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Measuring Business
Interruption Losses and
Other Commercial Damages:
an Economic Approach
I wish to thank Sheck Cho, my editor at John Wiley & Sons, for all of his
support over the years.
Measuring Business
Interruption Losses and
Other Commercial Damages:
an Economic Approach
Third Edition
PATRICK A. GAUGHAN
This edition first published 2020
© 2020 John Wiley & Sons, Inc.
All rights reserved. No part of this publication may be reproduced, stored in a

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10 9 8 7 6 5 4 3 2 1
Contents
CHAPTER 1 Introduction 1
Development of the Field of Litigation Economics 2
Development of the Field of Forensic Accounting 3
Qualifications of an Economic Expert 5
Qualifications of an Accounting Expert on Damages 8
Interdisciplinary Nature of Commercial Damages
Analysis 8
Difference Between Disciplines of Economics
and Finance 10
Finding a Damages Expert 11
Critically Reviewing a Potential Expert’s Curriculum
Vitae 12
Getting the Damages Expert on Board Early Enough 18
Courts’ Position on Experts on Economic Damages 19
Standards for Admissibility of Expert Testimony 21
Exclusion of Experts 25
Trends in Daubert Challenges to Financial Experts 25
Expert Reports 28
Defense Expert as a Testifying Expert, Not Just
a Consultant 33
Quantitative Research Evidence on the Benefits
of Calling a Defense Expert 35
Treatment of the Relevant Case Law 36
Legal Damage Principles 36
Other Types of Damages Cases 42
Summary 46
References 46
v
viContents
CHAPTER 2 Economic Framework for the Lost Profits

Estimation Process 51
Foundation for Damages Testimony 51
Role of Assumptions in Damages Analysis 52
Hearsay 53
Approaches to Proving Damages 55
Causality and Damages 59
Using Demonstrative Evidence to Help the Client
Understand Its Losses or Lack of Losses 67
Causality and Loss of Customers 68
Graphical Sales Analysis and Causality 69
Causality and the Special Case of Damages Resulting
from Adverse Publicity 71
Length of Loss Period: Business Interruption Case 72
Length of Loss Period: Plaintiff Goes Out of Business 77
Length of Loss Period: Breach of Contract 78
Methodological Framework 79
Summary 82
References 83
CHAPTER 3 Economic Analysis in Business Interruption

Loss Analysis 85
Economic Fluctuations and the Volume of Litigation 85
Macroeconomic Analysis 86
Definition of a Recession 86
Measuring Economic Growth and Performance 87
Business Cycles and the Movement of GDP Components 90
Business Cycles and Economic Damages 95
Varying Responses to Business Cycles Across Industries 97
Using More Narrowly Defined Economic Aggregates 99
Quantifying the Strength of the Relationship Between
Selected Economic Aggregates and Firm Performance 101
Implementing Inflationary Adjustments 104
Regional Economic Trends 108
Quality and Timeliness of Regional Economic Data 109
International Economic Analysis 111
Globalization of Supply and Demand 113
Summary 115
References 116
Contents vii
CHAPTER 4 Industry Analysis 119

Sources of Industry Data 119
North American Industry Classification System 125
Retaining an Industry Expert 132
Conducting an Industry Analysis 133
Relating Industry Growth to the Plaintiff’s Growth 136
Other Industry Factors 138
Yardstick Approach and Industry Analysis 141
Summary 144
References 145
CHAPTER 5 Projecting Lost Revenues 147

Projections Versus Forecasts: Economic Versus
Accounting Terminology 147
Using Graphical Analysis as an Aid in the Forecasting
Process 148
Methods of Projecting Lost Revenues 153
Curve‐Fitting Methods and Econometric Models 158
Understanding Regression Output and Diagnostics 161
Common Problems Affecting Regression Models 162
Confidence in Forecasted Values 167
Frequency of the Use of Econometric Techniques
in Commercial Litigation 169
Seasonality and the Forecasting Process 177
Capacity Constraints and Forecasts 179
Sensibility Check for the Forecasted Values 180
Projecting Lost Sales for a New Business 181
Projecting Losses for an Unestablished Business 186
Summary 188
Appendix 189
References 197
CHAPTER 6 Cost Analysis and Profitability 199

Presentation of Costs on the Company’s Financial
Statements 200
Measures of Costs 201
Profit Margins and Profitability 201
Appropriate Measure of Profitability for a Lost
Profits Analysis 202
viiiContents
Burden of Proof for Demonstrating Costs 206

Fixed Versus Variable Costs 207
Using Regression Analysis to Estimate Costs
as Opposed to More Basic Methods 212
Pitfalls of Using Regression Analysis to Measure
Incremental Costs 212
Possible Nonlinear Nature of Total Costs 213
Limitations of Using Unadjusted Accounting Data
for Measuring Incremental Costs 217
Treatment of Overhead Costs 220
Must a Plaintiff Be a Profitable Business to Recover
Damages? 224
Mitigation of Damages 225
Cash Flows Versus Net Income: Effects
on the Discounting Process 230
Recasted Profits 232
Firm‐Specific Financial Analysis 238
Cross‐Sectional Versus Time Series Analysis 240
Summary 240
References 241
CHAPTER 7 Time Value of Money Considerations 245

Determination of Interest Rates 246
Types of Interest Rates 246
Financial Markets: Money Market Versus Capital Market 247
Money Market Securities and Interest Rates 247
Capital Market 249
Real Versus Nominal Interest Rates 250
Determinants of Interest Rates 255
Prejudgment Losses 261
Components of the Cost of Capital 263
Discounting Projected Future Profits 269
Should the Risk‐Free Rate Be Normalized? 272
Common Errors Made in Discounting by Damages
“Experts” 276
Summary 282
References 283
Contents ix
CHAPTER 8 Business Valuations 287

Legal Standard for Business Valuations in Business
Interruption and Business Failure Lawsuits 287
Lost Profits Versus Lost Business Value 290
Business Valuation Framework 292
Public Versus Private Companies 293
Business Valuation Parameters 294
Revenue Ruling 59–60 and Factors to Consider
in Valuation 294
Valuation Concepts 298
Capitalization of Earnings 304
Adjustments and Discounts 308
Summary 314
References 316
CHAPTER 9 Intellectual Property 319

Patents 319
Computation of Damages for Patent Infringement 325
Legal Requirements Necessary to Prove Lost Profits 325
Royalty Arrangements 333
Copyrights 341
Measurement of Damages for Copyright Infringement 344
Trademarks 347
Trade Secrets 352
Summary 355
References 357
CHAPTER 10 Securities‐Related Damages 361

Key Securities Laws 361
Damages in Securities Litigation 366
Fraud‐on‐the‐Market 367
Comparable Index Approach 380
Event Study Approach 383
Examining the Variation in Abnormal Returns 386
Limitations of the Event Study Model 391
Broker Raiding Cases 394
xContents
Merger‐Related Damages 400

History of Mergers in the United States 400
Client‐Broker Claims 405
Churning 407
References 415
CHAPTER 11 Antitrust 419

Antitrust Laws 421
Antitrust Enforcement 423
Economics of Monopoly 425
Interpretation of Antitrust Violations: Structure
Versus Conduct 429
Changing Pattern of Antitrust Enforcement 429
Antitrust and the New Economy 434
Monopolization and Attempts at Monopolization 436
Market Definition and Microeconomic Analysis 440
Market Power 440
Measures of Market Concentration 442
Areeda and Turner’s Marginal Cost Rule
of Predatory Pricing 452
Summary 461
References 462
CHAPTER 12 Economics of Punitive Damages 467

Evolving Position of the U.S. Supreme Court
on Punitive Damages 467
Frequency of Punitive Damages 470
Frequency of Punitive Damages and the Shadow
Effect of Punitive Damages 471
Purposes of Punitive Damages 473
Compensatory Versus Punitive Damages 474
Criminal Penalties and Punitive Damages
in Civil Lawsuits 475
Punishment of Corporations and Corporate
Governance 475
Spillover Effects and Punishment of Corporations 476
Deterrence Theory and the Changing Litigation
Environment 487
Contents xi
Deterrence and Regulatory Processes 490

Typical Financial Measures Used in the Determination
of Punitive Damages 493
Net Worth 494
Market Capitalization 497
Uncertain Litigation Environment 503
Summary 508
References 508
Index 513
CHAPTER 1
Introduction
T his book is designed to provide a methodological framework for how

lost profits should be measured in business interruption litigation. Such
a framework is provided so that a standard approach can be followed in the
measurement of such damages.
In following the discussion, readers will notice the interdisciplinary
nature of commercial damages analysis. Depending on the type of case, the
expert who seeks to measure a plaintiff’s lost profits needs to possess a
well‐rounded knowledge of the research and practices in various areas of
expertise. In some cases, the issues are more limited and defined. Other
cases are complex and require broad areas of expertise. These may include
certain major subfields of economics (macroeconomics, microeconomics,
econometrics, and forensic economics), several subfields of finance (invest
ment analysis, capital market theory, and corporate finance), and account
ing. Given the broad range of expertise that ultimately may be needed and
that few individuals would be experts in all of these fields, a team of experts,
such as economists working with accountants, is often the optimal solution
for complex cases.
While we recognize, and we will elaborate on, that a reliable economic
loss analysis may require expertise of experts from disciplines (such as
economics, finance, and accounting), this edition will endeavour to focus
more on the important economic issues that are relevant to so many different
types of cases.
This book is not meant to present an exhaustive review of all the issues
relevant to commercial damages analysis. Rather, it is meant to discuss those
issues that are the most important and fundamental. It is necessary to bear
in mind, however, that each case brings with it a unique set of factors that
need to be considered on an individual basis. No broad‐based book, such
as this one, can anticipate all of the unique circumstances that may be
Measuring Business Interruption Losses and Other Commercial Damages: an Economic Approach,
Third Edition. Patrick A. Gaughan.
© 2020 John Wiley & Sons, Inc. Published 2020 by John Wiley & Sons, Inc.
1
2 Measuring Business Interruption Losses and Other Commercial Damages
encountered. For this reason, this book focuses on those circumstances that
are most commonly encountered and attempts to present a general damages
evaluation framework capable of handling most of them.
Development of the Field of Litigation Economics

The field of litigation economics, which is sometimes referred to as foren
sic economics, has developed significantly over the past two decades.
During this time period, the National Association of Forensic Economics
(NAFE) was formed. It is a national body of economists who work in the
field of litigation economics and who may provide expert testimony in
court proceedings. The organization is composed primarily of PhD econ
omists, many of whom have academic affiliations. In addition to the advent
of NAFE, two well‐received, refereed (peer‐reviewed) academic journals
devoted to the field of litigation economics have been created. They are
the Journal of Forensic Economics and the Journal of Legal Economics.
These journals have given litigation economics an academic stature similar
to other subdisciplines in the field of economics. In addition to this forum
for respected scholarly work in the area, most of the major meetings and
the leading professional conferences of economists in the United States,
including the annual meetings of the American Economics Association
and various regional associations, now have several sessions, sponsored
by NAFE, devoted exclusively to litigation economics. Such conferences
have allowed an exchange of ideas that has further developed the
methodologies in the field.
At present, the leading use of damages experts, often economists, is in
personal injury and wrongful death litigation. This is not surprising, since
this type of litigation is the most common.1 While there are some similarities
between lost profits analysis and the estimation of damages in personal
injury and wrongful death litigation, there are major differences that cause
them to be two separate fields, often including different groups of practi
tioners. Most economists who do personal injury damages analysis have a
background in labor economics but may not have a background in finance.
Many of these experts are sole practitioners who often have a full‐time aca
demic position. Experts in business interruption matters, however, tend to
be a more diverse group. Some of them work for large firms, including
some public companies. They come from a variety of backgrounds, the
most common of which are accounting, economics, and finance.
1
Lance Bachmier, Patrick Gaughan, and Norman Swanson, “The Volume of Litigation
and the Macroeconomy,” International Review of Law and Economics, 24(2) (2004):
191–207.
Introduction 3
Development of the Field of Forensic Accounting

