Modern law and economics received much of its impetus from Ronald Coase's analysis in ‘The Problem of Social Cost,’ and a goodly amount of that comes from the Coase theorem, which states that, absent transaction costs, externalities will be efficiently resolved through bargaining. The fact that the analysis that came to be codified in the Coase theorem was an exercise in pure fiction on Coase's part did not deter the erection of a substantial edifice of positive and normative analysis on (...) this foundation, nor, for that matter, has subsequent elaboration of Coase's intent done anything to abate the interest in the theorem and its implications. (shrink)

There are, broadly speaking, two ways to think about rationality, as defined in the following passage: ‘Reason’ for a long time meant the activity of understanding and assimilating the eternal ideas which were to function as goals for men. Today, on the contrary, it is not only the business but the essential work of reason to find means for the goals one adopts at any given time. To use what Horkheimer called objective reason, and what others have called expressive or (...) non–instrumental reason, is to reflect on one's goals, to attempt to determine what preferences one ought to hold. On the other hand, to use what Horkheimer called subjective reason is to ‘be concerned with means and ends, with the adequacy of procedures for purposes more or less taken for granted’, that is, to be instrumentally rational. This contrast between non-instrumental and instrumental reason is at the heart of many contemporary social and philosophical disputes. 1. (shrink)

In the history of liberal theories of property, the predominant model deduces a right to highly unequal amounts of property from a premise that the person is primarily independent and self‐determined. But modem social theory, communitarianism and critical legal theory have generated strong support for an alternative premise of social self‐determination of the person. These theories have not, however, adequately explored the logical implications of social personality for the justifiable degree of equality of income under property right. This study reasons (...) a right to some significant equalization of income from a premise that the individual is socially self‐determined. The supporting argument develops a different concept of social personality than found in prevailing social and communitarian theories. With regard to property, it is particularly important to conceptualize the formation of the individual by and within the system of economic relations. The personological premises are also developed differently from Marx's analysis, which overemphasizes the production side of the economy. The present analysis examines the individual in the consumption side as well. But in contrast to the subjective‐individualist conception of the consumer in neoclassical economic theory, we will utilize a conception of socially self‐determined consumer wants and self‐seeking. This social‐personological premise proves to have strong egalitarian implications for the distribution of income under property rights. (shrink)

Given statements like these about current developments in intellectualizing about law in America it is an exciting time to look at American legal philosophy. Given the ferment in the law schools and the volume of literature in the law journals it is also a difficult task confidently to extract the main lines of current thought and adequately to assess the significance of current intellectual movements. American lawyers are inclined to point out that there is no such thing as ‘American law’. (...) Rather, in addition to Federal law and the Supreme Court's jurisdiction there are some fifty jurisdictions each with its own Constitution, Legislature and Supreme Court and consequently diversity rather than uniformity is the rule. Equally, the very idea that there is some single, coherent and widely accepted theory of law deserving description as ‘American legal philosophy’ obviously begs all manner of significant questions. (shrink)

Kuhn and Moresi have proposed a useful taxonomy for classifying prisoners' dilemmas. This comment is concerned with K&M's observation that legal penalties for defection can transform PDs into cooperative games, and their argument that the role of the law may vary depending on how the PD is classified by their taxonomy. The purpose of this note is to support K&M's analysis by demonstrating that the law of damages, as understood by economic analysis, already performs the function that K&M assign to (...) legal penalties for defection. (shrink)

According to an often repeated definition, economics is the science of individual choices and their consequences. The emphasis on choice is often used – implicitly or explicitly – to mark a contrast between markets and the state: While the price mechanism in well-functioning markets preserves freedom of choice and still efficiently coordinates individual actions, the state has to rely to some degree on coercion to coordinate individual actions. Since coercion should not be used arbitrarily, coordination by the state needs to (...) be legitimized by the consent of its citizens. The emphasis in economic theory on freedom of choice in the market sphere suggests that legitimization in the market sphere is “automatic” and that markets can thus avoid the typical legitimization problem of the state. In this paper, I shall question the alleged dichotomy between legitimization in the market and in the state. I shall argue that it is the result of a conflation of choice and consent in economics and show how an independent concept of consent makes the need for legitimization of market transactions visible. Footnotes1 For helpful comments and suggestions I am most grateful to Marc Fleurbaey, Alain Marciano, Herlinde Pauer-Studer, Thomas Pogge, Hans Bernhard Schmid, to seminar or conference participants in Aix-Marseille, Tutzing, Paris, and Amsterdam, and to two anonymous referees. (shrink)

