Why Small has Become Beautiful-BECKER

In the Federalist papers, Alexander Hamilton argued for the proposed U.S. Constitution that gave the federal government great powers because he claimed large countries with strong central governments have freer internal markets, can better deal with foreign aggression, and can raise taxes more easily to pay for needed government services.Yet since 1946, the number of countries has grown from about 76 to almost 200. Some of that growth has been due to countries gaining independence from colonial powers, such as India or Zaire. Others resulted from a subdivision of countries into smaller units, such as the breakups of Czechoslovakia into the Czech Republic and Slovakia, or of Yugoslavia into several independent nations. Agitation to form independent nations continues in all regions of the world. Has this splintering into smaller nations, often due to nationalistic aspirations, lowered their economic efficiency? My conclusion is that developments in the global economy during the past 50 years have greatly reduced the economic disadvantages of small nations enumerated for his time by Hamilton. In fact, being small now may even have efficiency advantages. This would help explain the splintering of nations along ethnic, religious, linguistic, and geographic lines. In the past, larger nations generally provided bigger domestic markets with relatively low barriers to movements of goods, services, capital, and labor. By contrast, tariffs, quotas, capital and immigration constraints severely limited the movement of goods, capital, and people across national boundaries. But many of these barriers have come tumbling down as international trade has boomed for the past half century, propelled at first by GATT and then by the World Trade Organization (the WTO). Members of the WTO are forced to have low tariffs and quotas on import of most goods and services, and to some extent, on capital as well. As a result, world imports and exports have grown since 1950 at the remarkable rate of about 10 per cent per year In other words, small countries can now gain the advantages of large markets through trading with other nations. So it is no surprise that international trade generally constitutes a larger fraction of the GDP of small nations than of large ones. For example, exports in 2004 relative to GDP are about 10 per cent for the United States compared to 37 per cent for Iceland. Most poor nations that experienced rapid economic growth during the past four decades also were extensively involved in international trade. This is true not only of the Asian tigers- South Korea, Taiwan, Japan, Singapore and Hong Kong- but also of Chile and Mauritius. These are all small except for Japan. In addition, much greater use of international trade helped rescue the two giants, China and India, from their long economic sleep. Smaller nations even have some advantages in a world with much international trade. Their exports are too little to be considered a threat to other nations, so they are not subject to as many barriers as those from large nations, They often specialize in niche markets that are too insignificant, or not accessible, to large nations. For example, the tiny principality of Monte Carlo with about 5000 citizens has become a tax haven and gambling center for rich sports stars and other wealthy individuals. Singapore and Hong Kong have been mainly trading centers for shipments of goods to their much larger neighbors. Mauritius has succeeded by concentrating on textiles and tourism. Apropos of Hamilton�s other arguments, small nations can now free ride on the military umbrella provided by the United States, NATO, or the United Nations. Small nations may still be at a disadvantage in providing other government services, but powerful groups in large nations often use the economies of scale in raising taxes and dispensing subsidies to exploit weaker ethnic, national, or economic groups. Smaller nations are usually also more homogeneous, so the powerful interests there have fewer other groups to exploit. Tariffs and quotas on foreign producers impose a relatively big economic cost on small countries since they have little influence over the international prices of imports and exports. This cost reduces the ability of domestic producers to get politicians and voters to go along with their efforts to weaken competition from producers in other countries. The economic consequences of the reunification of East and West Germany demonstrate some of these advantages of being smaller. East German productivity was much below that in West Germany when the communist government was overthrown. Economists both inside and outside of West Germany warned against the consequences of both exchanging one East German mark for one West German mark, and preventing East German wages from falling much below those in West German. The result not surprisingly has been very high rates of East German unemployment- still around 20 per cent- with the unemployed and others supported by massive financial transfers from West German taxpayers. These transfers more than a decade after reunification still amount to 4 per cent of total German income. Both Germanies would have been better off economically if East Germany remained independent, and had an agreement with West Germany for free movement of goods, people, and capital across their borders. Wages in the East would then settle at a fraction of those in the West to reflect the lower productivity of East German workers. These low wages would attract companies from Germany and elsewhere to outsource some activities to the East that would provide jobs and raise employment and wages. Unfortunately, the prospects of attracting investments in East German have worsened with the expansion of the EU to include central European nations, like the Czech Republic, Slovakia, and Poland, with much cheaper, and less unionized, labor. The split into the Czech Republic and Slovakia about a decade ago is also instructive. There was concern then that Slovakia would have trouble going it alone because they received transfers from the richer Czech region, and because many powerful leaders in Slovakia were ex-communists. But economic pressures forced a much more realistic assessment of what they needed, so Slovakia threw the communists out of power, and prospered by reforming rapidly toward a freer market economy. My conclusion is that economic consequences no longer discourage secessionist movements that are driven by hostility among different religious, ethnic, linguistic, and other groups. This explains the continued secessionist pressure in some countries, such as the recent call by the main leader in the Basque region of Spain for a referendum there on whether they should become more or less completely independent from the rest of Spain. They already have considerable autonomy, so this example shows that giving power to regions is an imperfect substitute for full independence. Political pressure remains strong among French Canadians for Quebec to become independent from the rest of Canada, although this sentiment is weaker than a decade ago as Canadian regions have received greater autonomy. Many Kurds in Iraq, Iran, and Turkey still dream of an independent Kurdistan. The Tamils in Sri Lanka, and different groups in Indonesia continue their fight for independence. And is it any surprise that most Taiwanese do not want to become part of a greater China, despite growing threats from China? Mainly due to the growth of the global economy and globalized trading, the evidence is overwhelming that small nations can now do very well economically, perhaps better than larger ones. In light of this evidence, it is surprising how many people, including economists, continue to believe that their economies will be ruined if secessionist movements succeed.

