Sufficiency of the Materials
Overall, the course was helpful. I took Barbri’s mobile course, which allowed me to watch videos and study from home. Because California is a large national market of bar applicants looking for assistance in preparation for the exam, most of the substantive lectures were very good. The multistate bar examination (MBE) preparatory materials (the MBE is the 200-question multiple choice test that 48 jurisdictions use on the Wednesday of bar exam week) were helpful, because they escalated in difficulty and idiosyncrasy over time. I found Richard Sakai’s pragmatic lectures about how to take the essays generally helpful and Peter Jan Honigsberg’s lectures about the California Performance Test also to be very encouraging and helpful.

That said, the price of the program is too high for the material that is provided. Barbri certainly provides a significant—almost overwhelming—amount of material to the applicant. To its credit, Barbri makes no assumptions about what the average test taker needs and provides the full gamut of preparatory material so that each student has all the material any applicant might need to study. While I rarely looked at the complete subject matter outlines (instead using the lecture notes or the mini-review), the full outlines allow people who are completely unfamiliar with a subject to study them and feel satisfied they won’t need to do research elsewhere to understand the subject. There were more than enough past essays with model answers to practice and more than enough past performance tests with their own model answers to analyze. The sets of MBE questions were comprehensive.

Value
The irony is that because California is a national market for bar review (i.e., many applicants from all over the country take the test twice a year), the costs Barbri has in producing the materials and paying for the lectures must be subject to economies of scale, particularly when the legal material doesn’t change much from year to year. On one hand, I wonder if the inherent value* of the material is much less than the $4000 price tag of the program. To some extent, the cost of materials plus reasonably moderate double-digit profit** cannot possibly equal $4000. Some of the extra margin is driven by demand for Barbri’s goodwill. That it has been in business for thirty years and that lawyers (or would-be lawyers) are more predisposed to risk avoidance means that law students are routinely more likely to go with the dominant service provider in the market (the apparent tautology that more consumers choose the dominant vendor notwithstanding).

Moreover—and I think it was Sakai or Honigsberg that implied as much in one of their lectures—California graders have come to expect that essays and performance tests have the formats that Barbri recommends applicants use, simply because (a) so many Barbri students establish a modal “average” for what a 60- or 65-mean scored essay should look like; and (b) many graders themselves used Barbri to prepare for the California Bar Exam when they took it. Thus, Barbri has established a quasi-virtuous cycle with the California bar exam graders and its own students. Students take Barbri because it can claim a higher-than-average pass rate for the California Bar Exam. Some of that incremental difference is likely driven by the fact that graders subconsciously expect essays on the whole to look like Barbri recommends, potentially leading to more satisfactory scores for Barbri students.

Thus, the profit margins that California Barbri students pay are attributable both to its historical presence (goodwill) in the market and a virtuous cycle.

I wonder—at least for self-motivated home studiers—whether it would be less costly and equally as effective to get hold of written California Barbri essay materials in the secondary market (thanks to the First Sale Doctrine***, eBay, and Amazon) and simply practice writing essays that look similar to Barbri essays. On the other hand, if one is simply just perusing the Barbri materials without paying for the service, it is arguably more worthwhile simply to look at the selected answers California releases with past exams for a more direct understanding of what graders are looking for.

Undoubtedly, part of the value Barbri provides is in the feedback loop it provides for its students. Barbri, because of its size and customer base, can scale MBE practice question scores relative to other Barbri students, which provides—assuming its MBE questions on average represent the MBE questions created by the National Conference of Bar Examiners—an effective sample size for low-error rate comparison between other California test takers and a good guess at what a student’s MBE score will look like.

The Other Part of the Feedback Loop:
Essay Grading
Barbri also grades its students’ essays. This is the most value-lacking part of the course. I’ve heard from Barbri students in other jurisdictions that the essay grading in those places is helpful and a fairly accurate representation of the grading that will be done by actual bar examiners.

