The question of how to objectively determine damages for negligence (tort) in a libertarian system often arises. There is not much solid, libertarian analysis out there on this issue–the answers are usually either positivistic and assume some presumptive validity of common law rules; or they are libertarian but without much mooring in any coherent libertarian legal theory.
I don’t have a fully-developed view of this but I have touched on these matters in some publications and have always meant to return to this issue. I haven’t done so yet, but given the lack of much systematic libertarian treatment of this I will set forth below some tentative thoughts on how to approach this issue.
Restitution and the Right to Punish
First, note that the right to punish can serve to help make restitution more objective. As I argued in Knowledge, Calculation, Conflict, and Law, a review essay of Randy Barnett’s The Structure of Liberty, “It is … more costly to seek punishment than to seek restitution. For this and other reasons, restitution would probably become the predominant mode of justice in a free society.” However, as I explain there and elaborate in Inalienability and Punishment and Punishment and Proportionality,
Nevertheless, acknowledging (and justifying) the theoretical legitimacy of punishment can be useful. For example, punishment (or a theory of punishment) may be utilized to reach a more objective determination of the proper amount of restitution, because a serious aggression leads to the right to inflict more severe punishment on the aggressor, which would thus tend to be traded for a higher average amount of ransom or restitution than for comparatively minor crimes. Especially offended victims will tend to bargain for a higher ransom; and richer aggressors will tend to be willing to pay more ransom to avoid the punishment the victim has a right to inflict, thereby solving the so-called “millionaire” problem faced under a pure restitution system (where a rich man may commit crimes with impunity, since he can simply pay easily-affordable restitution after committing the crime).
Moreover, even if punishment is banned (de facto or de jure) and is not an actual option–because of the possibility of mistakenly punishing innocents, say–an award of restitution can be based on the model of punishment. To-wit: a jury could be instructed to award the victim an amount of money it believes he could bargain for, given all the circumstances, if he could threaten to proportionately punish the aggressor. This can lead to more just and objective restitution awards than would result if the jury is simply told to award the amount of damages it “feels” is “fair.”
This latter point is significant because, as noted above, restitution based on the idea of restoring the victim is often impossible, and thus meaningless; for this reason, those advocating restitution usually are vague about the proper standard (since there is no proper standard), or just “punt” it to the juries or courts, much like Congress does when it uses vague terms in statutes or Constitutions such as “accommodate” in the Americans with Disabilities Act or “privileges or immunities” in the Fourteenth Amendment.
(Further elaboration may be found in my post Fraud, Restitution, and Retaliation: The Libertarian Approach.)
Also, as noted above (see also “Wouldn’t Rich People Go On Murder Sprees In a System of Private Law?”: Reply to Bob Murphy), the punishment-based approach solves the “rich man” problem that some libertarians complain about but are unable to solve.
Intentionality, Threats, Fraud and Incitement
Notice that crime is thus viewed as an intentional action: action employing means selected to achieve the end of invading the property or body of another person. Viewing it this way helps also to solve other issues that sometimes vex libertarians. For example libertarians often throw “threats” and “fraud” into the list of things that libertarianism prohibits–aggression, the threat of aggression, and fraud. It is clear to most libertarians why, or at least that, we are against aggression; but it is not immediately clear why, or how, threats, or fraud, are types of aggression.
I as explain in Fraud, Restitution, and Retaliation and The Problem with “Fraud”: Fraud, Threat, and Contract Breach as Types of Aggression, for the libertarian, fraud is a type of aggression (namely, theft), just because it is a means by which one party receives or uses or takes the property of someone else without their consent–and there is failure of consent because the first party’s misrepresentation meant that one of the conditions to transfer of title was not satisfied. To understand this, you have to have a clear grasp of the Evers-Rothbard title-transfer theory of contract. (See A Libertarian Theory of Contract: Title Transfer, Binding Promises, and Inalienability.)
See also The Libertarian View on Fine Print, Shrinkwrap, Clickwrap, for examples of how clear understanding of libertarian property and contract principles help solve these issues too.
As noted in Fraud, Restitution, and Retaliation and The Problem with “Fraud”: Fraud, Threat, and Contract Breach as Types of Aggression, I tried to show, in Punishment and Proportionality: The Estoppel Approach (pp. 68-69), why threats can be a form of aggression (see also this version of the Punishment article, p. 639, section “Why Assault and Threats Are Aggression”). The basic idea is that a threat (“assault”) is either the attempt at aggression, or action that puts a victim in fear of receiving a battery (aggression). By the logic of estoppel (based on the same symmetry that permeates the libertarian non-aggression principle), the victim is entitled to do to the threatener what he did to the victim. But (as elaborated in those linked articles) the only way for the victim to have the right to attempt to use force against the threatener is to actually have the right to carry through with it; and the only way for him to have the right to put the threatener in fear of receiving a battery is to have the right to do it (otherwise the threatener knows it’s just play-acting and won’t be afraid).
So, a clear understanding of rights and the right to punish, combined with a libertarian focus on the non-aggression principle and related symmetry, helps clarify the threat issue too.
(See also my post The Limits of Armchair Theorizing: The case of Threats.)
