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A straw man

The other day I encountered this argument, which I failed properly to swat away and as a result, got rather rude to my interlocutor and he went off in a huff (sorry about that mate). What he said that made me go red was this:

“You libertarians keep banging on about the terrors of regulation. Yet you also slag off massive lawsuits and things like that. But if you want to get rid of huge payouts for things like people suing for damages, you need regulations. So why are you so hostile to them?”

As I pointed out, this is what is called a straw man argument.. Such “arguments” hold up a false, or in some cases deliberately false and weak, version of a point of view that a person wants to knock down easily (hence the “straw” bit). So let us fisk it.

First, I do not know any liberals or libertarians who argue that regulations are and always are a bad thing. Private sector bodies and voluntary associations of all kinds have them. A privately owned hospital, for instance, would regulate the behaviours of people who entered the premises. Why? Because that hospital would not want its reputation and bank account to be wrecked by outbreaks of disease, which lead to nasty insurance payouts. So it is in the self interest of said institutions to operate regulations, and more important perhaps, to be seen to do so. Another case is the London Stock Exchange. Long before modern financial regulators like the Financial Services Authority came along, the LSE was founded (back in the 18th Century, I think) and it had rules, albeit not always formal ones, but rules nonetheless (“my word is my bond”, etc). Trust is the key. And if you do not have trust, and have ways of enforcing said, then networks of commercial or other transactions do not work so well. So let us dispose of the canard that classical liberals are agin regulations. They are not. What we are against is one-size-fits-all regulations imposed heedlessly by the state. This is the crucial thing. Regulations, to be useful, need to be tried and tested, and if need be, discarded. State regulations tend not to be like that, but rather resemble clumps of ivy climbing up the side of a tree. They are much harder to reverse.

Okay, so now we come to the idea that libertarians hate expensive lawsuits. I suppose it is true that we hate frivolous, massively costly lawsuits, by definition (and who does not, except lawyers?). But sometimes you need to have lawsuits because you will not always have perfect knowledge of the kind of problems that can arise. Take the example of the hospital again – its managers may not know about new diseases that can be transported into the building in unexpected ways. A lawsuit following a disaster may be the trigger for a new rule. In this sense, lawsuits, although unpleasant for those on the receiving end of them, act as a sort of discovery process about what sort of problems exist. Lawyers have their uses.

In other words, this is quite a complicated argument. I just will not make the same mistake of trying to explain it after two beers and a 13-hour day at the office.

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16 comments to A straw man

  • freestater

    Also, American libertarians are generally fans of “well-regulated” militias.

  • Pa Annoyed

    I would have thought the critical point was not whether the regulations were one-size-fits-all or imposed by the state, but whether they were accepted as binding voluntarily. The only reason state regulation is (or maybe ‘should be’) despised is because it is compulsory, imposed by an elite who know better than the rest of us. There is no market of ideas, no possibility that someone with a ‘better’ set of regulations can compete and win support.
    (Unless you count the right to set up political parties and win elections, of course.)

    Why do regulations prevent huge payouts for damages? I don’t follow the logic, there. Is the idea that sensible regulations prevent damage, or that negligence can often only be proved and damages awarded if there were regulations in place that were disregarded, or does it simply mean that measures to stop such lawsuits are themselves a form of regulation? I don’t see why huge payouts cannot be made in the presence of regulation (and observations seem to support that), and I don’t see why you couldn’t have a system with neither regulation nor lawsuits. Just shut all the courts down. The result would be unpleasant, but not logically impossible.

    And as you say, I can’t think of any reason why lawsuits and damages are necessarily bad – the problem is the victim/litgation culture, when lawsuits are seen as a way of aquiring money rather than justice, when they’re used as a weapon for political ends, and so on. Abuses that are opposed because they are abuses, not because they are lawsuits.

  • Jacob

    We hold, in principle, that people have rights and freedoms that can, and should be, limited only by the same rights and freedoms held by other persons.

    Where exactly passes the border that should be protected, the border between my rights and your rights ? A practical answer to that is not trivial. We need all three: legislation, regulation and judicial processes to help us build a workable, reasonable society. It is true that to some extent, good regulations reduce the burden and uncertainties of the judiciary process.

    I don’t think that libertarians should oppose regulation (the involuntary type, issued by government) on principle. Only silly, intrusive, abusive regulation need to be opposed. Which, lamentably, means lots of them, but not all.

