Does blockchain rime with mortmain?

Discussions about the letter of the law versus the intent of the lawmaker are probably as old as the legal profession itself. A cynic might say that lawyers will give precedence to the letter of the law, or to its intention, depending on the specific cases they are arguing. But there is clearly more to the story.

The expression “The Code is The Law”[1] can be viewed as a modern restatement of the ancient Roman adage “Dura lex sed lex”[2] — but then the Romans were notoriously rigid in their application of the law. Moving on to later times, here is an interesting quote from the Wikipedia entry on Lysander Spooner, a 19th century US anarchist and political philosopher:

“Although he recognized that the Founders had probably not intended to outlaw slavery when writing the Constitution, he argued that only the meaning of the text, not the private intentions of its writers, was enforceable.”

By the way, Spooner was also against government restrictions on the issuance of private money, so if he lived today, he would probably be very interested in cryptocurrencies and blockchain technology.

Cultural and moral aspects

There are both cultural and moral aspects to the discussion, which can be illustrated by looking at contracts. While the western approach to contracts is quite rigid (“a deal is a deal”), this is not so in other cultures:

“Japanese are not as contract-oriented as westerners and they feel that contracts can be re-negotiated or adjusted when conditions change. The concept of naniwabushi refers to explaining why a contract cannot be fulfilled and still maintain one’s honor. Since the future is uncertain, drastic changing conditions allow partners to reject a contract. For example, if energy prices increase to such an amount that a product can no longer be sold for a profit under the original contract, the traditional view among Japanese is that the contract as a result becomes void.” [3]

The Japanese approach seems to fit well with a general moral imperative, that a contract should be fair not only at inception, but also in its consequences. The Koran’s prohibition against riba [4] may have been informed by a general preference for risk sharing over lending, a preference which itself can be seen as an application of the above-mentioned moral imperative.

If a trader borrowed money for a business venture, and the venture failed, he may have not only lost everything, but still owe money and risk default — which, in ancient times, could have disastrous consequences such as being sold into slavery. But if the trader has entered a profit-sharing agreement with the investor, then the failed venture, however disappointing, would not end with personal default. Mohammed, having been a trader himself, would have understood this distinction perfectly.

The question of time

Apart from the question of applying the letter of the law, or of the code, as the case may be, there is also the question of time.

Various legal systems recognise that the duration of the effect of human decisions should not be unlimited. In common law the rule against perpetuities limits the amount of time during which the will of a deceased person can affect the use of assets [5]. This is also called control by the “dead hand” or “mortmain”. Mortmain is a mediaeval legal concept denoting perpetual and inalienable ownership of real estate by a corporation. In modern use, it can also denote “the oppressive influence of past events or decisions.”

Elsewhere, Bernhard Großfeld has coined the word “ewigkeitsscheu” (literally: afraid of eternity) to describe German civil law [6]. He is also critical of a special clause in the German constitution, the so-called “Ewigkeitsklausel”, which stipulates that certain of its articles can never be changed.

In fact, even constitutions do change or get replaced sometimes. Including provisions on how to change them might be a good idea in general, and help dispel the illusion of quasi-eternity that some might have. In the blockchain area, there is an interesting project, tezos [7], with built-in rules to govern its own future evolution.

Immutability versus change

We are human beings, as all creatures known to us we are time-bound. What could we do with “unstoppable” smart contracts living on a blockchain for all eternity? It sounds like a very alien concept to me…

Everything in our universe is about change, about variety, about newness. The universe is in a process of constant creative destruction, and this is what drives evolution. In other words, the universe is not a rigid place, nothing is forever. Attempting “immutability” may be simply an expression of human hybris.

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[1] “The Code is The Law” is an expression used in the context of the DAO. Ref:

[2] “the law is harsh, but it is the law”

[3] John Alston and Isao Take, Japanese Business Culture and Practices: A Guide to Twenty-First Century Japanese Business

[4] usually translated as “usury”, although there is no agreement, even among Islamic scholars, as to its exact meaning. Ref:

[5] even though that time limit is rather long

[6] Großfeld, Zauber des Rechts, p 267 (ref)