Tuesday, April 26, 2016

150-Strong: A Pathway to a Different Future – Serialisation Part 3

“The more laws and commands there are,
the more thieves and robbers there will be.” Lao Tzu

Information leaked in the Panama Papers about the use of tax havens certainly supports this statement! Under the cover of the law thieves and robbers have been maintaining their privilege and ultra-wealth by being tricky. Many of them are leaders – politicians, monarchs and business executives. “I have done nothing illegal,” they say as their souls disappear a little further into a fog. And from the germ of their example a cancer grows.

Rules work best when they are kept to a minimum.

This I have seen illustrated in the context of the business I am involved in. We are a construction company employing approximately 150 people, a mix from all walks of life – old friends, relatives of workers who needed a job, qualified recruits who fitted the mold, troubled youth recommended by the courts as worthy of a second chance, odd bods and colorful characters who fell into each others' orbits. Some are very skilled and others developing.

We operate with very few rules. The main rule is that you must be accountable for your actions among your peers. Thanks to our systems of reporting, no information remains hidden for long, and no one is allowed to hide behind the manipulation of words, duplicity or attributing blame to others. There is little need for rules when regret and shame operate for those who fall short.

It is a system that requires that participants have a personal relationship with each other, where they know each other well enough to care and to understand, beyond a superficial level, what is going on. Moderation and maturity are required, because exposing the foibles of others can be exploited as an opportunity for persecution, blame and cavilling. We have seen that if people in senior positions lead by example, rather than skirting their responsibilities, a team spirit develops, characterised by collegiality and camaraderie. And when bonds are established through shared experience and commitment to support one another, there develops real strength, far beyond that which can be forged through an impersonal and inflexible system of rules.

But operating this way requires swimming against the current. We operate in a rules-based society. To an ever-greater extent, discernment is being replaced by compliance, and it is like sinking into a swamp.

Regulation and legislation are blunt tools. Take the United Kingdom, where there exist 21,000 pieces of regulation, while the City of London is thick with corruption. It serves as an example how morality and the application of the law often diverge.

Joseph Tainter, author of The Collapse of Complex Societies, reported that almost all of the two dozen collapsed civilisations he examined succumbed from diminishing returns on complexity. And there is nothing more complex than the legal system!

* * *

In this week's excerpt from 150-Strong, we examine the operation of the law as a companion of the profit motive system:

Law as a Counterpart to the Profit Motive

In a system governed by the profit motive, where the marketplace pits rivals against each other in fierce competition, the law acts to provide a moderating context. In an environment where there is much at stake, and the spoils of victory great, it is necessary that there be rules in place to maintain some basic standards, and to prevent capitalism from degenerating into gangsterism, or worse.

For example, slavery used to be legal in many parts of the world, but is now banned by a binding international convention (at least in its most overt and blatant forms). At the opposite end of the spectrum, in England it was once a common practice for bakers to add such things as ground bones, clay and chalk to bread to keep costs down and increase profits, but now this is also illegal.

For a business, compliance with the laws is usually seen as a cost, especially when it comes to environmental regulations and labor laws. And since minimizing costs to maximize profits is part of Friedman’s ideological imperative, businesses tend to gravitate to locations where the laws are the least restrictive. As long as property and contract law are respected, fewer laws generally mean greater profits.

The Law is a Blunt Instrument

The law is based upon the interpretation of rules that are written so as to be as general as possible, but they are subsequently applied in very specific circumstances. This conceptual flaw means that laws inherently lack sensitivity and contextual nuance, and the inevitable shades of grey present in any real-world situation have to be resolved by lawyers who argue endlessly about the meanings of words, taking a lot of time and costing extravagant amounts of money. In the process, they tend to divide people into winners and losers, giving rise to feelings of loss, aggravation and resentment.

The law is based on the precise interpretation of words, making it vulnerable to exploitation by clever people who find loopholes that go against the intent of the law. This creates a culture of insincerity, in which various parties adopt positions of righteousness that are not backed up by any sense of morality, and use tortuous language to disguise their pursuit of self-interest.

The very process by which laws are formulated requires them to be complex, since the process of developing them requires many different situations to be considered, and many different contexts to be accommodated. But no matter how intricate and nuanced a piece of legislation, most situations in which it applies do not allow for intricacy or nuance. They usually involve people or companies with limited amounts of experience, competence and resources. Thus, no matter how perfect a law is in its conception, it inevitably becomes a blunt instrument in its application.

The Law Upholds Privilege

One further significant shortcoming of the law is that it is biased in favor of those with money. The cost of engaging lawyers to resolve a dispute in the courts is significant, and those with the biggest budgets – insurance companies and other large corporations – have a far greater ability to prevail in litigation than ordinary citizens. There is often a total mismatch between parties that are in disagreement. A lawsuit is a small risk for corporations, with their armies of lawyers and with millions or billions of dollars in their war chests. To battle them, private citizens may have to stake their life's savings and commit a significant portion of their lives.

