didn’t need this settlement now. It would have been better for prosecutors to mount more cases, not just related to robo-signing and MERS but aimed at the fraud at the heart of mortgage securitization. Then, prosecutors could extract penalties that more accurately fit the crime—specifically fines and mortgage relief as restitution, well into the hundreds of billions of dollars. This is said to be Schneiderman’s goal, both in agreeing to join the settlement once it was revised so as not to tie his hands and taking part in the Justice Department task force.

Yves Smith, The Top 12 Reasons Why You Should Hate the Mortgage Settlement:

We’ve now set a price for forgeries and fabricating documents. It’s $2000 per loan. This is a rounding error compared to the chain of title problem these systematic practices were designed to circumvent. The cost is also trivial in comparison to the average loan, which is roughly $180k, so the settlement represents about 1% of loan balances. It is less than the price of the title insurance that banks failed to get when they transferred the loans to the trust. It is a fraction of the cost of the legal expenses when foreclosures are challenged. It’s a great deal for the banks because no one is at any of the servicers going to jail for forgery and the banks have set the upper bound of the cost of riding roughshod over 300 years of real estate law.

Janell Ross, Mortgage Settlement Leaves Some Foreclosure Victims Wanting:

Settled into a new life — one with a low credit score in the 500s that makes buying a car or even connecting utilities a more expensive proposition, in a neighborhood populated mostly by senior citizens instead of middle-class families with kids — Monica Zapata’s anxiety is under control. Ricardo Zapata has a new job managing a Cuban restaurant. The family has a lot less money and little hope of owning a home again in the next decade. Those aren’t the things that sometimes leave Zapata fighting back tears. . . . “I try to be a grateful person, really I do,” said Monica Zapata. “But it’s almost a slap in the face when you consider everything we’ve been through.”

Better Markets Blog, A Criminal Sellout:

[T]he most egregious aspect of all this may be the reporting: stories repeatedly use innocuous words that obscure what really happened here. For example, so-called “robo signing” is massive, systematic, fraudulent, criminal conduct. This is where banks themselves or their contractors sign legal documents to file in court swearing under oath that the facts are true and therefore support the legal application to take someone’s home away from them, i.e., foreclose.

Can you think of anything more despicable? Lying under oath to get someone thrown out of their home and onto the street. That’s what robo-signing means and what it obscures every time that word is used. Then, there’s always someone saying, basically, no harm, no foul because it’s just a “paper work” problem and these people are all delinquent and “deserve” to be thrown out on the street. Really? Since when does saying “trust us” while we lie to you under oath make illegal conduct acceptable?

I have long been concerned about foreclosure fraud and other bank abuses. If the reactions above are on target, we are in danger of entrenching a two-tier system of justice. An inflection point has been reached in a long, tragic decline in the rule of law in matters relating to powerful banks. It will be very interesting to see where the negotiators go on to work after they leave government employ.

Image Credit: American Casino.

There is an introduction [...]]]> On February 14-16, we will host an online symposium on A Legal Theory for Autonomous Artificial Agents, by Samir Chopra and Laurence White. Given the great discussions at our previous symposiums for Tim Wu’s Master Switch  and Jonathan Zittrain’s Future of the Internet, I’m sure this one will be a treat.  Participants will include Ken Anderson, Ryan Calo, James Grimmelmann, Sonia Katyal, Ian Kerr, Andrea Matwyshyn, Deborah DeMott, Paul Ohm,  Ugo Pagallo, Lawrence Solum, Ramesh Subramanian and Harry Surden.  Chopra will be reading their posts and responding here, too.  I discussed the book with Chopra and Grimmelmann in Brooklyn a few months ago, and I believe the audience found fascinating the many present and future scenarios raised in it.  (If you’re interested in Google’s autonomous cars, drones, robots, or even the annoying little Microsoft paperclip guy, you’ll find something intriguing in the book.)

There is an introduction to the book below the fold.  (Chapter 2 of the book was published in the Illinois Journal of Law, Technology and Policy, and can be found online at SSRN).  We look forward to hosting the discussion!

Social and economic interactions today increasingly feature a new category of being: the artificial agent. It buys and sells goods; determines eligibility for legal entitlements like healthcare benefits; processes applications for visas and credit cards; collects, acquires and processes financial information; trades on stock markets; and so on. We use language inflected with intentions in describing our interactions with an artificial agent, as when we say “the shopping cart program wants to know my shipping address.” This being’s competence at settling into our lives, in taking on our tasks, leads us to attribute knowledge and motivations, and to delegate responsibility, to it. Its abilities, often approximating human ones and sometimes going beyond them, make it the object of fear and gratitude: it might spy on us, or it might relieve us of tedium and boredom.

The advances in the technical sophistication and autonomous functioning of these systems represent a logical continuation of our social adoption of technologies of automation. Agent programs represent just one end of a spectrum of technologies that automate human capacities and abilities, extend our cognitive apparatus, and become modeled enhancements of ourselves. More than ever before, it is coherent to speak of computer programs and hardware systems as agents working on our behalf. The spelling checker that corrects this page as it is written is a lexicographic agent that aids in our writing, as much an agent as the automated trading system of a major Wall Street brokerage, and the PR2 robot, a prototype personal robotic assistant (Markoff 2009). While some delegations of our work to such agents are the oft-promised ones of alleviating tedious labor, others are ethically problematic, as in robots taking on warfare roles (Singer 2009). Yet others enable a richer, wider set of social and economic interconnections in our networked society, especially evident in e-commerce (Papazoglu 2001).

As we increasingly interact with these artificial agents in unsupervised settings, with no human mediators, their seeming autonomy and increasingly sophisticated functionality and behavior, raises legal and philosophical questions. For as the number of interactions mediated by artificial agents increase, as they  become actors in literal, metaphorical and legal senses, it is ever more important to understand, and do justice to, the artificial agent’s role within our networks of social, political and economic relations. What is the standing of these entities in our socio-legal framework? What is the legal status of the commercial transactions they enter into? What legal status should artificial agents have? Should they be mere things, tools, and instrumentalities?  Do they have any rights, duties, obligations? What are the legal strategies to make room for these future residents of our polity and society? The increasing sophistication, use, and social embedding of computerized agents makes the coherent answering of older questions raised by mechanical automation ever more necessary.

