Brian M McCall

Exploring the Foundations of Dworkin's Empire: The Discovery of an Underground Positivist

Brian M. McCall — Wed, 28 Sep 2011 12:51:21 PDT

This review essay examines the jurisprudence of Ronald Dworkin as presented in the anthology: Exploring Law's Empire: The Jurisprudence of Ronald Dworkin, edited by Scott Hershovitz. Notwithstanding the influence Dworkin's jurisprudence has had on the reconsideration of moral reasoning within legal reasoning, the essay concludes that at its foundation Dworkin's jurisprudence is based upon Legal Positivist principles. The essay first summarizes the jurisprudence of Dworkin and then contrasts his jurisprudence with traditional Natural Law Legal Theory and finally exposes the Positivist foundations of Dworkin's Legal Empire.

The Corporation as Imperfect Society

Brian M. McCall — Mon, 31 Jan 2011 09:46:57 PST

Corporations are ubiquitous in modern society. They pervade every aspect of our life, consumer, professional, investment activity. Probably, people have more contact with corporations on a daily basis than any other institution, including government. From the South Sea Bubble to the Stock market Crash of 1929 to Enron to General Motors and Countrywide Mortgage, corporate scandals and controversies invite fundamental questions about corporate law. This article attempts to bring a fresh perspective to the question: “what is a corporation and how should the law treat it?” The article articulates a corporate metaphysics rooted in political philosophy. The dominant models of corporate law and philosophy are rooted in the realm of private law, especially contract, agency and property law. Corporations are viewed as a nexus of contracts or as vehicles for joint ownership of a pool of economic assets. Conceptualizing of corporate law as an area of law facilitating private ordering has led to the entrenchment of the principle of shareholder wealth maximization. Corporations exist to maximize shareholder wealth. This conception affects the philosophy underpinning the system of corporate law. Although some commentators and policy makers have argued for some attention to the interests of other stakeholders or constituencies of a corporation, their arguments are still couched primarily within the hermeneutic of private law, albeit somewhat modified by their concern for particular groups or stakeholders. Placing corporate law within a political venue, however, allows corporate law to ask more fundamental questions such as what is the purpose of a corporation within the larger society? How should its organization be structured? What claims should its authorities have over other members of the corporation? What are the roles and responsibilities of authority figures in a political community? As created corporations are a legal entity “separate from the flesh and blood people who were its owners and managers.” This leaves the question is the corporation “essentially a private association subject to the laws of the state but with no greater obligation than making money, or a public one which is supposed to act in the public interest.” Based on Aristotelian political philosophy, this article constructs a theory of corporations as political entities. In this light corporate law is really a form of public law, not private ordering. Corporations are in the language of Aristotelian philosophy, imperfect communities which are one of several constituent parts of a perfect community, the civil polity. The end of Corporations, production of certain economic goods, is an imperfect end. Corporations also lack internally all the means to achieve their end and are dependent on the rest of civil society to attain it. Several implications flow from this vision. Those who command authority within the corporate community have obligations to the larger perfect community as well as to all the members of the corporate community. The imperfect ends of corporations must be harmonized to the common good of the civil society. Those exercising political authority within the imperfect community have the obligation to exercise that authority for the common good of the corporation, not just the individual good of any one member, be that managers, directors, shareholders, creditors, suppliers, customers or employees. The article concludes by observing that although this vision of the corporation differs from much of the commentary on corporate metaphysics, corporate law and many corporate practices are actually more consistent with this vision of the corporation as an imperfect society committed to the common good than the shareholder wealth maximization standard. The philosophy of corporate law should be realigned to take account of this reality.

Consulting the Architect when Problems Arise – The Divine Law

Brian M. McCall — Thu, 24 Jun 2010 12:20:04 PDT

In The Architecture of Law: Building Law on a Solid Foundation- The Eternal and Natural Law, I began laying the foundation for a particular form of legal architecture. Taking inspiration from St. Thomas Aquinas’ description of God as the artificer or architect, I argued that the Law is a multi storied edifice comprised of different types of law. I explored the nature of the foundational law, the Eternal Law and its relationship to justice. I considered how the frame of Natural Law is erected upon or participates in the foundation of Eternal Law. Finally, I discussed some of the most basic precepts of the Natural Law and argued that they are accessible to all Men by simply considering the nature of Man as a rational animal and deriving principles of action based upon the ends associated with the various aspects of Man’s nature.

