Category: Law

Law and Jurisprudence

New York Times Article on Kagan

“In another case, she recommended that the federal government intervene in a case to support religious freedom. The California Supreme Court ruled that a landlord violated a state law prohibiting housing discrimination by refusing to rent an apartment to an unwed couple because she considered sex outside marriage to be a sin.”http://www.nytimes.com/2010/06/12/us/politics/12kagan.html?pagewanted=2&src=me

Kagan’s position here was incorrect. If the case is as the NY Times article describes it, then this was a law of general application (prohibiting housing discrimination against unmarried couples). Providing exemptions from statutes of general application on “freedom of religion” grounds would lead to the absurdity that people can abuse children or engage in human sacrifice because of their need for “religious freedom”. Warren Jeffs would claim that he has a right to sexually abuse children because of his “religious freedom”. http://en.wikipedia.org/wiki/Warren_Jeffs

Judge John E. Jones III for US Supreme Court

In between stories about the latest celebrity sex scandal, the news is occasionally noting that Justice John Paul Stevens of the US Supreme Court is going to retire, allowing President Obama to make another appointment. I would like to propose that Judge John E. Jones III, of the Middle District of Pennsylvania be considered for the job. Judge Jones was appointed by President George W. Bush for his present position, and is a Republican. But, Judge Jones was the presiding judge in Kitzmiller v. Dover Area School District Judge Jones ruled that the School Board’s policy on “Intelligent Design”, which is another word for creationism, violated the Establishment Clause. In an interview about his decision, Judge Jones responded this way: “A significant number of Americans, if you poll, believe that creationism ought to be taught, either supplanting evolution or alongside of evolution. And, again, you ask how the judiciary works. We protect against the tyranny of the majority.” Amen.

Why I Don’t Recite Any Pledge of Allegiance

I have recently started attending the meetings of a local, Dallas-area political club affiliated with one of the two major parties in the United States. At the beginning of all meetings, this group starts with a recitation of the “U.S. Pledge of Allegiance”. During this period, I stand in order to be polite to the other people there, but I markedly put my hands behind my back, and I do not state the Pledge. Since this would be seen by many as a “subversive” or “unpatriotic” action on my part, and in order to mentally “crystallize” my own thinking on the subject, I thought I would take a moment to explain why I do this.

The first reason I refuse to recite the pledge is because of the use of religious language (“under god”) in its text. Historically speaking, America is not “one nation under god”, which I take to mean a nation founded on Christianity or religion. America is a product of the Enlightenment. In order to understand this, some historical context is necessary. The Dark Ages represented a period of religious domination, and therefore social, economic, scientific, and political stagnation (and human misery). During that period, religious authorities controlled the moral and intellectual realm. The socio-political ream was controlled by the feudal aristocracy, supposedly ordained to rule by god, but in practice, sanctioned to practice tyranny over the minds and bodies of other men by the Church. The Dark Ages ended with the re-discovery of Classical Greek and Roman thought and philosophies, which had emphasized the value of human life in the here-and-now, reality over the supernatural, and the efficacy of the human mind to know reality.

The Enlightenment period of history, which started some time in the 1600’s, represents a naturalistic explanation for the origins of life, via the works of Charles Darwin, a rational explanation for the physical motions of the universe, via the works of Newton, and the beginnings of a secular basis for the political and social order, via the works of John Locke, and others. The founding Fathers of the United States took the ideas of Locke and other Enlightenment thinkers and used them as the intellectual basis for the 13 Republics formed soon after the American Revolution, and for the Federal Republic which today is known as the United States of America. Of paramount importance to the Founding Fathers was the right of individuals to “the pursuit of happiness”, as embodied in the Declaration of Independence.

