Does Contract Law Need Morality? The Slave, The Digital Pedophile, and The Indebted Gambler

Wenhao Liu and I have just posted to SSRN a draft of our paper discussing Nate Oman’s book, The Dignity of Commerce.  For those of you who have not yet read the Dignity of Commerce, I highly recommend it. I adopted it for my Advanced Contracts seminar last year and have done the same for this year. The book might also be a useful addition to a first-year contracts course, depending on your coverage, but it definitely works well for me in the more advanced setting.

In brief, The Dignity of Commerce sets out an ambitious market theory of contract, which Nate argues is a superior normative foundation for contract law than either the moralist or economic justifications that currently dominate contract theory. One of the book’s most important contributions is its emphasis on the positive role played by markets and thus, by extension, of contracts. In an era rife with warnings about the market’s dangers to society, Nate’s cogent reminder of the market’s benefits is both refreshing and welcome. I was particularly drawn to the discussion of the market’s (and, therefore, contract’s) often forgotten role in organizing productive social interactions. These social benefits, Nate argues, are so important that it is these benefits—rather than a commitment to markets in and of themselves—that justify the use of state resources to support markets, and thus contracts.

Nate’s theory is also descriptively appealing: by recognizing that conceptions of morality and blameworthiness impact contract law, The Dignity of Commerce surely provides a descriptively more realistic account of contract law than theories that contend that contract law is explained solely by economic considerations or solely by moral ones. We find Nate’s market theory of contract less successful as a normative or prescriptive theory, however. To our mind, Nate makes moral judgments about the validity of certain markets (and, therefore, certain contracts) without providing a theoretical framework to replace either the moralist or economic theories he rejects. As a result, we don’t think the market theory can provide meaningful guidance to courts, policymakers, or scholars confronted with the more difficult questions facing contract law.

We illustrate all of these points using the examples of forced slavery, “The Digital Pedophile,” “The Indebted Gambler,” and taboo (or pernicious) markets, such as commercial surrogacy and sex work. And, hey, what could be more fun than that?!

So, all in all, The Dignity of Commerce is definitely a worthwhile read and can easily be incorporated into contract law courses and seminars, especially if you try to spend some time asking students to think about the normative foundations of contract law and how courts should resolve some of the thornier questions that emerge.

And, of course, you should make sure to read our critique of the book, as well!

Comments

[Al Brophy]

I clearly need to read this book right away. Does Nate engage at all with the debate about the market and anti-slavery thought between David Davis, Thomas Bender, Thomas Haskell, and John Ashworth? Also, the link to your critique doesn't seem to be working right.

[Kim Krawiec]

Thanks so much for the heads up Al (you'd think I'd have learned to preview my links by now, but no). Should be fixed now.

As to your question, I do not believe that Nate addressed it, though I could be missing it (I just looked back through that chapter and didn't see it referenced). My own objection to that particular part of Nate's argument is the contention that slavery is an evil market (as opposed to an evil activity that would be abhorrent w/o regard to the presence or absence of market trading and supporting contracts). We discuss why we think distinctions like that matter in the paper.

I do think you'd find the book interesting, though. And perhaps a suitable launchpad for your own thoughts about the intersection of slavery, contracts, markets, and morality.

[Al Brophy]

I see your review essay interprets the market as positive because it facilitates transactions. This is refrshingly straight-forward. The Davis debate is a lmore elliptical. The question for Davis is why do capitalism never anti-slavery sentiments arise at the same time? Why is it that as capitalism grew, so did humanitarian sentiments. One theory is that the market generates humane sentiments in part because it brings people together. And it brings them together across big distances, so that someone buying new sugar in England might understand and appreciate the lives of those who produced the sugar in the West Indies. This reminds me of Emerson’s statements that trade has done many positive things, such as bringing down feudalism and that it will bring down slavery, but that many hardships will come along with it.

[Kim Krawiec]

Interesting. This is very consistent with Nate's views on the benefits of commerce and markets -- the forcing together (for self-interested purposes) of people outside of one's own immediate community can lead to positive effects stemming from that familiarity and interaction.

[Kim Krawiec]

To be clear, we don't contest that interpretation of the market's benefit. It's somewhat orthogonal to our thesis, though, which is whether the market theory of contract explains thorny issues of contract law that existing theories do not, and whether it provides guidance to courts interpreting future difficult claims.

[Al Brophy]

I think there's a lot to be said about the relationship between anti-slavery thought and the market. This is one of the richest/most exciting debates in intellectual history in recent years.

[Kim Krawiec]

You should write about this Al. I do not think that any of the reviews so far have touched on this specific issue and, even if they had, I'm sure that you would bring additional knowledge and insights to the table, given your expertise on this.

[Enrique Guerra Pujol]

Nate claims to be a friend of markets, but he is much closer to the Michael Sandel end of the anti-market spectrum; here is my review "The dignity of commerce": http://newramblerreview.com/book-reviews/law/exit-voice-and-boilerplate

[Al Brophy]

I'd like to engage that literature, though my expertise is really more on the proslavery side of things.

[Enrique Guerra-Pujol]

I tried posting my review of Nate's book here, but to no avail. In any case, I was not much impressed by the slavery argument in his book (Whig history). Check out my review in The New Rambler.

[Kim Krawiec]

It almost certainly got caught in the spam filter. Ill dig it out when I get to a computer- and look forward to reading your review!

Sent from my iPhone

[Enrique Guerra-Pujol]

Thanks Kim. It's up now. Also, I love the title of Wenhao's and your review of Nate's book, which I just got around to reading. Although "The dignity of commerce" is a beautifully-written book and deserves to be read, along with such classics Fried's "Contract as promise," I agree that Nate's book is riddled with internal contradictions and lacks a coherent or overarching theory of morality. Although Nate decides to not pursue a theory of harm, I think one is needed if we are going to make any sense of contract law and the practice of promising generally.