The Triumph of Venus The Erotics of the Market Jeanne Lorraine Schroeder UNIVERSITY OF CALIFORNIA PRESS Berkeley Los Angeles London University of California Press Berkeley and Los Angeles, California University of California Press, Ltd. London, England © 2004 by the Regents of the University of California Library of Congress Cataloging-in-Publication Data Schroeder, Jeanne Lorraine. The triumph of Venus : the erotics of the market / Jeanne Lorraine Schroeder. p. cm.—(Philosophy, social theory, and the rule of law ; 10) Includes bibliographical references and index. isbn 0–520-23431–6 (cloth : alk. paper) 1. Law and economics—Psychological aspects—Philosophy. 2. Sociological jusrisprudence. 3. Feminist jurisprudence. 4. Economic man. 5. Utilitarianism. 6. Romanticism. 7. Erotica. 8. Venus (Roman deity) I. Title. II. Series. k487.e3 s38 2004 340’.115—dc21 2003012770 Manufactured in the United States of America 13 12 11 10 09 08 07 06 05 04 10 9 8 7 6 5 4 3 2 1 The paper used in this publication meets the minimum require- ments of ANSI/NISO Z39.48–1992 (R 1997) (Permanence of Paper). For my mother This page intentionally left blank contents Introduction: Juno Moneta / 1 1. Pandora’s Amphora: The Eroticism of Contract and Gift / 7 Prologue: The Myth of Allgifts / 7 The Nature of Gift / 11 Gift as Potlatch / 26 The Eroticism of the Market / 42 Commodification and Relationship / 64 Epilogue: Pandora’s Gift / 81 2. Orpheus’s Desire: The End of the Market / 83 Prologue: Orpheus and Eurydice, Eros and Thanatos / 83 The Desire of Economics / 86 The Perfect Market / 107 Conclusion: The Ideal of the Market as the End of the Market / 138 3. Narcissus’s Death: The Calabresi-Melamed Trichotomy / 149 Prologue: Narcissus and Echo / 149 Viewing the Cathedral; Seeing the Feminine / 152 Three’s a Crowd: The Trichotomy / 159 Six Hypotheticals / 169 Property / 179 Procedural and Substantive Critiques / 187 Conclusion: The Masculine Phallic Metaphor / 202 4. The Midas Touch: The Lethal Effect of Wealth Maximization / 205 Prologue: The Golden Touch / 205 Defining Wealth / 208 viii contents The Denial of Enjoyment / 229 Lacan avec Posner / 240 Epilogue: The Ass’s Ears / 272 5. The Eumenides’ Return: The Founding of Law Through the Repression of the Feminine / 276 Prologue: The Deus ex Machina / 276 The Erinyes / 281 The Law’s Necessary Repression of the Feminine / 290 Epilogue: The Birth of Venus / 308 index / 313 Introduction: Juno Moneta The object of the law and the object of desire are one and the same, and remain equally concealed. gilles deleuze1 There is nothing which so generally strikes the imagination, and engages the affection of mankind, as the right of property. And yet there are very few, that will give themselves the trouble to consider the origin and foundation of [prop- erty]. Pleased as we are with the possession, we seem afraid to look back . as if fearful . william blackstone2 William Blackstone insisted that property, and therefore market relations, are driven by desire. This eroticism should not surprise us. Etymology tells us that money is a woman. The word “money” derives from Juno Moneta. Juno, queen of heaven, was the Roman goddess of womanhood, the personification of the feminine. Her title, “Moneta,” means “she who reminds and warns.” The word “money” reminds us that the feminine is a reminder—a warning. Nevertheless, the erotic nature of law and markets is deeply repressed in American culture. We turn away from the primal scene of the passionate ori- gins of markets with the same embarrassment and shame we experience when we contemplate our own origins in the parental bed. The ideal of the perfect market, like the idea of our own conception, is “real” in the Lacan- ian sense. To look back, to confront the real, is not merely frightening—it is deadly. And yet there is nothing we desire more. To be a subject is to be driven by desire. Subjectivity is the triumph of Venus. In recent years, the study of markets in American jurisprudence has been expropriated by the self-styled “law-and-economics” movement, the dominant discourse of private law in America’s most elite law schools. One of its appeals is that it gives an aura of scientific certainty and objectivity to legal analysis and normative policymaking. Despite its claim to scientific status, however, this scholarship is almost entirely devoid of methodological discussion and inter- 1. Gilles Deleuze, Coldness and Cruelty, Masochism 9, 85 (Jean McNeil trans., 1971). 2. William Blackstone, Two Commentaries on the Laws of England 2 (A. W. Brian Simpson intro., 1979). 