8 ms·
For every 1% increase in the number of lawyers, economic growth falls 3% (1986)
- Zigurd 6y agoAn 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 6y agoHigher 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 6y agoLess 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 6y ago[deleted]
- bynkman 6y agoSo 13,000 at the bottom of the ocean is a good start?
- kevmo 6y agoAs 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 6y agoPutting 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 $$$ on mercenaries...
- koolba 6y ago> On the other hand, get rid of lawyers and you're going to spend $$$ 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 6y agoWell, 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 6y agoTheoretically 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.
- AbrahamParangi 6y agoIsrael 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 https://twitter.com/pankajghemawat/status/575654688491708416
- sudosysgen 6y agoThe thesis is about growth, not nominal GDP.
- tzs 6y agoThe numbers in that Tweet are way off, because what it counts as "lawyer" isn't the same thing in all countries. Take Japan, which it says has only 24 lawyers per 100k, compared to 396 per 100k in the US. Japan has several licensed non-lawyer professions that do a lot of work that in the US has to be done by lawyers. In addition, a very large number of people in Japan study law as undergraduates, then go into corporate jobs where they are allowed to handle corporate legal matters that would require a lawyer in the US.
- GarrisonPrime 6y agoNot necessarily a bad thing. Sometimes, resistance to boom growth is wise.
- nooyurrsdey 6y agodue 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 6y agoThat explains the Chinese economic miracle quite well!
- deleted 6y ago[deleted]
- jungletime 6y agoSomewhat 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 https://www.youtube.com/watch?v=CujsT3v9mpM
- RangerScience 6y agoI wonder how much this has to do with clarity-of-law? AFAIK, you don't really need (many) lawyers in CA to fight an employer's non-compete, since CA has ruled so clearly on it. (Although AFAIK you do need a lawyer just to navigate the courts-as-bureaucracy). AKA, you need lots of lawyers to litigate on unclear laws, you need fewer to litigate on clear ones...? In which case # of lawyers is a measure of the unclarity of the laws (and difficulty in engaging the courts); and it might be that lack of clarity that has a bigger impact on the economic growth...?
- Bostonian 6y agoIn the U.S., it's my impression that the ratio of businessmen to lawyers in the cabinet is higher in Republican than Democratic administrations.
- moeadham 6y agoI don’t even want to read the article. I just want to nod in agreement about rent seekers.
- api 6y agoIf there is causation, we still don't know whether lawyers cause falling growth or whether something else that causes falling growth (like declining trust) also causes rising demand for lawyers.
- aminukka 6y agoBuhari yaka mudacu tarmasha ko a yau A wata ganawa da Yayi dawani bature
- rcar 6y agoCorrelation vs. causation, etc., etc.
- grumple 6y agoCorrelation 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 6y agoYou need to take a look at this: https://www.tylervigen.com/spurious-correlations https://www.tylervigen.com/spurious-correlations
- grumple 6y agoI am well aware that correlations can be spurious, but they can also be related. I’ve noted a very strong correlation between my use of a hammer and the number of nails in my wall...
- rcar 6y agoFine, 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.
- dexterdog 6y agoBut what do lawyers actually create that would be part of any economic growth. It seems to me that they are just toll takers for access to justice and bureaucracy.
- sandworm101 6y agoBad economic numbers = fewer jobs = kids stay in school = more degrees = more lawyers.
- reaperducer 6y agofewer 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 6y agoDepends 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.)
- princeb 6y agothe 2012 crisis was 100% the reason i did my masters degree. it was the same for nearly 90% of my class. a lot of my peers decided to take a second major the moment their job offers at the bulge brackets got cancelled. a handful of seniors also went back to school after they got retrenched at the banks.
- emptywindow 6y agoi believe the USA has the most lawyers per capita of any country, and also (arguably) the world's strongest economy
- AbrahamParangi 6y agoIsrael has the most, followed by the US https://twitter.com/pankajghemawat/status/575654688491708416 https://twitter.com/pankajghemawat/status/575654688491708416
- frozenlettuce 6y agohttps://www.npr.org/sections/parallels/2014/11/05/359830235/brazil-the-land-of-many-lawyers-and-very-slow-justice 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.
- diegoholiveira 6y agoPeople in Brazil go to law school not to be a lawyer, but to be able to work for the government, since many government jobs require you a Bachelor in Law.
- microcolonel 6y agoI 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 6y agoThat'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.
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- Apes 6y agoIs 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 6y agoThe number of IP lawyers is a very small fraction of the total number of lawyers.