Comments

[MJ Hall MD]

14 February 2005

Clerk
United States Court of Appeals
Judicial Council of the Second Circuit
Thurgood Marshall US Courthouse
40 Foley Square
New York, New York 10007

RE: Resubmission of Complaint of Misconduct
Judicial Council of the Second Circuit
Case: Hall v. The New York Presbyterian Hospital, et al
USSD 00 CIV.7858

Dear Clerk:

As a practicing physician, born and trained in the United States of America, and board certified by the American Board of Family Medicine, I am held accountable for my professional actions. As a representative of my chosen profession, I am not only responsible to the patients I treat, but I am expected to adhere to an ideal, one that is called the Hippocratic Oath to ensure my patients receive the best care I possibly can deliver. It is understood that the same ethical and expert standards that apply to the medical profession also apply to the legal profession as well. Therefore, it is only natural that the following complaint be viewed only from the perspective of governance of the federal judiciary and management of federal law.

It is my firm belief that the Honorable Judge George Daniels, civil servant of the United States, agent of the United States federal judiciary, and lifetime member of the United States Southern District Court has violated his professional duties and must be held accountable to the American public. It is the belief of many that he has acted inappropriately and incompetently while presiding over Hall v. The New York Presbyterian Hospital, et al as he has treated these claims with extreme carelessness and negligence amounting to �judicial malpractice�.

It is inconceivable that a federal judge can ignore the official overtures of representing counsel. This has occurred in my case. It is morally unjust to require the filing of a lawsuit to force a ruling by a judge. This has occurred in my case. As well, one cannot comprehend how the federal court system can allow a member the federal judiciary to professionally lapse and allow an American citizen to be placed in an unacceptable and indeterminate state. This has occurred in my case. Moreover, it is unconscionable that this agent of the American government has not been held accountable for his actions. Honorable Judge George Daniels� behavior is not only unacceptable, but also reprehensible. It must be documented that my civil rights as an American citizen were carelessly abandoned not only by my previous employer, but also by the very federal legal system designed to fairly resolve such disputes. Clearly, my constitutional entitlement to a fair judicial examination was abandoned. This District Court and Honorable Judge George Daniels� actions have cast a great shadow on the American legal system and triggered a great number of personal, psychological and financial traumas. The Judicial Council of the Second Circuit must address these issues.

Please allow me to indulge the Judicial Council of the Second Circuit for a moment and provide some background for my complaint.

During the summer of 1997, while serving as chief ophthalmic resident and a graduate medical education member at The New York Presbyterian Hospital (�Hospital�), Petitioner witnessed several acts of racial prejudice and medical misconduct committed by senior medical staff against black Americans.

Within days, after verbally informing Petitioner�s chief-of-service, Dr. D. Jackson Coleman, MD, and program director, Kip Dolphin, MD, that an outer-borough black child did not receive timely and compassionate treatment from hospital surgeons for a traumatic penetrating eye injury, Petitioner was presented a fait accompli and asked to resign or face termination. Petitioner had previous been warned that previous comments regarding racial discrimination and medical negligence were not acceptable, and there was displeasure within the hospital staff regarding a written memo, in which Petitioner detailed why black patients did not receive adequate medical care at the hands of white hospital medical staff.

