Conduct / 2018-06-26 / Nick Sallnow-Smith

You will have to be patient for a couple of paragraphs before I arrive at explaining the title for my thoughts this month. My route to it begins with a quick reprise of the difference between “natural law” and what I will term “code law”, for the purposes of this piece.

By natural law, I mean those restrictions which have arisen in virtually every human society, and without which a community could not survive in the longer term: prohibitions against murder, theft and fraud. At root, these rules are based on every free human being able to do with his own body and personal possessions what he feels is in his best interests, without interference from others. It is the root of freedom. Therefore the only restriction on you as a free citizen is not to coerce others. In the words of Leonard Reed: “anything peaceful”.

It would be a rare human being who would feel such natural laws were “unjust”. Indeed that is why they are called, and feel, “natural”. By contrast, many laws invented by legislators will regularly be regarded as “unjust” by some, yet not by others (take for example those laws here that make Uber illegal). Code law like this usually involves the state coercing at least some in the community (in my example, Uber drivers) to favour other groups. All taxes do this as well.

From a libertarian viewpoint, this is not acceptable and indeed not “just”. However, at least this type of law can be clearly defined (though it often is not) and therefore predictable. One can regret it but at least manage one’s life around it. This typically applies to all regulations as well as statutes (although in many sectors in Hong Kong interpreting the meaning of the multitude of regulations can involve turning to expert consultants to find out what you are permitted to do or not). They may be regrettable but are at least predictable. Our daily lives as citizens are constrained as to what we are “permitted to do” by our government but at least if we stay within those boundaries we can relax. Or at least we could; no longer I fear.

I am now finally getting to my title! In the financial sector, institutions have long struggled with the mountains of regulations with which they need to comply, if they are to avoid fines or other penalties. But now the boundary of what is permitted is not only getting more restrictive but also much less clear.

In the UK in 2013, the Financial Services Authority, the regulatory body for the financial services industry, was replaced by the Financial Conduct Authority for that part of the industry serving retail consumers. I think the change of wording is very important. What these regulatory bodies now attempt to control is not simply compliance with the law but the manner of that compliance. Not only is what you sell to a customer limited by regulation but how you sell it. As you might imagine, not only is this a further reach by regulators into what human beings do every day but it is different in kind. It is much harder to define how you do something than it is to define what you do. Take for example the frequent geopolitical disputes over whether countries have sufficiently “apologised” for historical transgressions. Sometimes an apology is made, but is then rejected as not sincere. The words are not enough, the manner of the apology is more important. But since assessing “conduct” is subjective and is frequently made by someone whom you have never met, it becomes almost impossible to know whether you will be judged to have “conducted” yourself appropriately. Moreover, what you may think is appropriate today may be judged in the future to have been inappropriate. None of us has any way of predicting how these subjective judgements may change. The current “metoo” movement has at least partly arisen (in my opinion) from changes of subjective judgements about what was (as well as is)  appropriate (from the “victim’s” point of view as well as that of the “accused”).

What might be some of the consequences of this additional layer of subjective regulatory judgements and social expectations? Of course one obvious result is the reduction in that space in public life where all citizens can feel free to behave as they themselves judge best. But the effect goes beyond the size of that space. As I noted before, at least if regulations were predictable they could be planned for. Since judgements about conduct are now subjective and may be applied at some future date when norms have changed, the uncertainties about behaviour and penalties that may accrue will be much larger. The average citizen willi inevitably feel constrained to “play safe”.

This will mean less risk taking, which will mean less value creation for society. But it will also mean more conformity. By narrowing the socially acceptable range of human behaviour, diversity will be reduced. It is supremely ironic that those pushing for more and more conformity of social norms also claim they are in favour of diversity. What will be reaped from this wave of judgemental moralising will be a society where behaviour becomes more conformist. I suppose if one’s overriding objective is to produce a society with a Gini coefficient of zero, this is one way to go. Aim at a community which is completely uniform. A society of clones would have little inequality but no diversity either.

Yet if we examine those individuals through history who have contributed most to civilization, whether in science or within society, they were typically outliers, not only in ability but in conduct and character too. The sort of folk wisdom dispensed in my parents’ generation was encapsulated by phrases like “live and let live” and “mind your own business”. These were pretty good summaries of libertarian thought, although I am sure my mother had no idea what that was. It was a world full of quite eccentric people. Their “conduct” frequently raised eyebrows but few felt they should be prevented from going about their business in rather odd ways. Communities were in my view the richer for it. Such eccentrics amongst us also taught the next generation that society was broad enough to accept some rather less conformist behaviour than the norm.

Today many communities seem to be drifting ever further away from a “live and let live” approach. Judging the “conduct” of others according to shifting and subjective standards is a common pastime, not only amongst regulators but ordinary citizens too (see my earlier piece on our “Should, Must Society”).

This saddens me greatly. Life is made productive and enjoyable by making our own contributions, not by spending time and energy blaming others for any social outcomes that do not please us. My hope is that more of us might “conduct” ourselves by focussing on the freedoms of the former rather than on limitations of the latter.

Nick Sallnow-Smith



Facebook Comments

Leave a comment