Moreover, the law provides numerous advantages to wealthy and powerful people looking to protect their interests. It is a powerful enabling medium for numerous strategies that prevail through obfuscation, deceitfulness and insincerity in the pursuit of naked self-interest. These include the use of complicated small print to shirk moral responsibility, the structuring of one’s affairs in order to avoid taxation, the evasion of personal responsibility by establishing limited liability legal vehicles and, as just mentioned, by bullying those who are poorer and thus weaker with the threat of litigation.

Lastly, the law allows for systemic, legalized corruption. Those with money and connections can usually find a way to exert undue influence on lawmakers – through political donations, lobbying and more corrupt means – to have laws enacted that favor their private interests at the expense of the public.

The Law Stifles Personal Responsibility

Finally, and paradoxically, the law also tends to stifle personal responsibility and initiative by imposing a heavy burden of compliance... Instead of nurturing self-reliance and furthering the development of good judgment, many of these regulations seek to protect people from themselves. Children – even teenagers – cannot play unattended. Blind obedience to rules and mechanically generating health and safety compliance paperwork have become more important than safety itself. For example, a school in Bristol in the United Kingdom recently banned a blind 7-year-old girl from using her cane because it constituted a trip hazard. Examples of this absurd lack of common sense abound in the culture of zealous compliance that colors most of the Western world. All of this leads to an increasingly enfeebled population, fit only for life in a climate-controlled padded cell under the watchful eye of certified, credentialed minders. The root cause of this insanity is reliance on the law as a reconciling force, while what is really needed is discretion and intelligence.

The Law is a Poor Foil for the Ills of the Profit Motive

Regulation is often put forward as a way of compensating for the numerous ills created by the profit motive. But this amounts to an attempt to use two wrongs to make a right, because, just like the profit motive itself, the law is also rooted in negativity. It is a way of setting parties apart in conflict. As noted above, it promotes insincerity, disguises the pursuit of naked self-interest, amplifies the effects of privilege, and is slow, cumbersome, expensive, imprecise and unpredictable in its application, and vulnerable to exploitation and misappropriation by the least scrupulous.

That is not to say that lawlessness should be encouraged or promoted. But at the granular level where the socials ills borne of the profit motive have to be opposed, the usefulness of the law is very limited, and recourse to it is fraught with unintended consequences.

Something beyond laws and regulations is required if there is to be real regeneration.


Antti Laitumilta said...

Thank you for these.

As a reconciling force, law as it is returns people to where they started: at the feet of the more basic, negative reconciling forces. The profit motive is a big one, but to my mind an even more basic force is a kind of fear based on a very basic sense of insecurity and an inability to trust. This is what people grapple with, and the profit motive is a kind of rationalization of that fearfulness and the predatory survival mechanisms that follow into a supposed cohesive, social good.

I'm not sure though, that few rules by itself is necessarily a good thing, besides perhaps as a good practical starting point. It's the social system of rules and what/who it's geared towards that matters.

As a culture, we bring a lot of rules to bear to try to ensure a kind of death phobic permanence and a sense of power. Building a house "well" and by the rules today mostly lends itself to attaining a false sense of grandness and power--the more you pay and the less attention you give to being ripped off in the process, apparently the grander you should and do delude yourself into feeling, and the more reassuring that should be to any nagging insecurities and fears you may have (apparently there's no limit to the heights well-fed self-delusion can rise to)--but that doesn't mean building sustainable, of-this-world housing, with an intanct understanding of the physical, social as well as spiritual aspects of the work, would or should be any less careful and socially understood. To the contrary, a different culture would build and weave itself and its story into the social, physical and spiritual fabric of their housing, all aspects of it. The materials would have their origins and their stories, building would be collective, renewing work, and so on, all of which would imply a social understanding of village conduct.

Dmitry Orlov said...

Antti, I think you have things a bit backwards. Clearly, what works best for all species, not just humans, is cooperation, definitely within the species, and as much as possible across species (symbiosis). This is the way of life. But it doesn't open itself up to exploitation. To exploit people, there are two techniques: the carrot and the stick. The carrot is more effective, because while the stick is entirely negative, the carrot has a positive element of delayed gratification. Now, competition and the profit motive are optimizations of the carrot: now you can have multiple people chasing the same carrot, knowing that only one of them will get it. That is the essence of competition: you do the work, but you may or may not get the reward for it. Seeing various systems as sets of rules, socialism is one carrot per donkey, while capitalism is one carrot for all the donkeys willing to compete for it. In our contemporary globalized world, capitalism, hence the profit motive, have won. And we have lost. Rob's book explains how we can turn this situation around. I think all will become clear once you have read it.

jetstove said...

Laws are like squeezing a wet sponge. The first squeeze takes out most of the water. The next one takes out less. To get out more you need two hands and then another pair to twist the sponge. The sponge is still damp so it is left in a sunny spot. Still it contains water so it must be set in an oven to bake out the residual. Water molecules are still present so the sponge must be reduced to ash of get rid of the rest. The problem is...the sponge is now gone.

