Moneyball, GMU and the Future of Law and Economics
My colleague Ilya Somin insightfully defends against allegations of the death of Moneyball in baseball and legal academia — largely making the point that larger institutions with larger payrolls imitating the successful elements of the strategy. There is more there, so go read the whole thing as well as an interesting comment thread. Ilya points out the following non-exhaustive list of GMU strategies on the hiring market aimed at acquiring undervalued assets: (1) L&E scholars, (2) conservative and libertarian academics; (3) academics with strong publication records but otherwise inferior traditional academic credentials. Ilya correctly notes that L&E scholars are no longer generally undervalued in legal academia (he also asserts that ideological discrimination and credential fetishization are less than ten years ago — a view that contradicts my own prior somewhat — but I want to focus on the L & E point).
So, if GMU’s rise coincided with the rise of L&E in legal academy in the days of Henry Manne, but L&E scholars are no longer undervalued i the job market, what’s in store for GMU in the future? Will it, as an institution, be able to continue to attract the talent that has led to its success in faculty quality studies such as this? I know more about the L&E based legal academic job market than I do about either baseball or ideological discrimination at the institutional level so I want to add a few new points to the mix leveraging my thinking about the future of law and economics more generally into some observations about GMU’s future.
First, its important to note that L&E itself has changed. L&E is no longer a “conservative/libertarian” discipline, as is often assumed by its discussants outside the discipline. As I’ve discussed, among those with PhDs, the increasing mathematical formality of the economics discipline has produced a new generation of L&E scholars that are either serious modelers and theoreticians whose pay off comes largely for making marginal contributions to the sophisticated and elegance of the pre-existing literature than for the ideological policy leanings of the models or they are econometricians. In antitrust economics, for example, the bulk of “new” scholarship in the last several decades has been a few standard deviations to the political “left” (in terms of supporting intervention) than the scholarship of the 60s and 70s. In either case, the newly minted L&E scholars with PhD’s are ideologically all over the map. Further, the changes in economic science itself also include the proliferation of behavioral economics — which is inherently to the ideological left of traditional L&E. This is one reason that I’m skeptical about claims that there is less ideological discrimination than a decade ago. To the extent that there is less “discrimination” against L&E scholars now than ten years ago, it is generally because they are either doing behavioral law and economics, theoretical modeling with interventionist policy implications, or in some cases, econometricians who are seen as ideologically neutral.
Second, will GMU continue its success in hiring high quality L&E scholars (including those with PhDs)? I think so largely because that I am a firm believer that there remain plenty of undervalued assets in the L&E hiring market. There are plenty of reasons for this belief. One is that I do not believe most law schools have the institutional capability to review the work of the new L&E scholars doing highly formal modeling or theoretical econometrics. Further, most of the top L&E scholars coming out of “name” institutions like Harvard, MIT, Chicago, Yale, Berkeley, Stanford, and elsewhere are doing work that requires significant mathematical skills to evaluate. Under these conditions, institutions rely relatively more heavily on other quality signals: name of degree granting institution, reputation of advisors, etc. While these metrics might be very good predictors of success in economics as a discipline, they do not necessarily predict success in L&E which has at its core retail and policy elements that are largely absent from economics.
I predict that most top law schools wanting to make an L&E hire will frequently and increasingly: (1) make hires consistent with ideological priors, and (2) rely on quality signals that are correlated with rank of degree granting institution and recommenders rather than how well the work is likely to translate into contributions to the L&E discipline. There are a few implications of that analysis. One is that its pretty likely GMU is not going to continue its success in this area by hiring Harvard / MIT JD/PhDs or behavioral economists (and probably theoreticians in general). Another is that the undervalued assets are likely to be in corners and disciplines of the L&E field that do not necessarily correlate with the ideological priors of the legal academy in general or areas in vogue in economic science BUT that provide methods that are and have proven to be especially fruitful in L&E.
An obvious example is public choice economics. Top economists focusing on public choice economics are not generally these days coming from top 10 “ranked” economics departments. They are concentrated in a few places within departments that are especially strong in that area — but do not attract attention of the top law schools either for methodological, credential or ideological reasons. The discipline itself inherently offers policy relevant insights for L&E. There are other areas (economic history comes to mind) that fit this profile. But the more general point is that the metrics being used to evaluate top economists are the same as those used by the top law schools to evaluate talent, but not necessarily the same as predicting success in L&E. So it is important for schools like GMU to spend the time searching for undervalued assets (hey, nobody said Moneyball was easy) and finding the candidates in “other” departments that do have the skills, interest in policy-relevant L&E, and creativity to generate an execute a fruitful L&E research agenda. One bit of good news for GMU is that one source of comparative its advantage is that it does have a sufficient number of L&E scholars on its faculty to evaluate potential candidates internally without relying on noisy and more unreliable signals. A second reason for optimism is that GMU as an institution has a history of success in finding undervalued assets.
While the search has become more difficult to find them in L&E — one can no longer just wait for the top schools to pass on the top candidates — they’re still out there. If you know of one — or are one — send me an email!