Riassunto esame Metodi matematici per l'economia e la finanza, Prof. Zanchi Giuliano, libro consigliato Introduction to Private Law , Pietro Sirena

Chapter 17/11-8/11: Law and society

Definition of law

• Law binds a society's members with the prime purpose of solving their conflicts among them and, secondarily, of promoting their mutual cooperation.
• A lawless society could not exist and, conversely, the law would be devoid of any real sense outside of a society.
• Since the Enlightenment, law has been increasingly replacing religion as a technique deployed by society to control individuals' behavior.
• To date, however, law seems to be about to be supplanted by technology, which is credited with being able to carry out similar tasks with lower costs and higher efficiency.
• Law doesn’t require any state or kind of centralized authority to develop and to carry out its social functions; law doesn’t need language to develop and carry out its social functions, although it tends to be spoken and reduced to writing.

We can find numbers of definitions of law by reading texts and documents coming from different cultures and different times. For instance:

• Dictionary of Han’s Dynasty: Law is punishment
• Carl Marx: Law is a tool of oppression to exploit the working class
• John Austin: A rule laid down for the guidance of an intelligent being by an intelligent being having power over him
• Oliver Wendell Holmes: The prophecies of what the courts will do

Modern definitions of law:

• US Legal Dictionary: A body of rules of conduct of binding legal force and effects. Prescribed, recognized, and enforced by controlling authority.
• Oxford Dictionary: The system of rules which a particular country or community recognizes as regulating the actions of its members and which it may enforce by the imposition of penalties.
• Sirena (Introduction of private Law): Law is a social infrastructure which binds its members in that it aims primarily at solving conflicts among them and secondarily promoting their behavior.

Both Romance (or Ne-Latin) and West German languages have incorporated the word "directum", which in the common parlance of the Middle Ages meant "straight" in the sense of "just, equal". Ius was the Latin for law and its etymology is obscure: Ius quia iussum means "what has been commanded", while ius quia iustum means "what is just". The former (ancient sense of law) refers to law as justice and justice was the rational truth of nature; the latter (modern sense of law), instead, states that the "source" of law is the establishment of that law by some socially recognized legal authority.

Two opposite views of law

The answer given to the question "what is law?" during the course of history may be gathered into two main groups:

• Legal naturalism and the ancient sense of law (ius quia iustum)
• Legal positivism and the modern sense of law (ius quia iussum)

By "legal naturalism" it’s meant that this view of law was hinged on the ancient sense of natura as a rational order, where all men, animals, and things were to accomplish their own, inner reason of being, whether or not a divine footprint was recognized in it. Law was justice and justice was the rational truth of nature, where all beings were deemed to accomplish what they were designed to do.

During the 19th century, legal positivism has gradually overcome legal naturalism, thus becoming the common ground of any discourse about law and embodying the current mentality of jurists. In the positivist view, the "source" of a law is the establishment of that law by some socially recognized authority. The most famous conceptualization of legal positivism is to be ascribed to Hans Kelsen.

The functions of law

Recurrent features:

• Law is somehow connected to prescriptions and sanctions.
• Law is always in relation to a society.

Law is a social infrastructure which binds its members in order to solve conflicts and thus impeding the disruption of society (negative function of law) and promoting cooperation among the members of society, its unity and welfare (positive function of the law). Law exists because and insofar as society does. This assumption is embodied in the traditional society maxim ubi societas, ibi (et) ius, which means that any society is underpinned by law (no society without law). In fact, the assembly of individuals in a society requires the establishment of a certain degree of self-organization, which is provided by law.

According to the philosophical doctrine of Thomas Hobbes, society was born from the "state of nature" that was characterized by the war of all against all — the negotiation of a social contract would have marked the foundation of society where men agreed to exchange a part of their freedom for the advantages of mutual cooperation. The very source of law was thus to be identified in the constitutional act of society itself, which implied allegiance of every citizen to the established order and to the authority necessary to maintain it. If society necessarily requires a law, conversely, law outside a society can’t exist (no law without society). To sum up, we can say that any possible domain of law commences when there is a mutual relation between individuals, who come together in a group because a lonely individual would live beyond any possible law.

The law covers the following functions:

1. First, law serves the purpose to prevent and, as the case may be, to solve conflicts among the members of a group, which are inevitably raised either by the different views on the common good — law is aimed at impeding the disruption of society (negative function of law).
2. Secondly, law provides guidelines of behaviors deemed to be beneficial to the survival or rise of a group, thus strengthening cooperation among its members — law is aimed at enhancing the unity of society (positive function of law).