In order for individuals to pursue their own happiness in society, some implicit understanding of the concept of individual rights is necessary. Individual rights is based in a morality of rational self-interest (or an implicit understanding of such a morality). Each individual must be free to pursue his own rational self-interest (his own happiness) in a social context. (It must be also be kept in mind that “society” is nothing more than a number of individuals, and that the individual lives in society because it maximizes his own self-interest.) Individual rights should be seen as moral principles defining and sanctioning a person’s freedom to pursue his own rational self-interest in a social context. Historically, America is the nation of the Enlightenment, and the nation founded on individual rights. It is not a society founded in a belief in the supernatural, which was the distinguishing feature of the Dark Ages. I therefore oppose the inclusion of the words “under God” in the Pledge because it is not an accurate description of America.

Even if the “under God” language were removed from the Pledge of Allegiance, I would still not want to recite it. I have several objections to its recitation. First, I question the usefulness of any ritualistic recitals such as the Pledge. If the average person reciting the Pledge of Allegiance were asked what some of the key concepts in the pledge, such as “justice” and “liberty” meant, I doubt that he could give you a coherent explanation. There was an episode of the original TV series “Star Trek”, in which the main characters visited an “alternate Earth”, where stone-age men would recite a string of incoherent sounds that sounded strangely familiar, but you couldn’t quite figure out why. At the end of the episode, it is revealed that it is the US Pledge of Allegiance. Not only have the concepts been forgotten, but even the original words have been lost by the primitives reciting them. Every time I hear people reciting the pledge, I think of this episode of “Star Trek”. A “ritual” to me is nothing more than a formulaic endeavor that has no meaning and is meant to discourage thought and individualism, and to engender a tribalistic mindset. I find this utterly incompatible with the meaning and historical significance of America.

Additionally, an analysis of the words of the pledge reveals that it is a useless exercise. America is supposed to be a Republic (or, if you prefer, a “representative democracy”). The express words of the pledge say that you are pledging allegiance to “the flag”, but a flag is just a piece of cloth, and is merely another ritualistic display, so I don’t see any point in engaging in a ritualistic chant (the pledge), to a ritualistic display (the flag). The pledge goes on to say that the flag stands for the Republic, but the purpose of government is to serve as the agent, or servant, of “the people”, in the protection of their rights to life, liberty, and property. Therefore, I, as a citizen, do not owe the government allegiance, the employees of government –our elected officials- owe allegiance to the people that they represent (which would include me). I suppose you could say that you are pledging allegiance to “the people”, but “the people” are nothing more than a number of individuals, each with a right to pursue his or her own happiness, and all individuals are “equal under the law”, so there is no person or group of persons that one should rightly “pledge allegiance” to.

You could say that one is “pledging allegiance” to the concepts of liberty and justice, which are concepts that I fully support. But, I know that I support those concepts, and I actually take action to support them by thinking and writing about them -and by doing whatever small things I can to support liberty and justice in my professional and personal life. So long as I know that I support these concepts, and I take whatever action I am able to take to advance them, why do I need to engage in a ritualistic chant to convince others that I support them? Stating that you support the concepts of liberty and justice, but taking no action to advance them is to elevate form over substance, which is contrary to the spirit of our Nation, as best exemplified by the American expression: “Talk is cheap”.

How Should State Constitutions Be Amended?

I am currently reading a book called “The Creation of the American Republic, 1776-1787”, by Gordon S. Wood, and it has stimulated my thinking about Constitutional issues. My purpose here isn’t to provide the reader with a book review, but to discuss what I now believe is the proper amendment process for a state constitution.

What I am saying here is only applicable to a state constitution, or to the constitution of a non-American republic that doesn’t have a federal-state system of government like the United States. The reason it isn’t necessarily applicable to the U.S. Constitution is because that document represents a sort of balance between the need for a national government on certain issues and the sovereignty of states. (I am not saying that I am necessarily opposed to one consolidated national government, without state governments, for the country currently called the United States. Whether our current Federal system is ideal is an issue for another day. It is certainly better than any other government now in existence.)

