[HN Gopher] For every 1% increase in the number of lawyers, econ...
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For every 1% increase in the number of lawyers, economic growth
falls 3% (1986)
Author : f00zz
Score : 130 points
Date : 2020-10-05 22:13 UTC (46 minutes ago)
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(TXT) w3m dump (www.sciencedirect.com)
| emptywindow wrote:
| i believe the USA has the most lawyers per capita of any country,
| and also (arguably) the world's strongest economy
| microcolonel wrote:
| I think this says more about the virtues of the American legal
| system, and less about the efficiency of lawyers or any trend
| in the quality of judgments relative to the standard.
| WhompingWindows wrote:
| That's what you believe, is there evidence to support your two
| claims? I don't think HN should be a place where people state
| their "beliefs" about quantitative statements without providing
| a single number or citation.
| TylerE wrote:
| It's not exactly breaking news the US by leads the world in
| GDP - still almost double China despite having a fraction of
| the population.
|
| Per capita the US is high but not quite at the top - but
| almost all of those are small financial powerhouses like
| Switzerland or Macau.
| AbrahamParangi wrote:
| Israel has the most, followed by the US
| https://twitter.com/pankajghemawat/status/575654688491708416
| frozenlettuce wrote:
| https://www.npr.org/sections/parallels/2014/11/05/359830235/...
| .
|
| >Here is another telling statistic: Brazil has more law schools
| -- some 1,240 -- than the rest of the world combined. And they
| have turned out some 800,000 lawyers -- which means there are
| more lawyers per capita in Brazil than in the U.S.
| Apes wrote:
| Is this just saying that Intellectual Property (IP) protections
| stifle economic growth, but with more steps?
|
| I think it's pretty well understood that IP protection helps
| innovation to a point, but if you go to far it actually stifles
| growth and innovation more than not having any protection at all.
| If you have a ridiculous system of IP laws that allows
| pharmaceutical companies to avoid ever releasing anything into
| the public domain, you're going to also need an army of lawyers
| to enforce your draconian laws.
| chki wrote:
| The number of IP lawyers is a very small fraction of the total
| number of lawyers.
| tboyd47 wrote:
| Any mediating variables?
| SkyMarshal wrote:
| _> This paper uses international cross-section data to provide a
| simple test of this hypothesis. Despite the crudeness of the
| test, the small size of the sample and possible ambiguities in
| interpretation, the results provide a tentative confirmation of
| the hypothesis._
|
| Doesn't sound very reliable, especially being from 1986 when we
| generally had a much less sophisticated understanding of the
| intricacies of statistics and hypothesis testing.
|
| Conversely to the paper's implication, too many lawyers can also
| be seen as evidence of a society based on the rule of the law,
| with strong legal institutions, processes, separation of powers
| and other patterns of integrity, and lack of rule by decree in
| any form, all of which are valuable and possibly necessary
| components of sustainable economic growth. In such a society, law
| will naturally be one of the more prestigious and attractive
| professions.
|
| I'm sure there's some optimal ratio of lawyers to
| scientists|engineers|teachers|builders and other productive
| professions, where exceeding that ratio results in lower than
| optimal growth. But even a society with too many lawyers probably
| has stronger growth than one with none.
| fladrif wrote:
| I would counter to say your supposition would depend on how
| those lawyers are employed. If they were corporate lawyers I
| would struggle to see how a glut of those would tend towards
| the aspects of society you've listed. I wonder what the ratio
| of employment of lawyers looks like.
| londons_explore wrote:
| There are plenty of new small industries where everyone is
| copying each others ideas and making better products... all
| until someone hires a few lawyers and starts sending out
| threatening letters, and suddenly all innovation stops because
| everyone would prefer to keep making current products than to
| make new products and be bankrupted by a lawsuit for copying
| someone else's ideas...
|
| There are many times in my career that I have seen that as soon
| as lawyers get involved, all innovation stops.
| AnimalMuppet wrote:
| > Conversely to the paper's implication, too many lawyers can
| also be seen as evidence of a society based on the rule of the
| law, with strong legal institutions, processes, separation of
| powers and other patterns of integrity, and lack of rule by
| decree in any form
|
| Well, it means strong legal institutions. But...
