Read more: Should all MPs publish their tax returns?
The media is stuffed with argument and outrage about the Panama Papers. Many people are trying to ascertain the new things we know and don’t know about our tax law and the tax affairs of David Cameron’s Father. We have been plunged into a national debate about the ethical standards to which our leaders should adhere; and what should inform the tax code.
Janan Ganesh touched on key parts of the debate in his recent column for the Financial Times. One such part is the idea that some of our tax law is unfair. Another is that the debate has been partly about the fact that life is unfair, since some people are rich, and others become rich by inheriting. Finally, there is outrage that our politicians might not be playing fair, using the letter of the tax law to their own advantage, just like the rest of us could.
Ganesh summarised his view about all of these when he retweeted a tweet by Dan Hodges—commentator for the Mail on Sunday—that read "what this whole row shows is insanity that ensues when [you] try to supplant laws with abstract morality," and covered it, generously, with the words below.
https://twitter.com/JananGanesh/status/719831341416771584
Ganesh’s basic view, from which there are some important things to take away, is this. There are multiple, competing moral codes. "Fairness" is a vague concept many of us think we understand, but don’t. To make progress, and avoid chaos, laws have to stipulate something specific, about financial facts of life, and can’t mirror the nebulous outrage we might feel from time to time. Hence economic and political life is anchored by the law, not fairness.
But this account of our democracy and economy, and how it relates to the law, is incomplete and gets some things backwards.
To begin with, economic and social life is largely governed outside of the law, by these vague moralities and notions of fairness that spring from them. We have contracts with those we buy things from and those whom we work for. And there is the machinery of contract law, precedent, and the courts to enforce it. But most contracts are necessarily and terribly incomplete. They can’t possibly specify all the eventualities that might play out, and therefore rely on vague notions of reasonable expectations on either side. This legal gap is filled by morality and fairness, and trust that people will abide by it. Moreover, even where things can be written down in contracts, the cost of getting redress from the legal system is huge in proportion to the gains in most cases, so even here we all hope not to have do it.
That morality and fairness fills this gap is not surprising, since it’s highly probable that we are all hard-wired moralists. And there is substantial research in evolutionary psychology demonstrating this and theorising that it conferred advantage on us, helping us profit from cooperating with our peers. Notions of and responses to cheating, lying, sexual infidelity, jealousy, revenge, punishment and more are common across many human societies.
Since morality permeates our DNA, two further things follow.
First, not only does morality and fairness fill in the gaps that the law leaves; both also underpin features of the law itself. Ideas that we insure and compensate the unlucky. That those who can pay their way. That we split the cost of public goods we all use. Some redistribution. A mixture of "eye for an eye" (prison sentences) and rehabilitation. All these features are encoded, albeit messily, into our law. And more. Without this fairness, the law would not stand, since most states that try to enforce grossly unfair laws struggle to marshal the resources to do it forever.
The second thing that follows from our moral hard-wiring and the consequent pervasiveness of morality in our world view, is that we expect politicians to adhere to these moral codes too. If leaders are to make laws whose compliance relies on persuasion, rather than infeasibly costly compulsion, they must do their bit by adhering to moral codes. Even if we struggle to articulate precisely what that means.
The economic and political spheres might seem to be anchored by law amidst moral ambiguity and confusion. But they're aren't. It’s the reverse. Law is a symptom of a fundamental human morality, imperfectly realised in statutes and precedent. And failing to reach most of economic and social life anyway, which survives largely by us acting, imperfectly, as moral citizens and moral policemen.
Now read: In pursuit of the $21 trillion
Janan Ganesh touched on key parts of the debate in his recent column for the Financial Times. One such part is the idea that some of our tax law is unfair. Another is that the debate has been partly about the fact that life is unfair, since some people are rich, and others become rich by inheriting. Finally, there is outrage that our politicians might not be playing fair, using the letter of the tax law to their own advantage, just like the rest of us could.
Ganesh summarised his view about all of these when he retweeted a tweet by Dan Hodges—commentator for the Mail on Sunday—that read "what this whole row shows is insanity that ensues when [you] try to supplant laws with abstract morality," and covered it, generously, with the words below.
https://twitter.com/JananGanesh/status/719831341416771584
Ganesh’s basic view, from which there are some important things to take away, is this. There are multiple, competing moral codes. "Fairness" is a vague concept many of us think we understand, but don’t. To make progress, and avoid chaos, laws have to stipulate something specific, about financial facts of life, and can’t mirror the nebulous outrage we might feel from time to time. Hence economic and political life is anchored by the law, not fairness.
But this account of our democracy and economy, and how it relates to the law, is incomplete and gets some things backwards.
To begin with, economic and social life is largely governed outside of the law, by these vague moralities and notions of fairness that spring from them. We have contracts with those we buy things from and those whom we work for. And there is the machinery of contract law, precedent, and the courts to enforce it. But most contracts are necessarily and terribly incomplete. They can’t possibly specify all the eventualities that might play out, and therefore rely on vague notions of reasonable expectations on either side. This legal gap is filled by morality and fairness, and trust that people will abide by it. Moreover, even where things can be written down in contracts, the cost of getting redress from the legal system is huge in proportion to the gains in most cases, so even here we all hope not to have do it.
That morality and fairness fills this gap is not surprising, since it’s highly probable that we are all hard-wired moralists. And there is substantial research in evolutionary psychology demonstrating this and theorising that it conferred advantage on us, helping us profit from cooperating with our peers. Notions of and responses to cheating, lying, sexual infidelity, jealousy, revenge, punishment and more are common across many human societies.
Since morality permeates our DNA, two further things follow.
First, not only does morality and fairness fill in the gaps that the law leaves; both also underpin features of the law itself. Ideas that we insure and compensate the unlucky. That those who can pay their way. That we split the cost of public goods we all use. Some redistribution. A mixture of "eye for an eye" (prison sentences) and rehabilitation. All these features are encoded, albeit messily, into our law. And more. Without this fairness, the law would not stand, since most states that try to enforce grossly unfair laws struggle to marshal the resources to do it forever.
The second thing that follows from our moral hard-wiring and the consequent pervasiveness of morality in our world view, is that we expect politicians to adhere to these moral codes too. If leaders are to make laws whose compliance relies on persuasion, rather than infeasibly costly compulsion, they must do their bit by adhering to moral codes. Even if we struggle to articulate precisely what that means.
The economic and political spheres might seem to be anchored by law amidst moral ambiguity and confusion. But they're aren't. It’s the reverse. Law is a symptom of a fundamental human morality, imperfectly realised in statutes and precedent. And failing to reach most of economic and social life anyway, which survives largely by us acting, imperfectly, as moral citizens and moral policemen.
Now read: In pursuit of the $21 trillion