Before I discuss this proposed constitutional amendment process, I want to discuss the concept of a constitution. First, it must be kept in mind that the institution of government is man-made. This seems obvious, so why state it? I believe it is easy to adopt a subconscious mind-set that sees government as a natural feature of the world, that has an existence apart from the society that has created it. For instance, the British system of government is a product of hundreds of years of tradition, which doesn’t have a written constitution. I think it would be easy for people to forget that this institution is a creation of men, and can be changed or destroyed by men. Just as “society” is nothing more than a number of individual human beings, government is nothing more than an institution created and sustained by a number of individual men. Since government doesn’t exist apart from the men who create and maintain it, then why does it exist at all? All man-made creations should serve some purpose, and, ultimately, further human life. For instance, the automobile is a man-made thing that serves the purpose of transportation, which ultimately makes human lives more easy and convenient. Government is also a man-made thing, and should therefore serve certain functions.

What is the purpose of government? What function does it serve? Ultimately, government serves man’s life. More immediately, human beings must take certain actions in order to live. At the most basic level, they must produce food to eat, shelter to protect them from the elements, and all of the tools that allow them to acquire these things. Other human beings have the capacity to prevent men from taking the actions necessary to live by means of physical force. For instance, a robber uses a weapon to take what others have created to further their own lives. Therefore, in order to live, men must be free from other’s use of physical force in a manner that deprives them of the values they have created for their continued survival. It must be recognized that men are entitled to take actions necessary for maintaining their lives in a social context. People who use physical force to deprive others of the material values they have created are called criminals. Criminals must be restrained by means of physical force. For instance, a robber is put in a jail to prevent him from committing more crimes. (The length of time that a criminal should spend in jail depends on a calculation that takes into account, at a bare minimum, the level of threat that he represents to the lives of other people versus the possibility of him changing his ways -all human beings with normal functioning brains have the capacity to change.)

Each of us could individually take action to restrain criminals, but this would be inconvenient, since most of us do not want to spend our time apprehending thieves, rapists, and murderers. Government is a delegation by the population of the means of restraining criminals. (I also believe that there are other reasons why the restraint of criminals must be delegated to a central authority, and that anarchy is not compatible with a free society. In general terms, anarchy is not compatible with ensuring that a crime has been committed, and with establishing to other’s satisfaction that your use of physical force, and the amount of force used by you, to stop a criminal is justified. I believe this is what is meant by “due process”.) To sum up, an essential function of government is to ensure that the people who want to take action to further their own lives are free to do so.

Another feature of government that must be kept in mind to understand the concept of a constitution is this: government is a product of human association and collaboration. Since government involves a group of people, and since people must bring it into existence, there must be communication, collaboration, and agreement amongst those people about how the functions that government serves will be carried out. An implicit assumption contained in the need for collaboration and agreement amongst the people about the details of how government will operate is the fact that there is often more than one way to perform many government functions. Each state of the United States carries out the legitimate functions of government slightly differently. None of these arrangements are necessarily “right or wrong” in a universal sense. For instance, in the State of Texas, the final state court of appeal is divided into two separate courts. One court handles criminal appeals, and the other handles civil appeals. In other states, and in the Federal system of the United States, the final court of appeal is a single court that handles both criminal and civil appeals. Other issues that could come up include: Should the legislature be unicameral or bicameral? Should all criminal prosecutions be by means of indictment of a grand jury only, or should misdemeanor prosecutions be allowed to proceed by “information” (a charge leveled at the discretion of the District Attorney)? Which is better? (I do not know, and reasonable minds could easily disagree on such details.) Many of these details regarding how a particular government will operate will depend on the particular circumstances and context of any particular society, and the needs of a particular society may change over time. Since so many details depend on context, the people in a society must discuss what their particular needs are, and come to an agreement. Compromises may also need to be made regarding certain features of a particular government. A constitution is the most fundamental agreement amongst the people of a society about how governmental functions will be carried out in a particular society.

So, how should this fundamental agreement amongst the people about how governmental functions will be carried out be reached? Since American states already have constitutions, I will start with the assumption that there is a pre-existing institution that performs governmental functions, and propose a process for amending state constitutions that I think would better reflect the need for broad-based societal agreement over how governmental functions should be carried out in practice.