Carving out a niche for a new category of legal actor is a task rich with legal and philosophical significance. The history of jurisprudence addressing doctrinal changes in the law suggests legal theorizing to accommodate artificial agents will inevitably find its pragmatic deliberations colored by philosophical musings over the nature and being of these agents. Conversely, the accommodation, within legal doctrines, of the artificial agent, will influence future philosophical theorizing about such agents, for such accommodation will invariably include conceptual and empirical assessments of their capacities and abilities. This interplay between law and philosophy is not new: philosophical debates on personhood, for instance, cannot proceed without an acknowledgement of the legal person, just as legal discussions on tort liability are grounded in a philosophical understanding of responsibility and causation.

This book seeks to advance interdisciplinary legal scholarship in answer to the conundrums posed by this new entity in our midst. Drawing upon both contemporary and classical legal and philosophical analysis, we attempt to develop a prescriptive legal theory to guide our interactions with artificial agents, whether as users or operators entering contracts, acquiring knowledge or causing harm through agents, or as persons to whom agents are capable of causing harm in their own right. We seek to apply and extend existing legal and philosophical theories of agency, knowledge attribution, liability, and personhood, to the many roles artificial agents can be expected to play and the legal challenges they will pose while so doing. We emphasize legal continuity, while seeking to refocus on deep existing questions in legal theory.

The artificial agent is here to stay; our task is to accommodate it in a manner that does justice to our interests and its abilities.

Not many policymakers or scholars can write with the authority of Gregg Bloche. Bloche is not only a law professor, but a physician, who knows his way around a hospital. Throughout The Hippocratic Myth, Bloche cements his authority in the mind of the reader by relating stories of his experience as a clinician. In each of these stories, his humane and insightful approach as psychiatrist shines through. These fluently-written passages strike one as the work of one of those rare practitioners who manages to care deeply about the patient at hand while simultaneously contextualizing the encounter in a larger framework. Thus The Hippocratic Myth should take its place among other well-received books by physicians with a sense of [...]]]> Here’s an abstract of my review of Gregg Bloche’s fascinating book, The Hippocratic Myth:

Not many policymakers or scholars can write with the authority of Gregg Bloche. Bloche is not only a law professor, but a physician, who knows his way around a hospital. Throughout The Hippocratic Myth, Bloche cements his authority in the mind of the reader by relating stories of his experience as a clinician. In each of these stories, his humane and insightful approach as psychiatrist shines through. These fluently-written passages strike one as the work of one of those rare practitioners who manages to care deeply about the patient at hand while simultaneously contextualizing the encounter in a larger framework. Thus The Hippocratic Myth should take its place among other well-received books by physicians with a sense of the big picture, including Atul Gawande’s The Checklist Manifesto and Better and Jerome Groopman’s How Doctors Think.

In The Hippocratic Myth, Bloche leverages this authority to advocate for a more cost sensitive health care system, where individuals frankly acknowledge that they should expect trade-offs between cost and access to certain forms of care. My concern in this review is that Bloche the caring and expert physician would have a tough time in a health care world too deeply influenced by Bloche the cost-conscious author.

Bloche’s book is one of those rare volumes that merits a careful read by scholars, classroom reading by students, and a broad popular audience.

X-Posted: Health Reform Watch.

A common trope for conservative policy intellectuals is that they want to “means test” the welfare state – reduce its availability for those with high wealth and income and focus it on those with the least wealth and income. But the Tea Party base wants the opposite – they are opposed to a welfare state for the poor, young people, undocumented workers and other groups they think are undeserving. The welfare state is ok for people like themselves, but for people they think that don’t make the cut it should be a nonexistent or a burdensome affair.

From the latest research on the Tea Party we learn that “Tea [...]]]> Mike Konczal has an interesting interpretation of the recent rise of Gingrich in GOP polling:

A common trope for conservative policy intellectuals is that they want to “means test” the welfare state – reduce its availability for those with high wealth and income and focus it on those with the least wealth and income. But the Tea Party base wants the opposite – they are opposed to a welfare state for the poor, young people, undocumented workers and other groups they think are undeserving. The welfare state is ok for people like themselves, but for people they think that don’t make the cut it should be a nonexistent or a burdensome affair.

From the latest research on the Tea Party we learn that “Tea Partiers judge entitlement programs not in terms of abstract free-market orthodoxy, but according to the perceived deservingness of recipients…The fundamental distinction for them is not state vs. individual, it is the division of the United States into ‘workers’ vs. ‘people who don’t work.’” This is welfare as private charity, charity conditional on fitting certain expectations, not as an unconditional right. . . .

[T]he conservative mind doesn’t see the economy as something that is defective when involuntary unemployment shoots up or something that should work to the advantage of those who have the least. To them, the threat of people going hungry for failing in the market is what creates the ability to thrive in that market. The market doesn’t just reward the successful, it punishes those who fall behind. Food stamps deny people of that experience[.]

So, too, might burial money intended for the poor. Gingrich has not yet elaborated on the bracing effects of dying without enough money for a funeral. But he does have hard-edged answers for those near the beginning of life, repeatedly urging a repeal of “outdated” child labor laws. Remember, you heard it on this blog first.

 Every lawsuit is a potential drama: a story of conflict, often with victims and villains, leading to justice done or denied. Yet a great deal, if not all, that we learn about the most noteworthy of lawsuits — the truly great cases — comes from reading the opinion of an appellate court, written by a judge who never saw the parties of the case, who worked at a time and a place far removed from the [...]]]> Paul A. Lombardo published an essay “Legal Archaeology: Recovering the Stories behind the Cases” in the Fall 2008 issue of the Journal of Law, Medicine, and Ethics.  It reminded me of the wonderful chapters in this volume of “health law stories.”  Here are some excerpts that may be of interest: 

 Every lawsuit is a potential drama: a story of conflict, often with victims and villains, leading to justice done or denied. Yet a great deal, if not all, that we learn about the most noteworthy of lawsuits — the truly great cases — comes from reading the opinion of an appellate court, written by a judge who never saw the parties of the case, who worked at a time and a place far removed from the events that gave rise to litigation.

Rarely do we admit that the official factual account contained in an appellate opinion may have only the most tenuous relationship to the events that actually led the parties to court. The complex stories — turning on small facts, seemingly trivial circumstances, and inter-contingent events — fade away as the “case” takes on a life of its own as it leaves the court of appeals.

