Weekly Top 5 Papers – March 5, 2018

1. Splitsylvania: State Secession and What to Do About It by Glenn Harlan Reynolds (University of Tennessee College of Law)

Lately I’ve been thinking about some of the Constitution’s more obscure provisions, like the Guaranty Clause and Art. IV sec. 3’s provision for creating new states out of parts of existing ones.  Most recently, I was thinking about these provisions in the context of the new state-secession movements that are springing up, in which (typically rural and less prosperous) parts of states politically dominated by large urban areas want to break off and go on their own.

My paper looks at these movements, the complaints that animate them, and their likelihood of success, and suggests some fairly modest changes at the federal and state level that would take most of the steam out of movements for intra-state secession.  While states can split from existing states — look at West Virginia, Maine, or even Tennessee — it’s unusual and difficult.  But addressing the causes of rural unhappiness looks to be (comparatively) easy, if Congress is willing to do so. – Glenn Harlan Reynolds

2. The Political Economy of Black Panther’s Wakanda by J. Robert Subrick (James Madison University- Department of Economics)

3. Pulling the Goalie: Hockey and Investment Implications by Clifford S. Asness (AQR Capital Management) and Aaron Brown (LLC New York University (NYU) – Courant Institute of Mathematical Sciences)

4. Algorithmic Entities by Lynn M. LoPucki (University of California, Los Angeles (UCLA) – School of Law)

That artificial intelligence poses an existential threat to humanity is nothing new.  What is new in this paper is how corporate law magnifies the threat. A malicious artificial intelligence the controls a corporate entity has both (1) a government-verified identity in which it can transact business and accumulate wealth and (2) legal rights—including the rights to privacy, counsel, due process, free speech, and to make political contributions.

Governments can’t protect us from algorithmic entities because the government can’t distinguish algorithmic entities from human-controlled entities.  Despite international efforts—through the Financial Action Task Force—to fix the acknowledged problem with corporate law, most of the governments that charter entities—including Delaware—don’t require the entities they charter to identify the humans who control them. Nor can they.  Corporate law’s unique conflict-of-laws rule puts governments in competition to sell corporate charters and a large proportion of the customers want anonymity.  Only a fundamental, worldwide change in corporate law can eliminate the threat algorithmic entities pose.

One of the scariest parts of this project is that the flurry of SSRN downloads that put this manuscript at the top last week apparently came through the SSRN Combating Terrorism eJournal. That the experts on combating terrorism are interested in my manuscript seems to me to warrant concern. – Lynn M. LoPucki

5. Caso Banco Popular by Isabel Fernández Acín (University of Navarra)