Posts

Can All Workers Unite Actually End Capitalism?

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I'm always interested with the claim that if all workers in the world cease to work, capitalism would crumble and there will be no more masters and servants afterward. I highly doubt that a labor strike in such supernatural level will ever occur considering the nature of men and their self interest.  Nevertheless, this could be an interesting thought experiment. So, for the argument's sake, let us just assume that all of the workers in this planet simultaneously stop their work. What would happen? If all productions stop, I assume that most businesses (especially those which use employee/employer system) will also stop save for businesses that are being run by individuals.  My assumption that individual businesses will still conduct their business activities is based on two further assumptions: (i) they are their own masters, and therefore, there is no need for them to follow the workers, and (ii)  they can run their businesses without significant dependance on other businesses

Does Islamic Law Deal With Minimum Wage?

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There is a fundamental problem when I read this paper titled: Islamic Commercial Law and Social Justice: Shari'ah Compliant Companies, Worker's Rights and the Living Wage (written by Susan C. Hascall), namely, the fact that she argues that some of the Prophet's Hadiths can be used to support the existence of minimum wage for employees and the notion that a company cannot claim itself to be Shari'a compliant without complying with minimum wage requirement.  Why? Let us read first the Hadiths used by Ms. Hascall below: " Give a servant his fee before his sweat dries " " God Most High said: I shall be the opponent of three people on the day of judgment: the man to whom I gave generously but then he cheated; the man the man who sold a freeman into slavery and ate up its price, and the man who hired a worker and took his due measure from him but did not pay him for his (fair) wages " The word "fair" that I underline above is an additio

My New Papers on SPV's Law and Economics and Legal Positivism

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It's been a while since the last time I wrote in this blog. I admit, I have sinned. But enough with the excuses. I've just finished two papers having completely different themes. The first one is titled: " Special Purpose Vehicles in Law and Economics Perspective ". You can download the paper here . The second one is titled: " Legal Positivism and Law & Economics: A Defense ". You can download the second paper here . The first paper will be published in the Journal of Indonesia Corruption Watch to be published this year. In this paper, I discuss the nature of Special Purpose Vehicles (SPV) in the form of corporation, their function and benefits, their potentials for misuse, and also the techniques to solve or prevent such issue. I believe that for a developing country like Indonesia, relying on legal doctrine such as piercing the corporate veil to chase the ultimate shareholders of SPVs who conduct illegal acts would be too costly. They are just too cu

Once Again, In Defense of Legal Positivism

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This article is a continuation of my previous article: In Defense of Legal Positivism - A Reply to Iman Nasima . Since Imam has kindly responded to my article here , I think it should be appropriate to press the discussion one step further (though I have to apologize for the huge delay in responding to his second article). Legal Positivism is Not a Method of Legal Interpretation The first question that I asked in my previous article is: how critics to Legal Positivism perceive Legal Positivism? Is it a legal theory or method of interpretation? For me, the answer is obvious. Legal Positivism does not deal with method of legal interpretation, it is a theory of law. Why does this distinction matter? Because from my readings of various people who criticizes Legal Positivism, I get a tendency that they equate Legal Positivism with strict Textualism or Legal Formalism, i.e. that under Legal Positivism, judges tend to interpret the laws solely based on the texts of the formal laws issue

On Victimless Crime

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One of my favorite legal issues is the existence of victimless crime, usually defined as non-forceful actions whose participants are not complaining for their participation and no direct injuries are inflicted to non-participants of such actions. Victimless crimes are traditionally associated with actions performed by consenting adults which harm the society's moral foundations but not the society directly. These include drugs use, prostitution or non-marital sex and gambling, to name a few. Some economists would argue that rather than criminalizing the above acts, it would be better to instead legalize them. Not only that those acts can provide additional income to the government in the form of tax, it can also minimize the costs of legal enforcement. A good example would be the war on drugs which has caused a significant costs in the form of money and lives. Contrary to the above opinion, I, on the other hand, argue that victimless crime does not exist. If we

Adam Smith's View on Human Nature

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Recently, I found an excellent paper from Ronald Coase which summarizes the basic concept of Adam Smith on human nature. I would urge my readers to read the whole paper (first published in The University of Chicago's Journal of Law and Economics) as I think it provides a correct summary and a strong insight on how economists and also lawyers should think about human nature. The final paragraph of Coase's paper is very important that I will just copy it here for ease of reading. Enjoy! " It is wrong to believe, as is commonly done, that Adam Smith had as his view of man an abstraction, an “economic man,” rationally pursuing his self-interest in a single-minded way. Adam Smith would not have thought it sensible to treat man as a rational utility-maximizer. He thinks of man as he actually is-dominated, it is true, by self-love but not without some concern for others, able to reason but not necessarily in such a way as to reach the right conclusion, seeing the outcomes of

In Defense of Legal Positivism - A Reply to Imam Nasima

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As the title says, this article is a reply to a very interesting post from Imam Nasima on Legal Positivism Trend in Indonesian Legal System. As interesting as it may be, personally, the article raised a fundamental question, i.e. did Imam and the people he mentioned in his article discuss Legal Positivism as a legal theory or as a method of legal interpretation? If they talked about the second, I'm afraid that there is a misunderstanding here and my gut feeling says that this is a mistake similarly made by the majority of Indonesian legal scholars who deal with progressive legal theory. Legal Positivism as explained by HLA Hart does not specifically deal with method of legal interpretation. After all, it is a theory about the law, on why law exists and has authority upon the people. In Hart's view, a rule existing in the society shall be treated as a law when the majority of the people in such society accept the authority of such rule from an internal point of view and the l

Quantifying the Law? Why Not?

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I attended a national conference on the rule of law last week. At the conference, I presented my paper on the application of public choice theory into legislation system in Indonesia. (Those interested to learn more about the subject can go to my website and search for the 'public choice' tags by clicking here ) It was a nice experience and a good chance to see how Indonesian legal scholars perceive the law and its normative values. Having a quick reading on various papers, it seemed that abstract normative analysis still conquers the Indonesian legal scholarship, at least from the conference attendees. In this context, abstract means vague principles or values that are difficult, if not impossible, to quantify. For instance: the idea that law should promote the interests and happiness of the people, that law should promote justice and national interest etc. There is nothing wrong with promoting such ideas in terms of freedom of expression, but the problem is

The Law and Economics of Police Compensation

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The National Police Deputy Chief Nanan Sukarna on Thursday admits that there are corruption practices in his organization, as quoted by tempo.co . One of the many factors he cited was inadequate salary for police officers. "How should we ask them to not stay clear of corruption if their salary is not enough to pay for their children's school?" he said. From an economics perspective, this is an interesting topic. It is widely known by the public that being a police officer who only depends on salary will not make them rich or even survive day-to-day living. But despite such truth, why are there still many people apply to be one? If the job and payment are that bad, why do they pursue such career? A case like this offers several explanations. First, it might be possible that the majority of people who apply to become a police officer put more value on the authority attached to their position. This means that for these people, the fact that they gain such po