Behavioral law and economics: Its origins, fatal Flaws, and implications for liberty

Northwestern University Law Review

Volumn 106, Issue 3, 2012, Pages 1033-1090

  Wright, Joshua D ^a   Ginsburg, Douglas H ^b  

^a GEORGE MASON UNIVERSITY   (United States)

^b NEW YORK UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

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EID: 84861894165     PISSN: 00293571     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (441)

1. We refer to adherents of behavioral law and economics as "behaviorists," but their work is not to be confused with the "radical behaviorism" of John Watson and B.F. Skinner.
2. See generally B.F. SKINNER, SCIENCE AND HUMAN BEHAVIOR (1953) (advocating a science of psychology focused upon external human behavior to the exclusion of consciousness and other internal phenomena).
3. John B. Watson, Psychology as the Behaviorist Views It, 20 PSYCHOL. REV. 158 (1913) (defending the scientific study of human behavior).
4. See Cass R. Sunstein & Richard H. Thaler, Libertarian Paternalism Is Not an Oxymoron, 70 U. CHI. L. REV. 1159, 1161-62 (2003).
5. Our analysis focuses upon Thaler and Sunstein's libertarian paternalism because their apparent commitment to "choice preservation" evinces a greater concern about liberty than do other behaviorists. For example, the "asymmetric paternalism" of Camerer prefers paternalism that "helps those whose rationality is bounded from making a costly mistake and harms more rational folks very little." Colin Camerer et al., Regulation for Conservatives: Behavioral Economics and the Case for "Asymmetric Paternalism," 151 U. PA. L. REV. 1211, 1254 (2003).
6. This asymmetric paternalism makes no commitment to avoiding infringements upon individual autonomy. See id. at 1219 (focusing upon paternalism justified because the benefits of error prevention to irrational decisionmakers would exceed the harm imposed upon rational individuals). As discussed infra Part III.B, a number of behaviorist regulatory proposals would prohibit or tax certain products, reduce consumer choice, or otherwise reduce liberty. Thus, Thaler and Sunstein's libertarian paternalism represents a lower bound on the threat to liberty presented by the behaviorist regulatory agenda.
7. See infra Part IV.A, in which we contrast the "process aspect of freedom," which is focused upon means, with the "opportunity aspect of freedom," which is focused upon ends.
8. See ARMEN A. ALCHIAN & WILLIAM R. ALLEN, UNIVERSITY ECONOMICS 114 (3d ed. 1972) (explaining that in the model of perfectly competitive markets, "no unexploited opportunity of trade remains to enable any person to reach still more preferred situations by revision of the allocation of goods").
9. FRANK H. KNIGHT, RISK, UNCERTAINTY AND PROFIT 76-87 (Cosimo, Inc. 2006) (1921). For the history and implications of the model of perfect competition.
10. see George J. Stigler, Perfect Competition, Historically Contemplated, 65 J. POL. ECON. 1 (1957).
11. Harold Demsetz, The Theory of the Firm Revisited, 4 J.L. ECON. & ORG. 141, 142 (1988).
12. George J. Stigler, The Economics of Information, 69 J. POL. ECON. 213 (1961).
13. See MILTON FRIEDMAN, The Methodology of Positive Economics, in ESSAYS IN POSITIVE ECONOMICS 3, 3-16 (1953).
14. Armen A. Alchian, Uncertainty, Evolution, and Economic Theory, 58 J. POL. ECON. 211, 220-21 (1950).
15. Gary S. Becker, Irrational Behavior and Economic Theory, 70 J. POL. ECON. 1, 12-13 (1962).
16. Herbert A. Simon, Rational Decision Making in Business Organizations, 69 AM. ECON. REV. 493, 495 (1979).
17. see also Herbert A. Simon, A Behavioral Model of Rational Choice, 69 Q.J. ECON. 99, 99-100 (1955) (suggesting, based upon modern psychological insights, revisions to the traditional assumption of rationality in economic theory).
18. See, e.g., RICHARD M. CYERT & JAMES G. MARCH, A BEHAVIORAL THEORY OF THE FIRM 10 (2d ed. 1992).
19. Daniel Kahneman & Amos Tversky, Prospect Theory: An Analysis of Decision Under Risk, 47 ECONOMETRICA 263, 274-84 (1979).
20. See, e.g., Daniel Kahneman et al., Experimental Tests of the Endowment Effect and the Coase Theorem, 98 J. POL. ECON. 1325, 1329-36 (1990).
21. Daniel Kahneman & Shane Frederick, Representativeness Revisited: Attribute Substitution in Intuitive Judgment, in HEURISTICS AND BIASES: THE PSYCHOLOGY OF INTUITIVE JUDGMENT 49 (Thomas Gilovich et al. eds., 2002).
22. Kahneman & Tversky, supra note 11, at 265-73.
23. Amos Tversky & Daniel Kahneman, Availability: A Heuristic for Judging Frequency and Probability, 5 COGNITIVE PSYCHOL. 207, 208-09 (1973).
24. Amos Tversky & Daniel Kahneman, Judgment Under Uncertainty: Heuristics and Biases, in JUDGMENT UNDER UNCERTAINTY 3 (Daniel Kahneman et al. eds., 1982).
25. For a recent review of the literature, see Christine Jolls, Behavioral Law and Economics, in BEHAVIORAL ECONOMICS AND ITS APPLICATIONS 115 (Peter Diamond & Hannu Vartiainen eds., 2007).
26. Articles exploring the quantitative and other relevant differences between laboratory and market conditions with respect both to study results and to cognitive biases include, e.g., Michael S. Haigh & John A. List, Do Professional Traders Exhibit Myopic Loss Aversion? An Experimental Analysis, 60 J. FIN. 523 (2005)(discussing the sensitivity of laboratory results to market environments where
27. competition, expertise, and learning might be expected to ameliorate any biases).
28. Steven D. Levitt et al., What Happens in the Field Stays in the Field: Exploring Whether Professionals Play Minimax in Laboratory Experiments,78 ECONOMETRICA 1413 (2010) (same).
29. John A. List, Does Market Experience Eliminate Market Anomalies?, 118 Q.J. ECON. 41(2003) [hereinafter List, Market Experience] (same).
30. John A. List, Neoclassical Theory Versus Prospect Theory: Evidence from the Marketplace, 72 ECONOMETRICA 615 (2004) [hereinafter List, Neoclassical Theory] (same).
31. Uri Gneezy & John A. List, Putting Behavioral Economics to Work: Testing for Gift Exchange in Labor Markets Using Field Experiments (Nat'l Bureau of Econ. Research, Working Paper No. 12063, 2006) (same).
32. Sunstein was formerly a law professor at the University of Chicago Law School and Harvard Law School and is currently Administrator of the Office of Information and Regulatory Affairs, U.S. Office of Management and Budget, which oversees the regulatory activity of the Executive Branch of the government. Thaler is an economist at the University of Chicago Booth Graduate School of Business.
33. See, e.g., Timur Kuran & Cass R. Sunstein, Availability Cascades and Risk Regulation, 51 STAN. L. REV. 683 (1999).
34. Cass R. Sunstein, Moral Heuristics and Moral Framing, 88 MINN. L. REV. 1556 (2004).
35. Sunstein & Thaler, supra note 2.
36. Richard H. Thaler, Doing Economics Without Homo Economicus, in FOUNDATIONS OF RESEARCH IN ECONOMICS: HOW DO ECONOMISTS DO ECONOMICS? 227 (Steven G. Medema & Warren J. Samuels eds., 1996).
37. Richard Thaler, Mental Accounting and Consumer Choice, 4 MARKETING SCI. 199 (1985) [hereinafter Thaler, Mental Accounting].
38. Richard Thaler, Toward a Positive Theory of Consumer Choice, 1 J. ECON. BEHAV. & ORG. 39 (1980) [hereinafter Thaler, Positive Theory].
39. Richard H. Thaler & Shlomo Benartzi, Save More Tomorrow™: Using Behavioral Economics to Increase Employee Saving, 112 J. POL. ECON. S164 (2004).
40. Richard H. Thaler & Robyn M. Dawes, Cooperation, in THE WINNER'S CURSE: PARADOXES AND ANOMALIES OF ECONOMIC LIFE 6 (1992).
41. Richard H. Thaler & Cass R. Sunstein, Libertarian Paternalism, 93 AM. ECON. REV. 175, 179 (2003).
42. accord RICHARD H. THALER & CASS R. SUNSTEIN, NUDGE: IMPROVING DECISIONS ABOUT HEALTH, WEALTH, AND HAPPINESS 4-6 (2008).
43. See Thaler & Sunstein, supra note 17, at 175.
44. See infra Part III. Thaler & Sunstein, supra note 17, at 179 ("Our goal here has been to defend libertarian paternalism, an approach that preserves freedom of choice but that authorizes both private and public institutions to steer people in directions that will promote their welfare.").
45. See FRIEDMAN, supra note 8, at 14 ("Truly important and significant hypotheses will be found to have 'assumptions' that are wildly inaccurate descriptive representations of reality, and, in general, the more significant the theory, the more unrealistic the assumptions").
46. See Jonathan Klick & Gregory Mitchell, Government Regulation of Irrationality: Moral and Cognitive Hazards, 90 MINN. L. REV. 1620, 1627-28 n. 20 (2006) ("The dominant research program within behavioral decision theory, the heuristics and biases program, consists of a collection of robust empirical findings bound together by high-level concepts rather than an integrative theory that can predict how particular features of the mind and environment are likely to interact in particular cases").
47. Some notable early efforts to craft a general theory of errors include Botond Koszegi & Matthew Rabin, A Model of Reference-Dependent Preferences, 121 Q.J. ECON. 1133 (2006).
48. Botond Koszegi & Matthew Rabin, Reference-Dependent Risk Attitudes, 97 AM. ECON. REV. 1047 (2007).
49. See infra Part III.B.
50. See infra Part II.B.
51. Jeffrey J. Rachlinksi, The Uncertain Psychological Case for Paternalism, 97 NW. U. L. REV. 1165, 1166 (2003).
52. see also Gregory Mitchell, Why Law and Economics' Perfect Rationality Should Not Be Traded for Behavioral Law and Economics' Equal Incompetence, 91 GEO. L.J. 67, 73-74 (2002) (characterizing the policy prescriptions of behaviorists as relying upon the empirically false assumption that people uniformly suffer from certain cognitive biases).