Forensic accounting has undergone great development and has become a
well‐defined specialization in the accounting profession. Part of this devel
opment was due to the competitive pressures that were placed on tradi
tional accounting work such as auditing and taxation. However, the most
fundamental reason has been the growth in demand for this very special
ized expertise. Some of this development has been focused on the detec
tion of fraud. Other work has been directed toward the development of
standard methodologies for the valuation of businesses. Various organiza
tions have sought to market training and offer certification programs in
these areas.
As noted, economists are often called on to provide testimony on dam
ages in personal injury and wrongful death litigation. These cases utilize a
methodology that does not vary significantly among cases. This methodol
ogy has been well developed in the forensic economics literature.2 In addi
tion, a concise statement of many of the generally accepted steps in the
damages measurement process for personal injury cases has been set forth
in Economic Expert Testimony: A Guide for Judges and Attorneys.3 The meth
odology usually involves projecting lost earnings and fringe benefits (net of
mitigation in personal injury cases) over the work‐life expectancy of the
plaintiff, as well as valuing lost services over a time period that may approach
the life expectancy (or, more accurately, the healthy life expectancy) of the
plaintiff/decedent. The worklife is the generally accepted standard for the
terminal date of lost earnings estimates, while the life expectancy is often
used as a guide to establish the length of the loss period for the valuation
of lost services. (The life expectancy may be reduced to reflect the dimin
ished ability to provide services due to the aging process, and this may be
reflected in the healthy life expectancy.)4 Both the life expectancy and the
worklife expectancy are based on statistical data that establish averages
from demographic and labor market characteristics. This contrasts with lost
profits analysis in which the loss period is usually determined by a different
set of circumstances, such as a time period set forth in a contract. Naturally,
there may be differing interpretations of this contract and what it means
about the length of the loss period.
2
Stanley P. Stephenson, David Macphearson, and Gerald Martin, Determining
Economic Damages, Revision 25 (Costa Mesa, CA: James Publishing, 2016).
3
Thomas Ireland, Stephen M. Horner, and James Rodgers, “Reference Guide for
Valuing Economic Loss in Personal Injury, Wrongful Death and Survival Actions,” in
Economic Expert Testimony: A Guide for Judges and Attorneys (Tucson, AZ: Lawyers
and Judges Publishing, 1998), pp. 1–108.
4
Michael Brookshire and Frank Slesnick, “A 1990 Survey Study of Forensic Economists,”
Journal of Forensic Economists 4(2) (Spring–Summer 1991): 125–149.
In personal injury litigation, the monetary amount that is presented is

often derived from the historical earnings of the plaintiff or decedent. For those
who have not yet had much of an earnings history, lost earnings may be
derived from government statistics, which list earnings as a function of age,
sex, and education. Where appropriate, historical compensation data may
allow the expert to measure the value of fringe benefits. Once the total com
pensation base has been established, the expert constructs a projection by
selecting a proper growth rate. The projected values are then brought to
present‐day value terms through the application of an appropriate discount rate.
In employment litigation, the expert may project damages using similar
methods as those employed in personal injury cases. In this type of lawsuit,
the issue may not be losses over a plaintiff’s worklife but may involve losses
over the expected amount of time the plaintiff would have remained at a
given employer. In such cases, the economist may utilize databases and
probabilities that allow him or her to estimate that time period. Sometimes
these probabilities are referred to as “Baum factors.”5
The role of the economist can be expanded when there are claims of bias
or other discriminatory practices. Here, in addition to possibly measuring the
damages of the plaintiff, the economist may be called on to utilize his or her
econometrics background to render an opinion on the liability part of the case.6
Business interruption loss analysis tends to exhibit more variability than
that of those other types of lawsuits. Although some of the evaluation tech
niques used may be similar, the circumstances often vary more widely from
case to case. In addition, the industries involved can be very different and
may each present unique issues. Given this wide variability, business inter
ruption cases often exhibit a greater degree of complexity than the two
types of litigation mentioned previously. They typically involve significant
time demands for the expert who must conduct a thorough analysis. These
time demands often are greater than those associated with a typical per
sonal injury or wrongful death loss analysis, thereby making an expert busi
ness interruption analysis a more expensive proposition for clients.
Another important difference between business interruption analysis and
personal injury or wrongful death loss analysis is the role of cost analysis. The
losses of a worker are typically wages and benefits; job‐related expenses usu
ally are not a significant factor. In business interruption analysis, however,
costs related to lost revenues are generally quite important. It is here that the
skills of an accountant may be most useful in measuring the appropriate costs
that would have been incurred in order to realize certain lost revenues. This
is why we have devoted an entire chapter to cost analysis.
5
Charles L. Baum II, “Employee Tenure and Economic Losses in Wrongful Termination
Cases,” Journal of Forensic Economics, 24(1) (2013): 41–66.
6
Michael Piette, “Economic Methodology and the Analysis of Employment
Discrimination,” Journal of Forensic Economics 4(3) (Fall 1991): 307–316.
Introduction 5
Qualifications of an Economic Expert

It is important that the business interruption expert possess a well‐rounded
background in order to measure the damages reliably and withstand the
criticisms that will come during cross‐examination. While courts are gener
ally somewhat lenient in whom they accept as an expert, the “expert must
possess requisite skill, training, education, knowledge, or experience from
which it can be assumed that the opinion is reliable.”7 Given that these are
generic attributes, it is important to evaluate the expert’s specific credentials
relevant to measuring economic damages.
The desirable qualifications of an economic expert witness are given in
various publications in the field of litigation economics. Examples can be
found in Stuart Speiser’s Recovery for Wrongful Death and Injury, Michael
Brookshire and Stan Smith’s Economic/Hedonic Damages, Gerald Martin’s
Determining Economic Damages, and Baker and Seck’s Determining
Economic Loss in Injury and Death Cases.8 The qualifications listed in these
publications focus on applications in personal injury and wrongful death
litigation. The requisite qualifications for competently estimating business
interruption lost profits and rendering an expert opinion are similar.
However, the expert qualifications in business interruption matters are
normally broader. These have also been set forth in the forensic economics
literature.9
A list of the desirable qualifications of an economist who could provide
expert witness testimony on business interruption losses includes:
■■ PhD in economics or finance

■■ Background in finance or financial economics
■■ University teaching position, preferably at the graduate level
■■ Scholarly publications in economics, finance, or accounting
■■ Professional presentations in economics, finance, or accounting
■■ Experience in industry analysis and forecasting
■■ Experience in commercial damages analysis
7
Mattott v. Ward, 48 N.Y. 2d 455, 423 N.Y.S. 2d 645 (1979).
8
Stuart Speiser, Recovery for Wrongful Death and Injury, 2nd ed. (Lawyer’s
Cooperative Publishing, 1988); Michael L. Brookshire and Stan V. Smith,
Economic/Hedonic Damages, The Practice Book for Plaintiff and Defense Attorneys
(Cincinnati, OH: Anderson Publishing, 1990); Gerald Martin, Determining Economic
Damages (Santa Ana, CA: James Publishing, 1995); W. Gary Baker and Michael K.
Seck, Determining Economic Loss in Personal Injury and Death Cases (Colorado
Springs, CO: Shephard’s/McGraw-Hill, 1987).
9
Patrick A. Gaughan, “Economics and Financial Issues in Lost Profits Litigation,” in
Litigation Economics, Patrick A. Gaughan and Robert Thornton, eds. (Greenwich,
CT: JAI Press, 1993).
The qualified witness may not possess all of the above but may have
strengths in one area that outweigh deficiencies in other areas. Courts and
juries should consider such factors when weighing the testimony of indi
viduals who have been presented as experts but who may lack many of
these attributes or who only possess minimal levels of the listed qualifica
tions. Other individuals who are strong in most or even all of the areas may
“bring a greater level of expertise to the table.”
Overview of the U.S. Court System

In the United States there are two different court systems: federal courts and
state courts. Civil lawsuits are typically heard in state courts, although many
large commercial lawsuits are heard in federal court.
Federal courts are organized on three levels. The first level consists of
94 federal districts. District courts are the main trial courts of the federal
system. Above the district courts are 13 circuit courts which, in turn, are
below the U.S. Supreme Court, which is the highest court in the land.
These circuit courts handle appeals that may arise from a district court.
These circuits correspond to various geographical areas, which may include
various states.
Sometimes state court claims can be brought in federal court based
upon a claim of diversity jurisdiction where the parties reside in different
states. For example, a defendant who is located in a different state may
pursue the removal of a case to federal court by citing such diversity. One
reason a defendant may want to do this is that he or she may believe they
might receive more favorable treatment in federal court. Sometimes this is
due to the fact that some states tend to give high verdicts for plaintiffs in
certain types of cases.
Judges in federal courts are selected by the president and are confirmed
by the advice and consent of the U.S. Senate. Such judicial positions could
be held for life (barring misconduct), even though many federal judges
often resign at some point.
The other part of the U.S. court system is the state courts. The trial
courts of the state system are referred to as superior courts. These courts
tend to be organized at the county level. Appeals of state court decisions
are brought to state appellate courts. In appellate courts, the appeal issues
are argued before a panel of judges where decisions are rendered through
majority rule. In such decisions the panel can decide to let the original
verdict stand, reverse the verdict, or call for a new trial. The state court
system also has a state supreme court where appellate court decisions may
be brought.
State court judges can be appointed or elected. State courts enforce
state laws and handle the bulk of civil disputes such as breach of contract
claims.
Introduction 7
Example of How Courts Weigh and Compare Credentials of Experts

When hearing the opinions of two opposing damages experts, courts will
naturally consider the credentials of the experts when deciding how much
weight to give their opinions. This was very clear in United Phosphorous,
Ltd. v. Midland Fumigant, Inc. In discussing the respective credentials of
two economists put forward as damages experts, the courts summarized
their backgrounds in this way:
Hoyt received a B.S. degree in Milling Technology from Kansas State

University in 1962, and a PhD in Agriculture and Applied Economics
from the University of Minnesota in 1972. Hoyt previously held a teach-
ing position at the William Mitchell College of Law in St. Paul, Minnesota
and served as a guest lecturer at the University of Minnesota and at St.
Olaf College. Hoyt has published a total of seven articles in his entire
career, two of which appear in agricultural economics journals, and
two of which were published in law reviews, and were therefore not sub-
ject to peer review by economists.
In contrast, Dr. John Siegfried is a professor of economics at Vanderbilt
University and has served as a professor there for 24 years. Siegfried
earned a bachelor’s degree in economics from Rensselaer Polytechnic
Institute in 1967, a Master of Arts degree in economics from Penn State
University in 1968, and a PhD in economics in 1972. At Vanderbilt,
Dr. Siegfried served as chair of the department of economics from 1980
to 1986. He taught numerous courses at Vanderbilt, including
undergraduate and graduate courses on industrial organization and
antitrust economics.
The court continued with a discussion of Dr. Siegfried’s credentials and

then addressed his publication record:
Siegfried has authored over 100 articles, which have been published in
economics journals or as chapters in various books on economics.
Siegfried currently serves on the editorial board of three economics jour-
nals, and frequently “referees” articles submitted for publication as a
contribution to scientific knowledge in the field of economics.10
It is interesting to note that the court put particular emphasis on the

relative publication and scholarship records of the two experts. One had a
more limited publication record, a record that was not focused on the areas
on which he was testifying. The other had an extensive publication record
10
United Phosphorus, Ltd. v. Midland Fumigant, Inc., 173 F.R.D. 675, 1997.
and was also a referee for such publications. The court seemed impressed
with these credentials, and it is not surprising that it put more weight on that
expert’s opinions.
Qualifications of an Accounting Expert on Damages

In lost profits litigation, the courts have consistently ruled that both econo
mists and accountants are appropriate expert witnesses to testify on dam
ages. Like economists, the background of accountants can vary considerably.
Sometimes we find that attorneys hire accountants to do lost profits analysis
assuming that by virtue of the training and experience in accounting, they
have the requisite expertise to conduct such an analysis. As with econo
mists, such general assumptions often are wrong. Lost profits analysis is a
unique area requiring specialized expertise and experience.
The typical accountant possesses a bachelor’s degree in accounting and
often is a certified public accountant (CPA). Some accountants may not have
passed the CPA exam and lack this certification, but it is unusual to see such
individuals presented as litigation experts – especially when there is such
an abundance of accountants who are CPAs. Many CPAs also possess a
higher degree – often a Master’s in Business Administration. This degree
may feature a specialization in certain relevant areas such as accounting or
finance. The characteristics of an MBA degree and what it implies about an
expert’s credentials will be discussed later in this chapter.
As the practice of accounting has gotten increasingly competitive,
accountants have branched out into more lucrative areas of consulting such
as expert witness work. Some accountants have also been able to bring
specialized knowledge such as what they may have acquired from training
as a certified fraud examiner (CFE). They also may bring to bear their expe
rience working with clients and matters in industries that may be related to
the lawsuit in question.
Interdisciplinary Nature of Commercial Damages Analysis

Most commercial damages analysis is performed by an expert from one
discipline – economics, finance, or accounting. However, when the analytical
demands of the case require diverse skills and knowledge, expertise in just
one of these areas may not be enough. When experts go outside of their
own fields and dabble in areas for which they have little training or
expertise, this may yield a bad result. For example, if an individual, such as
an accountant who has little or no training in statistics or econometrics,
constructs a projection of lost revenues using multiple regression or time
series analysis, the projection may be replete with flaws. Such flaws could
Introduction 9
be readily avoided by gaining the assistance of an econometrician or

statistician or by using more basic projection methods.
In complex business loss cases, it may be preferable to employ a team
of experts, with one leading expert providing the methodological structure
for the analysis and performing the part that is within his expertise. Other
experts will then provide their own input on which the leading expert will
rely to put forward the loss measure.
While it is acceptable for one expert to rely on the opinions of other
team members when putting forward an opinion, at times it may be useful
to have more than one expert on the team testify. In this manner, each
expert stays within his or her own knowledge base and is capable of han
dling the cross‐examination on the relevant issues that arise.
Relative Strengths of Economists versus Accountants

