Fraud and Punishment
By Bryan Caplan
While I’m not a libertarian absolutist, there are plenty of criticisms of strict libertarian doctrine that don’t hold water. Two that have been on my mind lately:
1. Will Wilkinson doesn’t see why libertarianism prohibits fraud:
Even when I was a believer in Rand/Rothbard-style libertarianism, I found the ‘or’ in the “no force or fraud”
formulation of the non-coercion principle a bit vexing and suspect. It
seems too frank an admission that fraud isn’t force or aggression at
all. It’s another morally questionable way to get someone to do something they might not otherwise choose to do. But there are yet still other morally questionable ways to get people to do things. Why not add more ‘or’s?
Let me just say that because I think emotional coercion is coercion
doesn’t mean I think the state should try to stop it. And just because
I think fraud isn’t coercion doesn’t mean I think the state shouldn’t
try to stop it.
Frankly, I don’t see the problem. If you accept the initial libertarian equation of “coercion” with non-consensual use of others’ property, then the impermissibility of fraud follows. If you offer me a Mitsubishi 5500 projector in exchange for $2000, and hand me a box of straw instead, you are using my $2000 without my consent (which was contingent, of course, on you giving me the projector).
From a slightly different angle, if you buy Will’s fraud objection, what about skillful pickpocketing? Neither involves graphic violence. Indeed, in both cases, the victim may never be the wiser. Yet both involve non-consensual property use. Why would fraud be any more acceptable on purely libertarian grounds?
2. Tyler Cowen insists that not only punishment, but even requiring restitution, is contrary to libertarianism:
So let’s say I steal your painting. Yes, you do deserve your painting
back. It is yours. But say I steal your painting and lose it or wreck
it. That should be the end of the story. You never owned the “value
of that painting.” You simply owned the physical painting. You are
not due compensation. If you take my money as compensation for your
loss, that is simply another theft. All this talk about the “doctrine
of rights forfeiture” is handwaving. The forfeiture doctrine is a
convenient utilitarian fiction (which I will partially endorse), not
libertarian theory. Rights aggressors do not, in fact, lose their own
rights in turn. Why should they? Everyone in prison is there unjustly
and yes that includes murderers.
Tyler’s right that strict libertarianism has a counter-intuitive implication here. But it’s the opposite of what he says. If a thief steals your painting and destroys it, the correct libertarian deduction is that he still owes you your painting and is morally obliged to return it. Since it is by assumption impossible for him to fulfill his obligation, his only permissible course of action is to come to the victim, hat in hand, and ask the victim what he will accept as a substitute. The victim isn’t entitled to “the value of the painting”; he’s entitled to the painting – though of course he can settle for less. In other words, you can think of the thief as similar to someone who made a short sale, and has to buy back some stock – no matter what the price – to hold up his end of the contract.
What’s counter-intuitive about this? Well, it does imply that a victim could insist on infinite compensation because you stole his candy bar and ate it. Pragmatically, of course, it might be in the interest of the victim to accept a “plea bargain.” But strict libertarianism still implies that he has a right to hold out for infinity.
At this point, I would freely admit that libertarianism is not a perfect moral theory. At least in many cases, there is a maximum amount of compensation a victim can justly demand, libertarian rights notwithstanding. Nevertheless, to say that strict libertarianism implies that people should be allowed to get away with murder is plain wrong.