1) On October 17, 1997, unwilling to resign, Petitioner was summarily terminated from Accreditation Council for Graduate Medical Education (�ACGME�) approved ophthalmology residency position.

2) During April 1998 Petitioner brought forward a breach of contract complaint with the New York State Supreme Court based on a contractual obligation the Hospital had failed to obey by disregarding important employment bylaws while terminating Petitioner�s employment and disregarding a contractual obligation to provide adequate staffing and medical training based on ACGME approved guidelines.

3) On June 21, 1999, Judge Sheila Abdus-Salaam of the New York State Supreme Court dismissed the claims based a failure to go before the New York State Public Health Council (�PHC�). A state review board comprised of twelve (12) lay and professional New York State residents enacted by New York Public Health Law 2801-b. (NY Sup. Ct. docket no. 6020395/98)

4) After discussions with numerous attorneys, Petitioner was advised that as a member of the Hospital�s �graduate medical education�, or effectively a �medical student�, Petitioner would receive no resolution, as the PHC was purely designed to hear disputes between �credentialed hospital staff members� and hospital administration. Furthermore, the PHC was unable to offer any administrative remedy.

4) On October 14, 1999 Petitioner submitted an Emergency Medical Treatment and Active Labor Act claim ("EMTALA"), regarding two points, a) maintenance of physician-on-call lists and information on physicians who refuse or fail to appear to provide timely stabilizing treatment and b) protection for "whistle-blowers" who report a violation of the regulations, as well as a 42 U.S.C. � 1981 claim.

5) After initial arguments, a full disclosure revealed that District Court Judge Jed Rakoff had a conflict of interest with the case, as this was officially entered as part of the court record. At the time, the judge was affiliated with Cornell University; Petitioner�s attorney, Ambrose Wotorson, requested that he recuse himself and appoint a new judge, the judge refused.

6) On February 24, 2000, the District Court dismissed, without prejudice, the EMTALA claim for failure to proceed before the PHC. A copy of the opinion is attached as Exhibit A.

7) a) In July 2000, Petitioner provided a written complaint to the PHC and the Hospital provided a response. A copy of the complaint is attached as Exhibit B.
b) Additionally, in July 2000, Petitioner also communicated the same claim to the New York office of the Equal Employment and Opportunity Commission (�EEOC�) and the Department of Health and Human Services, Office of for Civil Rights. A copy of the letters is attached as Exhibit C.

8) On September 22, 2000, Petitioner was provided a full crediting and affirmation of civil rights violations claims by the PHC. A copy of the opinion is attached as Exhibit D.

9) On October 16, 2000, Petitioner attorney filed a suit against defendants alleging violations of 42 U. S. C. � 1981 and various state and local laws. Abruptly, the District Court Judge Jed Rakoff inexplicably recused himself from the case and appointed District Court Judge George Daniels.

10) Between November and December 2000, the Hospital provided false and malicious information regarding medical qualifications and skills to a prospective employer, in total contradiction to the findings of the PHC.

11) On December 13, 2000, the Hospital filed a 12(b)(6) Motion seeking to dismiss the complaint for failure to plead a prima facie case of discrimination and retaliation.

12) On April 6, 2001 Petitioner submitted a formal request to amend the complaint after receipt of a right-to-sue letter from EEOC. In January 2001 the EEOC provided Petitioner with a right-to-sue letter under Title VII civil rights law. A copy of the letter is attached as Exhibit E.

13) On July 4, 2001 Petitioner submitted a formal complaint of misconduct to the Judicial Council of the Second Circuit regarding the aberrant actions of Judge Jed Rakoff. (Docket no. 01-8568)

14) On November 18, 2003, a writ of mandamus was served by Petitioner�s attorney to the Second Circuit Appeals Court causing the District Court, by judgment dated December 5, 2003, to dismiss Petitioner�s claim under 42 U. S. C. � 1981 for failure to state a claim.

15) On July 13, 2004, Petitioner�s attorney filed a timely notice of appeal contesting the validity of the district court�s findings. A copy of the appeal is attached as Exhibit F.

16) On November 23, 2004, the United States Court of Appeals for the Second Circuit entered an order affirming the district court decision. A copy of the opinion is attached as Exhibit G.

