Lynn Stout's pathbreaking book Cultivating Conscience: How Good Laws Make Good People (Princeton University Press, 2010) represents a much-needed update to the discipline of law and economics. Using current social science and discarding threadbare premises, it develops new methods for theorizing and deploying law in its real-life context — starting from the simple observation that, as a matter of scientific fact, people are often remarkably and demonstrably unselfish.
In updating her own field of study, Prof. Stout found herself, unexpectedly, calling into question one of its most cherished axioms. Scholars of law and economics had always begun with the assumption that people were "rationally selfish." Cass Sunstein's 2008 book Nudge called into question the first term of that formula; Prof. Stout, holder of an endowed chair in Corporate and Securities Law at UCLA, now challenges the second. On the evidence of this book, it seems more than possible that her insights will prove more significant in the long run.
Lucidly summarizing the vast quantities of recent social-science research on so-called prosocial behavior, Cultivating Conscience shows how selfishness is overhyped as a driver of human conduct. Prof. Stout finds repeatedly that when there is a gap between actual legal structures and current legal theory, the problems are not with the law, but with the theory — problems rooted in certain academic cultures, unscientific thinking, and inattention to the empirically proven power of human conscience. The prospect of correcting these errors suggests a new direction for the field of law and economics.
Conscience may turn out to be a policy tool as useful as incentivization. In fact, the power of Prof. Stout's analytic framework, both as description and prescription, may make one-dimensional evaluation of legal incentives obsolete. Using the method proposed here, policymakers attentive to the key parameters of authority, conformity, and empathy may develop ways to "cue" conscientious behavior in a wide variety of social contexts.