VOLUME 162, ISSUE 5 April 2014

Cyberattacks are inevitable and widespread. Existing scholarship on cyberespionage and cyberwar is undermined by its futile obsession with preventing attacks. This Article draws on research in normal accident theory and complex system design to argue that successful attacks are unavoidable. Cybersecurity must focus on mitigating breaches rather than preventing them. First, this Article analyzes cybersecurity’s market failures and information asymmetries. It argues that these economic and structural factors necessitate greater regulation, particularly given the abject failures of alternative approaches. Second, this Article divides cyberthreats into two categories: known and unknown. To reduce the impact of known threats with identified fixes, the federal government should combine funding and legal mandates to push firms to redesign their computer systems. Redesign should follow two principles: disaggregation—dispersing data across many locations—and heterogeneity—running those disaggregated components on variegated software and hardware. For unknown threats—“zero-day attacks”—regulation should seek to increase the government’s access to markets for these exploits. Regulation cannot exorcise the ghost in the network, but it can contain the damage it causes.

It has been over a hundred years since George Bernard Shaw wrote that “[a]ll professions are a conspiracy against the laity.” Since then, the number of occupations and the percentage of workers subject to occupational licensing have exploded; nearly one-third of the U.S. workforce is now licensed, up from five percent in the 1950s. Through occupational licensing boards, states endow cosmetologists, veterinary doctors, medical doctors, and florists with the authority to decide who may practice their art. It cannot surprise when licensing boards comprised of competitors regulate in ways designed to raise their profits. The result for consumers is higher prices and less choice, as licensing raises wages by eighteen percent and bars competition from unlicensed workers. For African-style hair braiders, the result is either an illicit business or thousands of hours of irrelevant training imposed by a cosmetology board. For lawyers, the result is less competition from tax accountants, paralegals, and out-of-state lawyers.

The Sherman Act’s great accomplishment has been to make cartels per se illegal and relatively scarce—unless the cartel is managed by a professional licensing board. Most jurisdictions consider such boards, as state creations, exempt from antitrust scrutiny by the state action doctrine, leaving would-be competitors and consumers no recourse against their cartel-like activity.

We contend that the state action doctrine should not prevent antitrust suits against state licensing boards that are comprised of private competitors deputized to regulate and to outright exclude their own competition, often with the threat of criminal sanction. At most, state action should immunize licensing boards from the per se rule and require plaintiffs to prove their cases under the rule of reason. We argue that the Fourth Circuit’s recent decision, soon to be reviewed by the Supreme Court, to uphold a Federal Trade Commission (FTC) antitrust suit against a licensing board—denying state action immunity to a licensing board and thereby creating a circuit split—was a step in the right direction but did not go far enough. The Supreme Court should take the split as an opportunity to clarify that when competitors hold the reins to their own competition, they must answer to Senator Sherman.

What good is Article V? The Constitution’s amendment rule renders the text inflexible, countermajoritarian, and insensitive to important contemporary constituencies. Comparative empirical studies, moreover, show that textual rigidity is not only rare in other countries’ organic documents, but also highly correlated with constitutional failure. To promote our Constitution’s survival and to counteract Article V’s “dead hand” effect, commentators argue, Americans have turned to informal amendment through the courts or “super” statutes. Article V, the conventional wisdom goes, is a dead letter.

Against this pervasive skepticism, I propose instead that Article V may have played an important but hitherto unrecognized function in the early Republic. I hypothesize that Article V may have mitigated a “hold-up” dilemma that could have precluded the Constitution’s ratification and undermined its stability in the early Republic era. By hindering strategic deployment of textual amendment, Article V–induced rigidity fostered a virtuous circle of investment in new institutions, such as political parties and financial infrastructure. Identification of Article V’s potential role in the early Republic leads to a more nuanced view of the Constitution’s amendatory regime. In effect, it raises the possibility that we have a two-speed Constitution—with Article V–induced rigidity at the inception, supplemented gradually over time by informal judicial or statutory amendment protocols.