How can a law professor correct this bias?  Here are some of Lombardo’s suggestions: 

The best starting point for doing legal archaeology is the case record itself. We all begin our investigation of cases by reading an appellate opinion. With some extra effort, we can retrieve the records and briefs that the judges relied on as they wrote that opinion. Of course, the case record that is printed for submission to an appellate tribunal will include only a small portion of the documents that make up the lawsuit’s paper trail.

Much of the material contained in the case record is now filed electronically, and for recent cases, may be available on the Web. But even for most pre-Internet cases, finding the proper repository for all these records is not difficult. A visit to your school’s reference librarian with copies of the articles referenced here should get you started.

Lombardo also suggests consulting newspapers and magazines, professional journals, and material generated by the parties and their lawyers.  Though some students may complain of “reading overload,” skillful editing can make the effort to contextualize the cases well worth everyone’s while.  I also anticipate that internet archives of particular helpful case studies will accumulate over time.

Selected References from Lombardo:

P. Brooks and P. Gewirtz, eds., Law’s Stories: Narrative and Rhetoric in the Law (New Haven: Yale University Press, 1997).

J. L. Maute, “The Value of Legal Archaeology,” Utah Law Review 2000, no. 2 (2000).

D. L. Threedy, “Legal Archaeology: Excavating Cases, Reconstructing Context,” Tulane Law Review 80, no. 4 (2006)

C. Geertz, “Thick Description: Toward an Interpretive Theory of Culture,” in The Interpretation of Cultures: Selected Essays.

X-Posted: Health Law Profs.

To get a better sense of why the “animals” may be complaining, be sure to listen to Mike Daisey’s extraordinary report on his trip to Shenzhen, home of a massive Foxconn factory. Here’s one excerpt:

N-hexane is an iPhone screen cleaner. It’s great because it evaporates a little bit faster than alcohol does, which means [...]]]> Among the billionaires at the vanguard of global capital, Terry Gou of Hon Hai (also known as Foxconn) deserves special recognition for his honesty. “Hon Hai has a workforce of over one million worldwide and as human beings are also animals, to manage one million animals gives me a headache,” said the chairman. His company has also begun building “an empire of robots” to replace a whining workforce.

To get a better sense of why the “animals” may be complaining, be sure to listen to Mike Daisey’s extraordinary report on his trip to Shenzhen, home of a massive Foxconn factory. Here’s one excerpt:

N-hexane is an iPhone screen cleaner. It’s great because it evaporates a little bit faster than alcohol does, which means you can run the production line even faster and try to keep up with the quotas. The problem is that n-hexane is a potent neurotoxin, and all these people have been exposed. Their hands shake uncontrollably. Most of them can’t even pick up a glass.

I talk to people whose joints in their hands have disintegrated from working on the line, doing the same motion hundreds and hundreds of thousands of times. It’s like carpal tunnel on a scale we can scarcely imagine. And you need to know that this is eminently avoidable. If these people were rotated monthly on their jobs, this would not happen.

But that would require someone to care. That would require someone at Foxconn and the other suppliers to care. That would require someone at Apple and Dell and the other customers to care. Currently no one in the ecosystem cares enough to even enforce that. And so when you start working at 15 or 16, by the time you are 26, 27, your hands are ruined. And when they are truly ruined, once they will not do anything further, you know what we do with a defective part in a machine that makes machine. We throw it away.

When workers are already treated as machines, perhaps their replacement by robots should be a cause for celebration. But the question then becomes: what do the displaced do for a living? Is there an alternative to exploitation?

Writers in the more rarefied precincts of technology studies tend to praise the fading boundaries between man, machine, and beast. However, it’s by no means a foregone conclusion that animals’ interests will be vindicated by the legal order, or robots treated with the simulacrum of respect that their simulacrum of humanity merits. To the extent the bulk of humanity is being recognized as “dependent rational animals,” those in authority tend to agree with Gou’s approach more than Alasdair MacIntyre’s.

Expect more speed-up in the developed world, as thought leaders decree that Americans must become “ten times more productive” if they dare demand wages ten times higher than those prevailing among the bullied and battered workers at the bottom of the supply chain. That’s our future, unless we can continue to rally around a sense of social minimums due to each person qua person. That motivates my interest in positive rights, and the fantastic discussion that followed this post on the topic. Richard Posner once said that “Most of us would think it downright offensive to give greater rights to . . . computers than to retarded people, upon a showing that . . . [they have] a greater cognitive capacity than a profoundly retarded human being.” Similarly, global priorities are troublingly scrambled if the construction of a “robot empire” is more pressing than the establishment of humane and secure living conditions for those whose work created the wealth that makes the “empire” possible.

Sharing the Gains from Automation

Of course, we all know the Davos elite’s response to such dark premonitions: get educated and hustle. The bard of flatworld, Tom Friedman, helpfully applauds “race to the bottom” online auctions for talent as one more “opportunity.” He ignores the vast literature on these systems’ potential to eviscerate the last vestiges of legal protections for employees. Friedman’s too busy jet-setting to worry about anyone’s slavery footprint. Thinking about how to get health care or housing to the newly “liberated” global workforce is beneath him.

While Friedman’s Panglossian outlook is au courant, this plain talk from FDR appears ever more a relic of the 20th century:

To those who say that our expenditures for Public Works and other means for recovery are a waste that we cannot afford, I answer that no country, however rich, can afford the waste of its human resources. Demoralization caused by vast unemployment is our greatest extravagance. Morally, it is the greatest menace to our social order. Some people try to tell me that we must make up our minds that for the future we shall permanently have millions of unemployed just as other countries have had them for over a decade.

What may be necessary for those countries is not my responsibility to determine. But as for this country, I stand or fall by my refusal to accept as a necessary condition of our future a permanent army of unemployed. On the contrary, we must make it a national principle that we will not tolerate a large army of unemployed and that we will arrange our national economy to end our present unemployment as soon as we can and then to take wise measures against its return. I do not want to think that it is the destiny of any American to remain permanently on relief rolls.

We can count on Friedman and other sophisticates to claim that times have changed. Globalization and automation have made many US jobs obsolete, they say. FDR may have had an answer to the first Great Depression, but not the second.

