The Chronicles of a Capitalist Lawyer

Someone said on Twitter that corruption will never be effectively banished if people are still violating traffic regulations, including the three-in-one rule by using the jockeys service.

Three-in-one policy requires vehicles to have at least three passengers on busy roads at peak hours. The jockeys are hitchhikers who are paid to ride in a car when passing the main roads.

I won't discuss whether such rule is valid under the current hierarchy of laws, but or the sake of this discussion, let's just assume the three-in-one rule is legally valid and binding.

What I mainly disagree with the above statement is that using the service of jockeys is a violation of law that will somehow induce the people to corrupt - using a logic that if you can't be trusted for small matters, you can't be trusted for huge and important matters.

First of all, the rule only says that people who want to travel within the restricted roads must have at least 3 passengers inside their car. It doesn't stipulate that the people in the car must come from specific place or go to specific directions. Nor does the rule say that only certain type of people who really intend to use the car for traveling purposes might be considered as a legitimate passenger.

Having such condition would be an enforcement nightmare as finding the proof of violation and checking the overall background of all passengers would be very difficult, if not impossible. Not to mention the vagueness of the rule itself with respect to conditions for being considered a passenger.

Nevertheless, some people still think that the three-in-one rule is enforced in order to reduce the traffic jam, and using the service of jockeys will defeat such purpose. In other words, the use of three-in-one jockeys is a form of legal avoidance and should actually be prohibited.

The concept of legal avoidance is indeed confusing. On the one hand, it seems that you already comply with the prevailing laws. But on the other hand, you are deemed using the law to escape the consequences of your action which may violate the law's purpose or essence. Thus, your action will be deemed invalid.

To be honest, I refuse to admit the existence of legal avoidance concept. It is either you comply with the law or you violate the law. If there is no strict rule saying that you are violating the law, what would be the basis for some people to come and say that you are violating the law when you are still complying with the law? That would be absurd.

To follow the logic of people who support the existence of legal avoidance, take the three-in-one rule as an example. Bringing the jockeys in your car will let you satisfy the three-in-one rule. But because taking such jockeys somehow defeat the purpose of three-in-one rule, i.e. reducing traffic jam, you are already violating the law. The problem is, says who?

In any way, despite your choice of action, the three-in-one rule will most likely reduce the traffic all the time. Why? Because it creates additional costs for drivers to use the road during the three-in-one period. Either you take two more of your friends/colleagues or you pay for the service of jockeys.

The first type requires the costs of maintaining friendship, or maybe time, because you don't always have the same schedule with your friends. The second type requires the costs of paying jockeys or reduced level of security - after all, you are taking strangers into your car.

Thus, you can consider three-in-one rule as another form of tax or levy for the sole purpose of giving less incentives for people to travel within the three-in-one periods. If that's the case, then using jockey is not even a legal avoidance - assuming such concept exist - because you are still complying with the so called purpose of the rule, albeit in a different form.

This kind of act is completely different from mere traffic violation, such as trespassing the traffic lights. There is no doubt that such act is a violation because it directly breaches the rule. Under our criminal law principles, an act of criminal will always be considered as a criminal unless the defendant has a valid excuse - such as in case of force majeure or self defense.

Hopefully, you can see the difference. The key would always be whether there is a direct violation of a rule or not.

Next time, I would like to discuss whether there is a correlation between violating small rules with one's tendency to violate bigger rules, including corruption. Stay tuned.

The verdict for drunk driver Afriani Susanti has been issued earlier this week: 15 years in prison for killing nine pedestrians in an infamous traffic accident. She was deemed guilty not of intentional murder, but of reckless and fatal driving.

I won't discuss the verdict from legal perspective here. 15 years in prison is the maximum sanction she can get if she is deemed guilty of intentional murder. What I am more curious about is the way to find the proper penal sanctions for various criminal activities.

In my January 2012 article about Afriani, I argued she must receive higher penalty — by categorizing her crime as an intentional murder — in order to reduce the incentives for other drivers to drive recklessly.

At that time however, I did not think deeply about the most efficient sanction for her crime. I only followed standard Law and Economics doctrine that a sanction of multiple crimes should always be clearly differentiated with a single crime, simply because we want to give less incentive for criminals to commit more crimes.

As an example, if the sanction for rape plus murder is equal to the sanction for rape only, a rapist will have more incentives to kill his victim because he will receive the same sanction. But the costs of him to hide his crime would be lower.

In reality, however, differentiating the sanctions for multiple crimes is difficult. And the case would be even harder for differentiating sanctions for various types of crimes, especially when we focus our sanctions in the form of prison and fines.

What would be the proper sanction for thievery, corruption, rape, murder, fraud, violence, genocide, etc? How would we properly differentiate the sanction of a killer of one person and a mass murderer?