53. Gregory Mitchell, Libertarian Paternalism Is an Oxymoron, 99 NW. U. L. REV. 1245, 1255 (2005).
54. See Christine Jolls et al., A Behavioral Approach to Law and Economics, 50 STAN. L. REV. 1471, 1536-37 (1998).
55. See, e.g., Richard H. Thaler & Amos Tversky, Preference Reversals, in THE WINNER'S CURSE.
56. supra note 16, at 79, 79-81.
57. Kahneman & Tversky, supra note 11, at 277-79.
58. In this narrow sense, prospect theory implicates rational choice behavior. As discussed, however, the reference-dependent preferences against which economic agents maximize generally arise from a form of cognitive bias such as "loss aversion."
59. Thaler, Positive Theory, supra note 16, at 43-44.
60. Amos Tversky & Daniel Kahneman, Loss Aversion in Riskless Choice: A Reference-Dependent Model, 106 Q.J. ECON. 1039, 1041-42 (1991).
61. See, e.g., Samuel Issacharoff, Can There Be a Behavioral Law and Economics?, 51 VAND. L. REV. 1729, 1735 (1998) ("[T]he endowment effect is the most significant empirical observation from behavioral economics.").
62. Daniel Kahneman et al., Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias, in CHOICES, VALUES, AND FRAMES 159, 170 (Daniel Kahneman & Amos Tversky eds., 2000) (describing the robustness of the endowment effect as "part of our endowment, and we are naturally keener to retain it than others might be to acquire it").
63. Russell Korobkin, The Endowment Effect and Legal Analysis, 97 NW. U. L. REV. 1227, 1229 (2003) ("The endowment effect is undoubtedly the most significant single finding from behavioral economics for legal analysis to date.").
64. Cf. Elizabeth Hoffman & Matthew L. Spitzer, Willingness to Pay vs. Willingness to Accept: Legal and Economic Implications, 71 WASH. U. L.Q. 59, 99 (1993) (illustrating how a difference between a person's willingness to pay to purchase a good and the price the same person is willing to accept to sell the same good could prevent Coasean bargaining).
65. Jolls et al., supra note 28, at 1497 ("[A]n important aspect of law and economics is the Coase theorem, which says that the assignment of a legal entitlement will not influence the ultimate allocation of that entitlement").
66. See Christopher Buccafusco & Christopher Sprigman, Valuing Intellectual Property: An Experiment, 96 CORNELL L. REV. 1, 13 (2010) ("Recognition of the systematic discrepancy between owner and purchaser valuations has caused legal scholars to reevaluate many areas of the law where Coasean bargaining has been influential.").
67. Cass R. Sunstein, Switching the Default Rule, 77 N.Y.U. L. REV. 106, 112 (2002) ("The Coase Theorem fails to account for the fact that the initial allocation seems to create an endowment effect. When the endowment effect is at work, those who initially receive a legal right value it more than they would if the initial allocation had given the right to someone else." (footnote omitted)).
68. As of June 19, 2012, a search of the Westlaw Journals & Law Reviews (JLR) database reveals 1094 articles in legal periodicals referencing "endowment effect." The same search on Google Scholar shows 1030 references in legal periodicals and court opinions. According to one legal scholar, a broader search for "endowment effect" or "status quo bias" revealed that the terms were referenced in only two legal periodicals in 1990 but in 373 by 2003.
69. Korobkin, supra note 32, at 1229.
70. See, e.g., William A. Fischel, The Offer/Ask Disparity and Just Compensation for Takings: A Constitutional Choice Perspective, 15 INT'L REV. L. & ECON. 187, 187 (1995).
71. Jeffrey J. Rachlinski & Forest Jourden, Remedies and the Psychology of Ownership, 51 VAND. L. REV. 1541, 1542-46 (1998).
72. See, e.g., Jack L. Knetsch, Biased Valuations, Damage Assessments, and Policy Choices: The Choice of Measure Matters, 63 ECOLOGICAL ECON. 684, 684-85 (2007).
73. Edward J. McCaffery et al., Framing the Jury: Cognitive Perspectives on Pain and Suffering Awards, 81 VA. L. REV. 1341, 1351-54 (1995).
74. See, e.g., Russell Korobkin, The Status Quo Bias and Contract Default Rules, 83 CORNELL L. REV. 608, 630-33 (1998).
75. See, e.g., Christopher Buccafusco & Christopher Jon Sprigman, The Creativity Effect, 78 U. CHI. L. REV. 31, 51-52 (2011) (arguing evidence of an endowment effect in experiments simulating intellectual property markets "undermine[s] the normative justification for an IP law structured around strong property rules").
76. Buccafusco & Sprigman, supra note 34, at 2-4.
77. See Shane Frederick et al., Time Discounting and Time Preference: A Critical Review, in TIME AND DECISION: ECONOMIC AND PSYCHOLOGICAL PERSPECTIVES ON INTERTEMPORAL CHOICE 13, 24-26 (George Loewenstein et al. eds., 2003).
78. See id.
79. See, e.g., Oren Bar-Gill, Seduction by Plastic, 98 NW. U. L. REV. 1373, 1375 (2004) (relying upon hyperbolic discounting to explain why people incur extensive credit card debt).
80. Jonathan Gruber & Botond Koszegi, Tax Incidence When Individuals Are Time-Inconsistent: The Case of Cigarette Excise Taxes, 88 J. PUB. ECON. 1959, 1960 (2004) (using hyperbolic discounting to explain cigarette smoking).
81. Deborah M. Weiss, Paternalistic Pension Policy: Psychological Evidence and Economic Theory, 58 U. CHI. L. REV. 1275, 1275 (1991) (discussing how imperfect self-control results in insufficient saving for retirement).
82. Neil D. Weinstein, Unrealistic Optimism About Future Life Events, 39 J. PERSONALITY & SOC. PSYCHOL. 806, 806-07 (1980).
83. Jolls et al., supra note 28, at 1524.
84. Optimism bias can be characterized as contextual; individuals reach inordinately optimistic conclusions due to their failure to process information that would give them an accurate risk perception. Nevertheless, most behaviorist commentators group optimism bias with irrational failures of self- control.
85. See Bar-Gill, supra note 42, at 1376 (explaining how optimism bias could cause consumers to underestimate the occurrence of a future event that might necessitate borrowing). On the other hand, pessimism bias occurs when an individual overestimates the occurrence of adverse events.
86. Cass R. Sunstein, Hazardous Heuristics, 70 U. CHI. L. REV. 751, 773 (2003) (book review) ("With respect to some low-probability events, including life-threatening risks such as AIDS, people actually tend to overestimate their own susceptibility, and in that sense seem to show pessimistic bias.").
87. See generally Steven D. Levitt & John A. List, Viewpoint: On the Generalizability of Lab Behaviour to the Field, 40 CANADIAN J. ECON. 347 (2007) (analyzing properties of human behavior that limit the power of inferences drawn from laboratory results in markets).
88. See Edward L. Glaeser, Paternalism and Psychology, 73 U. CHI. L. REV. 133, 140 (2006) ("In experiments, individuals have few tools with which to improve their reasoning, and their only real method of responding to incentives is to think harder.").
89. See Jennifer Arlen et al., Endowment Effects Within Corporate Agency Relationships, 31 J. LEGAL STUD. 1, 4 (2002).
90. Joshua D. Wright, Behavioral Law and Economics, Paternalism, and Consumer Contracts: An Empirical Perspective, 2 N.Y.U. J.L. & LIBERTY 470, 471-72 (2007).
91. see also sources cited supra note 14.
92. The most obvious failure is to attribute all errors to irrational behavior when rational economic agents would not reduce their error rate to zero because the gains to error reduction are small relative to its cost. For example, consumer errors in selecting the best credit card from among several choices are often attributed to irrational behavior despite the low cost of making an error that can readily be corrected with experience, the relatively high cost of analyzing competing offers, and evidence that the error rate declines as the cost of errors increases.
93. See infra Part II.B. 2.
94. See, e.g., Buccafusco & Sprigman, supra note 39, at 51 (advocating various intellectual property reforms on the basis of experimental evidence).
95. See Vernon L. Smith, Economics in the Laboratory, 8 J. ECON. PERSP. 113, 118 (1994).
96. sources cited supra note 14.
97. See Thomas A. Lambert, Two Mistakes Behavioralists Make: A Response to Professors Feigenson et al. and Professor Slovic, 69 MO. L. REV. 1053, 1054-55 (2004).
98. Charles R. Plott & Kathryn Zeiler, Exchange Asymmetries Incorrectly Interpreted as Evidence of Endowment Effect Theory and Prospect Theory?, 97 AM. ECON. REV. 1449, 1454-56 (2007) [hereinafter Plott & Zeiler, Exchange].
99. Charles R. Plott & Kathryn Zeiler, The Willingness to Pay- Willingness to Accept Gap, the "Endowment Effect," Subject Misconceptions, and Experimental Procedures for Eliciting Valuations, 95 AM. ECON. REV. 530, 532-35 (2005) [hereinafter Plott & Zeiler, Willingness].
100. See, e.g., Plott & Zeiler, Exchange, supra note 54, at 1454.
101. Plott & Zeiler, Willingness, supra note 54, at 532.
102. See, e.g., Plott & Zeiler, Willingness, supra note 54, at 530-31.
103. DAVID K. LEVINE, IS BEHAVIORAL ECONOMICS DOOMED?: THE ORDINARY VERSUS THE EXTRAORDINARY (forthcoming 2012) (manuscript at 6-7), available at http://www.dklevine.com/general/behavioral/ch6.pdf.
