1 The Morality of Law and Economic Management Abdulmalik M. Altamimi PhD Law Candidate, University of Leeds [email protected]Abstract This article explores the economic basis of Lon L. Fuller’s morality of law thesis and its relevance to discussions on the complex relationship between law and economics. Almost all the flaws in national and international economic institutions are the result of a failure to establish a proper balance between the aspiration for ‘an optimum allocation of resources’ and the duty to provide ‘legal rules conducive to security and predictability’. Both ‘aspiration’ and ‘duty’ constitute the two kinds of morality that Fuller recognises in his demonstration that ‘law is inherently moral’, and that he used to highlight the role of an institutional setting responsible for adjudicating rules for the allocation of economic resources. Keywords: Lon L. Fuller; Law and Morality; Interactional Legal Theory; Law and Economics; Legal Obligation; World Trade Law. Introduction ‘Legal craftsmanship must…be concerned with bending a received tradition to emergent social needs, exploiting the resources of law for practical ends. When the tension between these commitments is faced, jurisprudence comes alive.’ Philip Selznick 1 Since the publication of the revised edition of Lon L. Fuller’s book The Morality of Law in 1969 the application of Fuller’s jurisprudence had increased significantly, ranging from questions of ethics to constitutional law and international law. 2 Fuller has been admired by a number of scholars who applaud him for rejuvenating ‘the study of legal theory in the twentieth century’. He has also, however, been censured by some scholars for what one critic calls his ‘sloppiness’ and ‘flimsy arguments’. 3 It was the 1 Philip Selznick, ‘Review of the Morality of Law’ (1965) American Sociological Review 947 2 Lon L. Fuller, The Morality of Law (revised edn, Yale University Press 1969); David Luban, ‘Natural Law as Professional Ethics: A Reading of Fuller’ (2001) Social Philosophy & Policy 176; Roderick Macdonald, ‘Legislation and Governance’ in W. Witteveen and Wibren van der Burg (eds), Rediscovering Fuller: Essays on Implicit Law and Institutional Design (Amsterdam University Press 1999) 279-311; Jutta Brunnée and Stephen J. Toope, Legitimacy and Legality in International Law: An Interactional Account (Cambridge University Press 2010) (hereinafter An Interactional Account) 3 Robert Summers, Lon L. Fuller (Stanford University Press 1984) VII; Nicola Lacey, ‘Out of the ‘Witches’ Cauldron’?’ in Peter Cane (ed), The Hart Fuller Debate in the Twenty-First Century (Hart Publishing 2010) 1-42. For a critique of Fuller’s jurisprudence and its defenders see Matthew Kramer, ‘Scrupulousness Without Scruples: A Critique of Lon Fuller and His Defenders’ (1998) Oxford Journal of Legal Studies 235; cf Nigel Simmonds, ‘Straightforwardly False: The Collapse of Kramer’s Positivism’ (2004) Cambridge Law Journal 93
This article explores the economic basis of Lon L. Fuller’s morality of law
thesis and its relevance to discussions on the complex relationship between
law and economics. Almost all the flaws in national and international
economic institutions are the result of a failure to establish a proper
balance between the aspiration for ‘an optimum allocation of resources’
and the duty to provide ‘legal rules conducive to security and
predictability’. Both ‘aspiration’ and ‘duty’ constitute the two kinds of
morality that Fuller recognises in his demonstration that ‘law is inherently
moral’, and that he used to highlight the role of an institutional setting
responsible for adjudicating rules for the allocation of economic resources.
Keywords: Lon L. Fuller; Law and Morality; Interactional Legal Theory; Law and
Economics; Legal Obligation; World Trade Law.
Introduction
‘Legal craftsmanship must…be concerned with bending a received
tradition to emergent social needs, exploiting the resources of law for
practical ends. When the tension between these commitments is faced,
jurisprudence comes alive.’ Philip Selznick1
Since the publication of the revised edition of Lon L. Fuller’s book The Morality of
Law in 1969 the application of Fuller’s jurisprudence had increased significantly,
ranging from questions of ethics to constitutional law and international law.2 Fuller has
been admired by a number of scholars who applaud him for rejuvenating ‘the study of
legal theory in the twentieth century’. He has also, however, been censured by some
scholars for what one critic calls his ‘sloppiness’ and ‘flimsy arguments’.3 It was the
1 Philip Selznick, ‘Review of the Morality of Law’ (1965) American Sociological Review 947 2 Lon L. Fuller, The Morality of Law (revised edn, Yale University Press 1969); David Luban, ‘Natural
Law as Professional Ethics: A Reading of Fuller’ (2001) Social Philosophy & Policy 176; Roderick
Macdonald, ‘Legislation and Governance’ in W. Witteveen and Wibren van der Burg (eds),
Rediscovering Fuller: Essays on Implicit Law and Institutional Design (Amsterdam University Press
1999) 279-311; Jutta Brunnée and Stephen J. Toope, Legitimacy and Legality in International Law: An
Interactional Account (Cambridge University Press 2010) (hereinafter An Interactional Account) 3 Robert Summers, Lon L. Fuller (Stanford University Press 1984) VII; Nicola Lacey, ‘Out of the
‘Witches’ Cauldron’?’ in Peter Cane (ed), The Hart Fuller Debate in the Twenty-First Century (Hart
Publishing 2010) 1-42. For a critique of Fuller’s jurisprudence and its defenders see Matthew Kramer,
‘Scrupulousness Without Scruples: A Critique of Lon Fuller and His Defenders’ (1998) Oxford Journal
of Legal Studies 235; cf Nigel Simmonds, ‘Straightforwardly False: The Collapse of Kramer’s
Oxford scholar in legal positivism, H.L.A. Hart’s challenge to Fuller in the
subsequently famous 1958 Harvard Law Review debate that made Fuller’s