Yet, as any experienced builder knows, even with a solid foundation and a sturdy frame, things can go wrong during construction. Problems arise. In the work of rationally participating in the Eternal Law, Men make mistakes. That all human societies, even the best, have made unjust laws, should be a statement that evokes no controversy. Just like the best plans for the building of a house, experience demonstrates that we get law and justice wrong at least sometimes. What can be done to correct serious errors in legal reasoning and work based on the foundation and frame of the Eternal and Natural Law? This article presents several aids to Natural Law reasoning but concludes that recourse to the architect is indispensible. God, the artificer and author of Natural Law, has provided additional specifications for the implementation of the Natural Law in the form of the Divine Law. This article explores the role of Divine Law in Natural Law jurisprudence. Leo XIII observed that the fate of Natural and Divine Law are intertwined when he lamented “a spreading wish to supplant natural and divine law by human law.” To sustain an effective frame for human law, the Natural Law needs to be accessed in conjunction with the Divine Law. This article concludes by arguing that just as it would be folly to work through a building crisis without recourse to the original architect, so too Natural Law cannot be used properly without some recourse to the Divine Law. Part I analyzes some of the problems faced by Man in making use of the Natural Law. Having diagnosed the pitfalls, part II presents some non-legal remedies to assist human reasoning about the Natural Law, taking good counsel, Equity, habit and advice of the wise. Yet, even these aids are insufficient for proper use of the Natural Law. Part III, argues that since the Natural Law has been destroyed in us we need a new law to assist reason. This additional law is the Divine Law. Part IV concludes the examination of the Divine Law summarizing the reasons for its necessity and arguing that a Natural Law project which ignores the necessity of Divine Law is doomed to failure.

The Corporation as Imperfect Society

Brian M. McCall — Mon, 07 Jun 2010 09:03:39 PDT

The Architecture of Law: Building Law on a Solid Foundation The Eternal and Natural Laws

Brian M. McCall — Wed, 19 Aug 2009 11:06:57 PDT

Employing the architectural themes used by Aquinas in his discussion of Eternal Law, this article presents Natural Law as a frame for rational thought rooted in the foundation of the Eternal Law. The argument contrasts this theory of law, based on a close reading of Aquinas and Gratian, to both a Positivist theory of law as power as well as to other Natural Law theories not incorporating the foundation. Law is presented as a product of both reason and will. The genus of law is shown to involve both specific precepts as well as more general guiding principles. Law is not only the detailed specifications of a building but also the very idea of it as well as the overall blueprint for its construction. The relationships among end, being, goodness and justice are explored through an examination of how the Natural Law frame is connected to the Eternal Law foundation. Placing the Eternal Law in such a central location raises an important question. To what extent is belief in a personal God necessary to construct a Natural Law system? A nuanced answer to this question is taken up in the conclusion.

Learning from Our History: Symposium Presentation

Brian M. McCall — Thu, 05 Feb 2009 15:03:21 PST

This is the audio recording of the presentaiton given at the South Carolina Law REview Symposium on the Sub-prime morgage crisis. The fothcoming article related thereto is listed under unpublished papers. It can be found under Panel 3 Historical Perspectives.

Learning from Our History: Evaluating the Modern Housing Finance Market in Light of Ancient Principles of Justice

Brian M. McCall — Thu, 05 Feb 2009 14:37:51 PST

Since I first accepted an invitation to join this symposium, the subprime mortgage crisis has exploded into a systemic financial crisis. Analysis and pundits alike seem on a quest to outdo each other in using dramatic phrases to describe its historic proportions. The causes of a crisis so large must have a multiplicity of causes lying in the realms of bank regulation and supervision, the operation and regulation of the securitization market and the derivatives and insurance markets. Yet, the root and spark of the various financial reverberations initiated in the home mortgage finance market. My presentation will focus on this central cause to look for an explanation of what went wrong. In a general sense, St. Thomas Aquinas predicted the systemic freezing of the financial system which we are currently witnessing when he predicted that in a society where unjust exchange transactions dominate, eventually all exchanges will cease. I will argue that at a major reason for the financial winter we are witnessing is that the market for buying housing has been systemically violating core principles of justice. Although other factors certainly contributed to its breadth and expansion, unjust financial transactions are the root of the problem. Two aspects of natural law economic theory will be used to evaluate the home finance market developed in the Twentieth Century – usury theory and just price requirements. Through an examination of these two core economic concepts which dominated the Western intellectual tradition for over a millennium we will see that a system which generates profits for those providing the money to buy housing violates these tenets of the natural law. Thus, although not the only cause of all the aspects of the current crisis, these unjust exchange transactions have initiated a systemic breakdown.

It's Just Secured Credit: The Natural Law Case in Defense of Some Forms of Secured Credit

