Social norms as a substitute for law.

Author:Druzin, Bryan H.

This paper follows the law and norms literature in arguing that policymakers can use social norms to support or even replace regulation. Key to the approach offered here is the idea--borrowed from the folk theorem in game theory--that cooperative order can arise in circumstances where parties repeatedly interact. This paper proposes that repeated interaction between the same agents, specifically the intensity of these interactions, may be used as a yardstick with which to gauge the potential to scale back regulation and use social norms as a substitute for law. Where there are very high levels of repeated interaction between people, policymakers can reduce regulation and then evaluate the emergent social order on a case-by-case basis. The contribution of the paper to the law and norms literature is that it proposes a practical technique to pinpoint the precise areas of social discourse where the possibility of using social norms as a substitute for law is most feasible--and perhaps even more crucially, it highlights precisely where it is not.


There is a war of ideology between those who support an expansive role for government and those who wish to shrink it. Advocates of state minimalism--those who wish to shrink it--often speak about the ability of market forces to sustain social order and the normative benefits in doing so. (1) In this sense, the market is put forward as an alternative to government. This can be thought of as market-based minimalism. There is a vast literature (much of it heterodox) arguing that the functions of government may be provided by "the private sector" and the "market." (2) These theorists often adopt a fiercely ideological, strident tone in their condemnation of the state--rhetoric that can be quite off-putting. While these voices often downplay or simply discount the necessity of regulation, (3) this does not, however, imply that there are no benefits to be had from reducing the intensity of legislation where possible. A crucial fact that must be understood is that the law is already minimalist: it does not seek to regulate every facet of human activity, nor could it. There exists a vast ocean of informal social ordering that goes unregulated by the state. (4) This paper argues that we may go further in the direction of legal minimalism, (5) and that, crucially, market-based minimalism is not the only game in town we can use to achieve this. It is possible to embrace an entirely different notion of minimalism, one that involves other kinds of "invisible hand" self-ordering. This broader vision is captured by the law and norms literature, which examines law's relationship with social norms. (6) Social ordering born from social norms is all around us, from the spontaneously self-assigned seating arrangements of students in a classroom, to the social rules of lining up, or the complex customary law of prepolitical societies. (7)

Prominent legal theorists such as Robert Ellickson, Robert Cooter, Dan Kahan, Lawrence Lessig, and Cass Sunstein advocate using social norms as efficient alternatives to legal rules. (8) As Richard Posner argues, social norms may be "both a source of law and often a cheap and effective substitute for law ...," (9) Following the law and norms literature, this paper argues that policymakers can harness the energy of social norms in creating and sustaining social order. (10) In contrast to market-based minimalism, we may think of this approach as norm-based minimalism.

Norm-based minimalism as envisioned here comprises both strong and weak versions. These versions permit degrees of state intercession: from a total absence of regulation, to the codification of existing social patterns, to minor regulatory adjustments aimed at correcting inefficiencies, to traditional top-down law. (11) In adopting such an approach, policymakers can take advantage of the natural patterning of social norms. There is abundant evidence that social norms can generate complex systems of cooperative order without the need for a centralized coercive authority. Ellickson's pioneering work on cattle ranchers in Shasta County showed that agents who frequently interact will tend to create cooperative systems that in fact maximize the aggregate welfare of the group. (12) Agents, he explains, who "repeatedly interact can generate [legal] institutions through communication, monitoring, and sanctioning." (13) Informal social norms are perfectly capable of producing all three of the core functions of law: dispute resolution, rule formation, and enforcement. (14) Correctly harnessed, bottom-up social order can be tremendously useful in that it can lighten the legislative and enforcement burden on the state. (15) Social norms do not need to be legislated or enforced because they are self-producing and often highly robust, internalized, (16) and self-enforcing. (17) Norm-based minimalism capitalizes on this. Social norms are like an untapped resource. Policymakers can exploit this resource, letting the natural emergence of social order do much of, or in some cases, even all of the heavy lifting. Yet this is not possible in many areas of law. Social norms are not always able to produce stable ordering. Moreover, even where social norms can generate bottom-up order, this social patterning may be massively inefficient. As such, we need to know exactly where there is at least the potential to utilize social norms and where there is not. While the law and norms literature is rich, it has yet to articulate a method by which to clearly identify the precise areas of law predisposed to such an approach. This paper proposes such a method.

Borrowing from game theory, this paper argues that repeated interaction between the same agents, specifically the intensity of it, may be used as a yardstick with which to gauge the potential to scale back regulation, and allow social norms to shoulder more of the burden of creating and sustaining social order. To this end, policymakers may look to whether an area of law involves preexisting relationships of repeated interaction between the same actors, using it as a heuristic to pinpoint where norm-based minimalism is most viable and where it is not. The idea that repeated interaction can generate cooperation is known in game theory as the folk theorem. (18) Cooperation, however, is only a possible result. The presence of repeated play is hardly a guarantee that self-sustaining cooperative equilibria will emerge or, perhaps even more importantly, that such equilibria, where they do emerge, will be normatively just and not simply entrench a social imbalance in power. (19) Where the emergent order is unjust or grossly sub-optimal, the state has a vital role to play in pushing parties toward one equilibrium over another. (20) The characteristic of repeated interaction between the same individuals is useful in that it indicates the possibility of stable and efficient ordering. (21) The less an area of law possesses this quality, the weaker its ability to self-order. (22) Where there are high levels of repeated play, policymakers can scale back regulation and then evaluate the consequences on a case-by-case basis. Where results prove sub-optimal, regulation can simply be reintroduced to whatever degree necessary. What distinguishes the present thesis from the prior law and norms literature is the concrete technique and taxonomy of law it provides. The paper proposes a simple, yet reliable, technique to pinpoint the precise areas of social discourse where the possibility of decreasing regulation is most feasible. Law regulates a wide spectrum of human activity: some of this activity entails repeated interaction and some of it does not. The paper identifies the areas of law where cooperative order might arise without, or with minimal state involvement. However, equally as important, the paper identifies precisely where such an approach is not possible.

While the discussion deals with the utilization of social norms to ease the legislative and enforcement burden on the state, the ideological argument for minimalism is not litigated here. (23) This is not because the matter is closed to debate--far from it. Rather, I do this because the ideological case for minimalism is not the paper's focus. The aim of the discussion is merely to articulate a technique policymakers may use to gauge the possibility of scaling back regulation. Whether doing so aligns with our broader social values is another matter. For advocates of regulatory minimalism, the discussion provides a practical tool to reduce regulation. For those unsympathetic to the idea, the discussion will still be of interest in that it clarifies where minimalism is simply not possible. A good way to think of this paper is as a kind of conceptual roadmap. Like the pathways on a map, the potential of norm-based minimalism is explored and its limits are carefully charted. The paper proceeds as follows. Part I lays out a basic model for norm-based minimalism. Part II discusses the importance of repeated interaction in the emergence of bottom-up social order. Part III applies this, differentiating areas of law with respect to the degree of repeated interaction between private actors implied by those areas (if at all). Part IV then details how the presence of repeated interaction may serve as a guide to policymakers in assessing in what situations norm-based minimalism may be most feasible. Part V then explores some likely objections to the model.


    In the literature, theorists do not usually distinguish clearly between market-based and norm-based minimalism. (24) To some extent the distinction is present in the two antithetical wings of the anarchist tradition: what can be thought of as libertarian anarchism, which has gained recent intellectual ascendency, particularly in the United States, and socialist anarchism, which has been more predominant in Europe. (25)...

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