17) On December 13, 2004, Petitioner submitted a formal complaint of misconduct to the Judicial Council of the Second Circuit regarding the actions of Judge George Daniels. Please refer to the New York Times article �Judges Decisions Draw Notice, For Being Conspicuously Late�, Dec 6, 2004. A copy of the article is attached as Exhibit H.

It is crystal clear, after mandates from New York State Supreme Court and the United States Southern District Court to seek review by the New York State Public Health Council; my complaints were thoroughly investigated in July 2000. Consequently, my allegations were fully credited and during September 2000 the council established that the New York Presbyterian Hospital and Drs. Dolphin and Coleman on two points:

(1) "Committed an improper practice by terminating Dr. Hall's clinical privileges" and (2) "the council determined the Hospital's actions was not based on principles of patient care, patient welfare, practitioner character or competence, and/or the objectives of the institution." (PHC letter dated September 22, 2000)

After receiving this patent victory against the Hospital, the case was reintroduced into the federal court system, again under the auspices of Judge Jed Rakoff. Abruptly, Judge Rakoff then recused himself without explanation after my attorney again raised the issue of a conflict of interest between his senior position with Cornell School of Law and my previous employer, Cornell Medical University, who was named a defendant in my case. Judge Rakoff unprecedented and aberrant behavior was raised with complaint of misconduct on July 4, 2001 with the Judicial Council of the Second Circuit (Docket No. 01-8568).

Shortly thereafter, Judge George Daniels was appointed to my case. After satisfying Judge Jed Rakoff�s request to seek review before the New York State Public Health Council, and receiving a Title VII right-to-sue letter from the Equal Employment and Opportunity Commission, my case was placed in a state of limbo. After almost three years of inaction and stating at oral argument that he would resolve a 12(b)(6) Motion �quickly� the case continue to face total inaction. In fact, my attorney was hamstrung by the Judge Daniels and forced to write �pleas� for discussion with Judge George Daniels and place phone calls that were causally dismissed, ignored and never returned. To our dismay, the District Court eventually required a writ of mandamus to finally issue any statement at all. It is important to note after the writ was filed, within a period of two weeks, Judge Daniels threw out my long-standing claims after years of delay, inaction and abandonment. The case was never allowed to proceed to discovery.

It is obvious that my civil rights claims contained within, Hall v. The New York Presbyterian Hospital, et al., (Southern District Court Index No. 00 CIV. 7858), were treated by the District Court with an absence of ordinary care.

I base this information on several facts and have enclosed documents to support my allegations.

1) Approximately one year ago, the Southern District Court (Honorable Judge George Daniels) granted defendants' motion to dismiss the case against The New York Presbyterian Hospital and Drs. Coleman and Dolphin. In an order dated December 5, 2003, the District Court held that my pleadings were legally deficient, "nowhere in his complaint�does Dr. Hall claim that he�specifically complained of disparate treatment provided to blacks as compared to white, or that the issue of race was ever discussed in connection with is patient�s care or his complaints about their treatment.� Moreover, the District Court held that the complaint made �no factual allegations that the white senior physicians were actually made aware that the patient in question was black, that senior physicians who failed to assist Dr. Hall were aware that the patient in question was black, that a departure from the standard of care occurred because the patient was black.� This issue is critical as we had submitted and affidavit attesting to this fact, yet Judge Daniels disallowed this evidence form becoming part of the legal record.

It is my claim that the District Court failed to appreciate a significant lower court ruling, primarily the New York State Public Health Council crediting my complaint against the New York Presbyterian Hospital in September 2000. It is my belief that this vital information was improperly disregarded by the District Court thwarting my claims. The substance of the complaint, in which I brought against the New York Presbyterian Hospital-Cornell Medical University, regarded the hospital terminating my professional privileges under the 2801-b provision of New York State Public Health Law. It is the New York State Public Health Council�s opinion the hospital, ophthalmology department chairman and program director acted improperly. Specifically stated in my complaint I referenced an African-American immigrant who was not treated timely or compassionately by white staff members after a severe penetrating eye injury, �it is my belief that the hospital internationally disregarded the patient (sic) civil rights and federal rights for treatment in a level one trauma center due to his ethnicity and immigration status.� Additionally, I went on to describe that an African-American child with a severe penetrating eye injury was not seen or examined at all, by any member of registered hospital attending staff after five separate white surgeons were notified personally by me while on call as chief resident. All white surgeons asked pointed questions about the child�s ethnicity and when identified as black were adverse to attend to his emergent medical care, �the incident that transpired in August involving a African-American child transferred explicitly to the hospital from another (local) hospital was entirely racially motivated and reflects an arrogance and superiority I have never witnessed before.� (See the New York State Public Health Council complaint)

