Archive for the 'Hobbes' Category

Faith and Act (a rejoinder to Nowicki)

Published on June 21, 2006 in Hobbes, Law and Society and Philosophy. 2 Comments

Along with Elizabeth Nowicki, I believe that in ordinary language we can very sensibly talk about the phrase ‘not in good faith’ without necessarily meaning ‘bad faith’. Rather, double negation phrases seem, in conversation, to mean a third in-between category. My last post was an attempt to shed some light on what features there are in ordinary language which could account for this. I concluded by saying that, while ordinary language may very plausibly and legitimately accept the third category, the law will probably not tolerate it, because the nature of the system is to render judgments on the basis of clear meanings, and this is accomplished most easily through black-and-white categories. Manfred Gabriel of L&S, in a related post (and far before mine), explained this legal Manicheanism by appealing to the action-oriented character of law. More recently, Nowicki has carefully expanded upon her interpretation of the Disney case, item by item.

The conclusion of my last post on L&S was both supportive, and cautiously pessimistic. The purpose of the present post, however, is to examine Nowicki’s proposal for interpretation of “not in good faith” on different grounds. It will veer away from language and into law and morality (to the extent that they may be separated). I have two related worries: one involves the use of the concept of “action”; the other, on “bad faith”.

Before I do those things, I first want to point out where I think Elizabeth has sold herself short. In item three, she asks us to consider the following case: “Director signs-off on President’s pay package because President is a good friend. Is this act affirmatively in the best interests of the corp./sh.? NO. This is, at the very least, an act NOT IN GOOD FAITH. Is this willful misconduct? I THINK SO. Label: BAD FAITH ACT. If reasonable minds differ, however, as to whether this act rises to the level of “BAD FAITH,” we can all agree that it is, at the least, an act “not in good faith,” as noted above, such that it is outside the business judgment rule presumption and DGCL 102(b)(7).” It seems to me that (if the description is accurate) then it is clearly, hands down, an act of bad faith. It’s true that it falls inside of the rest of 102(b)(7), presumably the “don’t act for improper personal benefits” clause; and to be safe on first blush, we might be hesitant about describing that as being a clear case of non-good-faith, since just because two clauses sit next to each other it doesn’t mean they’re identical in content (no doubt I’m just echoing Nowicki here). But logically it seems to me that the not-in-improper-personal-interest clause is indeed a member of to the “not in good faith” one, so long as we (reasonably) assume that in this context an act that is done for the sake of improper personal benefits is not, and cannot be, to act for the best interests of the corporation.

I. My preference for discussing the “good faith” issue tends to be in terms of behavior and not only action. This is because, for instance, negligence is not an action, or at least can’t best be described as an action (though some have tried). Rather, negligence is the absence of correct action; the derelection of a duty which may occur due to carelessness, not due to malign intent, but due to an absence of the right intent which would lead to correct action. For instance, negligence is understandable as being not-in-good-faith behavior in the DGCL. It reads, “The certificate of incorporation may also contain… A provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director… for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law” (emphasis mine). Ommissions are a solid half of what it can mean to be in a state of non-good faith. This is important because it appears that the ethically relevant aspects of Nowicki’s items five, six, and seven — her “not in good faith” judgments — are not themselves actions. Rather, they’re ommissions, or failures to act. So we should talk in terms of “behavior”, it seems to me, because behavior is a broad enough descriptive category to cover both act and omission.

II. What about the difference between bad faith and the third category of non-good faith? For many of us, intuition tells us that malicious intent is quite worse than negligence, because we have intuitions about a difference between positive and negative responsibility (or, roughly, between doing harm and allowing harm). And the most sensible way to make sense of the intuition in this case is to appeal to the third category between good and bad faith, or draw out graded categories. But, putting different lengths of judicial sentencing aside — the law here seems to observe no difference between bad faith and non-good-faith, or (if it did accept there was a difference) doesn’t seem to care.

The question becomes: should it care? And why?

Arguments can be made, either moral or linguistic. My previous post offered an ordinary-language argument (along the same lines as Nowicki’s, though with some differences). But linguistic arguments are unmotivated suggestions if they lack moral consideration. So I have to ask: is it possible that, for all intents and purposes, negligence could be in the same moral category as malicious intent – the category of “bad faith”?

Agreed, this sounds bizarre on the face of it. Negligence doesn’t seem intuitively like it is in the same ballpark as malicious intent. But in what follows, I’ll offer some reasons why they can be understood as being in the same category.