104. Plott & Zeiler, Exchange, supra note 54, at 1462.
105. Plott & Zeiler, Willingness, supra note 54, at 531-32.
106. Plott & Zeiler, Exchange, supra note 54, at 1462 ("While we do challenge the general accuracy of endowment effect theory, we do not challenge prospect theory"). Others have also found prospect theory to have limited power in explaining WTA-WTP gaps.
107. See Stephanie Kovalchik et al., Aging and Decision Making: A Comparison Between Neurologically Healthy Elderly and Young Individuals, 58 J. ECON. BEHAV. & ORG. 79, 85-87 (2005) (finding results consistent with Plott & Zeiler on the endowment effect).
108. See, e.g., Jack L. Knetsch & Wei-Kang Wong, The Endowment Effect and the Reference State: Evidence and Manipulations, 71 J. ECON BEHAV. & ORG. 407, 408 (2009).
109. Keith M. Marzilli Ericson & Andreas Fuster, Expectations as Endowments: Evidence on Reference-Dependent Preferences from Exchange and Valuation Experiments, 126 Q.J. ECON. 1879, 1879-83 (2011). One recent study replies to Plott and Zeiler's findings and has elicited a response from them.
110. See Andrea Isoni et al., The Willingness to Pay-Willingness to Accept Gap, the "Endowment Effect," Subject Misconceptions, and Experimental Procedures for Eliciting Valuations: Comment, 101 AM. ECON. REV. 991 (2011).
111. Charles R. Plott & Kathryn Zeiler, The Willingness to Pay-Willingness to Accept Gap, the "Endowment Effect," Subject Misconceptions, and Experimental Procedures for Eliciting Valuations: Reply, 101 AM. ECON. REV. 1012 (2011).
112. A search on May 31, 2012, of the Westlaw Journals & Law Reviews (JLR) database for the term "endowment effect" resulted in 1087 articles that include the term.
113. These results are based upon the search referenced supra note 61, with the results restricted to articles written after September 1, 2007.
114. 2'-that is, greater power to explain the observed data.").
115. See generally STANLEY L. PAYNE, THE ART OF ASKING QUESTIONS (1951) (discussing how varying the wording of a question can affect survey outcomes).
116. Donald Rugg & Hadley Cantril, The Wording of Questions, 37 J. ABNORMAL & SOC. PSYCHOL. 469, reprinted in GAUGING PUBLIC OPINION 23 (1944) (same).
117. See Mitchell, supra note 27, at 1256 n.40.
118. Id. at 1255-56.
119. Id. at 1253.
120. Id. at 1255-60.
121. Libertarian paternalists have relied upon framing effects, and particularly the endowment effect, to justify significant policy interventions, including switching the legal default rule from "at will" to "for cause" termination, redistributing various property rights, and preferring liability rules over property rules.
122. See, e.g., Korobkin, supra note 32, at 1259-69, 1283-87 (respectively discussing proposals to redistribute property rights relying upon the endowment effect and favoring liability rules over property rules).
123. Sunstein & Thaler, supra note 2, at 1187 (advocating the Model Employment Termination Act).
124. This point is doubly salient when one considers that behaviorists often assert the inapplicability of the Coase Theorem due to the mere presence of transaction costs.
125. See supra Part II.A.1.
126. Bar-Gill, supra note 42, at 1395-1411.
127. E.g., MICHAEL S. BARR ET AL., BEHAVIORALLY INFORMED FINANCIAL SERVICES REGULATION 12 (2008), available at www.newamerica.net/files/naf_behavioral_v5.pdf ("Credit card companies have fine-tuned product offerings and disclosures in a manner that appears to be systematically designed to prey on common psychological biases-biases that limit consumer ability to make rational choices regarding credit card borrowing.").
128. Oren Bar-Gill & Elizabeth Warren, Making Credit Safer, 157 U. PA. L. REV. 1, 46-52 (2008) (providing examples of numerous product design features that can be used to exploit consumer biases).
129. Elizabeth Warren, Redesigning Regulation: A Case Study from the Consumer Credit Market, in GOVERNMENT AND MARKETS: TOWARD A NEW THEORY OF REGULATION 391, 391 (Edward J. Balleisen & David A. Moss eds., 2010) ("Businesses have learned to exploit customers' systematic cognitive errors, selling complex credit products that are loaded with tricks and traps.").
130. See Bar-Gill, supra note 42, at 1411-12.
131. Id. at 1400.
132. Sumit Agarwal et al., Do Consumers Choose the Right Credit Contracts? 4 (November 2006) (unpublished manuscript), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=843826.
133. Id. at 5.
134. Id. at 4-5, 7.
135. That potential consumer irrationality is bounded by the level of the relevant cost is potent indirect evidence for the proposition that even relatively minor market pressures will dissipate behavioral errors made in a laboratory.
136. Id. at 15.
137. Tom Brown & Lacey Plache, Paying with Plastic: Maybe Not So Crazy, 73 U. CHI. L. REV. 63, 80 (2006).
138. Id.
139. Elizabeth Warren, Economic Model Almost Working or Broken?, CREDIT SLIPS (Dec. 26, 2006, 04:12 PM), http://www.creditslips.org/creditslips/2006/12/economic_model_.html.
140. Id.
141. See Harold Demsetz, Information and Efficiency: Another Viewpoint, 12 J.L. & ECON. 1, 1-3 (1969) ("The view that now pervades much public policy economics implicitly presents the relevant choice as between an ideal norm and an existing 'imperfect' institutional arrangement. This nirvana approach differs considerably from a comparative institution approach in which the relevant choice is between alternative real institutional arrangements.").
142. See Jonathan Klick & Gregory Mitchell, Government Regulation of Irrationality: Moral and Cognitive Hazards, 90 MINN. L. REV. 1620 (2006).
143. Mitchell, supra note 27.
144. Andrew Ferguson, Nudge Nudge, Wink Wink: Behavioral Economics-The Governing Theory of Obama's Nanny State, WKLY. STANDARD, Apr. 19, 2010, at 18, 18.
145. Time Magazine described the Obama Administration's advisers as a "behavioral dream team" that would rely upon behavioral economics to "transform the country."
146. Michael Grunwald, How Obama Is Using the Science of Change, TIME, Apr. 13, 2009, at 28, 29.
147. Warren, a prominent behaviorist in her own right, was charged with setting up the CFPB. For examples of her writing on behavioral economics and consumer choice.
148. see Bar-Gill & Warren, supra note 71, at 39.
149. Elizabeth Warren, Unsafe at Any Rate, 5 DEMOCRACY 8 (2007). Sendhil Mullainathan, a leading behavioral economist, was recently appointed CFPB Assistant Director for Research. For a criticism of the behavioral approach to regulating consumer credit.
150. see David S. Evans & Joshua D. Wright, The Effect of the Consumer Financial Protection Agency Act of 2009 on Consumer Credit, 22 LOY. CONSUMER L. REV. 277 (2010).
151. The CFPB and its roots in behavioral law and economics are discussed infra Part III.B.2.
152. J. Thomas Rosch, Comm'r, Fed. Trade Comm'n, Behavioral Economics: Observations Regarding Issues That Lie Ahead, Remarks Before the Vienna Competition Conference 12-15 (June 9, 2010), available at http://ftc.gov/speeches/rosch/100609viennaremarks.pdf.
153. For a skeptical account of the implications of behavioral economics for antitrust, see Joshua D. Wright & Judd E. Stone, Misbehavioral Economics: The Case Against Behavioral Antitrust, 33 CARDOZO L. REV. 1517 (2012).
154. As of May 31, 2012, a search of the Westlaw JLR database finds 2281 articles in legal periodicals referencing "behavioral economics." A search on Google Scholar turns up 2190 legal opinions and articles referencing the same term.
155. Based on data that first appeared in Douglas H. Ginsburg & Derek W. Moore, The Future of Behavioral Economics in Antitrust Jurisprudence, 6 COMPETITION POL'Y INT'L 89, 93-96 (2010), which Figure 1 updates. The number of references in the Google Book search was compiled by the authors at books.google.com on December 22, 2010. The Y-axis on the left hand side of Figure 1 measures the number of times the term "behavioral economics" appears in the Westlaw JLR database in the relevant time period. The Y-axis on the right hand side of Figure 1 measures the number of times each of the three terms appears in Google Books.
156. Data compiled by authors (on file with Northwestern University Law Review). The law schools are those of Yale University, Harvard University, the University of Chicago, New York University, Columbia University, Vanderbilt University, the University of California at Los Angeles, the University of Virginia, the University of Pennsylvania, and Georgetown University.
157. First European Summer Symposium in Behavioural Economics, CENTRE FOR ECON. POL'Y RES., http://www.cepr.org/meets/meetings/meetdesc.asp?meetno=5525 (last visited Aug. 13, 2012).
158. The ENABLE network, funded in part by the European Commission, completed its work in March 2008. EUROPEAN NETWORK FOR THE ADVANCEMENT OF BEHAV. ECON., http://www.cepr.org/research/networks/enable/ (last visited Aug. 13, 2012). The research training network enlisted several prominent figures in behavioral economics, including Daniel Kahneman of Princeton University and David Laibson of Harvard University.
159. People, EUROPEAN NETWORK FOR THE ADVANCEMENT OF BEHAV. ECON., http://www.cepr.org/research/networks/enable/people_new.htm (last visited Aug. 13, 2012).
160. Descriptions of the behaviorist approach similarly vary, from Sunstein & Thaler's preferred "libertarian paternalism" to the more restrictive "asymmetric paternalism" and the more constraining "new paternalism."
161. See Camerer et al., supra note 3, at 1212 ("A regulation is asymmetrically paternalistic if it creates large benefits for those who make errors, while imposing little or no harm on those who are fully rational.").
162. Mario J. Rizzo & Douglas Glen Whitman, The Knowledge Problem of New Paternalism, 2009 BYU L. REV. 905, 908 ("The new paternalism, by contrast, takes the individual's own subjective preferences as the basis for policy recommendations. New paternalist policies allegedly help the individual to better achieve his own subjective well-being, which cognitive impediments prevent him from attaining on his own.").
