Wednesday 7 September 2011

LIBERALITY - The Third Moral Virtue of Good Contracts and The Spiritual Commitment of Great Souls

1. The third moral virtue St Thomas borrowed from Aristotle as a criterion for good contracts is liberality. Aristotle's view on liberality is worth reading for he sketches what might be called the munificent character. Most scholars have called this the "magnanimous soul" or "great soul." The major point to keep in mind is that liberality is not just about the quantity or frequency of giving, or in indeed, about the objects of giving, but that it comes from the nature of the person per se. As Aristotle says,

"Further, the liberal man is easy to deal with in money matters; for he can be got the better of, since he sets no store by money, and is more annoyed if he has not spent something that he ought than pained if he has spent something that he ought not, and does not agree with the saying of Simonides."

Source: Aristotle's Nicomachean Ethics, IV, http://www.sacred-texts.com/cla/ari/nico/nico035.

When one maps out the characteristics of the munificent character, and realises that this person is not necessarily materially or financially wealthy, then we might also realise that we have a specific counter-example of the caricatured "self-interested" homo oeconomicus so favoured by Adam Smith through the 20th century economists and those superficial propagandists of pseudo-philosophy like Ayn Rand and Leo Strauss. And we might also recognise prodigality as the opposite of liberality, where immediate indulgence and self-gratification spring from a certain type of character, and not from all characters.

2. There is a school of financial law today that goes by the name "law matters." Its thesis is that even the tinniest legal rule may have a huge effect on society. For example, simple disclosure rules forcing tens of millions of unread pages per month in the US. The idea of law matters is foundational and assumes a network of necessary rules that are linked together such that the operation of one rule affects another, and so on, throughout the system of rules.

3. This is a deeply Aristotelian conception. So, Aristotle's method was simply, OBSERVE what is to discover the parts of the whole. But then we face a conundrum of determining which parts fit with what whole, if at all. Aristotle posed this problem as the one versus the many. The problem echoes down the ages in many guises. For example, in my theoretically preferred approach which is linked to SET THEORY and CATEGORY THEORY, the problem is stated in terms of INTENSIONALITY versus EXTENSIONALITY, and in notation form as "singular attribute" versus "list of elements having said attribute." How a person resolves (or not) the tension of the "one versus many" conundrum says a lot about a person's intellectual preferences and biases. I use to think Hume was correct on this point and that no part is necessarily connected to any other part because the definition of a part was arbitrary. But as I get older I see the point St Thomas was making that the parts-to-whole argument MUST be aligned to a means-to-ends argument because whether we like it or not, we have a moral choice.

4. As Sadao Yoshioka, Shihan in Aikido, use to say, "the Way gets narrower and narrower as you move forward." We live together in a society where each of us has a part to play to the whole and curiously, this part (role) is given sense and becomes meaningful by our relationship to the whole. So, we have looting in London, and we have hedge arbitrage in investment banking. How are these parts related to the whole? Objective science may not give us the satisfactory answer because it can only help us determine the definition of the parts. How many think tank studies do we need before we must act? To have meaning, we need to translate whatever parts we have observed into a means towards an end. This means some kind of intellectual, moral and indeed, spiritual commitment without which no further meaningful action is possible.

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