jurisprudence popular.4 Without Hart, who played an equally pivotal role in the
rejuvenation mission, there would not have been Fuller’s subsequent elaborations on
his jurisprudence which made it more intelligible and applicable to the world of
jurisprudence today. Recent major works that built upon The Morality of Law thesis
includes Simmonds’ Law as a Moral Idea and Rundle’s book which refocuses attention
on ‘human agency’, i.e. on activism within the law as is implicit in Fuller’s concept of
‘legal morality’.5 A fundamental pillar in Fuller’s thesis that has not received much
attention in jurisprudence and its study in spite of its importance in national and
international legal obligation is the economic basis of The Morality of Law. The main
message of this article is twofold: first, to make the point that a minimum knowledge
of economics is essential to understand The Morality of Law thesis; and, second, to
highlight the fact that applying Fuller’s jurisprudence to issues that involve the use of
legal rules for economic management defeats the claim that moralising the concept of
law is fanciful. Throughout his thesis, Fuller uses the science of economics to explicate
the institutional design of law. This is not surprising given that Fuller’s first degree was
in economics, which also explains his strong support for socio-legal studies that include
economics and other social science fields.6
This article will show that The Morality of Law is acutely relevant to national and
international economics institutions because it defines the challenges of setting the right
balance between ‘aspiration’ and ‘duty’ in economic regulation and, more importantly,
explains how ‘fidelity to law’ is socially constructed.7 Fuller was aware of the
limitations of adjudicating rules applying to the allocation of economic resources in an
institutional setting. This makes his jurisprudence useful for discussing compliance
problems facing any institutional body that is responsible for adjudicating rules for the
management of economic resources. This article is structured as follows: Part One
provides a summary of Fuller’s legal theory; Part Two pieces together the references to
economics in Fuller’s The Morality of Law and other writings; Part Three offers five
reflections on the relevance of The Morality of Law to economic law and Part Four
concludes the article.
***
4 See H.L.A. Hart, ‘Positivism and the Separation of Law and Morals’ (1958) Harvard Law Review
593; Lon Fuller, ‘Positivism and Fidelity to Law: A Reply to Professor Hart’ (1958) Harvard Law
Review 630; H. L. A. Hart, The Concept of Law (2nd edn, Clarendon Press 1997) 5 Nigel Simmonds, Law as a Moral Idea (Oxford University Press 2008); Kristen Rundle, Forms
Liberate: Reclaiming the Jurisprudence of Lon L. Fuller (Hart Publishing 2012) (hereinafter
Reclaiming Fuller). See Peter Teachout, ‘“Uncreated Conscience”: The Civilizing Force of Fuller’s
Jurisprudence’ in Witteveen and van der Burg (eds), Rediscovering Fuller (n 2) 229-254 6 Fuller was against the fragmentation of educational system with too much specialisation and lack of
interdisciplinary outreaches and engagements. For example, he wanted legal education to include social
sciences, chiefly economics. See Summers, Lon L. Fuller (n 3) 3,106,148 7 See Selznick, ‘Review of The Morality of Law’ (n 1)
3
I. A Summary of Fuller’s Jurisprudence
Before giving a summary of The Morality of Law it would be helpful to start by
providing an overview of Fuller’s interactional legal theory. Fuller’s notion of law is,
‘the enterprise of subjecting human conduct to the governance of rules’8. His concept
of morality is purely secular, as indicated by his choice of the word ‘enterprise’ to
highlight the fact that law-making is a human endeavour.9 The ‘human element’ has
always been prevalent in Fuller’s jurisprudence. He states, for instance, that the task of
legal philosophy is not only to provide a statement about ‘valid’ law but also ‘to give a
profitable and satisfying direction to the application of human energies in the law’.10
The notion of ‘an interactional law’ based on the principle of reciprocity is inherent in
a sentence that he wrote when opposing legal positivism and its inclination to ‘the
command theory of law’ where he states ‘if we could come to accept what may be
called broadly an interactional view of law, many things would become clear that are
now obscured by the prevailing conception of law as a one-way projection of
authority’.11 It was the contention of Fuller and natural law theorists before him that the
contemplation of the forms of law, i.e. the characters of legal declaration, would reveal
the moral content of law and its normative implications on human interaction.12
For instance, in a letter cited by Rundle, Fuller suggests that what his critics are missing
in their debates on the links between law and morality is a reference to ‘the conditions
antecedent to law’:
A legal system cannot lift itself into being legal by faith. Its security and
efficacy must rest on opinions formed outside of it, which create an attitude
of deference towards its human author (say, a royal law-giver), or a
constitutional procedure prescribing the rules for enacting valid law. To say
that this acceptance is ‘moral’ means merely that it is antecedent to law.13
Nonetheless, for a better understanding of Fuller’s jurisprudence it is useful to regard
law as being ‘an essentially ambiguous concept’.14 According to van der Burg, ‘an
essentially ambiguous concept is a concept which refers to a dynamic phenomenon that
can only be described and modelled in at least two different ways that are each
8 Fuller, The Morality of Law (n 2) 122 (emphasis added) 9 ibid 130 10 Lon L. Fuller, The Law in Quest of Itself (reprint edn, The Lawbook Exchange 2012) 2. See Lon L.
