Essay Example on Role of Laws in Society: Complexities of Regulating Social Norms

Introduction

Questions have been raised on the role of the laws in society because the norms exist. Where norms exist, the laws are maintained through non-legal sanctions and trust. Erick Poster posits that the norms in the society are sometimes desirable. However, sometimes they are odious and therefore, the law is essential in ensuring that there are good norms in society. He further says that regulating the social norms in the society is a task that is complex and delicate. He, therefore, says that the current form and understanding of the social norms is not adequate to guide the lawyers and the judges in making decisions. He offers a model which shows the relationship between the social norms and the law (Posner 537). The model he created shows that the concern people have in establishing cooperative relationships makes them engage in imitative behaviour and the behaviour patterns as a result of that are called norms

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Legal norms are usually seen as the best means which can be used to regulate behaviour when the social norms or self-interest do not produce the behaviour which is desired in people. It, therefore, means that they should mostly regulate in the areas which do not have the social norms as well as providing extra enforcement and support in the areas where the social norms exist. It also shows that there is no questioning of the fairness of the social norms which are already in existence as well as their intrinsic efficiency. The essay will focus on how social norms originated and how they are enforced. Therefore there should be a closer look at the fairness and the efficiency of the social norms in the society. There is an impact when legal norms are introduced where there is an existence of the social norms and in the areas where the social norms are not regulated.

The major issue is that the prevailing social norms at the historical moment are likely to be equilibrium amongst the much equilibrium that exists. Given the existence of much equilibrium, there needs to be an explanation as to why one equilibrium is chosen over the others and why some others are rejected. The function of the legal norms is to reinforce the social norms which are already in existence. They are sometimes bent so that they can work within the law when there exists a discrepancy. However, social norms can cease to exist or be defeated when legal norms are created.

Therefore there is a significant interplay between the enforcement of the law and the social norms. In society, the law has the upper hand over the behaviour as well as the ones who break the law. When an individual is found breaking the law, he/she is fined or imprisoned, and his/her behaviour will be forced down so that it can conform to the law. The breaking of the law by individuals is dependent on the social norms because detection of the breakage of any law relies either on being detected or when somebody becomes a whistleblower. The law-abiding agents have the natural incentive to blow the whistle which creates a significant mismatch between the partner, s behaviour and the overall negative externality (Posner 537). When many people are breaking the law, it means that the laws conflict with the social norms.

Additionally, when individuals hope that there is likely to be no whistleblowing, they are likely to break the law. Enforcing tighter laws where certain behaviours are banned, produce counteracting effects. They lead to more people who are law-abiding to show good behaviour, but at the same time, it induces more people into breaking the law. The number of people who break the law is reduced when there is good public enforcement, and when the fines are higher. However, it also increases the number of ones who violate the law. They lawbreakers often choose their behaviour by targeting other lawbreakers. In any given society, the laws conflict with social norms. The social norms may backfire, but the gradual tightening of the laws can be effective by changing the norms in society.

Law and Econ Final Reflection Paper

From Posner’s Corporate Law, there is no objection whatsoever how the aspect of transaction costs is reflected societal mode of tax collection to finance several goods and services. The organization of voluntary economic activities with regards to transaction costs to justify the reasons why various economic activities are conducted within the purviews of the corporate framework rather than individuals. Accordingly, this brings out so explicitly the theory of collective action outlining the fundamentals of material incentives (Posner 533). In his views about the nature of the firm, the initial stage and framework of production organization is the traditional dimensions of the market together with the aspect of the contract law. The second framework underpins the organizational economics and the master-serval law.

As such, the significance of the initial stage is an aspect of negation within the entrepreneurial frame concerning entering an agreement with the pronouncements of quantity, price, quality, and credit terms, among others. Subsequently, the latter stage creates emphasis on how the remunerations are dispensed and out to steer and direct performance within the workforce (Hansmann 20).

However, each of the two stages posits some fixed costs, with the initial contract defining the details of the supplier's performance within the contract (Posner 535). Apparently, Posner assumes that such might culminate into protracted negotiations and comprehensive bidding processes. In other words, he sees such lengthy negotiations as reputational signals in the contributions that the organization or norms render to business compliance. His arguments conversely demonstrate that the one with the low discounting rates in such bidding procedures is supposedly a suitable trading partner.

