This cartoon, Justice under Economics, concerns law and
economics in America. To most of us, law
and economics are distinct concepts. But
almost everyone who attended law school in recent decades took a course in law
and economics.
This course
considered the intersection of the law and economics. The students learned that economics is a modern
social science that seeks to optimize societal production, consumption, and
investment. Their legal curriculum
suggested that the law is a codification of the evolving ethical reasoning of
society.
The differences between the law and economics were
striking. For example, the law is
divided: by country, by state, by
municipality, by jurisdiction, by court, and as to origin (ie. common law
versus administrative law). Unlike law
which has many divisions, market economics purports to be a unity: it purports
to prescribe what is maximally productive or efficient across cultures and borders.
Economics is modern and progressive when compared with the
law. Much of law is ancient, is
cultural, is situational, and is outdated?
The law looks backward for precedents; economics looks
forward with forecasts and prescriptions.
Justice defies measurement; it is case-specific and based in
perceptions. Meanwhile, economics
provides neat numerical measures of societal utility (satiety)—if that can be
made to represent broad justice.
Here is a science, they learned, that can independently or
in tandem with other sciences reduce everything (however tenuously) to a
monetary cost or price or value. For
example, an economist might, using the prescriptions of a psychologist, derive
the monetary value of a mother lost to a child—if the psychologist’s prescriptions
are an adequate substitute for a mother.
They learned that economic theory, like game theory, might
suggest more efficient ways to compete and contend in a case or in a courtroom—if
maximal monetary gain was justice enough.
Economic arguments, they observed, appeal to something which
garners universal sympathy: human want
or need. Sympathies for literal and moral arguments are more heuristic— influenced
by one’s experience with the law or moral at issue.
Economics can substitute the cool rationality of digits for
the hype, heat, and heft of semantics in legal arguments. Literal and moral arguments tend to be strident
and divisive. With economics, one can
consider what is optimal, productive, and/or efficient--without the divisive freight
of moral arguments.
Economics exalts self-interest as service to society; in a
courtroom or in a political debate, self-interest is only self-seeking partisanship.
From the perspective of economics, the regulation of law is
an externality—something that inhibits or impedes the natural flows of capital
and goods. Economists assert that
competitive markets efficiently ration goods and capital; courts don’t; if laws
and governments didn’t intrude in economics, societal utility (satiety) would
be maximized.
The law students probably came away from the courses with vague perceptions that economics is unassailably mathematical and logical when
compared with the law which is ad hoc, political, administrative, unscientific,
and sometimes illogical.
During the courses, many of these law students probably made
and shared some new and informed resolutions:
to be a prudent lawyer: to generally favor economic arguments as
unifying to persons across classes and cultures and to spurn literal or moral
arguments as difficult and divisive, to err toward an economic interpretation
or execution of the law; to generally avoid a moralizing interpretation or
execution of the law; to identify and represent only economic causes so as to
have money and reason on one’s side; to only pursue a just cause for as long as
it is economic; to retain experts who would provide 'empirical' economic
testimony to influence juries; to refuse cases that would pit one against economic
collectives like the government and the legal community.
But in general, the classes did not provide the attorneys with
the skills to measure economic value. Without
this skill, in practice, the newly minted attorneys and judges would only
pursue clients, causes, and legal interpretations that they easily deemed
economic or progressive.
Progressively, economics (and law) would enable detachment from
literal interpretations and moral arguments when they would be inconvenient,
illiberal, or unprogressive. For
example, “just compensation” to be paid to private property owners under the
Bill of Rights when private property is taken for public use might be
trivialized to “just compensation” as in “just yesterday”, thus losing all the
ethical and moral freight of justice and equity, on behalf of an economic client
like the state and its public. It would
spare one the duty to represent or defend or even concede a jury trial to a
private “holdout” against the state and its public taxpayers because it would be
non-economic and unprogressive, however just.
To allow state employees to be accountable for torts, even egregious or
criminal torts, would be uneconomic—especially if one was a state judge on a
state payroll. An economic
interpretation of the law would spare judges much of the political hazard of rendering
justice—because an economic interpretation of law would almost always side with
might.
With some reflection, the students probably deduced that: what is economic generally promotes a
welfare state: it purports to represent
what is best for the majority; it generally benefits the masses—often at the
expense of the rights of individuals—unless the individual happens to be a
Rockefeller or a Rhodes. Law and economics
naturally sides with the rich and the collective poor--to the detriment of the middle
class.
Notably, what the law and economics classes probably omitted
was a simple observation about the origin and timing of economics. Relative to the origin of law, economics came
late. In fact, the English rule of law
preceded the study of economics by five centuries. It was in 1297, that the law of the land
clause of the Magna Carta was confirmed by Edward I. It protected persons and property from
arbitrary imprisonment and confiscation.
The first study of economics only emerged in 1776 with the publication
of The Wealth of Nations by Adam Smith. In
other words, the supremacy of law was instated in England and America long
before economics emerged. Much of
economic theory was developed in the United States under the auspices of Constitutional
law. This is notable.
Without rules, without the supremacy of law, everyone
understood economics: he prospers who is
not prey. Without protections for property and persons, both
were simple prey to power. Ownership was
not secure. Capital and goods were
ephemeral. Sovereign seizures made
physical security (not productivity) paramount.