  • The “Either All or Nothing” view of both regulations and lawsuits is childish and absurd. The argument ignores proportionality and makes every issue a matter of the same degree. A regulation for washing hands by restaurant employees becomes one for washing hands at all times in the home…etc.

    Regulations are simply the agreed upon rules by which the game is played. Lawsuits are our modern way of punishing those who transgress and compensating them for their losses.

    The Game gets skewed when the regulators seek a career and promotions that can only be justified by greater numbers of regulators and every more regulations. If they did not have the career opportunity then they could either do the job at a fixed rate or move along.

    Lawsuits lose their proportionality when the damages are slight, given the wealth of the defendant, when the jury or judges see the defendant as a greater villian and in need of more punishment that -THIS- simple damage would support (i.e. tobbacco companies, airlines, etc.)

    The proposal to remove the majesty of government from the regulators and allow them to be sued for their excesses has merit. Being personally liable for abuses and excesses is a great way to level the playing field between regulator and regulated. A similar type proposal that would create a scientific jury to make a determining of fact in cases of medical malpractice and pharmaceutical negilgence also has merit. No more dragging victims before untrained, and barely literate jurors to wring millions from evil corproations. By the same token, true negiligence malfeasance and fraud would be more readily detected and the individuals receive quicker and more severe punishment.

    “The portion determines the poison” is an old axiom. It seems to have been lost, forgotten, ignored in the modern discussions.

    Do we really wish to live in a world of complete absolutes? Always-This, Never-That and no consideration of degree? Isn’t this the mentality of the very very young…. Have we kept human adolescence from progressing to where we now face children’s minds in adult bodies ?

  • CFM

    What is often heard from Libertarians, and from other non-leftists, is an objection to regulatory over-reach.

    A prime example is what happened after passage of the Civil Rights Act of 1964 in the U.S.

    Hubert Humphrey famously stated that if the Act were to lead to quotas in hiring and education, he would eat the paper the bill was written upon. If he were alive today, I wonder if he’d like some fries with that. We now have regulatory scrutiny or lawsuits over every imaginable imbalance of race, sex, age, religion, etc.

    The U.S. Constitution has been undermined to the point of near irrelevance by hundreds of thousands of regulations written by people with an agenda. If Statists cannot convince the voters or their elected representatives to impose their vision, regulators using the power of rhetoric can simply re-define the Constitutional provisions and legitimately passed laws to accomplish their goals.

    Rights of property, of free association, of self-defense, commerce and trade, inheritance, travel, even in raising of our children have been severely undermined by un-restrained regulators.

    If only we could regulate those tyrannical bastards into the unemployment line.

  • MarkE

    Any organisation will have rules, some of which are necessary to its efficient operation, and others which may be no more than an expression of the proprietor’s prejudices. There is nothing wrong with that as long as they are voluntary. When they were free to choose, I preferred to work for companies that operated a “no smoking on the firm’s time” policy. Others may not wish to work for such companies, which is for them to choose. I also prefer not to work for companies that want to test me for drugs; if my work is not good enough, sack me; if my work is good enough, why should it matter how I relaxed last night (three professional ladies, a little blue pill and a line of Charlie if anyone from the government is reading this, a good book and an early night night if it’s my wife). Again, as long as there is choice I can go elsewhere if an employer tries to impose unacceptable (to me) conditions.

    It is far harder to go elsewhere when the regulation is imposed by the government. I accept there is a need for a certain minimum level of regulation to allow me enjoy my freedom, but I believe every western government had long since passed that point before I was born.

  • HJHJ

    Johnathon,

    Agree with you completely.

    However, you could have gone further and pointed out that the reason why lawsuits are often so expensive is because of the legal protection/regulation of the law profession – which artificially raises costs. Indeed, perhaps there should be alternative commercially run courts (with their own rules and regulations) competing on price and quality which both litigant and defendant could agree to use in order to cut costs.

  • HJHJ

    It’s interesting that those who are usually in favour of lots of state regulation are generally fairly hostile to capitalism and especially the power of large (global) companies. They argue (or just think) that regulation is the best way to protect against what they see as the tendency for large organisations to act against the public interest and to put profit before acting in the public interest.

    However, they fail to realise that the complications and costs introduced by the need to comply with regulation often actually favour these large companies because they act as a barrier to market entry by new, usually smaller, competitors. Thus the position of the large company is entrenched which often acts against the interests not only of customers and the wider public but also against employees (who have fewer choices of employer).

