For today’s Scholarship Roundup post, I’m going to exercise the host’s privilege and post a new essay of my own, “Markets and Morals: The Limits of Doux Commerce.” The essay, which I wrote for a symposium on Nate Oman’s book, The Dignity of Commerce, will appear in a forthcoming issue of the William and Mary Business Law Review. The doux commerce thesis holds that the market tends to promote the liberal virtues of pluralism and religious tolerance. Following Burke, I argue that the thesis gets things backwards. This was a fun essay to write, as it allowed me to go back and re-read the actual Enlightenment thinkers, as well as Alan Bloom’s great essay on The Merchant of Venice, which play figures prominently in Nate’s book.
Here’s the abstract:
In this essay for a symposium on Professor Nathan Oman’s new book, “The Dignity of Commerce,” I do three things. First, I describe what I take to be the central message of the book, namely, that markets promote liberal values of tolerance, pluralism, and cooperation among rival, even hostile groups. Second, I show how Oman’s argument draws from a line of political and economic thought that dates to the Enlightenment, the so-called “doux commerce” thesis of thinkers like Montesquieu and Adam Smith. Finally, I discuss what I consider the most penetrating criticism of that thesis, Edmund Burke’s critique from tradition, which suggests we should be careful attributing too much to markets’ ability to promote liberal pluralism. According to Burke, it is the Western tradition, including religion, and not commerce, which creates the tolerant, pluralist marketplace of the doux commerce thesis. That Burke was correct is suggested by several historical examples and by contemporary events in the United States and across the globe. That is not to say that Oman is entirely wrong about the potential political benefits of the market, only that we should be careful not to overstate them.
At the Liberty Law site today, I have a review of Nate Oman’s important new book on markets and morals, The Dignity of Commerce. The book is a great contribution to contracts scholarship, thoughtful and beautifully written. Nate and I have a friendly disagreement, though, about the cause-and-effect relationship between markets and morals, so it’s no surprise that I find myself disagreeing with one of the book’s main claims:
Liberals maintain that markets create wealth, promote mutual gain, and unlock talents and resources in individuals and nations. And, they say, markets have political benefits. Since the Enlightenment, liberals have argued that markets promote civic pluralism by making people more reasonable and prudent; less given to political and, especially, religious enthusiasm; and eager to avoid divisive debates about deep commitments.
That markets have these advantages is known as the doux commerce thesis. (That’s doux as in soft, or having a softening effect.) The thesis is most closely associated with the Baron de Montesquieu and Voltaire, though David Hume and Adam Smith endorsed it, too. In a very fine new book, The Dignity of Commerce: Markets and the Moral Foundations of Contract Law, contracts scholar Nathan B. Oman advances a version of the theory, updated to take account of current contract doctrine. Oman, a law professor at William and Mary Law School, combines immense learning and sophistication with a lightness of touch that makes his book a pleasure to read.
All of that said, I remain unpersuaded about doux commerce. Edmund Burke had it right, I think. Markets don’t inevitably lead to liberalism. Rather, the liberal tradition itself creates the sort of markets liberals admire.
You can read my full review here. For more information on Nate’s book, click here.
A really fascinating article in the New York Times this morning about the perhaps one million embryos currently in storage in medical facilities across the United States. Most of these embryos have been created through IVF treatments, on which increasing numbers of Americans rely. IVF allows many couples to bring new life into the world and experience the great gift of children. Given the current state of the technology, though, parents who use IVF must typically create several extra embryos in order to increase the odds of conception. This means that many unused embryos remain. The Times reports that perhaps a million such embryos now exist. What will become of them?
Of course, for many Americans, this question raises important religious issues. The Catholic Church teaches that IVF is immoral in principle, even for married couples, because it violates human dignity and degrades the marital act–though of course children created through IVF are to honored and cherished, just like any others. Evangelical Christians, however, in principle accept the practice for married couples, as do Orthodox Christians. The fate of any unused embryos raises very difficult questions, however. To destroy them seems tantamount to abortion, which both Evangelical and Orthodox Christianity condemn. And all Christians, I think, would have moral concerns about the commodification of embryos that seems the logical outcome of our market society. The Times reports that one California company is already in the business of creating embryos from third parties for would-be parents to purchase, for $12,500, plus a money-back guarantee.
