Equity – law and idea
Equity – law and idea

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Equity – law and idea

3.1 Equity, capitalism, justice and opportunism

How can the necessarily complicated relationship between equity, capitalism, justice and opportunism be explained? This relationship can be seen, broadly, from two positions, both of which start from the same basic aim (countering opportunism), but involve very different ends or outcomes:

  • equity counters opportunistic behaviour and secures justice in order to support and maintain the legitimacy of capitalism
  • equity counters opportunism, but in securing justice reveals capitalism to be the cultivator of opportunism.

While a plural equity, a combination of law and idea, is able to achieve both outcomes, it is arguably the route which ultimately maintains and supports capitalism that explains contemporary equity better, and follows the account given by Smith. The second outcome is of particular interest here, however, because on the one hand it provides contrast to mainstream accounts of equity and on the other it crucially advances the arguments made by the likes of Smith further, to a point of political and economic significance. This is important because Smith does not seek to question what is ultimately at stake beyond narrow legal and equitable concerns for tackling opportunism. This is a problem when dealing with a subject that is explicitly socio-economic in nature. In other words, lawyers and legal commentators, such as Smith (although he is not an overly bad example), will often focus on rules and doctrines to the exclusion of the ideological significance as well as the wider socio-economic political impact and effect those rules and doctrines have. This is a mistake. While opportunism is arguably born of more deep-seated and far-reaching aspects of the human condition, it unquestionably thrives under the more recent phenomenon of capitalism. More to the point, law and equity play an important and highly questionable role in the relationship between opportunism and capitalism. This notion resonates with many critics of capitalism such as Ellul, but also those who have attempted to understand the psychological effects of capitalism such as Hebert Marcuse (1998, 2002).

Returning to Ellul: faced with capitalism’s demands for increased efficiency and the economic rationalisation of systems and institutions such as those of law and equity, Ellul’s claim is that justice will wither and die because it is too uncertain and unpredictable to effectively meet those demands without being perceived as excessively burdensome or costly. This has long been the story faced by institutions under capitalism. For example, efficiency savings were a key reason that the Court of Chancery, equity’s home since the Middle Ages, was subsumed into the new High Court system during the latter half of the nineteenth century just as the Victorian ‘Great Depression’ took hold (in the 1870s). In other words, cost is a dominant consideration when it comes to justice to the extent that justice is subject to, even if not explicitly, forms of cost–benefit analysis that determine, among other things, whether or not those who engage in opportunistic behaviour are able to secure or evade justice.

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