Every two or three election cycles, a question is placed on the ballot used for electing representatives to the legislature. The question would be something like: “A constitutional convention shall be called.” The voters will either check “yes” or “no”. If three quarters of all registered voters check “yes”, then a constitutional convention (a “Convention”) shall be called within a certain period of time (within about 6 months). The reason three quarters of all registered voters must vote in favor of a Convention is because a constitution is the fundamental political agreement amongst the people, so before it can be changed, there must be broad support amongst the people in favor of change. This ensures broad-based societal agreement about the basic structure of government. It is also not enough to call a Convention based on a mere three quarters of the people who happen to vote in that particular election because, in some elections, voter turnout can be low, and it would be too easy for particular interest groups to get their own supporters out to vote in favor of calling a Convention even though the majority of the population is not in favor of a change.

If three quarters of the registered voters are in favor of a convention, then there is a special election to elect Convention Delegates. Delegates for the Convention should be chosen in a manner that ensures that they are representative of the people. Probably, they should be chosen in accordance with existing voting districts for the lower house. (The “lower house” is the legislative chamber that is usually seen as being the most “representative” of the people, and usually bases representation of each district on population levels. In the Federal system of the United States, it is the House of Representatives.) Existing voting districts for the lower house are used for purposes of efficiency, since these districts would be readily known to everyone. (However, I also think that it would also be appropriate, and possibly advantageous, to create special voting districts for the sole purpose of electing Delegates to the Convention.) What is important to keep in mind is that each voting district for the Convention gets a number of Delegates in proportion to the population of registered voters in that area. So under my plan, each voting district for Convention Delegates gets the same number of Delegates as they received in the most recent legislative session for the lower house. This is done because the lower house usually bases the number of representatives each district gets on population, which means that the areas with greater populations will get to send more Delegates to the Convention. Linking the number of Delegates at the Convention to population is based on the fact that a constitution is a fundamental political agreement amongst the people, which means it must reflect the will of the population. The membership criteria for Delegates to the Convention under my plan would be the same as the criteria for membership in the lower house of the legislature. This is because the lower house of the legislature usually has the lowest criteria in terms of age, residency, and (in the past) property ownership.

Individual Delegates to the Convention are chosen for each voting district by means of election. The exact election process could be done in different ways, but I would prefer a non-partisan election, in which the highest vote-getters get to be Delegates, without any sort of primary. For instance, if a particular district gets three Delegates, then the top three vote-getters get to be delegates.

At the Convention, constitutional amendments are proposed by individual Delegates, and then voted on by all of them. If a proposed constitutional amendment gets 51% of the votes of the Delegates at the Convention, then it will be sent to the people for a ratification vote. I am uncertain at this point of the details of how a Constitutional Convention would be run, other than the requirement that a proposed amendment get 51% of the Delegates’ votes, but I think it could be left up to the Delegates to set their own rules of procedure for how amendments would be proposed to the Convention, and debated on. One other necessary rule regarding the Convention: it must last for only a set period of time. This is to ensure that it doesn’t become a permanent body. Any amendments proposed by it after this set time period are considered null and have no legal validity.

As I already noted, all proposed amendments of the Convention will be sent to the people for a ratification vote. If three quarters of the registered voters vote to ratify an amendment, then it becomes a part of the constitution. Just as when the Convention was called, requiring three quarters of registered voters to ratify an amendment ensures that it does represent an agreement of the people.

I would now like to compare this proposed Constitutional Amendment process with the current amendment process of the State of Texas, in which the state legislature plays a role. This will illustrate what I think is wrong with an existing legislature having a role in the amendment process of a constitution. It would appear that the Texas State Constitution (as of 2009) allows for the lower house of the Texas legislature to propose constitutional amendments on a 2/3 majority vote. It also appears from the text of the state constitution that a mere majority of the actual votes cast by the population will ratify the proposed amendment and make it part of the Texas State Constitution. This process has two major flaws. First, allowing the Texas State legislature to act as a Constitutional Convention is problematic. Since a legislature is a part, or aspect, of government, it has no greater right to exist than the government itself does. Since government is a delegation by the people of the right to the use of physical force to restrain criminals, it seems fundamentally contradictory for the members of the legislature, who have been delegated that power, to play a role in the process of the delegation of that very power. In order for a legislature to be an actual representative body, as opposed to a sort of aristocratic body, there must be some more fundamental, and prior, agreement amongst the people represented about the basic terms under which the legislature is to exist, such as: how and when the legislators are elected, for how long they meet, how long they are to serve, on what matters they may legislate, etc. Logically, these issues must be decided by the people prior to the establishment of a legislature. It is possible to combine a legislature and a constitutional convention in one body of people, but this would be a bad idea. The legislators would tend to create a constitution that favored the legislature as an institution, whereas a body of people whose sole purpose is to create the constitution would have to live under that constitution, so they would create a document that is more representative of the people’s will.