Fuller, Anatomy of Law (Penguin Books 1971) 59 11 Fuller, The Morality of Law (n 2) 221; Lon L. Fuller, ‘Human Interaction and the Law’ (1969)
American Journal of Jurisprudence 1 12 Fowler Harper, ‘Forms of Law and Moral Content’ (1929) Illinois Law Review 256; Rundle,
Reclaiming Fuller (n 5) 101; Colleen Murphy, ‘Lon Fuller and the Moral Value of the Rule of Law’
(2005) Law and Philosophy 239 13 Rundle, Reclaiming Fuller (n 5) 14 citing ‘untitled and undated document, paginated in hand as p
25’ (The Paper of Lon L. Fuller, Harvard Law School Library Box 12, Folder 4 ‘Encyclopaedia
Britannica’) 14 Wibren van der Burg, The Dynamics of Law and Morality: A Pluralist Account of Legal
in the pervasiveness of its implications’.26 However, determining the relationship
between the law and morality, he notes a second problem concerning the failure to
address the morality that makes law possible, or what he calls the demands of ‘the inner
morality of law’,27 in the existing literature. To address this problem, Fuller focuses on
the problems of legal pathology resulting from the neglect of such demands.28 He
formulates the following eight moral tests of legality: ‘generality, promulgation, non-
retroactivity, clarity, non-contradictory, not asking the impossible, constancy, and
congruence between rules and official action’.29
Fuller associates these eight constitutive elements of legality with the morality of
aspiration, to show that they compromise ‘a moral ideal that is internal to the concept
of law’.30 Simmonds argues that Fuller’s systems, ‘count as law in virtue of their
approximation to the ideal of compliance with the eight desiderata’.31 According to
Rundle, this approximation affords respect for human agency ‘i.e. activism within the
law’.32 As she explains, in the Fullerian sense law is connected to morality:
In the moral dimension of law that consists in the ethos of the lawgiver’s
role and the distinctively moral burden which that role carries (…) in the
moral value that accrues to the legal subject, as a consequences of law’s
presupposed acceptance of and respect for her as a responsible agent.33
Before turning to the economics base of Fuller’s jurisprudence, it would be helpful to
briefly explain what he meant by ‘the external morality of law’. It should be reiterated
at this point that it is important for legal craftsmen to bend ‘the received [legal] tradition
to emergent social needs’.34 One way of doing this is by re-conceptualising the terms
‘justice’, ‘equality’, and ‘fairness’ before the law to meet the contemporary
manifestations of human needs. Fuller, who was concerned about such needs, used ‘the
external morality of law’ and ‘external aims of law’ interchangeably to refer to the
law’s substantive aims such as the principle of fairness. This means that the societal
concerns for justice ‘i.e. substantive ends pursued through law’ that he identified as the
‘the external morality of law’, should be guided by the principles of legality that he
associated with the inner morality of law.35 For example, writing about the neutrality
26 ibid 9 27 ibid 4 28 ibid 33-94 29 ibid 39 citing section 4 ‘Interaction in the Idea of Law’ in Kurt Wolff (trs, and ed), The Sociology of
Georg Simmel (The Free Press 1950) 186-189 30 Nigel Simmonds, Central Issues in Jurisprudence: Justice, Law and Rights (4th edn, Sweet &
Maxwell 2013) 256; Moffat argues that the law objective of ‘attaining legitimacy means that the
purpose of the principles of legality is…the achievement of optimum overall legality’, and the
complete failure to observe one of the principles, ‘can result in a failure to make law’. See Robert
Moffat, ‘Fuller, Lon L. (1902-1978)’ in Christopher Gray (ed), The Philosophy of Law: An
Encyclopaedia (Routledge 2013) 321 31 Simmonds, Central Issues in Jurisprudence (n 30) 258 32 See Rundle, Reclaiming Fuller (n 5) 33 ibid 101 34 Selznick, ‘Review of the Morality of Law’ (n 1) 35 Fuller, The Morality of Law (n 2) 4
6
of judges when interpreting statutes, Fuller said ‘the very same considerations that
require an attitude of neutrality with regard to the external aims of the law demand a
commitment by the judge to the law’s internal morality’.36 The interpretation of statute,
Fuller argued is ‘a process of adjusting the statute to the implicit demands and values
of the society to which it is to be applied’.37
To sum up, as a firm believer in ‘socialising’ the concept of law as an indispensable
basis for any jurisprudential inquiry of national or international law, the author of this
article endorses the claim that ‘legal morality’ empowers agents to act independently
and productively.38 Some of these agents, inspired by the history of people’s
interregional interactions in trade, established the institution of the market economy.
