Todd Henderson, of the group blog “Truth on the Market,” had a suggestion last Thursday : Subject politicians to the same good-governance laws as executives. Specifically, allow constituent lawsuits on bases similar to those that provide for shareholder lawsuits. Henderson wrote:
“It might be argued that holding elected officials to the same standards as corporate managers will breed voluminous and vexatious litigation. But there are lessons that may be learned from shareholder litigation. Potential plaintiffs might be required to demand action from the Senate or House ethics committee first, and, only if they refuse to act or act in a way that is clearly biased by conflicted interest would a citizen right to sue arise. Remedies could also be limited in ways that make the prospect of frivolous litigation less likely. A fee-shifting rule in which the loser paid all the lawyer costs would be a way of doing this. Finally, we can imagine special courts—like the Delaware Chancery Court for corporate cases—designed to address citizen litigation. Such courts would be better able to weed out the purely political suits designed to embarrass or harass from those alleging true breach of duties owed to citizens. Although shareholders have broad rights to sue, there is not much frivolous litigation in Delaware. Political elections have proved insufficient and ineffective at policing our politicians and bureaucrats. It is time to hold them accountable to the same standards to which they hold corporate managers.”
It is all very tempting in a Golden Rule, how-would-you-like-it sort of way. But we must be wary of two things: the suggestion’s origin (a lawyer) and its conclusion (elections don’t work).
First, its origin: Henderson is a professor of law at the University of Chicago Law School, and I am sure he is an excellent professor. But to paraphrase D.H. Lawrence, lawyers tend to think that laws are the greatest thing in the world for the same reason that rabbits think little pills are the greatest thing in the world: because that is what they make. But laws are not the greatest thing in the world. Indeed, it would not be far amiss to say that laws are the second worst thing in the world, the worst being anarchy.
And then there is Henderson’s conclusion: Elections don’t work. I don’t believe we know that yet. We have problems in the world of electoral politics, obviously. But I think that we should look at getting rid of some laws that may be causing the problems, before we start thinking up more laws that will bind more people more tightly. When we have returned the Commerce clause and the General Welfare clause to their original meanings, it will be time enough to start talking about the failure of the electoral process.
In the meantime, if we want to apply Henderson’s Golden-Rule suggestion to the relationship between politics and business, let us apply it in the other direction and remind politicians that considerable freedom of speech and action is needed if leaders are to be effective.