The Chronicles of a Capitalist Lawyer

We all know the familiar phrase “may the best candidate win” in an election process. Obviously, we really hope that we can get the best leader through such process. Yet in reality, we often fall into a situation where the entire candidates suck and we are forced to vote for the best among the worst, which is still bad.

Have you ever wondered why most of the time, getting the best from the bests as our leader is very difficult? Is it actually possible for us to use a meritocratic system where leaders are chosen solely based on their capabilities? The answer might be disappointing.

The main problem? We tend to forget that in the modern world, leadership is neither simply a right nor a privilege; it is a job with certain responsibilities. There are costs and benefits involved. Thus, the law of supply and demand will govern the process.

Those who want to be leaders do not necessarily have the needed capabilities. Most of them, if not all, are people who believe that the overall benefits of being a leader are higher than the total costs.

Of course, the hopeful leaders might have been wrong in projecting their victory. We’ve seen cases where unelected officials went berserk due to the stress caused by their failure. But that does not matter.

The most important thing is that when they chose the path of leadership in the first place, they were convinced that it would be good for them. Whether it would also be good for other people is a bonus. It would only matter when there is a strong connection between the leader’s performance and his future electability or the security of his current position.

This is the primary cause for our difficulties in finding the best leaders. We can’t simply assume that these leaders would be purely motivated by altruism or that they will serve the people just for the sake of being a good leader.

Even worse, the problem would be amplified when the requirements of getting as many votes as possible are significantly different with the requirements for becoming a leader itself. The differences may vary around the world but they do exist.

That would mean that each candidate will need two different set of skills: the skills to be elected and the skills to lead. In practice, these two set of skills are different. Thus, we see people who become politicians and those who become technocrats.

Not everyone, unfortunately, is blessed with both skills. There are many situations which may affect the possibility of a candidate to become a leader and give one set of skills a better advantage over the other.

Track record of leadership is one example. No one knows exactly how a person can be an effective leader without first knowing his track record of past performances. However, in a situation where the track record is unclear or hard to know, the skills for attracting voters would be more important than the skills to lead.

In countries where information about candidates is not widely distributed - unless you have a lot of money - the costs for candidates with good leadership skills but less vote gaining skills would be too high.

In case these people - who are actually fit to be the best leaders- believe that joining the election race does not worth their time because they don’t have enough skills to be elected, we are doomed.

With less good people, the market of leaders will be oversupplied with bad candidates who know how to attract votes. While at first people might vote for them, sooner or later people will know their leaders true quality.

The problem is, if these bad leaders create a cartel to maintain their position - since they are in power anyway - the chances of having new good candidates would decrease. This will trigger more apathy from rational voters to participate in the election and we will end up in a vicious circle until God knows when.

Of course, I do not want to write an entirely gloomy article. A single tiebreaker can actually end the above vicious circle. The case of the latest regional election in Jakarta might be a great example.

I believe that the existence of independent candidates who have some vote attracting skills - though have no chances of winning - opened the possibilities for Jakarta politicians to break up their cartel and pursue a chance to win the election for themselves, which give opportunities to the citizens to choose other candidates.

At this stage, I do not know whether the election result would be beneficial for the citizens, but I am happy to see that there is a practical solution to break the vicious circle without having to conduct a revolution.

I always want to do a survey on how Indonesian people perceive the implementation of Shari’a as a part of positive laws. Many surveys have been done on this issue. The problem is, either the questions are too general or only deal with the “famous” provisions of Islamic law.

By general, I mean that the question only asks whether a person accepts the implementation of Shari’a without knowing whether he would agree entirely with any kind of implementation or only to a certain degree.

By famous, I mean that the question only deals with classical provisions that are well known by many people such as hand cutting for thievery, stoning for adultery, etc.

I believe that this kind of survey cannot be used to know precisely whether the respondent fully understand his answer, that he gives his responses based on a good understanding of Shari’a and not just because he doesn’t want to be considered as a religious blasphemer.

In this article, I will provide certain guidelines of questions that can be considered when we are doing the above survey. First, do not start by asking the general question. Rather the survey must start with questions on specific provisions of Islamic law without any reference that such provision of law is a part of Islamic law.