Not so in California. Barbri graders routinely grade practice essays with an élan for doom. The scores students receive are typically very low, particularly at the beginning of the course, and sometimes at the end. No one really knows why but a consensus is that that Barbri is attempting to bootcamp its students into realizing that the California graders will not treat graciously a poorly written essay. On one hand, that could be commendable tough love. For me, it was nerve-racking and unhelpful. At first, when I received an excessively low grade from Barbri, I crusaded to shore my bar exam essay writing skills up. And then when more low scores were returned to me, I became discouraged. It wasn’t until I read about students literally copying model answers word for word, submitting them as experiments, and still receiving failing grades, that I realized that Barbri was intentionally deflating scores to impel its students to work harder.

At one point, I received a 45 on an essay. I had made some mistakes, but nothing seemingly major. When I compared my essay to the grading rubric, I realized the grading system was a farce. A Barbri 45 indicates that the essay had not identified one major issue. In fact, in my essay, I had identified all but one minor issue. The grading was self-referentially incoherent as compared to the standards.

I do not doubt that for some students, the Stick can be a very motivating incentive to try harder and do better as opposed to the Carrot. For me—as I am already a self-motivated, self-starting student—it was simply discouraging. All I wanted was honest feedback. If an essay truly deserved a 45, then I wanted to hear it. At one point, I wrote an essay that I thought was akin to a 75, and I think I received a 65. At that point, my disagreement with Barbri would have been debatable, if not pointless. 65 is a passing grade for an essay on the California Bar Exam, and if in real life the essay was actually a 75, then telling me I received a 65 might have been marginally helpful to keep me from complacency without harming my own developing self-heuristic for what way of writing would help me pass a real essay question.

But when Barbri’s eagerness to keep its students from prosaic complacency leads them to fail practice essays by a wide margin when the essay may have been borderline or even a fair pass, Barbri loses its effectiveness as a preparatory tool. This also doesn’t comport with Barbri’s goodnatured cheerleading and its continual reminders that we should prepare enough, but just enough, to pass. It was difficult for me to simply aim for a barely passing grade but, my own fastidiousness for excellence aside, the fact that Barbri was proclaiming we should do “just enough” as contrasted to its graders failing essays that were objectively just good enough to pass, reduced the utility, consistency, and clarity of the process overall.

Conclusion
We find out in eight days whether those of us who took the July 2011 California Bar Examination passed. I wanted to write my thoughts about the Barbri process before I found out, so that my opinion would not be colored by whether I passed the exam. That said, if I am honest with myself, good news next Friday will probably wash away the bad aftertaste in my mouth left by Barbri’s wonky practice essay grading system.

Overall, I found the program effective—maybe not perfectly tuned to the California Bar Exam like some of the smaller boutique tutoring programs in California may be—but sufficient. I still question whether the price tag is worth it. I certainly think $2000 would be an outstanding value. At $4000, students enter the realm of prices for private tutoring ($5000+), and I wonder if paying another $1000 would have made for a better, more productive, or more effective experience overall. Barbri should lower its prices, but it still seemed to provide a relatively good, though not perfect, value.

Footnotes
* Whatever this means. Value is always best calculated by what a willing buyer pays a willing seller. Thus, I don’t believe the $4000 price comprises just the value of the books and lectures, but also includes a host of intangibles. See supra.

** I do not begrudge high profits and do not really believe in the notion of “reasonable” profits as some sort of moral limiting factor on profit—that doesn’t mean I want (as a self-interested actor) to pay more than some arbitrarily low percentage of profit, even though I may still choose to do so anyway. Obviously there are comparative reverse inequalities of value at work. Such is the nature of free-market demand.

*** No doubt Barbri and zealous IP attorneys would argue the First Sale Doctrine does not apply to a set of “leased” books, but the designation of the books as under a lease is arguable, especially given the fact that there is an inherent liquidated damages provision in the Barbri agreement in case one does not return the books, stipulating he loses his book deposit. This, among other factors, makes the part of the transaction having to do with the written books look like a sale.