But back to married couples. What should a couple with religious scruples do about extra embryos created by IVF? Some Evangelicals have come up with a good solution. They donate the embryos to other infertile couples. It’s analogous to adoption:
For example, the National Embryo Donation Center in Tennessee, which is endorsed by the Christian Medical Association, places embryos only with heterosexual couples married at least three years — and only after a home study exploring their readiness to be parents, as is required for families adopting a living child.
“We think the embryos deserve the same level of protections as children who are being adopted,” said Stephanie Wood-Moyers, marketing director of the center, where the Watts embryos were stored.
Where does the civil law stand in all this? Unlike many countries, the US does not regulate assisted reproduction technologies, including IVF. And so, as with respect to so many aspects of American life, it becomes a matter of contract law. In my first-year contracts class, in fact, our casebook has two relatively recent cases, one from Massachusetts and one from New York, on the enforceability of parties’ agreements with respect to the disposal of unwanted embryos after IVF. In the Massachusetts case, the court declined to enforce the agreement, in large part because the agreement was ambiguous.
The New York court, by contrast, ruled in favor of enforcement. “Explicit agreements avoid costly litigation in business transactions,” Chief Judge Kaye wrote. She continued:
They are all the more necessary and desirable in personal matters of reproductive choice, where the intangible costs of any litigation are simply incalculable. Advance directives … both minimize misunderstandings and maximize procreative liberty by reserving to the progenitors the authority to make what is in the first instances a quintessentially personal, private decision. Written agreements also provide the certainty needed for effective operation of IVF programs.
Now, you might wonder whether questions as complicated and wrenching for people as these should be handled by contract law, as if they were equivalent to particularly difficult business transactions. (“How do we divide up the inventory if the partnership dissolves?”). Surely there is a more humane way to address these issues. But that seems to be the way our culture is heading. If there’s one thing we still believe in, apparently, it’s liberty of contract–at least when it comes to bearing children.
I’ve enjoyed Nate’s posts this month on the importance and benevolence of the market as a human institution. The market can indeed promote tolerance, cooperation, and peace, to say nothing of wealth. And its importance in our culture only increases. The market continues to expand its reach, governing many aspects of life we once thought beyond it. A few decades ago, prenuptial agreements were void as against public policy. Courts would not enforce agreements in contemplation of divorce. Now, prenups are routine. There are many other examples.
As the market expands, it seems inevitable that competing commitments will shrink, at least as a matter of public life. Religion may be among these commitments. In fact, as Nate explains, reducing religion’s hold on people may have been the point all along. Voltaire, for example, anticipated that the expansion of commerce would cause religious commitment to atrophy. People would come to see the market, not the church, as important, and identify as buyers and sellers rather than believers. After all, in the marketplace, it doesn’t matter whether one is a good Christian, Jew, Muslim or pagan. All that matters is whether one can pay.
In the passage Nate quotes, Voltaire offers eighteenth-century London as the model of a benevolent, religiously indifferent, commercial society. (Voltaire overstated things. In 1780, two years after he died, London was convulsed by the vicious, anti-Catholic Gordon Riots, in which mobs terrorized the city for days while Londoners huddled inside their homes, afraid to face them. “Such,” Johnson observed, “is the cowardice of a commercial place.”) When one thinks of the prototype of a mercantile society, though, one usually thinks of another city a thousand miles away. It’s Venice, more than any other place, which conventionally epitomizes the commercial society.
I’ve been thinking a great deal about Venice, lately, ever since I visited last month to participate in an international law and religion moot court competition. In its glory, Venice was a city devoted to commerce. Just as in today’s New York, you could find anything for sale. The city pioneered credit-financed capitalism and grew fabulously wealthy on trade with Byzantium and the Levant. And, as Voltaire’s theory would suggest, the Venetian Republic was quite tolerant of religious difference, especially for the time. The city had significant colonies of Eastern Christians like Greeks and Armenians; Lutheran Germans; Muslim Turks; and of course Jews. All made fortunes trading peaceably in Venice.
And yet, as I learned, Venice had a compensating commitment to tradition. The city balanced devotion to the fluid world of commerce with an equal devotion to the static world of custom. As Peter Ackroyd explains in his marvelous book, Venice, Pure City (2009), Venice was “the most conservative of societies.” In law and government, ancient usage had preeminent authority, more than positive legislation. Social interactions followed patterns that did not change. For example, strict rules limited what different classes could wear. Patricians wore stiff black gowns, which highlighted gravity and authority, not flexibility and cosmopolitanism. In architecture, generation after generation followed old models. When buildings collapsed, Venetians would reconstruct them exactly as they had been, often using the same materials. Come era, dove era.