Convening a special body just for the purpose of creating or amending a constitution will also ensure that the best and the brightest Delegates will be elected to the Convention. Once a Constitution is established, any particular legislative body can have less intelligent and competent people in it because the Constitution will have institutional safeguards in place against legislative tyranny, such as the courts to strike down unconstitutional laws. Also, while the best and the brightest might be willing to serve, for a short period, in the creation of a Constitution, they may not desire a career in politics, so the legislature may normally be composed of people of lesser abilities. It is okay for any particular legislature to be filled with incompetents, because its powers are already defined by a constitution, so the damage they can do is not as great. A constitutional convention filled with incompetents would be a disaster, because they are setting the broad terms by which all future legislatures, executives, and judges are to govern. In essence, a special Convention that meets for that sole purpose, and then is dissolved provides an extra institutional safeguard against any sort of legislative tyranny, and insures that the most competent people are involved in the constitutional drafting/amending process.

The second major flaw I see with the current amendment process for the Texas state constitution is that it appears to only require a simple majority of the people that actually vote regarding the proposed amendment to ratify it. This means that a very small segment of the population can ratify constitutional amendments, and would tend to encourage small interest groups to write constitutional law. There is no assurance that the particular constitutional amendment that is ratified represents the agreement and consent of “the people”, just special interest groups.

A perusal of the Texas State Constitution reveals that much of it reads more like a set of statutes than a constitution. The important, fundamental, portions of it, are drowning in a sea of trivial provisions. By separating out the constitutional amendment process from the legislative process, and by requiring a super-majority of the voters to ratify, I believe a better constitution can be maintained, and that it will truly represent a fundamental agreement of the people, rather than a legalistic collage of special interest groups.

Woman Ordered to Pay $80,000 per Song: Time To Reform Copyright Law

A woman has been found liable for copyright infringement by a Federal court in Minnesota, and ordered to pay $80,000 per song that she was found to have illegally shared on the Internet. In total, she must pay the record industry $1.92 million dollars. The reason she must pay $80,000 per song is because Federal law currently has a “statutory damages” provision that allows copyright holders to be awarded a set amount of money, regardless of the actual damages that they suffered. This is why the woman is being ordered to pay $80,000 per song when she could have purchased the songs for a few dollars, or less. I think this case illustrates the need for Congress to do away with statutory damages awards in Copyright law.

The law must be proportional to the wrong committed. We do not execute a shop-lifter because the wrong that he has committed is not great enough to merit that level of restraint. (“Probation” is sufficient to allow the state to monitor him for a period of time, and ensure that he doesn’t get into more trouble.) The risk that the shop-lifter poses to the rights of others is minimal, and the chance that he will reform his behavior is great. (It should be noted that if this woman had stolen these songs out of the store, she would get less of a punishment than she is receiving in civil court by being ordered to pay $1.92 million dollars.) Furthermore, the purpose of the civil court system is to make the victim whole with money compensation -to provide reparations- not to punish the wrongdoer. This means that the record companies are entitled to an award of their actual damages in the case (plus attorney’s fees) -not an arbitrarily high amount of money that serves no purpose other than to arbitrarily aggrandize the record companies’ wallets and frighten people that may be wrongly accused of file-sharing into settling for fear that they may get a $1.92 million dollar judgment against them.