Full disclosure: I returned my California Barbri materials to Barbri per the face of my agreement with Barbri and received the deposit back.

The so-called “public” and its grand protector, the SEC, have no morally sufficient argument to demand that a person, even a CEO, explain to them that he is receiving a transplant.  It is a complex, extremely frightening, private affair.

An argument for materiality undercuts our cultural notions of privacy.  Jobs did the right thing by stepping down as CEO for the time he was waiting for and receiving the transplant.  The market correctly priced the uncertainty of his return at that point, and the discussion should end there.

Investors who cry out “Materiality!  Materiality!” are just upset they didn’t have the chance to put or call the stock more lucratively.  Get over it.

First Reason: Perversion of Incentive
Communism and socialism do not just hope for, but rely on the good of mankind in aggregate to work. In fact, apropos to a previous discussion, all political purveyors of socialism/communism are selling hope and the value received is far less than the value paid out by the buyer. Believing in the current goodness of mankind, or rather in the goodness of every individual such as to expect that he will act in the best interest of others is rank madness. Socialism wrecks the ability for people to appropriately measure value for themselves by robbing them of incentive. When the fruits of labor are taken from a person in order to redistribute them in aggregate to everyone else, including him, he resents the theft of his labor but also comes to reliance upon the redistribution.

Jamestown and Plymouth
In Thomas J. DiLorenzo’s book, How Capitalism Saved America, he recounts the story of two early colonies in America, Jamestown and Plymouth. In both, the settlers were required to function in socialism; private property was not allowed and the settlers were required to toil for the “common good.” Within six months of the founding of Jamestown,

all but 38 of the original 104 settlers were dead, most having succumbed to famine. Two years later, the Virginia Company sent 500 more ‘recruits’ to settle in Virginia and within six months, a staggering 440 more were dead by starvation and disease.

He also recounts an example: if 1 out of 20 people refuses to work but can take as needed from the “common wealth,” he will still be able to maintain 95% of his “income” on average while 19 out of 20 people do their jobs. Once too many people realize they can game the system and do less work for more food at the expense of their fellow man, the system fails, and starvation ensues.

Thankfully, in 1611, a governor traveled to America and realized that the incentive structure for the English colonists was the culprit for the previous death and failure. He instituted private property with a small tax on the fruits of their labors. The people could (only) realize the full fruits of their own labor, and the colony began to thrive, because everyone, self-servingly, worked as much as they needed and desired.

Nature’s stochasticity is a far more potent motivator than government’s contrivances.

Socialism cannot possibly work, because it is axiomatically flawed on the notions that people should be selfless and government is the correct actor to ensure selflessness. Thus, in order to effectuate the schemes of the noble cause of “from each according to his ability, to each according to his need,” violent force is justified as a necessity to make men noble. This brings us to the second fatal flaw: socialism relies on force to make it work. By definition, because humans are amoral in aggregate, force is required to effectuate wealth transfer, because rational actors, on the whole, do not voluntarily give away money without value in return.

The Legal Tangent
In fact, our Anglo-Saxon legal system, particularly in the Law of Contracts, at a fundamental level (modulo all the reforms of the modern era), reflects an innate belief that individuals should receive value for value exchanged. The doctrine of consideration, quid pro quo, a bargained-for exchange of something received for something given, mandates that for a contract to be enforceable, it must have the element of consideration. Courts do not like to weigh the relative values of the “something given” for the “something received” because value is entirely relative to the circumstances of individuals in their own situations, and judges do not usually believe their purview is to monitor or value private contracts. An iPhone may be worth $600 to an early adopter, but only $300 to a later adopter or not worth any expense to someone who does not want one. If there is no consideration, the promise is often viewed as a gift, which is always legally revocable unless the promisee reasonably relied on the promise.

