14 September 2018

The Market, Religion, and Contract Law

During another hurricane-enforced sabbatical six years ago I wrote here about an article by Nate Oman published a few weeks earlier. Oman had argued (in my words) that "rather than wedding neo-classical economics to the vagaries of John Rawls, Oman now cabins efficiency within a more concrete social practice, that of the market. Contract law is about supporting the market and not (directly, anyway) about creating an optimal distribution of resources or about vindicating personal autonomy."

Moving away from the hyper-individualistic autonomy and efficiency accounts of contract law, Oman argued that making possible the flourishing of the market as a whole rather than any particular participant was the goal of contract law. In turn, widespread adoption of the social virtues demanded by the market (a measure of fairness, some degree of honesty, promissory fidelity, and the like) would make its individual participants at least somewhat more virtuous.

Correct as I took Oman's overall argument to be, I expressed concern that there would be a "seepage" of the limited virtues of the market into the remainder of social life. In other words, "other forms of social order including the family and at least some voluntary social and religious institutions are equally critical to the maintenance of political liberalism. And at best the market exists in an uneasy relationship with these spheres of human life." And I don't think I was wrong. (For example read my positive observations about Adeline Allen's article Surrogacy and Limitations to Freedom of Contract: Toward Being More Fully Human here and here.)

Late in 2017 Oman took another swing at justifying the value (and virtues) of the market, underwritten by contract law. In Commerce, Religion, and the Rule of Law (download here), Oman seeks to limit the impersonal market-oriented virtues from the effects of the more intense personal virtues inculcated by religion: "The rule of law allows for trade among strangers, fostering peaceful pluralism. However, law breeds what Montesquieu called 'a certain feeling for exact justice' that crowds out deeper forms of relation. Religious commerce fosters precisely such communities." In other words, "religious networks provide a high-trust social context in which commerce can thrive." Sounds great but ...

When it comes to contemporary religiously plural states high levels of intra-religious trust can actually inhibit inter-religious commerce. A flourishing market needs to develop social virtues that are a only a facsimile of what a common commitment to God can achieve; thus "the state must use law to flatten and simplify social reality." Such a thinned-out version of the virtues is great for the state which, after all, wants a prosperous and reasonably docile populace to pay taxes and acquiesce in the state's asserted monopoly of coercive force. On the other hand, a growing sphere of "stranger" virtues can crowd out the higher order of virtues prized by a religious community. What is a religious community to do? 

Given enough size, such a religious community might try to opt out of the larger inter-religious market economy. Can the state allow that? In other words, what happens when religious communities practice "the kind of opaque social arrangements that are likely to draw the suspicions of states wishing to create a legible social reality"? The violence associated with the western migration of America's Mormons is an example to which Oman points.

Oman leaves this conundrum unresolved. Indeed, I think it is unresolvable, which points to the fragility of the liberal political and economic order. In any event, I appreciate Oman's continuing quest to articulate a truly moral basis for my field of contract law.

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