As a quality control technician, I see all levels of required compliance but the worst form is the preventative action request (PAR). This is a method to prevent something from occurring that could affect your final product. All it really does is create a set of rules that operate on the assumption that something, no matter how remote the possibility, is going to happen; all must act accordingly to prevent this. Ideas that could really improve things are lost in the existing regulation. Upper managers are the worst for making rules that don't help and don't make things better. When challenged, the response usually is "it only takes 15 minutes more to do the job" but, after 20 PARs how many more extra 15 minutes do you have in a day?

Regulation feeds on it self. Make a rule and you need enforcement and then you need judgement and then representation and then punishment and then prisons and then jailers...all this costs Tax money so then you need taxes...people don't want to pay taxes and so you need enforcement with guns...Will it ever stop?

OKDaimyo said...

https://www.jacobinmag.com/2011/03/burn-the-constitution/ Related somewhat.

Ien in the Kootenays said...

Applauding enthousiastically. Thank you so much for this elegant clear piece of writing. I had been struggling to put thoughts on the disconnect between law and justice into words. It is done!

Johnny Swift said...

Some years back I was counsel for a small municipality, population probably only around 50 at the time. They had already managed to cobble together a fairly massive, disjointed, overlapping, and often self-contradictory set of municipal ordinances. After a particularly inane few counsel meetings in which members were proposing all sorts of increasingly obtuse ordinances, one old council member proposed an ordinance which I thought was one of the best I'd ever heard. "Henceforth, every new ordinance proposed shall be accompanied by the deletion of two existing ordinances." Brilliant! I thought not only would it discourage the proposal of new ordinances, but might give impetus to get rid of some of the more ridiculous existing ordinances, and at the very least might cause the board members to become at least passingly familiar with the ordinances they already had. Alas, that was one ordinance they did not pass.

Mark said...

Seeing others wrestle with the same issues as myself, but express them better than I ever could, comes as a huge relief. Clearly, the body of law that we live under is broken. The fact that law benefits those with resources while forcing those without resources into submission can not be over-stated. Even shining examples of well-intentioned laws are hamstrung before birth, mired by existing law, or have their wings clipped by later law.

We can see why this situation develops over time, as those with resources shape the law to their interests. It is a very natural evolution and it happens to nearly every system, not just law. Those with the resources (money, influence, power, position, etc.) tweak *everything* to their benefit. Entrenched interests hold on much longer than the fundamentals suggest they should. You can see this in everything from the half-measures taken to weed out government corruption, to electoral systems, to the bureaucratic hurdles that slow the move to renewable energy. From ten-person businesses to multi-national organizations, it is everywhere.

As an individual, I don't see that there is much one can do. In fact, taking any kind of real action will almost definitely do an individual harm. Much better to quietly support movements that are pushing in the right direction (keeping in mind that they aren't free from influence). I'm hoping that a future article will explore strategies for affecting change.

horizonstar said...

It's well worth one's time to take a look at Jerry Mander's 1991 book "In the Absence of the Sacred" in which he describes the origin and structure of the Great Law that united the tribes of the Iroquis Confederacy for two centuries. In fact it seems that this legal structure was the model for the Confederate States of America. The Colonists had little experience with democracy and the rule of law, knowing only the monarchies of Europe that they had fled. What they found was a highly sophisticated system of laws and relationships developed by the dominant occupants of the land they had immigrated to. But knowing only Monarchy, they had neither the cultural values or the motivation to adapt a leaderless system based on consensus and matriarchy, so they created an executive branch (substitute King) for their new system of governance. It eventually (de)volved into the endless election reality circuses that characterize American politics in 2016.

Mander is an interesting early observer of the Technospere. His book "Four Arguments for the Elimination of Television" is a must read for anyone wishing to understand the process of visual brainwashing.

Alex said...

Dmitry - I love your analogy where socialism is one carrot per donkey, and capitalism is one carrot all the donkeys have to fight for. I'd enlarge it to say, socialism might be one carrot per donkey, and capitalism might be a bag of carrots, but only one donkey, out-competing the others, wins it.

Even our social-welfare systems in the US have a capitalistic tinge and I don't mean this in a good way. I have had my income so low that I'd qualify for food stamps and get $200 or so a month. BUT ... the song-and-dance, jump-through-hoops routine I had to go through, continually, to get, and stay on, food stamps in California is nuts. The administrators of this program, in California, are very capricious. Meanwhile, I could make that same $200 in four decent panhandling days a month. And, I knew I was going to get something as opposed to putting in a lot of effort and maybe getting nothing. Yep, I panhandled. I tried to be a cheerful bit of human interaction in people's day, and I only had to do it for a matter of months, but that's what I did. The end result was a huge uptick in my faith in humanity, I survived, and the public got to help me directly instead of paying several layers of bureaucracy to help someone in my situation. Yep, I'm an easy touch with panhandlers these days. And even though it's the highest-paying job I've ever had (average $20 an hour, try making that in tech!) I've come up with half a dozen different handicrafts that I can always sell if I'm hard up. But, the main point is, our overall system in the US is very capricious, and anyone with common sense is going to try to decouple from it.

jaym said...

Totally agree though I can't even keep the 5 precepts of buddhism so the laws would have to be simpler than that.

ed boyle said...

nice article, maybe relevant to your way of thinking Dmitry.