I’d bet rather a lot that “simple beauty of fiduciary law” hasn’t previously been put to paper or pixel. Google supports the instinct, showing no instances of anything like it. There may really have been none, or Google may have suppressed them, given its own volte face from “don’t be evil.”
Neither result would surprise. Google’s evil extends to suppression, while fiduciary law, when broadly and ordinarily honored, doesn’t occasion much consideration.
The new ‘20s, though, have been unordinary. Poison brewed in a now all-but wholly corrupted academe first seeped and then burst forth to corrode the whole life of the American people and the western world, aided and aimed by malicious cadres atop the departing U.S. administration, western business corporations (particularly the American custodians of other people’s capital), the dark and furtive anti-democracy of Brussels, and others similarly situated. Whatever each actor’s individual aims, the result has been perhaps the greatest grift, scam, or wrongful conversion of power and value in human history – with even darker descriptors potentially and properly to be appended.
All of it can be understood as, or explained by, a general collapse of respect for and attendance to fiduciary law. Had even a sliver of those bound by fiduciary duty acted with rigor and vigor to vindicate those duties, few of the travesties that have benighted the first quarter of this (so far) Dumbest Possible Century could have unfolded.
The claim seems unbalanced: a “greatest grift” ought to have occasioned vast moral failures and ought to carry high and solemn penalties – not boil down to what sounds like a sort of accounting-practices error.
In fact, though – and herein lies the beauty, and the simplicity – fiduciary law is not a dusty artifact or statutory hodgepodge of limited commercial application. Fiduciary law is best understood as a requirement to “do the right thing when it’s likely no one is looking.” And the fiduciary right thing is no complicated mystery hidden in the Code of Federal Regulations or volume 322 of 600 (so far) of a state’s collected judicial opinions. With one vital exception, the right thing to do under fiduciary law is the thing that an ordinary grammar school student who has mastered the concept of abstract entities would know to be right. It is almost wholly derivative – as are most of decent conduct – of that universal necessary principle: do unto others … (or don’t do unto others …), or, in more modern if less articulate expression, don’t be evil.
It is a paean to the legal history and original methods of the English-speaking peoples that law so clean and just could have emerged, and a frank marvel that it has come down to us broadly intact despite centuries of well-meaning but ill-advised legislative- and regulatory-code spinning. Fiduciary law, as most of the best remaining Anglosphere law, grew up in and out of two of its most distinctive and salutary features: common law and equity (as meant in its old, glorious sense – i.e., at law v. in equity – not the tawdry and morally perverse purpose to which the term had been recently been shackled, the last embers of which flicker away even now on the great Ash Heap of History). Between them, they allowed judges the room to “make things right” and the mechanism by which to learn from and incrementally to improve upon previous efforts – a forerunner and godfather of the processes that led to, among other things, the scientific and industrial revolutions.
Fiduciary law responds to circumstances in which some parties (“bound parties”) are committed to act will reasonable skill and attention for the benefit of other parties (“beneficiaries”) rather than themselves – and in which the beneficiaries don’t have, or are unlikely to have, very good ways of enforcing those commitments.
Such enforcement problems arise regularly. They are virtually inevitable when the bound parties are very close to the relevant action and have significant power over it, while the beneficiaries are far from the action and find it difficult to know what’s being done and whether it’s consonant with the bound party’s commitments. As forms of human interaction grow in scope, include more people and layers of hierarchy, and otherwise get more complex, fiduciary law and its appurtenant duties lock on to add legal encouragement (sometimes by very significant penalties) for bound parties to follow, borrow or hire working moral compasses.
For all parties’ benefit – another facet of beauty – fiduciary law generally posits (or attaches to) an abstraction (e.g., forms of business/non-profit/&c. organization, trusts or estates) when bound parties owe duties to many beneficiaries of different sorts, and with different aims. Bound parties’ duties then run initially to the abstraction, which simplifies analysis of both the (objective) duties owed and the consequences and implications of breach.
The cardinal sin of fiduciary law – the most contemptible breach, chastened and chastised by the greatest sanctions – is “self-dealing.” Self-dealing breach arises when bound parties act not as they are committed to – for the objective benefit of the corporation, non-profit entity, estate, &c. – but instead to advance their own personal fortunes, or personal policy preferences, or idiosyncratic whim: when they consult their personal interests – whether from greed, stupidity, inattention, commitment to “the cause,” *&c. – they become liable to pay damages from their personal wealth to those harmed, including the abstract entity itself.
Upcoming installments will unpack fiduciary law and its particular relevance in 2025, the interests of readers and the patience of the editor of these pages permitting.
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