The first set of questions should deal with slavery issues. Here we test whether the respondent would agree with the legality of slavery and whether they perceive slavery as a bad thing. Classical Islamic law permits slavery for more than a thousand of years. If people disagree with such notion, their belief on the supremacy of Islamic law should be questionable.

The second set of questions deal with economic issues. In this part we ask the respondents on whether they would agree to lend money to other people without any interest at all time, even for business purposes. And then we ask them whether they perceive bank interest as something bad, or just business as usual.

Classical Islamic laws stipulate that bank interest should be prohibited because it resembles "riba," that the sin of charging "riba" is equal to killing a person or having incest relationship with your own mother. Interestingly, for such type of sin, no criminal punishment is available (making me to believe that in terms of economic matters, Islamic law is pro capitalism).

Third, we deal with family law issues. The questions should be, among others, whether they agree that divorce rights should stay exclusively with the husband and that courts should not interfere at all (so husbands can divorce their wives as they wish) and whether husbands can do polygamy without requiring any approval from his first wife.

Here I primarily want to see how women respondents will react. The above provisions are parts of classical Islamic law which is not even implemented under Indonesian Islamic law. Yet, if we are staying with the tradition we should go with the old ones, unless you want to say that Islamic law is not eternal and its provisions can be changed in accordance with the relevant situation.

Fourth, we go with the criminal law issues, we can ask the usual famous questions with some twists. We should ask whether respondents would agree that any murderer can be released from punishment as long as he pay a decent amount of compensation to the victim’s family.

If they say yes, we can ask them whether they would agree that a thief can also be forgiven if he pay additional compensation to his victims along with returning the stolen goods. Such concept does not exist in classical Islamic law.

What I want to test here is whether people would agree that Islamic criminal law is good for the rich but not for the poor since the poor has no money to pay their way out from punishment, whether they will perceive this as a fair law or not.

Finally, we ask them about procedural law issues. Would they agree that a woman’s value of testimony will only be considered half of a man? Would they agree that non Muslims cannot testify in a case and if there are no Muslim witnesses for an important case, what would they do?

Would they agree that any witnesses must satisfy the strict requirement of Islamic law, meaning that such witness is close to a perfect human being, e.g. consistently maintain 5 times prayer a day and any other type of worshiping activities, never lie, maintain body cleanliness all the time, nice to other people, etc.

All these questions test the respondents believe on whether the above requirements (which no longer work in actual practice due to their inefficiencies) should be accepted as a part of positive law.

The final goal of these questions is to test the respondents consistency, especially when we close the survey with this question: would you agree that Indonesia should implement Islamic law in entirety because it is God’s law?

If they still say yes in the end, we should see whether they accept everything from the beginning or whether they agree to certain parts only. If they only accept certain parts, we can ask them whether they truly believe that Islamic law is perfect and thus should be implemented without any further questions.

Once we go with these kind of questions, I doubt that the number of people who vote for complete Shari’a implementation would be many. But this is still a prediction.

So, is there anyone who want to try conducting this survey and find out the real answer?

The title of this article is the main question generated by people who believe that there are certain laws which are derived from God or basic moral principles. Thus, these laws would have a holy status and will be perfect and remain unchanged for eternity.

Unfortunately for them, the answer is no. There is no such thing as a holy law and there is no record that a law can be applied without any changes within the past 2,000 years. Law is a social fact and is always evolving. That’s the reality.

By social fact, I mean that the basic validity of the law is solely determined by social acceptance, namely that the people within a territory, including their legal officials, accept from their internal point of view that a norm has valid authoritative power as a law.

How can we know that such acceptance exists? First, we can see such acceptance from how legal officials (such as judges) express the normative aspect of such rules within their opinions/statements. For example, they say that judges ought to adhere to certain norms in deciding cases, that it is the right thing to do, etc.

Second, we can also see the acceptance of such norm through critical evaluation, meaning that judges who accept such rules criticize others, even themselves, for failing to conform to the norm. Not only do deviations from the norm produce criticism, but such criticism is deemed to be legitimate and made with good reason.

Based on the above standards, no holy law would exist simply because it is holy or derived from the sky. All “holy” laws receive their holiness status because people treat them as such. And if people cease to treat them as a holy law, such law would also cease to become holy -- and lose its authoritativeness.

This understanding is very important. In any part of this world, we can say that no laws receive their authoritative status automatically. In modern world, there is certain exhaustive process (ultimately through democracy) that must be done before certain norm can be regarded as a law and enforced by the state/legal officials.

