Defending Nuance (or, just fuck it. Seriously.)

Contract law scholars may be interested in a new paper, The Relational Economics of Commercial Contract, recently posted to SSRN by Chapin Cimino of Drexel Law School: 

Abstract:

For almost half a century, the mainstream law-and-economics movement in contract law has zealously protected the parsimony – or simplicity – of economic analysis. The faith in ever-increasing formality is captured both by stubbornly spare assumptions about human behavior and tightly controlled econometric modeling. With few exceptions, the trend in most mainstream contract law scholarship – where the law-and-economic approach is dominant – has been toward excluding, not including, any variable which would capture the realities of actual contracting behavior. This trend has fueled the rise of neo-formalism in both contract theory and doctrine to the exclusion of other accounts.

At the same time, however, economic empiricists in other disciplines have been capitalizing on insights from sociology – insights almost as old as the law-and-economics movement itself – showing not only that, but also how, commercial actors in contemporary transactions rely on cooperative social behaviors common in everyday contracting. These behaviors, called relational norms, were originally identified by law-and-sociology professor Ian MacNeil as part of what is now called relational contract theory. Since the early 1990’s, economics scholars working mostly in the fields of marketing and strategic management have included relational norms as key variables in transaction cost analysis research. Strangely, though this work has clear implications for contract law and theory, this work has yet to be discussed in contract law literature. This article breaks new ground by introducing that work in contract law scholarship. The article shows how, contrary to received wisdom in law-and-economics, including relational behaviors in transaction cost research can improve, not detract from, the predictive power of economic analysis. 

I think Cimino oversimplifies both the modern law and economics approach to contract as well as the reasons for some of its adherents’ attachment to formalism.  For example, Cimino argues in the paper that: 

For the past half-century, law and economics has played the dominant role in contracts scholarship. Scholars in this tradition value the prediction of behavior based on a cost-benefit analysis over the ability to precisely describe the world in which that behavior occurs.

Of course, that describes some contract scholarship in the law & econ tradition, but far from all of it, and even scholars making simplifying assumptions for the sake of modeling often have valid reasons for those assumptions – for example, to highlight and provide insights into a particular aspect of contracting behavior.  And my own sense is that some of the law and economics scholars cited in the paper favor formalist approaches, not out of a vague attachment to simple predictive models, but because they believe it will lead to the most favorable results under real-world relational contracting conditions (such as sophisticated repeat players and informationally disadvantaged courts).

Nonetheless, the paper discusses in detail literature of which many contracts scholars may be unaware and argues for its relevance to current contract law debates, so be sure to read the whole thing here. 

Interestingly, the call to turn to the nuance of sociology rather than to the simplicity of economics comes at a time when at least some sociologists are urging the opposite result.  In Fuck Nuance, my co-author (on, coincidentally, a contract law paper), the sociologist Kieran Healy argues that:

Nuance is not a virtue of good sociological theory. Sociologists typically use it as a term of praise, and almost without exception when nuance is mentioned it is because someone is asking for more of it. I shall argue that, for the problems facing Sociology at present, demanding more nuance typically obstructs the development of theory that is intellectually interesting, empirically generative, or practically successful.

. . .

To take the most obvious example, it is traditional in Sociology to deride the way Economists work, depending as they do on an extremely pared-down model of human action. There is no less nuanced a character than Homo Economicus. While it is easy to snipe at theory on this basis, the strategy of assuming a can opener (as the old desert-island joke goes) turns out to be an unreasonably effective way of generating some powerful ideas. 

But, of course, the best part of the paper is the abstract, which reads in its entirety: “Abstract: Seriously, fuck it.”  

Clearly, the law professoriate needs to borrow from sociology its brevity and humor, if not its nuance.

My understanding is that the paper was a big hit at the 2015 American Sociological Association Meetings.