Moreover, stated bolding in my the New York State Public Health Council complaint and made exhibit one of my federal complaint, I proclaim �the hospital parties were also well aware of several complaints�.in writing and verbally�to hospital superiors�complaints were based on several episodes of medical negligence and racial discrimination.� (See the New York State Public Health Council complaint). Contrary to the defendant�s claims, I immediately made Drs. Coleman and Dolphin aware of my concerns of disparate medical care against black patients by white hospital staff. This is unequivocally supported by the New York State Public Health Council investigation and extensive review of all the evidence. As well, the crediting of the allegations as fact completely contradict the District Court�s affirming the defendants� outlandish assertions that the claims are �after-the-fact� and are based on �a second bite at the apple� legal theory.

2) Additionally, the District Court denied my motion to amend my complaint by implying it held no new relevant information. In the alternative, I argued that the District Court should have granted me this relevant affidavit, amending my complaint, so that I could have pleased the court with specified details that the court requested, including the substance of the New York State Public Health Council ruling, [which incidentally was already cited in the pending federal complaint] and demanded highly germane by the previous District Court Judge Jed Rakoff in accordance to New York State Health Law. (Southern District Court Index No.99 CIV. 10554)

In that regard, it is unclear from the District Court�s dismissal what additional information would please the court, as it would seem that the court has on one hand demanded [per District Court Judge Jed Rakoff] the New York State Public Health Council judgement, deemed vital to pursue federal action, and on the other, ignored the New York State Public Health Council findings altogether. Based on my first federal ruling, (Southern District Court Index No. 99 CIV. 10554), a nexus was formed and clearly stated my federal claims are not separate and distinct from the New York State Public Health Council�s expert judgement and the affirmation of these allegations, as they are intertwined, provide undeniable, definitive and incorruptible support to my sentinel allegations against the defendants.

Once again, incredulously, at oral argument counsel represented that I had furnished all links to disparate care and the mistreatment of black patient by defendants through my detailed and fully accepted New York State Public Health Council review finalized in September 2000. I had met the legal threshold of both 42 U.S.C. � 1981 and Title VII, 42 U.S.C. � 2000e by advocating for a racial minority and then later being discriminated against by my employer for doing so through termination and defamation. Emphatically, this is based on the verbal and written statements attesting to the surgical and medical mistreatment and racial discrimination by the defendants as it related to black patients I was caring for as a federal funded proxy of the defendants.

Clearly, I witnessed and purported black patients with critical eye injuries did indeed suffer and receive disparate care by agents of The New York Presbyterian Hospital. I vociferously expressed these concerns through an internal memo providing them to my immediate superiors and was later fired for doing so. As my claims were presented before the court, they have been boxed neatly by the New York State Public Health Council and avoid any notion of presumption or confusion.

To reiterate, as I have read my claims presented by my attorney, it is ludicrous to determine that I have failed to allege �that he was fired by the hospital because he was advocating the 1981 rights of member of a racial minority,� as per Honorable Judge George Daniels. Plainly stated, the District Court argued this point was never alleged or supported in my federal claim. This is absolutely wrong, as it formed the basis of my New York Hospital Public Health Council complaint and this action was entered into my federal complaint in October 2000 as well as a Title VII right-to-sue letter from the Equal Employment and Opportunity Commission a letter provided to the court on April 6, 2001. What exactly does a right to sue letter imply if the District Court can ignore it and is not held accountable to the federal agency that provided it? Again, it is impossible to understand why this claim was not acknowledged or understood, as it was highlighted and on the first page of my federal complaint.