Economists have training in various forms of macroeconomic and micro
economic analysis. Often economists have extensive training and expertise
in statistical analysis and econometrics, skill areas that may be invaluable in
forecasting. However, unless they have separately acquired a background
in finance, many economists have limited familiarity with the analysis of
financial statements. Such analysis is not part of the normal training of
economists who do not do work in finance.
Accountants, especially ones who have training in financial analysis and
corporate finance, may be able to bring such skills to a case. In addition,
knowledge of cost accounting is also very useful in lost profits analysis.
Each case brings with it its own specialized skill demands. An account
ant with a CPA and Master’s in Business Administration (MBA) may be able
to do a competent job in a straightforward lost profits analysis. However, it
is important to bear in mind that in terms of educational training, an MBA
is a general business degree. The economics and forecasting courses in
MBA programs are often elementary and provide the student with only lim
ited training in these areas, training that would not be considered expertise
by economists. These courses are not comparable to the training that a
PhD economist normally receives. Experts who possess only an MBA have
been rejected by courts when they seek to offer expert opinions requiring
specialized and advanced knowledge. For example, in Thomas J. Kline, Inc.
v. Lorrilard, the court concluded that a witness with only an MBA was
merely a professional witness and did not possess the requisite expertise,
such as a background and training in antitrust economics, to testify whether
a company’s credit practices constituted a violation of the Robinson Patman
Act.11 One should also bear in mind that a doctorate in Business Administration
11
Thomas Kline v. Lorrilard, 878 F. 2d 791 (4th Cir. 1989).
is offered, which offers significantly greater training than an MBA. Some

accountants have PhD degrees and also possess such training. However,
one of the strengths of accountants is their field experience. It is particularly
useful if it is in the industry that is being considered in the lawsuit.
Accountants with PhD degrees may be pure academics and may not have
the experience of a practicing accountant.
An example of the court’s reaction to opposing experts who pos
sessed some of the strengths and shortcomings discussed above can be
found in Digital Analog Design Corporation v. North Supply Company. The
plaintiff introduced an expert who had a PhD and who presented himself
as an expert in economics and business finance. While the court appeared
confused by the forecasting methods the economist employed, it was
notably impressed.
In this regard DAD’s economic expert in the field of economic analysis,

with a large number of publications and professional activities to his
credit. The evidence would reasonably support his technique of cost‐
profit analysis, the so‐called “time series analysis and projection.”
NSC, by comparison did not produce a comparable expert. Instead, NSC
relied upon the testimony of a certified public accountant, an employee
controller of NSC, a Mr. Simon, neither of whom it appears had as exten-
sive training or expertise in the time series analysis method as had
Dr. Zinser, and neither of whom utilized a competing method of analysis
to calculate a lesser amount of profits.12
Although impressed by the economist’s forecasting abilities, the court

found his cost analysis lacking. The economist applied the gross margin to
projected lost sales without more carefully measuring incremental costs along
the lines of what is discussed in Chapter 6. A solution that neither side
attempted would have been to have an economist do the lost revenue projec
tion and an accountant conduct the analysis of the costs associated with the
forecasted lost revenues. Such an approach is advocated throughout this book.
Difference Between Disciplines of Economics and Finance

Attorneys are more aware of the relative skills of economists versus
accountants than they are when comparing specialists in economics versus
finance. This is partly due to the fact that the fields are interrelated. Many
economists consider finance to be a subfield of economics. Indeed, there
Digital & Analog Design Corporation v. North Supply Company, 44 Ohio St. 3d 36;
12
540 N.E. 2d 1358, 1989.

Introduction 11
is a subfield of economics called financial economics, which applies eco

nomic analysis to financial markets. However, there are several differences
between a PhD in finance and a PhD in economics. For one, finance degrees
are often conferred by a college of business within a university; economics
degrees, however, may be offered by the university outside of the college
of business. This difference is not important. What is more relevant is the
different training of the individuals.
A finance PhD and an economics PhD provide different training. A PhD
in finance may have some training in accounting and may have taken certain
courses taught in business school that economists are not required to take.
Many economists lack any knowledge of finance and financial statements.
It is possible, for example, to get a PhD in economics without ever having
even seen a financial statement (as shocking as this sounds). Indeed, many
economists do their work in complicated and esoteric areas and consider
topics such as the analysis of financial statements simplistic. Nonetheless, it
is important that the economists in commercial damages analysis have a
broad knowledge base that goes beyond the training received in graduate
school. Those, for example, who write their dissertation on a financially
related topic may get this background as part of their thesis research. Each
expert has a unique combination of credentials, training, and experience.
The court and jury will have to consider this set of credentials and then
determine the weight to apply to the testimony.
Finding a Damages Expert

There are many ways for an attorney to find a damages expert. One of the
most often used is word‐of‐mouth referrals, whereby an attorney consults
with colleagues he or she respects and gets the names of experts who have
successfully performed for them. If this process is not productive, other
methods must be employed.
There are certain media that advertise the services of experts. They
include regional legal publications as well as legal reference diaries. It is
important that references be gathered and checked, particularly in cases
where the attorney does not have any information on the expert other than
what the advertisement lists. This review process can be enhanced by a
verdict search, which may reveal the names of cases in which the expert has
testified.13 The attorneys who retained the expert in the past and the attor
neys who cross‐examined the expert in prior matters can be consulted for
feedback. However, an adversarial attorney may fail to give an objective
13
A data source that publishes such information on a weekly basis is Verdict Search
(East Islip, NY: Moran Publishing Company).
review, particularly an attorney who did not do as well as he or she would

have liked in the case in question.
Other sources where one can obtain information on experts are the expert
referral companies. These are firms that maintain names and curriculum vitae
(CVs) of experts with many different specialties whom they refer to attorneys
for a fee.14 A CV is a document that lists an expert’s credentials. The fee that
these companies charge may include an initial charge as well as a built‐in
hourly charge incorporated into the expert’s fee. This causes the expert’s fee
to be different from what it otherwise would be if he or she were contacted
directly without a referral intermediary. However, referral agencies can greatly
speed up the process of finding an expert – particularly if one is looking for
unique expertise from a specialist in a narrowly defined industry.
Another source of experts is local universities. A professor at a nearby
university may have a certain appeal to a jury from the same community. In
addition, professors may possess the ability to explain complicated concepts
clearly. However, attorneys have to be very careful if they hire an academic
who lacks litigation and testimony expertise. It takes a certain personality to
withstand the rigors of the adversarial litigation process in the United States.
Furthermore, the way one voices arguments and positions in an academic
environment can be very different from how one expresses those same
arguments and positions in an adversarial litigation environment. As obvious
as this sounds, many would‐be litigation experts who are pure academics
may find this difficult to comprehend. Therefore, attorneys need to exercise
caution in using untested experts – their testimony may be somewhat
unpredictable. The role of experience will be discussed later in this chapter.
Several economic consulting firms offer litigation‐related services. Some
specialize in commercial matters while others offer a variety of damages‐
related services. These economic consulting firms range from small “bou
tiques” to large national firms. Some attorneys may mistakenly think that if
they hire a large firm they may be hiring a well‐qualified expert. This may
or may not be the case. It is also important for attorneys to bear in mind that
the role of an expert witness is ultimately an individual role. Being part of
a large firm with many coworkers may be nice but it may not help the
expert when he or she is on the witness stand as an individual.
Critically Reviewing a Potential Expert’s Curriculum Vitae

Many attorneys take at face value the content of a potential or opposing
expert’s curriculum vitae. They merely give the CV a cursory scan and conclude
from the length of the CV that the expert possesses impressive credentials.
Technical Advisory Service for Attorneys, (www.tasanet.com) and ExamWorks

14
(www.examworks.com).
Introduction 13
A closer review of the listings included on the CV, however, may possibly
expose the misleading nature of the items. For example, in lieu of quality pub
lications, an expert may list presentations made before attorneys, which are
nothing more than marketing appeals and sales pitches. A CV may list very
general articles published in legal newspapers and magazines. These articles,
though, do not enjoy the scrutiny that a peer‐reviewed or refereed journal arti
cle or book would. Sometimes what is listed as a publication is a paper or
article that has not even been published. Opposing counsel may be able to take
advantage of such misleading entries on a CV.
Degrees
Some basic comments on degrees are mandatory. The most fundamental
characteristic of a degree as it relates to litigation is the relevance of the
degree. It is very common for experts to want to testify in an area that is
outside their expertise. Courts, though, have been supportive of objections
to experts who testify outside their expertise.15 In the area of commercial
damages, one sees a variety of individuals present themselves as experts.
Courts are often liberal in accepting such individuals and rely on the voir
dire process and cross‐examination to expose any deficiencies. However,
attorneys should be aware that PhDs in some fields provide little or no
training in the areas that are relevant to most types of commercial damages
analysis. For example, fields like engineering or operations research may
provide little training relevant to measuring damages in litigation.
Attorneys should be very wary of the “mail‐away PhD.” These are PhD
degrees that one can earn at home. Several institutions offering such PhDs
have sprung up, and some even advertise their degrees in major publica
tions. This issue has become more convoluted as online higher education
has grown considerably; now even major academic institutions are offering
online courses. In fact, online education has become one of the faster‐grow
ing areas of academia. If the degree‐granting institution is unknown, the
attorney should read its catalog course descriptions and degree standards to
review the criteria employed for issuing degrees. When encountering
experts with questionable degrees, this can be a very fertile area of inquiry.
Published Books
Published books can be impressive credentials for an expert to have. These
books are even more noteworthy if they are published by major publishers,
who can afford to be more selective. Books that have received acclaim or
won awards for their quality are even better. In addition, books that have
15
Wright v. Williams, 47 Cal. App. 3d 802, 121 Cal. Rptr. 194 (1975).
been used as textbooks may also provide the author with credentials that
other experts who have not published any books may lack. Books in the
area in which the expert is testifying can be invaluable. It is ideal to use as
an expert the person “who wrote the book” in the area.
Beware of books published by vanity publishers. These publishers
“publish” a book for an author – for a fee. They are not unlike photocopy
houses as opposed to the more traditional publisher. Having a book pub
lished in such a way implies that none of the reputable publishing houses
considered the work worthy of publication. It also implies that the book in
question has a very limited readership and may not be regarded as authori
tative by anyone in the field.
Refereed or Peer‐Reviewed Journal Articles

In addition to published books, another important standard used for evalu
ating scholarship in academia is refereed, or peer‐reviewed, journal articles.
A refereed journal is one that utilizes a group of experts to blindly review
articles submitted to the journal in their specialty. A journal’s editors will
allocate the articles to the referees and ensure that the process is completed
without revealing the names of the authors or the referees. These referees
judge the quality of the article and decide if it is worthy of publication.
Peer‐reviewed articles are very different from articles that undergo editorial
review; in the latter case, an editor simply decides whether a piece is of
interest to the readers.
As noted earlier, there are two refereed journals in the field of litigation
economics. They are the Journal of Forensic Economics and the Journal of
Legal Economics. At one time there were three journals in the field. However,
another journal, Litigation Economics Review, has been merged into the
Journal of Forensic Economics. While many of their articles focus on areas
other than commercial damages, a certain quantity of articles on business
interruption losses have been published in each of these refereed journals.
Other refereed journals which feature articles in the area of commercial
damages can be found in the closely related field of law and economics.
This is a subfield of economics in which someone getting a PhD in economics
can specialize. The five leading journals in the field are the Journal of Law
and Economics; Journal of Legal Studies; International Review of Law and
Economics; Journal of Law, Economics and Organization; and Journal of
Empirical Legal Studies. In finance, there are many refereed journals. These
include the Journal of Finance, Journal of Financial Economics, Journal of
Applied Corporate Finance, Financial Management, Financial Analysts
Journal, and Journal of Accounting and Economics. In econometrics, there
are several quality journals, such as Econometrica, the Journal of
Econometrics, and the Journal of the American Statistical Association.
In the field of accounting, Accounting Review and Accounting Horizons
are two leading refereed journals. Accounting Horizons is published by the
Introduction 15
American Accounting Association. While not a refereed journal, the Journal

of Accountancy is published by the American Institute of CPAs and is widely
distributed to all members of the Institute. In addition, the Journal of
Corporate Accounting and Finance is known as a source of quality articles
in accounting and finance.
Presentations
An expert’s CV often contains lists of presentations. In the academic world,
the publication process often begins with a refereed presentation to one’s
peers in the specific area of the article. Refereed presentations are those that
are accepted after a “call for papers” has been announced and submitted
articles are reviewed by the organizers of paper sessions at academic confer
ences. The standards for acceptance vary widely but are usually higher than
those for nonrefereed presentations. Attorneys should be wary of listings that
are merely sales presentations made before potential clients. For example, a
talk before a group of attorneys or at a law firm may be nothing more than
a marketing session. This should not be considered a “credential.”
Concluding Comments on CV Content