163. See, e.g., Jolls et al., supra note 28, at 1536-37.
164. Thaler & Sunstein, supra note 17, at 178-79.
165. See discussion infra Part III.C.2.a.
166. Sunstein & Thaler, supra note 2, at 1176.
167. See Camerer et al., supra note 3, at 1227-30.
168. Behaviorists also rely on present bias and hyperbolic discounting in support of nudges that would increase savings.
169. See, e.g., David Laibson, Golden Eggs and Hyperbolic Discounting, 112 Q.J. ECON. 443 (1997).
170. Sunstein & Thaler, supra note 2, at 1172-73 ("[E]mployers think (correctly, we believe) that most employees would prefer to join the 401(k) plan if they took the time to think about it and did not lose the enrollment form").
171. Thaler & Benartzi, supra note 16, at S170.
172. Sunstein & Thaler, supra note 2, at 1185.
173. accord Thaler & Benartzi, supra note 16, at S186.
174. Sunstein & Thaler, supra note 2, at 1191 ("The fact that very few participants choose to opt out supports (though it does not prove) the claim that they are helped by a system that makes joining easy").
175. For a discussion of this point, see Mitchell, supra note 27, at 1252 n. 24, 1254-55 n.36.
176. Recent evidence also supports skepticism concerning the claim that manipulating the choice architecture for retirement savings will "nudge" the decisions of those whose welfare will be increased while allowing nearly costless opt out by those whose welfare would not.
177. See Anne Tergesen, 401(k) Law Suppresses Saving for Retirement, WALL ST. J., July 7, 2011, at A1 (discussing findings that while total 401(k) savings increased moderately due to greater participation at specified default rates, participants' average savings rates fell after adoption of auto-enrollment because individuals who would have opted for higher savings rates in the absence of auto-enrollment accept the lower auto-enrollment default rate).
178. See Evans & Wright, supra note 85, at 319-20.
179. see also BARR et al., supra note 71, at 12-15 (discussing the potential structure of such rules and regulations).
180. See Bar-Gill & Warren, supra note 71.
181. See BARR et al., supra note 71, at 7-9.
182. This is consistent with the behaviorists' preference for legal requirements to call attention to particular risks in order to offset consumers' optimism bias, which causes them to underestimate the likelihood that they will personally suffer bad outcomes.
183. See Christine Jolls & Cass R. Sunstein, Debiasing Through Law, 35 J. LEGAL STUD. 199, 212-13 (2006).
184. Bar-Gill & Warren, supra note 71, at 21.
185. Id. at 26.
186. George Loewenstein & Ted O'Donoghue, "We Can Do This the Easy Way or the Hard Way": Negative Emotions, Self-Regulation, and the Law, 73 U. CHI. L. REV. 183, 196-98 (2006).
187. Bar-Gill, supra note 42, at 1421-22.
188. The CFPB has the broad authority to "ensure that the features of any consumer financial product or service, both initially and over the term of the product or service, are fully, accurately, and effectively disclosed to consumers in a manner that permits consumers to understand the costs, benefits, and risks associated with the product or service" 12 U.S.C. § 5532(a) (2006). This provision may authorize, for example, a plain vanilla requirement, at least if the CFPB interprets the statute to mean all or nearly all consumers must understand disclosures before it authorizes a product.
189. See, e.g., Who's Watching the Watchmen? Oversight of the Consumer Financial Protection Bureau: Hearing Before the Subcomm. on TARP, Fin. Servs. & Bailouts of Pub. & Private Programs of the H. Comm. on Oversight & Gov't Reform, 112th Cong. 50 (2011) [hereinafter Who's Watching the Watchmen?] (statement of David S. Evans, Chairman, Global Economics Group) (explaining that, even without explicit authority to do so, "the [CFPB] can also steer financial services companies toward offering plain vanilla products designed by the CFPB by either banning products that don't conform to the CFPB view or by making it legally risky and expensive to deviate too far from the products that the CFPB wants").
190. Joshua D. Wright & Todd J. Zywicki, Three Problematic Truths About the Consumer Financial Protection Agency Act of 2009, LOMBARD ST., September 14, 2009, at 29, 41-44 (discussing the vague mandates of the CFPA Act).
191. See Jonathan Gruber & Botond Koszegi, Is Addiction "Rational"? Theory and Evidence, 116 Q.J. ECON. 1261, 1293-94 (2001).
192. Gruber & Koszegi, supra note 42, at 1980-81.
193. Jonathan H. Gruber & Sendhil Mullainathan, Do Cigarette Taxes Make Smokers Happier, 5 ADVANCES ECON. ANALYSIS & POL'Y 1, 2 (2005).
194. See Ted O'Donoghue & Matthew Rabin, Studying Optimal Paternalism, Illustrated by a Model of Sin Taxes, 93 AM. ECON. REV. 186, 190-91 (2003).
195. See supra Part II.A.2.
196. The original analysis of such time-inconsistent preferences in economics is R. H. Strotz, Myopia and Inconsistency in Dynamic Utility Maximization, 23 REV. ECON. STUD. 165 (1955).
197. See THOMAS C. SCHELLING, CHOICE AND CONSEQUENCE 84 (1984) ("[P]eople act as if there were two selves alternately in command [T]he ways that people cope, or try to cope, with loss of command within or over themselves are much like the ways that one exercises command over a second individual." (emphasis omitted)).
198. See infra Part III.C.1.
199. See Thaler & Sunstein, supra note 17, at 176.
200. In Part IV of this Article, where we focus upon the underappreciated threat behavioral law and economics poses to individual liberty, we will assume for the sake of the argument that any given behavioral intervention offers a Pareto-superior alternative to the status quo.
201. See HAL R. VARIAN, INTERMEDIATE MICROECONOMICS: A MODERN APPROACH 121 (8th ed. 2010) (describing the core economic concept of revealed preference, whereby "[i]f a bundle X is chosen over a bundle Y, then X must be preferred to Y").
202. We discussed supra Part II.B the empirical obstacles facing behaviorists relying on hyperbolic discounting models.
203. See, e.g., Gruber & Koszegi, supra note 111, at 1287.
204. O'Donoghue & Rabin, supra note 112, at 190.
205. See Mario J. Rizzo & Douglas Glen Whitman, Little Brother Is Watching You: New Paternalism on the Slippery Slopes, 51 ARIZ. L. REV 685, 701 (2009) ("[T]he normative standard inherent in any attempt to 'help' agents with hyperbolic preferences is inherently vague. We do not know where 'reasonable' impatience ends and 'excessive' patience begins.").
206. see also Faruk Gul & Wolfgang Pesendorfer, The Case for Mindless Economics 38-39 (Nov. 2005) (unpublished manuscript), available at http://economics.uchicago.edu/pdf/Pesendorfer040306.pdf ("Economists often note the arbitrariness of using U0 as a welfare criterion in the multiselves model. It is not clear what hedonic utility calculations have led neuroeconomists to decide that U0 represents the right trade-off among the hedonic utilities of the various selves.").
207. Gul & Pesendorfer, supra note 121, at 39.
208. Gul and Pesendorfer describe this stance as "therapeutic" and "paternalistic," and "similar to the position of medical professionals who attempt to cure a patient's addiction."
209. Id.
210. accord Gary S. Becker & Kevin M. Murphy, A Theory of Rational Addiction, 96 J. POL. ECON. 675, 681 (1988) (defining addiction as current behavior positively influencing future behavior).
211. See Rizzo & Whitman, supra note 121, at 703.
212. In contract law, a default rule is a right that acts as the standard unless waived by the party it benefits.
213. See Sunstein, supra note 34, at 107.
214. Sunstein & Thaler, supra note 2, at 1174.
215. One alternative to the selection of a default rule may be to require that the individual make a choice, for example, about whether to participate in a payroll savings plan.
216. Mitchell, supra note 27, at 1250-51 (emphasis omitted).
217. see also Jeffrey J. Rachlinksi, Cognitive Errors, Individual Differences, and Paternalism, 73 U. CHI. L. REV. 207, 224-26 (2006) (discussing how "[t]he presence of significant individual variation in [cognitive] vulnerability" weakens the common cognitive psychology arguments supporting paternalistic interventions).
218. See Mitchell, supra note 27, at 1251-52.
219. For a fuller explanation of the circumstances under which framing effects are likely to dissipate, see supra Part II.B.1.
220. MODEL EMPLOYMENT TERMINATION ACT §§ 3, 4(C), 7A U.L.A. 71, 312-13 (2002).
221. Sunstein & Thaler, supra note 2, at 1187.
222. See Glaeser, supra note 48, at 134 ("[I]f psychological errors are understood to be endogenous, then there are good reasons why we might think that public decisionmaking is likely to be more flawed than private decisionmaking.").
223. Rachlinski, supra note 127, at 224 ("The most common use of cognitive psychology in legal scholarship is to support paternalistic legal interventions.").
224. Richard A. Posner, Op-Ed., Treating Financial Consumers as Consenting Adults, WALL ST. J., July 23, 2009, at A15.
225. Thaler Responds to Posner on Consumer Protection, PBS NEWSHOUR (July 28, 2009), http://www.pbs.org/newshour/businessdesk/2009/07/thaler-responds-to-posner-on-c.html.
226. For a discussion of the confirmation bias in the context of behavioral law and economics and its proponents, see Gregory Mitchell, Taking Behavioralism Too Seriously? The Unwarranted Pessimism of the New Behavioral Analysis of Law, 43 WM. & MARY L. REV. 1907 (2002).
227. Nor do Sunstein, Thaler, or other behaviorists appear to be concerned with a research program or policy agenda intended to "nudge" regulators and judges to more rational evaluation of data or improved decisionmaking free from behavioral biases. For example, the behavioral literature does not appear to include cooling off periods for regulatory decisions made in haste, or a plain vanilla requirement for novel applications of behavioral interventions that would require the government decisionmaker to be informed of the risks of policy error and the potential costs of unintended consequences.
228. But see Josh Wright, A "Plain Vanilla" Proposal for Behavioral Law and Economics, TRUTH ON THE MARKET (July 16, 2010, 8:53 AM), http://truthonthemarket.com/2010/07/16/a-plain-vanilla-proposal-for-behavioral-law-and-economics/.