Is the answer really to put everyone on a hamster wheel of digital labor auctions and scrambles for gigs? I don’t think that’s correct. The question for a future economics (and morals) is how to set a baseline “social minimum” for workers in an utterly precarious and unpredictable work environment.

We have the resources to do this. There have been enormous gains in productivity over the past few decades. But the gains are going disproportionately to those at the very top. In the last economic expansion, the top 1 percent of U.S. households captured two-thirds of income gains. Yes, that’s 67% going to the top 1%. During the expansion, “the inflation-adjusted income of the top 1 percent of households grew more than ten times faster than the income of the bottom 90 percent of households.” The thought that the gains from automation will be shared equally among social classes is about as quaint as this personal robot envisioned in 1961.

Now I’m sure that, among that top 1%, there were some incredibly hard-working geniuses. Maybe some produced productivity gains that were actually worth 200 times more than what the average member of the bottom 99% contributed.* But power drives economic outcomes at least as often as productivity. Being able to slash all your workers’ pay (or work them to exhaustion in an 110-degree warehouse) simply because there is high unemployment is not exactly a valuable skill. Any fool could improve the bottom line at “a highly profitable company” by “demanding large-scale concessions” from its employees.

As a whole host of commentators have suggested, automation and technological change is threatening to wipe out whole industries, and to create far fewer jobs than they destroy. If software and hardware are making jobs in fields ranging from medicine to retail to science to law obsolete, it doesn’t make sense to continue giving the lion’s share of gains to the top 1%. A longshoremen’s union provided one model here:

In modern times, far more than other unions, the longshoreman have used technological change to their advantage. In 1960, the West Coast longshoremen agreed to far-reaching automation that replaced inefficient break-bulk cargo, which relied on hooks to move the cargo, with containerized cargo, which relies on cranes. In accepting automation, the union recognized that productivity would soar and the number of longshoremen needed would plunge; there are now 10,500 West Coast longshoremen, down from 100,000 in the 1950′s.

In exchange, the union received an unusual promise: port operators pledged to share the fruits of the new automation. Management promised all longshoremen a guaranteed level of pay, even if there was not work for everyone. Management also promised to share the wealth.

I found this example via Peter Frase, who offers the following gloss:

Basically, I think this is the deal we need to strike throughout the economy: automation (and relatedly, free trade) in exchange for compensating the displaced. However, the longshoremen were only able to achieve this victory because they occupy an unusual strategic choke-point in the economy. Shutting down the ports can cripple wide swaths of business, and this gives dockworkers a kind of negotiating leverage that isn’t available to, say, supermarket checkers. Which is why I think that the demand to compensate workers for technological change now has to be fought out politically and electorally, at the level of the state, rather than in the individual workplace. That’s the essence of my argument for the Basic Income: just like the dockworkers’ agreement, it ensures a level of pay whether or not there is work for everyone, only it generalizes the principle to encompass the whole economy.

You can dismiss that as utopianism if you like. Certainly the call for work reduction and the decoupling of income from employment has been made many times through the generations, from Paul LaFargue to André Gorz to Stanley Aronowitz. But the left does itself no favors by remaining in a defensive crouch, clinging to nostalgia for a political order that was rooted in a very different political economy–and which wasn’t even all that great to begin with. . . . The modern right provided an offensive strategy and a grand vision of what was wrong with the society that existed and what had to be done to turn it into something better: one market under god.

Pace economists like Goldin & Katz, we can’t guarantee livelihoods by promoting employment by educating everyone more. When robots are in line to replace some of the most highly educated people in society, that’s a recipe for disappointment. The real question is how to divide the spoils from societal advancement and automation fairly. Alperovitz and Daly have demonstrated that “up to 90 percent (and perhaps more) of current economic output derives not from individual ingenuity, effort, or investment but from our collective inheritance of scientific and technological knowledge: an inheritance we all receive as a “free lunch.”" The real motivation for calling workers “animals” or “machines” is to deny them their share in the the “universal destination of goods,” which “remains primordial, even if the promotion of the common good requires respect for the right to private property and its exercise.”

*My back of the envelope calculation: If there were 100 units of gain in this time period to be distributed to 100 people, that means that the top person would get 67 units. The 99 persons remaining would share the remaining 33. That average would be one third of a unit for each of the 99. That’s 200 times less than 67.

Mazzone argues that overenforcement of copyright is rampant:

False copyright notices appear on modern reprints of Shakespeare’s plays, Beethoven’s piano scores, greeting card versions of Monet’s Water Lilies, and even the U.S. Constitution. Archives claim blanket copyright in everything in their collections. Vendors of microfilmed versions of historical newspapers assert copyright ownership. These false copyright claims, which are often accompanied by threatened litigation [...]]]> In my Boston Review piece on SOPA, I mentioned a sad story about a drawn-out copyright lawsuit’s effect on an entrepreneur. I should have also brought up a whole book on the problem of IP overenforcement, Jason Mazzone’s Copyfraud. Important on the day it was published, it’s particularly salient now that Congress is considering expanding the powers of copyright and trademark owners.

Mazzone argues that overenforcement of copyright is rampant:

False copyright notices appear on modern reprints of Shakespeare’s plays, Beethoven’s piano scores, greeting card versions of Monet’s Water Lilies, and even the U.S. Constitution. Archives claim blanket copyright in everything in their collections. Vendors of microfilmed versions of historical newspapers assert copyright ownership. These false copyright claims, which are often accompanied by threatened litigation for reproducing a work without the “owner’s” permission, result in users seeking licenses and paying fees to reproduce works that are free for everyone to use.

Mazzone’s book highlights an underappreciated problem of rights fabrication that threatens to become a form of private legislation. If the intellectual property system is to genuinely promote innovation and creativity, it will need to address the issues he describes. It should certainly do so before adopting the types of intrusive remedies proposed under SOPA/PIPA. Mazzone’s policy recommendations are wise and often original, both recognizing and building on a large law review literature on IP reform. As Mazzone has argued:

Congress should amend the Copyright Act to allow private parties to bring civil causes of action for false copyright claims. Courts should extend the availability of the copyright misuse defense to prevent copyright owners from enforcing an otherwise valid copyright if they have engaged in past copyfraud. In addition, Congress should further protect the public domain by creating a national registry listing public domain works and a symbol to designate those works.

