This Article offers a critical evaluation of preference satisfaction as a frame for normative thinking. It begins with an internal critique of the way preferences work in normative economics, distinguishing among three elements: welfare; preferences; and choices. For preference satisfaction to work well, it must be able to bridge two gaps, one between choice and preferences, and another between preferences and welfare. In contexts where both those gaps are bridged, preference satisfaction offers a workable normative framework; where at least one (...) of those gaps is unbridgeable, the framework should be treated with extreme caution if not jettisoned altogether. The Article then goes on to pursue an external critique, by asking what price we pay for using the preference satisfaction framework when it appears to perform well. The point of the critique is that even when preference satisfaction provides a good normative framework on its own terms, the framework obscures considerations that should not be ignored. By pursuing one concrete example, the Article shows how broad considerations regarding the implications of the regime of wage labor are absent from legal contemplation when labor law is imagined and shaped through the lens of preference satisfaction. The Article concludes with a speculation about how different theories of welfare might be employed in concert, rather than as alternatives. It suggests that a pluralism of theory is a way to expose the political stakes in the kinds of policy discussion where preference satisfaction is often a dominant way of thinking. (shrink)

Private law and regulation are constantly involved in the evaluation of conflicts of interest, judging some of them salutary, with others requiring adjustment. Focusing on the question of conflicts of interest allows us to clarify our vision of when such adjustment is appropriate and, more specifically, when the law should supply an infrastructure for cooperative behavior. Thus, the prism of conflicts of interest provides a lens through which to view basic legal problems that turn on whether individual actors will be (...) deemed responsible to some joint interest or whether they will be at liberty to pursue their individual interests despite the adverse effects of such activity on others. This article proposes a conflicts of interest perspective for examining contract law and its immediate surroundings. It suggests a map of conflicts of interest along three axes: the remedial axis; the axis of positive duties to avoid conflicts; and the axis of the transition from independence to loyalty. Applying the map to contract doctrine, the article examines a number of contract doctrines including: remedies for breach of contract; modification; conditions; good faith in performance; and formation. The article goes on to apply the map of conflicts to two complex fact situations: corporate acquisitions and corporate bankruptcies. The analysis underscores the fact that conflicts of interest rules do not simply protect existing interests, but also contribute to the very constitution of those interests. Recognizing the constitutive role of legal rules raises questions about our ability to determine interests ex ante and thus calls for a more nuanced approach to gauging the incentive effects of a legal regime. (shrink)

Contracts are the building blocks of markets, where participation is typically understood through choice: to buy or not to buy, and if so, from whom? In other words, contract choices allow participation by exit, with little need for discussion. However, in some instances markets may be open to a fair degree of voice. Market behavior is not always a take it or leave it endeavor, and market participation does not always entail the kind of passivity associated with the role of (...) the price taker. At least when some contract parties put their minds to it, markets may retreat from the mechanics of pure preference satisfaction and interact with a realm of reasoned deliberation, where some market reasons are significantly public-minded. This essay explores the potential of contracts to become a locus of deliberative participation in the context of institutional investment (primarily by pension funds) and investors’ pursuit of commitments to nonfinancial goals. (shrink)

The decades before and after the turn of the twentieth century, like those surrounding the turn of the twenty-first, are often understood as periods of globalization. The two periods share key features that characterize the global as a motif, including high mobility of goods, services, people, ideas and, perhaps most centrally, capital. An important distinguishing feature between the periods is the monetary regime: the gold standard for the turn of the twentieth century; managed flexibility for the turn of the twenty-first. (...) This paper examines the legal infrastructure of these two monetary regimes in order to illuminate two distinct yet related issues. The first is the connection between the form of rulemaking and the means of isolating monetary policy decisions from political influence. The second is the role of the monetary regime in mediating value. Both the gold standard and the managed flexibility regime aim to shield money from partisan intervention, but they do so in different ways; attention to the legal framework sheds light on how these differing regimes pursue the goal of insulating money from politics. (shrink)