Brian M. McCall — Thu, 05 Feb 2009 14:22:34 PST

For decades scholars have been debating whether of not the institution of security can be explained and justified. After much discussion from varying points of view and hermeneutics, although some insights have been gained, the answer to the original question remains unresolved. This article attempts to bring new life to this debate by building on Professors Mooney and Harris’ idea of security interest as property right while taking account of the valid concerns of scholars such as Elizabeth Warren and Lyn Lopucki that certain results produced by the current system seem unjust. This reconciliation of these two strands of secured credit theory is rooted in the article’s wider scope of consideration. Security Interests cannot be evaluated normatively outside of the contexts in which they are employed. Using the natural law theory of usury and business credit to distinguish the lending of money for consumption from the investment of capital in a business, the article concludes that the use of security as a device for achieving various agreements among capital investors in a business venture is just. Once the system in principle is justified, the article suggests three specific changes to particular aspects of existing law which are necessary to conform more completely secured credit law in the business finance context to this normative theory which provides for its justification. Thus, the conclusion may be more modest than the hopes of the original debate. All security is not explained and justified in every context. Yet, this more limited scope may provide the key to solving the puzzle of secured credit. Perhaps scholars have failed to agree on the answer to the original question because the answer is more subtle than a simple yes or no. Secured Credit can be explained and justified but not for the same reason in every context. The article provides the answer in the context of business credit by exploring the interaction of security with the principles of natural law theory of business credit and investment.

Unprofitable Lending: Modern Credit Regulation and the Lost Theory of Usury

Brian M. McCall — Thu, 11 Dec 2008 14:31:16 PST

With almost daily news stories about the crisis in our credit markets, it seems inevitable that a new political and academic debate about credit regulation is commencing. With Americans paying billions of dollars in finance charges every year and some loosing their homes, it is time to ask fundamental questions about the liberality of credit supply and terms. Rather than readjusting usury limits or tinkering with disclosure requirements, it is time to reassess America’s philosophy of lending. Although the current socio-economic belief that more credit is better has held dominance for several centuries, history offers an alternative theory. Surprisingly, a serious analysis of this scholastic theory of usury has been virtually absent from academic debates about credit for the past several decades. This article argues that the confusion and ineffectiveness of usury laws could be corrected by a return to the principles of the scholastic theory of usury. This article identifies contemporary academic, political and public dissatisfaction with the current state of credit regulation. It surveys some of the recent data demonstrating the rising levels and costs of consumer debt. Next, the historical approaches to usury that predated the scholastic theory are introduced to set the context for a presentation of the scholastic theory itself. The article outlines the scholastic theory of usury as a synthesis of biblical principles, natural law reasoning and Roman law concepts. The scholastic theory is shown to have developed while remaining true to its core principles from the fourth to the sixteenth century. The new economic environment of the sixteenth century caused some usury theorists to develop a troubling subjective theory of usury which eventually displaced the original principles. After examining this history, the article articulates core principles of the scholastic theory which are then applied to modern commercial and consumer lending transactions. The article concludes that modern credit regulation would greatly benefit from a return to the scholastic principles of usury regulation.

Quas Primas and the Economic Ordering of Society for the Social Reign of Christ the King; A Third Perspective on the Bainbridge/Sargent Law and Economics Debate

Brian M. McCall — Mon, 01 Sep 2008 09:15:53 PDT

How can it be that respected Catholic legal scholars can reach seemingly opposite conclusions about “Law and Economics?” Stephen Bainbridge has argued that both the descriptive and normative aspects of the Law and Economics movement are consistent with and even demanded by the Catholic understanding of the nature of the human person in a fallen world and our historical experience with totalitarian regimes. Mark Sargent, on the other hand, argues that at least the normative, and perhaps aspects of the descriptive, side of Law and Economics are not completely consistent with the nature and purpose of the human being as expressed through Catholic Social Teaching. Both of these approaches attempt to debate the correctness of Law and Economics from an anthropological perspective: what is human nature and what does the answer to that question tell us about economic analysis of law? This essay attempts to address the topic from a perspective that differs from both that of Bainbridge and Sargent, a cosmological perspective. How does God relate not only to individuals but organized collections of individuals in a partnership, corporation or a commercial society? The answer lies in a closer examination of the teaching on the Social Reign of Christ the King. This essay examines the encyclical Quas Primas in light of the other writings of Pius XI and the history of Catholic thought about economics to arrive at a novel critique of the place of Law and Economics within Catholic legal theory.

Money, Money Everywhere but not a Drop to Secure: A Proposal for Amending the Perfection Rules for Security Interests in Money and Deposit Accounts

Brian M. McCall — Mon, 03 Mar 2008 10:47:59 PST

It is time that the billions of dollars of money and bank account balances held by debtors be made available as security in a manner that is commercially practical. The rules governing the perfection of security interests in money and deposit accounts need to be reformed to allow perfection by filing. This article builds a case for the proposed revisions by addressing the vexing question “what is money.” A brief history, especially drawing upon the history of the UCC, of answers to this question is presented. Various policy rationales are explored including an examination of the different forms of payment utilized in the payment system. After demonstrating that permitting filing of security interests in money and deposit accounts will lower costs for some debtors as well as promote the policy goals of avoiding hidden property interests, simplicity, improvement of the complicated law of proceeds of collateral and comparable treatment of different types of debtors, the argument turns to the international context. Contrasting the US approach to the fixed and floating charge regime of the United Kingdom, an argument is made that the current proposal is consistent with harmonizing the treatment of different types of lenders to that in the UK and other UK based legal systems.