31 March 2014

Behavioral law : Why we should talk about it deeper than before

So it was true. 

When we try to start doing things all over again, after long hiatuses or pauses, we outrageously bias about how, when, and where to start. In my case, thanks to Professor Robert H. Frank from Johnson School of Management, Cornell University, after reading the introduction to his Economic Naturalist's book, I decided to start writing my Paradigmafifa's blog again. Why? Professor Frank's simple approach to questioning the reasons behind everyday-human-behaviour, has intellectually seduced me to think deeper about it. About human, about their natural egoism, about their ambition for goals and other things that mostly valued in terms of money, about law as a means to an end, and also about me: as what I tend to believe myself 'an irrational human.' 

My interest at the behavioral economics/finance has long been started from the moment where I encountered Professor Shiller's (Yale University) video on Youtube. He famously known for his research about behavioral finance, the knowledge that brought him winning the Nobel Prize in Economics, back in 2013 (just last year). Before that, I also learned to read piece of stories about the financial crisis in 2008, from where I learned that the most certain thing in life, is the uncertainty." In other words, "uncertainty is the only thing that we must be certain about." 

Let me give one true example : In his highly praised book, 'Too Big to Fail,' Andrew Ross Sorkin provided us with complete explanations back to the doomsdays  for Wall Street bankers in 2008. In the beginning, he showed the readers about how Richard S. Fuld, Jr, the chairman of Lehman Brothers, shouted confidently, "who says we're going bankrupt?" just hours before the company did so. Human may predict the incoming situation, but did they have 100% assurance about how big or small their prediction will be about to happen?

If we all were growing up knowing that the financial system is something that we can learn and predict and then solve, I do think for now, no one (should) buy that myth anymore. We can't be so sure about something that lies far from our reach. What I see more important within this system, in a place where human races into each other to get more and accomplish more than anyone else is: the importance of law and its effect to the system. 

The basic concept of my conclusion is that, 'human tends to react freely when there is no law.' In reality, nobody knows where the law is. Do not tell that 'law is where the police officers are standing,' because those officers could be just symbol for the law institution where they work and got paid to stand all day in a street or some small kiosk in this country. Growing numbers of high rank police officers who got convicted for corruptions or any other crimes, proving that law does not always lies with the enforcer(s). They all are human, they all are irrationals too. 

So I keep questioning again : If law is too abstract, then how could we rely on the law as a system to abolish crimes and human wrongdoings? 

I propose one suggestion : Make law openly. This is such a joke for many of us, I am pretty sure about that, but there's no harm in suggesting crazy ideas to the societies. Especially when the crazyness comes from the idea to make life better :)

Humans are:
...and many other million adjective words we could identify ourselves with.


Humans also are :
Craving for acceptance,
...and other reason that simply explain  'human is a human in the end.'

We need to enter the era where legal system should be openly well-connected with two other important systems in our daily life : economy and financial systems. Think about this : 

When governors or the leader of provinces commited to crime (corruption, as we're talking about Indonesia in general,) they hadn't only violated their promises to the people they serve (violating public law), but also hurting the area's development process (by corrupting the money which intendedly allocated for that matter). The possibility for the impact of this wrongdoing is much farther than that. By witnessing this, foreign investors could withdraw their bid for investing in the area, when they found out that the leader and the cronies are involved in the unhealthy scheme of public money embezzlement (where on the other hand, we know that investment will generate more income to the country).  

We should no longer classify law only as wide as 'criminal law' or 'civil law' or 'economic analysis of law,' and many other law studies' distinctions we could find in most law schools. Since they all deal with human, there should be more emphasis on analyzing the humans as the DO-ers inside the system. 

More deep research needed to answer the questions such as : why do human tend to corrupt or commit to economic crime when they are in power? Is it because the system give them the opportunity to do that or the human quality is simply devalues moral and trust? Should we blame the system which were made by other humans? Then how we should perceive law as a means to an end?

Until then, we should not define law as a means to an end, because so far, it is still become an end in itself.

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