3) District Court Judge George Daniels, as a lifetime member of the federal judiciary and representative of the United States of America legal system, was issued a Writ of Mandamus regarding a unreasonable time delay regarding a 12(b)(6) Motion sought by the defendants. The writ was issued because of a perceived lack of professionalism and ethics, as he was contacted by my attorney via phone and writing multiple times without response over a period of years and failing to render a decision over two and half years. Realizing that the case was in a state of limbo, on June 2, 2003 we wrote the Chief Judge of the Southern District of New York requesting that the case be transferred to another District Court Judge in light of the District Court�s failure to render a decision on a 12(b)(6) Motion for almost three years. This letter was never answered. Only after being issued a Writ of Mandamus on November 18, 2003, the District Court ruled on December 5th, 2003, fifteen days after receiving the summons. It appears that after a period of many years, the Honorable Judge George Daniels was exceptionally willing to work toward resolving the case and dismissing it without delay. The space of time required for him to make this profoundly swift decision raises the question of his motives and raises the question that he breached his professional and ethical judicial duties.

Furthermore, I allege the District Court acted unjustly and prejudicially by the sweeping dismissal of claims, 42 U.S.C. � 1981 and Title VII, 42 U.S.C. � 2000e, [provided by a right-to-sue letter from the New York office of the Equal Employment and Opportunity Commission in January 2001] after the said court was again forced by legal threat to make a decision based on a higher court�s writ of mandamus submitted by my attorney Ambrose Wotorson. Soon after, the District Court ruled with unceremonious alacrity to discharge the claims while boldly demonstrating, through a short opinion, it had no reasonable comprehension of the case and supporting documents. The District Court failed to address serious claims with any modicum of logically bearing and has made irrational statements that indicate it clearly had no understanding of the claims and set out to nullify said claims and thereby actively obstructed my case and hindering due process.

The District Court affirmed the dismissal of all defendants and found with prejudice against Dr. Hall.

4) Recently, the Southern District Federal Court of Manhattan, New York, and its proxy, the Honorable Judge George Daniels has recently come under scrutiny in the press. It is obvious that the United States Southern District Court�s integrity is currently in peril and based on a front page article from The New York Times, dated December 6, 2004, the District Court�s Judge George Daniels has had a series of lapses in jurisprudence. Unparalleled in the history of the United States Southern District, this chaotic situation creates numerous fears, invokes unprecedented suspicions and opprobrium. Most concerning, Judge Daniels� behavior gives the appearance and impression that the validity of his rulings are potentially flawed. According to The New York Times, the District Court�s Chief Judge, Michael B. Mukasey, Judge George Daniels� behavior is not isolated and is was recognized as improper and ongoing, �Judge Michael B. Mukasey, chief judge of the Federal District Court, who has received repeated complaints about the delays, said that he thought Judge Daniels had been tackling his backlog, and that the year-old statistics did not offer the clearest picture. �Judge Daniels and I have spoken about this," he said, �"As an institutional matter," Judge Mukasey added, "obviously inordinate delay is always a concern."

There are serious questions raised by these statements. Are we to assume that any clearer picture exists? What does �institutional matter� legally define; does it apply only to the bench or also the public? Who exactly is in charge? Why is behavior condoned and this allowed to happen? Can a judge be above the law?

In conclusion, I respectfully ask the Judicial Council of the Second Circuit to initiate and complete a professional review of the Honorable Judge George B. Daniels� court procedures and a full and unfettered evaluation of his ruling regarding Hall v. The New York Presbyterian Hospital, et al. As you may be aware, I have recently submitted a formal complaint of misconduct against the Honorable Judge George B. Daniels to the Clerk of Court of the Second Circuit Appeals Court, but was required to formally resubmit the matter.

These statements are true under penalty of perjury.

Yours faithfully,

Michael James Hall, MD, MSc

[logicnazi]

What the heck is the above comment about?

Anyway, I just wanted to point out that being ignored in trade deals also probably has disadvantages. For one nations are going to be less concerned about giving you favored trading status or entering into other agreements to lower trade barriers. Moreover, should a large country be engaging in unfair trade practices your threat to respond with your own tariffs or duty is likely to be ignored.

Still, I do agree with your broader point that it is now easier to be a small country by entering into economic pacts.

[RWS]

I think innovations in international government change the playing field for this issue in interesting ways, as Becker and logicnazi note. For example, the monetary unions of West Africa and Central Africa allow small states to endure while preventing the inefficiency that comes from a small, corrupt government printing lots of money to keep itself afloat. The currency union has a regional monetary bank.

