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On (Im)Moral Competition

On (Im)Moral Competition

4.7.2013 17:57
Autor: Petr Hajn, KSB

As it pertains to lawmaking, however, the proverb works the other way around: although things will stay the same, they are changing after all.

This paraphrase of French wisdom crossed my mind while comparing unfair competition provisions in the laws of the First Czechoslovak Republic, the current Commercial Code and the new Civil Code. The central figure in each of the statutes is good morals. At the same time, another thought came to mind: why do we, as lawyers, use such vague phrases instead of clearly laying out what is and is not permitted.

A similar question was answered by Karel Skála in a commentary on the Competition Act from the First Czechoslovak Republic: “Business life reflects the condition and quality of human culture, which, like everything human, changes continuously over time. The ingenuity of the human spirit (for better or worse) must be considered seriously even in the area of combating unfair competition. Hence, legal provisions must provide flexible rules that can enable all developments and aspects to be taken into account.”

I would just add that it is not only culture that influences human behaviour. If we are to survive and pass on our genes, we, like other animals, must be equipped with a fighting spirit and the art and ability to attract and take advantage of others. In human competition a very fine line exists between reasonable assertiveness and unreasonable aggression, between standard solicitation and deceptive practices, and between parasitism and the state which a well-known explorer described as “standing on the shoulders of giants”.

Greed, Creativity and Calculation

Moreover, man differs from other animals in that he is greedy, creative and calculating. One of the characteristics of greed is that humans have, besides primary biological needs, secondary needs like the need for prestige, dominance, and awareness of success. The material symbols for such needs are usually very costly. Human creativity (in conjunction with the other traits mentioned) can perhaps best be understood by comparing the behaviour of man to that of bees. A bee is extremely efficient and its productivity is pretty constant: to produce a kilo of honey, it needs to fly a certain fixed number of kilometres. It does not occur to the bee that it could have more while doing less. A calculating man, however, cannot help but consider such a thought.

The balance between the energy spent and the benefits gained can be improved by employing several means: diligence combined with frugality, extraordinary creative performance, inheritance, accident and, unfortunately quite often, illegal conduct. Men choose the method that is closest to their own selves and which is allowed by their social environment. Asocial activities as a display of human greed can be of a constant as well as creative nature (referred to as deviant creativity) and result from uncontrolled emotional responses or thorough calculation. Gary Becker, a Nobel Prize winner for economics, found that illegal activity is often based on “risk assessment”, in which potential profit is compared with the probability and degree of punishment.

Apple Champagne

What the above matters confirm is that no law can foresee, and thus precisely list, all kinds of conduct to be prohibited in competition. Even if a lawmaker specifies hundreds of prohibited activities, new ways to circumvent the law, or tiptoe along its border, will probably be found through human ingenuity. I recall one such case brought before a French court. A maker of a soft drink for children named its product “Champommy” (“pomme” is French for apple), only to be sued for abusing the term “Champagne”. However, the court held, quite surprisingly, that rather than parasitic, the conduct could be considered symbiotic, stating that kids accustomed to celebrating with “Champommy” may be inclined to open bottles of Champagne as adults.

The law against unfair competition will primarily still be based on case law even in the future. The text of the law can only respond to the basic foundation of human nature by using a broad, simple term such as “moral competition”. A precise universal phrase that could easily and swiftly be employed to decide which conduct violates competition and which does not will never be possible. Only by interpreting the given facts and thoroughly assessing conflicting interests will one be able to respond to unpredictable displays of human spontaneity. The concept published in 1930 in Hamann, Drábek, Buchtela: Nekalá soutěž (komentář) (Unfair Competition (Comments)), which states that moral competition and general morals are not the same, will also certainly be used. The German lawyer Kohler is said to have stated that “It is difficult to find an immoral act that did not at least contribute in some way to human progress.” After all, no culture can do without the Devil.

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