• Selected
• Entire List

Abstract:
From a macrosociological perspective, law is an institution of society, is shaped by conditions in society, and facilitates social life by inter alia producing symbols. Law accordingly adopts concepts and principles that focus on the appearance to society of certain phenomena and that are symbols when the phenomena are socially significant. To illustrate symbols in law, the article examines (i) the "hold oneself out" standard in defining an investment adviser under the federal Investment Advisers Act and (ii) the standard for ethical conduct that requires attorneys to avoid appearances of impropriety. If symbolic concepts and principles are tied to the properties of society, the acceptance of the appearance-of-impropriety standard by a state will be related to one or more system-level properties. In an analysis of data with logistic regression, differences between states in whether the standard was in use as of 2005 were found to be associated with differences between states in the levels in 1980 of two such properties: cultural heterogeneity, which was measured by the percentage of state inhabitants who had been born outside the United States; and social system rationality, which was measured by the percentage of adults in the state who were enrolled in college. Specifically, the odds that a state was using the standard were appreciably raised by each increase in level of cultural heterogeneity and were lowered by each increase in level of social system rationality. Because the appearance-of-impropriety standard for attorneys is symbolic, the two properties affected whether symbolism developed in law. The findings also suggest that information on societal properties and the forces behind them can be used to predict, albeit imperfectly, the symbolic concepts and principles of law that will exist at future points in time.

sociology of law, symbol, investment advisers, lawyers, ethics

Abstract:
Section 2(a)(19) of the Investment Company Act classifies directors of mutual funds and other types of investment companies as either interested or not interested. Under section 10(a) of the Act, directors who are deemed not interested by section 2(a)(19) must comprise at least 40% of the board of a registered investment company, and rules of the Securities and Exchange Commission require a higher percentage. The preceding sections of the Act and rules of the Commission are based on the assumption that only non-interested directors consistently protect the shareholders of investment companies from financial exploitation. The assumption exists even though all directors, regardless of their classification by section 2(a)(19), are subject under state law to the same fiduciary duties and to the same test for determining whether they breached a fiduciary duty. Notably, social science studies on the accuracy of the assumption have reached contradictory conclusions. Because a considerable body of research casts doubt on the effectiveness of law as a mechanism to regulate social behavior in general, the instant article suggests that law manifesting the assumption does not markedly reduce the frequency with which investment company shareholders are financially exploited but, instead, benefits society in ways captured by the concept of social productivity. In particular, the article hypothesizes that such law serves as a symbol of a commitment by society to combating shareholder exploitation and thereby aids in bonding individuals to the society. Such law can also be expected to preserve public trust in, and protect the reputation of, investment companies. Under this reasoning, law on investment companies is important because of its sociological effects, not because of its economic impact.

mutual funds, boards of directors, investment company act

Abstract:
In 2008, the United States experienced a severe contraction in the availability of credit, a marked reduction in the price of common stocks, and an appreciable increase in interest rates on debt instruments issued by business entities and by state and local governments. The premise of the instant article is that, although this upheaval was economic in form and sudden in occurrence, it stemmed from change that was sociological in character and that started in prior decades. Specifically, the 2008 upheaval in finance is traced to a shift in social values among Americans - namely, an increased prevalence of hedonism and materialism in conjunction with an increased emphasis on short-term considerations - and to the suboptimum intellectual skills of the population that resulted from this shift. Quantitative evidence in support of the thesis is presented, and implications of the thesis for provisions of the Investment Company Act are discussed.

investment companies, financial sector, credit crisis, sociology, social values, credit

Abstract:
Macrosociology considers law to be one of the institutions of society and, hence, a fundamental component of a social system. Four macrosociological propositions underlie the instant article: (i) the institutions comprising a social system are, in the long term, compatible with one another; (ii) the compatibility of institutions includes, inter alia, concepts that are similar or identical across at least some institutions; (iii) the concepts and doctrines of the institution of law manifest the properties, including the central values, of the social system; and (iv) the properties of the social system are fashioned by system-level forces. Because the propositions are consistent with existing evidence, they are the foundation for an examination of the concepts of public and private. In the United States, the dichotomy between public and private is widespread both in social values and in law, as illustrated by the Investment Company Act. Under the Act, mutual funds are classified as public and hedge funds are classified as private. However, research is lacking on the source of social values that lead law to designate certain topics as public and other topics as private. In a macrosociological framework, the designation can be attributed to another institution or to the social system as a whole. These alternatives are assessed using data from a national sample of adults in U.S. households. Specifically, logistic regression coefficients are estimated for the relationship between (i) the strength of ties to each of four institutions (economy, education, law, and religion) and (ii) whether social values designate morality a public or private matter. In the sociology of law, (ii) is important because law incorporates societal designations of matters as public or private. The findings indicate that the designations are produced by the social system, not by an institution. The implications of this conclusion for the sociology of law are discussed.

mutual funds, hedge funds, macrosociology, sociology of law, public, private

Abstract:
The article advances the thesis that the doctrines and concepts of law are attributable to the properties of society and to the forces molding these properties. The thesis, after being illustrated with the federal Investment Advisers Act, is assessed quantitatively using data from the General Social Survey. The Survey interviews a national sample of adults in U.S. households, and in 1991, it ascertained whether interviewees classified morality as a private matter or as a public issue. The social values of interviewees on the public-private nature of morality were the dependent variable in a study that assumed (i) an activity is not explicitly addressed by law, or is explicitly protected by law from regulation, when society designates the activity as private, and (ii) the doctrines of law that are adopted to regulate activities that are designated public embody the doctrines of prevailing morality.

