Social Norms, the Invisible Hand, and the Law

21 Pages Posted: 21 Nov 2014 Last revised: 15 Apr 2015

See all articles by Jonathan Anomaly

Jonathan Anomaly

Duke University

Geoffrey Brennan

Australian National University (ANU) - Research School of Social Sciences (RSSS)

Date Written: December 22, 2014

Abstract

In this paper we argue that social norms are emergent orders, and that when they work well they function as invisible hands, leading each person to act in ways that inadvertently promote social welfare. While coercively enforced laws can achieve similar ends, we argue that lawmakers are apt to overlook the ability of social norms to solve collective action problems. Although there is no simple answer to the question of whether norms or laws should prevail, we outline some general principles to assess the moral trade-offs associated with each.

Keywords: social norms, invisible hand explanations, emergent order, law and economics

JEL Classification: K00, Z18

Suggested Citation

Anomaly, Jonathan and Brennan, Geoffrey, Social Norms, the Invisible Hand, and the Law (December 22, 2014). Available at SSRN: https://ssrn.com/abstract=2527984 or http://dx.doi.org/10.2139/ssrn.2527984

Jonathan Anomaly (Contact Author)

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

Geoffrey Brennan

Australian National University (ANU) - Research School of Social Sciences (RSSS) ( email )

Canberra, Australian Capital Territory 0200
Australia

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