This might include election of officials by the people, promulgation of the laws by the legislators via voting process, and enforcement of the laws by legal officials (including interpretation of the laws by judges). It is a complex yet necessary process since laws affect how people behave in their day-to-day life.

However, there is also a twist here. Since law is a social practice, people who believe that certain laws should be treated as holy may gain power through the democratic process. I do not know and cannot predict whether they might ever win, at least in Indonesia, but that should always be taken into our consideration whenever we go to the general election.

Next on eternally unchanged laws: if they do exist, there would be no need for interpretation. There would be no exception to the law unless the law says that it can be exempted. More importantly, it will also contradict the practices that have been done by various legal officials and scholars in implementing the law for centuries.

There are two examples of this: first, the classical Islamic laws on slavery. Some people claim that slavery is entirely prohibited by Islamic law. This is mistaken. Various archaic sources indicate clearly that slavery was a usual practice even hundreds of years after the birth of Islam. You can have sex with your slaves and you are not permitted to release them if your debts exceed your assets.

Islamic law encourages people to free their slaves, but it does not say that slavery is a prohibited action that will send the owners to hell. Surely if we say that the law should be unchanged, this practice of slavery should also stay provided that you treat your slaves nicely.

Second is the law on divorce. In classical Islamic law, men can divorce their wives directly without any interference from the court. Yet, Indonesian Islamic law limits such absolute right. A divorce by men will only be valid when the religious court has decided so. Interestingly, the Indonesian Islamic scholars use the sources from Shia schools to back up their opinion.

The two issues above are just small samples of an even bigger discrepancy between theory and practice. This is a deep theoretical challenge upon those who believe that the law should be applied as it is for eternity. If you accept that the law is perfect, how can you justify any changes to such law?

In short, making the claim for an eternal law is easy, but when you face the actual cases in real life, you will soon realize that such law is merely an illusion.

The argument that moral violations invite God’s punishment (such as in the form of natural disaster) is a famous one. In a way, this argument is usually used by its proponents to support moral enforcement. Since God’s punishment will be very costly to all of us, it would be better if we spend our resources to maintain the good morality of society.

The question is: Is this a plausible argument? The quick answer would be no. Some of the arguments against moral enforcement have already been set out in my previous article. This time around, we will try to take a look at this famous religious foundation of moral enforcement.

Saying that God might punish the people for misbehavior and moral violations is not necessarily incorrect. There are certain instances in the Holy Book that give us examples of God’s harsh punishment to those who oppose God’s rules. So we have some precedents here.

But we need to dig deeper and try to understand the major aspects of those precedents, at least from Islamic point of view. All of those cases happen in the distant past where the prophets and their supporters are minorities, they involve a situation where the prophets have directly informed the people about the possible punishment from God, and there are also preliminary warnings from the nature indicating the coming of a disaster.

What can we derive from such cases? God practically works in accordance with modern legal conceptions, i.e. no law shall be enforced to the people without proper and timely public disclosure. By proper, I mean that the law has been disseminated in a way that is understandable to the public. After all, you cannot expect someone to follow your order if they do not have any capacity to understand such order.

Of course this will be problematic for our modern age since the last prophet of Islam died more than 1,400 years ago. There are no longer direct messenger of God that can actually inform us precisely what God really wants.

Now, some might argue that the existence of prophet is no longer necessary since the prophet has left us the Holy Book. That might be plausible but not sufficient. Based on the precedents provided by the Koran, God’s punishment was enforced to society where no record of systematic holy book was available. Interestingly, for societies that received a systematic holy book, there is also no record of direct punishment from God.

One then can argue that when a society have a systematic rules of moral values, God gives the chance to such society to settle their own problems. Whether they will follow such rules or whether they will prosper or not is simply another case.

Notice also that once we discussed the history of Islam, we no longer see any threats of punishment from God and the history of Islamic civilization works in accordance with the laws of nature. Some existed for a long time and prospered, some were crushed. But at all time, the civilizations depend entirely on how good they cope with the situation and condition, including in this case, how they apply and enforce the rules.

And I think this is the correct interpretation. In a world where a prophet still exists and can directly deliver the heavenly message to all of us, people can easily understand what God wants. Then it would be logical for the people to comply with God rules of morality and for God to gives punishment based on a fair warning mechanism.