The expert witness arena has become quite crowded – professionals from
many fields have discovered that they can charge substantial fees by serving
as experts in litigated matters. They have learned that they may be better
able to get the assignment if they have a long CV filled with impressive‐
sounding contents. Therefore, it is incumbent on the attorneys to carefully
review the listed items and ascertain their quality. When reviewing the con
tents of an opposing expert’s CV, one’s own expert can be invaluable. For
example, it has been observed on many occasions that experts who lack
publications may try to compile a list of alternative credentials that may take
up several pages. As noted above, one tactic employed by such witnesses is
to list testimonies. It is important to note that prior testimony experience is not
a real credential. Some attorneys may be reluctant to challenge an expert’s
background if the expert has been accepted as an expert a number of times
by other courts. This may be a mistake. It simply could be the case that
attorneys in those other cases made the same mistake. This was the court’s
position in Kline v. Lorrilard: “Although it would be incorrect to conclude
that Gordon’s occupation as a professional expert alone requires exclusion
of her testimony, it would be absurd to conclude that one can become an
expert simply by accumulating experience in testifying.”16 It is not unusual
to have an expert with marginal credentials present a CV that is six or even
ten pages in length. This may include several pages of testimony lists and
16
Thomas Kline v. Lorrilard, 878 F. 2d 791 (4th Cir. 1989).
marketing presentations but little scholarly, peer‐reviewed work. The

retaining attorney must then decide if a list of court appearances as an
expert witness is truly a credential, particularly if there is little else on the
CV. Another example of misrepresentation is what may be listed under the
heading of publications. Experts who lack legitimate publication credits
often list items that range from papers that were not even published to
speaking appearances. A cross‐examining attorney may expose such
misrepresentations. Therefore, it is the retaining attorney’s responsibility to
review the contents of an expert’s CV carefully.
One additional comment on expert credentials is necessary. As noted
earlier, it is common that attorneys merely give a CV a cursory scan prior
to retaining or cross‐examining an expert. They often conclude that if the
CV is several pages in length, then the individual must possess sufficient
expertise. Often attorneys who know that the expert has testified several
times assume that there is no point in challenging the individual’s exper
tise. This is sometimes an error. It could be that many of these other testi
monies were made possible by other attorneys neglecting to make similar
challenges. Moreover, prior courts could have concluded that the expert
was allowed to testify but that the jury could hear the challenges and
accord the testimony whatever weight it wanted to. The fact that an expert
has testified does not indicate anything about what weight the jury
ultimately gave the testimony. If there is a legitimate concern about the
strength of an individual’s expertise, the opposing attorney should not
hesitate to pursue this.
Credentials Versus Experience in Litigation Analysis

Attorneys need to be aware that litigation‐related analysis is a specialized
field and not all highly credentialed experts can perform well in it. One
classic example of an expert who possessed extremely impressive creden
tials but who lacked a familiarity with litigation analysis occurred in a
recent antitrust case where the class action plaintiffs hired the Nobel Prize –
winning economist Dr. Robert Lucas.17 With respect to his credentials, the
court had these comments:
We next come to Dr. Robert Lucas and the opinions he expressed,

particularly as regards to the alleged collusion engaged in by all of the
Defendants. First, it is proper to recognize Dr. Lucas’ eminent and
distinguished credentials. He is affiliated with the University of Chicago,
indisputably one of the finest educational institutions in the world.
In Re Brand Name Prescription Drugs Antitrust Litigation, 1999 U.S. Dist. Lexis
17
550, January 19, 1999 (decided and docketed).

Introduction 17
He is also a past recipient of the Nobel Prize in Economics, an award

without equal in recognition of scholarship and contributions in his
chosen discipline. It was with high expectation that the Court antici-
pated his testimony and denied requests from the defendants to pre-
clude his testimony or to conduct a separate Daubert hearing out of the
presence of the jury.
However, with respect to his analysis, the court was not as

complimentary.
Sad to say, Dr. Lucas’ testimony did not measure up to his unique quali-
fications. Among other things, his testimony showed the following:
He abdicated entirely the concept of the independence of the expert

witnesses and simply became the sponsor for the Class Plaintiff’s
theory of the case
He was ignorant of material testimony and other evidence
His essential opinions were not only not based on the evidence, they
were inconsistent with it
His opinions were offered without any scientific basis or having been
the subject of economic methodological testing
Dr. Lucas reached his conclusions within 40 hours of his engagement

and before he undertook any substantial or detailed study of the pre-
scription drug industry. Most of the facts upon which he based his opin-
ions and conclusions were supplied by Class Plaintiff’s counsel, although
he admitted he did not expect Class Plaintiff’s counsel to have a bal-
anced presentation. His expert’s report was redrafted by Class Plaintiff’s
counsel in its entirety and only included what counsel wanted.
In Dr. Lucas’ own words: “I don’t think there is a single sentence in this
affidavit that’s intact from the first draft that I proposed.”
It seems that in the above case, the attorneys who retained Dr. Lucas
probably thought that presented with such a notable expert, the court
would simply adopt his opinions. However, Dr. Lucas is a known expert in
macroeconomic theory – a field that is somewhat removed from the issues
of that particular lawsuit.
The expert’s credentials can certainly add weight to the presentation,
but the expert’s work has to be able to hold up under scrutiny. Notable
academic articles that one has written along with awards for prior work can
be very helpful, but the work done in formulating and supporting the
opinions expressed in the current case has to maintain a high standard. In
addition, academic credentials without experience in litigation work should
give cause for concern.
Getting the Damages Expert on Board Early Enough

One of the errors that attorneys sometimes make in commercial as well as
other types of litigation, such as personal injury and employment litiga
tion, is not retaining the damages expert early in the process. Attorneys
often devote much of their time to the liability side of their case while
paying less attention to the damages aspect. Sometimes when they focus
on damages, such as when gathering necessary damages‐related docu
ments, attorneys attempt to do so without the aid of a damages expert.
This may result in a failure to collect important documents or to ask essen
tial questions in depositions.
This error occurs for a variety of reasons. One is that the attorney
may think he knows enough to gather the necessary damages‐related
materials and to conduct a complete deposition on his own. Another rea
son is that there may be cost constraints driving the litigation; the client
is trying to control litigation expenses and the attorney does not want to
add to the client’s costs by hiring an expert – until the last minute when
it can’t be put off any longer. This often happens when deadlines for
naming experts are near and the client either has to incur this cost or
proceed without an expert. While the attorney may believe that he has
gone to great lengths to keep his client’s costs down, failing to retain the
damages expert may cause the damages side of the case to suffer. If this
happens, the apparent cost consciousness may in the long run be a dis
service to the client.
In commenting on the failure to retain an economic damages expert
early in the process, one expert noted:
A typical disaster scenario. The damage expert gets hired two days before
the deadline for expert disclosure. A pile of documents and depositions
arrive at the expert’s office a week later. When the expert calls the attor-
ney to ask for key data that was not in the pile, the litigator says, “It looks
like we never asked for that in the document request or at depositions.
Oh by the way, they want to take your deposition next week.” The expert
must do a damages analysis that makes assumptions about key facts
and then alter those assumptions depending on trial testimony. This
often results in a poorer analysis and increases experts costs by a factor
of 2 or 3.18
James Plummer and Gerald McGowan, “Ten Most Frequent Errors in Litigating
18
Business Damages,” Association of Business Trial Lawyers (ABTL), Northern

California Report (November 1995).
Another random document with
no related content on Scribd:
which should have melted a heart of flint, was powerless to allay
their ill-temper.
If well-meaning counsellors could be persuaded that there are
phenomena upon which they are not all qualified to give advice, they
might perhaps forbear to send delegations of children to the White
House. This is a popular diversion, and one which is much to be
deplored. In the hour of our utmost depression, when our rights as a
free nation were denied us, and the lives of our citizens were
imperilled on land and sea, a number of children were sent to Mr.
Wilson, to ask him not to go to war. It was as though they had asked
him not to play games on Sunday, or not to put Christmas candles in
his windows. Three years later, another deputation of innocents
marched past the White House, bearing banners with severely
worded directions from their mothers as to how the President (then a
very ill man) should conduct himself. The language used was of
reprehensible rudeness. The exhortations themselves appeared to
be irrelevant. “American women demand that anarchy in the White
House be stopped!” puzzled the onlookers, who wondered what was
happening in that sad abode of pain, what women these were who
knew so much about it, and why a children’s crusade had been
organized for the control of our foreign and domestic policies.
The last query is the easiest answered. Picketing is a survival of
the childish instinct in the human heart. It represents the play-spirit
about which modern educators talk so glibly, and which we are
bidden to cherish and preserve. A society of “American Women
Pickets” (delightful phrase!) is out to enjoy itself, and its pleasures
are as simple as they are satisfying. To parade the streets, to proffer
impertinent instructions, to be stared at by passers-by, and to elude
the law which seeks to abate public nuisances—what better sport
could be asked either for little boys and girls, or for Peter Pans
valiantly refusing to mature? Mr. Harding was pursued in his day by
picketing children, and Mr. Coolidge has probably the same pleasure
awaiting him. Even the tomb at Mount Vernon has been surrounded
by malcontents, bearing banners with the inscription, “Washington,
Thou Art Truly Dead!” To which the mighty shade, who in his day had
heard too often the sound and fury of importunate counsels, and
who, because he would not hearken, had been abused, like “a Nero,
a defaulter and a pickpocket,” might well have answered from the
safety and dignity of the tomb, “Deo gratias!”
When a private citizen calls at the White House, to “frankly advise”
a modification of the peace treaty; when a private citizen writes to
the American Bar Association, to “frankly advise” this distinguished
body of men to forbear from any discussion of public affairs at their
annual meeting; when a private citizeness writes to the Secretary of
War to “frankly advise” that he should treat the slacker of to-day as
he would treat the hero of to-morrow, we begin to realize how far the
individual American is prepared to dry-nurse the Nation. Every land
has its torch-bearers, but nowhere else do they all profess to carry
the sacred fire. It is difficult to admonish Frenchmen. Their habit of
mind is unfavourable to preachment. We can hardly conceive a
delegation of little French girls sent to tell M. Millerand what their
mothers think of him. Even England shows herself at times impatient
of her monitors. “Mr. Norman Angell is very cross,” observed a British
reviewer dryly. “Europe is behaving in her old mad way without
having previously consulted him.”
“Causes are the proper subject of history,” says Mr. Brownell, “and
characteristics are the proper subject of criticism.” It may be that
much of our criticism is beside the mark, because we disregard the
weight of history. Our fresh enthusiasm for small nations is
dependent upon their docility, and upon their respect for boundary
lines which the big nations have painstakingly defined. That a
boundary which has been fought over for centuries should be more
provocative of dispute than a claim staked off in Montana does not
occur to an American who has little interest in events that antedate
the Declaration of Independence. Countries, small, weak and
incredibly old, whose sons are untaught and unfed, appear to be
eager for supplies and insensible to moral leadership. We recognize
these characteristics, and resent or deplore them according to our
dispositions; but for an explanation of the causes—which might
prove enlightening—we must go further back than Americans care to
travel.
“I seldom consult others, and am seldom attended to; and I know
no concern, either public or private, that has been mended or
bettered by my advice.” So wrote Montaigne placidly in the great
days of disputation, when men counselled the doubtful with sword
and gun, reasoning in platoons, and correcting theological errors
with the all-powerful argument of arms. Few men were then guilty of
intolerance, and fewer still understood with Montaigne and Burton
the irreclaimable obstinacy of convictions. There reigned a profound
confidence in intellectual and physical coercion. It was the opinion of
John Donne, poet and pietist, that Satan was deeply indebted to the
counsels of Saint Ignatius Loyola, which is a higher claim for the
intelligence of that great churchman than Catholics have ever
advanced. Milton, whose ardent and compelling mind could not
conceive of tolerance, failed to comprehend that Puritanism was out
of accord with the main currents of English thought and temper. He
not only assumed that his enemies were in the wrong, says Sir
Leslie Stephen, “but he often seemed to expect that they would grant
so obvious an assertion.”
This sounds modern. It even sounds American. We are so
confident that we are showing the way, we have been told so
repeatedly that what we show is the way, that we cannot understand
the reluctance of our neighbours to follow it. There is a curious game
played by educators, which consists in sending questionnaires to
some hundreds, or some thousands, of school-children, and
tabulating their replies for the enlightenment of the adult public. The
precise purport of this game has never been defined; but its
popularity impels us to envy the leisure that educators seem to
enjoy. A few years ago twelve hundred and fourteen little
Californians were asked if they made collections of any kind, and if
so, what did they collect? The answers were such as might have
been expected, with one exception. A small and innocently ironic boy
wrote that he collected “bits of advice.” His hoard was the only one
that piqued curiosity; but, as in the case of Isacke Bucke and the
quarrelsome couple of Plymouth, we were left to our own
conjectures.
The fourth “Spiritual Work of Mercy” is “To comfort the sorrowful.”
How gentle and persuasive it sounds after its somewhat contentious
predecessors; how sure its appeal; how gracious and reanimating its
principle! The sorrowful are, after all, far in excess of the doubtful;
they do not have to be assailed; their sad faces are turned toward
us, their sad hearts beat responsively to ours. The eddying drifts of
counsel are loud with disputation; but the great tides of human
emotion ebb and flow in obedience to forces that work in silence.
“The innocent moon, that nothing does but shine,