Judges often become the victim of this absurdity. On the one hand, our legislators are not that creative in designing penal sanctions. On the other hand, the general public often have obscure ideas about justice and how justice should be served for these criminals. In the end, judges will be blamed for making the "wrong" decision.

What I would like to propose is to analyze each type of crime, to study the incentives of each criminal in conducting the relevant crime, and to design a sanction which will defeat the purpose of doing such crime and maximize the welfare of the society.

Further consideration should also be given to the cost of law enforcement, the compensation to be given to the victim as a result of the crime (if any), and the probability to prevent the same crime from occurring again (recidivism).

In Afriani case, she drove while she was being intoxicated. It is a very dangerous behavior, indeed. But would 15 years in prison serve her (and any other person committing the same act) right? How about we give her a sanction in the form of a lifetime ban from driving, a huge fine as a compensation for the victim, and countless hours of social service?

Then when she fails to obey the above sanctions and commits similar crime in the future, we send her to prison for a lifetime simply because she is too dangerous to exist in the society.

Why do I design the sanction in the above form? First, we know she is a very reckless driver. I doubt putting her in prison will fix that. And maybe 15 years after, she will still do the same thing. What is really necessary is to ban her from driving infinitely.

Second, putting her in prison is another costs to be paid by us taxpayers (not to mention that the costs of prison will include all reckless drivers involved in similar cases, albeit having different degree of crime). Why not focusing on giving compensation to the victim instead of wasting taxpayers' money?

Third, forcing her to do social service might be more useful than putting her in the prison. At least we can expect her to give more contribution to the society rather than paying her cost of life in jail.

And if all fails and she breaches her obligations above, we can justify the decision to put her behind the bars indefinitely, i.e. she is dangerous to the society.

Of course, if we know that Afriani intentionally kills those victims because she likes it, we can directly put her in prison or send her to the death penalty squad. In other words, incentives of the criminals matter.

As you can see, discussing the proper sanction for a single criminal act like reckless driving is already quite complicated, but this is necessary. If our government and legislators really care about legal enforcement, they should think carefully before they criminalize an act.

A single law can have a great impact to the overall society. So let us ensure such great impact does not affect us in a negative way.

Don't you just hate the fact that many politicians seem very inconsistent in making their political choices? Supporting candidate A today, B the next day.

I still vividly remember a politician who was criticizing one of the independent candidates in July's Jakarta gubernatorial election for the candidate's lack of experience, and then changed his position to be a firm supporter of that candidate once his own candidate failed to join the election process.

We see similar things happening now when some political parties, who previously attacked the incumbent candidate, decided to support the incumbent after tragically losing the first round of the election.

Is this really a bad behavior? Should we condemn such act? I don’t think so. Far from being a reckless act, the change in political choices made by these politicians is simply rational. They would be stupid if they did otherwise. Why?

Surviving in the business of politics requires similar skills that you need in order to survive the world of commercial business. Politicians must realize, while their wants are unlimited, their resources and choices are limited, including the number of voters that will support their cause.

In the real world, you can't always get what you want. If you can't get your best choice, you should strive for the second best and so on, to the extent that you still can achieve your end goals, or at least a part of such goals.

The last US presidential election can be a good example. When I was in the United States, I once encountered a political campaign ad from Mitt Romney showing a video record of Hillary Clinton accusing Obama a liar. That was a very strong choice of word.

Obviously, the video was made before Obama defeated her in the presidential nomination race of the Democratic Party in 2008. Afterwards, Hillary became a firm supporter of Obama and now she holds the Secretary of the State position in Obama's administration.

I think that is how the political world works. Politicians use strong words in order to attract voters and to differentiate themselves from other candidates. If you say that all candidates are good, why bother having the expensive election in the first place. We can't settle everything using lotteries.

Thus, it is not a good idea to measure politicians' consistency based solely on what they say during election process or how they change their support from one cause or candidate to other cause/candidate in a short term.

Instead, it would be better for us to measure their consistency from how close they stay true with their basic objectives (assuming that the party itself has such objectives) in a long term.

This means that we need to know to what extent they will compromise their original best plan for getting the second best plan (and so on) in case they don’t have the necessary vote. And knowing the extent of their compromise is much more difficult than reading the bombastic campaign in various medias.

As an example, every media can cover a story of a politician who changes his position from A to B. But why stop there, why not ask more, like the politician's reasons for changing his standing, or how much has been compromised in order to change the vote from A to B, and so forth?

In one of my previous articles, "The Economic Problem of Choosing the Best Leader," I argue how we might create a vicious circle if we let bad politicians rule the game. One of the solutions for us to fight back is to pay more attention to the track record of those politicians.