But without a prophet, rules become rationally indeterminate, namely that there are various ways to read the provisions of such rules and how to enforce them in practice (i.e. whether they should stay as moral rules or whether they should be formally turned into laws).

Without any practical authority to determine the absolutely correct interpretation (since no one can speak on behalf of God), how can we expect a fair God to impose punishment in the form of disasters against indeterminate moral violations?

Furthermore, there is no way we can actually know whether a disaster is a part of God’s punishment. First, without any authority from God, making the claim that a disaster is a form of God’s punishment is as easy as making the claims that cats and dogs are spies from Mars.

Second, we can actually say that in terms of fairness, the overall distribution of natural disaster might be fair enough, i.e. that no one in this planet is completely safe from the power of nature. This means that whether you are good or bad, disaster may always occur against you. So how should we interpret that?

Thus, we should stick with such fact and accept the notion that there is indeed a missing link between moral violations and God’s punishment. Sure, you can always make your own claim, but it is not good enough to justify any moral enforcement attempt.

Around two weeks ago, I had an opportunity to attend a debate on Neoliberalism Thought at the University of Chicago between Gary Becker (Professor of Economics at the University of Chicago), Bernard Harcourt (Professor of Law and Chair of the Political Science Department at the University of Chicago) and François Ewald (former assistant to Michael Foucault and Professor of Insurance at Conservatoire National des Arts et Métiers, Paris). I think the quality of the debate is very good and it would be a pity if I don't share the ideas raised in such debate in this blog.

First of all, the debate spins on the idea of Homo Economicus or the Economic Rational Men by Gary Becker. Michael Foucault, a famous French philosopher and historians, believe that Gary Becker's idea on economics rationality provides the necessary theoretical foundation of Neoliberalism. This is interesting because usually Neoliberalism is more associated with political economic thoughts rather than pure theoretical economic thought.

I think even most of the time, when Indonesian people talk about Neoliberalism, they think about the idea of excessive free market, non governmental intervention, injustices by corporations and dictators, etc. Of course, I heavily doubt that this is the correct interpretation of Neoliberalism since pure Capitalism does not support any crony capitalism, dictatorism, business without liabilities, and so on. See my previous post on this issue here.

For now, let us return to Foucault ideas. He is a proponent of the idea that history is determined by the power relationship that controls men. Law and morality are things that are defined by those who have power and authority, and therefore they might be simply an illusion for the society. However, Foucault finds some consolations in Gary Becker's concept of Homo Economicus, which according to him is liberating.

Gary Becker, which is also a Nobel Laureate, is the proponent of idea that the science of economics can be used as a powerful tool to analyze almost all, if not all, of human behavior and activities. He introduces the use of economic analysis on crime, family and discrimination and is also considered as a part of Law and Economics development at the University of Chicago.

Within Becker's theory, human is viewed as a rational being that always wants to maximize his own interest. It does not mean that human has a perfect capacity of calculating the entire costs and benefits of his action. It simply means that when they are making their decision, they pay attention and respond to incentives, and thus, to certain extent, human behaviors are predictable.

A separate note though, even Becker agrees with Foucault that a perfect rational men is a fictional concept. What matters is that the theory is useful to understand the world in an insightful way by taking certain aspects of human behavior and make a simple model. After all, all theories are fictions, and a good theory of fiction is the one that works the best among many other fictions.

Then, why this kind of theory is liberating? According to Foucault, economists are seekers of truth, their analysis is not based on moral or legal issues, rather they focus on human behavior and incentives, and they also prioritize liberty (through free market concept). This is important for Foucault who sees the possibility of maintaining order without any coercion or doctrine as presupposed by laws and morality.

But the Neoliberalism view of Gary Becker is not totally free from any problem. Although it may be a liberating theory it can also be used to suppress the people and here we are moving to Gary Becker theory of Human Capital which is an essential part of Neoliberalism. Becker believes that human capital is very important, i.e. investing in people, making them to be a better and more productive person which will contribute to the welfare of the society.

The problem with that view, at least according to Harcourt and Foucault, is that once human is viewed as a part of capital, the government may favor certain group above other groups, discriminating and investing only in people who will produce the highest benefits and left the ones who are bad to suffer in the slumps. An example would be the case of mass incarcerations in the United States that target most of African Americans and poor people based on various criminal actions. Eugenics can also be a problem here since there was a time where the Government of US actually allow the sterilization of imbeciles and people with mental disorders.