They accomplished this by relying on the principles of reciprocity and non-
discrimination and determining the validity of their actions based on institutional rules
having legal and moral bases. Hence, Fuller, who was also highly enthused by the
economic history of interactions and their achievement in advancing human prosperity,
understandably relied on economic science to explain the morality of law.
***
II. Economics in Fuller’s The Morality of Law and other Writings
The relation between law and economics, according to Fuller, is not merely determined
by the role of the law in mitigating or removing inequality, but by the translation of that
law into corrective and distributive justice that refocuses the attention on the role of the
institutional setting responsible for economic management.39 Aristotle’s distinction
between ‘corrective’ and ‘distributive’ justice, which was embraced by Fuller, means
that the latter is concerned with the restoration of ‘a previous relationship that has been
upset in some improper manner’, while the former refers to the nature of socially just
allocation of resources among the members of society.40 Viewing law within this realm
of social justice, Fuller argues, will facilitate the kinds of action that are taken to remedy
economic inequalities that ‘arise within a framework of legal compulsions’.41 Fuller’s
view on reciprocity is informed by his proposed, though never completed, project of
Eunomics, or the study of good social order.42 When he wrote about the concept of
‘freedom’, he made a distinction between ‘association by common aims’ and
‘association by reciprocity’.43 The former refers to parties joining forces to accomplish
36 ibid 132 37 Fuller, Anatomy of Law (n 10) 59 38 See Edwin Tucker, ‘The Morality of Law, by Lon L. Fuller’ (1965) Indiana Law Journal 270 39 Lon Fuller ‘Some Reflections on Legal and Economic Freedoms—A Review of Robert L. Hale’s
“Freedom through Law”’ (1954) Columbia Law Review 70 40 ibid 41 ibid 42 See Kenneth Winston (ed), The Principles of Social Order: Selected Essays of Lon L. Fuller (revised
edn, Hart Publishing 2001) 231-266 43 Lon Fuller ‘Freedom- A Suggested Analysis’ (1955) Harvard Law Review 1305.
7
mutually desirable goals that they could not attain individually, while the latter refers
to the principle of reciprocity in the literal sense of parties exchanging rights or
privileges for reciprocal gain.44 An organisation can be founded on the model of
reciprocity and still aspire to achieve common goals. A prime example of this, with all
of its flaws, is the World Trade Organisation (WTO). The WTO, to a large extent,
represents ‘the organization of market economy’ that Fuller elaborated on to advance
his thesis.45 Nevertheless, Fuller considers organisation by reciprocity to highlight the
challenge of providing a mechanism for an optimal realisation of the gains of
reciprocity.46 For him, ‘economic freedom’ cannot be discussed ‘in isolation from the
specific mechanisms or procedures by which that freedom is determined, or … by
which freedom to choose is allocated and conflicting choices are reciprocally
adjusted’.47
In relation to The Morality of Law and economic science, the third problem that Fuller
initially faced when he laid down the premises outlined above for his book and the one
he reiterated when he wrote about the substantive aims of law and institutional design
was ‘the proper location of the moral scale’s pointer’.48 He clarified this problem by
using the analogy of ‘a scale or yardstick that begins at the bottom with the most
obvious demands of social living, and extends upward to the highest reaches of human
aspirations’.49 He said that the difficulty with this moral scale was in locating the
pointer that ‘marks the dividing line where the pressure of duty leaves off, and the
challenge of excellence begins’.50 He explained this by saying:
If the pointer is set too low, the notion of duty itself may disintegrate under
the influence of modes of thought appropriate only to the higher levels of a
morality of aspiration. If it is set too high, the rigidities of duty may reach
up to smother the urge toward excellence and substitute for truly effective
action a routine of obligatory acts.51
Throughout his thesis and specifically to express this problem clearly, Fuller uses
economic management models to show the difficulty of locating such a pointer and the
interconnection and limitations of the two moralities. First, he selects two concepts
relating to economics: the first is concerned with ‘the relationships of exchange’ and
the second with what he regarded as something at the heart of economics, namely, ‘the
principle of marginal utility, by which we make the most effective allocation of the
44 ibid 45 Fuller even went further to say ‘this analysis [of the society of economic traders] suggests the
somewhat startling conclusion that it is only under capitalism that the notion of the moral and legal
duty can reach its full development’. Fuller, The Morality of Law (n 2) 24 46 Fuller, ‘Freedom –A Suggested Analysis’ (n 43) 47 Fuller ‘Some Reflections on Legal and Economic Freedoms’ (n 39) 48 Fuller, The Morality of Law (n 2) 170 (emphasis added) 49 ibid 9-10 50 ibid 170 51 ibid
8
resources at our command’.52 He regards marginal utility as being the economic
counterpart of ‘the morality of aspiration’ and the economics of exchange as having a
close affinity with the morality of duty.53 By way of illustration, Fuller explains that
when an economist is trying to create a stable and productive economy by advising
consumers on the most efficient ways of equalising the return for the money they spend,
the economist usually resorts to the ‘utility’ criterion, which is an undefined criterion
for the optimum allocation of resources.54 However, the ‘aspiration moralist’ who is
concerned with humans’ efforts to make the best use of their lives, is unable to define
what the best course of action for them is.55 Hence, it is within this undefined criterion,
relating to ideas about the highest economic or moral good, that the marginal utility
economist and aspiration moralist meet, ultimately leading both to the consideration of
the notion of balance.56 The primary concern of both the morality of aspiration and
marginal utility is maintaining the right balance in every life-fulfilling human
endeavour and this means that the prudent management of resources is of paramount
importance.57
The morality of duty, however, finds its closest kinship with the economics of exchange
