I agree with your characterization of that socio-economics panel. I'm no libertarian, but I found that panel too reflexively pro-regulation for my tastes. There seemed to be no discussion of whether, even if markets are imperfect, government can do anything to improve the situation.

That's ironic, because (a) their whole premise was that institutions such as corporations have many endemic flaws, (b) yet they seem to assume that governments would be immune from these problems that befall large institutions. I don't always buy the free-marketeer argument that private institutions are always superior to government institutions -- in part because when a private institution gets big enough, it can suffer from the same diseconomies of scale that we see in government institutions. But I certainly don't agree with their unstated reverse assumption that government institutions surely will be effective at redressing the problems of private institutions.

Nicely stated, Scott. Comparative institutional analysis rises again.

As someone caught in no-man's land between the two camps, I appreciate and largely agree with your post. One quibble: I don't agree that "free marketeers tend to favor the descriptive." Indeed, I suspect the phrase undermines itself--"free marketeers" is a highly normative concept, and that normative commitment to markets pervades much (most?) work in mainstream corporate law scholarship, even work that on its face is "descriptive."

I think I also dip in and out of the two camps, and I was disappointed that the "Law & Socioeconomics" panels were opposite the "Business Orgs" & "Securities Laws" panels, with very little on business the other 2 days. Why did the organizers assume that there would be no overlap? No dialogue can get started if the camps are put in separate rooms.

I also think that contractarianism is a normative concept and not a purely descriptive concept.

Lastly, a year and a half ago I had hopes of a blog populated by some of the people that populate the socio-economics panels so that there could be blogospheric dialogue, but alas that did not happen.

Like Brett and Christine, I too think that both camps have merit, and that there should be a dialogue between them. I also agree with Larry Ribstein in wishing good things for the young AALS section on Agency, Partnership, LLCs, and Unincorporated Associations. Like Larry, I focus my scholarship on this emerging area and think that it presents the opportunity for highly innovative and interesting academic work.

Take the following sentence as an addendum to original post after reading Brett and Christine on the normative-descriptive divide: "Progressives do not have a corner on hyperbole."

"Progressives do not have a corner on hyperbole."

True enough, but they do seem to have a dominant market share.

I'm hardly reflexively anti-regulation. I have written a fair bit about why securities markets depend on good legal and market institutions, and done empirical work suggesting that mandatory regulation sometimes can increase firm values (in Korea, for example). The field of "law and finance," in which I locate much of my recent writing, is all about those interactions.

At the same time someone who doesn't understand markets and incentives, what economic problems they solve (and how well), what problems unregulated markets don't solve, and what we can realistically expect from efforts by imperfect government actors, with decidedly imperfect incentives, when they seek to fix market problems, shouldn't be writing about regulation of corporations, other business entities, fiduciary duty, and the like. Ditto for someone who isn't willing to read and deal with the available empirical literature on successes and failures in regulating corporate goverance, some in law journals, but much of it in economics and finance journals.

Sadly, in my view, both aspects of this pejorative description (doesn't understand markets, doesn't read and grapple with data) applies to a fair number of the practitioners of the "progressive" approach to these subjects. This leads me to ignore their writing, and unless the writing changes, I will continue to do so.

Well done, Bernie. In re-reading my original post, I notice that it seems to place the blame for the lack of "real engagement across ideological boundaries" at the feet of the free-marketeers, but you are right to point out the progressives have an obligation to attend to markets and to empirical studies on corporate governance. Indeed, it was precisely this failure that caused me so much agitation (mostly suppressed in my post) at the Section on Agency, Partnership, LLCs, and Unincorporated Associations.

Apropos of Bernie's comments, I was speaking with someone intent on entering the law teaching market (in corporate law) today. The candidate acknowledged that some getting up to speed on the literature would be necessary, but when I mentioned the L&E literature, the candidate dismissed it because the candidate did not buy in to L&E. I said, "I don't think you understand. . . ."

It may be useful to portray the differences that Gordon observed at AALS as existing along two different axes, a technical axis and a political axis. Most of those who are members of the Conglomerate community embrace the tools of rigorous economic and empirical analysis, tools that to a large extent were developed outside of legal academia. Those who study business associations using tools of analysis traditionally accepted in other areas of legal academia, carefully reasoned argumentation, are on the other side of this technical axis. The second axis is a political one. On the one hand, are those I would call conservatives who are keen to point out the efficiency and elegance of market based solutions; on the other hand, there are those I would call progressives, who are more interested in exploring how and why markets fail, and what government intervention can do to improve upon market outcomes.

Historically, in the discussion of business organizations in legal academia these two axes have been rather closely aligned. Traditional legal analysis is used to support government intervention, while the more rigorous analytic work, such as that of Roberta Romano, is provided in support of arguments that highlight the inherent strength of market solutions. Gordon’s observations at AALS suggest that to a large extent this pairing may still be predominate.

The good news is that these two axes are starting to separate, as shown by Bernie’s work and the work of Andrei Schleifer and his colleagues. The interesting discussions will come from those who share a common foundation in terms of their commitment to formal analytic technique, but that differ along the political axis: call it a discussion between modern conservatives and modern progressives (letting my prejudices show). I think Matt Bodie is absolutely correct to point to the Conglomerate and other weblogs as examples of communities that embrace such a dialogue.

For me the interesting question is this: where and how can this dialogue between modern conservatives and modern progressives be more fully developed? Take, for example, the issues surrounding mandatory securities regulation. There are rigorous discussions of securities regulation that exist on both sides of the political spectrum. But, as Larry Ribstein pointed out, the AALS section that was supposed to address the issue of the efficiency of securities regulation did not prove a useful forum.