Mazzone presents a level-headed and persuasive account of the policy changes that could improve matters. Copyfraud is a wonderful read and a great contribution to the IP literature. It’s recommended reading for anyone wondering how such an imbalanced legal regime arose.

SOPA has spawned a powerful alliance of netizens to support basic principles of due process, free expression, and accountability online. But this battle is merely a prelude to a much more contested debate about the proper allocation of digital revenues. Like health care battles between providers and insurers, struggles between content owners and intermediaries will profoundly shape our common life. Stopping SOPA is only one small step toward preserving a fair, free, and democratic culture online.

For other Co-Op commentary, here’s Danielle Citron, [...]]]> I have an essay on the SOPA controversy at the Boston Review. My main point: SOPA and its ilk are terrible, but its opponents should rally behind a constructive alternative to promote funding for arts and culture. As I argue there:

SOPA has spawned a powerful alliance of netizens to support basic principles of due process, free expression, and accountability online. But this battle is merely a prelude to a much more contested debate about the proper allocation of digital revenues. Like health care battles between providers and insurers, struggles between content owners and intermediaries will profoundly shape our common life. Stopping SOPA is only one small step toward preserving a fair, free, and democratic culture online.

For other Co-Op commentary, here’s Danielle Citron, Gerard Magliocca, and Derek Bambauer.

1) An opinion piece in the Bergen Record, A Constitutional Right to Health Care.

2) A post at Madisonian, Internet Access as a Human Right.

I don’t think I have much to add to the already well-developed philosophical literature on positive rights, but I’d like to do more to bring this concept to an American audience.

1) Nicholas K. Peart, Why is the NYPD After Me?

Less than two years later, in the spring of 2008, N.Y.P.D. officers stopped and frisked me, again. And for no apparent reason. This time I was leaving my grandmother’s home in Flatbush, Brooklyn; a squad car passed me as I walked down East 49th Street to the bus stop. The car backed up. Three officers jumped out. Not again. The officers ordered me to stand, hands against a garage door, fished my wallet out of my pocket and looked at my ID. Then they let me go. I was stopped again in September of 2010. This time I was just walking home from the gym. It was the [...]]]> To mark the day, a few reflections:

1) Nicholas K. Peart, Why is the NYPD After Me?

Less than two years later, in the spring of 2008, N.Y.P.D. officers stopped and frisked me, again. And for no apparent reason. This time I was leaving my grandmother’s home in Flatbush, Brooklyn; a squad car passed me as I walked down East 49th Street to the bus stop. The car backed up. Three officers jumped out. Not again. The officers ordered me to stand, hands against a garage door, fished my wallet out of my pocket and looked at my ID. Then they let me go. I was stopped again in September of 2010. This time I was just walking home from the gym. It was the same routine: I was stopped, frisked, searched, ID’d and let go. . . .

[L]ast year, the N.Y.P.D. recorded more than 600,000 stops; 84 percent of those stopped were blacks or Latinos. Police are far more likely to use force when stopping blacks or Latinos than whites. In half the stops police cite the vague “furtive movements” as the reason for the stop. Maybe black and brown people just look more furtive, whatever that means. These stops are part of a larger, more widespread problem — a racially discriminatory system of stop-and-frisk in the N.Y.P.D.

2) MLK’s Legacy: The Charleston Hospital Workers’ Strike of 1969:

During the year after her husband’s assassination, Coretta Scott King made several visits to Charleston, S.C., where hospital aides at what was then the Medical College of South Carolina were involved in a protracted fight for decent wages. After a 113-day strike, the union won an agreement that led to wage increases and new grievance procedures.

The campaign was led by Mary Moultrie, a South Carolina native . . . In Moultrie’s telling, the gains that the union won lasted only for a few years. Because South Carolina is a right-to-work state, the union couldn’t manage to maintain much strength. But Moultrie didn’t give up: She was still organizing as recently as 2008.

3) Adam Kotsko, On the commemoration of Martin Luther King

Above all, they say: we gave you formal equality and canonized the man who forced us to do so — now can we please not talk about this any more? Yet things are not quite so fargone as that. Despite their formidable power, despite all the efforts of domestication and neutralization they’ve devoted to it, they can’t fully control the meaning of such a powerful symbol. We should be glad that this date is on the calendar, not so that we can passively honor that symbol but so that we can continue to struggle over its meaning.

4) Glenn Loury, Ghettos, Prisons, and Racial Stigma (Tanner Lectures, 2007)

[O]ne can see from the table[s] that the experience of incarceration for poorly educated black men is estimated to be four times more prevalent in the later than in the earlier cohort – 58.9% as compared to 17.1%. The massive scale of this policy shift is stunning. To repeat: there is a nearly three-fifths chance that a black male with less than HS diploma born between 1965-69 will have gone to prison or jail at least once prior to reaching age 35.

5) John Paul Stevens review of William Stuntz, The Collapse of American Criminal Justice

While only 10 percent of the adult black population uses illegal drugs, as does a roughly equal percentage—9 percent—of the adult white population, blacks are nine times more likely than whites to serve prison sentences for drug crimes. “And the same system that discriminates against black drug defendants also discriminates against black victims of criminal violence.” As “suburban voters, for whom crime is usually a minor issue,” have come to “exercise more power over urban criminal justice than in the past,” police protection against violent felonies has disproportionately extended to suburban neighborhoods rather than the urban centers where more black individuals reside.

The “bottom line,” Stuntz explains, has been that “poor black neighborhoods see too little of the kinds of policing and criminal punishment that do the most good, and too much of the kinds that do the most harm.” In this sense and others, Stuntz concludes, our criminal justice system has “run off the rails.”

6) Ten OTHER things Martin Luther King said.

7) If you missed it last year; some commentary on Michelle Alexander’s The New Jim Crow.

Paul Krugman notes today that MLK would be “disappointed” in what the US has become since his death. I think the feeling of alienation and indignation would be much stronger than that.

