October 2007


The New York Times has this article on fatty foods and the concept of “informational cascade.”

The notion that fatty foods shorten your life began as a hypothesis based on dubious assumptions and data; when scientists tried to confirm it they failed repeatedly. The evidence against Häagen-Dazs was nothing like the evidence against Marlboros.

It may seem bizarre that a surgeon general could go so wrong. After all, wasn’t it his job to express the scientific consensus? But that was the problem. Dr. Koop was expressing the consensus. He, like the architects of the federal “food pyramid” telling Americans what to eat, went wrong by listening to everyone else. He was caught in what social scientists call a cascade.

We like to think that people improve their judgment by putting their minds together, and sometimes they do. The studio audience at “Who Wants to Be a Millionaire” usually votes for the right answer. But suppose, instead of the audience members voting silently in unison, they voted out loud one after another. And suppose the first person gets it wrong.

If the second person isn’t sure of the answer, he’s liable to go along with the first person’s guess. By then, even if the third person suspects another answer is right, she’s more liable to go along just because she assumes the first two together know more than she does. Thus begins an “informational cascade” as one person after another assumes that the rest can’t all be wrong.

Does this sound like another religious “scientific” non-debate grabbing headlines recently?  In fact, let’s play a game.  I’ll just take some of the money lines from this article on the health effects of fat and substitute a few words.

–  “The scientists, despite their impressive credentials, were accused of bias because some of them had done research financed by the food [oil] industry.”

–  “With skeptical scientists ostracized, the public debate and research agenda became dominated by the fat-is-bad [catastrophic global warming] school.”

–  “Later the National Institutes of Health [Intergovernmental Panel on Climate Change] would hold a “consensus conference” that concluded there was “no doubt” that low-fat diets “will afford significant protection against coronary heart disease” for every American over the age of 2 [global warming is now a reality].”

–  “But when the theories were tested in clinical trials [against actual climate data], the evidence kept turning up negative.”

On both global warming and dietary fat, I’ll defer to the wisdom of Dr. Edward H. Ahrens Jr., who stood steadfast against the fat-is-bad consensus:

“This is a matter,” he continued, “of such enormous social, economic and medical importance that it must be evaluated with our eyes completely open. Thus I would hate to see this issue settled by anything that smacks of a Gallup poll.”

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

— Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Book I, Ch. 10, ¶ 82)

This Adam Smith quote is often used to emphasize the evil and collusive nature of “big business.”  Unfortunately, like so often happens in these instances, everyone forgets the rest of the quote.

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

Smith wasn’t advocating for anti-trust legislation; he thought such laws were unenforceable and inconsistent with liberty and justice.  Rather, Smith cautioned against government mandated collusion.

Coyote Blog illustrate how we have quite ignored Smith’s admonition.

I can add a million examples.  Hair braiders are stepped on by the government in collusion with licensed beauticians.  Taxi companies get the government to quash low-cost or innovative shuttle transportation.  Discount casket companies are banned by government in collusion with undertakers.  Take dentistry.  Why do I need to go to an expensive dentist when 99% of my dental needs could be served by a hygienist alone?  Because the government colludes with dentists to make it so.  And don’t even get me started on medicine.  My guess is a huge percentage of the conditions people come into emergency rooms with are treatable by someone without a 4 year medical degree and 6 years of internship.  Does one really need a full medical education to stitch up a kids cut knee?  Well, yes, you do today, because doctors collude with the government to make it so.  Why can’t people specialize, with less than 10 years of education, on just, say, setting bones and closing cuts?  Why can’t someone specialize in simple wills or divorces without a full law degree?

As Adam Smith clearly saw, the real danger is not collusion between business men and business men, but collusion between business men and government.  Government is so much more dangerous because it is always done “for our own good.”

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies, The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.

–C.S. Lewis

The Mercian Royal Family is sort-of in the market for a new castle.  So, we sometimes drive around on Sunday afternoon and look at houses.  We stopped by an open house in a nearby neighborhood a couple of weeks ago.  The house was way beyond the budget of this minor kingdom (not enough serfs to exploit I think), but it’s fun to look.  The real estate agent made a little bit of small talk and casually asked what I did for a living.  When I told her I was a (soon to be) lawyer, her eyes positively lit up.

My brother, also a lawyer, recently faced the same reaction when buying a house in Utah.  He recounts how he dreaded the point in the discussion where the seller asked about his job.  He wanted to lie and say he was a plumber or a school teacher.  Because, the reaction was invariably, “Oh, you should have no problem affording this house then.”

Everyone knows that all lawyers are loaded, aren’t they?  It turns out that maybe not.

A friend and loyal reader recently sent me this article from the Wall Street Journal.*

A law degree isn’t necessarily a license to print money these days.

For graduates of elite law schools, prospects have never been better. Big law firms this year boosted their starting salaries to as high as $160,000. But the majority of law-school graduates are suffering from a supply-and-demand imbalance that’s suppressing pay and job growth. The result: Graduates who don’t score at the top of their class are struggling to find well-paying jobs to make payments on law-school debts that can exceed $100,000.

The actual situation is stunningly shown in the distribution of starting salaries for law school graduates (via Adam Smith, Esq. and Empirical Legal Studies).

Photos-Uncategorized-2007-08-30-Nalp-Bimodal

Can you say “bimodal,” and this predates the recent move to a $160,000 starting salary at many big firms.  Unfortunately, the future prospects might not look any better.

Public-Resources-Images-P1-Aj088-Lawjob-20070923191725-1

The Wall Street Journal article spills a lot of ink taking law schools to task about their marketing and makes some valid points about the transparency of law schools’ marketing material.  A law school could say, “the average starting salary of our graduates is $95,000,” and that would be perfectly true and honest.  But, it doesn’t quite tell the whole story because almost no one makes $95,000.  Starting lawyers make almost twice that much . . . or half that much.
Maintaining a little skepticism, I do have to wonder if the graph represents actual salaries or base salaries.  Smaller firms are much more likely to have a lower base with a higher portion of salary dependent on billing.  For example, a small firm may offer a base salary of $50,000 with the actual salary being much closer to $90,000 if the lawyer bills a reasonable number of hours.

All this being said, I have one word of advice for those starting or considering law school:

GRADES
.

Having been on the job hunting side and more recently on the recruiting side, there is not another single factor, or combination of factors, that comes close to the emphasis big firms place on grades.  One can argue all one likes that good grades do not mean good lawyers, and I would probably agree.  But, as I tell my clients: I don’t make the rules, I just explain how they work.

(HT Elijah G.)

(* I’m sure this article will shortly disappear behind WSJ’s pay-per-view firewall.  Sorry.)