“Come here, and I’ll rob you”
Posted by Marc Hodak on August 27, 2007 under Unintended consequences | 
5 Comments to Read
Actually, the quote was this:
As long as I am allowed to redistribute wealth from out-of-state companies to in-state plaintiffs, I shall continue to do so.– Chief Justice Richard Neely, West Virginia Supreme Court
I wonder what percentage of people in or out of WV would characterize Justice Neely’s statement as being friendly to WV’s interests? Probably a majority.
On the other hand, it would be difficult for someone with economic sense to not connect the dots between:
– hostility to outside capital
– outside investment in the state
– job and wealth creation in the state
So, it would not be surprising to someone with economic sense that WV’s notable absence of the rule of law may somehow contribute to that state’s ranking 49th in median household income.
One of the things I teach in my class is how corporate behavior is naturally and significantly regulated by repeat transactions. If you want to keep your customers, employees, vendors, and shareholders, you better take reasonable care of them–at least as good as the next guy. It’s amazing to me how many elected officials ignore this fact of competition, as if the competition for capital weren’t real. It’s amazing until you see the incentives of the election process. Justice Neely, for instance, was elected by the citizens to whom he redistributed that wealth, and his campaigns were funded with the money from settlements that he delivered by the local lawyers who appeared in his court. Whether or not Neely believed in redistributive “justice,” it’s unlikely that the system would support someone in his position who didn’t.
Shakespeare's Fool said,
Well said, Mark, well said.
John
shawn said,
I’m so ecstatic that I was absolutely ready, prior to your last paragraph, to jump in and say “the judge has no incentive to think economically, he actually has an incentive to do the exact opposite in this case!”. Then, you said the same thing.
It’s almost as if this landscape architect, pretty-picture-drawing, non-economically-educated buffoon has learned a thing or two over the past few months.
Now, the tricky thing is, how can we create incentives for Justice Neely to act in line with what would truly be in the best interest of West Virginia? ‘Justice Neely’ being a proxy there for ‘every elected official’.
M. Hodak said,
Nothing warms the heart of a teacher more than that, Shawn. You have done well grasshopper.
One of the tricks to improving a bad situation is to look at what others are doing that seems to make more sense. In the case of judges, you could appoint them rather than elect them. That’s what the Federalist Society has been advocating for years. Judicial appointment, lifetime or term, has its own problems, but it seems to produce a much more reliable “rule of law” result than judicial elections.
shawn said,
…and that’s why states’ rights are so important: the ability to see how others have done it, and try other methods of doing things.
….i feel like a dog that’s been thrown a bone. man, is my desire for approval nasty, or what? 🙂
Ian Random said,
Looks like every with a lick of sense moved to Virginia:
Median income
US $46,037
WV $35,234
Virginia $54,301
http://www.statehealthfacts.org