Moral wrongfulness and cartel criminalization in East Asia

Abstract

The global trend toward formal criminalization of cartel conduct is typically justified by reference to deterrence theory and the economic incentives that influence behavior. Other factors have often been treated with benign neglect. Some scholars have helpfully begun to highlight links between the likely effectiveness of criminal sanctions for cartel practices on the one hand, and on the other, a social norm that recognizes such behavior as deserving punishment that goes beyond administrative sanctions and possible private remedies. Where social acceptance of the need for criminal sanctions to fight cartels is absent or underdeveloped, there may be a wide gap between the formal adoption of a criminal regime and its effective implementation. This article discusses the subject of the criminalization of cartels in the context of China, Japan, and Korea. It suggests that criminalizing cartels is less likely to be effective in the absence of moral condemnation, and further suggests that an understanding of moral norms in East Asian countries is aided by a thorough investigation of the history of ancient Chinese jurisprudence. Underpinned by the foundation of a communal natural order, Confucian moral thought is distinct from the ‘Western’ moral philosophy. Condemning cartel conduct and characterizing it as morally wrongful thus requires a conception that goes beyond individualist assumptions and calculations. To explore the intertwined roots of criminality and morality in East Asia, we trace a legal history in which Confucian ethics were incorporated into the criminal codes of ancient China. Such an exercise suggests inter alia the possibility of stigmatizing cartel conduct on the moral ground that it constitutes improper profit-making in violation of the Confucian principle of righteousness. The article thus submits that debates concerning the morality of cartel conduct and the legal prohibitions of cartels in East Asia are properly informed by an understanding of norms derived from Confucian principles-which include not only the rules and norms that allow an actor to achieve virtue internally but also those associated with one's status and the maintenance of harmonious social order externally. The article proposes that, in the East Asian context, the likely effectiveness of criminal sanctions targeting cartel behavior can be enhanced if the moral wrongfulness of such behavior has been properly defined, and if its immoral character has become widely recognized and accepted within the society concerned.