|
| Take criminal law, for example. Lots of lawyers mean that each
| criminal gets their day in court. That's good. But a law-
| abiding society would be better.
|
| Or take contract law. Lots of lawyers mean that, if the other
| party violates the contract, you can sue them. But wouldn't it
| be better to have a society where more people just did what the
| contract said, instead of trying to find ways to weasel out of
| it?
|
| Even with respect to the government, yes, when they overstep
| their bounds, we can take them to court, and we can even win
| and make them stop doing whatever they're not supposed to. But
| really, it would be better if they just stayed within the
| constitutional parameters of what they're allowed to do.
|
| In all these cases, it's good (really!) that we can have our
| day in court, in a system that is at least relatively fair. The
| lawyers are the sign of a healthy legal system. But they're
| also the sign of an _un_ healthy society, that is restrained by
| court cases rather than by doing the right thing.
| darawk wrote:
| I'd also guess that when a society is just establishing itself
| (i.e. in the process of moving from 3rd -> 1st world status, to
| put it crudely), they probably have a comparatively low number
| of lawyers to engineers/scientists. This also tends to be a
| very high growth phase. In other words, there's a
| correlation/causality problem here, where all societies tend to
| go through a high growth phase as they urbanize and
| industralize, and that phase also tends to be under-developed
| legally relative to the slower growth late phase.
| rayiner wrote:
| Some work done in the early 1990s suggests that, at that time,
| we had 40% too many lawyers:
| https://www.csmonitor.com/1994/0215/15081.html
|
| > Beyond the optimal number of lawyers, however, the effects of
| their work are negative. In this graph, the optimal number of
| lawyers per 1,000 white-collar workers is said to be about 10;
| because the US has about 14, it has an excess.
|
| Today we might have a slightly lower excess. The number of
| lawyers per 100,000 people has been stable since the 1980s.
| Meanwhile, the fraction of white collar workers has gone up a
| bit.
| jedberg wrote:
| "The justice system works swiftly in the future now that they've
| abolished all lawyers."
| shanecleveland wrote:
| That's heavy.
| slater wrote:
| Better get used to these bars kid.
| drtillberg wrote:
| GDP would suffer most from an increased lawyer count when the
| statistics are bloated by fraud and lies.
| Zigurd wrote:
| An alternative hypothesis is that legal complexity breeds demand
| for lawyers. But even that is obviously too simple: The highly
| regulated EU has fewer lawyers than the laissez faire US. One
| would have to dig into the incentives of tort law, patent law,
| etc. to find specific drivers of complexity.
| Ekaros wrote:
| Higher regulation doesn't necessarily mean more complexity. It
| might even simplify things as things are already codified in
| the laws and less time is spend on searching and arguing about
| precedents and so on...
|
| Also whole legal systems affects the complexity. So it's not
| easy to compare between systems, not to even talk about
| countries.
| nabla9 wrote:
| Less developed the country is, the higher growth rate it can
| have.
|
| Number of lawyers can be used as a indicator fore the level of
| development in the the economy.
| [deleted]
| bynkman wrote:
| So 13,000 at the bottom of the ocean is a good start?
| kevmo wrote:
| As a former lawyer, this makes a lot of sense to me. America in
| particular has an insane number of lawyers. The bar exam isn't
| actually that hard to pass (look at the pass rates for native
| English speakers, they're high) and there are 100s of law
| schools, so the market is flooded with bad lawyers looking to
| scratch a living. This results in a lot of bad lawsuits being
| filed, shoddy legal work that bears costs long into the future,
| and a general legalization of many aspects of business that
| probably often doesn't need to happen.
|
| In addition to the all of the bad legal work, the best lawyers
| also often go to the "white shoe" law firms. In America, these
| law firms hire out their legal capital to corporate world that
| engages in beating down consumers and competition, which is
| resulting in an increasingly monolithic and sclerotic economy.