Anyone who believes the Internet to be exclusively, or even primarily, a site for the democratisation of the media or a mechanism to enhance participation in public discourse needs to read this book. This outstanding collection tackles the dark side of the Internet, its use by ‘cyber mobs’, liars, aggressive misogynists and purveyors of hate to distribute their views largely with impunity, while their targets [...]]]> Katharine Gelber offers a thoughtful review of The Offensive Internet in the Australian Review. (David Levine conducted an interview with the book’s editors, Martha Nussbaum and Saul Levmore, available here.) I contributed an essay to this volume, and I found both the other essays in it and the conference it was based on very illuminating. As Gelber notes,

Anyone who believes the Internet to be exclusively, or even primarily, a site for the democratisation of the media or a mechanism to enhance participation in public discourse needs to read this book. This outstanding collection tackles the dark side of the Internet, its use by ‘cyber mobs’, liars, aggressive misogynists and purveyors of hate to distribute their views largely with impunity, while their targets suffer the consequences of this predominantly unregulated arena for speech. . . .

The ubiquity of the Internet, the permanence of posts, and the accessibility of data through search engines that do the looking for you mean that material that makes its way online can affect people’s lives over the long term and in profound ways. When you combine these features with the anonymity of posters and the difficulty of regulating the Internet, it means that people do things and say things on the Internet that they would not do or say in face to face conversations, or at least if they did there would be legal and moral consequences. The Internet as a medium provides a uniquely powerful and wide reaching mechanism with which to do bad things, yet relatively little work to date has acknowledged this aspect of it.

A growing feminist literature, ranging from the work of co-blogger Danielle Citron and that of Ann Bartow, to interventions in social web and other communities, also highlights these problems.

Some will say: if you don’t like a given online community, just join another one. But the ubiquity of options on the internet often amounts to little more than a mirage of choice. You may really like Google+ or Instagram and find it to be a more congenial environment than Facebook or Twitter. (As Liz Kelley put it, “Instagram is homey; Twitter is noisy.”) But just try dragging all your friends or followers to them.

Moreover, digital networks aren’t just leisure activities for many people. Public deliberation occurs on them. Entities like Klout have started a competitive game of influence accumulation with career implications. And they can be important forums for the development of identity, as Rob Horning explains:

The more effort we put into crafting identity online, the more material we supply to Facebook and search engines to associate with contextual ads and other marketing initiatives. For this organizational work we are compensated not with wages but with a stronger sense of self, measurable in hard, quantifiable terms. How many friends do you have? How often do they update? How many photos have you shared? How many times have they been looked at? And so on.

All of this is to say that as Web 2.0 has infiltrated our everyday life, it has transformed our habitus — sociologist Pierre Bourdieu’s term for our manifest and class-bound way of being in the social world — into an explicit productive force without our conscious consent. By continually enticing us to produce more and enrich our self-concept, it presents a clear danger to our ability to maintain a coherent sense of ourselves — to sustain a feeling of ontological security, as Anthony Giddens puts it. Inundated with digital information from all sides — from friends, marketers, and the fruits of own unbounded curiosity — we can fritter away our time shuffling and reshuffling the little bits of novelty without performing a synthesis.

The data deluge and constantly shifting metrics of digital capitalism are hard enough to deal with. The types of civil rights concerns raised by The Offensive Internet shouldn’t be burdening anyone.

X-Posted: Madisonian.

It really is a war against the poor. The inequity that has existed in the past is going to continue unless civil society is informed, asks the right questions of its government, of its business leadership, and [...]]]> The past few years I’ve tried to find an inspiring quote for the New Year for the blog. There’s a rich vein of insight to be mined from the Carnegie Council podcasts, which I recently discovered on iTunes. One speaker I particularly enjoyed was Krishen Mehta, a former partner with PricewaterhouseCoopers who is now the co-chairman of Global Financial Integrity’s advisory board. Asked about what motivated him to try to stop the shocking abuse of tax havens and mispriced trade by oligarchs, he said the following:

It really is a war against the poor. The inequity that has existed in the past is going to continue unless civil society is informed, asks the right questions of its government, of its business leadership, and asks for more responsibility. One of my favorite writers is Blaise Pascal, who said that “justice and power must be brought together so that whatever is just may be powerful and whatever is powerful may be just.”

A recent study concluded that, “For a salary of between £75,000 and £200,000, tax accountants destroy £47 in value, for every pound they generate.” Mehta, by contrast, is not only creating value, but doing so for the most vulnerable people. How appropriate that a thinker admired by both mathematicians and philosophers would inspire him.

Image Credit: Augustin Pajou. As described on Wikimedia Commons: “Blaise Pascal (1623–1662) studying the cycloid, engraved on the tablet he is holding in his left hand; the scattered papers at his feet are his Pensées, the open book his Lettres provinciales.”

[A] one-strike clause . . . allows the public housing authority to evict [the tenant] if any member of her household or any guest engages in certain kinds of criminal activity. . . . Stories abound about the one-strike policy being wielded in seemingly egregious ways to evict “innocent tenants,” such as a disabled elderly man in California whose caretaker was caught with crack. . . .The Chicago Reporter wrote in September that 86 percent of Chicago’s one-strike evictions last year did not arise from criminal activity by the person named on the lease.

“These policies, the effect of them on children, families, women, families [...]]]> Most readers of this blog are already familiar with draconian treatment of the poor by various law enforcers and state bureaucracies. Here’s yet another example:

[A] one-strike clause . . . allows the public housing authority to evict [the tenant] if any member of her household or any guest engages in certain kinds of criminal activity. . . . Stories abound about the one-strike policy being wielded in seemingly egregious ways to evict “innocent tenants,” such as a disabled elderly man in California whose caretaker was caught with crack. . . .The Chicago Reporter wrote in September that 86 percent of Chicago’s one-strike evictions last year did not arise from criminal activity by the person named on the lease.

“These policies, the effect of them on children, families, women, families of color, were not thought through. And I think now a national conversation is beginning to rethink that,” said Ariela Migdal, a senior staff attorney with the Women’s Rights Project of the American Civil Liberties Union. Migdal pointed to a June 2011 letter from HUD Secretary Shaun Donovan to public housing directors, encouraging the directors to use their “broad discretion” to create a flexible set of standards for who will be admitted to and allowed to stay in public housing.

Certainly the Obama administration has ample experience deploying “discretion” and “mercy” in other areas.  For example, consider Barry Ritholtz’s summary of a shocking Reuters report by Scott Paltrow on foreclosure fraud:

There have been . . . “tens of thousands of fraudulent documents filed in tens of thousands of cases.” Sworn affidavits have been filed containing false information. This is easily prosecuted perjury. . . . The size and scope of the fraud on the U.S. court system is unprecedented in U.S. history.