Inherent in the doctrine of consideration is that there must be an exchanged that was bargained for. Bargaining, as a legal term of art, does not mean wrangling, dickering or heavy negotiation is required. What it means is that there is an intention of both parties to exchange things of legal value to which both parties assent. By contrast, a contract forced upon one person by another, i.e., using duress, is voidable by the coerced party later.  Why? Because there was no bargaining. There was an exchange, and it might even be of relatively legal value, but the mere act of force makes the contract voidable by the party who was wronged by the lack of free will. It is not usually discussed in this manner, but duress is really the antithesis of consideration.

Second Reason: Socialism is Violence
Force, of course, is a form of duress, and though the United States now has a long history of employing force to get what it wants from its constituents and other peoples (starting, really, with Alexander Hamilton’s policies of excessive and overwhelming national power), the augmentation of the use of force to transfer wealth is still total anathema to our natural law notions in Anglo-Saxon society of what a fair and right contract is. We should all recognize that force to take wealth away from another person, while justified at a governmental level, is still theft on an individual level. So, while socialism might be noble in its thrust to ensure the welfare of other people, it is pragmatically reliant on the evil of violence to make it work.

Contrast the doctrine of consideration, required in Anglo-Saxon legal systems, with contract laws in civil countries, which do not necessarily recognize the need for consideration. It is not surprising, therefore, that in cultures without a long history honoring the notion of bargain to ensure the satisfaction of parties exchanging value, communism and socialism took root faster, even with our early forays into forced socialism. See Jamestown, supra. Because these political theories are fundamentally based on oppressive force–in contrast to force being used in the name of liberty here, even though liberty does not require it–the doctrine of consideration as an innate part of our culture has been a silent bulwark to such force. Unfortunately, the Pacific and Atlantic oceans seem to not be wide enough . . .

Ironically, the Jamestown/Plymouth colonies are poignant examples from our own history of why a modern socialist government relies on force to effect an economy. The perversion of incentives leading to low production are evident to even the most mindless pro-government drone, which is why modern governments employ force to ensure the “health” of the socialist state.

Of course, labor at gunpoint does not comprise a worthwhile society; it is a Prison.

Vitiating the Counterexample
Naive proponents of socialism correctly point out that the apostolic community of believers in Yeshua (“Jesus”) was the first successful manifestation of communism. I suppose the inherent argument is that if it was good enough for Jesus . . .

The surprisingly overlooked flaw in this counterexample is that the association of believers was entirely voluntary, because at no time did Yeshua command his followers to preach the good news to convert by force. I believe it is a hallmark of Good for people to voluntarily associate and combine their assets and incomes in a manner to synergetically benefit one another. But it is the voluntariness (the “cheerfulness” in scriptural semantics) that makes it noble and good, not the sharing by itself.

Let each one give as he purposes in his heart, not of grief [grudgingly] or of necessity [compulsion], for Elohim loves a joyous [cheerful] giver.

2d Corinthians 9:7 (The Scriptures, Inst. for Scripture Research 1998)

Third Reason: The Corollary of Correct Valuation
Correct valuation of labor in the form of goods and services can only be appropriately calculated by the parties to their own contract. This is definitely a corollary to the observation that incentives remain healthy when individuals have control over their own labor. Only you know what you really need. Only I know what I really need. If we are friends, we may be able to effectively negotiate on behalf of one another and trade for value in a way that satisfies the other person. Of course, we run the risk of not doing so. Why? It is as simple as the fact that we cannot read one another’s minds and perfectly understand one another’s goals.

Multiply that by the billions of transactions that occur daily. Is it even fathomable that a central planner (especially a bureaucratic committee prone to inaction and inefficiency, detached from the reality of life and the harshness of nature) can correctly value the effectuate transactions between hundreds of millions of people? No, such a proposition is patently absurd.

