Entrenchment is fundamental to law. Grand documents like the U.S. Constitution, and mundane ones like city and corporate charters, entrench themselves against change through supermajority rules and other mechanisms. Entrenchment frustrates responsiveness, but it promotes stability, a rule of law virtue extolled for centuries. It does so through a straightforward channel: Entrenched law is difficult to change. Scholars have long understood this idea, which can be called the first status quo bias of entrenchment. This Article shows that a second bias lurks: Entrenchment makes changes that do take place incremental. As entrenchment deepens, the scope of potential change to law collapses on the status quo. To restate the idea, when we entrench law, we prevent change, at least for a time, and we confine any changes that do take place to small steps. This has implications for constitutional law, especially the debate about Article V and the separation of powers, both of which shield the Constitution from change more than scholars realize. It also illuminates several questions, especially in comparative constitutional law, such as why constitutions remain unpopular after amendment. Finally, it generates a theory of constitutional failure. When voters’ preferences evolve consistently in one direction, entrenched law eventually becomes as unstable as ordinary law, only less popular. Thus, entrenchment buys neither stability nor responsiveness. Because entrenchment confines legal change to incremental steps, amendment cannot correct the problem. This recasts questions of legal design in new light, and it may explain why some constitutions endure while others collapse.
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The Untenable Case for Perpetual Dual-Class Stock
The desirability of a dual-class structure, which enables founders of public companies to retain a lock on control while holding a minority of the company’s equity capital, has long been the subject of a heated debate. This debate has focused on whether dual-class stock is an efficient capital structure that should be permitted at the time of initial public offering (“IPO”). By contrast, we focus on how the passage of time since the IPO can be expected to affect the efficiency of such a structure.
Our analysis demonstrates that the potential advantages of dual-class structures (such as those resulting from founders’ superior leadership skills) tend to recede, and the potential costs tend to rise, as time passes from the IPO. Furthermore, we show that controllers have perverse incentives to retain dual-class structures even when those structures become inefficient over time. Accordingly, even those who believe that dual-class structures are in many cases efficient at the time of the IPO should recognize the substantial risk that their efficiency may decline and disappear over time. Going forward, the debate should focus on the permissibility of finite-term dual-class structures¾that is, structures that sunset after a fixed period of time (such as ten or fifteen years) unless their extension is approved by shareholders unaffiliated with the controller.
We provide a framework for designing dual-class sunsets and address potential objections to their use. We also discuss the significant implications of our analysis for public officials, institutional investors, and researchers.
Religion Is Special Enough
In ways almost beyond counting, our legal system treats religion differently, subjecting it both to certain protections and certain disabilities. Developing the specifics of those protections and disabilities, along with more general theories tying the specifics together and justifying them collectively, has long been the usual stuff of debate among courts and commentators.
Those debates still continue. But in recent years, increasingly people have asked a slightly different question—whether religion should be singled out for special treatment at all, in any context, for any purpose. Across the board, but especially in the context of religious exemptions from generally applicable laws, many have come to doubt religion’s distinctiveness. And traditional defenses of religion’s distinctiveness have been rejected as unpersuasive or religiously partisan.
This Article offers a defense of our legal tradition and its special treatment of religion. Religious freedom can be justified on religion-neutral grounds; it serves the same kinds of values as other rights (like freedom of speech). And while religion as a category may not perfectly correspond to the underlying values that religious freedom serves, that kind of mismatch happens commonly with other rights and is probably inevitable. Ultimately, religious liberty makes sense as one important liberty within the pantheon of human freedoms. Religion may not be uniquely special, but it is special enough.