John Grisham’s “The Rainmaker”

I recently watched the movie version of John Grisham’s “The Rainmaker”, and I liked the move so much, that I went to Half Price Books and purchased the novel that day. I thought that it presented the trials and tribulations of being a recent law school graduate, trying to make it as a solo-practicing lawyer quite well. I could relate to the fears that the main character Rudy Baylor must overcome as a newly practicing attorney. Going to court is pretty intimidating at first, especially when you are all by yourself, and don’t have the support of a firm with more experienced attorneys to bail you out if you get in over your head. I could also relate to the financial difficulties of the main character, when you don’t necessarily know when and where your next fee is going to come from, and you’ve got bills to pay. As a result, I read this book in 3 days, and enjoyed it immensely.

Although I generally could relate to Rudy Baylor, a couple of things that he did really bothered me. First of all, at the beginning of the novel, a lot of his behavior seems to be motivated by either greed or envy, especially the later. He seemed to hold a lot of resentment towards a lot of different people, and he acted on this resentment from time to time, such as when he destroyed property at a law office because they wouldn’t hire him.

The other thing that really bothered me were his improper ex parte communications with the trial judge throughout the novel. Before I explain what an ex parte communication is, let me explain the basic outline of the plot. The major conflict in the novel is a lawsuit Rudy Baylor files against a very corrupt insurance company, who has denied the claim of his client, who is dying of leukemia. The insurance company has wrongfully denied his client’s claim, and now they file suit, although it is now too late for the client to get the bone marrow transplant that would have saved his life. An ex parte communication is a generally prohibited communication between a party and/or their attorney or representative and the judge when the opposing party, their attorney and/or their representative is not participating in the communication regarding some substantive issue regarding the case before the judge. I am always careful not to engage in ex parte communications with a trial judge because it would get me in trouble, but I also agree that it is, ethically, totally improper, and I think that it can rightfully be prohibited. Our System is an adversarial system, where both parties argue their sides of the case, and then an impartial third party (the judge and/or jury) decides who is right and who is wrong. This system best ensures that the truth will prevail because each side has an incentive to makes its best argument to the judge or jury. Justice should be “blind” in the sense that the winner of a trial should not be based on personal contacts or friendships between a party’s lawyer and the judge, because we are a “nation of laws, not of men”. Ex parte communication would corrupt this adversarial system by allowing you to argue your side of the case without the judge hearing from the other side on the matter, which would thwart a just outcome.

Despite the fact that ex parte communication with the trial judge is improper, the main character, Rudy Baylor, does it over and over again throughout the novel. For instance, in Chapter 26, Rudy Baylor goes to Judge Tyrone Kipler’s office and explains to him why the case should be “fast tracked”, and the insurance company’s lawyer(s) are not there. In Chapter 34, Rudy Baylor, Judge Kipler and the insurance company’s lawyer are having a phone conference over a discovery dispute during a deposition, and the judge orders the insurance company lawyer off the phone, so that he can talk to Rudy Baylor alone. The judge is also hardly what I’d call impartial, since he clearly wants Rudy Baylor to win, and does everything he can to make this happen in the novel, although I agree that, given the set of facts in the novel, Rudy Baylor probably should win.

I agree that, morally, the executives at the fictional insurance company (“Great Benefit”) did something wrong for the simple fact that they had a policy of denying all insurance claims without regard of their merit under the insurance contract. At some point in the novel, it is revealed that the insurance company instructed its employees in their procedures manual to initially deny all claims. I think that this would be fraud. Generally, if you enter into a contract with someone with the present intention of never performing under the contract, then I believe it is considered fraud. While it is not fraud to default on the contract at some later time, so long as you intended to perform at the time you entered into the contract, if you intend to default on the contract at the time you entered into it, then that is fraud. Regardless of the present state of law, I think that it should be fraud, because you are, in essence, taking values from someone, without ever intending to reciprocate. In essence, you are conning them out of values that they wouldn’t part with, if they knew that you didn’t plan to live up to your end of the agreement. Great Benefit was incurring a debt, or obligation, when it accepted people’s insurance premiums. By deciding it was going to initially deny all claims, its managers had a present intention not to pay out under the insurance contract. I think that any corporate executive who instructed the corporation’s employees to deny all claims, regardless of the fact that some of the claims were legitimately covered under the policy, would be guilty of the criminal act of fraud, and could be jailed and/or fined.