The market is not a controllable system: it is simply the sum-greater-that-its-parts of all value exchanges between the actors in a population. It is more organic than technical, and it is only predictable on an individual level where we can spend time imperfectly analyzing how actors might negotiate and trade value. If you know all about me, you, again, can probably predict how I would want to transact business and for how much money. Of course, that requires time, patience and astute observation to get it right.

Thought Experiment
Let’s assume a central planning committee has the resources to observe each person constantly and to get to a point where it can accurately predict the appropriate value exchange for each person. Let’s assume this observational analysis only takes one minute one time for each person in the country. Let’s also assume each person enters into five transactions daily. For 327,000,000 people, it would require 3,111 man-years to accomplish the analysis to ensure the central planner could have the information necessary to direct the economy. The assumptions for the experiment are prima facie conservative in favor of the theory socialism, of course, and the result is, nonetheless, literally incredible.

One alternative is that the central planning committee simply fails to do what it believes its job is. It is doomed to failure, because “getting it right,” i.e., ensuring maximum wealth in a centrally controlled manner for each person, is impossible. Because no one appropriately small subset of people can correctly evaluate economic incentives for hundreds of millions of people, the wealth transfer is guaranteed to be lopsided and ineffectual. The plight of the Soviet, Chinese, Cuban and several southeast Asian peoples from the twentieth century are evidence of this.

Conclusion
Socialism promotes misery, starvation, violence and murder. The worst that can be said for capitalism is that it allows for poverty due to nature and poverty due to laziness, both of which decrease over time in a free market. All examples of non-voluntary socialism in their stated quest to eliminate poverty only increase it.

The true alternative is that we can simply allow for each person to transact for himself freely. Liberty is the hallmark of a workable economic system. As flawed as capitalism is for relying on man’s self-centered nature, it is paradoxically this reason that makes capitalism pragmatically perfect.

The Market Analysis
Charles Revson of Revlon stated, “In the factory we make cosmetics, in the store we sell hope.”  See endnote α.

Clearly, as in other industries, a primary thrust of the business owner in the wedding industry is to sell hope to the couple.  This sentiment of salespeople everywhere is particularly powerful in industries where hope has been interwoven with tradition over centuries.  Specifically, what the couple hopes for on their wedding day is often preconceived, because traditions surrounding marriage are so old that they have become standards nearly unquestionable to the conscious mind.  A couple’s hope, therefore, is often a manifestation of the desire that those particular traditions will be fulfilled in a perfect way.  For example, how often does the bride in our culture want beforehand to wear blue jeans and a blouse?  Not only is she looking for a white wedding dress (the tradition), she aspires to find the perfect, most fitting, unique white dress which will cause all of her loved ones to awe in her beauty for the day (the hope).

Moreover, because marriage is so important and fundamental to the health of a family, which is the atomic unit of society, the couple already has a built-in hope that the wedding and celebration will be excellent as a predicate for an excellent marriage.  This is not necessarily a good proxy, but the hope is potent, because the wedding and celebration are precisely meant to be metaphors for the marriage itself.

With such hope already present as couples shop for services to plan their weddings, it does not take much to convince them of the high value of the enterprise of the wedding day.  Further, it takes only a little bit more to convince the couple that this high value is appropriately represented by the seller’s high prices.  Candidly, there is nothing wrong if both parties believe their contract represents a correct valuation to both of them.  But, hope certainly commands a premium on the services if not for the services themselves, because hope is a primary predicate for demand.

Another way to summarize this is to think of wedding planning as event planning for the most important life event that most people go through.  Because of the importance the buyers attach to the event, the seller commands a premium in exchange for the implicit (sometimes explicit) consideration that the wedding vendor will provide services and products with the utmost standard of care and high orienation to detail.  The catering will be ordered, accommodating to all food-allergies and quiet.  The flowers will be a certain species of Bird of Paradise and appropriate filler flowers of complementary color.  So on and so forth.