229. Rizzo & Whitman, supra note 91, at 910.
230. Id.
231. F.A. Hayek, The Use of Knowledge in Society, 35 AM. ECON. REV. 519 (1945).
232. Rizzo & Whitman, supra note 91, at 910.
233. See Ginsburg & Moore, supra note 88, at 96-97 ("[Behavioral economics] is almost the opposite of price theory, which narrows significantly the range of outcomes a court may reach;" instead it "increases the degrees of freedom with which a court may pursue personal, idiosyncratic goals.").
234. See James Surowiecki, A Smarter Stimulus, NEW YORKER, Jan. 26, 2009, at 25 (attribution to Thaler).
235. Claudia R. Sahm et al., Check in the Mail or More in the Paycheck: Does the Effectiveness of Fiscal Stimulus Depend On How It Is Delivered?, (Nat'l Bureau of Econ. Research, Working Paper No. 16246, 2010), available at http://www.nber.org/papers/w16246.pdf.
236. citing Cass Sunstein & Richard Thaler, How Behavioral Economics Could Show Up in the New Stimulus Package, NUDGE BLOG (Jan. 20, 2009), http://nudges.org/2009/01/20/how-behavioral-economics-could-show-up-in-the-new-stimulus-package/ (no longer available online).
237. See Barry Schwartz, On the Economic Stimulus Package: The "Packaging" Counts, PSYCHOL. TODAY (Feb. 1, 2009), http://www.psychologytoday.com/blog/the-choices-worth-having/200902/the-economic-stimulus-package-the-packaging-counts.
238. See Sahm et al., supra note 140, at 1-3.
239. Id. at 29.
240. Sahm, Shapiro, and Slemrod use survey data based upon telephone interviews to assess the impact of the tax rebates.
241. Id. at 6 & n.9.
242. See THALER & SUNSTEIN, supra note 17.
243. Id. at 157-96.
244. Id. at 101-56.
245. Mitchell, supra note 27, at 1260-64.
246. Regulatory proposals that reduce welfare for the reasons described in Part III will necessarily reduce liberty. The theoretically plausible set of "close calls" involves interventions that would increase welfare while posing a significant threat to liberty.
247. For example, these liberty concerns are likely to dominate behaviorist regulatory proposals with positive, but trivial, expected welfare benefits.
248. See IMMANUEL KANT, GROUNDWORK FOR THE METAPHYSICS OF MORALS 97-98 (Lara Denis ed., Thomas K. Abbott trans., Broadview Press 2005) (1785).
249. Cf., e.g., JOHN LOCKE, TWO TREATISES OF GOVERNMENT 306 (Peter Laslett ed., student ed. 1988) (1690) ("[T]he end of Law is not to abolish or restrain, but to preserve and enlarge Freedom Freedom is. a Liberty to dispose, and order, as he lists, his Person, Actions, Possessions, and his whole Property, within the Allowance of those Laws under which he is; and therein not to be subject to the arbitrary Will of another, but freely follow his own.").
250. JOHN STUART MILL, On Liberty, in ON LIBERTY AND OTHER ESSAYS 5, 75 (John Gray ed., 1991) (1859).
251. accord JAMES GRIFFIN, WELL-BEING: ITS MEANING, MEASUREMENT, AND MORAL IMPORTANCE 67 (1986) ("One component of agency is deciding for oneself. Even if I constantly made a mess of my life, even if you could do better if you took charge, I would not let you do it. Autonomy has a value of its own.").
252. MILL, supra note 152, at 65.
253. See THALER & SUNSTEIN, supra note 17, at 103-17.
254. MILL, supra note 152, at 65.
255. F.A. HAYEK, THE CONSTITUTION OF LIBERTY: THE DEFINITIVE EDITION 83 (Ronald Hamowy ed., 1960).
256. Amartya Sen, Markets and Freedoms: Achievements and Limitations of the Market Mechanism in Promoting Individual Freedoms, 45 OXFORD ECON. PAPERS 519, 523-24 (1993).
257. Id. at 524.
258. cf. MILTON FRIEDMAN & ROSE FRIEDMAN, FREE TO CHOOSE: A PERSONAL STATEMENT 27 (1980) (noting that "[s]elf-interest is not myopic selfishness. It is whatever it is that interests the participants, whatever they value, whatever goals they pursue," including their altruistic goals).
259. Sunstein and Thaler would assign zero weight to decisional autonomy unless it is linked with a welfare-based preference for decisionmaking.
260. Sunstein & Thaler, supra note 2, at 1198-99 ("Freedom of choice is itself an ingredient in welfare. In some situations people derive welfare from the very act of choosingBut much of the time, especially in technical areas, people do not particularly enjoy the process of choice"). In practice, they ignore it altogether.
261. Mozaffar Qizilbash, Well-Being, Preference Formation and the Danger of Paternalism 23 (Max Planck Inst. of Econ. Papers on Econ. & Evolution, Working Paper No. 0918, 2009), available at ftp://papers.econ.mpg.de/evo/discussionpapers/2009-18.pdf.
262. Id.
263. Id.
264. THALER & SUNSTEIN, supra note 17, at 1.
265. Id. at 1-3.
266. Sunstein clarified the connection in an earlier work, instancing "the cafeteria at some organization" and rather lamely suggesting that if the cafeteria's goal is profit maximization, then even "those cafeterias that face competition will find that some of the time, market success will come not from tracking people's preferences, but from providing goods and services that turn out, in practice, to promote their welfare, all things considered. Consumers might be surprised by what they end up liking" CASS R. SUNSTEIN, LAWS OF FEAR 178-79 (2005). Clearly Sunstein and Thaler have little to offer when they move from a coercive to a market environment, where consumers are sovereign.
267. James P. Byrnes et al., Learning to Make Good Decisions: A Self-Regulation Perspective, 70 CHILD DEV. 1121, 1122 (1999).
268. see also JAMES P. BYRNES, THE NATURE AND DEVELOPMENT OF DECISION MAKING: A SELF-REGULATION MODEL 27-28 (1998) (relying upon the approach used in the field of artificial intelligence in formulating the self-regulation model for rational task analysis and observing "[n]o one would disagree with. my claim that decision making requires the[se] four processes"). The experimental literature shows that subsequent decisions are more likely to be improved by experiencing success or failure than by being told one's decision was a success or a failure and why.
269. Byrnes et al., supra at 1137. Experimental studies suggest "adults could progressively learn to make better decisions if they received relatively clear feedback from outcomes."
270. Id. at 1125, 1137 (citing two studies in support of the general proposition adults will make better decisions as a result of clear feedback and two studies that conclude older children are more likely to exhibit improved decisionmaking as a result of feedback than are young children).
271. Klick and Mitchell have expanded somewhat upon Byrnes's findings, concluding that, because feedback is obtained "[t]hrough education, experimentation, experience, and observation," increased activity or opportunity in these areas will likewise lead individuals to "select the option that will lead to the most favorable outcomes."
272. Klick & Mitchell, supra note 83, at 1629. A related body of studies in experimental psychology shows that individuals better remember and more closely analyze unfavorable feedback than they do favorable feedback.
273. See, e.g., Peter H. Ditto et al., Motivated Sensitivity to Preference-Inconsistent Information, 75 J. PERSONALITY & SOC. PSYCHOL. 53, 65 (1998).
274. Ziva Kunda, The Case for Motivated Reasoning, 108 PSYCHOL. BULL. 480, 481 (1990).
275. Consistent with this inference, Vernon Smith and James Walker's review of the experimental literature on the effect of incentives on decisionmaking finds that "[s]ome studies report observations that fail to support the predictions of rational models, but as reward level is increased the data shift toward these predictions."
276. Vernon L. Smith & James M. Walker, Monetary Rewards and Decision Cost in Experimental Economics, 31 ECON. INQUIRY 245, 259-60 (1993).
277. Consequences need not be serious, however, for the effect of a choice to provide valuable feedback; studies show the repetition of feedback that accompanies making similar decisions may be useful to the decisionmaking process.
278. See List, Market Experience, supra note 14, at 70 ("I find strong evidence that individual behavior converges to the neoclassical prediction as trading experience intensifies."); Smith, supra note 52, at 118 (noting that rational behavior tends to emerge "in the context of a repetitive market institution").
279. Glaeser, supra note 48, at 140.
280. See Klick & Mitchell, supra note 83, at 1635-36.
281. Id. at 1626.
282. HAYEK, supra note 156, at 82.
283. Id. at 133.
284. Id. at 139.
285. James M. Buchanan, Afraid to Be Free: Dependency as Desideratum, 124 PUB. CHOICE 19, 23 (2005) (observing that the academy has "failed to emphasize sufficiently, and to examine the implications of, the fact that liberty carries with it responsibility").
286. Id. at 24.
287. Id. at 27.
288. Amir N. Licht, The Entrepreneurial Spirit and What the Law Can Do About It, 28 COMP. LAB. L. & POL'Y J. 817, 819 (2007).
289. Id. at 824-25.
290. see also Connie Marie Gaglio & Jerome A. Katz, The Psychological Basis of Opportunity Identification: Entrepreneurial Alertness, 16 SMALL BUS. ECON. 95, 96-98 (2001).
291. Israel M. Kirzner, Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach, 35 J. ECON. LITERATURE 60, 71 (1997).
292. See KATHERINE VERDERY, WHAT WAS SOCIALISM, AND WHAT COMES NEXT? 26 (1996) (explaining that the purpose of socialism was "to accumulate means of production" in order "to redirect resources to a goal greater than satisfying the population's needs").
293. See MILAN SIMECKA, RESTORATION OF ORDER: THE NORMALIZATION OF CZECHOSLOVAKIA 1969-1976 (A.G. Brain trans., 1984).
294. See id. at 18.
295. see also KEVIN DEVLIN, HOW NORMAL IS NORMALIZATION? 4 (1982), available at http://www.osaarchivum.org/files/holdings/300/8/3/pdf/139-4-7.pdf.
296. See Ruta Aidis et al., Institutions and Entrepreneurship Development in Russia: A Comparative Perspective, 23 J. BUS. VENTURING 656, 658 (2008).