NY State court judge Arthur Schack, ruled in 2010 that pleadings by the Baum Law Firm— who handle 40% of NY foreclosures — were “so incredible, outrageous, ludicrous and disingenuous that they should have been authorized by the late Rod Serling, creator of the famous science-fiction television series, The Twilight Zone.”  There has been no fraud prosecution to date. . . . [and banks] have routinely filed falsified mortgage promissory notes — in some cases, six different documents have been filed, all claimed to be the original. At the least 5 must be forgeries — an easy felony to prosecute.

 The administration slapped BofA/Countrywide on the wrist for massively discriminatory action.  Its OCC has initiated a program where “servicers agree[] to submit foreclosure fraud for review by ‘independent’ third-party companies” that is not credible.  Matt Stoller describes the dynamics that are now wrecking lives and neighborhoods around the country:

The attitude during the go-go days of the housing bubble was “here today, gone tomorrow,” as Joe Nocera and Bethany McLean make clear in their book “All the Devils Are Here.” This was a refinement of the financial deal makers’ code, “IBG-YBG,” meaning “I’ll be gone, you’ll be gone,” described by Jonathan Knee in “The Accidental Investment Banker.” In this environment, why bother getting your paperwork in order when the goal is to put someone into a predatory loan, reap fees and disappear tomorrow?

Now that these homes are in foreclosure, however, the lack of paperwork is a serious problem. And, since no one has yet been held accountable for the fraud perpetrated during the housing bubble, the business model of financial institutions is often still predatory. This fraud is now coming back to haunt our courts — for example, in the falsified foreclosure paperwork required to cover up the corner-cutting of the subprime lenders and the banks that funded them. . . .The [Obama] administration is now attempting to quash state-level officials by fiercely lobbying for a 50-state settlement to paper over the foreclosure fraud scandal. Obama may talk about his fealty to the “99 percent,” but his administration is engaged in an aggressive coverup of bank crimes.

 But wait, as they say in the infomercials, there’s more.  It would be bad enough if the wholesale campaign of primitive accumulation via predatory loans and sloppy foreclosures merely contributed to destitution and inequality.  But, as CBS’s 60 Minutes documents, the same banks evicting families are not exactly putting the empty houses to their “highest and best” use in many cities:

 Cuyahoga County ripped down 1,000 homes this year. And they have 20,000 more to go. That’ll cost about $150 million dollars. . . . In theory there shouldn’t be this many abandoned houses. When homeowners walk away, the bank is supposed to take responsibility. But one little known feature of the great recession is, that many banks are walking away too, unwilling to maintain a house whose value has crashed. “Very often a bank will take a property to the point of foreclosure, but won’t go to the sheriff’s sale, ’cause they don’t want that property. They don’t want the responsibility of the $8-$10,000 bill that comes with tearing this house down” [says Jim Rokakis, a former county treasurer].

There is no concern for communities, none for struggling families, none for the public treasury.  There is simply a Kafkaesque interlinkage of contracts and incentives that keep the foreclosure machine humming (along with Potemkin programs like HAMP), putting families on streets with dubious documentation for the paper gains of banks and servicers.  The law enforcement apparatus will hammer a disabled man for inadequately monitoring his caretaker, but moves slowly and ineffectively (if at all) against a wholesale abandonment of legality. Glenn Greenwald’s and Bernard Harcourt’s books on such discrepancies, already damning, appear to have understated the extent of our 2-tier justice system.

Banks’ Economic Impact

This is not simply a problem for lawyers, but for anyone concerned about the overall health of the US economy.  The foreclosure disaster is only one particularly pure example of a financial system prone to overcentalization,  bubble-blowing, opacity, and disregard for long-term productivity.  Henry Mintzberg has warned that the economy will never be “fixed” as long as problematic alliances between business and government consume such a disproportionate share of resources:

When economists boast about America’s great productivity, what they have in mind is exploration – finding ways to do things better, especially through superior processes. But much of this “productivity” has in fact been destructively exploitative. Think of all the corporations that have fired great numbers of people at the drop of a share price, leaving behind underpaid, overworked employees and burned-out managers, while the CEOs escape with their bonuses.  To see where this leads, imagine a company that fires all of its workers and then ships its orders from stock. Economic statistics would record this as highly productive – until, of course, the company runs out of stock. American enterprise is running out of stock.

There have been a number of recent studies on the productivity of the financial sector (see, e.g., here, here, here, and here). Many have asked whether it increases GDP, but perhaps the more telling question is how it raises GDP.  Mike Konczal recently evocatively compared the foreclosure crisis to an earthquake or storm affecting millions:

Imagine a natural disaster that hit the United States and internally displaced over 5 million families.  We’d understand that would require a major policy response.  But for the 5 million estimated foreclosures, and the millions more that are going to happen, there’s no response from the administration to match this challenge.

US GDP probably got some kind of “bump” in 2006 as some homes of Katrina victims were rebuilt.  But I’ve heard few people try to describe hurricanes as a form of “creative destruction,” or “information creators.”  Maybe the hurricane lobby just needs to donate to the right think thanks.

A New Way Forward?

Is there any solution to these problems? The Clinton administration diverted law enforcement resources from financial to health care fraud, and later Bush did the same thing in response to terror fears.  Health care fraud detection and deterrence has become extraordinarily sophisticated.  For instance, as Wheeler, Fuller, and Broussard have noted (in 4 J. Health & Life Sci. L. 1, 2011):

Recently, the number of Medicare- and Medicaid-affiliated government contractors charged with detecting fraudulent and abusive practices by enrolled providers has expanded dramatically. The contractors’ role has been to monitor and investigate providers rather than simply to administer these programs.   [T]he healthcare government contractor landscape continues its transformation with an increased number of contractors actively pursuing the recovery of erroneous payments and the identification of potential patterns of fraud and abuse.

There is a veritable alphabet soup of entities devoted to this goal, including Program Safeguard Contractors (PSCs) and Zone Program Integrity Contractors (ZPICs).  They perform “auditing, data mining, and improper billing and fraud investigation.”  