| CoffeeDregs wrote:
| Putting aside is-this-right-or-wrong?: this is unsurprising:
| lawyers (many in my family), police, doctors, sales people, etc
| represent mechanisms to reduce more problematic _inefficiencies_
| in our society. No one (including lawyers I know) wants lawyers;
| but a world-with-lawyers is better than a world-without-lawyers.
| Doctors: why do you go to the doctor? To __improve __your body?
| Almost never; it 's always to reduce problems or prevent them, a
| cost you only incur because of the fallibility of your body.
| Sales people: imperfect information in society. Police: lovely
| folks; would be much better if we didn't have people being
| assholes so that we needed _police_.
|
| Then add in all of the secondary effects of
| exploitation/corruption of these not-productive-and-
| shouldn't-exist positions...
|
| Further for every $1 you spend on an attorney, someone else has
| to spend $$ and the society has wasted that $$$ plus that time,
| none of which is productive.
|
| On the other hand, get rid of lawyers and you're going to spend
| $$$ on mercenaries...
| koolba wrote:
| > On the other hand, get rid of lawyers and you're going to
| spend $$$ on mercenaries...
|
| The true alternative for most people is they're out the
| additional baked in cost of the lawyers and they can't afford
| their own lawyer to "even the odds" so it's asymmetrical
| warfare.
| samatman wrote:
| Well, not entirely. They benefit from that 'baked in' cost as
| well, companies and individuals are less willing to be
| negligent or exploitative because of the fear of lawsuits.
|
| True of the police as well: calling them doesn't benefit me
| much, but they do play a role in making the streets
| (relatively) safe at night.
|
| In both cases we might imagine a better way of doing these
| things, I'm speaking about the world we happen to have.
| kiba wrote:
| Theoretically and ideally, doctors improve the lifespan and
| health of human beings beyond what natural selection gave us.
| In an ideal world, the budget for social healthcare would just
| collapse due to incredibly effective medicine.
|
| Whereas lawyers and police must deal with the imperfection of
| people and society, no matter how much it is reduced.
| NoodleIncident wrote:
| > Putting aside is-this-right-or-wrong?: this is unsurprising
|
| Every HN thread about a scientific study ever
| lucb1e wrote:
| I found the comment to be more thoughtful (=contributing to
| the topic) than how you present it here as "it's always the
| same".
| RangerScience wrote:
| Most medicine does seem to be about fixing what's broken in
| your body (which is what you described), but some medicine is
| about bring your body to a healthier state. (Or maybe that's
| just "fitness"?).
|
| I suspect it's possible to have a society where doctors focus
| on improving the health of people rather than focusing on
| fixing things when they break; and I suspect there's a way to
| adopt that mindset with lawyers, as well. Police too, actually
| - if police are social workers _first_ , and enforcers _last_.
| AbrahamParangi wrote:
| Israel has the most, followed by the US[1]. The thesis seems
| pretty flimsy. Israel and the US rank 31st and 1st respectively
| in nominal GDP.
|
| [1] https://twitter.com/pankajghemawat/status/575654688491708416
| GarrisonPrime wrote:
| Not necessarily a bad thing.
|
| Sometimes, resistance to boom growth is wise.
| nooyurrsdey wrote:
| due diligence of reading at least the abstract instead of the
| post title
|
| > Despite the crudeness of the test, the small size of the sample
| and possible ambiguities in interpretation, the results provide a
| tentative confirmation of the hypothesis.
| HippoBaro wrote:
| That explains the Chinese economic miracle quite well!
| [deleted]
| rcar wrote:
| Correlation vs. causation, etc., etc.
| H8crilA wrote:
| Exactly, it sounds to me that the causation may very well run
| the other direction, if at all.
|
| Low economic growth implies low interest rates, high
| indebtedness, high asset prices and extended asset duration[1].
| Therefore it is so much more important to look at your
| contracts carefully, because they matter so much more.
|
| If you don't see it then imagine what a true 0% (or around -1%,
| to account for risk premium) riskfree interest rate across the
| entire duration means. It means, for example, that it
| theoretically makes sense to level entire mountains just to
| create more farmland or to build slightly faster highways
| because it will pay back over hundreds of years. Imagine
| negotiating such deals!