Since the establishment of the Human Genome Project and the identification of genes in human DNA that play a role in human diseases and disorders, a long, moral and political, battle has began over the extension of IPRs to information contained in human genetic material. According to the Nuffield Council on Bioethics, over the past 20 years, large numbers of human genes have been the subject of thousands of patent applications. This paper examines whether human gene patents can be justified (...) in terms of liberal theories of morality such as natural law, personality development, just reward and social utility. It is argued that human gene patents are in conflict with fundamental principles of liberal morality and justice because they result in "genetic information feudalism". (shrink)

Throughout the longstanding debate on privacy, the concept has been framed in various ways. Most often it has been discussed as an area within which individuals rightfully may expect to be left alone and in terms of certain data that they should be entitled to control. The sphere in which individuals should be granted freedom from intrusion has typically been equated with the indisputably private domestic sphere. Privacy claims in the semi-public area of work have not been sufficiently investigated. In (...) this article, the case is made that employees have reasonable expectations on privacy at work. Firstly, in a descriptive analysis, employees’ need for workspace privacy is spelt out. Secondly, a normative analysis explicates the reasons why privacy should be protected. The main thrust is to provide a more inclusive privacy concept and hence, a more adequate basis for privacy protection legislation and codes in the area of work. Contrary to prevailing workplace privacy protection, employees’ need for local privacy should be accommodated as well as informational privacy. (shrink)

The common view is that insider trading is always unethical and illegal. But such is not the case. Some forms of insider trading are legal. Furthermore, applying ethical principles to insider trading causes one to conclude that it is also sometimes ethical. This paper attempts to get past the hype, the press reports, and the political grandstanding to get to the truth of the matter. The author applies two sets of ethical principles – utilitarianism and rights theory – in an (...) attempt to determine when, and in what circumstances, insider trading is ethical. The views of Henry Manne, an early proponent of insider trading, are critically examined, as are the major arguments against insider trading. Is insider trading good for the company if it is used as a form of executive compensation which makes it possible to pay lower salaries than would otherwise be the case? Does insider trading cause the stock market to work more efficiently? If insider trading does increase efficiency, is that sufficient to call for its total legalization, or are there other things to be considered? Several arguments against insider trading have been put forth over the last few decades but there are problems with all of them. One of the main arguments is the fairness argument. The problem with this argument is that different people have different definitions of unfairness. A closely related argument is the level playing field argument, which advocates wider dissemination of information so that it is less asymmetric. One problem with the level playing field argument is that it is better applied to sporting competitions than to trading in information. Some economists argue that forcing the disclosure of nonpublic information can actually result in more harm than good and must necessarily involve the violation of property rights. Other arguments examined in this chapter include the fiduciary duty argument, the problem of outside traders, the misappropriation doctrine and the restrictions that insider trading laws place on freedom of speech and press. The article concludes by setting forth some principles or guidelines to determine when insider trading should be punished and when it should not. (shrink)

Current discussions of business ethics usually only consider deontological and utilitarian approaches. What is missing is a discussion of traditional teleology, often referred to as virtue ethics. While deontology and teleology are useful, they both suffer insufficiencies. Traditional teleology, while deontological in many respects, does not object to utilitarian style calculations as long as they are contained within a moral framework that is not utilitarian in its origin. It contains the best of both approaches and can be used to focus (...) on the individual''s role within an organization. More work is needed in exposing students and faculty to traditional teleology and its place in business ethic''s discussions. (shrink)

In recent years, neuroscience has been making dramatic progress. The discipline holds great promise but also raises a number of important ethical concerns. Among these is the concern that, some day in the distant future, we will have brain scanners capable of reading our minds, thus making our inner thoughts transparent to others. There are at least two reasons why we might regret our resulting loss of privacy. One is, so the argument goes, that this would undermine our ability to (...) form intimate relations. Another is that the omnipresent gaze of others would render an authentic inner life impossible. I argue that both of these concerns are exaggerated. First, intimacy might flourish through the differential acknowledgement of knowledge as common knowledge; for example, even if I know that both a friend and my taxi driver know that I have kinky sexual fantasies, I might only acknowledge this as common knowledge and, thus, an admissible piece of conversation with my friend, and this differential acknowledgement might be enforced by norms of social interaction. Second, the gaze of others would become much less oppressive if everyone’s inner lives were transparent to everyone else. I also argue that our minds are already partly transparent to others through the use of non-neuroscience-assisted mindreading techniques and, thus, that the latter offer no distinct threat to mind privacy. I offer an additional argument for this conclusion; to wit, that our minds extend beyond our brains. (shrink)

