4 ms·

>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 a

>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 ago
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 6y ago
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.
- bleepblorp 6y ago
  This 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
AnimalMuppet 6y ago
> 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 unhealthy society, that is restrained by court cases rather than by doing the right thing.
darawk 6y ago
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.
- notahacker 6y ago
  This. Whilst the hypothesis is plausible, there are plenty of other reasons for diminishing returns to growth in more developed states which are difficult to distinguish. Skimming through the short paper its basic regression attempts to control for differences in development by including variables for other development indicators, but it's a very small sample skewed by Korea, Japan and especially autocratic-era Taiwan reporting low levels of [formally qualified] lawyers. The authors even comment they 'would be surprised if someone could not come up with a specification to support the opposite conclusion'!
rayiner 6y ago
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 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. It’s also worth observing that the Anglosphere countries tend to be the most legalistic, but also are the most economically dynamic: https://www.theglobeandmail.com/report-on-business/rob-commentary/the-anglosphere-yet-reigns-supreme/article4197076/ https://www.theglobeandmail.com/report-on-business/rob-comme...
scrozier 6y ago
This reads to me like a textbook case of a note (and the referenced paper) that should not have gotten published. In addition to the introduction you cite, the note also says: > This measure is certainly not without its shortcomings. and > Indeed, we would be surprised if someone could not come up with a specification and/or sample which might even support the opposite conclusion. WTF.
munk-a 6y ago
> 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. I just wanted to note - statistical analysis is not a new or groundbreaking thing. A lot of these tests have been around for decades or centuries[1] and experimental design ditto. Honestly, it being from so long ago actually gives me a bit more faith in the results since gaming statistics to get a click-bait headline and more funding has become a cottage industry in recent years. 1. https://en.wikipedia.org/wiki/Student%27s_t-test#History https://en.wikipedia.org/wiki/Student%27s_t-test#History - enjoy the amusing connection to Guinness, it's a favorite with new stats students.
btilly 6y ago
The bigger issue is whether this is cause or correlation. As in, I believe that the figure is correct, and that more lawyers do cause less economic growth, but most of the correlation is not caused by the lawyers. A less developed country probably doesn't have solid rule of law, and so has fewer lawyers. A less developed country also can generate fast economic growth by transferring knowledge from more advanced ones. By contrast advanced countries have solid rule of law, and so lots of lawyers. They also can't easily grow through knowledge transfer, because there is nobody to transfer knowledge from. They have to generate new knowledge themselves. I would therefore suggest removing GDP/capita as a confounding factor first. That said, lawyers are economic sand. The main purpose of lawyers is to make other lawyers be needed. And lawyers are good at convincing themselves that they were needed. We would be better off with fewer lawyers. If you don't believe me, consider the phenomena of patent trolls. What do they add to anyone other than themselves?
zbq 6y ago
Or it could be as simple as rules limiting change, and growth simply being positive change.

fladrif 6y ago

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 6y ago

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.

bleepblorp 6y ago
This 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

AnimalMuppet 6y ago

> 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 unhealthy society, that is restrained by court cases rather than by doing the right thing.

darawk 6y ago

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.

notahacker 6y ago
This. Whilst the hypothesis is plausible, there are plenty of other reasons for diminishing returns to growth in more developed states which are difficult to distinguish. Skimming through the short paper its basic regression attempts to control for differences in development by including variables for other development indicators, but it's a very small sample skewed by Korea, Japan and especially autocratic-era Taiwan reporting low levels of [formally qualified] lawyers. The authors even comment they 'would be surprised if someone could not come up with a specification to support the opposite conclusion'!

rayiner 6y ago

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 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. It’s also worth observing that the Anglosphere countries tend to be the most legalistic, but also are the most economically dynamic: https://www.theglobeandmail.com/report-on-business/rob-commentary/the-anglosphere-yet-reigns-supreme/article4197076/ https://www.theglobeandmail.com/report-on-business/rob-comme...

scrozier 6y ago

This reads to me like a textbook case of a note (and the referenced paper) that should not have gotten published. In addition to the introduction you cite, the note also says: > This measure is certainly not without its shortcomings. and > Indeed, we would be surprised if someone could not come up with a specification and/or sample which might even support the opposite conclusion. WTF.

munk-a 6y ago

> 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. I just wanted to note - statistical analysis is not a new or groundbreaking thing. A lot of these tests have been around for decades or centuries[1] and experimental design ditto. Honestly, it being from so long ago actually gives me a bit more faith in the results since gaming statistics to get a click-bait headline and more funding has become a cottage industry in recent years. 1. https://en.wikipedia.org/wiki/Student%27s_t-test#History https://en.wikipedia.org/wiki/Student%27s_t-test#History - enjoy the amusing connection to Guinness, it's a favorite with new stats students.

btilly 6y ago

The bigger issue is whether this is cause or correlation. As in, I believe that the figure is correct, and that more lawyers do cause less economic growth, but most of the correlation is not caused by the lawyers. A less developed country probably doesn't have solid rule of law, and so has fewer lawyers. A less developed country also can generate fast economic growth by transferring knowledge from more advanced ones. By contrast advanced countries have solid rule of law, and so lots of lawyers. They also can't easily grow through knowledge transfer, because there is nobody to transfer knowledge from. They have to generate new knowledge themselves. I would therefore suggest removing GDP/capita as a confounding factor first. That said, lawyers are economic sand. The main purpose of lawyers is to make other lawyers be needed. And lawyers are good at convincing themselves that they were needed. We would be better off with fewer lawyers. If you don't believe me, consider the phenomena of patent trolls. What do they add to anyone other than themselves?

zbq 6y ago

Or it could be as simple as rules limiting change, and growth simply being positive change.