Furthermore, viewing human as only a part of capital production could be degrading, i.e. human is viewed like a machine with the sole purpose of producing more capital and whose value is solely determined on how much capital will be produced and accumulated by him in the long run. I take this as the modern critics of Neoliberalism and Capitalism in general.

Becker's response was simple. His theory on human capital is established to liberate the people and while he agree that some aspects of economics theory on production and capital can be used to analyze issues on human capital, human capital is still a separate subject (and thus the reason why he makes a separate class on human capital in the University of Chicago).

From any point of view, human cannot be fully compared with machines. We can put machine in the warehouses and easily disassemble them whenever we want, we can't do that with human. Furthermore, the theory put a lot of stress in building human capital so that everyone may reap the benefit of social welfare. It includes investment in education, on the job training, health, etc.

The most interesting response from Becker is that his theory of human capital focuses on efficiency, but most of the time, things that are efficient, are also equitable. Through his theory, Becker want to show that human is the most important part of our capital. By investing in people, we hope that they can develop themselves and free to make their own life decisions without any interference. He also notes that there is an underinvestment in poor people and that is actually an inefficient thing to do, since better human capital always lead to better welfare maximization.

I completely agree with Becker's notion. This is indeed the main purpose of introducing the concept of human capital, preserving freedom and reducing paternalism, finding the most efficient way to allocate resources among the people. And I think this should be the main idea of Neoliberalism. It is just too bad that politicians and even some academics are using this concept in such a misleading way that they confuse the original concept of Neoliberalism that focuses on liberation and freedom of the people with crony capitalism, dictatorism, and the freedom to do anything without any legal liabilities which are not even parts of original concept of Neoliberalism.

Let me start this post with the claim that I am a legal positivist, meaning that philosophically, I believe that the existence of law is based solely on social facts and that a legal system can validly exist without any moral basis. Note this, it doesn’t mean that the law cannot contain any moral values, it simply means that law can be separated from morality issues in order to exist.

This separation is crucial to understand why I take the position that pure moral enforcement would be an impossible attempt. I will also use the concept of separation of moral and legal issues in Islamic law to support my argument in this post.

As you may be aware, this world is full with people who believe that the morality of a society must be upheld and enforced even when there is no legal rules relating to such matter. Take the example of Lady Gaga’s concert in Jakarta.

I am not talking about the thugs who demand the concert to be cancelled since based on the facts on their usual practices, I don’t think that they are motivated by morality issues. It would be more accurate if we explain their motivation from pure economics issues.

What I am talking here are people who take the issue at face value and believe from an internal point of view that Lady Gaga’s concert adversely affects the morality of our nation and thus encourage the legal authorities to conduct morality enforcement by prohibiting the concert even when the legal basis is ambiguous or even non existent.

Suppose that no legal rules exist concerning such matter. Can morality be simply enforced within such condition? The answer would be no.

First, different with legal rules which are usually accessible to the public and have more certainties with respect to their contents, moral rules do not have clear standards and authorities to which one can ask for a final judgment.

Second, legal rules exist in order to coordinate the behavior of the people. They exist as a response to social net loss caused by certain actions. While morality rules deal with decencies, things that are good to be followed by a person, where breaching such rules might cause disagreement from other people but not strong enough to justify enforcement (which would always involve costs).

Here are some examples from Islamic law provisions. Eating pork and drinking alcoholic drinks are both prohibited, yet penal sanctions exist only for being drunk. Why?

A simplified explanation would be: Because the net social loss of eating pork is questionable and might only affect people in a personal level while drinking problem creates social loss, especially in terms of accidents. Even the United States admits that drinking is indeed a social problem.

Another example would be the law on adultery. To accuse someone for adultery, you must provide 4 male witnesses with the highest standard of human being. Failure to do this would cause the other witnesses to be deemed of giving false testimony and there is a harsh penalty for that action.

Interestingly, the privacy rule in Islamic law is also very tight. Not only that you are forbidden to enter into someone’s private property, you are also forbidden to even spying at someone’s house. Breaching such rule will allow the home owner to hit you in the eyes.