If it is accepted that the real marketplace does not necessarily distribute wealth in the manner that the ideal market would have done, and that societal institutions have an obligation to bring the real and ideal market distributions into accord, then it can be argued that economic actors have a responsibility to consider the effects of their activities on the distribution of wealth in society. This paper asserts that businesses have a responsibility to consider the wealth distribution effects of their (...) wealth-creating decisions. We use arguments from moral economics and Catholic social teaching to support this assertion, deriving decision principles that we apply to the Starbucks fair trade coffee case. (shrink)

In light of recent doctrinal changes, we examine the confused state of U.S. insider trading law, identifying gaps that permit certain market participants to trade on the basis of material nonpublic information, and contrast U.S. insider trading doctrine with the European approach. We then explore the ethical implications of the status quo in the U.S., explaining why the dominant legal justifications for prohibiting classical insider trading and misappropriation—the fiduciary duty and property rights theories—fail to account for the wrongfulness of insider (...) trading by eavesdroppers and certain tippees. We refute common arguments for legalizing insider trading, including arguments that insider trading is a victimless crime and that the practice promotes efficiency. We explain why insider trading constitutes the moral wrong of cheating, grounding our theory in the legitimate expectations of market participants. Having considered Kantian deontology in other work, we find that virtue ethics theory offers a helpful albeit rough framework for assessing the morality of insider trading independent of its legality. We also find that social contract theories, with norms of equality of opportunity and moral desert, provide a compelling ethical basis for retaining, clarifying and broadening current legal prohibitions against insider trading. (shrink)

A spate of recent attacks on the rationality assumption in economic theory is noticed. Some of these attacks are fresh and, in many ways, original, but the central ideas underlying them are not new. They appear to have been provoked by the direction in which much of mainstream economics has been moving in recent years. On the other hand, it is suggested here, certain developments in contemporary economics, associated particularly with the revival of interest in the Austrian paradigm, offer afresh (...) understanding of the way in which the rationality assumption, its role in economics properly understood, is able to meet these old?new attacks. (shrink)

This paper considers the tension between timelessness and timeboundedness in legal interpretation, examining parallels between sacred texts and secular law. It is argued that familiar dualities such as those between statute and judge-made law, law and equity, written and spoken discourse, dictionary meaning versus intended or contextual meaning, can be examined using this timeless/timebounded framework. Two landmark English cases, DPP v Shaw (1961) and R v R (1991) are analyzed as illustrating contrasting aspects of the socio-legal politics of “reasoning backwards”. (...) The related temporal distinction between ex ante and ex post points of view is examined both within legal theory and as a key issue for linguistic and semiotic systems. The argument is made that this distinction is the key to a wide range of methodological and theoretical problems in relating linguistics and semiotics to law. (shrink)

Work on analogy has been done from a number of disciplinary perspectives throughout the history of Western thought. This work is a multidisciplinary guide to theorizing about analogy. It contains 1,406 references, primarily to journal articles and monographs, and primarily to English language material. classical through to contemporary sources are included. The work is classified into eight different sections (with a number of subsections). A brief introduction to each section is provided. Keywords and key expressions of importance to research on (...) analogy are discussed in the introductory material. Electronic resources for conducting research on analogy are listed as well. (shrink)

The standard theories of cooperation in humans, which depend on repeated interaction and reputation effects among self-regarding agents, are inadequate. Strong reciprocity, a predisposition to participate in costly cooperation and the punishment, fosters cooperation where self-regarding behaviors fail. The effectiveness of socially coordinated punishment depends on individual motivations to participate, which are based on strong reciprocity motives. The relative infrequency of high-cost punishment is a result of the ubiquity of strong reciprocity, not its absence.