|
| [1] this is not just my opinion, but also the opinion of 2012
| Jerome Powell; you can find it in FOMC transcripts from before
| he became the chairman of the Fed.
| hammock wrote:
| >it theoretically makes sense to level entire mountains just
| to create more farmland or to build slightly faster highways
| because it will pay back over hundreds of years
|
| Is that not what we are doing, in the US and elsewhere?
| Creating massive debt, the proceeds from which are plowed
| into real estate development via cheap loans, infrastructure
| stimulus bills, etc.
| H8crilA wrote:
| Absolutely, though of course it's not even close to
| leveling mountains yet.
|
| It's much worse in some places than in the US. For example
| the Swiss 50 year bond is currently priced at -0.36%, and
| this is "high" given recent yields history. Switzerland is
| already buying nearly every financial asset it can with
| printed money, including US stocks, but the credit markets
| don't give a damn. Swiss mortgages have theoretically
| infinite duration (you never pay it back by design).
| Austria has some extremely low yielding 100 year bonds
| despite not having existed yet for 100 years (in the
| current form). The deflation is just too strong.
| hammock wrote:
| We have been leveling mountains for a long time already.
| https://www.google.com/search?q=strip+mining+leveling+mou
| nta...
|
| And the reason deflation is bad is because we got hooked
| on debt long ago and wouldn't be able to pay the
| interest..
| grumple wrote:
| Correlation might not prove causation (is anything in economics
| proveable?) but it does strongly suggest a relationship. It
| doesn't take fanciful thinking to theorize a relationship here.
| It might be that both greater numbers of lawyers and lower
| economic activity are caused by something else (like more
| regulation), or that lower economic activity creates more
| lawyers.
| dylanjcastillo wrote:
| You need to take a look at this:
| https://www.tylervigen.com/spurious-correlations
| rcar wrote:
| Fine, but you could just as easily flip the arrow or come up
| with a common cause to come up with a plausible narrative. In
| areas with low economic growth, lawyers are a high status,
| high earning potential field, and so why not go into that
| field? Maybe areas with autocratic leadership see both more
| complex laws and lower economic growth, leading to a
| necessity for more lawyers overall.
|
| Observational studies like this are not sufficient to answer
| these sorts of questions even if you can use them to come up
| with cute, cheeky headlines.
| sandworm101 wrote:
| Bad economic numbers = fewer jobs = kids stay in school = more
| degrees = more lawyers.
| reaperducer wrote:
| _fewer jobs = kids stay in school_
|
| This hasn't been my observation.
|
| What I've seen from my friends and their families is "fewer
| jobs = kids leave school to support the family."
| nostrademons wrote:
| Depends on the socioeconomic status you come from. In my
| experience, it's "fewer jobs = ...
|
| Working class, immigrants, and service jobs: "kids leave
| school to support the family"
|
| Middle class: "kids work their ass off at school so that
| they're one of the few to get a job (and failing that, move
| back into the parent's basement until the job situation
| improves)"
|
| Upper middle class: "kids go to grad school, law school, or
| med school to wait out the poor economy and come out with a
| good credential afterwards"
|
| Wealthy: "kids call up their daddy's wealthy private equity
| friend and get funding to buy up a struggling small company,
| fire half the workforce, goose the profits, and unload it on
| the public markets before anyone realizes that the business's
| core function isn't functioning anymore."
|
| I've met all of the above, and definitely know a lot of folks
| that went to law school because they weren't sure they could
| get a job upon graduation. (Although a more common reason for
| that is that they don't know what they want to do...law
| school is a really attractive option for liberal arts grads
| whose coursework doesn't really line up with anything that
| makes money.)
| jungletime wrote:
| Somewhat related; "The Viva Frey and Robert Barnes" livestream.
| Robert Barnes is a civil rights lawyer, and often talks about how
| corrupted, political and bipolar the current US judiciary has
| become.
|
| https://www.youtube.com/watch?v=CujsT3v9mpM
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