Do Too Many Lawyers Spoil The Economy? [1994]

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MachineGhost
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Do Too Many Lawyers Spoil The Economy? [1994]

Post by MachineGhost » Wed Sep 19, 2012 11:28 pm

Dr. Magee has plotted the relationship between economic growth rates and lawyer populations in various countries. His resulting ``Magee curve'' indicates that lawyers bring economic benefits to a country up to a point - by enforcing contracts, prosecuting criminals, etc. Beyond the optimal number of lawyers, however, the effects of their work are negative. In this graph, the optimal number of lawyers per 1,000 white-collar workers is said to be about 10; because the US has about 14, it has an excess.

By Magee's calculation, ``on average each excess lawyer knocks $1 million off US gross domestic product every year.'' He acknowledges that the number of lawyers in a society is just ``a proxy for the level of legal activity,'' but he concludes that it is the best one available.

Why don't the laws of supply and demand operate to keep the number of lawyers in a society at or near the optimal level? Magee says the US market for legal services has imperfections, in part by lawyers' own contrivance. Most notably, he says, lawyers use their domination of Congress and state legislatures to create new demand for their skills. Magee relies in part on the ``collective action'' theories of Mancur Olson, an economist at the University of Maryland, to suggest that lawyers organize themselves in legislative bodies and bar associations to engage in rent seeking.


http://www.csmonitor.com/1994/0215/15081.html
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

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