Strong central authorities are able to effectively manage costly defection, but are unable to adequately address lesser conflicts because of limits to their ability to monitor and enforce. We argue, counterintuitively, that these limitations build cooperation and trust among subordinates: the limitations contribute to the production of order. First, limits to authority leave space for locally informed decentralized enforcement. Second, central authorities act as powerful but incompetent third parties whose threatened interventions increase incentives to cooperate and, therefore, to trust. We (...) outline the mechanisms by which a strong central authority enforces order and test their utility by considering the secondary literature on rates of conflict in strong, weak, and capricious states. We supplement this evidence, based on association, with a close examination of diverse case studies: baseball umpires, commercial contracts, and domestic disputes. By analyzing these case studies, we isolate and describe the mechanisms by which central authorities produce order in varied settings. We find that central authority may be effective, but the majority of this effectiveness derives from an indirect influence on dyadic relations rather than direct intervention. The state interacts with local communities, but each operates according to distinct logics. The particular character of their interaction produces four mechanisms useful in the production of order. We briefly explore implications for the operation of law as well as the production of generalized trust. (shrink)

Clinical research under the usual regulatory constraints may be difficult or even impossible in a public health emergency. Regulators must seek to strike a good balance in granting as wide therapeutic access to new drugs as possible at the same time as gathering sound evidence of safety and effectiveness. To inform current policy, I reexamine the philosophical rationale for restricting new medicines to clinical trials, at any stage and for any population of patients (which resides in the precautionary principle), to (...) show that its objective to protect public health, now or in the future, could soon be defeated in a pandemic. Providing wider therapeutic access and coordinating observations and natural experiments, including service delivery by cluster (wedged cluster trials), may provide such a balance. However, there are important questions of fairness to resolve before any such research can proceed. (shrink)

Experimental studies on punishment have sometimes been over-interpreted not only for the reasons Guala lists, but also because of a frequent conflation of proximate and ultimate explanatory levels that Guala's review perpetuates. Moreover, for future analyses we may need a clearer classification of different kinds of punishment.

Trends in the history of social science dedicated to the study of crime and punishment are presented as a case study supporting F.A. Hayek's theory of social change. Designing effective social institutions and public policies first requires an accurate vision of how society operates. An accurate model of society further requires scientific methods uniquely suited for the study of human beings as purposeful agents and the study of human institutions as complex social phenomena. If guided by faulty methods, theories are (...) inaccurate and policy outcomes veer from their intentions. Hayek termed such outcomes "abuses of reason". Aiming to replicate the objectivity of physical sciences via formal modeling and statistical measurement, economists throughout the 20th century imposed an excessively technical vision of human decision-making. Policy failures and social problems resulted. This paper argues that the historical trends of applied social science dedicated to crime and punishment can be understood similarly. Formal modeling and statistical measurement continuously displaced methods more attuned to human intentionality and social complexity. In result, amidst a long-run history of intellectual and political change, US law enforcement and criminal punishment policies became technocratic, and outcomes became disjointed from their stated intentions to promote social order and welfare. (shrink)

The proportionality standard demands a meaningful link between the severity of crimes and the punishments received for them. This article investigates the compatibility between this philosophical d...

One of the fundamental components of the concept of economic rationality is that preference orderings are “complete,” i.e., that all alternative actions an economic agent can take are comparable. The idea that all actions can be ranked may be called the single utility assumption. The attractiveness of this assumption is considerable. It would be hard to fathom what choice among alternatives means if the available alternatives cannot be ranked by the chooser in some way. In addition, the efficiency criterion makes (...) sense only if one can infer that an individual's choice reflects the best, in expected welfare terms, among all choices that individual could have made. The possibility that a rearrangement of resources could make someone “better off” without making others “worse off” can be understood only if the post-rearrangement world is comparable with the pre-rearrange-ment world. (shrink)

Rent control is an economic abomination. It diverts investments away from residential rent units, it leads to their deterioration, it is responsible for urban decay such as in the South Bronx, it does not help poor tenants, it is a horrendous means of income redistribution. Yet this economic regulation is beloved of intellectuals (hot beds of pro rent control sentiment are Berkeley, Ann Arbor and Cambridge) particularly in the legal and philosophical communities. The present article is dedicated to an exploration (...) and rejection of the arguments in behalf of rent control which emanate from this source. (shrink)

