This is part 2 of a multi-part series presenting a praxeological theory of the origin and character of law. Part 1 here.

Morality can be thought of as the art of choosing right ends. I think it’s safe to say that most people choose their own ends without a great deal of introspection. But among those who do introspect and opine on morality, there is almost universal agreement that the choice of right ends cannot be based solely or even primarily on one’s own desires irrespective of social well-being. This is the central tenet of collectivism, which is the prevailing moral sentiment today and has been for a very long time.

But the only sense in which an end can be right as opposed to wrong is the extent to which that end is a means to the ultimate end which every acting being has: satisfaction of wants. Satisfaction of wants is only apprehended subjectively.

… As a passive being [man] experiences sensations that are painful or pleasurable. As an active being he strives to banish the former and multiply the latter. The result, which affects him again as a passive being, can be called satisfaction. [Emphasis original]

Frederic Bastiat – Economic Harmonies

If I choose a particular course of action it is because I believe I am right to do so, that it is to my best and highest benefit to follow this course of action. And the same is equally true of another person who has chosen a course of action which conflicts with mine. Hence, we are not only involved in a dispute but we are each convinced, “I am the one who is in the right, I have the right to do as I’m doing and you are interfering with my rights.” I think this explains why normal people take legal disputes so personally.

Let’s set aside the matter of right and wrong for now and focus on the real issue which is the fact of conflict. Regardless of who is right or wrong, the problem is that the means I am employing to bring about my chosen end is obstructing the means you are employing to bring about your chosen end. In other words, I can only be happy by frustrating you. Disputes arise whenever the chosen ends of two individuals are mutually exclusive and, thus, come into conflict.

If I’m living in a very primitive society and I get into an argument with one of my fellow men, what happens? There are no judges and may not even be a chief we can appeal to. So what do we do? One option is to fight. But if my opponent is much bigger than me, I will almost certainly defer to him rather than fight him. If I am much bigger than my opponent, I will gladly fight him and probably win. But if you take any two men at random, they will be about the same size, strength and ferocity with high probability because most humans are close to the average. I will probably be about as afraid of the person I am in a dispute with as he is of me. We each are going to be wary of the other.

“There cannot be social order without the cattle-prod of the prospect of violent conflict driving disputants to arbitrate their disputes”

Since we’re human, we can do something that other animals can’t: we can speak and reason. It might consist of a mix of shouting and posturing with reason but that is much better than getting my skull bashed in over whatever it was we were arguing about. If we resolve our dispute without further violence, then we have succeeded in a kind of cooperative voluntary exchange. We both agreed together to exchange our present circumstances – fight/standoff – for a better set of circumstances – bargained settlement. I would rather give up a little of my sustenance to avoid the uncertainty and risk of being involved in a man-to-man battle where I might get to keep everything or I might just lose everything.

This is a crucial point because it explains how both parties to a dispute are better off, even though it might superficially appear that the party who was in the wrong – and, thus, has to pay – loses out. Because he agreed to the terms of settlement voluntarily, we can be sure that he believed that settling was preferable to remaining in a state of open conflict. Hence, both parties are better off as a result of settling the dispute.

The cooperative nature of the settlement decision is the essential difference between the kind of exchange that occurs as a result of dispute-resolution and ordinary voluntary exchange (catallactic exchange). In ordinary voluntary exchange, each decision-maker is completely autonomous and his decision to exchange or not exchange is determined solely by internal factors within himself. But it is very difficult to get even two people to make one choice that they both agree is the best for the both of them taken together. Each party wants to keep everything and give up nothing. The prospect of violent conflict if the issue is not settled – and the uncertainty regarding the outcome of such a conflict – drives them to bargain with one another. There cannot be social order without the cattle-prod of the prospect of violent conflict driving disputants to arbitrate their disputes. Thieves would simply keep the proceeds of their theft and the social order would necessarily disintegrate.

Continued in Part 3.

Clayton –