Economists as Expert Witnesses

Posted by lukegilman

March 21, 2007

Jenn Chiang, my classmate and apologist par excellence for the top hat and monocle set, has apparently thrown over Julian Simon and Montgomery Burns as her roll models and fixated, at least for the time being, on David Teece.

Read all about it @ the WSJ: Economists as Expert Witnesses

For high-profile economists like the 58-year-old Prof. Teece, expert testimony has become a way to earn $2 million or more a year. Their rise has its roots in the Reagan era of the 1980s, when a free-market view of the law inspired by University of Chicago scholars gained ground. Courts now rely far more on economic analysis, with its apparent precision, to reach decisions. As a result, big companies in legal disputes race to enlist top economists on their side, paying top dollar in an arms race for talent.

Aside from the rising general need for expert witnesses in complex litigation, I think it helps that Teece advocates a position a particular type of litigant really likes to hear.

In a widely cited 1986 paper, “Profiting from Technological Innovation,” he argued that the big winners from breakthrough ideas can be companies that control distribution and customer service, not the inventors.

Lest I give the wrong impression, I should point out that Chiang and I actually agree on most things, having been re-educated by the same economics program, but I think there is a limit to the number of degrees one has time to make use of on this mortal coil.

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