So, in the second stage, the firm should establish incentive mechanics, communication, and information costs. This is because; the social norm and law of such firms would dictate the indirect payment mechanism to their workers, thereby leveraging fewer incentives to reduce the costs.

With his signaling model and explanations, it is understandable why some expensive behavioral patterns such as consumption of high quality and costly goods, gift-lifting, and such as are regarded as norms. It is so because, within the firm, the very behavioral patterns reflect the sacrifice of material riches and the chances of its accumulation. To Posner, individuals who involve in such behaviors are concerned majorly with the future payoffs rather than the bad aspects of exaggeration of discount rates (Hansmann 20). However, various norms, like the corporation within the contract, for some reason or another, is a reflection of trivial costs imposition. So, with his signaling model, the explanations of their conformity are extensively clear.

Some persons might even take part in cheap contracts and actions for the mere fact that their deviancy (deviation from the normal) is perceptually punishable by others. The punishers tend to signal their patterns by taking part in costly contracts or actions to shun others who act in peculiar ways. In other words, Posner suggests that anything costly can activate signals.

Notwithstanding such flexibility, Posner's attempts to render the entire themes of norms into signaling behavior is at least relevant to his very concepts in corporate law. While elaborating on the various types of firms, he suggests that different challenges regarding partnerships are inevitable because of the need to acquire more capital than workers (Posner 534). Therefore, a firm that is devoid of external capital can be rendered as a partnership but not as a corporation. It is so because corporations fundamentally overcome the challenges of partnerships of raising resources from external sources.

His challenge is founded on the universal view that behavior within settings of collective action is affected by the failure of the theory to assess its repeat actions. In one encounter, best described as 'one-shot prisoner's dilemma,' the maximizers of rational wealth may undergo the self-conquering incentives that Olson and different conventional theorists have posited. However, the situation might turn out quite different in circumstances where there is anticipation of the encounter between these individuals over and over again. In such a situation, every person may think that their decision to ride freely or contribute in a given meeting could impact the probability that the other persons will mimic or emulate that same behavior in their next meeting. In doing so, both of them may decide to forego the short-lived physical advantage of presently having a free ride in the hope that they will enjoy the material benefits with which cooperation throughout future interactions are associated. The systematic development of this insight was made by Robert Axelrod, a political scientist (Posner 533). Axelrod used computer simulations and several other proofs of ingenuity to ascertain that even the maximizers of wealth will resort to a uniform pattern of cooperative behavior if they foresee an indefinitely long series of future encounters with persons they can keep track of and monitor their behavior settings of collective action.

Posner distinctively refines the theory advanced by Axelrod in his report of reputational signaling. Posner assumes that a person will find another person desirable as partners in a beneficial group undertaking as far as perceiving them to have low instead of high discount rates. There is a high likelihood that people who revere future payoffs to the same degree or nearly to the same degree as immediate payoffs will forego the instant benefits of cheating or shirking than those who discount the future in excess. They would probably do this with the expectation of getting the long-term profits related to trading opportunities in the future. In the same vein, an individual will want to acquire a name for subordinating long-term to short-term payoffs through participating in practices that demonstrate with conviction a disposition such as that in the presence of others. As per Posner, a social norm is merely a sequence of behavior that indicates a low instead of a high rate of discount in this way (Cheffins 5). If there is a signal created by, among other things, adding to collective goods of numerous sorts, then the necessity of depending on law- with all its associate pathologies and costs- might be minimized by a robust regime of social norms a problem-solving tool of collective action.

But that is the story as told by Posner. What should be considered then is whether the story is reliable factually or realistic behaviorally. As it is, there seems to be no social science data presented by Posner to back his model of reputational signals in social norms. He openly acknowledges that such data does not exist (Posner 537). Nonetheless, the reader is invited to credit Posner's account, provisionally at least, based on its ability to develop explanations for a vast scope of easily seeable phenomena as well as to generate hypotheses that can be tested empirically.

The hypothetical instance Posner has suggested with regards to the nature of firms is that organization is the basic structures for governance. It has to be legitimate authority that can engage in any forms of contracts. So, apart from being susceptible to various analyses from economists it matters. He suggested that one of reasons why this kind of information has taken quite long to be accommodated is because the inability of justifying how the organizations matters. However, his model is inconsistent with the so called a wealth of empiricism with regards to how organizations sometimes do behave when it comes to collective action settings. Various economists and social psychologists have constructed broa...