This issue continually confounds libertarians. Some say incitement is never a crime; others say that an indirect actor is liable only if he pays the direct actor, or is coercing him. Pat Tinsley and I discuss in our Causation and Aggression. We point out that, first, many such views are based on the fallacious notion that only one person is liable: if you blame the boss, you absolve the underling; or that there is a fixed amount of liability to be divided between the two. Some accept mainstream, positive law reasoning on this and believe that if there is a human in the chain of causation between the boss/indirect actor, and the victim, the boss is absolved. Nonsense. There is no fixed amount of liability; it can be joint and several. And humans can be means to action to. And there is no need to limit responsibility to the case of a contract or coercion.
But the point for our purposes here is the recognition that a crime is an action: it is the use of (efficacious) means to cause the invasion of the borders of others’ property. The means can be anything efficacious, including inanimate scarce resources, or even other people.
One more brief point before turning to liability for negligence. Many libertarians seem to assume the validity of some kind of “strict liability.” They say this with respect to property, when they assume that the owner “is responsible” for harm that is done by or with his property.
I believe this an unjustified assumption, and is based on lack of careful analysis of property rights. Property is the right to use or control a scarce resource. It is not immediately clear why the right to use would imply obligations. Thinking this way clouds other property-related issues like IP. People say, for example, that IP is not problematic just because it limits what you can do with your own property–after all, your rights in your property are not unlimited, since you can’t use your property to commit aggression against others.
This latter phrase is said repeatedly by libertarians. I can’t count how many times I’ve heard it over the years. The problem is it improperly links the prohibition on aggression to ownership of one’s own property, thus implying that property rights are limited. But a crime is simply an action, and actions employ means. But the actor does not need to own the means. If I steal A’s handgun to shoot B, I am the murderer, not A. I violated A’s right to control the gun; but A’s right to the gun does not make him the murderer. We can see that the idea of strict liability as it applies to “responsibility for owned things” is deeply flawed.
In other words, just because you have no right to commit aggression (via any means, whether the means are your owned property or not, or even other humans, whether owned or not) does not mean that property rights are “limited.” The non-aggression principle limits what actions you are permitted to engage in. And since inanimate property does not act by itself, then it never commits crimes. It is people who commit crimes. If the owner commits a crime, he is liable, whether he uses his own property or not. But if another person uses my property to commit a crime, why should I be liable? It was not my action. Therefore, we can see that the assumption that “ownership implies responsibility” is relatively mindless, unthinking, and useless.
I bring the foregoing up because it helps illuminate how to approach negligence. Sometimes negligence is treated as strict liability; but as noted above, there are some problems with strict liability; and there are problems with divorcing wrongful action from intentionality on the part of the wrongdoer. A wrongdoer is someone who intentionally causes harm or does something that gives the victim or recipient of the action a right to forcefully respond. This is true in the case of aggression (self-defense or retaliation); threats (the action of attempting harm, or making someone fearful of receiving a battery gives rise to a right to use force in response); fraud (the defrauder intentionally and knowingly takes property of the victim without the victim’s genuine consent); incitement (the boss uses other humans as a means to cause a victim’s borders to be invaded).
So how should we view negligence? I believe it should be viewed as being on a spectrum between non-action or mere behavior, and fully intentional action (crime). It is “partially” intentional. As I noted Causation and Aggression (note 11 and accompanying text):
… when we ask if someone was the cause of a certain aggression, we are asking whether the actor did choose and employ means to attain the prohibited result. For there to be “cause” in this sense, obviously there has to be cause-in-fact—this is implied by the notion of the means employed “attaining” or resulting in the actor’s end. Intentionality is also a factor, because action has to be intentional to be an action (the means is chosen and employed intentionally; the actor intends to achieve a given end).11
11. Notice that this analysis helps to explain why damages or punishment is greater for intentional crimes than for negligent torts that result in similar damage. For example, punishment is an action: it is intentional and aims at punishing the body of the aggressor or tortfeasor. In punishing a criminal, the punishment is justified because the criminal himself intentionally violated the borders of the victim; the punishment is therefore symmetrical …. However, in punishing a mere tortfeasor, the punishment is fully intentionally, but the negligent action being punished is only “partially” intentional. Therefore punishing a tortfeasor can be disproportionate; it would be symmetrical only if the punishment were also “partially” intentional. But punishment cannot be partially intentional; therefore, the damages inflicted (or extracted) have to be reduced to make the punishment more proportionate.
If this analysis is right, the “strict liability” approach that would treat the damages from murder the same as for manslaughter is wrong. Thus, in my approach, given that the right to punishment is the standard for fully intentional torts (crimes), and helps arrive at an objective determination of damages–you just back off of this by determining how intentional (negligent) the tort was. For example, for an act of fully (100%) intentional murder, then the heirs have a right to kill the murderer in revenge. They have this right because it is symmetrical: the murderer intended, and caused, the death of the victim; the victim’s agents are doing this back to him: they are intending to kill him. So that can be used to bargain for some kind of ransom, e.g. wergeld (see also David Friedman on this).
If you kill someone out of negligence, it’s not 100% intentional; but retaliation necessarily is. So killing the tortfeasor is disproportionate. For example say you did something that had a 10% chance of killing the victim. So the punishment is 100% certain, so the severity of punishment has to itself be reduced by 90% to make it balance out. So you have a right to (say) chop off someone’s arm. Then you use that as a bargaining chip (or model) to get damages from that, which would be (say) 10% of the standard wergeld.