297. See, e.g., TONY JUDT, POSTWAR: A HISTORY OF EUROPE SINCE 1945, at 428 (2005) (noting that Hungary under János Kádár implemented economic reforms in 1968 to promote a "mixed economy" with some local autonomy and private ownership).
298. David Lipton & Jeffrey Sachs, Creating a Market Economy in Eastern Europe: The Case of Poland, BROOKINGS PAPERS ECON. ACTIVITY, no. 1, 1990, at 75, 80-82 (noting that farmers in Poland "retained their private land after World War II," and a larger though still restricted "private sector ha[d] been allowed to operate under the reforms in Hungary and Poland" during communism).
299. Louis Putterman, The Role of Ownership and Property Rights in China's Economic Transition, in CHINA'S TRANSITIONAL ECONOMY 85, 86 (Andrew G. Walder ed., 1996) ("The period from 1978 to the early 1990s was marked by a massive shift. with significant new participation by foreign and domestic private firms.").
300. see also Jonas Alsén, An Introduction to Chinese Property Law, 20 MD. J. INT'L L. & TRADE 1, 20-21 (1996) (detailing shift to more private ownership in China beginning in 1978).
301. Richard D. Cudahy, From Socialism to Capitalism: A Winding Road, 11 CHI. J. INT'L L. 39, 53-56 (2010) (noting "[t]he flexibility of the Chinese in economic matters seemed to far exceed the Soviets" and discussing China's cautious shift toward privatization).
302. GLOBAL ENTREPRENEURSHIP MONITOR, http://www.gemconsortium.org (last visited Aug. 13, 2012).
303. See Aidis et al., supra note 184, at 658-59, 662.
304. Martin Robson, Explaining Cross-National Variations in Entrepreneurship: The Role of Social Protection and Political Culture, 28 COMP. LAB. L. & POL'Y J. 863, 890 (2007).
305. Aidis et al., supra note 184, at 657, 670 (attributing difference in part to weak institutions to support entrepreneurial development).
306. Alexander I. Ageev et al., Entrepreneurship in the Soviet Union and Post-Socialist Russia, 7 SMALL BUS. ECON. 365, 369 (1995).
307. See id. at 371, 374 (finding entrepreneurs in Russia are younger than their counterparts in Poland and Hungary).
308. See Douglas Glen Whitman & Mario J. Rizzo, Paternalistic Slopes, 2 N.Y.U. J.L. & LIBERTY 411, 412 (2007) ("A slippery slope argument is one suggesting that a proposed policy or course of action that might appear desirable now, when taken in isolation, is in fact undesirable (or less desirable) because it increases the likelihood of undesirable policies being adopted in the future.").
309. See Rizzo & Whitman, supra note 121, at 691-705 (stating "slippery slopes flourish in the presence of a gradient or continuum," and "[t]he new paternalist paradigm. relies on discarding sharp distinctions in favor of gradients").
310. For a brief history of federal seat belt laws, see Barry L. Huntington, Welcome to the Mount Rushmore State! Keep Your Arms and Legs Inside the Vehicle at All Times and Buckle Up... Not for Safety, But to Protect Your Constitutional Rights, 47 S.D. L. REV. 99, 101-04 (2002).
311. See Geier v. Am. Honda Motor Co., 529 U.S. 861, 875-77 (2000) (discussing history of federal regulations requiring passive restraints).
312. Id. at 876.
313. Huntington, supra note 195, at 101-02.
314. States without mandatory seatbelt laws also receive reduced federal funding for highway maintenance.
315. Id. at 102.
316. See MILTON FRIEDMAN, WHY GOVERNMENT IS THE PROBLEM 9 (1993) ("The general rule is that government undertakes an activity that seems desirable at the time. Once the activity begins, whether it proves desirable or not, people in both the government and the private sector acquire a vested interest in it. If the initial reason for undertaking the activity disappears, they have a strong incentive to find another justification for its continued existence.").
317. see also Rizzo & Whitman, supra note 121, at 717-23 (arguing that the adoption of a moderate paternalist policy makes the adoption of further policies more likely because the proponent can argue the now-accepted justification for the first policy also provides a foundation for the new policy).
318. Gary W. Jenkins, Who's Afraid of Philanthrocapitalism?, 61 CASE W. RES. L. REV. 753, 805 n.212 (2011) ("Mission creep refers to an organizational phenomenon in which entities inadvertently, over time, stray from their fundamental mission by engaging in activities or behaviors less closely related to the core. purpose.").
319. See, e.g., Simeon Djankov et al., The Regulation of Entry, 117 Q.J. ECON. 1, 3 (2002).
320. Fred S. McChesney, Rent Extraction and Rent Creation in the Economic Theory of Regulation, 16 J. LEGAL STUD. 101, 117 (1987).
321. See HOWARD P. GREENWALD, ORGANIZATIONS: MANAGEMENT WITHOUT CONTROL 369 (2008).
322. DAVID L. SILLS, THE VOLUNTEERS: MEANS AND ENDS IN A NATIONAL ORGANIZATION 253-54 (1957).
323. Global Programs, MARCH OF DIMES, http://www.marchofdimes.com/mission/globalprograms.html (last visited Aug. 13, 2012).
324. See Olmstead v. United States, 277 U.S. 438, 479 (1928) (Brandeis, J., dissenting) ("Experience should teach us to be most on our guard to protect liberty when the Government's purposes are beneficent. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.").
325. See Whitman & Rizzo, supra note 193, at 441.
326. cf. Lawrence Lessig, The New Chicago School, 27 J. LEGAL STUD. 661, 666-72 (1998) (describing work by scholars concluding law can regulate social norms).
327. Cass R. Sunstein, Social Norms and Social Roles, 96 COLUM. L. REV. 903, 964 (1996) ("Many laws have an expressive function. They 'make a statement' about how much, and how, a good or bad should be valued. They are an effort to constitute and to affect social meanings, social norms, and social roles. Most simply, they are designed to change existing norms and to influence behavior in that fashion.").
328. See Rizzo & Whitman, supra note 121, at 720-23.
329. Id. at 720.
330. See Trends in Current Cigarette Smoking Among High School Students and Adults, United States, 1965-2010, CENTERS FOR DISEASE CONTROL & PREVENTION, http://www.cdc.gov/tobacco/data_statistics/tables/trends/cig_smoking/index.htm (last visited Aug. 13, 2012).
331. See Rizzo & Whitman, supra note 121, at 720.
332. See, e.g., Sewell Chan, "No Smoking' Could Be Rule Outdoors, Too, N.Y. TIMES, Sept. 15, 2009, at A1 (discussing the New York City Health Commissioner's proposal to ban smoking at city parks and beaches).
333. See Rizzo & Whitman, supra note 121, at 722 ("[F]urther restriction of public smoking became acceptable with little or no evidence of significant harm to bystanders.").
334. BERNARD J. TURNOCK, ESSENTIALS OF PUBLIC HEALTH 4 (2d ed. 2012) (noting the "clear intent" of creating state public health agencies in the late nineteenth century was that their "powers be used to battle epidemics of infectious diseases").
335. For example, the Office of the Assistant Secretary for Health-formerly the Office of Public Health and Science, 75 Fed. Reg. 53,304 (Aug. 31, 2010)-currently comprises eleven public health offices with missions ranging from "improv[ing] the quality of healthcare across the United States" to "[c]oordinat[ing] adolescent health promotion and disease prevention" Public Health Offices, U.S. DEP'T OF HEALTH & HUMAN SERVS., http://www.hhs.gov/ash/public_health/indexph.html (last visited Aug. 13, 2012). The World Health Organization, the objective of which is "the attainment by all peoples of the highest possible level of health," defines "health" as "a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity."
336. Constitution of the World Health Organization, WORLD HEALTH ORG. pmbl., art. 1 (Oct. 2006), http://www.who.int/governance/eb/who_constitution_en.pdf.
337. Similarly, the mission of the U.S. National Institutes of Health is "to enhance health, lengthen life, and reduce the burdens of illness and disability." Mission, NAT'L INSTS. OF HEALTH, http://www.nih.gov/about/mission.htm (last visited Aug. 13, 2012).
338. The legal effort to promote more healthful eating started in 1990 with the enactment of the Nutrition Labeling and Education Act, which authorized the Food and Drug Administration to issue rules requiring that food bear nutrition labels.
339. See Pub. L. No. 101-535, 104 Stat. 2353 (1990).
340. see also 21 C.F.R. pt. 101 (implementing regulations). This effort has evolved into outright bans on the use of trans fats in restaurants. N.Y.C. ADMIN. CODE § 81.08 (West 2006).
341. The Centers for Disease Control refers to obesity as an "epidemic." CENTERS FOR DISEASE CONTROL & PREVENTION, OBESITY: HALTING THE EPIDEMIC BY MAKING HEALTH EASIER 2 (2009), available at http://www.cdc.gov/chronicdisease/resources/publications/AAG/pdf/obesity.pdf ("American society has become 'obesogenic,' characterized by environments that promote increased food intake, nonhealthful foods, and physical inactivity. Public health approaches that affect large numbers of different populations in multiple settings-communities, schools, work sites, and health care facilities-are needed.").
342. Dana Fradon, NEW YORKER, July 24, 1978, at 29.
343. In addition, as pointed out by Rizzo & Whitman, supra note 121, at 717, "rent-seeking activities impart a particular direction to slippery slopes As a result, we are unlikely to observe 'backward' slippage toward more laissez-faire policies." (emphasis omitted).
344. See supra Fig. 1.
345. see also Ginsburg & Moore, supra note 88, at 94 (cataloging the number of law review articles discussing behavioral economics).
346. RICHARD A. POSNER, ECONOMIC ANALYSIS OF LAW (1973).
347. See, e.g., William Breit & Kenneth G. Elzinga, Antitrust Penalties and Attitudes Toward Risk: An Economic Analysis, 86 HARV. L. REV. 693 (1973).