And Venice was exceptionally religious. The city’s enthusiastic participation in the Crusades is well known, and was always a matter of great pride. One could dismiss Crusading as a search for more loot, but for Venetians it was more than that. Venetians were genuinely devout, perhaps excessively so. Hundreds of churches shared a very small space; religious processions were numerous and frequent. Reports of miracles were common; only Rome had more. This is not to say that Venetians were saints. They never lost sight of the main chance. But Catholicism was a centerpiece of their identity. Ackroyd sums it up best: “Machiavelli wrote that ‘we Italians are corrupt and irreligious beyond all others.’ That was not true of the Venetians. They were corrupt and religious.”
The commitment to tradition was brought home to me when I was visited the famous basilica of Santa Maria della Salute on the Grand Canal. The basilica was built in the seventeenth century to commemorate the Virgin’s help in ending one of the periodic plagues that struck Venice. As architectural historian Gianmario Guidarelli explained to me, at the very center of this church, there is an inscription (above) that captures the Venetian understanding of life: Unde Origo Inde Salus, “Where is the Origin, There is Salvation.” The inscription refers to the legendary founding of Venice on March 25, the Feast of the Annunciation to the Virgin in the Western calendar. But I think the inscription must allude more generally to the saving power of the past. Salvation doesn’t come from novelty or change. To preserve the city, one must return to history, to ancient customs, to the origins. You can’t get more traditional than that.
With their dual commitment to markets and tradition, the merchants of Venice held the gorgeous East in fee. The state they created, the Venetian Republic, lasted for more than a thousand years. In the West today, we have kept and expanded markets, but seem ever more eager to jettison tradition. I wonder how long we’ll last.
Levy raises two sets of concerns with Indiana’s law, one of which is largely illusory and one of which merits serious thought. The illusory concern is that the Indiana RFRA is a radical innovation that by applying the compelling state interest test to private causes of action threatens to undermine the basic legal infrastructure – property, contract, and tort – of the market.
It’s important to remember that we have decades of experience applying some version of the compelling state interest test to religious claims. We have the nearly three decades from Sherbert to Smith as a matter of constitutional law, and then the more than two decades from the passage of RFRA to the present as a matter of federal statutory law. Beginning in the mid-1990s some states began passing their own RFRAs, and during this entire period numerous states applied some version of the compelling state interest test as a matter of state constitutional law. If antinomian chaos were going to break forth one would think that after a half century it already would have happened.
In terms of concrete conflicts between RFRAs and basic private law, it seems to me that the most dangerous ones would be cases involving bodily harm or the invasion or destruction of property. I think that in cases involving bodily integrity, courts would have no problem saying that the state had a compelling government interest in protecting bodily integrity and in providing recourse to those suffering bodily injury. I think that for most property cases, we can dispose of them by saying that property law places no substantial burden on religious exercise. Saying that you have to build your sukkah on in your yard rather than my yard is not a substantial burden. There might be issues if we have a property owner who for some reason owned religiously significant land, as has been the case with some Native American claims against the federal government. Depending on the facts, I am not convinced that chaos would result if we granted an exemption from certain rules of property law. To give an analogy, lots of private property owners have land that contains graves. In many states there is a common law doctrine granting descendants an easement on the land to visit the graves. The market has not been threatened.
His rather fanciful legal concerns aside, however, Levy raises a deeper issue, one that deserve far more attention that it has received. His concern is with the way in which allowing religious believers to claim exemptions from otherwise applicable laws might inject the question of religious identity into commerce. He quotes Voltaire’s famous statement of the doux commerce argument:
Take a view of the Royal Exchange in London, a place more venerable than many courts of justice, where the representatives of all nations meet for the benefit of mankind. There the Jew, the Mahometan, and the Christian transact together, as though they all professed the same religion, and give the name of infidel to none but bankrupts. There thee Presbyterian confides in the Anabaptist, and the Churchman depends on the Quaker’s word. At the breaking up of this pacific and free assembly, some withdraw to the synagogue, and others to take a glass. This man goes and is baptized in a great tub, in the name of the Father, Son, and Holy Ghost: that man has his son’s foreskin cut off, whilst a set of Hebrew words (quite unintelligible to him) are mumbled over his child. Others retire to their churches, and there wait for the inspiration of heaven with their hats on, and all are satisfied.
