The destruction of social capital through law.

AuthorPildes, Richard H.
PositionSymposium: Law, Economics, & Norms

INTRODUCTION

The articles presented here portray several different conceptions of the relationship between the realm of formal state law and the realm of social norms--as well as various views on what economic analysis might contribute to our knowledge of that relationship. Robert Ellickson's pathbreaking work describes two parallel domains, largely segregated from and irrelevant to each other; the norms of Shasta County arise and are maintained not in the shadow of the law, but in ignorance of it.(1) Robert Cooter offers a more normative and synthetic vision, but it is a synthesis in which state law should understand itself primarily as the passive, Hayckian reflector of a dynamic, creative domain of social norms formed under the appropriate decentralized and efficiency-tending conditions.(2) A third view emerges from several members of what might be called the Pennsylvania contingent (that this convergence arises from discrete empirical studies of seemingly disparate fields, such as commercial law and labor law, makes these findings particularly provocative).(3) On this third view, state law and social norms are still viewed as parallel, separate domains; yet both are highly relevant to those they regulate (contra Ellickson), and nonetheless the regulated parties prefer ex ante to keep the two domains independent and distinct (contra Cooter). This complex position emerges because state law and social norms have different substantive characteristics, at least in the com-mercial context: To borrow from sociologists of law, state law is "cold," social norms are "warm."(4) Hence different phases of commercial interaction justify the application of different principles; social norms for ongoing relationships, state law for endgames. Commercial actors bargain in the shadow of both regimes, but to unify these regimes--by letting one subordinate the other--would be to undermine the overall efficiency of commercial transactions.

Cass Sunstein's article presents a fourth and wholly different view. Drawing more on the domain of general public-policy than that of commercial exchange, Sunstein emphasizes state law as an instrument for the production and reshaping of social norms.5 This view pictures law and norms as neither independent nor easily separated. Sunstein instead envisions two mutually constituted realms, though he focuses primarily on one direction of that influence: that of law on norms. This interdependence I want to explore a bit further.

I share many of Sunstein's views about the need for both positive and normative legal theory to embrace a more complex appreciation of the interdependence between law and social norms.(6) This intertwining can be approached in different ways for different purposes: as the dependence of individual rationality upon social norms; as the connection between personal preferences and social norms; or as the need to evaluate and understand actions not just in terms of the more familiar material consequences they produce, but also in terms of what those actions are perceived to mean. Given my basic agreement with Sunstein about the limitations of current legal thought in these respects, I will focus here on two points. First, I want to clarify the claim being made to avoid certain common misunderstandings. Second, and more centrally, I want to turn Sunstein's article on its head a bit and explore a darker side to the interrelationship between state law and social norms. I am interested in what might be called law's norm-destroying capacity, rather than its norm-producing capacity. If law and public policy influence social norms in ways Sunstein suggests, this influence will not necessarily be an optimistic, productive one. By the norm-destroying capacity of law, I mean nothing as profound as Robert Cover's vision of the "jurispathic" quality of state law's destruction of competing subcultural value systems.(7) My focus is on the more quotidian ways in which state law can undermine general, yet crucial, social norms--norms ironically necessary for the effective realization of state law itself.

  1. LIBERALISM AND THE LIMITS OF STATE ATTENTION TO SOCIAL NORMS

    First, arguments of the kind Sunstein offers for greater attention to the effect of law on norms are often mistaken as justifications for a more expansive conception of the proper ends of government. To note that law influences norms, and that norms influence the effectiveness of laws, is taken as tantamount to arguing that government should directly pursue norm manipulation as one of its ends. Such a view raises the specter of an "industrial policy for norm generation," as one participant at this Symposium put it, or the specter of precisely the kind of oppressive state that liberalism as a political philosophy was meant to avert. To avoid these dangers, critics might argue, government should stay out of the business of norm manipulation altogether.

    I think Sunstein's arguments are best cast in different and more limited terms. To begin, the argument is as much descriptive as normative. Those of us who have urged greater attention to the expressive dimensions of law and public policy consider it inevitable that "cultural consequences" as well as "instrumental consequences" are at stake when government acts.(8) Ignoring the way law works on background norms simply is not an option, at least in many contexts. Behavior is guided not just by formal rules, but by the interaction between such rules and beliefs, social norms, values, cognitive means of processing information, psychological frames, and other factors. At the extreme, laws will be self-defeating when they undermine social norms whose maintenance turns out to be necessary to makes those very laws effective.(9) Even for purely predictive purposes, policymakers must be aware of the way state-generated rules and social norms are likely to influence each other. If to say government should avoid norm manipulation means that policymakers should ignore the full range of consequences their decisions will have, such a wilful self-blinding would hardly enhance the success of public policies.

    This point has implications for the tension between economists and others within law schools. In a meditative essay, Avery Katz argues that this tension stems from a "cultural clash" between the largely empiricist, predictive aims of economics and the more normative aspirations of disciplines like law. "[E]conomists are unified in their commitment to positivism and to the idea that one can usefully proceed while putting normative issues to one side, and lawyers are not."(10) There is something to this idea, but it might better explain the initial resistance to economics in law schools a generation ago, rather than today. Many contemporary critics do not challenge the positivism of economics per se. Rather, the principal concern is that economic analysis of law sometimes becomes bad positivism.(11) When rational-choice models of social interaction or economic approaches to law prescribe policy based on assumptions of a sharp separation between law and norms, they are likely to predict behavior poorly and channel policy in misguided directions. Simply at the level of understanding behavior sufficiently well to make sensible policy, policymakers must take account of the way that law and norms interact.

    In addition, I do not think arguments like Sunstein's should be taken in the direction of licensing government pursuit of norm modification in and of itself. That is, attention to the expressive dimensions of public policy and law should not be understood to supplant or clash with prior frameworks justifying state action and defining its boundaries. As an example from within political liberalism, if Mill's "harm to others" principle is taken to represent the prerequisite for justified state coercion, Sunstein's arguments should not be understood to modify that principle. Instead, they are better understood as operating within it. Government action is still justified only when "harm to others" occurs; once that precondit ion has been met, however, the most effective way of regulating that harm might well require taking account of the way laws and norms interact. But a bare governmental interest in regulating social norms intrinsically--in "making a statement"--should not in and of itself justify coercive forms of state action, such as criminalization, that would not be independently justified within the appropriate political philosophy.(12) Arguments that require sophisticated policymakers to attend to the cultural as well as the instrumental consequences of policy need not justify an "industrial policy for norm generation."(13) Sunstein is right to emphasize the interdependence of state law and social norms; but stressing this relationship need not raise certain commonly invoked specters of boundless and oppressive state efforts to manipulate social norms unanchored in a larger political philosophy that defines the appropriate limits of state action.

  2. SOCIAL CAPITAL AND STATE LAW

    Once state law and social norms are seen as interdependent, their interrelationship might take many forms. We might think of these as parallel systems of social control, which operate with indifference to each other. We might think of the two systems as Sunstein does, with law working productively to draw on or influence social norms in ways that make law more effective. But I want to emphasize the capacity of state law to destroy social norms in ways that undermine both law and norms. The post-New Deal regulatory state is so pervasive that we might think it has squeezed out any significant role for social norms. But even in the modern administrative state, norms continue to be central means of creating and sustaining social, economic, and political interaction.(14) Moreover, failure to appreciate the place of norms within a system of state law can lead law into a destructive relationship with these...

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