348. Richard A. Epstein, Unconscionability: A Critical Reappraisal, 18 J.L. & ECON. 293 (1975).
349. Charles J. Goetz & Robert E. Scott, Liquidated Damages, Penalties and the Just Compensation Principle: Some Notes on an Enforcement Model and a Theory of Efficient Breach, 77 COLUM. L. REV. 554 (1977).
350. Anthony T. Kronman, Specific Performance, 45 U. CHI. L. REV. 351 (1978).
351. Richard A. Posner, Gratuitous Promises in Economics and Law, 6 J. LEGAL STUD. 411 (1977).
352. George L. Priest, Breach and Remedy for the Tender of Nonconforming Goods Under the Uniform Commercial Code: An Economic Approach, 91 HARV. L. REV. 960 (1978).
353. Alan Schwartz & Louis L. Wilde, Intervening in Markets on the Basis of Imperfect Information: A Legal and Economic Analysis, 127 U. PA. L. REV. 630 (1979).
354. See, e.g., ANN-SOPHIE VANDENBERGHE, AN ECONOMIC ANALYSIS OF EMPLOYMENT LAW (2004).
355. Judy A. Temple et al., Cost-Effective Crime Prevention: Economic Analysis of the Chicago Child-Parent Centers Early Education Program, 15 PUB. INT. L. REP. 181 (2010).
356. See MARK KELMAN, A GUIDE TO CRITICAL LEGAL STUDIES 1 (1987) ("[T]he first annual Conference on Critical Legal Studies in 1977 gave little hint as to what the organizers thought 'critical legal studies' (CLS) was or might become [T]he organizers were simply seeking to locate those people working either at law schools or in closely related academic settings [who were]. something akin to New Leftists").
357. See CRITICAL RACE THEORY: THE CUTTING EDGE xvi (Richard Delgado & Jean Stefancic eds., 2d ed. 2000) (noting that Critical Race Theory "has predecessors-Critical Legal Studies, to which it owes a great debt").
358. See generally Deborah L. Rhode, Feminist Critical Theories, 42 STAN. L. REV. 617, 617-19 (1990) (charting the relationship between CLS and feminist theories, identifying "crosscutting objectives, methodologies, and concerns" between the two fields and observing a "growing body of feminist and critical race scholarship. developed along lines that paralleled, intersected, and challenged critical legal theory").
359. See Francisco Valdes, Queers, Sissies, Dykes, and Tomboys: Deconstructing the Conflation of "Sex," "Gender," and "Sexual Orientation" in Euro-American Law and Society, 83 CALIF. L. REV. 1, 29 (1995) ("[T]his project endeavors to enlist critical legal theories and theorists in an effort to create a space and a framework for holistic and contextual critiques of sex, gender, and sexual orientation as legal (and social) concepts.").
360. see also Minna J. Kotkin, Creating True Believers: Putting Macro Theory into Practice, 5 CLINICAL L. REV. 95, 101-02 (1998) ("Critical jurisprudence also finds expression in feminist legal theory, critical race theory, and queer theory. These movements are alternatively viewed as off-shoots of CLS or independent schools of legal thought that changed the focus of CLS. In either case, by the late 1980s, critical scholarship had shifted to some degree from exclusively economic analysis to the exploration of how issues of race, gender, and sexuality determine legal outcomes.").
361. See, e.g., MORTON J. HORWITZ, THE TRANSFORMATION OF AMERICAN LAW: 1780-1860 (1977).
362. KELMAN, supra note 221.
363. ROBERTO MANGABEIRA UNGER, KNOWLEDGE AND POLITICS (1975).
364. Mark Kelman, Consumption Theory, Production Theory, and Ideology in the Coase Theorem, 52 S. CAL. L. REV. 669, 676-77 (1979).
365. Mark G. Kelman, Misunderstanding Social Life: A Critique of the Core Premises of "Law and Economics," 33 J. LEGAL. EDUC. 274, 277-78 (1983).
366. Duncan Kennedy, How the Law School Fails: A Polemic, 1 YALE REV. L. & SOC. ACTION 71 (1970).
367. Duncan Kennedy, Legal Education and the Reproduction of Hierarchy, 32 J. LEGAL EDUC. 591, 591-92 (1982) [hereinafter Kennedy, Legal Education].
368. Duncan Kennedy, Psycho-Social CLS: A Comment on the Cardozo Symposium, 6 CARDOZO L. REV. 1013 (1985) [hereinafter Kennedy, Psycho-Social CLS].
369. Duncan Kennedy, The Critique of Rights in Critical Legal Studies, in LEFT LEGALISM/LEFT CRITIQUE 178 (Wendy Brown & Janet Halley eds., 2002).
370. Duncan Kennedy, Toward a Critical Phenomenology of Judging, in THE RULE OF LAW: IDEAL OR IDEOLOGY 141 (Allan C. Hutchinson & Patrick Monahan eds., 1987). For a more complete bibliography of the CLS movement.
371. see Duncan Kennedy & Karl E. Klare, A Bibliography of Critical Legal Studies, 94 YALE L.J. 461 (1984).
372. Duncan Kennedy, Law-and-Economics from the Perspective of Critical Legal Studies, in 2 THE NEW PALGRAVE DICTIONARY OF ECONOMICS AND THE LAW 465, 465 (Peter Newman ed., 1998).
373. KELMAN, supra note 221, at 1.
374. Kennedy, Psycho-Social CLS, supra note 225, at 1014, 1017.
375. See David S. Caudill, Disclosing Tilt: A Partial Defense of Critical Legal Studies and a Comparative Introduction to the Philosophy of the Law-Idea, 72 IOWA L. REV. 287, 299-304 (1987).
376. Robert W. Gordon, Critical Legal Histories, 36 STAN. L. REV. 57, 102 n.102 (1984).
377. ANDREW ALTMAN, CRITICAL LEGAL STUDIES: A LIBERAL CRITIQUE 3 (1990).
378. accord KELMAN, supra note 221, at 1-8.
379. This phrase is often attributed directly to Marx. But see Joseph McCarney, Ideology and False Consciousness, MARX MYTHS AND LEGENDS (Apr.2005), http://marxmyths.org/joseph-mccarney/article.htm (questioning whether Marx ever actually described ideology as"false consciousness"). The phrase, if not the concept, seems actually to derive from an early translation of a letter Friedrich Engels wrote to Franz Mehring.
380. See MICHÈLE BARRETT, THE POLITICS OF TRUTH: FROM MARX TO FOUCAULT 5-6 (1991).
381. John T. Jost, Negative Illusions: Conceptual Clarification and Psychological Evidence Concerning False Consciousness, 16 POL. PSYCHOL. 397, 400 (1995) (emphasis omitted).
382. accord Richard Delgado, Rodrigo's Sixth Chronicle: Intersections, Essences, and the Dilemma of Social Reform, 68 N.Y.U. L. REV. 639, 653 n.57 (1993) (defining "false consciousness" as the "phenomenon in which the oppressed come to identify with their oppressors, internalize their views, and thus appear to consent to their own subordination").
383. As one student of Kennedy's put it, the phrase "implies that all those who disagree with you are stupid." RICHARD D. KAHLENBERG, BROKEN CONTRACT: A MEMOIR OF HARVARD LAW SCHOOL 166 (1999).
384. See A. Michael Froomkin, Habermas@Discourse.net: Toward a Critical Theory of Cyberspace, 116 HARV. L. REV. 749, 768 (2003) (noting that under Habermas's theory of self-deception, "[e]xplanation, education, discussion, and even therapy may serve to allow everyone except those suffering from the worst forms of self-delusion to understand (or, at least, better understand) their true interests").
385. Robin J. Munro, Political Psychiatry in Post-Mao China and Its Origins in the Cultural Revolution, 30 J. AM. ACAD. PSYCHIATRY & L. 97, 103 (2002) ("[I]f we use class education and political-line education to profoundly re-educate the mentally ill in the proletarian worldview. and raise their awareness of the class struggle, the struggle over political line and the need to continue the revolution under the dictatorship of the proletariat. and dig out the roots of mental illness by overthrowing the concept of private ownership and implanting the principle of public ownership. then the overwhelming majority (90%) of mentally ill people can be completely cured." (quoting Jia Rubao, a psychiatrist from Shaanxi Province, April 1977)).
386. See Kennedy, Legal Education, supra note 225, at 615 (proposing legal education be reformed by "equaliz[ing] all salaries in the school (including secretaries and janitors), regardless of educational qualifications, 'difficulty' of job, or 'social contribution'" and encouraging every university employee or faculty member to "spend one month per year performing a job in a different part of the hierarchy from his normal job, [so that] over a period of years everyone [is] trained to do some jobs at each hierarchical level").
387. see also Randy Beck, The Faith of the "Crits": Critical Legal Studies and Human Nature, 11 HARV. J.L. & PUB. POL'Y 433, 447 (1988) ("Among [Kennedy's] more familiar proposals is his suggestion that law schools allocate positions in the starting class by lottery to all students possessing minimum qualifications and that janitors and law professors periodically switch jobs.").
388. Kennedy, Legal Education, supra note 225, at 610.
389. See Duncan Kennedy, Teaching from the Left in My Anecdotage, 31 N.Y.U. REV. L. & SOC. CHANGE 449 (2007).
390. Steven Lukes, In Defense of "False Consciousness," 2011 U. CHI. LEGAL F. 19.
391. See Cass R. Sunstein, Foreword: On Academic Fads and Fashions, 99 MICH. L. REV. 1251, 1255 (2001) (discussing the disappearance of critical legal studies from law schools).
392. In 2007, Brian Leiter compiled a list of the most cited faculty members by specialty, including Critical Theories, which includes Critical Legal Studies, Critical Race Theory, and Feminist Legal Theory. The ages of the top twenty members ranged from mid 40s to 60s, showing a lack of young entrants in the field.
393. Brian Leiter, Most Cited Law Professors by Specialty, 2000-2007, BRIAN LEITER'S LAW SCHOOL RANKINGS, (Dec. 18, 2007), http://www.leiterrankings.com/faculty/2007faculty_impact_areas.shtml#CriticalTheory.