It seems to me, intuitively, that a deontic-sounding argument can be made that an ommission (failure to act) can be legitimately called “bad faith behavior” if it involves a dereliction of written duties. Written duties are those where there is a pre-established obligation, i.e., a habit of conduct. Unwritten ones are where an unexpected situation arises for which a reasonable person can easily arrive at morally acceptable solutions, but to which they have no prior instruction or expectation, general or precise. To paraphrase one infamous political philosopher, unwritten laws are obvious by way of reason, and their content does not derive from the will of an external force.

Morally, duties can be normal (i.e., the obligation to act, to inform or discuss), or agentic (i.e., the obligation to learn). The infamous Kitty Genovese case is one example where people had failed to fulfill their obligation to act, and a young woman died horribly because of it; several of the items which Nowicki presents are illustrations of the Director’s failure to fulfill an obligation to inform. The obligation to learn new facts is also an essential component of the analysis; if a person, say, fails to stay abreast of certain issues and make informed decisions despite the fact that that is their fiduciary role, then they’re failing to take seriously the obligation to learn. Even more obviously, a security guard has the obligation to watch for burglars, to learn that burglars are burgaling; otherwise, they seem to be committing what Nowicki rightfully calls “gross negligence in becoming informed”.

I would imagine that a person violates their unwritten duties largely through neglect of normal or agentic duties, and is engaging intuitively in bad faith when they avoid performing said duties. But it’s not fair to blame a person for violation of unwritten duties when they’re not also violating any normal or agentic duties; they might just be feeling sluggish that day, or have bad moral luck.

This little taxonomy of duties isn’t idle (I hope). By keeping in mind the notion of agentic duties, we have a means of being able to say to a negligent individual that they have behaved in bad faith — through ommission, which as we have seen, the law seems to allow. Moreover, it would likely be agreed on all hands that the consequences of ignoring agentic duties can be dire (as is obvious in the burglar case, and arguably also in the Disney case). WIth all these considerations, it seems to be a very small imaginative leap to say that cases of agentic negligence may be instances of “bad faith”.

What do you folks think?

[Philosophical debts to: Thomas Hobbes (unwritten laws); Philippa Foot and Warren Quinn (moral agency, though this post disagreed with them both]

Efficient Anarchy?

Published on April 15, 2006 in Hobbes and Law and Society. Closed

In a recent paper, Efficient Anarchy, Peter Leeson examines the conditions under which anarchy is efficient. There are, essentially, two reasons for the existence of anarchy as a means to organize a society. Either the costs of government exceed the gains from government, or the gains from government are so minimal that, taking transaction costs into account, individual agents lack the incentive to create one.

What are the costs of government?

  • Organizing collective action, including, of course, the opportunitiy cost of those whose individual choices are being replaced by collective action.
  • Enforcing the rules promulgated by the government, which requires courts, police, and an admininstrative system.
  • The costs of providing traditional public goods such as roads and education.

The primary gains from government are the reduction of uncertainty and the lowering of transaction costs for exchanges among strangers. A simple formula captures this framework. L (= low) is the net welfare in a state where government is absent. H (= high) is the net welfare in a state where government is present. G is the cost of government. It follows that government is rational only if H – L > G. Where H – L < G, anarchy is efficient.

There are certain common environmental factors that influence both the direct costs of government and the indirect gains from government. Here is a partial list.

  • Population size. The greater the population size, the higher the cost of organizing and enforcing collective action and the greater the potential benefits from trade.
  • Diversity. The more diverse a population in terms of endowments, preferences, and productive abilities, the higher the cost of achieving consensus and the greater the benefits from trade
  • Social norms facilitating exchange. If such norms are present (e.g., arbitration, non-communal possessions), trade will yield greater benefits, which diminishes the potential gains from formal government.

Against this backdrop, Leeson proceeds to outline the two types of efficient anarchy:

Having established what affects the cost of government and what affects the benefits government provides by moving society from a lower trade equilibrium to a higher trade one, it is now possible to distinguish two types of efficient anarchy: (1) “big G anarchy,” in which despite the presence of a substantial gap between social wealth in the higher vs. lower trade equilibrium, government is too costly to justify its emergence, and (2) “small H – L anarchy,” in which even though government may be inexpensive to create, the difference between social wealth in the higher and lower trade equilibrium is so small as to make the state inefficient on cost-benefit grounds. At least theoretically then, these are situations in which statelessness is socially optimal. A society of rationally self-interested agents operating in either environment would thus (rationally) choose anarchy over government.

