The Law of the Rich

The Ting Hsin Group's sale of gutter oil three times in a year has sparked widespread public outrage, leading to calls for a boycott to drive the company out of business. Other corruption scandals and cases involving elites have also gradually come to light. The exposure of unsecured loans for luxury housing purchases like Teipei Grand Palace, as well as the preferential allocation and easy profits from TDR issuances for political and business elites, slowly reveals the underlying structural network of politics, elites, and the wealthy. While ordinary people cannot even imagine buying a home without collateral or waiting in line for TDR lotteries only to watch elites bypass the queue and even receive commission rebates, these behaviors—grinding the teeth of ordinary citizens—are nonetheless legal. Is the law truly a law for the rich?

Yes, some legal scholars think precisely this. Between the 1970s and 1980s in the United States, the once-flourishing "Critical Legal Studies" movement strongly asserted that "law" is simply "the rules of the game formulated by the rich," and naturally serves to protect the wealthy. Compared to the prefaces and legislative purposes of laws—which invariably claim to protect the disadvantaged, uphold fairness, and manifest justice—this reality appears profoundly ironic and hypocritical.

The Highly Critical "Critical Legal Studies"

The claims of Critical Legal Studies should not be difficult for the Taiwanese public to accept, given their widespread distrust of legislation and the judiciary. For instance, it asserts that "law is politics," meaning that whether lawmakers enact laws or judicial actors apply them, it is fundamentally a "political decision." Consequently, this fundamentally challenges traditional "formalist jurisprudence" or "liberal jurisprudence," which views law as "value-neutral." In short, the law is not neutral; it contains value judgments that are deeply political in color.

Applied to the Ting Hsin Group, we feel this intensely. Administrative policies favor the rich. Banks assert that unsecured loans are still being repaid normally with interest, meaning no default has occurred and they cannot demand early repayment or retroactive collateral. Simply put, private lending is a matter of mutual consent, and others have no right to interfere.

The problem is: if Ting Hsin collapses, tens of billions will instantly become bad debts—will the government let the bank fail? If not (effectively capitalizing on the panic of the Taiwanese people), once the state steps in, taxpayers will absorb the losses. This type of administrative policy shifts the risk of bad debt onto ordinary people. As for ordinary folks, who need collateral to borrow money, they must bear the risk of bad debt entirely on their own.

Consider further the laws regulating food safety. Selling tainted food is an act of "economic rationality." Businesses will take on capital offenses for profit, but none will operate at a loss—this is "economic rationality." Relying on the conscience of business operators is extremely fragile. For regulation to be effective, the measures must align with "economic rationality." The Ministry of Health and Welfare increasing whistleblower rewards stems from this exact mindset.

Yet, beyond this, other measures are remarkably "irrational." Can the government drive tainted food operators out of business? It is hardly likely. Aside from concerns over the livelihood of frontline workers (reminiscent of the panic surrounding bad debts), there is also a lack of legal instruments to do so, because the entire legal framework favors capitalists.

From the perspective of crony capitalism, when the financial backer falls, the politician falls. No one will take actions that cause their own downfall, which is also "rational." From the perspective of protecting civil rights and preventing state encroachment, we are also reluctant to grant the government excessive power, lest it be abused to punish political opponents (and their financial backers).

Consequently, apart from ex-ante supervision mechanisms by the government (and civil society organizations) that are unlikely to be overly stringent, the most effective deterrent is actually the ex-post restitution mechanism. This is the primary reason why Anglo-American nations developed "punitive damages." Only when businesses are sued into bankruptcy by consumers will there be a genuine deterrent effect. It is not a matter of the government directly pushing businesses down, because the state is capable of abusing its power. When the people take action, the judiciary still serves as the final checkpoint.

The Law Takes a Stand

Of course, this also means that whether a bad corporate group collapses ultimately depends on passing through the judiciary. From the perspective of Critical Legal Studies, the law is frequently internally contradictory, and consequently, judges retain a vast scope of arbitrary discretion. From the perspective of the people, victory does not seem guaranteed. But from the perspective of capitalists, this also implies bearing unpredictable risks. This explains why large corporations always tend toward out-of-court settlements, paying to make problems go away. Managing risk and damage is of paramount importance.

The arguments of Critical Legal Studies are resonant and powerful, capable of diagnosing nearly all the ailments of Taiwan's current legal system. Rather than blaming the failure to pass "punitive damages" legislation in Taiwan on differences between the civil law and common law systems, it is more accurate to say that our politicians simply "do not have the heart" to let financial backers take on excessive judicial risks.

The "formalist jurisprudence" or "liberal jurisprudence" primarily attacked by Critical Legal Studies is also a widespread malady in our country. Taiwan's judiciary has long remained stuck in "formalism supreme," merely parsing statutory provisions while ignoring specific social contexts and cutting away the underlying political and economic structures. Hiding behind the traditional liberal jurisprudential claim of "value-neutrality," they assert absolute objectivity and neutrality, unknowingly becoming accomplices to inter-class oppression and exploitation.

Of course, many arguments of Critical Legal Studies focus on critique and do not easily translate into institutionalized systemic measures. However, Critical Legal Studies represents a profound introspection and a deepening attitude, rather than a contemptuous hurling of insults at the judiciary. If those engaged in legal work can all traverse this level of "seeing mountains as not mountains," I believe the landscape of Taiwan's judiciary will transform into the moving realization of "seeing mountains once again as mountains."