In other words, the entire legal rules on adultery is structured to deal with adultery cases practiced in the public and those that fall under the scope of privacy will be considered as a moral issue. Notice this: Islamic morality will never deem adultery as a permissible act (you are still responsible to God for your personal action), but legal enforcement will only be conducted when clear social loss is established, say due to the public act.

This brings us to the third issue. It is possible that moral enforcers might still argue that although breach of moral rules do not cause clear social losses, it still causes losses, at least to the people whose moral values are being harassed by such act.

I agree, this can be considered as a loss. But since the losses are pretty much subjective and solely related to the moral enforcer’s taste of decency, it is absolutely necessary that these moral enforcers adhere to the strictest standards of good human being. Why?

You can’t claim that you experience losses because some people are breaching the values that you perceive so highly when you don’t take such values seriously either. So this is a completely different issue with legal enforcement where such standard is not necessary as I argued in my previous article.

Now the final question for these moral enforcers is: Can you really adhere to your own principles?

Remember, God hates hypocrites more than people who consciously breach moral rules and admit that they are wrong.

A recent blog post has caught my attention. It describes another usual day in Jakarta, complete with major traffic jams and motorcycle drivers using the curb lane. The writer, a pedestrian, says he was in a fight with a motorcycle driver who wanted to pass him and kept asking him to step aside.

Of course, the request was ridiculous. The lane has always been reserved for pedestrians, and they don’t have any legal obligation to let motorcycle drivers use it. Just when the fight was about to turn physical, a police officer came to break things up.

At first the officer scolded the driver, saying he was violating the law and could be fined. The driver simply replied that he would accept the punishment as long as the officer also fined other motorcycle drivers using the curb lane, and there are many of them.

Upon hearing that, the officer turned and instead scolded the pedestrian for his refusal to let the driver use the lane. It was a perverse result, showing that the officer was regrettably taken by the driver’s misleading argument.

We hear this kind of argument for fairness all the time. If you want to punish me, you should also punish the other people who are involved in the same crime. Or if you want to punish me, you should show that you’ve never done the same thing yourself. Is this argument valid when we’re talking about law enforcement?

The answer is no. From a legal perspective, I’ve never seen any serious legal philosophers who support the idea that in order to make a valid legal enforcement, legal enforcers must be saints and ensure that all people who commit the same crime will be punished at the same time.

From an economics point of view, it would simply be inefficient to have that kind of rule. Imagine the costs if we had to ensure that all legal enforcers possessed the moral capacities of a prophet, being a perfect person who absolutely adheres to the highest standard of moral and religious principles. Where can we find such a great person?

Pakistan would be good case study. Pakistani legal officials, who believe they act in accordance with the correct version of Islamic law (unfortunately, it’s not correct), have established a strict rule for becoming a witness in homicide cases. People can only be witnesses if they have certain moral qualities, which include, among others, praying five times a day, never lying and maintaining good hygiene.

The result? No one has ever been punished for murder under Pakistani Islamic law. Thankfully, that does not mean murderers can run away from their liabilities, because Pakistani legal officials still use the witness standards established under the English law, which is also applicable in Pakistan. But you see the point.

When police officers are dealing with cases like the one I describe above, they should realize that they can in fact punish a motorcycle driver even if they don’t do the same to other violators. By punishing one driver, they can set an example that they’re going to enforce the law, even if it’s in a random or selective way.

And such enforcement would be efficient. There are costs for law enforcement, and the optimum crime level might not actually be zero because at certain point, the cost for law enforcement might outweigh the benefits that we expect from reduced crime. This is called diminishing marginal returns.

Of course, there are situations where we might be required to increase the law enforcement costs for specific crimes (say, corruption). But for traffic violations? Having random or selective enforcement in this case would be sufficient to give the correct signal to violators.

Sometimes, uncertainty is effective to deter crimes. If you don’t enforce the law at all for traffic violators, they’ll think it’s fine to commit a violation as long as everyone else does, too. But if they know they might be punished, even if it’s just a possibility and not 100 percent guaranteed, they will think again.

Such uncertain law enforcement will increase the costs of violation and make people more likely to comply with the rules. That’s why law enforcement is still necessary, even when the process is random or selective. So next time a police officer faces a similar case, he should just fine the guy and say to him: “Well, tough luck, sir!”