The EU is a very similar arrangement, where there is a regional central bank and regional currency, which greatly facilitates monetary discipline and has done an excellent job of lowering barriers to trade among member states. The American union has done the same, and that was one of the key reasons for the original federal Union�preventing trade wars and other economic barriers between the states. Until the 1930s and after the adoption of the 16th and 17th Amendments, which inadvertently swelled federal power over states, the American union did that. The new law that puts class action lawsuits in the hands of federal courts also tends to use federal power to enforce economic discipline and liberalization in the judicial management of the cases, while not touching the substance of the laws themselves, which are the province of state law.

Lastly, I would offer the WTO as another increasingly effective form of quasi-governmental innovation that preserves decentralization while using centralized control to enforce economic and regulatory discipline on member states.

[Michael B]

OT, but in alluding to the Federalist Papers it brought a prominent contemporary issue to mind.

Would the Becker-Posner blog consider addressing what the Federalist Papers have to say regarding the intended power of the courts in relation to the other two branches of govt. It's been a while since I've read the FP, but I recall emphases which would suggest the courts are, among the three branches, intended to be the least powerful. I.e., indications or suggestions proscribing activist initiatives.

[R]

Actually, some of the federalist papers explicitly anticipate judicial review of state and federal laws. You have to remember that most of the founding fathers believed in natural law and the corollary that unjust laws are not laws themselves. The founding fathers (generalizing here) had no problem whatsoever with judges throwing out bad laws, for they believed that unconstitutional laws weren't really laws at all.

A lot of the due process incoherence that we have to deal with is much more to blame on the "natural law" concept of 18th century jurisdprudence as it is on 20th century judicial activism.

[kelvin]

With all due respect, I believe that Professor Becker might be a little ethnocentric in his assertion that small countries can "free ride" off of the military protection offered by United States, NATO, etc.

Small, first-world countries (Singapore, for example) might be offered such protections and could theoretically live in a world where military might is obsolete. However, many small undeveloped countries, say in Africa or even Palestine, live with permeable borders and constant military strife.

These countries, who are struggling to get their economies off the ground, might be more akin to the America that existed when Hamilton was writing (pre - American banks, pre - stock markets). It would be nice to think that the world has moved past that and that small is indeed universally beautiful, however, I don't think that's yet the case.

[killy]

Why Small has Become Beautiful-BECKER

[CJ]

Generally agree with the idea that small wannabe states sometimes become more serious and responsible when they get out on their own. Prof. Becker used the example of the Slovaks. Congratulations to them, but there's no guarantee that all new states will do the same. Would Quebec tighten up its act if it got independence? Unlikely, since about 80% of the French-speaking population regards capitalist enterprises as pirate ships. Ethnic groups may achieve independence and nonetheless continue to blame others for whatever misfortunes befall them.

Regarding that ridiculous piece of amateur legal brief spam that opens the comments on this thread ... the spammer's name is linked to a book promotion website called "The American Gentleman" where the same guy is shilling for a book he wrote promoting chivalry and a return to manners and civility. Hey brainiac ... if you really want to be a gentleman, refrain from dumping spam into unrelated blogversations.

[mark safranski]

I believe the founders would have been more comfortable in terms of traditional English legal culture with juries throwing out bad laws - like seditious libel in the Zenger case - by refusing to enforce them. But some kind of review power in the judiciary seems to have been anticipated.

[Michael B]

To be clear, judicial review and judicial activism are not synonymous, they're two different animals.

[Palooka]

How'd this go back to judicial review? Anyway, judicial review was discussed in the federalist papers. It was generally thought to be permissable because the judiciary was the "least dangerous branch" insofar as it had no enforcement mechanism. An absurd, or baseless decision could be ignored, it was thought. Indeed many presidents did just that--Jackson and Lincoln come to mind. But we are in a new era, where because of "the rule of law" and governmental stability, even the most baseless and unpopular decisions, such as Roe v. Wade, are obeyed and enforced. Decision after questionable decision, however, is testing this deference to the judiciary and the current balance of power. Will the Court press its luck one too many times?

The question Becker and Posner raise in their most recent entry is interesting. I think it is true that one traditional impediment to the small state is being eroding--barriers to trade. However, I think the other benefits of a country such as the United States have been overlooked. The EU attempts to produce the freedom of capital, labor, and goods and services that the US has had since its inception. But how much of this freedom is dependent on homogeneity of the population? Language, culture, and understanding of one's neighbor is all necessary to facilitate a united market in its fullest sense. In short, while trade barriers are significant, I don't see an economic zone like the EU, where cultures and language are still quite different throughout the continent, achieving anything close to the freedom of movement of labor and capital that the United States possesses. Eliminating legal barriers isn't the same as eliminating all barriers. Should they also move to adopt a more homogenous culture to facilitate this economic growth? Doesn't the lack of a homogenous culture impede the fludiity of the resource market (and to a much lesser degree, the product market)?