Moves all the labouring surges of the world.”
Are Americans a Timid People?
As the hare is timid—no! They have made good their fighting
record in war. They have proved themselves over and over again to
be tranquilly courageous in moments of acute peril. They have faced
“their duty and their death” as composedly as Englishmen; and
nobler comparison there is none. The sinking of the Titanic offered
but one opportunity out of many for the display of a quality which is
apt to be described in superlatives; but which is, nevertheless, an
inherent principle of manhood. The protective instinct is strong in the
native American. He does not prate about the sacredness of human
life, because he knows, consciously or unconsciously, that the most
sacred thing in life is the will to surrender it unfalteringly.
Of what then are Americans afraid, and what form does their
timidity take? Mr. Harold Stearns puts the case coarsely and strongly
when he affirms that our moral code resolves itself into fear of what
people may say. With a profound and bitter distaste for things as
they are, he bids us beware lest we confuse “the reformistic
tendencies of our national life—Pollyanna optimism, prohibition, blue
laws, clericalism, home and foreign missions, exaggerated
reverence for women, with anything a civilized man can legitimately
call moral idealism.... These manifestations are the fine flower of
timidity, and fear, and ignorance.”
Mr. Stearns is a robust writer. His antagonists, if he has any, need
never fear the sharp thrust of an understatement. He recognizes the
tyranny of opinion in the United States; but he does not do full justice
to its serio-comic aspects, to the part it plays in trivial as well as in
august affairs, to the nervousness of our regard, to the absurdities of
our subordination. There are successful newspapers and periodicals
whose editors and contributors walk a chalked path, shunning facts,
ignoring issues, avoiding the two things which spell life for all of us—
men and customs—and triumphantly presenting a non-existent world
to unobservant readers. Henry Adams said that the magazine-made
female has not a feature that would have been recognized by Adam;
but our first father’s experience, while intimate and conclusive, was
necessarily narrow. We have evolved a magazine-made universe,
unfamiliar to the eyes of the earth-dweller, and unrelated to his soul.
When this country was pronounced to be too democratic for
liberty, the epigram came as close to the truth as epigrams are ever
permitted to come. Democracies have been systematically praised
because we stand committed to democratic tenets, and have no
desire to foul our own roost. It is granted that equality, rather than
freedom, is their animating principle. It is granted also that they are
sometimes unfortunate in their representatives; that their legislative
bodies are neither intelligent nor disinterested, and that their public
service is apt to be distinguished for its incapacity. But with so much
vigour and proficiency manifested every day in private ventures, we
feel they can afford a fair share of departmental incompetence. The
tremendous reserves of will and manhood, the incredible
insufficiency of direction, which Mr. Wells remarked in democratic
England when confronted by an overwhelming crisis, were equally
apparent in the United States. It would seem as though a high
average of individual force and intelligence failed to offer material for
leadership.
The English, however, unlike Americans, refuse to survey with
unconcern the spectacle of chaotic officialdom. They are a fault-
finding people, and have expressed their dissatisfaction since the
days of King John and the Magna Carta. They were no more
encouraged to find fault than were other European commonalties
that kept silence, or spoke in whispers. The Plantagenets were a
high-handed race. The hot-tempered Tudors resented any opinions
their subjects might form. Elizabeth had no more loyal servant than
the unlucky John Stubbs, who lost his right hand for the doubtful
pleasure of writing the “Gaping Gulf.” Any other woman would have
been touched when the culprit, raising his hat with his left hand
which had been mercifully spared, cried aloud, “God save the
Queen!” Not so the great Elizabeth. Stubbs had expressed his views
upon her proposed marriage to the Duke of Anjou, and it was no
business of his to have views, much less to give them utterance;
while his intimation that, at forty-six, she was unlikely to bear children
was the most unpardonable truth he could have spoken.
The Stuarts, with the exception of the second Charles, were as
resentful of candour as were the Tudors. “I hope,” said James the
First to his Commons, “that I shall hear no more about liberty of
speech.” The Hanoverians heartily disliked British frankness
because they heartily disliked their unruly British subjects. George
the Third had all Elizabeth’s irascibility without her power to indulge
it. And Victoria was not much behind either of them—witness her
indignation at the “Greville Memoirs,” “an insult to royalty,” and her
regret that the publishers were not open to prosecution.
It was no use. Nothing could keep the Englishman from speaking
his mind. With him it was not only “What is there that a man dare not
do?” but “What is there that a man dare not say?” Many a time he
paid more for the privilege than it was worth; but he handed it down
to his sons, who took care that it was not lost through disuse. When
Sorbière visited England in 1663, he was amazed to find the
“common people” discussing public affairs in taverns and inns,
recalling the glories as well as the discomforts of Cromwell’s day,
and grumbling over the taxes. “They do not forbear saying what they
think of the king himself.” In the “Memoirs” of the publisher, John
Murray, there is an amusing letter from the Persian envoy, Mirza Abul
Hassan, dated 1824, and expressing his opinion of a government
which permitted such unrestrained liberty. Englishmen “do what they
like, say what they like, write what they like in their newspapers,”
comments the Oriental with bewildered but affectionate contempt.
“How far do you think it safe to go in defying your sovereign?” asked
Madame de Pompadour of John Wilkes, when that notorious plain-
speaker had taken refuge in Paris from his incensed king and
exasperated creditors. “That, Madame,” said the member from
Aylesbury, “is what I am trying to find out.”
In our day the indifference of the British Government to what used
to be called “treasonable utterances” has in it a galling element of
contempt. Not that the utterances are invariably contemptible. Far
from it. Blighting truths as well as extravagant senilities may still be
heard in Hyde Park and Trafalgar Square. But the orators might be
addressing their audiences in classic Greek for any token the
London bobby gives of listening or comprehending. “Words are the
daughters of earth; deeds are the sons of Heaven.” The bobby has
never heard this grandiloquent definition; but he divides them as
clearly in his own mind into hot air and disorderly conduct, and he
takes his measures accordingly.
In the United States, as in all countries which enjoy a
representative government, censure and praise run in familiar
grooves. The party which is out sees nothing but graft and incapacity
in the party which is in; and the party which is in sees nothing but
greed and animosity in the party which is out. This antagonism is
duly reflected by the press; and the job of arriving at a correct
conclusion is left to the future historian. As an instance of the fashion
in which history can be sidetracked by politics, the reader is referred
to the portraits of Andrew Jackson as drawn by Mr. Beveridge in his
“Life of John Marshall,” and by Mr. Bowers in his “Party Battles of the
Jackson Period.”
The first lesson taught us by the Great War was that we got
nowhere in political leading-strings, and that none of our accustomed
formulas covered this strange upheaval. It was like trying to make a
correct survey of land which was being daily cracked by
earthquakes. Our national timidity entrenched itself behind a wilful
disregard of facts. It was content to view the conflict as a catastrophe
for which nobody, or everybody, was to blame. Our national
intrepidity manifested itself from the outset in a sense of human
responsibility, in a bitter denial of our right to ignorance or
indifference. The timidity was not an actual fear of getting hurt; the
intrepidity was not insensitiveness to danger. What tore our Nation
asunder was the question of accepting or evading a challenge which
had—so we at first thought—only a spiritual significance.
In one of Birmingham’s most genially nonsensical stories, “The
Island Mystery,” there is an American gentleman named Donovan.
He is rich, elderly, good-tempered, brave, kind and humorous; as
blameless in his private life as King Arthur, as corrupt politically and
financially as Tweed or Fiske; a buyer of men’s souls in the market-
place, a gentle, profound and invulnerable cynic. To him a young
Irishman sets forth the value of certain things well worth the
surrender of life; but the old American smiles away such a primitive
mode of reckoning. The salient article of his creed is that nothing
should be paid for in blood that can be bought for money; and that,
as every man has his price, money, if there is enough of it, will buy
the world. He is never betrayed, however, into a callous word, being
mindful always of the phraseology of the press and platform; and the
reader is made to understand that long acquaintance with such
phraseology has brought him close to believing his own pretences.
“In the Middle West where I was raised,” he observes mildly, “we
don’t think guns and shooting the proper way of settling national
differences. We’ve advanced beyond those ideas. We’re a civilized
people, especially in the dry States, where university education is
common, and the influence of women permeates elections. We’ve
attained a nobler outlook upon life.” It reads like a humorous
illustration of Mr. Stearns’s unhumorous invectives.
Sociologists are wont to point to the American public as a
remarkable instance of the herd mind—a mind not to be utterly
despised. It makes for solidity, if not for enlightenment. It is the most
economical way of thinking; it saves trouble and it saves noise. So
acute an observer as Lord Chesterfield set store by it as unlikely to
disturb the peace of society; so practical a statesman as Sir Robert
Walpole found it the best substratum upon which to rear the fabric of
constitutional government. It is most satisfactory and most popular
when void of all sentiment save such as can be expressed by a
carnation on Mother’s Day, or by the social activities of an Old Home
Week. Strong emotions are as admittedly insubordinate as strong
convictions. “A world full of patriots,” sighs the peace-loving
Honourable Bertrand Russell, “may be a world full of strife.” This is
true. A single patriot has been known to breed strife in plenty. Who
can measure the blood poured out in the cause that Wallace led, the
“sacred” human lives sacrificed at his behest, the devastations that
marked his victories and defeats? And all that came of such
regrettable disturbances were a gallows at Smithfield, a name that
shines like a star in the murk of history, and a deathless impulse to
freedom in the hearts of a brave people.
The herd mind is essentially and inevitably a timid mind. Mr.
Sinclair Lewis has analyzed it with relentless acumen in his amazing
novel, “Babbitt.” The worthy citizen who gives his name to the story
has reached middle age without any crying need to think for himself.
His church and his newspaper have supplied his religious and
political creeds. If there are any gaps left in his mind, they are filled
up at his business club, or at his “lodge,” that kindly institution
designed to give “the swaddled American husband” a chance to
escape from home one night in the week. Church, newspaper, club
and lodge afford a supply of ready-made phrases which pass muster
for principles as well as for conversation.
Yet stirring sluggishly in Babbitt’s blood are a spirit of revolt, a
regard for justice, and a love of freedom. He does not want to join
the Good Citizens’ League, and he refuses to be coerced into
membership. He does not like the word “Vigilante,” or the thing it
represents. His own sane instinct rejects the tyranny of the
conservative rich and of the anarchical poor. He dimly respects
Seneca Doane and Professor Brockbank when he sees them
marching in the strikers’ parade. “Nothing in it for them, not a cent!”
But his distaste for the strikers themselves, for any body of men who
obstruct the pleasant ways of prosperity, remains unchanged. In the
end—and it is an end which comes quickly—he finds that the one
thing unendurable to his soul is isolation. Cut off from the thought
currents of his group, he is chilled, lonely, and beset by a vague
uneasiness. He yields, and he yields without a pang, glad to get
back into the warm familiar atmosphere of class complacency, of
smugness, of “safety first”; glad to sacrifice a wavering idealism and
a purposeless independence for the solid substance of smooth living
and conformity to his neighbours’ point of view.
The curious thing about Mr. Lewis’s analysis is that back of the
contempt he strives to awaken in our souls is a suspicion that
Babbitt’s herd mind, the mind of many thousands of Americans, is,
on the whole, a safe mind for the country. It will not raise us to any
intellectual or spiritual heights, but neither will it plunge us into ruin. It
is not making trouble for itself, or for the rest of the world. In its dull,
imperfect way it represents the static forces of society. Sudden and
violent change is hostile to its spirit. It may be trusted to create a
certain measure of commercial prosperity, to provide work for
workers, and safety for securities. It is not without regard for
education, and it delights in practical science—the science which
speeds transit, or which collects, preserves and distributes the
noises of the world. It permits artists and authors to earn their daily
bread, which is as much as artists and authors have any business to
expect, and which is a very precious privilege. In revolutionary
Russia, the intelligentsia were the first to starve, an unpleasant
reminder of possibilities.
What Mr. Lewis implies is that, outside of the herd mind he is
considering, may be found understanding and a sense of fair play.
But this is an unwarranted assumption. The intelligence of the
country—and of the world—is a limited quantity; and fair play is less
characteristic of groups than of individuals. Katharine Fullerton
Gerould, in an immensely discontented paper entitled “The Land of
the Free,” presents the reverse of Mr. Lewis’s medal. She contends
that, as a people, we have “learned fear,” and that, while England
has kept the traditions of freedom (a point on which Mr. Chesterton
vehemently disagrees with her), we are content with its rhetoric. But
she finds us terrorized by labour as well as by capital, by reformers
and theorists as well as by the unbudging conservative. Fanatics,
she says, are no longer negligible. They have learned how to control
votes by organizing ignorance and hysteria. “In company with your
most intimate friends you may lift amused eyebrows over the
Fundamentalists, over the anti-cigarette organization, over the film
censors, over the people who wish to shape our foreign policy in the
interests of Methodism, over the people who wish to cut ‘The
Merchant of Venice’ out of school editions of Shakespeare. But it is
only in company with your most intimate friends that you can do this.
If you do it in public, you are going to be persecuted. You are sure, at
the very least, to be called ‘un-American.’”
It is a bearable misfortune to be called un-American, because the
phrase still waits analysis. The only sure way to escape it is by
stepping warily—as in an egg-dance—among the complicated
interests sacred to democracies. The agile egg-dancer, aware that
there is nothing in the world so sensitive as a voter (Shelley’s
coddled plant was a hardy annual by comparison), discountenances
plain speech on any subject, as liable to awaken antagonism. There
is no telling whom it may hit, and there is no calculating the return
blows. “To covet the truth is a very distinguished passion,” observes
Santayana. It has burned in the bosom of man, but not in the
corporate bosoms of municipalities and legislative bodies. A world of
vested interests is not a world which welcomes the disruptive force
of candour.
The plain-speaker may, for example, offend the Jews; and nothing
can be more manifestly unwise than to give umbrage to a people,
thin-skinned, powerful and clannish, who hold the purse-strings of
the country. Look what happened to Sargent’s fresco in the Boston
Library, which angered the Synagogue it inadequately represented.
Or he may offend the Irish, who control wards, and councils, and
local elections; and who, being always prompt to retaliate, are best
kept in a good humour. Or he may offend either the Methodists or
the Roman Catholics, powerful factors in politics, both of them, and
capable of dealing knock-down blows. A presidential election was
once lost and won through an unpardonable affront to Catholicism;
and are we not now drinking soda-fountain beverages in obedience
to the mandates of religious bodies, of which the Methodists are the
most closely organized and aggressive?
It is well to consider these things, and the American press does
very soberly and seriously consider them. The Boston “Transcript”
ventured, it is true, to protest against the ruling of the Navy
Department which gave to Jewish seamen of the ancient faith three
days’ leave of absence, from the thirty-first of March, 1923, to the
second of April, with such “additional time” as was practicable, that
they might attend the rites of the Synagogue; while Gentile seamen
of the Christian faith enjoyed no such religious privileges. The
newspapers in general, however, discreetly avoided this issue. “Life”
pointed out with a chuckle that the people who disapproved of
President Lowell’s decision to exclude negroes from the Harvard
Freshman dormitories “rose up and slammed him”; while the people
who approved were “less vocal.” When Rear Admiral Sims said
disconcertingly: “The Kentucky is not a battleship at all. She is the
worst crime in naval construction ever perpetrated by the white
race”; even those reviewers who admitted that the Admiral knew a
battleship when he saw one, were more ready to soften his words
than to uphold them.
The negro is a man and a brother. He is also a voter, and as such
merits consideration. There is no more popular appeal throughout
the length and breadth of the North than that of fairness to the
coloured citizen. Volumes have been written about his rights; but
who save President Roosevelt ever linked responsibilities with rights,
duties with deliverance? Who, at least, save President Roosevelt
ever paused in the midst of a scathing denunciation of the crime of
lynching (a stain on the Nation’s honour and a blight on the Nation’s
rectitude) to remind the black man that his part of the contract was to
deliver up the felon to justice, that his duty to his country, his race,
and his manhood was to refuse all sanctuary to crime? A few years
ago an acute negro policeman in Philadelphia recognized and
trapped a negro criminal. For this he received his full measure of
commendation; but he also received threatening letters from other
negroes whose simple conception of a policeman’s part was the
giving of shelter and protection to offenders of his own race.
The nastiest bit of hypocrisy ever put forward by wrong-doers was
the cant of the early slave-dealers about Christianity and the
negroes’ souls. The slaves were Christianized by thousands, and
took kindly to their new creed; but their spiritual welfare was not a
controlling factor in the commerce which supplied the Southern
States with labour. That four fifths of the labourers were better off in
America than they would have been in Africa was a circumstance
equally unfit to be offered as a palliative by civilized men. The
inherent injustice of slavery lay too deep for vindication. But now that
the great wrong has been righted (and that three hundred thousand
white men laid down their lives in the righting is a fact which
deserves to be remembered), now that the American negroes are
free, Christian, educated, and privileged (like artists and authors) to
earn their daily bread, they cannot candidly regret that their remote
ancestors had not been left unmolested on the coast of Guinea.
They have their grievances; but they are the most fortunate of their
race. The debt the white men owed them has been paid. There is left
a mutual dependence on the law, a mutual obligation of self-imposed
decency of behaviour from which not even voters are exempt.
Timidity is superimposed upon certain classes of men who are
either tied up with red tape, like teachers, soldiers and sailors, or
unduly dependent upon other men, like legislators, and like clerics in
those churches which are strong enough to control the
insubordinations of the pulpit. Of all these classes, legislators are the
worst off, because their dependence is the most ignoble and
disastrous. So long as a future election is the controlling influence in
their lives, they have no alternative but to truckle to any compact
body of voters that bullies them into subjection. So long as they take
for their slogan, “We aim to please,” they must pay out their
manhood for the privilege of pleasing. In 1923 Senator Borah
charged Congress with “organized cowardice” in the matter of the
soldiers’ bonus. It was a borrowed phrase neatly refitted. The
spectacle of a body of lawmakers doubling and turning like a hare in
its efforts to satisfy the servicemen without annoying the taxpayer
struck the Senator—and others—as the kind of exaggerated
subjection which paves the way to anarchy.
Timidity was as alien to the soul of Henry Adams as it is alien to
the soul of Admiral Sims. He was not a man who skirted the hard
places on the road, or who was so busy keeping both feet on the
ground that he feared to take a step. But he was conscious of the
inquisitorial spirit which is part of the righteousness of America, and
which keeps watch and ward over all the schooling of the country.
“Education,” he wrote, “like politics, is a rough affair, and every
instructor has to shut his eyes and hold his tongue as though he
were a priest.”
The policy of shutting one’s eyes and holding one’s tongue is
highly esteemed in all professions, and in all departments of public
service. The man who can hear black called white without fussily
suggesting that perhaps it is only grey; the man who evades
responsibility, and eschews inside criticism (like the criticism of a
battleship by an admiral); the man who never tells an unpalatable
truth “at the wrong time” (the right time has yet to be discovered), is
the man whose success in life is fairly well assured. There is an
optimism which nobly anticipates the eventual triumph of great moral
laws, and there is an optimism which cheerfully tolerates
unworthiness. The first belongs to brave and lonely men; the second
is the endearing quality of men whose sagging energy and cautious
content can be trusted to make no trouble for their kind.
The plain-speaking of soldiers and sailors is reprobated and
punished, but their discretion is less conspicuously rewarded. They
are expected to be undeviatingly brave in the field and at sea; but
timorous and heedful when not engaged in fighting their country’s
enemies. They are at a disadvantage in times of peace, strait-
jacketed by rules and regulations, regarded with suspicion by
sociologists, with hostility by pacifists, with jealousy by politicians. A
grateful Republic dismisses the men who fought for her, and
cherishes her army of office-holders. When General Wood and
Admiral Sims spoke some unpleasant truths, nobody ventured to call
these truths lies; but everybody said that General Wood and Admiral
Sims were not the proper persons to speak them. As the proper
persons to speak them never would have spoken them, the country
would have been spared the discomfort of listening, and the
“common quiet,” which is mankind’s concern, would have been
undisturbed.
So far, then, is Mr. Harold Stearns right in accusing us as a nation
of timidity. So far, then, is Mrs. Gerould right in accusing us of
exaggerated prudence. That something akin to timidity has crept into
the hearts of Englishmen, who are fortified by a long tradition of
freedom and common sense, is evidenced by the title given to two
recent volumes of scholarly, and by no means revolutionary, papers,
“Outspoken Essays.” Frankness must be at a discount when it
becomes self-conscious, and constitutes a claim to regard. The early
essayists were fairly outspoken without calling anybody’s attention to
the fact. The contributors to those great and grim “Reviews” which so
long held the public ear were outspoken to the verge of brutality. A
comfortless candour was their long suit. Never before in the history
of English letters has this quality been so rare as to be formally
adopted and proclaimed.
Santayana, analyzing the essentials of independence, comes to
the discouraging conclusion that liberty of speech and liberty to elect
our lawmakers do not materially help us to live after our own minds.
This he holds to be the only positive and worthwhile form of freedom.
He aims high. Very few of us can live after our own minds, because
the tyranny of opinion is reënforced by the tyranny of circumstance.
But none of us can hope to live after our own minds unless we are
free to speak our own minds; to speak them, not only in the company
of friends (which is all Mrs. Gerould grants us), but openly in the
market-place; and not with a blast of defiance, but calmly as in the
exercise of an unquestioned prerogative. Under no other
circumstance is it possible to say anything of value or of distinction.
Under no other circumstance can we enjoy the luxury of self-respect.
There is an occasional affectation of courage and candour on the
part of those who know they are striking a popular note; but to dare
to be unpopular, “in the best and noblest sense of a good and noble
word,” is to hold fast to the principles which speeded the Mayflower
to Plymouth Rock, and Penn to the shores of the Delaware.
The Happiness of Writing an
Autobiography
Mr. Edmund Gosse, commenting on the lack of literary curiosity in
the early years of the seventeenth century, ascribes it to a growing
desire for real knowledge, to an increasing seriousness of mind. Men
read travels, history, philosophy, theology. “There were interesting
people to be met with, but there were no Boswells. Sir Aston
Cokayne mentions that he knew all the men of his time, and could
have written their lives, had it been worth his while. Instead of doing
this, the exasperating creature wrote bad epigrams and dreary tragi-
comedies.”
A century later, when literary curiosity had in some measure
revived, Sir Walter Scott, losing his temper over Richard
Cumberland’s “Memoirs,” wrote of their author in the “Quarterly
Review”: “He has pandered to the public lust for personal anecdote
by publishing his own life, and the private history of his
acquaintances.”
A better illustration of La Fontaine’s wisest fable, “The Miller, his
Son, and the Ass,” could not anywhere be found. The only way to
please everybody is to have no ass; that is, to print nothing, and
leave the world at peace. But as authorship is a trade by which men
seek to live, they must in some way get their beast to market, and be
criticized accordingly.
It is probable that the increasing vogue of biography, the amazing
output of books about men and women of meagre attainments and
flickering celebrity, sets the modern autobiographer at work.
“For now the dentist cannot die,

