Law · Uncategorized

Law’s Perverse Incentives

[R]ule of law, given a homogenous and therefore universal definition of property rights, constitutes a central authority. Just as mathematical operations constitute a central authority. Just as the scientific method constitutes a central authority.

Humans must make judgements. A central authority can be reduced to judgements and decidability requires humans to make decisions.  If we articulate a sufficiently calculable rule of law, they only need determine the truth or falsehood of human testimony, and all questions are decidable.

The problem in constructing rule of law is too often to protect the credibility of the state, so that it does not miscarry justice.  Instead, if we focus on the incentive for truth telling.

Incentives:
1) Universal standing (ability to sue), universal vulnerability.
2) Warranty of for one’s truth telling.
3) Restitution plus costs, for truth telling.
4) Triple damages plus costs for not truth telling.
5) Ten times damages for immoral (illegal) directives. No limit of liability. No immunity in the chain of command. All employees personally insured, and all personally accountable.

Truth telling matters. Right now lying does not increase risk. And so the law is currently constructed to provide perverse incentives.

We all err. We need not lie.

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