- tboyd47 6y agoAny mediating variables?
- SkyMarshal 6y ago>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 6y agoI 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 6y agoThere 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.
- bleepblorp 6y agoThis isn't a new problem. There's a very good example of intellectual property retarding socioeconomic development in the industrial history of the steam engine. Early steam engine development was a collaborative endeavor, with various engineers building on the ideas of others to make incremental improvements in steam technology. Then came Bolton and Watt, who used patents to stop the development of steam engines superior to their own products. The Bolton and Watt patents prevented the development of steam railway engines, and in so doing delayed the beginning of the railway era--and all the societal development it created--by twenty years or more. Intellectual property law is a gift to monopolists. It is not a social good. See: https://en.wikipedia.org/wiki/History_of_the_steam_engine https://en.wikipedia.org/wiki/History_of_the_steam_engine
- jedberg 6y ago"The justice system works swiftly in the future now that they've abolished all lawyers."
- shanecleveland 6y agoThat's heavy.
- slater 6y agoBetter get used to these bars, kid.
- notahacker 6y agoThe country in the study with the fewest lawyers was Taiwan, which was under martial law for the entire period...
- drtillberg 6y agoGDP would suffer most from an increased lawyer count when the statistics are bloated by fraud and lies.
- mercurialshark 6y agoPost hoc ergo propter hoc... Nothing says long-term stability and prosperity like eliminating mechanisms to protect the populace from unlawful, illegal, or harmful conduct. Rule of Law, who needs it?!
- diegoholiveira 6y agoThe increase of lawyers could be correlated to the increase of laws? And the increase of laws could be correlated to economic falls?
- throwaway5752 6y agoHypothetically, what would the net change to the GDP year over year be if we killed all people over a threshold age when they were diagnosed with a terminal disease? My point is not that this would be a good idea, it's that GDP growth is not a good measure for a society across the board. Maybe GDP growth would be higher if we could simply dump toxic waste in water supplies, and the threat of lawyers/class action suits that helps prevent that behavior hurts economic growth.
- gota 6y agoI think there are a thousand nails and you hit one of the most outstanding ones in the head. GDP is as much a metric of wealth as it is of the speed with which we consume natural resources. If we account for externalities witha reasonable "weight" most economic activity must be operating close to or at an absolute loss
- AnHonestComment 6y agoGDP growth is a questionable metric even for wealth. For example, if two housewives join the workforce by cleaning each other’s now unattended houses, GDP shows a large increase even though the situation is (arugably) a net loss for everyone involved.
- limaoscarjuliet 6y agoThe difference is they have to pay tax on what they earn, so they are technically contributing to the society.
- epicureanideal 6y agoBut where would that money come from? If they both clean the other person's house for $20, where does $5 in taxes come from? (Answer: from the other income earner.). So the "contribution to society" doesn't just magically appear when we make this a commercial transaction.
- amelius 6y agoEconomic growth correlates negatively with ecological health. So ... lawyers are good for the planet?
- deleted 6y ago[deleted]
- zbq 6y agoRules limit change.
- deleted 6y ago[deleted]
- m3at 6y agoFor more of this, please look at: http://www.tylervigen.com/spurious-correlations http://www.tylervigen.com/spurious-correlations
- bigiain 6y ago"The first thing we do, let's kill all the lawyers." -- William Shakespeare ~1598
- supernova87a 6y agoI am skeptical of a causal relationship here. I think it may be more to do with a different but simple phenomenon: the growth and maturation of countries. When a people/country are starting out "from scratch" with little material wealth, of course most of their economic growth are focused on material advances -- getting people to produce more, make technological innovations, infrastructural gains. Postwar USA (and Europe) people's economic activity was just to build up society. (broad strokes of course) As a country gets older and more mature, and its material needs are reaching 90+% satisfied (by some subjective measure) then what happens? People have wealth, interests, commercial activites, and they start disputing with each other over it. Legal activity increases while primary production activity no longer dominates an economy. So naturally, you observe that legal/professional services increase and of course at some point you'll experience a flattening or decrease of raw economic growth as a country can't sustain 10% growth every year. Then you think "oh, the lawyers caused this". But that's not interpreting the effect correctly. I would wager you'd see an increase in the number of doctors and their economic activity, or artists, or musicians, etc. too.
- aminukka 6y agoBuhari he is die today and tomorrow covid19
- darepublic 6y agoIt's like software projects, some people are actually advancing the solution forward, some people are just creating PRs