and the duties that arise through the exchange of promises. Fuller maintains that ‘to
establish the affinity between duty and exchange’ there needs to be ‘a mediating
principle that can only be found in the relationship of reciprocity’.58 When trying to
answer the question ‘under what circumstances does a duty, legal or moral, become
most understandable and most acceptable to those affected by it?’, Fuller identifies
three conditions to achieve ‘the optimum efficacy of the notion of duty’.59 First, the
reciprocal exchanges of promises must be voluntary; second, the parties’ reciprocal
performances ‘must be equal in value’60 ; and, third, the relationship of duty must be in
theory and practice ‘reversible’.61 In answer to the question ‘in what kind of society are
these conditions most apt to be met?’ Fuller said:
[…] the answer is a surprising one: in a society of economic traders. By
definition the members of such a society enter direct voluntary relationships
of exchange. As for equality it is only with the aid of something like a free
market that it is possible to develop anything like an exact measure for the
value of disparate goods. Without such a measure the notion of equality
loses substance and descends to the level of a kind of a metaphor. Finally,
economic traders frequently change roles, now selling, now buying. The
duties that arise out of their exchanges are therefore reversible, not only in
theory but in practice. 62
The challenge of setting the right balance between aspiration and duty, or what Fuller
called ‘supporting structure and adaptive fluidity’, is ‘shared by morals, law and
economics’, but is best epitomised by the economics of trade.63 However, when he
discusses ‘legal morality and the allocation of economic resources’ Fuller raises an
issue about the challenge of locating the pointer on the moral scale, this time to advance
this thought:
The task of economic allocation cannot be effectively performed within the
limits set by the internal morality of law. The attempt to accomplish such
tasks through adjudicative forms is certain to result in inefficiency,
hypocrisy, moral confusion, and frustration (…) As lawyers we have a
natural inclination to “judicialize’” every function of government.
Adjudication is a process with which we are familiar and that enables us to
show to advantage our special talents. Yet we must face the plain truth that
adjudication is an ineffective instrument for economic management and for
governmental participation in the allocation of economic resources.64
This cautionary note counterbalances Fuller’s earlier remarks that an authoritative
mechanism or procedure is needed so that ‘economic freedom to choose is allocated
and conflicting choices are reciprocally adjusted’.65 This call for an adjustment
mechanism supports the institutionalisation of economics, especially of trade, through
institutions of decision-making and dispute resolution. Since the economics of trade
was the focus of Fuller’s thesis, the following paragraphs shall provide a brief account
of one of the most developed institutions of trade, the institution of world trade.66
The reason for institutionalised trade is found in the model of comparative advantage
and the subsequent international economic theories that have improved this model. The
economist David Ricardo’s formula for dealing with the absolute advantage challenge,
the so-called ‘comparative advantage’, is the founding economic theory of international
trade.67 The theory stipulates that trade restrictions do not contribute to the state’s
economic welfare, and, ‘if nations specialise in those areas in which they have a
comparative cost advantage and trade where the advantage is lacking then there would
62 ibid 23 (emphasis added) 63 Fuller, The Morality of Law (n 2) 29 64 ibid 173, 176. See Lon L. Fuller, ‘Freedom as a Problem of Allocating Choice’ (1968) Proceedings
of the American Philosophical Society 101 65 Fuller ‘Some Reflections on Legal and Economic Freedoms’ (n 39) 66 For more on ‘the progressive legalization’ of world trade see Ernst-Ulrich Petersmann, ‘The
Establishment of a GATT Office of Legal Affairs and the Limits of ‘Public Reason’ in the
GATT/WTO Dispute Settlement System’ in Gabrielle Marceau (ed), A History of Law and Lawyers in
the GATT/WTO (Cambridge University Press 2015) 31(hereinafter, The GATT Legal Office) 67 Raj Bhala, Dictionary of International Trade Law (LexisNexis 2008) 85-88
10
be an overall increase in world production of the product in question’.68 For example,
if the United States (US) is superior at producing ‘wheat’, but less superior at producing
‘cloth’, which is China’s main product, then each can still benefit via the US investing
resources in what it does best – wheat production - and exporting its surplus to China,
and China doing the same with its ‘cloth’ and exporting its surplus to the US in
exchange for the wheat.69 Nonetheless, according to Bhagwati, ‘the Ricardian analysis
implied that this technical possibility of gaining from trade through specialisation
would only be realised if a policy of free trade were adopted in an institutional setting
where prices guided resources allocation’.70
Over the years, the Ricardian comparative advantage, designated ‘the law of
comparative advantage’, has provided the main rationale for legal rules oriented toward
freer trade. The theory has constituted ‘the stated logic for negotiating, drafting,
implementing, and enforcing rules to liberalise trade on a multilateral, regional, or
bilateral basis’.71 It was at the multilateral level under the rules of the 1947 General
Agreement on Tariffs and Trade (GATT), and later the 1994 WTO Agreements, that
legally binding rules for non-discriminatory trade relations between member states
were enacted. These world trade rules have to be fairly administered and adjudicated in
accordance with the trade rule of law criteria, and member states can only obtain a
derogation from these rules based on ‘general’ and ‘security’ exceptions under GATT
Articles XX and XXI. The GATT/WTO trade promises instantiate Fuller’s trade model
as being ‘voluntary in nature’, the reciprocal performances, with the exception of those
of developing countries, are ‘equal in value’, and the relationship of duty ‘is in theory
and practice reversible’.72 Moreover, the GATT/WTO rules largely instantiate Fuller’s
principles of legality, though they might be lacking in terms of the practice of legality.
