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.
I’ve always thought of natural law and law and economics as opposing schools of thought. Like Rick in Casablanca, I must have been misinformed. On March 21, law and economics scholar Richard Epstein will deliver the Spring 2013 Natural Law Colloquium Lecture at Fordham. Details are here.
Here’s something you don’t see every day, even if you follow the law reviews. On SSRN, George Mason University economist Peter Leeson has posted an abstract for a new paper that explains human sacrifice in terms of property rights (Human Sacrifice). Although economists typically dismiss the practice as irrational, he argues, human sacrifice is actually a rational social strategy that allows a group to signal to outsiders that it’s poor and therefore not worth plundering. Religious commandments are useful in creating incentives — to get people comfortable with the idea of ritual immolation — but really are only secondary. Leeson hasn’t posted his paper on SSRN, but you can find it on his website. Here’s the abstract:
This paper develops a theory of rational human sacrifice: the purchase and ritual slaughter of innocent persons to appease divinities. I argue that human sacrifice is a technology for protecting property rights. It improves property protection by destroying part of sacrificing communities’ wealth, which depresses the expected payoff of plundering them. Human sacrifice is a highly effective vehicle for destroying wealth to protect property rights because it’s an excellent public meter of wealth destruction. Human sacrifice is spectacular, publicly communicating a sacrificer’s destruction far and wide. And immolating a live person is nearly impossible to fake, verifying the amount of wealth a sacrificer has destroyed. To incentivize community members to contribute wealth for destruction, human sacrifice is presented as a religious obligation. To test my theory I investigate human sacrifice as practiced by the most significant and well-known society of ritual immolators in the modern era: the Konds of Orissa, India. Evidence from the Konds supports my theory’s predictions.
I don’t know enough about the Konds or economics to evaluate Professor Leeson’s paper, but it does suggest a strategy for religious communities that seek to influence public debate. Don’t make sectarian arguments that might be inaccessible and off-putting to non-believers. Find an economist.
This November, Princeton University Press will publish The Long Divergence: How Islamic Law Held Back the Middle East by Timur Kuran (Duke University). The publisher’s description follows.
In the year 1000, the economy of the Middle East was at least as advanced as that of Europe. But by 1800, the region had fallen dramatically behind–in living standards, technology, and economic institutions. In short, the Middle East had failed to modernize economically as the West surged ahead. What caused this long divergence? And why does the Middle East remain drastically underdeveloped compared to the West? In The Long Divergence, one of the world’s leading experts on Islamic economic institutions and the economy of the Middle East provides a new answer to these long-debated questions.
Timur Kuran argues that what slowed the economic development of the Middle East was not colonialism or geography, still less Muslim attitudes or some incompatibility between Islam and capitalism. Rather, starting around the tenth century, Islamic legal institutions, which had benefitted the Middle Eastern economy in the early centuries of Islam, began to act as a drag on development by slowing or blocking the emergence of central features of modern economic life–including private capital accumulation, corporations, large-scale production, and impersonal exchange. By the nineteenth century, modern economic institutions began to be transplanted to the Middle East, but its economy has not caught up. And there is no quick fix today. Low trust, rampant corruption, and weak civil societies–all characteristic of the region’s economies today and all legacies of its economic history–will take generations to overcome.
The Long Divergence opens up a frank and honest debate on a crucial issue that even some of the most ardent secularists in the Muslim world have hesitated to discuss.
Peter T. Leeson (George Mason U.) has posted “God Damn”: The Law and Economics of Monastic Malediction. The abstract follows.
Today monks are known for turning the other cheek, honoring saints, and blessing humanity with brotherly love. But for centuries they were known equally for fulminating their foes, humiliating saints, and casting calamitous curses at persons who crossed them. Clerics called these curses “maledictions.” This article argues that medieval communities of monks and canons used maledictions to protect their property against predators where government and physical self-help were unavailable to them. To explain how they did this I develop a theory of cursing with rational agents. I show that curses capable of improving property protection when cursors and their targets are rational must satisfy three conditions. They must be grounded in targets’ existing beliefs, monopolized by cursors, and unfalsiﬁable. Malediction satisﬁed these conditions, making it an effective institutional substitute for conventional institutions of clerical property protection.
On October 18, Fordham’s Institute on Religion, Law & Lawyer’s Work will host what looks to be a fascinating panel discussion, “Why Morality-Free Economic Theory Does Not Work: A Natural Law Perspective in the Wake of the Recent Financial Crisis.” Speakers include Luigino Bruni (Milan-Bicocca), Michael Baur (Fordham) and Russell Pearce (Fordham). Details are here.
