Law, Morality, Trust, and their Limits

-- By EdiRumano - 16 Feb 2012

This paper is an exploration of the benefits and challenges of reductionist economic thinking, and the strengths and benefits of moral arguments. In “The Moral Foundation of Economic Behavior” (2011) David Rose examined the role of trust and the internalization of moral beliefs, and how this internalization affects cooperation among individuals.

The essence of Rose’s argument is that in the absence of methods of enforcing an agreement, such the lack of surveillance or law, people will engage in cooperate behaviors only when the risk of free-riding or breach is minimized because individuals internalize rules of behaviors. For example, we would be unwilling to lend money to someone we can’t monitor or reach unless we are assured that he will behave ethically.

Are you sure? The usual conclusion would be that we don't care whether he behaves ethically, as long as he repays the loan. Therefore, we secure ourselves with collateral we can monitor and reach more easily than we can monitor and reach the borrower. We observe that this is in fact what happens in the world. So if the example you are giving is Rose's example, you should give us a reference so we can verify that this is indeed the quality of his argument, after which we are likely to dismiss him from our minds. If this is your example, on the other hand, your editing is still not adequately self-critical.

Rose’s starting point, that the moral structure of societies plays a fundamental role in their economic development through their members’ ability to cooperate, isn’t a particularly new idea. That cooperation depends on, among other things, trust, is also obvious. Rose’s contribution lies in his exploration of what beliefs are the most useful in facilitating trust and cooperation if a society’s sole objective is to maximize “general prosperity.”

Do you mean that he has demonstrated that this is not a culturally-constructed matter, varying from one social setting to another? This would indeed be a contribution. Or do you mean that he ignores the obvious fact that this is a culturally-constructed matter, varying from one society and social setting to another, in which case his contribution is less evident?

My initial inclination was to explore what role the law plays in furthering cooperation and trust. However, even on a cursory examination, it’s apparent that the law’s role is both weak and contradictory. For instance, certain aspects of contract law serve to further reliance on promises, while other aspects invite and promote breach. Whole parts of the law have nothing to do with cooperation and trust and instead focus on risk allocation, or freedoms not justified on any economic basis. In short, reducing law to its function as a transaction cost is both under-inclusive and over-inclusive.

You have three problems here. First, you haven't defined "trust." Second. there's no such thing as "the law." Third, you have taken my point, using my words, and modified it just enough to make it wrong. "Reducing law to its function as a transaction cost" is not either under- or over-inclusive. It's just nonsense, unless one or more of the key words is being given an idiosyncratic definition. Try rewriting the sentence in a jargon-free fashion, using words of one syllable.

On reexamination, I find myself questioning the reasons for my motivation. Even if all the above is true, why I am interested in maximizing “general prosperity”? Rose defines that term as the maximum production of goods and services, but I don’t find that particularly convincing as prosperity. Unanswered in that definition are questions about sustainability, distribution, and justice.

But if that's the definition given, is it not more simple just to demonstrate that there is no direct relationship between legal rules and level of economic output, thus dismissing the question not by doubting his definition, but by demolishing the whole argument completely?

The reductionist economic framework is tempting.

To whom?

With this tool, you can neatly assemble all of life’s messy bits (morality, cooperation, trust) into a machine that takes in rationally self-interested human beings, applies some incentives, turns the crank, and out comes “prosperity.”

Unestablished. Indeed, if the arguments in favor of this proposition are the ones you have so far advanced under the protective coloration of calling them "Rose," almost certainly false.

Like other ideologies it seems to be universal and self-evident after enough repetition.

This is only true if you turn off your critical thinking after a while.

The econodwarf seems tall when you stoop to his level.

Are you sure? Unless the trees are all the right height, he still looks pretty short to me, because I can still see the trees, and even the forest. The econodwarf is a reductionist who reduced himself. He didn't have the power to reduce me too. Or you, for that matter, if you stop helping.

Steering away from reductionism, I believe it’s important to recognize an important contribution from Rose’s work: there are large areas of our lives where economics and law can’t reach, and in which our behavior is guided only by our morality.

The first part of the sentence is tautologically correct, so no contribution has been made by Rose. The second part is evidently false. That which is not reached by "law" or "economics" may be guided, in addition to "our morality," by "our aesthetics," "our insecurity," "our unconscious motives," "our sexuality," or "our foolishness," among an actually very large number of nouns. No contribution there either.

I immediately feel awkward making such an argument, as arguments based on “morality” are loaded with negative connotations, especially in today’s political climate.

