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Generativity provides a measure of the degree to which a system is open to innovation not necessarily contemplated or understood when the system was created or emerged. In economic analysis, generativity can be distinguished from efficiency as sometimes conflicting goals related to the factors leading to prosperity and growth. The property of generativity in our legal institutions is an important one for increasing the rate of productive innovation, and our laws should be designed with this principle in mind. Generativity does come with potential dangers. Protecting against those dangers, as well as fostering other social goals, will require balancing the institutional factors which promote generativity against those that mitigate risk of harm or that promote social cohesion. Exploring some of the considerations that might weigh in that balancing exercise can inform the debates that swirl around questions of regulation and freedom in our economic life.

We show that the fundamental legal structure of a well-written financial contract follows a state transition logic that can be formalized mathematically as a finite-state machine (also known as a finite state automaton). The automaton defines the states that a financial relationship can be in, such as “default,” “delinquency,” “performing,” etc., and it defines an “alphabet” of events that can trigger state transitions, such as “payment arrives,” “due date passes,” etc. The core of a contract describes the rules by which different sequences of event arrivals trigger particular sequences of state transitions in the relationship between the counter parties. By conceptualizing and representing the legal structure of a contract in this way, we expose it to a range of powerful tools and results from the theory of computation. These allow, for example, automated reasoning to determine whether a contract is internally coherent and whether it is complete relative to a particular event alphabet. We illustrate the process by representing a simple loan agreement as an automaton.

As cloud computing becomes ubiquitous, the need to fashion better and more finely targeted rules for the cloud takes on increasing urgency. Governance at its best is not an abstraction; rather, it is a set of institutional structures that help people to achieve better outcomes than would occur in a world of unconstrained, self-interested decision making. The rules in contracts, through associations, and by governments can each play a role in creating beneficial governance, provided they are crafted to effectively meet the challenges and characteristics of the activity in question. This paper - still a work in process - explores a number of factors that rule makers should take into account in crafting such a suite of laws and customs. These factors include the structure and history of cloud computing, the ways in which it creates, captures and allocates values, the fundamental challenges of trust for the industry, and the toolkit of private and public rule making that can create structures to help cloud computing reach is potential for providing and distributing benefits. As recent revelations of government surveillance underline, policy-making efforts for cloud computing are rendered particularly complicated by the shifting pattern of convergence and divergence of interests among users, providers, and governments.

Legal practice and legal education are both at challenging inflection points, where much of how and what we do as lawyers and how and what we have taught as legal educators comes under scrutiny. Legal technology is an important factor in driving the challenges we face. As we reform our curriculums in this moment of change, we should be guided by considerations of value added, values added, and economic sustainability. Law and technology is an area that is ripe for expansion in our teaching, with the possibility of satisfying all of these criteria. It also provides ample room for scholarly examination. Creating opportunities for learning how technology is shaping legal practice should be a priority for any school looking to provide a useful education for the lawyers of the present, let alone the future.

Despite recent innovations in entrepreneurial finance, particularly at the early stage of business creation, many new and young companies continue to face hurdles to acquire capital.The Kauffman Foundation addressed current challenges and opportunities in financing entrepreneurial growth, a key driver of job creation and economic expansion, at its fourth annual State of Entrepreneurship Address on February 5, 2013. The event featured remarks from Small Business Administrator Karen Mills, U.S. Senator Jerry Moran and Kauffman President and CEO Tom McDonnell.In his address at the National Press Club in Washington, McDonnell offered policy recommendations to increase financing of entrepreneurial ventures that are featured in a paper on the same topic. Key recommendations include: Crowdfunding: The Securities and Exchange Commission should approve rules under the JOBS Act that encourage experimentation without excessive regulation; IPOs: Greater use of auctions, such as the Dutch auction used by Google, rather than the more common practice of setting a specific price for new stock offerings; Bank Debt: Introduce more flexibility into the regulatory process – such as providing the Federal Reserve, Comptroller of the Currency and Federal Deposit Insurance Corporation the authority to make judgment calls at the local level; Regulation: Allow shareholders of companies the right to vote whether Sarbanes-Oxley accounting rules are necessary; Venture Capital: Create longer-term venture funds that include significant "skin-in-the-game" investment from General Partners, so their interests are aligned with Limited Partner investors over a reasonable time horizon.

The United States economy is struggling to recover from its worst economic downturn since the Great Depression. After several huge doses of conventional macroeconomic stimulus - deficit-spending and monetary stimulus - policymakers are understandably eager to find innovative no-cost ways of sustaining growth both in the short and long runs. In response to this challenge, the Kauffman Foundation convened a number of America’s leading legal scholars and social scientists during the summer of 2010 to present and discuss their ideas for changing legal rules and policies to promote innovation and accelerate U.S. economic growth. This meeting led to the publication of Rules for Growth: Promoting Innovation and Growth Through Legal Reform, a comprehensive and groundbreaking volume of essays prescribing a new set of growth-promoting policies for policymakers, legal scholars, economists, and business men and women. Some of the top Rules include: • Reforming U.S. immigration laws so that more high-skilled immigrants can launch businesses in the United States. • Improving university technology licensing practices so university-generated innovation is more quickly and efficiently commercialized. • Moving away from taxes on income that penalize risk-taking, innovation, and employment while shifting toward a more consumption-based tax system that encourages saving that funds investment. In addition, the research tax credit should be redesigned and made permanent. • Overhauling local zoning rules to facilitate the formation of innovative companies. • Urging judges to take a more expansive view of flexible business contracts that are increasingly used by innovative firms. • Urging antitrust enforcers and courts to define markets more in global terms to reflect contemporary realities, resist antitrust enforcement from countries with less sound antitrust regimes, and prohibit industry trade protection and subsidies. • Reforming the intellectual property system to allow for a post-grant opposition process and address the large patent application backlog by allowing applicants to pay for more rapid patent reviews. • Authorizing corporate entities to form digitally and use software as a means for setting out agreements and bylaws governing corporate activities. The collective essays in the book propose a new way of thinking about the legal system that should be of interest to policymakers and academic scholars alike. Moreover, the ideas presented here, if embodied in law, would augment a sustained increase in U.S. economic growth, improving living standards for U.S. residents and for many in the rest of the world.

This paper has four goals. The first is to provide an overview of the emerging sub-discipline of “Neurolaw.” Incorporating the insights of neuroscience into legal analysis and policy-setting is a rapidly expanding enterprise. The second goal is to focus on game theory and mechanism design, which provide useful analytic starting points for applying cognitive neuroscience in a social context. This leads to the third goal. This paper suggests that the formal structures of the mechanisms of sociality may be represented in the structures of the cognitive processes which implement them. I do not mean to suggest that there is a simple and direct homology between such mechanisms and any particular physical structures within the brain. It is widely recognized, however, that the brain is a computational device, and the brain processes which carry out a particular type of computation will necessarily reflect the requirements of the computation being made. Finally, the paper suggests an application of this mechanism-based approach to a particular instance: understanding the nature of human moral commitment.