Law solves not only concrete (individual) conflicts but also abstract (general) ones, thus contributing to framework society as a whole.

Law and religion

Insofar as law is purported to avert the disintegration of a society and to neutralize its inner centrifugal forces, law exhibits remarkable commonalities with religion. In fact, according to Carl Schmitt, "all significant concepts of the modern state are secularized theological concepts". It happens that law and religion are entrenched, although their connection may tend to be lost or become obsolete over time. Each legal tradition is founded upon a substrate of religious nature, which bothers the shared mentality of lawyers and the fundamental traits of law. At the historical outset of law, there is often the authority of religion, since it is a god that stipulates what is good and what is evil for the community — both law and religion may be therefore understood as techniques of societal control. In fact, the common feature of legal and religion rules is the function of controlling and influencing the society.

If we consider that law is purported to avert the disintegration of a society and to neutralize its inner centrifugal forces, law exhibits remarkable commonalities with religion. In the West, the Enlightenment of the late 18th century marked a secularization of society and the increasing replacement of religion with the state’s legislature and jurisdiction.

Do we need rules establishing what is permitted and what is prohibited, to what extent a member of the society is free to do whatever she/he wants, and what kind of behaviors are mandatory? We have numbers of different kinds of rules dealing with the organization of the society and the relations among its members (religion, morality, customs) — techniques of social control. In our daily life, we can appreciate that sometimes these rules match perfectly, sometimes they differ or even collide. Moral-religion-laws have the ability to influence people. Some examples:

• Helping poor and needy people is a religious and moral rule, but not a legal rule.
• Leaving your seat to a pregnant woman is a moral rule, but neither a religious nor a legal prescription.
• Refusing blood transfers is a religious rule but not a legal rule.

The relationship among these sets of rules can be:

• Indifference
• Coincidence — coincidence between moral and religious
• Conflict — when there is contrast between a legal rule and a religion rule

It is commonly said that the distinctive character of law is the provision of a sanction, a negative consequence in case of violation of a legal rule, such as damages, imprisonment, fine, restitutions etc. Is that true?

First, we need to know the definition of sanction — not a typical (and exclusive) consequence of infringing a rule of law, because all social sets of rules provide for such negative consequences. We could say that the law provides for particularly strong and negative consequences, but again it is true also for those who follow a religion in which, for example, eternal damnation is connected to bad behaviors during life.

The general scope of a rule of law makes the real difference: a rule of law is meant to be applied to everyone in a community but is often not true; it occurs that a certain law applies only to a limited number of people in the society. So, the answer to the question is NO. Ex.: If you read the Italian constitution, you can find the Solidarity Principle that says it's better to be nice to other people but doesn’t provide for a sanction, even though it’s legal because provided by the law — sanction is related to a lot of parts of society, it’s rooted in the moral (not showing up to a date).

The rules of law are the only social rules whose:

1. Duties must be fulfilled
2. Sanctions are inflicted by entities that can legitimately use the force to make people respect the rules of law (this aspect is important because the legitimate use of the force by authorities makes a social rule a rule of law and makes the rules of law effective and reliable to achieve the goal of social stability and cooperation).

What is a specific element that qualifies the structure of legal roles (not present in the moral and religious rules)? Social authority is the main one and has the function to sanction individuals etc. A rule of law is meant to be applied to everyone in a community; but it’s often not true. It occurs that a certain law applies only to a limited number of people in the society. Law is applied because we recognize the existence of a social authority.

What is a legal system?

Given a society, the whole of the applicable rules of law in that society is called a legal system. The legal system is therefore the law applicable to that specific community of men and women, to that particular society.

Process of juridification of Western societies

The replacement of religion's social authority with a state constitutionally based on the rule of law (Rechtsstaat) commenced a large process of juridification of Western societies, with the aim of preventing class struggle and avoiding political conflicts based on selfish interest of single individuals — starting point of large process of juridification (Verrechtlichung) of Western societies. The concept of juridification was forged by Otto Kirchheimer to depict the rise of labor as a means to overcome the conflict of interests between workers and entrepreneurs. The following critical attitude towards the process of juridification favored the intervention of the state in areas traditionally left to individuals — more societal control of the state over individuals’ behavior (role of Enlightenment).

We move from a legal naturalism to a legal positivism. The advent of digital technologies challenges the rules of law — law is challenged.

