ACS Issue Brief

By Frederick Mark Gedicks, Guy Anderson Chair & Professor of Law, Brigham Young University Law School

John Breen, Professor of Law at Loyola University Chicago School of Law recently criticized on the Mirror of Justice blog my ACS Issue Brief defending the Affordable Care Act’s contraception mandate, and several of his points require a response.

1. Professor Breen, like many mandate opponents, refuses to recognize that employers’ free exercise of religion rights are not the only liberties at stake in this conflict. Using the Religious Freedom Restoration Act (RFRA) to exempt employers from the mandate would deny their employees contraceptive coverage without-cost sharing under employer health insurance plans. Employees would be denied this benefit because of religious beliefs they do not share. This is an obvious intrusion on employee liberty in general -- it denies employees covered by an employer health plan their statutory right to no-cost contraception coverage under the ACA -- and an obvious intrusion on their religious liberty in particular -- it imposes the burdens of observing the employer’s religious beliefs on employees who do not share them. The fact that employees would remain free to purchase contraceptives with their own money is no justification for loss of the statutory right to contraceptives without spending their own money.

Professor Breen maintains that no government action is involved when employers are exempted from the mandate -- indeed, that government action is “entirely absent” when an employer decides “to refrain from paying for contraceptives under its health plan.” But an employer may make this decision to violate the mandate, if at all, only because it is permitted to do so (a) by RFRA as (b) applied by a judge. These are both government actions that, in the event, would result in an intrusion on employee liberty.

By Stan Liebowitz, an economics professor at the University of Texas at Dallas

Andrew Popper, in his insightful paper on problems and remedies of software theft, focuses on an aspect of theft that is not often considered. Instead of considering the theft of final consumer goods, he focuses on the theft of intermediate goods used in the production of other goods. The thieves in this case are companies, not individuals, and they produce products using stolen software, giving themselves an advantage over their more honest competitors.

Theft is normally considered harmful to society for several reasons. Most importantly, if theft is allowed to become common, the linkage between effort and reward is weakened for law abiding citizens, thus reducing or eliminating incentives for individuals to provide the efforts to be productive. If the neighborhood thug is capable of taking all the fruits of your labors, you lose an incentive to labor. It is also the case that individuals and governments spend resources trying to reduce theft (so that individuals will have incentives to work) and these are resources that could have been used for other more productive purposes if not for theft.

The economic model of competition provides clear predictions of how competition would work for firms within an industry when this type of theft is permitted. In the short run, the low cost producers (using pirated software) will earn higher profits than the high cost producers. In the longer run, the low cost producers will drive the high cost producers out of business.

Normally, we want more efficient firms to drive out the less efficient firms because that lowers the cost of the product and lowers prices for consumers. There is another, probably more important reason to want the more efficient firms to prevail, although this is often left out of the simplistic economic models of competition. The expectation is that the current lower cost firms are generally the better and more capable firms, and thus as conditions change over time, the fitter firms are likely to better handle these changes. This is the same reason that sports teams try to pick the players with the best statistics — because the expectation is that the players who have been above average will stay above average during their productive careers.