One of the most intriguing aspects of Leeson’s paper is that he is unafraid of applying his theoretical framework to the real world. “Small H – L anarchy,” Leeson proposes, is observed

in small, primitive societies … such as the Eskimo tribes of the North American Arctic, Pygmies in Zaire, Indian tribes like the Yoruk of North America, the Ifugao of the Philippines, the Massims of East Paupo-Melanesia, Indian tribes of South America like the Kuikuru, the Kabyle Berbers of Algeria, the Land Dyaks of Sarawak and the tribal Santals of India, none of which had governments.

In these societies, because of their relatively small population size, exclusionary social norms, and homogeneity of endowments, preferences, and productive abilities, the markets are so thin that the benefits from government (moving from L to H) are not sufficient to outweigh the costs G of forming even the most minimal state. Leeson’s example for “big G” anarchy is international relations. Given the world’s population of 6.5 billion and significant differences in endowments, preferences, and abilities, the potential gains from trade are enormous. International anarchy, consequently, must be the result of the costs of truly global government outweighing even those massive gains. In Leeson’s words:

Organizational costs [of a world government] would also rise considerably because of the vast increase in the heterogeneity of the relevant population. If it is difficult to arrive at a decision regarding where a new police station is to be located within a community of 20,000 suburbanites, imagine the difficulty of coming to a much larger decision when over a billion people are involved from Beirut to Mexico City.

What is one to make of Leeson’s argument? I find the explanation for “small H – L” anarchy more compelling than the case for “big G” anarchy. One of the main problems with “international anarchy” is that we are leaving the individual as the unit of analysis. Nation states are not individuals and applying an incentive based framework to analyze and explain their actions is fraught with methodological problems. In other words, “big G” anarchy is a very different kind of anarchy than “small H – L” anarchy, the former more metaphoric, the latter more directly rooted in the behavioral postulates of economics. In practical terms, it makes little sense to identify elements of anarchy in the relations between a German and a US citizen, just because their respective nation states relate to each other in a metaphorical state of nature.

Rather than looking to the international domain, “big G” anarchy is probably much more prevalent at the micro-level of interpersonal exchanges for which the costs of legal enforcement are too high. There must be millions of exchanges taking place in the US every day, where one party is wronged but effectively left without recourse because the costs of accessing the legal system are too great. For example, few plaintiffs lawyers would take a $1,000 case, and for many, the opportunity costs of going to a small claims court far outstrip the potential gains from winning the case. That’s not a “small H – L” problem, because the gains from moving to the higher level of trade would be considerable. Rather, the cost of providing access to the legal system for minimal “sub-legal” claims is too high.

Leeson’s paper is worth reading, if only because the question “Why have government at all?” is no longer seriously asked by mainstream political science. There is no good reason for ignoring this fundamental question. Let’s not forget that modern political science originated with the problem of anarchy in the 17th Century, when Hobbes broke with political Aristotelianism. Of course, Hobbes incorrectly conceived of the natural state as a zero sum game, which led him down the path of government as the necessary enabler of trade. But the fact that Hobbes got the answer (or at least some fundamental assumptions of his analysis) wrong doesn’t mean that he didn’t ask the right question.
[tags]anarchy, efficiency, economics, international relations[/tags]

From Justice to Freedom: Changing Paradigms in the Theory of Punishment.

Published on May 22, 2005 in Hobbes, Philosophy and Theories of Punishment. Closed

Heeding my own call for a re-examination of consequentialist theories of punishment, and responding to Bloomfield’s posts here and here, it might make sense to examine how the radical dichotomy of consequentialist and retributivist accounts came about. In the Aristotelian world order, which dominated European political thought into the 17th Century, humans were “political animals” and as such they ontologically belonged to a social order, an order within which each had his or her predefined place. Society was the human biotope. It was unthinkable as against nature for humans to live without or outside of society. Those who did, were either wolves or gods. (Not surprisingly, the Werewolf, or man-wolf, has its origins in Aristotelian substantive social ontology.) Against this backdrop, the critical question of legitimacy was one of justice, that is, whether an existing social order was good or bad. Hence Aristotle’s taxonomy of political systems: tyranny, aristocracy, democracy, oligarchy, ochlocracy. Whether there should be society at all, was beyond the frame of reference of Aristotelian political thought. The substantive social ontology, in which injustice was being out of place had wide-ranging implications for a theory of punishment. Most significantly, there was a qualitative, ontological difference between the criminal and everyone else. The criminal was wicked by nature. The crime merely revealed that nature for everyone to see. And so, the through his crime, the criminal literally expelled himself from society. Crime, and punishment as a reaction to the crime, therefore did not, strictly speaking, take place within society; rather, the crime was evidence that the borders of society had been drawn too liberally, mistakenly including the criminal. The response was an exercise in downsizing society, that is re-drawing the borders of society under exclusion of the criminal. Once properly excluded, the criminal could be dealt with in an instrumental manner like any other natural (that is, extra societal) object. He could be killed, mutilated, maimed, brandished, locked up, sent into exile, etc.