Efficient activities included hoarding and bribery under this
regime. It was superfluous to consider
the efficiency, productivity, and optimization of capital when capital was not
secure.Some centuries after the rule of law had ordered society and economic relationships and interactions, economics arose. History reveals that the rule of law was the egg; economics was the chicken that hatched from this egg. The enlightenment of economic science was only enabled by and extended from the rule of law (ie. the Constitution of the United States).
Some would say this observation is tenuous and that the rule
of law was an accident observed in a single sample: history.
An
economist, Richard Posner, one of the most cited legal scholars of the 20th century, has
suggested that “the rule of law is an accidental and dispensable element of
legal ideology". In other words, he considers the rule of law to be an inexplicable, unprogressive deviation from what is optimal. Perhaps he considers economics to be other
than “an accidental and dispensable element of legal ideology”?
It is nonsense, blindness, and/or treason to propound
economic theory as the highest argument or analysis or law or arbiter or
government: to do so is to propound the
invisible hand of anarchy. To do so, is
to run against the only sample we have:
history. To do so, is to reduce all
humanity to economic capital. To do so,
is to embrace the centralized planning of society by politicians and economists.
Rule of law would suggest that even science
including economic science is beneath the law.
But is that how we actually order our society? By this transitive: rule of law > economics? Or, is economy foremost? As a society, haven’t we come to generally shun
what is literal, cultural, political, and religious and favor what is economic,
productive, and efficient?
What is our dominant identity as Americans? Is our chief identity economic? Is it that: of the credit-enabled consumer, of the profiteer
with or without produce and with or without work, of the insatiable internationalist
or industrialist, of the uncensurable government employee or unionist, of the entitled
welfare recipient or social-security retiree?
Or, do we identify with the patriots to whom freedom under law was so
dear that they purchased it with their money and lives and reputations—for us? Do we value the rule of law above our jobs, credit,
investments, entitlements, profits, industries, even our temporary security? Or, for the sake of jobs or pensions or profits,
will we assent to the suspension and subversion of some laws that protect the
property and persons of others?
For the sake of societal gain, economics (ie. Keynesianism) is used to justify all
sorts of extra-legal and otherwise unconscionable redistributions of property,
rights, and legal priorities—especially in times of crisis. For example, to avert an economic crisis and to
stimulate the mortgage market, economists have suggested that borrowers ought
to be allowed to breach mortgage contracts—but only if their mortgage is past
due—never mind the social cost to justice, to the lender, and to other borrowers. Politicians, informed by central planners,
have intervened to prop up industries like banking, insurance, and the auto
industry and to develop industries like green energy. Apparently, this intervention has not
improved the economy. Much of this
activity has contravened existing law. It
has made investment in the American economy uncertain and unprofitable. Worse, it has redistributed wealth without
regard to justice or the rule of law. Worse,
wealth has been redistributed away from those who uphold or would uphold the
rule of law (ie. the middle class).
Under law and economics, without moorings to morality, the
legal system lacks the will to check this lawlessness. Consider the events of 2008. Some
of our law students became politicians, judges, and regulators—the same
individuals who reversed laws and deferred regulations and structured rulings to
deregulate the financial markets, concerned that laws would check the efficiency
of the financial markets that ultimately fleeced so many Americans in a
financial crisis that continues to reverberate.
In so doing, they propounded economic theory as ascendant to the rule of
law.
Certainly, for the rich and powerful, raw economics is more efficient
than egalitarian laws. Perhaps economics
and law has contributed to the increasingly unequal distribution of income in
America? Apparently, the rich are
getting richer right alongside economic interpretations of the law. And the poor are getting poorer (and the
prisons are burgeoning) right alongside economic interpretations of the law.
But if economic interpretations of law are unjust, if they confound
the checks on government that protect the rule of law, what will be our basis
for law and justice? Can a consensus be
formed based on morality when common sense and conscience are publicly confounded?
In its true light, law and economics
ought to be viewed for what it is: a valiant
but impoverished attempt by the legal community to prop up law in the absence
of morality as a substitute for displaced absolutes like God, truth, and right. In place of moral absolutes, economics exalts
self-interest as enlightenment in the judge and in the judged.
This simplifies justice.
It reduces it to sums. It appeals
to our selfish natures. It rebuffs guilt
when we encounter inequality: we rationalize
that the poverty of others is self-inflicted--perhaps because they have refused
the enlightenment of pure self-interest?
But isn’t it also self-interest that animates nature’s predators? Are we, then, under economics, animals who
accidentally acquired a conscience? Would
our courtroom, economic, political, religious, and cultural disputes be better
reconciled by natural processes that leave one “red in tooth and claw”?
Here is my economic forecast for a country that puts economics
above the rule of law and morality:
hunger and fear. Don’t expect good
sense or justice or morality to prevail in a society where the only law applied
or upheld is the science of secular economics.
In fact, if constitutional law is successfully subverted by law and economics,
if economics becomes our only unity, conscience, and constraint expect to turn
the calendar back about 1,000 years to a period that resembles the Spanish
Inquisition.
God bless you,
Whoseman
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