Overall, the interaction between law and economics is evident in the relationship of
economic traders and the moral implications that this relationship raises. Thus, Fuller
was right in grounding The Morality of Law on the economics of trade as a useful
premise to illustrate his legal morality argument. It suffices to say that the immoral
wrongs committed in the course of conducting free trade or investments does not refute
The Morality of Law thesis. Going back to the first two arguments that Fuller uses to
68 Asif Qureshi, The World Trade Organization: Implementing International Trade Norms (Manchester
University Press 1998) 11 69 See Jagdish Bhagwati, Free Trade Today (Princeton University Press 2003) 4; Paul Samuelson, ‘The
Gain from International Trade Once Again’ Economic Journal (1962) 820; Gottfried Haberler, ‘Some
Problems in the Pure Theory of International Trade’ (1950) Economic Journal 223 70 Bhagwati, Free Trade Today (n 69) 4 (emphasis added) 71 Raj Bhala, International Trade Law: Interdisciplinary Theory and Practice (3rd end, LexisNexis
2008) 207 72 Fuller, The Morality of Law (n 2) 23; Fuller’s illuminating distinction between ‘norms of aspiration’
and ‘norms of obligation’ is important for highlighting the danger of mixing these norms in one trade
instrument leading states to regard ‘their strict obligations as mere aspirations’. See Wibren van der
Burg, ‘The Morality of Aspiration: A Neglected Dimension of Law and Morality’ in Witteveen and
van der Burg (eds), Rediscovering Fuller (n 2) 170 citing John H. Jackson, World Trade and the Law
of GATT (Bobbs Merrill 1969) 761-762
11
claim that ‘law is inherently moral’; namely, the failure to clarify the meaning of
morality and the morality that makes law possible, it can be inferred that any wrong
committed in the name of any subfields of economics was precisely because of the lack
of respect for the overarching concept of legal morality. Respect for this concept
invokes moral criteria that include not demanding the impossible of those subject to the
law and holding legal officials acting under the law accountable to the legal rules they
claim to defend. Therefore, a trade lawyer, for example, who claims that a trade policy
that deprives people of their only water resource is justifiable (contrary to the trade law
exception of prohibiting trade in exhaustible natural resources), is not acting based on
either moral or legal rule. Although Fuller was influenced by the phenomenon of trade
at the national level, his jurisprudence is also relevant to the theory and practice of
international trade, as the principle of reciprocity and the rule of law principle of non-
discrimination raise the same moral and legal implications for the practice of world
trade. In sum, both economists and lawyers need to understand the morality of law to
be able to appreciate the economic and legal aspects of their chosen fields and to be
able to support the rule of law principles of procedural fairness, equality, and justice.
***
III. Reflections on the Morality of Law and Economic Management
The summary given above invites the following five reflections on the link between
The Morality of Law and economic management. The first is that Fuller’s thesis is
useful when addressing the discussion that separately focuses on the fulfilment of
‘aspiration’ or ‘duty’ in economics without realising the close interactive relationship
between the two moralities and their internal connection to the concept of law. It was
not by accident that Fuller found economics to be a good basis for his Morality of Law
thesis as law and economics are intertwined. At the national level ‘law makes the
economy’,73 while at the international level ‘international law has always had
considerable ‘economic content’’.74 Fuller’s jurisprudence is relevant in this regard, as
it highlights the moral content of law in relation to the institutionalised economic
conducts of trade, finance and investment. By applying Fuller’s notion of law and his
inner morality concerning law criteria in reference to institutionalised conducts, The
Morality of Law will always have a positive bearing on such analyses. For instance,
those who are sceptical about the ‘judicialisation’ of world trade advocating
‘noncompliance’ for welfare objectives might be relieved to read about Fuller’s
scepticism about adjudication.75 However, from a historical perspective, the premises
of advocates who were labelled ‘anti-legalists’ and those of the ‘legalists’ who
73 Philip Allott, The Health of Nations: Society and Law beyond the State (Cambridge University Press
2002) 86 74 John Jackson, ‘International Economic Law: Complexity and Puzzles’, (2007) Journal of
International Economic Law 3 75 See Judith Goldstein and Lisa Martin, ‘Legalization, Trade Liberalization, and Domestic Politics: A
Cautionary Note’ in Judith Goldstein and others, Legalization and World Politics (MIT Press 2001)
219
12
remained entrenched in their belief that ‘judicialization’ is the only way forward, are
very distinct. This is true especially when one considers their take on the notion of duty
or obligation that arise from the reciprocal exchanges of promises and the proper
function of an institutional setting that organises such activity. Both the legalists and
anti-legalists seem to agree on the benefits of trade conducts guided by the principles
of reciprocity and non-discrimination, but they do not agree on the status of the
obligations arising out of these conducts or how they should be adjudicated. This is
why interactional law is relevant when it comes to highlighting the notion of obligation
in the institutional setting of economic traders who ought to use adjudication as the
appropriate mechanism of settling disputes. It is true that not every legal problem can
be aptly solved by a legal verdict, as there are other factors that influence the
functioning of society among them social or purely managerial factors that transcend
the subject of law.