In my next post on financial institutions, I will outline some potential lessons for financial fraud prevention from the realm of health care fraud.  The critical conceptual issue here is to begin to see the banks as a sector as permanently embedded in a web of state subsidy and support as health care, defense, and energy.  Mintzberg convincingly complains about “the energy companies with their cozy tax deals, the defense contractors that live off government budgets, and the pharmaceutical companies that buy their innovations and price what the market will bear, thanks to patents that governments grant, but without policing their holders.”  I also worry about all these sectors. But it may well be the finance sector that is the most menacing to economic growth, and the least accountable.  We cannot simply accept lawlessness in the sector as the status quo.  Creative and forceful responses are possible, and have precedents both historically, in other nations, and in other sectors in our own economy.

Image Credit: Keith Allison.

“Blessed are the peacemakers, for they shall be called sons of God”, as Jesus says in the Sermon on the Mount (Mt 5:9). Peace for all is the fruit of justice for all, and no one can shirk this essential task of promoting justice, according to one’s particular areas of competence and responsibility. . . .

Peace . . . is not merely a gift to be received: it is also a task to be undertaken. In order to be true peacemakers, we must educate ourselves in compassion, solidarity, working together, [...]]]> Pope Benedict’s interpretations of Catholic Social Thought have been consistently inspiring. His recent message on the World Day of Justice and Peace focused on the material foundations of a just and well-ordered society.

“Blessed are the peacemakers, for they shall be called sons of God”, as Jesus says in the Sermon on the Mount (Mt 5:9). Peace for all is the fruit of justice for all, and no one can shirk this essential task of promoting justice, according to one’s particular areas of competence and responsibility. . . .

Peace . . . is not merely a gift to be received: it is also a task to be undertaken. In order to be true peacemakers, we must educate ourselves in compassion, solidarity, working together, fraternity, in being active within the community and concerned to raise awareness about national and international issues and the importance of seeking adequate mechanisms for the redistribution of wealth, the promotion of growth, cooperation for development and conflict resolution.

This position confirms a long line of encyclicals urging the fair distribution of global resources. As Pope Benedict earlier stated in Caritas in Veritate, “Without internal forms of solidarity and mutual trust, the market cannot completely fulfil its proper economic function.”

While Catholic Social Thoughts acknowledges the innovation that capitalism sparks, Caritas in Veritate also judged that “[o]n the part of rich countries there is excessive zeal for protecting knowledge through an unduly rigid assertion of the right to intellectual property, especially in the field of health care.” The Vatican has long demanded that the basic needs of all be met. As Leo XIII put it in Rerum Novarum,

Justice . . .demands that the interests of the working classes should be carefully watched over by the administration, so that they who contribute so largely to the advantage of the community may themselves share in the benefits which they create—–that being housed, clothed, and bodily fit, they may find their life less hard and more endurable.

This language insists on the importance of basic human needs as a reflection of a deeply incarnational religion. In contrast with economists’ efforts to fragment reality into more tractable units of analysis, a holistic, synthetic vision drives Catholic Social Thought. The encyclicals articulate a vision of global justice, based on an account of the nature and destiny of humankind as a whole. As Caritas in Veritate puts it:

In an increasingly globalized society, the common good and the effort to obtain it cannot fail to assume the dimensions of the whole human family, that is to say, the community of peoples and nations, in such a way as to shape the earthly city in unity and peace, rendering it to some degree an anticipation and a prefiguration of the undivided city of God.

Traditional economic goals of maximizing efficiency (at the micro-level) and gross domestic product (at the macro-level) do not necessarily create an “earthly city in unity and peace.” Indeed, when the lion’s share of growth is taken by the top 1%, such growth can merely reinforce conditions of exploitation. While contemporary economists resort to complex mathematics to model production and measure aggregate well-being, Catholic Social Thought is concerned with the basic conditions for human dignity and flourishing. Since its inception, it has been willing to challenge economic precepts in order to advance that vision.

Does this create a new conflict between science and religion—the rigor of economics, and the emotion of faith? Not really. As thinkers ranging from Mirowski to McCloskey to Roberts to Klein have demonstrated, the economic crisis has ripped the veil of scientism from the rather pedestrian interest-advocacy embedded in dominant strands of contemporary economic thought. It will fall to thinkers of good will of diverse perspectives to put real human needs back at the center of policymaking.

This task is particularly urgent in the field of financial and monetary systems. The Pontifical Council for Justice and Peace’s document, “Towards Reforming The International Financial And Monetary Systems In The Context Of Global Public Authority,” is a worthy contribution to this emerging dialogue. As the Council states, “The economic and financial crisis which the world is going through calls everyone, individuals and peoples, to examine in depth the principles and the cultural and moral values at the basis of social coexistence.” Here are some of their conclusions:

[T]he crisis has revealed behaviours like selfishness, collective greed and the hoarding of goods on a great scale. No one can be content with seeing man live like “a wolf to his fellow man”, according to the concept expounded by Hobbes. No one can in conscience accept the development of some countries to the detriment of others. If no solutions are found to the various forms of injustice, the negative effects that will follow on the social, political and economic level will be destined to create a climate of growing hostility and even violence, and ultimately undermine the very foundations of democratic institutions, even the ones considered most solid. . . .

On the way to building a more fraternal and just human family and, even before that, a new humanism open to transcendence, Blessed John XXIII’s teaching seems especially timely. In the prophetic Encyclical Pacem in Terris of 1963, he observed that the world was heading towards ever greater unification. He then acknowledged the fact that a correspondence was lacking in the human community between the political organization “on a world level and the objective needs of the universal common good”. He also expressed the hope that one day “a true world political authority” would be created. In view of the unification of the world engendered by the complex phenomenon of globalization, and of the importance of guaranteeing, in addition to other collective goods, the good of a free, stable world economic and financial system at the service of the real economy, today the teaching of Pacem in Terris appears to be even more vital and worthy of urgent implementation.

There are many paths to establishing a “financial system at the service of the real economy.” A Tobin Tax appears to be an obvious first step; David Graeber’s work on debt presents other, more radical approaches (such as jubilees, another concept with religious resonance). Whatever path policymakers take, I hope they pay more attention to the deep wisdom and insight reflected in Catholic Social Thought, and the NGO’s like Global Financial Integrity and the Tax Justice Network that help to put it into action.

Image Credit: Parable of Dives and Lazarus, retold in economic terms here.