Which negative connotations? Are you feeling apprehensive about an onslaught of moral relativism? Or a suspicion that your moralism would be treated as culturally primitive by people with a less reductive form of moral argumentation? Or are you saying that hyper-moralism has caused people to believe that every political difference is a conflict between morality and immorality? There are other possible meanings too that occur to me, of course. So it would be desirable to say what you mean, instead of saying something that could mean so many things.

But if our role as lawyers is to imagine a set of social relations and to try to make them a reality through our powers of persuasion, then it is also important for lawyers to recognize the limits of the law and the limits of economic incentives.

Why bother with the rhetoric of "recognizing limits"? Surely I said more than enough times that law is a weak form of social control. Why not just say that if our role as lawyers is to do things, we should know how those things are done?

The promise of a future reward or the threat of a future punishment can only go so far. If we seek to bring about a set of social relations that are just, then our task doesn’t stop at changing legal and economic incentives, but extends into making normative, moral arguments.

Unestablished so far. If this is the conclusion you want to reach, you need to open a road to it. If we seek to achieve results, we must use the means that will achieve those results. But nothing has so far shown, or will show this way, that there are exactly three choices about how to achieve results. Perhaps we need to write satirical comedies, or blow up buildings, or take photographs or paint pictures. Perhaps we need to leap around with guitars while wearing balaclavas and lip-syncing in a Russian cathedral.

The argument is a category error. You're now expressing some sort of theory of social action based on a very peculiar social ontology, in which the only contents of society are "law," "economics" and "morality." How much editorial attention can have been paid to these ideas? The point of editing is to test your ideas, not to worship them.

Creativity in legal thinking requires the amalgamation of different ways of thinking and different fields. Just as reductionist economics can be helpful but shouldn’t be the only tool, moral thinking can help generate insights, along with historical analysis, and sociological and psychological frameworks. Moral arguments also have strength where other tools fail, by advocating self-regulation in the absence of a watchful authority.

You mean some kinds of moral arguments advocate self-regulation? Or do you mean that arguments not having the property of being about self-regulation aren't moral arguments? Or do you mean that only self-regulation is moral? If an argument does not advocate self-regulation, is it an "ethical" rather than a "moral" argument? Or is anything that isn't about self-regulation therefore about "law"? What is the ontological category for social processes that advocate self-regulation by lining up people who have not correctly self-regulated and shooting them? The purpose of such advocacy, which is not uncommon, is to produce "self-regulation in the absence of a watchful authority." It is very effective, at least in the short term. No doubt, however, you don't mean to include this form of advocacy in your category of "helpful" behavior. A clearer exposition achieved by more careful editing is called for.

As future lawyers, we shouldn’t be afraid of making these arguments. Sticking to supposedly objective economic arguments, a la Posner, is both limiting and unhelpful.

Not even Eric Posner, whom I think you don't mean because you probably mean his father, Judge Richard Posner, doesn't "stick to supposedly objective economic arguments." This time the straw man has a name, and the rhetorical form being employed is therefore clearer, as well as being brief. But in truth the essay is a kind of nested doll arrangement of straw men. Rose, who ought simply to be dismissed out of hand, is now hanging around in order to be faux-dismissed. We were told at the outset that we were now going to be informed about the benefits and drawbacks of reductionism (because the last draft, which was apparently too much in favor of reductionism, was poorly defended). But in fact the only value of this reductionism demonstrated is that it can be replaced with another reductionism. "Rose" is good, on the present account, because sometimes he is wrong one way and sometimes another.

Maybe it is time to take aboard the possibility that ideas aren't valuable because they are right or wrong, but because of the ideas to which they lead. Here, a bunch of supposedly specific ideas have lead to the idea that its good to have multiple approaches to social phenomena in order to understand (or perhaps influence) them. But we've been there before. Indeed, that's the starting point of our whole venture. So either these ideas have not been valuable, because they only place they've lead us is back to the starting point, or the use that has been made of them has not been very effective in showing where they could lead.

As I said about the last draft, I think the problem is the editing. Not the paragraph- or sentence-level editing, but the outline-level editing. What is the new idea of yours that is central to the draft? It should be identified, carefully expressed in the briefest but most lucid form, and be made the subject of the introductory paragraph. Its antecedents, along with the facts and interpretations on which it depends, should be developed in the paragraphs that form the internal sections of the essay. A more ramified statement of the idea, demonstrating or implying for the exploration of the reader further consequences or applications, should form the subject of the conclusion. Each these steps should be tested by unsparing skeptical analysis: each component step—conceptual, factual, rhetorical—should be greeted afresh, as the reader comes upon it. Every hard question should be asked. Only when that habit has become deeply embedded have you mastered the practice of editing yourself. Every shortcut and cheap escape you give yourself in each project you undertake delays the achievement of that very important stage in your development as a writer.