From the seller’s perspective, while some of the value is demand (hope) driven, some of the value is also a premium for the compensation of risk inherent in the hope.  If something goes wrong, there could be hell to pay to the couple, but if everything goes right the worrying about everything going right and the extra labor required to ensure a successful event requires such a premium.

Of course, we also tend to highly value beauty, design and prospect (“the view” of the mountains or ocean, etc).  Wedding venues, in order to serve as an appropriate metaphor for the aspirations of the couple and the couple’s loved ones about their marriage, often incorporate exquisite views or thoughtfully designed beauty.  If not, given the hope couples usually have for the representational effects of their wedding, they may be choosing a venue for convenience, which can also command a higher premium.  In fact, this premium is exacerbated or increased (vis-a-vis buyer or seller), especially because real property, land, is unique and not fungible (one thing of the same type is as good as another).  A ton of scrap metal is the same as another ton of scrap metal.  A wedding venue is not the same as any other.

Moreover, the market pricing signals for wedding planning are not as smooth and predictable as for other services or commodities.  People do not get married often enough to be able to iteratively judge value.  The lack of the number of signficant digits in pricing is indicative of this.  A venue might cost $5,000 (or the moral equivalent, $4,999), but were demand in society more pervasive and frequent, the market might make the pricing much more precise, e.g., $3,826.23.  Here, the risk the vendor is requiring for lack of pricing signals is $5,000 – $3,826.23.  More complexly, wedding vendors actually still do have more signals available to them (many customers constantly) than the buyer has (pricing from only several competing vendors one or a few times in her life), which means they will be able to extract a premium for buyer ignorance as well.  Of course, little of this is usually conscious to the seller or buyer, but is reflected in normal principles of human action, because pricing is often done intuitively until there are many many more pricing signals with which buyers and sellers interpolate.

The “racket”, thus, is the buyer’s  indignation arising from their intuitions that the vendors are extracting a premium based on their hope and ignorance.  Buyers usually concede to the rationality of premium-for-risk, which is why high cancellation penalties are usually not argued.  But, because the hope the buyer-couple has with respect to their marriage translates into expectations about their wedding, they easily conflate the two and can irrationally but intuitively respond to the seller’s premiums as profiting on their marriage.  No, the seller is rightfully profiting from the wedding, but it is so easy to mix the two up that it frustrates many couples looking to wed within a budget.

The market is amoral, but at least in a theoretically free market, the buyers have the choice to walk away from the deal before the contract is signed if they feel the value is asymmetric.  And with respect to the market only (as opposed to other non-economic considerations about weddings in the next upcoming post), frustration with pricing is an asymmetric internalization of value.  The buyer can be frustrated, “You want me to pay $35,000 for 40 seats in a boat house?  No.” and the seller can be frustrated, “You want me to provide my oceanview beachside mansion in Monterey for $500?  No.”  In both cases, the frustration is legitimate with respect to the individuals who are negotiating, because they perceive the value received does not equate to the value given in consideration.

Thought experiment: Couple finds the perfect wedding venue for $20,000 but only wants to spend $5,000. They may express frustration at the pricing for a value they just don’t perceive and chalk it up to the wedding racket.  Conversely, let’s say the couple’s demand-pricing is really elastic, and they are willing to pay $20,000 for a venue the vendor knows is usually worth $5,000.  He’ll be thrilled!  On the other hand, if Couple finds the perfect wedding venue but because of very low demand might be able to get it for $1,000 where its previous going rate was $20,000, the seller might resent the fact that they are “getting a steal while the same Couple in the first instance will stop complaining about “the wedding racket” and take the deal.

In a free market, again amoral (and justly so), resentments and thrills are always based on asymmetries of perceived value exacerbated by the underlying or circumstantial hopes that the buyers and sellers bring to the table.

α Stephen M. Feldman, Free Expression and Democracy in America 299 (U. Chi. Press 2008).