1 2 introduction nal criticism, as though these matters were uncontroversial. Moreover, the practitioners of the “science” of law-and-economics rarely engage in empirical research. Instead, law-and-economics consists of deductions from dogmatic principles. Consequently, most law-and-economic proposals are classic cases of GIGO (garbage in—garbage out): nonfalsified theories are applied to untested assumptions in order to produce nonverifiable conclusions. Law-and- economics has all of the characteristics of a cult. Nevertheless, although it is frequently attacked in law reviews, particularly from scholars self-identified with the critical left, law-and-economics has not only prevailed; it has thrived. One reason for this is that much of this opposition to law-and-economics has taken the equally unsatisfactory form of romanticism, a viewpoint that unwit- tingly repeats the errors of utilitarianism. In this book, I argue that there are powerful psychoanalytic reasons why law-and-economics, as well as the roman- tic critique, continue to be so seductive despite their failures. The legal economist sees market participants, and therefore the market, as essentially rational. Market participants know their preferences and take appro- priate action reasonably calculated to maximize their atomistic, individualistic well-being conceived in terms of either “utility” or “wealth.” Markets are deemed efficient insofar as they enable rational economic actors collectively to achieve their goals. Although individual preferences may be irrational, in the sense of pregiven and subjective, homo oeconomicus is rational, single-minded, predictable, and objective in the pursuit of these irrational preferences. The romantic sees the economic vision of human nature as fundamentally flawed because it ignores, or de-emphasizes, “higher” aspects of human nature, such as spirituality, empathy, altruism, and so on. Surprisingly, these “New Age” neoromantics who emphasize the supposedly irrational aspect of human nature tend to confirm the utilitarian analysis of the market as cold and rational. Eroticism and other forms of “irrationality” are therefore seen as essentially different from and usually superior to economic relations. Their critique, however, remains impotent, precisely because it accepts a fundamental tenet of the approach they claim to condemn. Utilitarianism and romanticism are mirror images of each other. They val- orize opposites but fundamentally agree. They draw diametrically opposed conclusions from a shared erroneous assumption about law and market rela- tions. They both assume that market relations are inherently cold, atomistic, and “rational.” The utilitarian believes that “rationality” is the true essence of human nature, and therefore analyzes all human relations by analogy with the market. The romantic, in contrast, believes that human nature is essen- tially “irrational” in one way or another. Therefore, the market is an aberra- tion. At best, it is a necessary evil tolerated only insofar as it is limited in scope, as a means to provide basic physical needs. At worst it is a perversion that threatens to undermine all human relations and frustrate the achieve- ment of personhood. introduction 3 This book on utilitarianism and romanticism is an encounter with Hegelian philosophy and Lacanian psychoanalysis, and an exploration of the erotics of law and the market using metaphors drawn from classical mythol- ogy. I argue that the utilitarian-romantic analysis of the law and the market is incorrect for two interrelated reasons. First, Hegelian philosophy shows us that, far from being anti-erotic, market relations are the most basic and prim- itive from of eroticism. Meanwhile, Lacanian theory reveals that the femi- nine is the primal commodity; money is Juno Moneta. Consequently, the util- itarian is correct in seeing a fundamental similarity between erotic and economic behavior, but wrong in thinking that the former can be reduced to the latter. Rather, it is the latter that can be explained in terms of the for- mer. Venus triumphs over the market. To put this another way, both the util- itarian and the romantic see desire as external to law. In contradistinction, the Hegelian and Lacanian, following a Western philosophic tradition reach- ing back to Aristotelian virtue ethics, posit that law operates at the level of desire. Second, the rational-irrational dichotomy adopted equally by utilitarians and romantics is incompetent. Dialectical reasoning reveals that reason and passion are not inalterably opposed, but rather two aspects of the same con- cept. It is true that human beings are rational, as argued by utilitarians. But rationality represents only the potential of human nature. This potential must be actualized through desire. Consequently, desire drives human behavior, as romantics intuit. Through reason, the abstract person comes to understand that she can only actualize herself through recognition by other subjects— through love. Therefore, she rationally desires others: logic tells her to give way to passion. This does not imply, however, that the romantic is correct in assuming that passion is superior to logic. Rather, even at the ecstatic moment of jouissance, the subject must preserve a moment of the rationality that makes desire possible, or submerge her personhood in the abyss. My goal in this book is to reveal the internal, but repressed, logic of certain legal and economic concepts. I believe that the law-and-economics paradigm3 drawn from classical price theory is decadent; in the terminology of Imre Lakatos, it is a degenerating research program.4 I show that several attempts 3.