2000 SYNTHETIC COMMON LAW The common law is a good candidate for the regulatory competition debate because it originally depended on extensive competition among courts and judges. For example, just as many scholars argue that the competition among states for corporate charters is a race-to-the-top, driving the development of (Delaware) corporate law, one can argue that competition among courts and judges generally was a race-to-the-top, driving the development of English, and later American, common law. Over time, so the argument goes, the system that survived is superior. If it had not been superior, private parties would have opted to have their disputes governed by another regime; alternatively, rational and well-informed judges would have responded with different decisions. The viability of this argument depends on empirical research, which has not yet been done in the common law context For some scholars. it is enough to establish that the common lay is an efficient" method of dispute resolution. Yet there remains the State Competition in Corporate Law, 105 HARV. L REv. 1435, 1448-50(1992) (offering race-to-the-bottom interpretation) among e,e.g, Roberta Romano, supra note 35(arguing for regulatory competition tate securities law regimes within the U.S.); Stephen J. Choi Andrew T. Guzman, Portable Reciprocity: Rethinking the International Reach of securities Regulation, 71 S CAL L rev. 903(1998)(arguing for regulatory among national securities law regimes); Partnoy, Why Markets Crash, supra note 3 at #(criticizing and suggesting amendments to proposals for competition among international securities law regimes) See, e.g, Richard L. Revesz, Rehabilitating Interstate Competition Rethinking the"Race-to-the-Bottom"Rationale for Federal Environmental Regulation, 67NY U L. Rev. 1210(1992)(describing race-to-the-bottom versus nts in the context of enviro 38 Randy Barnett has written about the evolution of common law from competitive law merchant: " Many of [common laws] principles originated with the e common were determined in an era when common-law courts competed for legal business with other legal systems and therefore had a far greater incentive than today to be sensitive to the expectations of both parties. With this as its origin, I suggest that the correspon lence between common sense and common law is no coi nce.”See Randy e. Barnett, The Sound of silence: Default Rules and Contractual Consent, 78 VA.L.REV.821,910-11(1992) The argument in corporate law is that corporations choose to incorporate in Delaware to benefit from that state's value-enhancing corporate law rules. See, e.g Romano, supra note 35, at 2384 n 76(substantiating this claim with event studies) There is a question about whether common law competition was a race to the top or a race to the bottom. But it certainly was a race. See, e.g, Tom w. Bell, Public Choice and Public Law: The Common Law in Cyberspace, 97 MICH. L REV. 1746 1769-70(1999)(describing efficiency arguments ). The specialized courts of the law merchant often are cited as the predecessors to common law rules. See I. Trotter ardy, The Proper Legal Regime for"Cyberspace, 55 U. PITT. L REv. 993, 1019-21 (1994); David R Johnson David Post, Law and Borders- The Rise of Law in Cyberspace, 48 STAN. L REV. 1367, 1387-91(1996), see also Lisa Bernstei Merchant Law in a Merchant Court: Rethinking the Codes Search for immanent Business Norms, 144 U. PA L REV. 1765(1996). The law merchant courts evolved during the eleventh and twelfth centuries, when clients paid fees to courts. See BRUCE L. BENSON, THE ENTERPRISE OF LAW 60-62(1990) is that the has led to an inefficient and unfair ee infra Part Il. B I In the debate about common law, it frequently is un whether scholars are arguing that common law is efficient in a Pareto sense( better off without making another party worse off or in a r-Hicks sense(i. g2000] SYNTHETIC COMMON LAW 9 The common law is a good candidate for the regulatory competition debate because it originally depended on extensive competition among courts and judges.38 For example, just as many scholars argue that the competition among states for corporate charters is a race-to-the-top, driving the development of (Delaware) corporate law,39 one can argue that competition among courts and judges generally was a race-to-the-top,40 driving the development of English, and later American, common law. Over time, so the argument goes, the system that survived is superior.41 If it had not been superior, private parties would have opted to have their disputes governed by another regime; alternatively, rational and well-informed judges would have responded with different decisions. The viability of this argument depends on empirical research, which has not yet been done in the common law context. For some scholars, it is enough to establish that the common law is an efficient42 method of dispute resolution. Yet there remains the State Competition in Corporate Law, 105 HARV. L. REV. 1435, 1448-50 (1992) (offering race-to-the-bottom interpretation). 36 See, e.g, Roberta Romano, supra note 35 (arguing for regulatory competition among state securities law regimes within the U.S.); Stephen J. Choi & Andrew T. Guzman, Portable Reciprocity: Rethinking the International Reach of Securities Regulation, 71 S. CAL. L. REV. 903 (1998) (arguing for regulatory competition among national securities law regimes); Partnoy, Why Markets Crash, supra note 3, at # (criticizing and suggesting amendments to proposals for competition among international securities law regimes). 37 See, e.g., Richard L. Revesz, Rehabilitating Interstate Competition: Rethinking the "Race-to-the-Bottom" Rationale for Federal Environmental Regulation, 67 N.Y.U. L. Rev. 1210 (1992) (describing race-to-the-bottom versus race-to-the-top arguments in the context of environmental regulation). 38 Randy Barnett has written about the evolution of common law from the competitive law merchant: “Many of [common law’s] principles originated with the competitive law merchant that preceded the growth of the common law. Many more were determined in an era when common-law courts competed for legal business with other legal systems and therefore had a far greater incentive than today to be sensitive to the expectations of both parties. With this as its origin, I suggest that the correspondence between common sense and common law is no coincidence.” See Randy E. Barnett, The Sound of Silence: Default Rules and Contractual Consent, 78 VA. L. REV. 821, 910-11 (1992). 39 The argument in corporate law is that corporations choose to incorporate in Delaware to benefit from that state’s value-enhancing corporate law rules. See, e.g., Romano, supra note 35, at 2384 n.76 (substantiating this claim with event studies). 40 There is a question about whether common law competition was a race to the top or a race to the bottom. But it certainly was a race. See, e.g., Tom W. Bell, Public Choice and Public Law: The Common Law in Cyberspace, 97 MICH. L. REV. 1746, 1769-70 (1999) (describing efficiency arguments). The specialized courts of the law merchant often are cited as the predecessors to common law rules. See I. Trotter Hardy, The Proper Legal Regime for “Cyberspace,” 55 U. PITT. L. REV. 993, 1019-21 (1994); David R. Johnson & David Post, Law and Borders – The Rise of Law in Cyberspace, 48 STAN. L. REV. 1367, 1387-91 (1996); see also Lisa Bernstein, Merchant Law in a Merchant Court: Rethinking the Code’s Search for Immanent Business Norms, 144 U. PA. L. REV. 1765 (1996). The law merchant courts evolved during the eleventh and twelfth centuries, when clients paid fees to courts. See BRUCE L. BENSON, THE ENTERPRISE OF LAW 60-62 (1990). 41 An alternative view is that the competition in common law was a race-to-the￾bottom, i.e., has led to an inefficient and unfair regime. See infra Part II.B.1. 42 In the debate about common law, it frequently is unclear whether scholars are arguing that common law is efficient in a Pareto sense (i.e., that no party can be made better off without making another party worse off) or in a Kaldor-Hicks sense (i.e., that no party can be made better off by an amount greater than the amount other parties are made worse off). In an environment of high transaction costs, the