Should Law Schools Teach Rent-Seeking?

In the old days, circa 1900, American businessmen had to twist their minds into pretzels in order to pretend that some desired governmental intervention criminalizing rival companies was compatible with free enterprise. In the middle of the twentieth century, it was easier: Businessmen could portray governmental interventions criminalizing rivals as undoubted exceptions to free enterprise but as actions demanded by national security—and as actions targeting less patriotic rivals. Today, fifty years deep into the postmodernist era, I wonder if American businessmen can any longer distinguish between business activities aimed at out-competing rivals and governmental activities aimed at criminalizing them.

The question is raised by “Law & Strategy ,” a post at “The Conglomerate Blog” written by Gordon Smith, associate dean and Glen L. Farr Professor of Law at Brigham Young University’s Law School. Smith quotes Richard Shell’s new book, Make the Rules or Your Rivals Will: “The laws of economics explain how people make money. But another kind of law—written by legislatures, bureaucracies, and courts—often determines who gets what share.” Smith then adds: "In simplest terms, the study of law and strategy views the world from the perspective of a business and asks: how can we use law to gain a competitive advantage? This question ought to be of interest to lawyers, but does any law school teach a class on law and strategy?”

I have ordered Shell’s book and shall have more to say about it later. But looking at just these few quotations from the perspective of American capitalism’s history, what comes to mind is a quatrain from Alexander Pope’s “Essay on Man.

Vice is a monster of so frightful mien,As, to be hated, needs but to be seen;Yet seen too oft, familiar with her face,We first endure, then pity, then embrace.