Furthermore, if someone did die in the scenario outlined in Grisham’s book, then I think the insurance company executives responsible for the fraudulent scheme to initially deny all claims, despite some of them being meritorious, might be guilty of manslaughter, because they engaged in a reckless act (denying claims regardless of the fact that they were supposed to be covered under the insurance contract), which resulted in the death of an insured person.

I would also note that I do not consider the scenario outlined in the book to be very likely to happen under pure capitalism. I note this fact because I think that Grisham’s probable agenda in writing “The Rainmaker” is to push for Canadian-style socialized medicine. I had never read a “legal thriller” before I read “The Rainmaker” last week. (I have always preferred science fiction novels.) But, I have seen several of the movie versions of Grisham’s novels, and they always have a socialist political-viewpoint. So, I suspect that the message of “The Rainmaker” was: “Private insurance companies are evil because capitalism is evil, so we need socialized medicine, similar to the Canadian version.” However, Grisham is mistaken if he thinks the current American health care system is a free market.

The American medical system is not a free market for several reasons, some of which I will now note. First, Medicare and Medicade drive up prices by providing free medical care to people, who then have no incentive to economize on their use of health care. Second, there probably is no industry more regulated than the health care industry. Patients aren’t free to choose who will provide them with health care thanks to medical licensure statutes. This means they must go to a government-approved doctor. Licensure statutes artificially limit supply by arbitrarily limiting the number of medical practitioners, thereby driving up prices. Patients aren’t free to choose which drugs they will consume, since they must get permission from a government-approved doctor before they can purchase so-called “prescription drugs” from a government-approved pharmacist. Once again, licensure statutes for pharmacists artificially limit supply and drive up prices. When it comes to drugs and medical devices, the government won’t allow innovators to market new drugs and medical products without government approval from the Food and Drug Administration, which can take years. Furthermore, taxes are structured to favor third-party payment of health care, because the government favors employer-provided health insurance by giving companies a tax break for providing it, but if employees want to get their own health insurance, they don’t get the same tax break. This also tends to make people dependent on their employer for continued health-coverage. Additionally, although I think this is less of a problem now, thanks to tort reform, doctor’s malpractice insurance expenses were outrageously high because of arbitrarily high punitive damages awards.

I tend to think that punitive damages awards should be capped. (In a civil suit, “punitive damages” are not the damages a plaintiff receives to repair the damage done to him by the defendant, they are an extra money award given to the plaintiff, just to punish the defendant’s wrongful conduct.) In the book, the fictional insurance company is hit with a massive punitive damages award, but I’m not sure that this is the best way to deal with the problem. I think that the management responsible for the fraudulent scheme in the novel would need to have been removed. The stockholders are probably not responsible at all, yet, they are the ones being punished with a high civil punitive damages award. I think it would make more sense to allow the criminal justice system to handle punishment, rather than the civil courts. As I said earlier, the corporate executives in the novel would probably be guilty of fraud and manslaughter for instituting a policy of denying all claims, which resulted in death.

