A central result of the paper is that in choosing among different liability rules allocative concerns can be decoupled from distributive concerns. There exist an infinite number of liability rules which produce each of the four basic allocations, but every rule within a particular class divides differently between the litigants the expected value of the allocation. To successfully decouple, courts should at times impose "call option," "put option," "Pay or be Paid," and "Pay or Pay" rules.

Representative John T. Doolittle (R-Calif.) has proposed the "Citizen Legislature and Political Freedom Act" that essentially would repeal all limits on political campaign contributions and merely require immediate disclosure by candidates when they do receive contributions. This type of "pure disclosure" reform has garnered support from a wide spectrum of political activists, from Sen. Mitch McConnell (R-Ky.) to Stanford Law School dean Kathleen Sullivan.

But there exists in our polity a counter-image--the voting booth--that stands against the cult of disclosure. Ballot secrecy was adopted toward the end of the nineteenth century to deter political corruption. Voting booth privacy disrupted the economics of vote buying, making it much more difficult for candidates to buy votes because, at the end of the day, they could never know for sure who voted for them.

A similar pro-anonymity argument can be applied to campaign finance. We could harness similar anonymity benefits by creating a "donation booth": a screen that forces donors to funnel campaign contributions through blind trusts that would keep candidates from learning the identity of their supporters. Just as the secret ballot makes it more difficult for candidates to buy votes, mandating anonymous donations through a system of blind trusts might make it harder for candidates to sell access or influence because they would never know which donors had paid the price. Knowledge about whether the other side actually fulfills his or her promise is an important prerequisite for trade. People--including political candidates--are less likely to deal if they are uncertain whether the other side performs.

This result was not necessarily wrong, but the Court’s analysis was wrong. The Grutter and Gratz Courts replaced the “minimum necessary preference” requirement with a requirement that admissions programs provide “individualized consideration,” which we show amounts to a “Don’t Tell, Don’t Ask” regime. The Court will not “ask” probing questions about the size and differentiation of preferences as long as the government decisionmaker does not “tell” the Court how much of a racial preference it is giving. Indeed, as an example of the differential standards the Court applied, we demonstrate that while the Court impugned the admissions program at issue Gratz for making race decisive for “virtually every minimally qualified minority applicant,” in fact the fraction of qualified minority applicants for whom race was decisive was smaller in the admissions program struck down in Gratz than it was in the admissions program upheld in Grutter.

We call for a return to the minimum necessary preference requirement. Instead of examining whether preferences are “individualized,” courts should determine whether the constitutionally relevant benefits of granting preferences of a given size outweigh the constitutionally relevant costs, both overall and at the margin.