Comments

[Patrick S. O'Donnell]

I’m not sure the discipline of economics should be invoked as exemplar to make the point if one considers not only the many cogent and persuasive critiques of conventional and popular models and theories from both within the profession (e.g., and apart from Marxist critiques: Amartya Sen, John Quiggin, Daniel M. Hausman and Michael S. McPherson, Deirdre McCloskey, Christian Arnsperger, Ha-Joon Chang …) and outside the profession (e.g., Elizabeth Anderson, S.M. Amadae, Philip Mirowski, Debra Satz, Michael J. Sandel, Martha Nussbaum …). And to the extent that economics is a “social” and thus human and not a “natural” science, nuance would seem to remain a virtue, given the complexity of human motivation and behavior in a “morally messy” (C.A.J. Coady) world. As Jon Elster writes in the conclusion to Explaining Social Behavior: More Nuts and Bolts for the Social Sciences (Cambridge University Press, 2007), questioning the relevance of “ingenious mathematical models,” “An interesting question in the psychology and sociology of science is how many _secret practitioners_ there are of economic science fiction—hiding either from themselves or others the fact that this is indeed what they are practicing.” Moreover, “what rational-choice practitioners do is often so removed from reality that it is hard to take seriously their claims that they are engaged with the world” (see pp. 462-63, where he summarizes his argument in ten points). Thus quantitative and formal models (the use of measurement, data analysis, and modeling in the so-called ‘hard’ sciences) do not necessarily trump the so-called “soft” and qualitative dimensions of the social sciences, wherein the lines between the descriptive and normative are blurred and porous (i.e., we cannot make hard and fast distinctions between facts, values, and theories). What “counts” for science, I believe, should be different in the two cases (making the social sciences sometimes, if not often, closer to literature and history or the humanities than the natural sciences, much in the manner humanistic and neo-Freudian psychology could be said to aspiring to something like a “science of subjectivity,” the normative criteria for which are only beginning to be articulated). Indeed, with ample reason Elster reminds us, for example, that “with respect to an important subset of the emotions we can learn more from moralists, novelists, and playwrights, that from the cumulative findings of scientific psychology,” that form of psychology that today that casually and derisively dismisses the work of Freud and those inspired by him. In the end, “Some of us are impressed and overwhelmed by the complexity and instability of human behavior. Others have a gut belief in the underlying regularity that, when uncovered, will enable us to put the social sciences on a par with the natural sciences — be it with physics, chemistry, geology, or meteorology.”

Legal scholars and theorists might in fact learn a bit about nuance from those in philosophy, for unlike many economists and now, it seems, some sociologists, moral philosophers cannot say, “fuck nuance.” To wit:

“…’[C]omplicity’ is loosely employed in ordinary discourse as a catch-all term referring indiscriminately to the whole multitude of sins arising from ‘what … I … do by way of contribution to what you do,’ when you do wrong. The generic term ‘complicity’ is used to describe what are, in truth, several distinct practices.

Among those that we [later] characterize more precisely … are ‘conniving,’ ‘conspiring,’ ‘contiguity,’ ‘collusion,’ ‘collaboration,’ ‘condoning,’ ‘consorting,’ ‘conspiring,’ and ‘full joint wrongdoing.’ Lumping all those phenomena together under the generic label of ‘complicity’ is morally misleading …. Those terms are not all interchangeable. Each points to a distinct way of engaging with someone else who is committing a wrong; each differs not only in degree but also in kind.

Furthermore, playing close attention to all those intermediate practices is genuinely important. It is all too tempting, both politically and philosophically [which I take to include ‘morally’], to fixate on the limiting cases. One such limiting case occurs when other people share completely the wrongful purposed of the wrongdoers and do whatever they can to help them accomplish their dastardly deeds. At the opposite extreme, the other limiting case comes when genuinely well-meaning people, with great reluctance and regret, find themselves contributing to the wrongdoing of others because that is the only way that they themselves can accomplish the greater good. But those limiting cases are just that: limits. Real life is live well inside those limits. There, matters are much more nuanced.” — From Chiara Lepora and Robert E. Goodin, On Complicity & Compromise (Oxford University Press, 2013)

I would think such moral distinctions might have a measure of legal resonance and value as well.