Punitive behaviours are often assumed to be the result of an instinct for punishment. This instinct would have evolved to punish wrongdoers and it would be the evidence that cooperation has evolved by group selection. Here, I propose an alternative theory according to which punishment is a not an adaptation and that there was no specific selective pressure to inflict costs on wrongdoers in the ancestral environment. In this theory, cooperation evolved through partner choice for mutual advantage. In the ancestral (...) environment, individuals were in competition to be recruited in cooperative ventures and it was vital to share the benefits of cooperation in a mutually advantageous manner. If individuals took a bigger share of the benefits, their partners would leave them for more interesting partners. If they took a smaller share, they would be exploited by their partners who would receive more than what they had contributed to produce. This competition led to the selection of a sense of fairness, a cognitive adaptation aiming to share equally the benefits of cooperation in order to attract partners. In this theory, punishment is not necessary for the evolution of cooperation. Punitive behaviours are only a way to restore fairness by compensating the victim or penalizing the culprit. Drawing on behavioural economics, legal anthropology, and cognitive psychology, I show that empirical data fit better with this framework than with the theory of group selection. When people punish, they do so to restore fairness rather than to help the group. (shrink)

In the past decade, experiments on altruistic punishment have played a central role in the study of the evolution of cooperation. By showing that people are ready to incur a cost to punish cheaters and that punishment help to stabilise cooperation, these experiments have greatly contributed to the rise of group selection theory. However, despite its experimental robustness, it is not clear whether altruistic punishment really exists. Here, I review the anthropological literature and show that hunter-gatherers rarely punish cheaters. Instead, (...) they avoid dealing with them and switch to other partners. I suggest that these data are better explained by individual selection, and in particular by partner choice models, in which individuals are in competition to be recruited by cooperative partners. I discuss two apparent problems for partner choice theories: large-scale cooperation and punishments in economic games. I suggest that rather than favouring group selection theory, these two phenomena provide evidence in favour of individual selection: (1) people produce large-scale cooperation through institutions in which punishment is not altruistic but rewarded on an individual basis; (2) punishment in experimental games can be explained without altruism and is indeed often better explained by individual interests. (shrink)

What makes humans moral beings? This question can be understood either as a proximate question or as an ultimate question. The question is about the mental and social mechanisms that produce moral judgments and interactions, and has been investigated by psychologists and social scientists. The question is about the fitness consequences that explain why humans have morality, and has been discussed by evolutionary biologists in the context of the evolution of cooperation. Our goal here is to contribute to a fruitful (...) articulation of such proximate and ultimate explanations of human morality. We develop an approach to morality as an adaptation to an environment in which individuals were in competition to be chosen and recruited in mutually advantageous cooperative interactions. In this environment, the best strategy is to treat others with impartiality and to share the costs and benefits of cooperation equally. Those who offer less than others will be left out of cooperation; conversely, those who offer more will be exploited by their partners. In line with this mutualistic approach, the study of a range of economic games involving property rights, collective actions, mutual help and punishment shows that participants' distributions aim at sharing the costs and benefits of interactions in an impartial way. In particular, the distribution of resources is influenced by effort and talent, and the perception of each participant's rights on the resources to be distributed. (shrink)

Gender greatly impacts access to opportunities, potential, and success in corporate leadership roles. We begin with a general presentation of why such discussion is necessary for basic considerations of justice and fairness in gender equality and how the issues we raise must impact any ethical perspective on gender in the corporate workplace. We continue with a breakdown of the central categories affecting the success of women in corporate leadership roles. The first of these includes gender-influenced behavioral factors, such as the (...) requirements and expectations of gendered verbal and nonverbal communication styles as well as appearance. We move on to address the impact of family on corporate leadership opportunities and success, discussing the asymmetrical evaluation of an individual’s potential, authority, and competence based on gender stereotypes of familial obligations and expectations. Finally, we address how gender impacts access to networking and sponsorship opportunities and the long-term effects of systematic limitations on women’s inclusion in the upper echelons of corporate leadership. We conclude with a summary of the questions and issues raised by our discussion and direct individuals to consider how different ethical systems and moral requirements might influence their interpretations of gender and leadership in the corporate workplace. (shrink)

Any ethical argument involving the problems of access to assisted reproductive technologies should entail the discussion of the decision protocol and consider the individual deliberating on the appropriateness of these remedies from the point of view of self and community. Yet, arguments based on patients' own moral calculations are rare in the bioethics literature. The moral voice behind most discourses concerning ARTs is that of an outwardly independent spectator, who nonetheless proceeds to justify a personally significant worldview in the utilization (...) of these resources. Investigators grounded in social and legal sciences have offered relevant arguments in this regard, but because their discourses are derived from research protocols specific to their respective disciplines, they fail to provide a general rationale applicable to moral deliberation. (shrink)