Law and technology

To date, a further technique of societal control is rapidly gaining dominance in societies worldwide, and it tends to replace both religion and law in this context. In fact, the development of predictive and communication technologies and the possibility of obtaining a huge amount of data and information scattered on the Internet about the behavior and the choices or preferences of each member of a society (big data) make it possible to control the life of its members in a pervasive way.

The advent of digital law based on an information society is thus going to pose a dramatic challenge to the privacy protection of individuals and organizations. Smart phones, laptops, and communication devices are permanently connected to the Internet and, no less importantly, the Internet of Things. The same is occurring with domestic appliances, vehicles — as a consequence, a growing spectrum of daily behavior and personal choices is traceable, so that all information is traded. The consequence of the advent of digital law (detailed info) enables the replacement of the abstractness and generality of legal rules and standards with "granular norms" (=personalized directives) which are to be shaped on the track record of relevant information and continuously communicated to everyone. These assessments imply not only a large availability of personal information, but also a certain number of assumptions which may endanger the principle of non-discrimination, insofar as they embody social stereotypes and standardized patterns of behavior.

Contracts concluded and governed through algorithms (smart contracts) are designed to implement self-performing remedies, which, for example, a large number of legal and factual assessments which have been traditionally committed to a judge are governed by algorithms. Unmanned cars, which are capable of autonomous driving, must be programmed in order to take decisions which may affect the life not only of passengers on board but also of other people accidentally involved in their movement.

The assumption that decision-making by artificial intelligence, smart systems, is compliant with legal rules and standards leads to the thinking that they are but neutral mechanisms to implement the application of law in a more efficient and impartial way, not biased by personal beliefs and the individual preferences of a judge or an official — law is code. On the other hand, there is no room left for human interpretations, law is being replaced by mechanisms of societal control which differ from those sanctioned in legal principles and rules — code is law. This implies a shift of decisional power from lawyers to technocrafts, so from analogic reasoning of law and religion to the digital functioning of machines.

Slide additions

Technology raises several questions for lawyers because they have to understand if civil codes still apply in certain situations.

• Positive effects = everything it’s quicker, secure (blood-chain) — the new modern age is challenging the traditional background focused on written laws.
• Negative effects = hacking

What does a society based on information mean? Why does digital law require such information? Without information, we would not be able to digital combivement. It’s just another technique of societal control because individuals are more and more influenced by information.

The role of B-data is relevant, of course, there is a swap point between B-data and information but the reason why it’s so important is that B-data collects data. There is a tension between data and privacy (privacy is important because it’s the fundamental right of a person and recognized as the cornerstone of Western society) that is endangered by the progression of digital law. There is a sort of connection between the concept of constitution and privacy because the constitution recognizes the importance of individuals and so consequentially protects privacy (USA mostly).

Legal rules must be applied to everyone — If we consider the general notion of law, we recognize that legal rules are general abstractness because they apply to everyone. They apply to the general if they apply only to a small group of individuals.

Granular norms

With the advent of digital law, the function of specific devisers is designed to be only used by specific individuals, the standard functioning is challenging the work of legal rules. They are personalized and not provided with abstractness and generality.

DEF: Granular norms are personalized directives which are to be molded on the track record of relevant information and continuously communicated to everyone. The people that manage your device can offer you an appetible device (product) filled with your preferences.

Potential consequences of the advent of digital law

In the normal function of the contract, we should execute the contract personally; in contrast, with digital law, the individual is not involved in the execution of the contract (e.g., rimborso di un volo cancellato, avviene senza la viva partecipazione del cliente). In the traditional functioning of contracts, if someone is at fault, the other part is entitled to conclude the contract. In smart contracts, this doesn’t happen because they suppose an automatic execution of the contract.

Smart contracts are related to the advent of digital law, and they are spreading more and more with different functions than traditional contracts. Smart contracts are not stipulated in person, and the problem is that law is supposed to be applied with contracts stipulated in person.

ex. Autonomous cars are becoming really popular — take autonomous decisions — consider an accident in which the artificial intelligence is obliged to take a decision (do I need to kill the person in the car or on the street?). But whom is the fault? Are traditional laws still applied to this category? NO.

Do we need to adapt our traditional law system to this new era scenario? Yes and no, it depends.

LAW IS CODE <—> CODE IS THE LAW

The law encompassed this new phenomenon (Law is code), code is the law is the contrary. Is this law real law or not? Maybe it’s influenced by technology, so it’s not possible to talk about real law.

Chapter 314/11: National and international law