Because social values on whether morality is private or public comprised the dependent variable, the factors that mold these values have the potential to prevent or permit law designed to regulate socially significant activities. Logistic regression was used to estimate the relationship to the dependent variable of two sets of factors that may influence whether morality is designated private or public. One set was factors that structure (e.g., stratify) a society and that have important societal correlates and consequences. The other set was comprised of modes of thought and conduct that are cultural dimensions of a society. Notable relationships to the dependent variable were found for the structural factors of gender and, among women, educational attainment. In terms of gender, the odds that morality would be considered a private matter were approximately three-and-a-half times higher among women than among men. In terms of education, the odds that morality would be considered private were approximately three-fourths lower among women with 13 or more years of schooling than among women with 12 or fewer years of schooling. The article suggests that, because the odds of placing morality in the private sphere are appreciably greater among women, gains in the status of women may help to explain U.S. Supreme Court decisions that construed the federal Constitution to restrict government regulation of sexual activity and its incidents.

law, sociology, morality, public, private, macrosociology, investment advisors, society, rule of law, women, law and society

Abstract:
An investment company that must register with the Securities and Exchange Commission is required by the Investment Company Act to have a specified percentage or number of directors who are not "interested" in the company. To be not interested (i.e., to be independent), a director of an investment company is barred by section 2(a)(19) of the Act from inter alia having had, during the last two completed fiscal years of the company, a material business relationship or a material professional relationship with specified parties. The Commission, in interpreting section 2(a)(19), has not clearly distinguished the two types of relationships and has not focused on professional relationships apart from business relationships. The article contends that this is contrary to the intent of Congress. Accordingly, the article (i) identifies both the elements of a business relationship and the elements of a professional relationship; and (ii) reviews three no-action letters in each of which the Commission staff could have found that a proposed arrangement would have created a professional relationship for an investment company director.

mutual funds, investment companies, directors, independent directors, independence, relationships

Abstract:
Section 35(d) of the Investment Company Act authorizes the Securities and Exchange Commission to regulate the names of investment companies that are registered with the Commission, and bars registered investment companies - the vast majority of which are mutual funds - from using names that contain words "that the Commission finds are materially deceptive or misleading." The article relates the regulation of investment company names to the importance to society of trust. Pertinent case law under section 35(d) is reviewed, and Rule 35d-1 is discussed. The article also considers fund names that are not covered either by section 35(d) or by Rule 35d-1 - specifically, names that are "cute" or "catchy" - and suggests a possible revision of the section. The suggested revision employs a behavioral science, value-neutral approach to fund names rather than the present value-based approach.

mutual funds, investment companies, names, trust

Abstract:
The article proposes and develops a concept - social productivity - to complement the widely used concepts of social capital and economic productivity. All three concepts are concerned with structured groups, which include organizations, institutions, and societies. However, while social capital focuses on a group's social resources and economic productivity focuses on a group's economically relevant goods and services, social productivity focuses on a group's social outputs. Four social outputs of groups are identified: (1) standards for behavior, (2) reputation, (3) symbols, and (4) trust and perceptions of fairness. These social outputs are important to a group not only because they affect the degree of commitment to the group by its participants but also because they affect the responses to the group by others. From the perspective of social productivity, government adopts law (formal standards for behavior) in order to preserve the reputation of important groups, provide symbols, and maintain or increase trust and fairness. To illustrate the concept of social productivity, the article examines ways that federal law on investment companies and investment advisers deals with conflicts of interest.

social productivity, law, reputation, symbols, trust, fairness

Abstract:
The article rests on the macrosociological thesis that (i) the concepts and doctrines used in law are determined by the properties of society and that (ii) these properties are produced by large-scale forces. The thesis thus maintains that the content of law is not shaped by the persons who serve as legislators, judges, and executive-branch policymakers; such individuals are merely the vehicles by which societal conditions mold law. To illustrate, the article examines shifts in law in the United States on a number of subjects, including law setting the age of majority and law regulating access to abortion, and it links these shifts to changes in specific aspects of U.S. society. Data from the 1960 census on the 48 coterminous states are analyzed with logistic regression to identify system-level properties distinguishing states that liberalized their law on abortion between 1967 and 1972 (i.e., before the U.S. Supreme Court decision in Roe v. Wade) from states that did not. The regression analysis, in conjunction with time-series data for the nation as a whole, suggests that the liberalization by states and by Roe of law-imposed restrictions on abortion was associated mainly with increases in school enrollment and educational level among young women. The article advances the premise that the American social system and its law have been broadly affected by long-term growth in the quantity of knowledge, and ascribes the rising prevalence and longer duration of education among women - as antecedents of the liberalization of law on abortion - primarily to the expansion of knowledge.

macrosociology, law, abortion, school enrollment, educational level, women

Abstract:
The article suggests that a fruitful approach to curbing fertility and alleviating population pressures in the United States may be to reduce the support that childbearing receives from publicly owned goods and publicly operated services. Law relevant to the thesis is reviewed. The Journal is published at the Harvard University School of Law by the Harvard Society for Law & Public Policy.

population, policy, law, United States

Abstract:
The article advances the thesis that population growth in the United States reduced the privacy that Americans value and thereby became the common antecedent for two seemingly unrelated phenomena in the third quarter of the twentieth century - the emergence of two organizations concerned with domestic population growth, and a narrow judicial interpretation of law relevant to privacy. The thesis is supported by (1) data obtained in sample surveys I conducted of the members of Zero Population Growth and the members of the National Organization for Non-Parents, and (2) court opinions pertinent to the right of privacy.

population, privacy, law, constitutional law