But in order to understand their overall track record, we cannot rely on insufficient data. Sure, change of political support would be a major news and a good source for political bashing by political rivals. The problem is, everyone is doing the same and people will soon forget the case.

What we really need is a media who records the development of a political party or politician for years and then share the information to the general public. I don’t think that is difficult in this modern age and I bet the information would be more helpful to all of us compared to the usual critics that we now have.

If we really care about how politics shape our life, at least try to make people understand the issues correctly. The battle for image is absolutely necessary for political campaign and it might be impossible to ask those politicians to completely let such practice go.

Surely we can ask the independent parties, i.e. the media, to provide the needed check and balance in our political system, can't we?

Here is my latest post (in Indonesian language) at ILUNI-FHUI site: Revisiting the Function of Penal Sanctions. The post discusses the use of Law and Economics tool in analyzing the role and use of penal sanctions and how we can shape our penal sanctions to meet their primary purposes.

For a couple of weeks, we have been bombarded by news on the use — or misuse — of religion as a part of Jakarta's gubernatorial election campaign. Even the Islamic Council of Ulema's (MUI) Jakarta branch joined the fray by issuing a fatwa that people have the obligation to choose their leaders based on their religion.

This, of course, attracts a lot of comments. Some view such attempt as stupid or hypocrite, others view it as acceptable and necessary in accordance with their religious practice.

From political and economics point of view, using this strategy seems rational. Like it or not, this is a sensitive issue where opinions might be fairly distributed between the pros and cons. If you can use it to gain more voters from certain side, why not?

But, from legal point of view, should we prohibit the use of this strategy? I don't think so. Not only that it would be a very paternalistic policy, there are hundreds of other reasons that can be used by a candidate to attack other candidates. Why should we pay more attention to religion?

I don't think it would be efficient for governmental authorities to prohibit issues that can be discussed and used in a political campaign. It would be costly and we would have difficulties in justifying the reasons. Do we have a rational reason to do so or is it merely a problem of taste?

If we can say to other people that they should not vote for stupid people, why couldn't we do the same for religion?

What I think that is most important in a political campaign is candidates must speak the truth and only the truth. This is to ensure that there is no misleading information in the campaign and the democratic process can work smoothly.

This means that political candidates can say and encourage people to vote solely based on religion or ideology or ethnicity. That would be acceptable as long as they don't commit fraud or hide material information. An example: Spreading bad rumors about the other candidate who has a different religion or ideology that he is planning to destroy the voters once elected without any solid evidence.

I understand that looking at such a shallow political campaign might shock some of us. How could people blatantly accept that kind of campaign? But this is a part of democracy and freedom of speech. It is an inherent risk in a society whose people are not mature enough to focus on political programs instead of trivial things.

But don't be disappointed too much, because we can still find this joke even in a country like United States. I know that some people there — albeit minority — believe that Barack Obama is actually an Islamic agent with a mission to destroy the United States.

While the rumor is of course laughable and wrong, it shows that religious sentiments still hold certain power in a first world country. Honestly speaking, I don’t think that United States citizens would be ready to accept a Muslim as their president.

In a case like this, my recommendation would always be: fight idea with idea. If some political candidates say that religious aspect should be considered as the decisive factor in voting, other candidates must show that such idea is bad and encourage voters to do otherwise.

Later on, the market of information will eventually determine the winner of the election. And from such information we can also see whether Indonesian people still take religion issues seriously or not.

If we still want to punish these political candidates, punish those who spread false information because they might cause baseless distortion in the market which would create losses to all of us. However, how they want to shape the language of their own campaign, including choosing the ideas to discuss, should not be our concern.

The recent Olympics badminton scandal is very interesting. From a legal perspective, the answer is quite clear. The players deliberately tried to lose against each other, so they breached the Olympic rule of doing their best in each competition. Case closed.

But surely we can’t stop there. Why should we have that kind of rule in the first place? Why should we prohibit the players from choosing a rational strategy when the competition rules allow that possibility?

Is this all about sportsmanship? Like in that various martial arts stories where the fighters are always trying to fight fair and square in order to gain the sweetest victory? Or is it something else?

As a spectator, I don’t mind if the players deliberately tried to lose in order to gain victory later. The problem is, it seems that I am in the minority group. Like it or not, the idea that sport competitions should be held in accordance with the highest moral principles still lives on until today.

And the case is even stronger for the Olympic which serves as the ultimate symbol of fair competition. People want their symbol to be incorruptible. If even the players in such important event cannot meet such requirement, where else should the people look for virtue?

In this case, the rational act of the players seem to be irrational. While it is true that each player has the right incentive to win the game (including trying to lose first), they seem to forget that they are not alone in the competition.