This October, Cambridge University Press will publish The Politics of Jewish Commerce by Jonathan Karp (State University of New York, Binghamton). The publisher’s description follows.
This study demonstrates the centrality of economic rationales to debates on Jews’ status in Italy, Britain, France, and Germany during the course of two centuries. It delineates the common motifs that informed these discussions. It thus provides the first overview of the political-economic dimensions of the Jewish emancipation literature of this period viewed against the backdrop of broader controversies within European society over the effects of commerce on inherited political values and institutions.
It doesn’t address religion as such, but a new piece on SSRN, The State and the Market–A Parable: On the State’s Commodifying Effects, raises issues that law and religion scholars may find interesting. Over the last generation, more and more aspects of life have become matters of the market. People can make contracts about lots of things that once were off limits. Some scholars argue that this trend has gone too far, that certain subjects, like family relationships, relate so closely to human personality that their commodifcation does violence to something essential. The authors of this new piece, Tsilly Dagan (Bar-Ilan) and Talia Fisher (Tel Aviv) are skeptical of the anti-commodification position, arguing that state regulation may have commodifying effects as well. Their paper is entirely secular, but religious jurisprudence traditionally opposes commodification as well, and scholars who work in that field may find the discussion of commodification suggestive. The abstract follows.
Commodification has become the central parameter in delineating the contours of the market and in the division of labor between the market and the state. The commodification critique has become a ‘buzz word’ against the market and thus in support of State intervention. In what has been termed “taboo trades” – human organs, reproductive capacities, sexuality and the like – market-based orders have been condemned on the basis of commodification, thus leaving the floor open for state-intervention by regulation. The central argument of this article is that the commodificatory effects, often associated with monetary transactions, are not exclusive to monetized exchanges nor to the market arena. Rather, State intervention, as such, involves similar reductive effects, in light of its inherent itemizing, categorizing and ranking nature. This understanding has a significant implication for the structuring of the market-state debate: In light of the fact that upon closer scrutiny state ordering shares similar commodificatory effects with the market – we argue that it is not enough to raise the commodification banner in order to justify state intervention. Put differently, an implicit premise in the prevailing commodification discourse is that where the market commodifies, the state is necessarily neutral. However, state intervention – we will show – suffers from similar flaws. Another purpose of viewing commodification through the prism of State intervention is to expose the multi-faceted nature of the anti-commodificatory sentiment. Expanding the horizons of the commodification discourse beyond the traditional contexts of taboo markets to the unexplored terrain of state regulation exposes the fact that money is but one instance of a whole family of cases where thick social interactions are translated into a uni-dimensional currency that has a reductive effect on them.
It isn’t often that law and economics and law and religion meet up, but this book, Economic Origins of Roman Christianity (U. Chicago Press 2011), by Robert B. Ekelund, Jr. and Robert D. Tollison, looks to be an exception. The book is itself an example of how Americans believe that the tools of economics and the market can be fruitfully applied to understand all sorts of social phenomena — indeed, how the metaphor of the market is a natural fit for understanding religious experience. Definitely worth a look, though I am not familiar with the designation, “Roman Christianity” (I’m sure the authors explain why they chose it). The publisher’s description follows.
In the global marketplace of ideas, few realms spark as much conflict as religion. For millions of people, it is an integral part of everyday life, reflected by a widely divergent supply of practices and philosophical perspectives. Yet, historically, the marketplace has not always been competitive. While the early Common Era saw competition between Christianity, Judaism, and the many pagan cults, Roman Christianity came eventually to dominate Western Europe.
Using basic concepts of economic theory, Robert B. Ekelund Jr. and Robert D. Tollison explain the origin and subsequent spread of Roman Christianity, showing first how the standard concepts of risk, cost, and benefit can account for the demand for religion. Then, drawing on the economics of networking, entrepreneurship, and industrial organization, the book explains Christianity’s rapid ascent. Like a business, the church developed sound business strategies that increased its market share to a near monopoly in the medieval period. This book offers a fascinating look at the dynamics of Christianity’s rise, as well as how aspects the church’s structure—developed over the first millennium—illuminate a number of critical problems faced by the Church today.
This afternoon, I have the pleasure of introducing the conference keynote speaker, Geoffrey Miller of NYU. Geoff’s talk, “Law and Economics versus Economic Analysis of Law,” distinguishes the former discipline from the latter, using Robert Aumann’s famous economic analysis of Talmudic law as an example. Geoff argues that the economic analysis of law offers elegance, but that law and economics offers a rich understanding of complex real-world institutions like courts and legal systems. Taken together, the two disciplines offer “complementary means for obtaining information about the social world.” — MLM