Voltaire’s insight – one he shared with thinkers such as Montesquieu and Adam Smith – was that markets are more than simply a mechanism for organizing economic production. They are also moral and political institutions that structure relationships and inculcate certain moral habits. For the eighteenth-century apologists for commerce, the effect of markets in this area was largely beneficent. They allowed those of very differing religious convictions to peacefully cooperate and tended to inculcate habits of tolerance and, if not respect, at least peaceful co-existence.
Levy suggests that by allowing religious people to claim exemptions from the demands of contract or property, RFRA statutes might undermine this order. As explained above, I think that this is the wrong thing to worry about. The scope of anti-discrimination laws, however, does raise this issue. As near as I can tell, Levy himself favors rather narrow antidiscrimination laws on largely libertarian grounds. What happens, however, when we apply the doux commerce argument itself to the question of antidiscrimination laws?
Normally we think of contract as structuring relationships in the market. Antidiscrimination laws, however, deprive certain market participants of the ability to avoid contracting. This raises two questions. First, does such forced contracting undermine doux commerce by replacing contractual norms with non-contractual equality norms, or does it enhance doux commerce by requiring people to trade across tribal and religious boundaries? Second, when thinking about religion in our society, how desirable is the Royal Exchange of Voltaire? On one hand it tends to promote tolerance and peacefully mediate religious pluralism. At the end of the day, however, Voltaire was no great friend of religious faith and for him one of the great attractions of commerce was the corrosive effect he hoped that it would have on religious communities, which he wished to see submerged in the universal, secular identity of citizenship.
An interesting story about The Law Society’s decision to recognize the legitimacy of Islamic law by permitting solicitors to draft wills that are compliant with principles of Islamic law. A bit:
Under ground-breaking guidance, produced by The Law Society, High Street solicitors will be able to write Islamic wills that deny women an equal share of inheritances and exclude unbelievers altogether.
The documents, which would be recognised by Britain’s courts, will also prevent children born out of wedlock – and even those who have been adopted – from being counted as legitimate heirs.
Anyone married in a church, or in a civil ceremony, could be excluded from succession under Sharia principles, which recognise only Muslim weddings for inheritance purposes.
Nicholas Fluck, president of The Law Society, said the guidance would promote “good practice” in applying Islamic principles in the British legal system.
The story reports that some of the existing Islamic law tribunals also “have powers to set contracts between parties, mainly in commercial disputes, but also to deal with issues such as domestic violence, family disputes and inheritance battles.”
It may be that The Law Society will eventually make the same decision with respect to private parties who wish to engage in commercial transactions that conform to Islamic law, or who wish to avoid commercial transactions with those who hold what are taken to be religiously objectionable views. Interesting that the reception to similar claims in this country has been rather different.
UPDATE: See Frank Cranmer’s comment for various clarifications.
This month, I.B. Tauris Publishers is publishing Contracts in Islamic Law by Hussein Hassan. The publisher’s description follows.
This book introduces students to the theoretical and philosophical foundations of Islamic contractual law. Islamic law is applied in differing degrees by many countries across the world and especially in the Middle East. Considering the strategic and financial importance of these countries, taken as a whole, it is surprising how little academic writing exists in the West on either Islamic law or Middle Eastern law. Recently there have been signs of a burgeoning interest in Middle Eastern law. However, traditional Islamic law remains a neglected area of study. Hussein Hassan makes a significant contribution by presenting a detailed survey (which utilises both contemporary and classical sources) of a crucially important area of Islamic law – contract law – and by adopting an approach that gives priority to theory and to a comparative analysis with Anglo-American law theory. Contracts in Islamic Law offers an invaluable resource to academics and researchers with a specific interest in Islamic law, to postgraduate students and final year students of law, and to scholars whose main focus is Anglo-American contract law but who are interested in comparative law/theory.
In an era of increasing financial complexity, the Catholic legal and intellectual tradition offers not only a symbolic moral witness to the policy debates concerning lending, but a voice that offers real solutions to the problem of modern usury. The duty of those in the economic world to safeguard the weaker, more vulnerable parties in society as articulated by Pope Benedict XVI in Caritas in Veritate can best find its expression in vigorous adherence to the unconscionability doctrine of contract law. In addition, the Catholic legal and intellectual tradition promotes microcredit lending programs and community credit unions as strong economic alternatives to modern usury.