However, the law always asserts its relevance in social interaction modes that are
working toward the achievement of a normative order. The question of whether this
order, once it has been established, can be best served by prudent managerial decisions
or legal rulings is a different matter altogether. For Fuller, legal texts matter but ‘the
source of normativity is social interaction’ guided by the principles of legality.76 What
is clear is that The Morality of Law is relevant when it comes to explaining the world
trade law with its competing aims of ‘an optimum allocation of resources’ and ‘legal
rules conducive to security and predictability’.77 The second point of reflection is that
this thesis is applicable to the conduct of finance as finance needs a concept of law with
a clearly identified ethical dimension. According to Fuller, professional ethical rules
have to be devised into aspirational ‘ethical considerations’ and mandatory
‘disciplinary rules’.78 A law concept drawn up with the idea that ‘law is separate from
morality’ will fall short of clarifying the ethics to be followed particularly in an
evolving field such as finance that urgently needs a clear ‘ethical code of conduct’. The
third point is that Fuller’s thesis is suitable for exploring the procedural justice of
economic institutions and addressing moral claims of wrongdoing.79 If the formation
of moral obligations was the direct result of sustained interactions on the basis of
reciprocity and non-discrimination, then surely those obligations have to be adjudicated
by procedural requirements infused with moral values.80 The Morality of Law will
become more pertinent once the social role of law, especially in terms of economic
conducts, is critically considered. For example, the clear analogy between harm-based
76 Robert Wolfe, ‘Kaleidoscopic Multilateralism: Lon Fuller, Rod Macdonald and the WTO’ in
Richard Janda and others (eds), The Unbounded Level of the Mind: Rod Macdonald’s Legal
Imagination (McGill-Queen’s University Press 2015) 90 77 Bhagwati, Free Trade Today (n 69) 4; John Jackson, The World Trading System: Law and Policy of
International Economic Relations (2nd edn, MIT Press 1997) 10 78 See David Luban, ‘Rediscovering Fuller’s Legal Ethics’ in Witteveen and van der Burg (eds),
Rediscovering Fuller (n 2) 193 79 Thomas Schultz, ‘The Concept of Law in Transnational Arbitral Legal Orders and Some of its
Consequences’ (2011) Journal of International Dispute Settlement 59 80 Simmonds, ‘Straightforwardly False: The Collapse of Kramer’s Positivism’ (n 3); Harper (n 11)
13
and duty-based moral restraints and the Fullerian moralities of aspiration and duty
propositions show the pertinence of Fuller’s thesis to research on ‘the moral foundation
of economic behaviour’.81 Moreover, trade experts’ deliberations on the ‘collective
moral responsibility’ to fulfil trade practices, highlights the suitability of Fuller’s thesis
as an appropriate analytical framework to address this contentious issue.82 Whether it
be research on the social, ethical or moral dimensions of economic law, The Morality
of Law can contribute to the research by revealing ‘the legal consciousness’ derived
from the actors’ interactions.
The fourth point is that the Fuller’s thesis is germane to addressing the distortions
arising from Posner Law and Economics Jurisprudence School with its ultimate goal of
‘wealth maximization’ at the expense of all human constructed values, moral or legal.83
The so-called ‘Chicago School of Jurisprudence’ that overemphasises the efficient
breach of contract, i.e. breach with impunity and the dilution of liability, i.e. the
discarding of responsibility, has done immeasurable harm to the study of law and
economics.84 In Fullerian terms, a theory that does not find its reason in either law or
morality and instead analyses legal obligations purely on the basis of economic
calculation will be devoid of any sense of justice. A society where breaching the law
‘efficiently’ means restoring some level of justice is prone to inequality and instability.