[John F. Opie]

Hi -

Great piece, but with a flaw on the analysis of German unification (not reunification, quite a bit was left with the Poles and others!).

The major reason that the East Germans built their wall was to keep their citizens in. If after the collapse - the East German government wasn't overthrown, it collapsed - East Germany had remained sovereign and independent, it would have seen a massive drain towards the west with little or no chance to stop it.

East Germany wasn't just a disaster economically, but also socially and poltically, and in many ways remains so today. Hence the idea that you could simply ask the East Germans to remain home and they'd continue to work in their factories is absurd: there was virtually no industry worth the name left in Eastern Germany after all those decades of incompetence and neglect. Indeed the only real survivor of East German industrialization has been the watch industry, which was rejuvenated by west Germans.

Hence the example of German unification is flawed: the moment the border became porous, the drain started and continues today.

While the 1:1 exchange rate was a fiscal catastrophe, it was a political necessity and is widely acknowledged in the ex-GDR that it was the only economically positive thing about unification at all...

And the depopulation of East Germany continues to this day, but that is an effect of demographics and legal risks to investing in eastern Germany (largely having to do with environmental pollution cleanup costs that any new investor has to carry...)

John

[RWS]

A major other reason for Germany's persistent economic malaise is extensive labor regulations and the social welfare state, which greatly inhibit the release of human capital. Contrasting German and Soviet transitions is interesting, because Germany kept a lot of that stuff, whereas the former USSR went cold turkey on socialism. Both transitions have been sharply criticized! Bottom line is that the transition ain't gonna be easy.

I do think that the German story is hardly finished, and the same with Russia. Assessing those changes still is a little mid-stream. Germany won't emerge from its stagnation, though, until it liberalizes the labor market, something which has been slowly gaining in currency for several years. (yes that's a pun...!) Until that happens, the question of the wisdom of economic reunification remains an unfinished matter, because labor regulations probably greatly slow the process of equilibrium between East and West.

[R]

"An absurd, or baseless decision could be ignored"

Off-topic, I know, but wanted to point out that this is still true. Courts have remarkably limited powers. Look in the area of institutional injunctions and consent decrees which are often uniformly ignored. Or look how hard it was for any real civil rights enforcement to get accomplished during the period in-between the Brown v. Board decision, and the passage of the Civil Rights Act.

It's a touchy issue, but the Roe decision was not-crazy enough such that it wasn't just ignored. It easily could have been. Times haven't changed that much.

[N.E.Hatfield]

As for the splintering of the current geo-politcal/economic blocks that the world has experienced in the last twenty years; this can be attributed to the basic inconsistencies and contradictions inherent in the decisions reached at the Yalta and Potsdam conferences during and at the end of World War 2. These decisions were based on the accomplished facts of conquest and occupation. Ignoring basic fundamental desires of politico-economic organization based on homogeneous structures. Whether it has an ethnic, racial, religious, or political bent.

In terms of the advantages or disadvantages, homogeneoity or heterogeneoity, smallness or largeness of modern nation states and it's economic orginazation; it may be appropriate to develop a new method of analysis. This analytical method ought to be based on some of the ideas and concepts already developed in the physical sciences. Some of these concepts are; mass and energy, momentum, inertia, entropy and the like. By developing a new methodology based on such principles, a clearer picture of the current politico-economic phenomenon would be gained.

As for the application of such principles, I'll leave it up to all of you to figure it out.

Hope this helps.

[David]

To be sure, international trade has grown significantly in the last 50 years. But I wonder how much of this is due to a proliferation of nations, and not a creation of trade between nations? That is, trade between the UK and India used to not be international trade. With India's independence, it becomes international trade with no change in the goods or parties involved. The opposite would happen if Europe were integrated - trade between France and Germany that is now international trade would become intranational trade. Worldwide international trade would plummet, even without a change in trading structure. My guess, based on the fact that in the U.S., int'l trade has roughly tripled as a share of GDP, and the general observation that most of the countries splintering off to form new entities are relatively poor and therefore engage in only a small percentage of the world's international trade, is that the effect that I describe is minimal, but it is worth considering when assessing the magnitude of the increase in international trade.

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