I also find it doubtful that someone would actually not be able to receive treatment for leukemia under capitalism, even if they had no health insurance, and the treatment cost $200,000, which is how much the bone marrow transplant that the fictional insurance company refuses to pay for in the novel costs. First, I would note that I am uncertain what the cost of $200,000 reflects. Is the $200,000 cost mostly just to cover the “R&D costs” (“Research and Development”) of the procedure, or the actual costs of labor and materials? If the $200,000 cost is mostly to cover the costs of the R&D that went into developing the intellectual property for the procedure, then it would be possible under capitalism for the owners of the intellectual property to give a massive discount to those who actually couldn’t afford the procedure due to poverty. For instance, if $150,000 of the cost of the procedure is to help cover the per-unit costs of the R&D that went into developing the patents and other intellectual property, while only $50,000 represents the cost of labor and materials, then the manufacturer could give a discount to this particular patient, after doing an audit of his personal finances to confirm that he is in fact poor. Even if they could only charge this particular patient, say, $60,000, they would still be making $10,000 on the sale, which is $10,000 they otherwise wouldn’t have gotten. As long as they can perform a financial audit of the patient to determine that he isn’t lying about being poor, then the medical provider can charge rich people more, and poor people less, for the same procedure, and this would likely be the most profitable business plan they could adopt. For instance, with most pharmaceuticals, the manufacturing costs for the drug are extremely low. The reason they cost so much is to cover the expenses of R&D that went into the drug. This means that drug manufacturers could reduce the sales price for those who are genuinely poor, and charge rich people more, without much difficulty, and they would have an incentive to do so, because even if they make a lower profit on the drug for that particular customer, it is still a profit.

Even assuming that the $200,000 cost of a bone marrow transplant is mostly to cover the cost of labor and materials, rather than the cost of research and development, I think that the chances of a poor person getting a loan to cover the costs would be very good under capitalism. According to the novel, the chances of long-term success for the bone marrow transplant were around 90%. The character with leukemia is in his early 20’s, which means that, but for his leukemia, he would probably live to be about 75. So, his chances are 90% that he will live for another 50 years. This is a pretty good bet for an investor. Assume that he works for 50 years and that he can make about $30,000 per year on average, which is about $15 per hour, working 40 hours per week, 50 weeks out of the year. (This is an extremely low-ball figure in my opinion.) This means he would make $1,500,000 over 50 years. Assume he can live off of $15,000 per year ($11,000 is the approximate US poverty line). Then, he can pay $15,000 towards the $200,000 loan every year. Say that $10,000 of the $15,000 he pays every year is interest. This means the loan would be paid off in less than 40 years. The average yearly interest rate the creditor would get would be about 5% under this payment plan. (Actually, it would be a higher interest rate, since he is paying $5,000 towards principle every year, which means principle is being reduced every year, but I can’t remember how to figure the actual average interest rate over 40 years).

Five percent APR is about what you would pay towards a mortgage on a house. Certainly if someone is willing to give you a loan at 5% for a house, they would be willing to give you a loan at 5% for an operation to save your life, especially if the bankruptcy laws said that such a loan is non-dischargeable and they are allowed to garnish your wages and seize all assets if you default on the loan.

This all assumes that there are no private charities that would help a poor person with leukemia (doubtful), and that nobody else, such as his parents, friends, or family members, would be willing to sign a contract making themselves legally responsible for paying part of the loan, which is also a doubtful premise -I would certainly be willing to pay a portion of a friend or immediate family member’s loan for an operation to save their life.

This also assumes that it would, in fact, cost $200,000 under pure capitalism for a bone marrow transplant. I would note that capitalism creates the social conditions of freedom necessary for technological innovation, and reductions in the costs of products. For instance, fetal stem cell research creates the promise that we will soon be able to grow cloned organs and tissues in the lab, which will be a perfect match to your own body’s genetic code, thereby eliminating the risk of tissue rejection. But, every time medical innovators, who are the true “rainmakers”, get hit with massive punitive damages awards in court, or a new regulation by the government, technological innovation tends to dry up.

Texas Pledge Briefs

My client David Croft has posted some of the briefs in the Texas Pledge case, which is a challenge to the insertion of the language “under god” into the Texas State Pledge on the grounds that it violates the Establishment Clause of the First Amendment. Public school children are required, absent a note from their parents, to recite the Texas State Pledge prior to beginning school. (Yes, Texas has its own pledge of allegiance.)

I wanted to mention this because I am, quite frankly, more proud of my work on the Texas Pledge and Texas Moment of Silence cases than of anything I have ever done. I may never get to see laissez faire capitalism, which I think will require broad societal support in order to elect the right politicians to the legislature, but I will always try to do what I can, as one person, to ensure that America doesn’t become more socialist, or, possibly worse, backslide into medieval theocracy.