This school of jurisprudence is oblivious to the notion of moral obligation because it
neglects the aim of providing ‘security and predictability’ to economic actors to orient
their actions towards clearly stated rules of conduct.85 The terms stability, security, and
predictability are peculiarly alien to the law and economics school.86 The fifth point,
following from earlier remarks on the WTO, is about considering the applicability of
Fuller’s informed ‘interactional international law theory’ to the WTO given that some
scholars have claimed that this organisation suffers from the lack of ‘normative
consciousness’, public reason and an undetermined legal status.87 Petersmann, for one,
81 See David C. Rose, The Moral Foundation of Economic Behavior (Oxford University Press 2014) 82 Andrew Lang, World Trade Law After Neoliberalism: Reimagining the Global Economic Order
(Oxford University Press 2011) 353; Robert Howse, Joanna Langille and Katie Sykes, ‘Pluralism in
Practice: Moral Legislation and the Law of the WTO After Seal Products’ (2015). New York
University Public Law and Legal Theory Working Papers <http://lsr.nellco.org/nyu_plltwp/506>
accessed 2 April 2015 83 See Richard Posner, The Economics of Justice (Harvard University Press 1981); Alan Sykes and Eric
Posner, Economic Foundations of International Law (Harvard University Press, 2013); Eric Posner,
The Twilight of Human Rights Law (Oxford University Press 2014) in this book Posner criticized
human rights law, saying developmental aid should be preferred to the investment in human rights’
infrastructure. No explanation is given about how ‘aid’ can be protected from misuses. Such views of
human rights law, and preference for economic might over rights of individuals and states, are common
from anti-legalists. See Eric Posner, The Perils of Global Legalism (Chicago University Press 2009) xi 84 See Eric Posner and Alan Sykes, ‘Efficient Breach of International Law: Optimal Remedies,
“Legalized Noncompliance,” and Related Issues’ (2011) Michigan Law Review 243; John Dillbary,
‘Tortfest’ (2013) The University of Chicago Law Review 953 85 See Jackson, The World Trading System (n 77) 8-11 86 See Sykes and Posner, Economic Foundations of International Law (n 83); Posner and Sykes (n 84) 87 See Steve Charnovitz, The Path of World Trade Law in the 21st Century (World Scientific
Publishing 2014); Sungjoon Cho, The Social Foundations of World Trade: Norms, Community, and
Transatlantic Free Trade Agreements without Rights and Remedies of Citizens?’ (2015) Journal of
International Economic Law 579 89 See Brunnée and Toope, An Interactional Account (n 2) 90 See Petersmann, ‘The GATT Legal Office’ (n 66); Frank Garcia, Global Justice and International
Economic Law (Cambridge University Press 2015) 205-272 91 S. Viner, ‘Fuller’s Concept of Law and Its Cosmopolitan Aims’ (2007) Law and Philosophy 1 92 Nicholas Mcbride and Sandy Steel, Great Debates in Jurisprudence (Palgrave 2014) 125. See the
Vienna Convention on the Law of Treaties Articles (18) (31-33) that emphasis the ‘purposive
interpretation of treaties. For more on the moral purposive view of international law see Stephen
Allen, Law Express: International Law (2nd edn, Pearson Education Limited 2015) 6
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of study, that does not rid law of its essential obligatory effect, or economics of its
marginal utility ideal.93 One wonders if Fuller were alive what would he have said
about Buchanan’s last book, The Reason of Rules (1985), which brought Buchanan’s
work even closer to Fuller’s elaborations on legal rules?94 The two scholars, who both
had to stand up to strong opposition by experts in their respective fields (Fuller for his
morality of law theory and Buchanan for his reasoning on economic rules), left us with
the enlightening legacy of an economic analysis of law.
Finally, The Morality of Law’s strong basis in economics does not negate the fact that
this thesis originally relates to the laws of lawmaking and the respect these laws afford
to human agency. Only by considering the inherently unjust laws in totalitarian regimes
and the newly made laws in ‘countries-in-transition’ that are striving to live up to the
principles of legality that Fuller identified can the moral content of law be fully
comprehended. The term ‘countries-in-transition’ refers to a group of countries that
are neither a stable democracy nor a stable autocracy but are going through the
upheavals of transitioning toward a nomocracy, i.e. to be ruled by laws not by a
government’s arbitrary will. 95 A useful connection in this regard can be made between
Fuller’s jurisprudence and the work of the political theorist, Hannah Arendt, who
perceived the law as being not an expression of command or the legitimate will of the
sovereign, but rather as a horizontal interactive mechanism for arranging the relations
between people within a society. How the lawgiver’s power could be constrained in
favour of the agency ‘i.e. activism’ of law subjects was the central question that equally
concerned Fuller and Arendt and scholars who studied their works.96 Overall, this
article main argument is that it is imperative, especially for economic law scholars and
lawyers, to contemplate The Morality of Law’s origins in economics that add to the
novelty and usefulness of Fuller’s jurisprudence.
93 Letters exchanged between Fuller and Buchanan, 8-13 January 1964, (The Papers of Lon Fuller,
Harvard Law School Library, box 2, folder 2) cited in Lacey, ‘Out of the Witches’ Cauldron’ (n 3) 30-
31; See James M. Buchanan, ‘The Domain of Constitutional Economics’ (1990) Constitutional
Political Economy 1 94 James M. Buchanan and Geoffrey Brennan, The Reason of Rules: Constitutional Political Economy
(reprint edn, Liberty Fund 2000) 95 See Beth Simmonds, Mobilizing for Human Rights: International Law in Domestic Politics
(Cambridge University Press 2009) 96 When the lawgiver overlooks his moral ethos to ‘rule by law’, and therefore resorts to violence, the
law-subject will find the moral imperative of revolt. See Kristen Rundle, ‘Legal Subjects and Juridical
Persons: Developing Public Legal Theory through Fuller and Arendt’, (2014) Netherlands Journal of
Legal Philosophy 212; Keith Breen, ‘Law beyond Command? An Evolution of Arendt’s Understanding
of Law’ in Marco Goldoni and Christopher McCorkindale (eds), Hannah Arendt and the Law (Hart
Publishing 2013) 15; Kenneth Winston, ‘The Inner Morality of Chinese Legalism’ (2005) Singapore