394. More recently, the 2010-2011 edition of the Association of American Law Schools Directory of Law Teachers listed only ninety-nine professors with one to five years of experience currently teaching Critical Theories, which also includes Critical Legal Studies, Critical Race Theory, and Feminist Legal Theory. ASSOCIATION OF AMERICAN LAW SCHOOLS: 2010-2011 DIRECTORY OF LAW TEACHERS 1627-28, 1669-70 (2011).
395. See, e.g., ROBERT H. BORK, THE ANTITRUST PARADOX: A POLICY AT WAR WITH ITSELF (1978).
396. GUIDO CALABRESI, THE COSTS OF ACCIDENTS: A LEGAL AND ECONOMIC ANALYSIS (1970).
397. POSNER, supra note 218.
398. Guido Calabresi, Some Thoughts on Risk Distribution and the Law of Torts, 70 YALE L.J. 499 (1961).
399. Guido Calabresi & A. Douglas Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 HARV. L. REV. 1089 (1972).
400. Henry G. Manne, Mergers and the Market for Corporate Control, 73 J. POL. ECON. 110 (1965).
401. Gordon Tullock, The Welfare Costs of Tariffs, Monopolies, and Theft, 5 W. ECON. J. 224 (1967).
402. See, e.g., Guido Calabresi & Alvin K. Klevorick, Four Tests for Liability in Torts, 14 J. LEGAL STUD. 585 (1985).
403. William M. Landes & Richard A. Posner, Legal Precedent: A Theoretical and Empirical Analysis, 19 J.L. & ECON. 249 (1976).
404. Pioneering examples include JAMES M. BUCHANAN & GORDON TULLOCK, THE CALCULUS OF CONSENT: LOGICAL FOUNDATIONS OF A CONSTITUTIONAL DEMOCRACY (1962).
405. Robert H. Bork & Ward S. Bowman, Jr., The Crisis in Antitrust, 65 COLUM. L. REV. 363 (1965).
406. Aaron Director & Edward H. Levi, Law and the Future: Trade Regulation, 51 NW. U. L. REV. 281 (1956).
407. See generally Henry G. Manne & Joshua D. Wright, The Future of Law and Economics: A Discussion 10-11 (George Mason Univ. Law & Econ., Research Paper No. 08-35, 2008), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1145421 (discussing the shift toward the modern, formal, mathematical approach to economics and its implication for law and economics and legal education).
408. The Berkeley Electronic Press law review submission service, ExpressO, includes more than 750 student-edited law reviews and journals.
409. See List, EXPRESSO, http://law.bepress.com/expresso/list.html (last visited Aug. 13, 2012).
410. See, e.g., CALABRESI, supra note 238, at 311-18.
411. William M. Landes & Richard A. Posner, Joint and Multiple Tortfeasors: An Economic Analysis, 9 J. LEGAL STUD. 517, 517 (1980).
412. A. Mitchell Polinksy, Resolving Nuisance Disputes: The Simple Economics of Injunctive and Damage Remedies, 32 STAN. L. REV. 1075, 1079-80 (1980).
413. cf. John H. Langbein & Richard A. Posner, Social Investing and the Law of Trusts, 79 MICH. L. REV. 72, 77-96 (1980) (arguing conventional investment practices of trusts are inadequate with the portfolio theory and therefore yield inadequate returns).
414. See, e.g., Gary S. Becker, A Theory of Competition Among Pressure Groups for Political Influence, 98 Q.J. ECON. 371, 394-96 (1983).
415. Frank H. Easterbrook, Foreword: The Court and the Economic System, 98 HARV. L. REV. 4, 15-16 (1984) ("People demand laws just as they demand automobiles, and some people demand more effectively than others. Laws that benefit the people in common are hard to enact because no one can obtain very much of the benefit of lobbying for or preserving such laws. Smaller, more cohesive groups are more effective lobbyists. These groups can obtain a greater share of the benefits of laws targeted to assist people who have common characteristics, and so they will raise more money and campaign for legislation more effectively It also turns out that small, cohesive groups can get more for themselves by restricting competition and appropriating rents than by seeking rules that enhance the welfare of all. Thus we should expect regulatory programs and other statutes to benefit the regulated group-they need not 'capture' the programs, because they owned them all along. The burgeoning evidence showing that regulatory programs increase prices for consumers and profits for producers supports this understanding.").
416. McChesney, supra note 201, at 101-03.
417. Sam Peltzman, Toward a More General Theory of Regulation, 19 J.L. & ECON. 211, 240 (1976).
418. George J. Stigler, The Theory of Economic Regulation, 2 BELL J. ECON. & MGMT. SCI. 3, 3-4 (1971).
419. See, e.g., Michael S. Barr et al., Behaviorally Informed Home Mortgage Credit Regulation, in BORROWING TO LIVE: CONSUMER AND MORTGAGE CREDIT REVISITED 170, 197-98 (Nicolas P. Retsinas & Eric S. Belsky eds., 2008) (arguing for a default option of plain vanilla mortgages).
420. Nutrition labeling on menus exemplifies well the creeping nature of paternalism. Initially required by only a few cities and states-most notably, New York City, Philadelphia, and the state of California-the House of Representatives proposed to bring nutrition labels to restaurant menus nationwide in its first three drafts of the Affordable Health Care for America Act.
421. See Shirley S. Wang, Menu Labeling to Go National, Thanks to Health Bill's Passage, WALL ST. J. HEALTH BLOG (Mar. 22, 2010, 2:16 PM), http://blogs.wsj.com/health/2010/03/22/menu-labeling-to-go-national-thanks-to-health-bills-passage/.
422. see also Affordable Health Care for America Act, H.R. 3962, 111th Cong. § 2572 (2009) (as introduced to the Senate on November 16, 2009). The labeling provision did not survive the Senate, Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, Pub. L. No. 111-192, 124 Stat. 1280, but it is unlikely we have seen the last of the nutrition-labeling proposal.
423. See, e.g., Natural Gas Policy Act of 1978, Pub. L. No. 95-621, 92 Stat. 3350 (codified as amended in scattered sections of 5, 12, 15, 16, and 42 U.S.C.) (phasing out price regulations).
424. Emergency Natural Gas Act of 1977, Pub. L. No. 95-2, 91 Stat. 4 (codified at 15 U.S.C. § 717).
425. See, e.g., Staggers Rail Act of 1980, Pub. L. No. 96-448, 94 Stat. 1895 (codified as amended in scattered sections of 5 and 49 U.S.C.); Motor Carrier Act of 1980, Pub. L. No. 96-296, 94 Stat. 793 (codified in scattered sections of 49 U.S.C.); Airline Deregulation Act of 1978, Pub. L. No. 95-504, 92 Stat. 1705 (codified in scattered sections of 49 U.S.C.); Air Cargo Deregulation Act of 1977, Pub. L. No. 95-163, 91 Stat. 1278 (codified as amended in scattered sections of 26 and 49 U.S.C.).
426. See, e.g., Depository Institutions Deregulation and Monetary Control Act of 1980, Pub. L. No. 96-221, 94 Stat. 132 (codified in scattered sections of 12, 15, 22, 38, and 42 U.S.C.) (preempting various state restrictions on mortgages).
427. See, e.g., Revision of Programming & Commercialization, Policies, Ascertainment Requirements, & Program Log Requirements for Commercial Television Stations, 6 FCC Rcd. 5093 (1991) (eliminating ascertainment requirements and programming guidelines for commercial television).
428. Syracuse Peace Council,2 FCC Rcd.5043,5052(1987)(invalidating"fairness doctrine" as unconstitutional and contrary to public interest), aff'd, Syracuse Peace Council v. FCC, 867 F.2d 654 (D.C. Cir. 1989).
429. Amendment of Part 73 of the Comm'n's Rules & Regulations in Regard to Section 73.642(a)(3) & Other Aspects of the Subscription Television Serv., 90 F.C.C.2d 341 (1982) (abolishing various programming and other restrictions for subscription television).
430. In re Deregulation of Radio, 84 F.C.C.2d 968 (1981).
431. See, e.g., Shelf Registration, Securities Act Release No. 33-6499, 48 Fed. Reg. 52,889 (Nov. 23, 1983) (codified as amended at 17 C.F.R. § 230.415) (reducing registration requirements for mortgage- related securities.
432. Davis W. Turner, Note, Nonbank Banks: Congressional Options, 39 VAND. L. REV. 1735, 1736, 1744 (1986) (describing willingness of the Comptroller of the Currency in the Reagan Administration to charter "nonbank banks," thereby allowing companies to escape restrictions of various banking laws and regulations).
433. See, e.g., Exec. Order No. 12,287, 46 Fed. Reg. 9909 (Jan. 30, 1981) (eliminating oil price controls immediately rather than phasing out over time).
434. See Improvement of TOFC/COFC Regulation, 46 Fed. Reg. 14,348, 14,352 (1981) (exempting "piggyback" services from certain railway and trucking rules).
435. Mary A. Wallace, Interstate Commerce Commission, 56 GEO. WASH. L. REV. 937, 938-41 (1988) (describing the Commission's largely successful efforts at deregulating the transportation industry in the 1980s).
436. See Ferguson, supra note 84, at 18.
437. Grunwald, supra note 84, at 29.
438. Mike Dorning, A Beachhead for the Behavorialists [sic], BUS. WK., June 28, 2010, at 19 ("[T]he behavioralists could be influencing regulations long after [Peter] Orszag leaves [OMB]. Their ideas have been seeded in numerous initiatives, just as the regulatory state is poised for a dramatic comeback following decades of retrenchment. Other promoters include Michael S. Barr, the Assistant Treasury Secretary for Financial Institutions, who helped draft Obama's Wall Street reforms."). The first chairman of President Obama's Council of Economic Advisers was Austan Goolsbee, who is sympathetic to (but not himself a practitioner of) behavioral economics.
439. See Lori Montgomery, New Economic Face, Still Familiar, WASH. POST, Sept. 11, 2010, at A12.
440. Ferguson, supra note 84, at 18.
441. Indeed, the CFPB is perhaps the only major behavioral law and economics initiative that will be realized within the President's first term.