The collapse of Aristotelian substantive ontology in the late 17th Century (brought about by Galileo, Newton, Leibnitz, and others), also led to a collapse of the corresponding social ontology and its theory of punishment. Thomas Hobbes was the first to transpose the revolution in the physical realm to the social world. As the physical world was reduced from a rich, qualitative ontology to a monistic concept of matter in motion, its human inhabitants were stripped of their various (inherently unequal) essences, which pre-defined their proper position within society. Hobbes re-conceptualized humans as trivial machines, that is, complex, causally determined automata, programmed to ensure their individual survival by rational means. One of the many implication of this seismic shift in the concept of the subject was a sudden urgency in the search for new sources of political legitimacy. Such new sources could no longer be found within the existing social order. And so, in the mid-17th Century, Hobbes posed the radical question, from which all modern political thought embarks: “Why have a government at all? Why not anarchy?” This question was only intelligible against the backdrop of the new, radically simplified social ontology, in which the individual, for the first time in Western intellectual history, logically and genetically preceded the state. The modern state, as Hobbes saw it, is composed of individuals, and it exists to serve one specific, shared objective of each of such individuals: the establishment and maintenance of peace. Beyond that, no shared objectives could be presumed. Difference replaced unity as the starting point for political thought. With that, the semantics of political legitimacy changed from a qualitative question (”Is the government good or bad?”) to an instrumental one (”¬Ä¬úIs the government effective in preserving the peace?”). Seen from the vantage point of the modern individual, the legitimacy of the government came to hinge on a comparison of costs and benefits. As long as the benefits of having a government outweigh the costs, including opportunity costs, it is rational to have a government. Once that bottom line changes, the government has lost its legitimacy. The costs of government are measured in the restrictions that it imposes on the exercise of any one individual’s freedom of action. Therefore, at the heart of each individual’s interaction with the state is an exchange. The individual gives up some measure of freedom of action (for example, not to steal, having to pay taxes) in exchange for a greater measure of freedom of action (for example, through the existence of secure property rights and the absence of violence). The qualitative summum bonum of old gave way to the quantitative maximum bonum. Freedom (that is, negative freedom or freedom from), replaced justice as the central criterion of legitimacy.

As the new monistic ontology was unable to account for qualitative differences between individuals, the exclusion of the criminal on ontological grounds was no longer plausible. The criminal did no longer appear as qualitatively different from the law-abiding citizen. This reconstitution of the individual as a rational cost-benefit calculator opened the door to consequentialist accounts, such as Beccaria’s On Crimes and Punishment. It also paved the way for theories of punishment and political legitimacy built on the idea of a social contract. (Negative freedom as the source of legitimacy is the common root of consequentialism and social contract theory.) Social contract theories, while radically different from political Aristotelianism in their philosophical foundations, quickly recreated the effects of exclusion on ontological grounds by expelling those in breach of the social contract from society. (Hence, one of the recurring problems of social contract theories is that, taken to their logical extreme, there is only one crime, the breach of the contract, and one punishment, the termination of the contract.) Therefore, little changed in practice. Criminals were still excluded and treated accordingly (that is, brutally). In other words, the first seismic shift from the Aristotelian world to that of the modern economic man, did not yet bring about the sharp divide between consequentialist and deontological accounts. It took another shift of similar magnitude and consequence to arrive at the sharp division that characterizes and haunts modern ethical theory until this day: the discovery of universal rationalism. (More on that in a later post.)
[tags]Hobbes, Aristotle, punishment, anarchy[/tags]

Is Law a Science?

Published on December 5, 2004 in Hobbes, Jurisprudence and Kant. Closed

“Is law a science?” Usually, this is a rhetorical question. Formalists say, “Of course it is. The equivocation of science with natural sciences, a development of the 18th and 19th Century, unduly restricts the realm of scientific reasoning.” Realists say, “Of course it isn’t. Ultimately, law is distinguished from politics only by the manner of its administration and by the technical nature of its discourse. But under the hood, law is about values, interests, and power, not about objective or at least inter-subjective truth.” Both sides have a point, and on a superficial level the disagreement can be solved with a somewhat broader definition of ¨?science. But substantively, as much as it pains me, I must agree with the realists, even though their assessment of the law as an epiphenomenon of underlying social and economics forces is so incomplete as to render it largely useless.

