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The buyer at the gate offers more than the cooperative: does a promise bind when breaking it pays?

Akosua Mensah Fellow
· 6 replies
Moral theoriesAfrican & AfricanaIslamicModern EuropeanDavid HumeW. D. Ross#contracts#cooperatives#fidelity#promises
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Its coordinates: 3.2 Normative Ethics · 3.2.1 Consequence-Based Approaches · 3.2.2 Duty-Based Approaches +3 more

I sell my cocoa through a farmers' cooperative. At the start of the season every member promises to bring their beans to the cooperative, which in return gives us credit for fertiliser, a fair weight on the scale, and a share of the premium at the end of the year.

Some seasons, buyers turn up at farm gates offering more per bag than the cooperative pays. It is cash, today, and when school fees are due, cash today is not a small thing. Every year some members sell part of their crop to the buyer at the gate. They say the cooperative will survive, and they are mostly right. Nobody is caught. The difference for one family can be a term of school.

I have never done it. But this year my neighbour asked me straight: “What harm does it do? You promised, but promises are for when things are normal.”

I did not have a good answer. I said a promise is a promise, which my son tells me is what philosophers call a tautology.

So I am asking here. If keeping a promise costs more than breaking it, and nobody seems to be hurt, why should it still bind? Is my neighbour wrong, or am I just stubborn?

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6 replies

  1. Kwame Asante

    Fellow

    Akosua, your neighbour's argument works for one farmer and fails for all of them, and a cooperative is exactly the case where that matters. If every member reasons as she does, the cooperative loses the volume it needs to get credit and a fair price, and then nobody has a good scale at the end of the season. Her breaking is only harmless because you are keeping. That is not a reason for you to keep; it is a reason to see that she is living off your promise.

    Helpful · 3
    1. Akosua Mensah

      Fellow

      I will tell my neighbour Kwame's version, because she will understand it. She is selling my promise along with her beans. And Khalid's advice is good: the cooperative does give hardship credit, and I will remind her of that. My son will be pleased I have finally said something that is not a tautology.

  2. Javier Ferrandis

    Fellow

    An economist should admit the other side. There is a tradition in contract law, going back to Oliver Wendell Holmes's “The Path of the Law” (1897), that says the duty to keep a contract is really a duty to keep it or pay damages. On that view, breaking and compensating is perfectly honourable when it is more efficient. But that only works where damages are actually paid. Your neighbour is proposing breach without compensation, which even Holmes would not defend.

  3. Khalid Mahmood Awan

    Fellow

    The Qur'an opens one of its chapters with the command to fulfil your contracts. The jurists did not read this as “fulfil them when convenient”. They allowed contracts to be rescinded in cases of fraud or genuine hardship, by agreement or through a judge, but not secretly by one party because a better offer came along. A season of high prices is not hardship. School fees are closer to hardship, which is why I would tell your neighbour to go to the cooperative and ask for help, not to the gate.

    Helpful · 1
  4. Harpreet Kaur Grewal

    Fellow

    In our gurdwara we talk about honest work, kirat karni, as part of the path. I do tax returns, and I see what happens to small businesses that get used to small dishonesties when nobody checks. It is never just the one time. Akosua, I do not think you are stubborn. I think you understand that your word is something you are building, and it is worth less the first time you sell it.

    Helpful · 2
  5. Hamza Qureshi

    Fellow

    A footnote on why the philosophers disagree. Hume thought promising is an invented convention, a social practice that works because people keep it, which is close to Kwame's argument. Ross thought fidelity is a basic duty you see directly, not one justified by the practice. Both get your conclusion, Akosua, but for different reasons. Hume would tell your neighbour she is free-riding. Ross would say she has wronged you whether or not the cooperative survives.

    Helpful · 3