And leave his forceps as of old,
But round him, ere his clay be cold,
Is spun the vast biography.”
The astute dentist says very sensibly: “If there is any money to be
made out of me, why not make it myself? If there is any gossip to be
told about me, why not tell it myself? If modesty restrains me from
praising myself as highly as I should expect a biographer to praise
me, prudence dictates the ignoring of circumstances which an
indiscreet biographer might drag into the light. I am, to say the least,
as safe in my own hands as I should be in anybody else’s; and I
shall, moreover, enjoy the pleasure dearest to the heart of man, the
pleasure of talking about myself in the terms that suit me best.”
Perhaps it is this open-hearted enjoyment which communicates
itself to the reader, if he has a generous disposition, and likes to see
other people have a good time. Even the titles of certain
autobiographical works are saturated with self-appreciation. We can
see the august simper with which a great lady in the days of Charles
the Second headed her manuscript: “A True Relation of the Birth,
Breeding and Life of Margaret Cavendish, Duchess of Newcastle.
Written by Herself.” Mr. Theodore Dreiser’s “A Book About Myself”
sounds like nothing but a loud human purr. The intimate wording of
“Margot Asquith, An Autobiography,” gives the key to all the cheerful
confidences that follow. Never before or since has any book been so
much relished by its author. She makes no foolish pretence of
concealing the pleasure that it gives her; but passes on with radiant
satisfaction from episode to episode, extracting from each in turn its
full and flattering significance. The volumes are as devoid of
revelations as of reticence. If at times they resemble the dance of the
seven veils, the reader is invariably reassured when the last veil has
been whisked aside, and he sees there is nothing behind it.
The happiness of writing an autobiography which is going to be
published and read is a simple and comprehensible emotion. Before
books were invented, men carved on stone something of a
vainglorious nature about themselves, and expected their subjects,
or their neighbours, to decipher it. But there is a deeper and subtler
gratification in writing an autobiography which seeks no immediate
public, and contents itself with the expression of a profound and
indulged egotism. Marie Bashkirtseff has been reproached for
making the world her father confessor; but the reproach seems
hardly justified in view of the fact that the “Journal,” although “meant
to be read,” was never thrust by its author upon readers, and was
not published until six years after her death. She was, although
barely out of girlhood, as complex as Mrs. Asquith is simple and
robust. She possessed, moreover, genuine intellectual and artistic
gifts. The immensity of her self-love and self-pity (she could be more
sorry for her own troubles than anybody who ever lived) steeped her
pages in an ignoble emotionalism. She was often unhappy; but she
revelled in her unhappiness, and summoned the Almighty to give it
his serious attention. Her overmastering interest in herself made
writing about herself a secret and passionate delight.
There must always be a different standard for the confessions
which, like Rousseau’s, are made voluntarily to the world, and the
confessions which, like Mr. Pepys’s, are disinterred by the world from
the caches where the confessants concealed them. Not content with
writing in a cipher, which must have been a deal of trouble, the great
diarist confided his most shameless passages to the additional cover
of Spanish, French, Greek and Latin, thus piquing the curiosity of a
public which likes nothing better than to penetrate secrets and rifle
tombs. He had been dead one hundred and twenty-two years before
the first part of his diary was printed. Fifty years later, it was
considerably enlarged. One hundred and ninety years after the
garrulous Secretary of the Admiralty had passed into the eternal
silences, the record of his life (of that portion of it which he deemed
worth recording) was given unreservedly to English readers. The
“Diary” is what it is because of the manner of the writing. Mr. Lang
says that of all who have gossiped about themselves, Pepys alone
tells the truth. Naturally. If one does not tell the truth in a Greek
cipher, when shall the truth be told?
The severe strictures passed by George Eliot upon
autobiographies are directed against scandal-mongering no less
than against personal outpourings. She could have had the English-
speaking world for a confidant had she consented to confide to it; but
nothing was less to her liking. She objected to “volunteered and
picked confessions,” as in their nature insincere, and also as
conveying, directly or indirectly, accusations against others. Her
natural impulse was to veil her own soul—which was often sick and
sore—from scrutiny; and, being a person of limited sympathies, she
begrudged her neighbour the privilege of exhibiting his soul, sores
and all, to the public. The struggle of human nature “to bury its
lowest faculties,” over which she cast unbroken silence, is what the
egotist wants to reveal, and the public wants to observe. When
Nietzsche says debonairly of himself, “I have had no experience of
religious difficulties, and have never known what it was to feel sinful,”
the statement, though probably untrue, creates at once an
atmosphere of flatness. It is what Walt Whitman ardently admired in
beasts—
“They do not lie awake in the dark, and weep for their sins,
They do not make me sick discussing their duty to God.”
Next to the pleasure of writing lovingly about ourselves—but not