Olympic is a big business. Sure people need a huge symbol of fairness and virtue but they would be crazy if they conduct the Olympic solely for such reason. In other words, the Olympic is conducted in that way because it is profitable for the organizer — or at least they think that it would be profitable for them.

Thus, images hold a very important position in the competition. If the organizer can’t maintain the image that the game is fair and all the players are doing their best, it will be difficult to maintain the credibility of the competition and it would affect the number of viewers.

The players — and their coaches — should put this in mind when they choose their strategy. What I see now is a foolish act, not because it was irrational, but because it was executed poorly.

Had these players realize the reality of the game and how people perceive them, they might try to lose the game elegantly. Unfortunately, trying to lose is a little bit too difficult for them.

I read in the news that people were already booing them and the referee has warned the players that if they continued to play like that, they might be disqualified. So yes, the way they executed their plan was too obvious.

So, the punishment is well deserved. Not because they fail to maintain sportsmanship, but rather because they fail to entertain the spectators and risk the overall image of the Olympic game.

Another interesting thing is the fact that some of the coaches asked the Olympic organizer to change the rule of the game to prevent such cases happening again in the future.

If the rule does not permit any possibility to pick your future competitor, the players might fully engage their true power from the beginning since nothing could be done anyway.

But once they see a slight chance to choose their future competitor, their strategy significantly changes. The question is: Is it the mistake of the organizer for making a rule that induce the players and coaches to pick such strategy?

I don’t think so. The rule of the game is clear: How players cope with the rule is their own business and if they are really smart, they should choose a strategy that will benefit them the most while minimizing the cost.

Clearly the players fail to study the costs and benefits of their action and they have to pay dearly for that. I can only hope that this could serve a good lesson for them, especially the Indonesian contingent. Better luck next time.

This is an era where people can spread information anonymously and are able to gain trust from a lot of other people. The million dollar question is: Is this a good thing or a bad thing?

I know that some people do not like the fact that these anonymous informants can get many viewers in such an easy way and fear that these viewers will be fooled by distribution of false information. This, however, is an exaggeration.

Like it or not, having anonymous informants is a normal thing in the modern market of information, especially with our telecommunication technological advances.

And in such market, there will be high quality information and low quality information. Trying to have a paternalistic central body to analyze and differentiate each type of information would be very costly. So it would be better to let the people themselves decide whether the information is worth to know or not.

Furthermore, it would also be too late to say that anonymous informants are unreliable and should be censored at this stage. Similar to anything that falls under the category of free speech, censorship would always be costly and difficult to do (unless you are the government of China).

Rather than spending our times thinking how to prevent these anonymous informants from getting more and more viewers, we should do what every rational man would do: ignore them.

Why? It’s simple. If the unreliable information hurts the interest of certain people or entity, they would be the ones who naturally have the biggest incentive to fight back and spend their resources for such fight. We’ve seen these cases happen in the real world.

There would be no need for bystanders like us to join the fight and spend our precious time and resources to deal with informants that we think are unreliable in the first place.

Or might it be that you are enraged by the fact that there are so many foolish people who blatantly believe or follow what these anonymous informants say? And as a result, you want to declare a war on the informants?

Better think about it again. First of all, you don’t really know whether these so called “foolish” people really think that they are getting the truth. They might just see it as a form of entertainment. Everyone loves gossips and conspiracy theories after all.

Second, unless the informants are trying to persuade their readers to conduct a bloody revolution, why we should care about the mumbo jumbo that other people believe? As I said, those who are being harmed by the false information will move by their own, quicker than we can ever thought.

Another thing that makes me believe that these anonymous “informants” (especially those from social media) do not give us reliable information is because no one is truly anonymous in this modern age.

Anonymity is usually used when you want to talk about some sensitive issues and you are concerned about your safety, although in certain case it is used simply because you want to talk anything without any responsibility. Thus, such anonymity would be used carefully.

But I don’t see this carefulness coming from the informants that we often see and hear in the social media. They just share information as they wish through a media that can be easily accessed by other people to know their whereabouts.

If the information that they distribute is very sensitive and true, and all of such information is related to powerful people, these informants must already hit the coffin long time ago. But apparently, that’s not the case. Not even any serious report to the police for defamation. In other words, the information should be unreliable and they exist just for fun.

Word of advice: don’t think too much about these informants. As for the people who think that these informants bring the truth, well, there is still a good side of it.

If you are an employer, you would now have a good arsenal to test new employee. Ask them whether they believe what these informants say and let their answer help you to decide whether they are qualified for the job or not.

Look, you just get a cheap IQ test out of it. So, who says that having these informants are bad for the society?