In this debate, one must retain a sense of perspective. Scientific reasoning and scientific method, as in natural sciences, stands out among all other forms of human reasoning and inquiry, because it allows for the construction of machines. Natural science enables technology, and technology has changed our lives more than any other human invention in history (discounting language, because it was not consciously invented). A citizen of Athens would have recognized the world in 1650 without great difficulties. A citizen of Oliver Cromwell’s London in today’s world would recognize our law, our political institutions, and many of our social customs, but he or she would gape in awe and utter incomprehension at our technology, at cars, cell phones, the internet, airplanes, etc.

The transformation of a (largely) natural world into an engineered world, a process that is continuously accelerating, has been the single most defining event in human history of the last 350 years; nothing else comes even close. The driving force of that change, the enabling faculty, was the marriage of mathematics with empiricism, that is, scientific reasoning as explored by Galileo Galilei, Rene Descartes, Gottfried Wilhelm Leibniz, Isaac Newton and others and as described by Karl Popper and the critical rationalists, taking into account the occasional dead end and a series of turf wars among an ever more highly specialized scientific community, which accounts for much of what Thomas Kuhn describes in the Structure of Scientific Revolutions.

“Hold on,” says the formalist, “mathematics and empiricism have been part and parcel of the philosophical discourse ever since before Plato. What happened in the 17th Century that made natural science so special that it has now become the gold standard of science as such?” One word: Calculus. The defining discovery of Greek philosophy was to provide a general, ontological explanation for the ubiquitous experience of change and invariance (some things change, others don’t), that is, the discovery of matter and form, of the empirical world and the world of ideas, of body and soul. Mathematics, in particular geometry and early number theory (most of which we would see as numerology today), had immediately been identified as part of the ideal, unchanging world, whereas empiricism was the method of choice to learn about our changing environment. And that is largely how things remained for the next 2,000 years. Philosophers explored the universe of eternal, unchanging ideas (using geometry as one of many intellectual tools), and the rest of us kept muddling through in the real world. The discoveries of Leibniz and Newton changed all that, because suddenly mathematics was able to describe change. That was a true paradigm shift. Philosophers had always been aware of the fact that, for whatever reason, nature obeyed mathematics. But the application of mathematics to natural phenomena was severely limited, because most of nature (that is, the empirical world) is in constant, non-linear change, and mathematics was only able to deal with those parts of the world that remained more or less static. (For example, measuring plots of land, etc.) Calculus made mathematics applicable to the entire empirical world, to its static and its dynamic parts. And that is what made scientific reasoning, the marriage of mathematics and empiricism, the most successful intellectual and practical undertaking of humankind.

Against this backdrop, we are in a better position to understand why other forms of intellectual inquiry fell into disrepute. For 2,000 years hermeneutic reasoning, rhetoric, exegesis, religion, alchemy, astrology, empiricism, geometry, and other modes of intellectual inquiry had competed with one another. But within two generations of its invention, the new natural philosophy (natural science) had blown away the contenders, transforming the world in the process. As a result of the resounding victory of the natural sciences, other disciplines scrambled to hop onto the bandwagon. In particular Thomas Hobbes tried to make social science (and law) a natural science, equivocating the normative with the factual. That trend continues to this day.

Of course, there have been modes of intellectual inquiry other than that of the natural sciences, but most of those that survived were part of a new breed of meta theories, that is second order observations, which scrupulously avoided direct competition with the natural sciences by talking about the natural sciences and their a priori limitations. Without a doubt, the most influential thinker of the new meta theorists was Immanuel Kant. His Critique of Pure Reason is an attempt to answer the question why the empirical world obeys the laws of mathematics and/or physics, and to what extent we can reason validly about things that are not part of the empirical world. (His answer: Only marginally, and only with extreme caution.)

“How does that help me with my question whether law is a science?” It answers the question in the negative. Law is not a science, because its subject matter resists empiricism and mathematics. It is, however, a sophisticated mode of intellectual inquiry and reasoning. Reason and rationality are not confined to science. And here is where the legal realists, at least most of them, go wrong. Law is not about the explanation and prediction of behavior. Law is about norms and reasons for (not explanations of) decisions. And, most significantly, law does not require certainty. (I will attempt to spell out the difference in a future entry.)
[tags]jurisprudence, law, science, Hobbes, Kant[/tags]