comparable to it—is the pleasure of writing unlovingly about our
fellows. Next to the joy of the egotist is the joy of the detractor. I think
that the last years of Saint-Simon, those sad impoverished years
when he lived forgotten by his world, must have been tremendously
cheered by the certainty that, sooner or later, the public would read
his memoirs. Nobody knows with what patient labour, and from what
devious sources he collected his material; but we can all divine the
secret zest with which he penned his brilliant, malicious,
sympathetic, truth-telling pages. Thirty years after his death some of
these pages crept cautiously into print; but a full hundred years had
passed before the whole text was given to the world. Perhaps the
dying French gentleman anticipated no earlier resurrection for his
buried manuscript; but he knew his nation and he knew his work.
The nation and the work were bound to meet.
A somewhat similar satisfaction must have stolen into the heart of
Charles Greville when he wrote the last pages of his diary, and laid it
aside for future publication. Nineteenth-century England presented
none of the restrictions common to eighteenth-century France; and
ten years after Greville’s death the first instalment of the ever-
famous “Memoirs” exploded like a bomb in the serried ranks of
British official and fashionable life. It shook, not the security, but the
complacency of the Queen on her throne. It was an intelligent and
impartial picture of the times; and there is nothing that people like
less than to be intelligently and impartially described. Moreover, the
writer was no anonymous critic whose words came unweighted by
authority, no mere man of letters whom men of affairs could ignore.
He had lived in the heart of administrative England, and he knew
whereof he spoke.
Lord Hervey’s memoirs are not autobiographical at all: they are
historical, like the memoirs of Sully, and Jean de Joinville, and
Philippe de Comines. They are very properly entitled “Memoirs of the
Reign of George the Second,” and what their author did not know
about that interesting reign (as seen from the angle of the Court) was
not worth the knowing. Historians have made free use of his
material; and some of those to whom it has been most valuable, like
Thackeray, have harshly depreciated the chronicler. Dr. Jowett, in a
moment of cynical misgiving, said that every amusing story must of
necessity be unkind, untrue, or immoral. Hervey’s stories are not
untrue, and not often immoral; but they are unkind. What did he see
about him of which he could consistently write with kindness? His
sharpest thrusts have a careless quality which redeems them from
the charge of vindictiveness. When he says of Frederick, Prince of
Wales, “He was as false as his capacity would allow him to be,” it
sounds like an observation passed with casual unconcern upon a
natural phenomenon which had chanced to come under his notice.
Sully was a maker of history as well as a writer of history. He had
no taste and no time for self-analysis, and, like Joinville, he had the
rare good fortune to serve a master whom he sincerely loved and
admired. Comines also admired his master, but he did not love him.
Nobody has yet been put on record as loving Louis the Eleventh. All
these men wrote with candour and acumen. No pleasure which they
can have taken in compiling their memoirs can equal, or even
approach, the pleasure with which we read them. Their accuracy is
the accuracy of the observer, not of the antiquarian. “In my opinion,”
writes Comines, “you who lived in the age when these affairs were
transacted have no need to be informed of the exact hours when
everything was done.” “I now make known to my readers,” observes
Joinville composedly, “that all they shall find in this book which I have
declared I have seen and known, is true, and what they ought most
firmly to believe. As for such things as I have mentioned as hearsay,
they may understand them as they please.”
These excursions into the diversified region of the memoir lead us
away from the straight and narrow path of the autobiography. These
saunterings along the pleasant byways of history distract us from the
consideration of the human soul, as shown us by its too ecstatic
possessor. We know as much as we need to know about the souls of
Lord Hervey, and Sully, and of the Sire de Joinville, which was really
a beautiful article; but we know a great deal more about the souls of
George the Second, and Henry of Navarre, and of Saint Louis,
shining starlike through the centuries. What we gain is better worth
having than what we lose.
When we read the true autobiography, as that of Benvenuto
Cellini, we see the august men of the period assume a secondary
place, a shadowy significance. They patronize the artist or imprison
him, according to their bent. They give him purses of five hundred
ducats when they are complacent, and they banish him from their
very limited domains when he kills somebody whom they prefer to
keep alive. But not for one moment is our attention distracted from
the narrator himself to these rude arbiters of fate. He makes it plain
to us from the start that he is penning his autobiography in a spirit of
composed enjoyment, and because he deems it “incumbent upon
upright men who have performed anything noble or praiseworthy to
record with their own hand the events of their lives.” He tells us in
detail how it pleased God that he should come into the world; and he
tells us of all that he has done to make God’s action in the matter a
source of regret, as well as of satisfaction, to others. Those true
words of Frederick the Great, “On peut apprendre de bonnes choses
d’un scélérat,” are singularly applicable to this particular rascal. It is
as difficult to find standards by which to appraise his worth as it is to
find rules by which to test his accuracy. Just as it has been said of
Rousseau, that even in the very ecstasy of truth-telling he does not
tell the truth, so it may be said of Cellini, that even in the very
ecstasy of lying he does not wholly lie.
It is characteristic of a simpler age than the one we live in now that
autobiographers sang their own praises candidly and lustily. Cellini
puts graceful eulogies of himself into the mouths of his
contemporaries, which is one way, and a very good way, of getting
them said. The Duchesse de Montpensier (La Grande
Mademoiselle) goes a step further, and assures us that the Creator
is sympathetically aware of her merits and importance. “I may say
without vanity that just Heaven would not bestow such a woman as I
am upon a man who was unworthy of her.” Wilhelmina, Margravine
of Baireuth, and sister of Frederick the Great, writes with composure:
“Happily my good disposition was stronger than the bad example of
my governess”; and, as the testimony of the governess was not
taken, Wilhelmina’s carries the day.
This directness contrasts pleasantly with the more involved, and
possibly more judicious, methods employed by memoir-writers like
Richard Lovell Edgeworth, father of the immortal Maria, and by
autobiographers like Harriet Martineau. Mr. Edgeworth, recounting
his first experience of married life, says with conscious nobility: “I felt
the inconvenience of an early and hasty marriage; and though I
heartily repented of my folly, I determined to bear with fortitude and
temper the evil I had brought upon myself.”
Miss Martineau, whose voluminous work is ranked by Anna
Robeson Burr as among the great autobiographies of the world,
does not condescend to naïveté; but she never forgets, or permits
her reader to forget, what a superior person she is. When Miss Aiken
ventures to congratulate her upon her “success” in London society,
she loftily repudiates the word. Success implies endeavour, and she
(Harriet Martineau) has “nothing to strive for in any such direction.”
When she sails for the United States, it is with the avowed purpose
of “self-discipline.” She has become “too much accustomed to
luxury,” and seeks for wholesome hardships. It sounds a trifle far-
fetched. Byron—an incomparable traveller—admits that folks who go
“a-pleasuring” in the world must not ask for comfort; but even Byron
did not visit the East in order to be uncomfortable. He was not
hunting a corrective for St. James Street and Piccadilly.
There is no finer example in the world of the happiness of writing
an autobiography than that afforded us by Miss Martineau. Her book
is a real book, not an ephemeral piece of self-flattery. Her enjoyment
of it is so intense that it impedes her progress. She cannot get on
with her narrative because of the delight of lingering. Every
circumstance of an uneventful childhood invites her attention. Other
little girls cry now and then. Mothers and nurserymaids are aware of
this fact. Other little girls hate to get up in the morning. Other little
girls are occasionally impertinent to their parents. But no one else
has ever recorded these details with such serious and sympathetic
concern. A petulant word from an older sister (most of us have lived
through something of the kind) made her resolve “never to tell
anybody anything again.” This resolution was broken. She has told
everybody everything, and the telling must have given her days, and
weeks, and months of undiluted pleasure.
Miss Martineau’s life was in the main a successful one. It is natural
that she should have liked to think about it, and write about it. But
Mrs. Oliphant, a far more brilliant woman, was overburdened,
overworked, always anxious, and often very unhappy. Arthur Young
was a melancholy, disgruntled man, at odds with himself, his
surroundings, and the world. The painter, Haydon, lived through
years so harassed by poverty, so untempered by discretion, so
embittered by disappointments, that his tragic suicide was the only
thing which could have brought his manifold miseries to an end. Yet
Mrs. Oliphant took comfort in setting forth her difficulties, and in
expressing a reasonable self-pity. Arthur Young relieved his mind by
a well-worked-out system of intensive grumbling. Even Haydon
seems to have sought and found a dreary solace in the recital of his
woes. The fragment of autobiography is painful to read, but was
evidently the one poor consolation of its writer’s life.
That George Sand’s “Histoire de Ma Vie” afforded its author more
than her proper share of contentment is evidenced by its length, and
by the relish which is stamped on every page. Sir Leslie Stephen
pronounced it the best autobiography he had ever read. It seems to
have delighted him as Rousseau’s “Confessions” delighted
Emerson; which goes to prove that intellectual kinship need not
necessarily be accompanied by any similarity of taste. “If we would
really know our hearts,” says Bishop Wilson, “let us impartially
review our actions.” George Sand and Rousseau reviewed their
actions with the fondest solicitude; but were biased in their own
favour. Gibbon reviewed his actions, and such emotions as he was
aware of, with an impartiality that staggers us; but his heart, at no
time an intrusive organ, gave him little concern. Franklin, with whom
truth-telling was never an “ecstasy,” but a natural process like
breathing and eating, reviewed his actions candidly, if not altogether
impartially, and left the record without boast, or apology, or the
reticence dictated by taste, to the judgment of coming generations.
He was a busy man, engaged, like Sully, in making history on a large
scale. It pleased him, not only to write his recollections, but to
bequeath them, as he bequeathed so much else, to the young nation
that he loved. He never sought to patent his inventions. He never
sought to publish his autobiography. His large outlook embraced the
future, and America was his residuary legatee.
John Wesley kept a journal for fifty-five years. This is one of the
most amazing facts in the history of letters. He was beyond
comparison the hardest worker of his day. John Stuart Mill, who
knew too much and did too much for any one man, also wrote an
autobiography, which the reading world has been content to ignore.
But Mill’s failing health compelled him sometimes to rest. Wesley
never rested. It is estimated that for over thirty years he rode, on an
average, eight thousand miles a year. He preached in his lifetime full
thirty thousand sermons—an overwhelming and relentless figure. He
wrestled with lagging Churchmen of the Establishment no less than
with zealous Antinomians, Swedenborgians, Necessitarians,
Anabaptists and Quakers. Other records of human endeavour read
like the idling of a summer day alongside of his supernatural
activities. Yet so great is the compulsion of the born diarist to confide
to the world the history of his thoughts and deeds that Wesley found
time—or took time—to write, in a minute, cryptic short-hand, a diary
which fills seven large volumes. He not only wanted to do this; he
had to do it. The narrative, now bald and itemized, now stirring and
spirited, now poignant and terrible, was part of himself. He might
have said of it more truly than Walt Whitman said of “Leaves of
Grass,” that whoever laid hold upon the book laid hold upon a man.
To ask that the autobiographer should “know himself as a realist,
and deal with himself as an artist,” is one way of demanding
perfection. Realists are plentiful, and their ranks are freshly recruited
every year. Artists are rare, and grow always rarer in an age which
lacks the freedom, the serenity, the sense of proportion, essential to
their development. It has happened from time to time that a single
powerful and sustained emotion has forced from a reticent nature an
unreserved and illuminating disclosure. Newman’s “Apologia pro Vita
sua” was written with an avowed purpose—to make clear the
sincerity of his religious life, and to refute a charge of deceitfulness.
The stern coercion which gave it birth, and which carried it to a
triumphant close, was remote from any sense of enjoyment save
such as might be found in clarity of thought and distinction of
workmanship. The thrust of truth in this fragment of autobiography
has carried it far; but it is not by truth alone that a book lives. It is not
by simple veracity that minds “deeply moralized, discriminating and
sad” have charmed, and will always charm, the few austere thinkers
and fastidious critics whom a standardized world has spared.
The pleasure derived by ordinary readers from memoirs and
reminiscences is twofold. It is the pleasure of acquiring agreeable
information in an agreeable way, and it is, more rarely, the pleasure
of a direct and penetrating mental stimulus. “The Education of Henry
Adams” has so filtered through the intelligent public mind that
echoes of it are still to be heard in serious lectures and flippant after-
dinner speeches. We can, if we are adroit borrowers, set up
intellectual shop-keeping on Mr. Adams’s stock-in-trade. We can
deal out over our own counters his essentially marketable wares.
The simpler delight afforded us by such a charming book as
Frederick Locker’s “Confidences,” which is not confidential at all; or
by John Murray’s well-bred “Memoirs of a Publisher”; or by Lord
Broughton’s “Recollections of a Long Life,” is easy to estimate. We
could ill spare Lord Broughton’s volumes, both because he tells us
things we do not learn elsewhere, and because of his illuminating
common sense. The world of authorship has of late years so
occupied itself with Lord Byron that we wince at the sound of his
name. But if we really want to know him, we must still turn to
Broughton for the knowledge. The account of Byron’s wedding in the
“Recollections” is as unforgettable as the account of Byron’s funeral
in Moore’s diffuse and rambling “Memoirs.” It is in such narratives
that the eye-witness eclipses, and must forever eclipse, the most
acute and penetrating investigator. Biographers cannot stand as
Broughton stood at the door of Seaham, when the ill-mated couple
drove away to certain misery: “I felt as if I had buried a friend.”
Historians cannot stand as John Evelyn stood on the Strand, when
the second Charles entered London: “I beheld him and blessed
God!” Or at Gravesend, seven years later, when the Dutch fleet lay
at the mouth of the Thames: “A dreadful spectacle as ever
Englishmen saw, and a dishonour never to be wiped off!”
Ever since that most readable book, “An Apology for the Life of Mr.
Colley Cibber, Comedian,” was given to the English world, actors
and playwrights have been indefatigable autobiographers. They may
write about themselves alone, as did Macready, or about themselves
and the world, after the fashion of Frances Kemble. They may be
amusing, like Ellen Terry, or discursive, like Augustus Thomas, or
casual, like John Drew. But they fall into line, and tell us what
dramas they wrote, what companies they managed, what parts they
played, and when and where they played them, together with any
scraps of theatrical gossip they may be fortunate enough to recollect.
All, at least, except the once celebrated Mrs. Inchbald. She
recollected so much that the publisher, Phillips, offered her a
thousand pounds for her manuscript; and her confessor, a wise and
nameless Catholic priest, persuaded her to burn it unread. Yet there
are people so perversely minded as to disapprove of auricular
confession.
The golden age of the autobiographer has come, perhaps to stay.
Mr. Howells, observant and sympathetic, welcomed its dawning, and
the fullness of its promise. He was of the opinion that this form of
composition represented “the supreme Christian contribution to
literature”; and, while admitting that there were bad as well as good
specimens of the art, he stoutly maintained that one more
autobiography, however indifferent, was better than one less—a
disputable point.
The question which confronts the reading public is this: “How far
should the law of kindness, which we all profess to follow, influence
us in allowing to our fellow creatures the happiness of writing books
about themselves?” There is no use saying that it would be
impossible to stop them. Nothing in the way of inhibitions is
impossible to the United States. “There is no country,” says the
observant Santayana, “in which people live under more powerful
compulsions.”
Americans have so far been inclined to tolerate the vanity of the
autobiography, because mankind is naturally vain, and to forgive its
dullness, because life is frequently dull. Moreover, they are well
disposed towards any form of art or letters that lays claim to the
quality of truth; and it is generally conceded that a man knows
himself better than others know him. He does not know, and he
never can know, how he appears to his acquaintances. The sound of
his own voice, the light in his own eye, his accent, his mannerisms,
his laugh, the sensations, pleasurable or otherwise, which he
produces by his presence—these things, apparent to every casual
observer, are unfamiliar to him. But his naturel (a word too
expressive for translation) which others must estimate by the help of
circumstantial evidence, he can, if he be honest, know and judge.
This, at least, is the theory on which rest the lucidity of art and the
weight of conscience. Yet George Sand, who was given to self-
inspection, self-analysis and self-applause, admitted the dimness of
her inward vision. “The study of the human heart,” she wrote, “is of
such a nature, that the more we are absorbed by it, the less clearly
do we see.”
Strayed Sympathies
It is probably more instructive to entertain a sneaking
kindness for any unpopular person than to give way to perfect
raptures of moral indignation against his abstract vices.—
Robert Louis Stevenson.
It is not only more instructive—it is more enlivening. The
conventionalities of criticism (moral, not literary, criticism) pass from
mouth to mouth, and from pen to pen, until the iterations of the press
are crystallized in encyclopædias and biographical dictionaries. And
from such verdicts there is no appeal. Their laboured impartiality,
their systematic adjustments, their careful avoidance of intuition,
produce in the public mind a level sameness of misunderstanding.
Many sensible people think this a good result. Even a man who did
his own thinking, and maintained his own intellectual free-hold, like
Mr. Bagehot, knew and upheld the value of ruts. He was well aware
how far a little intelligence can be made to go, unless it aspires to
originality. Therefore he grumbled at the paradoxes which were
somewhat of a novelty in his day, but which are out-worn in ours, at
the making over of virtue into vice, and of vice into something more
inspiriting than virtue. “We have palliations of Tiberius, eulogies on
Henry the Eighth, devotional exercises to Cromwell, and fulsome
adulations of the first Napoleon.”
That was a half-century ago. To-day, Tiberius is not so much out of
favour as out of mind; Mr. Froude was the last man really interested
in the moral status of Henry the Eighth; Mr. Wells has given us his
word for it that Napoleon was a very ordinary person; and the
English people have erected a statue of Cromwell close to the
Houses of Parliament, by way of reminding him (in his appointed
place) of the survival of representative government. The twentieth
century does not lean to extravagant partialities. Its trend is to
disparagement, to searchlights, to that lavish and ironic candour
which no man’s reputation can survive.
When Mr. Lytton Strachey reversed Mr. Stevenson’s suggestion,
and chose, as subject-matter of a book, four people of whom the
world had heard little but good, who had been praised and
reverenced beyond their deserts, but for whom he cherished a secret
and cold hostility, he experimented successfully with the latent
uncharitableness of men’s minds. The brilliancy with which the four
essays were written, the keenness of each assault, the charm and
persuasiveness of the style, delighted even the uncensorious. The
business of a biographer, said the author in a very engaging preface,
is to maintain his own freedom of spirit, and lay bare events as he
understands them, “dispassionately, impartially, and without ulterior
intentions.”
It sounds fair and square; but the fact remains that Mr. Strachey
disliked Manning, despised Arnold, had little sympathy with Gordon,
and no great fancy for Florence Nightingale. It must be remembered
also that in three cases out of four he was dealing with persons of
stubborn character and compelling will, as far removed from
irreproachable excellence as from criminality. Of such, much
criticism may be offered; but the only way to keep an open outlook is
to ask, “What was their life’s job?” “How well did they do it?” Men
and women who have a pressing job on hand (Florence Nightingale
was all job) cannot afford to cultivate the minor virtues. They move
with an irresistible impulse to their goal. It is a curious fact that Mr.
Strachey is never so illuminating as when he turns his back upon
these forceful and disconcerting personages, and dallies with their
more amenable contemporaries. What he writes about Gordon we
should be glad to forget; what he writes about Sir Evelyn Baring and
Lord Hartington we hope to remember while we live.
The popularity of “Eminent Victorians” inspired a host of followers.
Critics began to look about them for other vulnerable reputations. Mr.
J. A. Strahan, stepping back from Victoria to Anne, made the happy
discovery that Addison had been systematically overpraised, and
that every side of his character was open to assault. The result of
this perspicuity is a damning denunciation of a man whom his
contemporaries liked and esteemed, and concerning whom we have
been content to take the word of those who knew him. He may have

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Measuring Business Interruption

Losses and Other Commercial

Measuring business interruption losses and other

Designing commercial interiors 3rd Edition Piotrowski

Austrian Theory of Capital and Business Cycle : A

Managing and Measuring Performance in Public and

Imperialism and Economic Development in Sub-Saharan

Business process reengineering: an ICT approach First

Economic Value and Revenue Management Systems: An

An introduction to business research methods 3rd

All rights reserved. No part of this publication may be reproduced, stored in a

Limit of Liability/Disclaimer of Warranty

Library of Congress Cataloging‐in‐Publication Data is available

9781119647911 (Hardback); 9781119648048 (ePDF); 9781119647997 (epub)

Cover Design: Wiley

Set in 10/12pt ITC Garamond Std by SPi Global, Pondicherry, India

CHAPTER 2 Economic Framework for the Lost Profits

CHAPTER 3 Economic Analysis in Business Interruption

CHAPTER 4 Industry Analysis 119

CHAPTER 5 Projecting Lost Revenues 147

CHAPTER 6 Cost Analysis and Profitability 199

Burden of Proof for Demonstrating Costs 206

CHAPTER 7 Time Value of Money Considerations 245

CHAPTER 8 Business Valuations 287

CHAPTER 9 Intellectual Property 319

CHAPTER 10 Securities‐Related Damages 361

Merger‐Related Damages 400

CHAPTER 11 Antitrust 419

CHAPTER 12 Economics of Punitive Damages 467

Deterrence and Regulatory Processes 490

T his book is designed to provide a methodological framework for how

Development of the Field of Litigation Economics

Development of the Field of Forensic Accounting

In personal injury litigation, the monetary amount that is presented is

Qualifications of an Economic Expert

■■ PhD in economics or finance

Overview of the U.S. Court System

Example of How Courts Weigh and Compare Credentials of Experts

Hoyt received a B.S. degree in Milling Technology from Kansas State

The court continued with a discussion of Dr. Siegfried’s credentials and

It is interesting to note that the court put particular emphasis on the

Qualifications of an Accounting Expert on Damages

Interdisciplinary Nature of Commercial Damages Analysis

be readily avoided by gaining the assistance of an econometrician or

Relative Strengths of Economists versus Accountants

is offered, which offers significantly greater training than an MBA. Some

In this regard DAD’s economic expert in the field of economic analysis,

Although impressed by the economist’s forecasting abilities, the court

Difference Between Disciplines of Economics and Finance

540 N.E. 2d 1358, 1989.

is a subfield of economics called financial economics, which applies eco­

Finding a Damages Expert

review, particularly an attorney who did not do as well as he or she would

Critically Reviewing a Potential Expert’s Curriculum Vitae

Technical Advisory Service for Attorneys, (www.tasanet.com) and ExamWorks

Refereed or Peer‐Reviewed Journal Articles

American Accounting Association. While not a refereed journal, the Journal

Concluding Comments on CV Content

marketing presentations but little scholarly, peer‐reviewed work. The

Credentials Versus Experience in Litigation Analysis

We next come to Dr. Robert Lucas and the opinions he expressed,

550, January 19, 1999 (decided and docketed).

He is also a past recipient of the Nobel Prize in Economics, an award

is a subfield of economics called financial economics, which applies eco