  • Paul Marks

    Your mate should be made aware that the United States (and increasingly Britain) has BOTH out-of-control tort law AND endless regulations.

    True there are not the comprehensive price controls of World War II or the Nixon Administration – but the United States is a much more regulated country than it was 20 years ago and, in most (but not all) respects, a VASTLY more regulated country than it was 50 years ago.

    As for Britain – again true that we do not have comprehensive price controls of World War II or Comrade Edward Heath (a man who could not make his mind which he admired more – the European Union, or Mao). But we are a vastly more regulated country than we were in 1986 (when the the tide of E.U. inspired regulations really started to hit – after the “single market” deception was used against Mrs Thatcher).

    And yet we also have far more law cases (and far odder ones) than we did in 1986.

    So your friend is just flat wrong. And this should be pointed out to him.

    As for government regulations as opposed to voluntary action (such as the self interest of people in not wanting to kill their customers – and organizations like “Underwriters Labs” not wishing to lose their reputation).

    Well, as has often pointed out, if government is really needed (contrary to Milton Friedman – in the relevant chapter of “Free to Choose” 1980) to “Protect the Consumer” all that needs to be done is for business enterprises to be allowed to CHOOSE whether to go along with government regulations – as if government regulations really have good effects shops and other such will put out signs saying “the products in this store are made in accordance to all government regulations” and people will flock to shop there.

    Of course the whole thing is a joke anyway – for a particular reason.

    All the regulations (and the out-of-control tort law) do is help drive manufacturing overseas.

    For example, the lead that gets stolen from buildings in Kettering gets sold to people in China and comes back in Chinese made goods (two violations of the nonaggression principle – the theft of the lead, and the fraud of putting lead into products which are not supposed to have lead in them).

    A manufacturer does not want to poison his customers (loss of reputation for a start), but many manufacturers have been destroyed by taxes and regulations (and regulation backed union power). But no one even knows the name of some obscure subcontractor in China – they have no reputation to lose.

    The government has been no help at all (all their regulations do not “protect the consumer”). In fact it is companies like Disney that (concerned for their reputation) have taken it upon themselves to test imported goods.

  • Paul Marks

    Of course in 18th century English “regulated” meant “ordered” or “orderly”.

    It need have nothing to do with statutes.

    If you well regulate your conduct (i.e. you are orderly) you do not go around shooting people at random. If you do go round shooting people at random you should not be allowed a firearm (in fact you should be in jail – or executed).

    This is the correct response to Plato’s question (in “The Republic”) that if justice (as conservatives claim) is “to each what is owing, to each his own” would you give an axe, that you had borrowed, back to the owner – IF HE HAD GONE VIOLENTLY MAD.

    Apart from saying “hard cases make bad law”, one can also say “no, if I had good reason to believe he intended to use the axe to murder the innocent”. The civil (i.e. non violating) use of property is bound up in the just ownership of it. It would make no difference if the person was NOT mad. “Hand me back my axe so that I may murder you” is a question that should not be replied to with “right you are, here it is”.

    It astonishes me that some people find this difficult (if they really do).

    It is the same with firearms. What some violently mad or evil (rather different things) people may do with firearms is no reason to ban them from other folk – especially as criminals ignore the ban anyway (i.e. the gang banger will still have a firearm – all the statute does is to disarm the victims).

    Spontanious order (“cosmos” in ancient Greek as F.A. Hayek was fond of pointing out) depends on the civil interaction of human beings and upon their individual self control (something the determinist F.A. Hayek was rather less accepting of).

    Firearms are needed to defend against criminals (who will have no more respect for “gun control” statutes than they have for any statute) and against government that steps beyond constitutional limits.

    This was well understood by the writers o both the British and American Bill of Rights (most British people seem unaware that we have a Bill of Rights – and the B.B.C. and the “education system” are only interested in supporting the vague and P.C. “Human Rights Act” and the “European Convention of Human Rights” that it represents).

  • Brad

    The simplest way to put it is that, just like laws that stand as the broad statement to the regulations’ more refined stance, regulations can be defensive or offensive. Defensive regulations seek to preserve individual rights, quiet ownership and use of property, not having person or property threatened with force or coercion. Offensive regulations seek to make things “equal”, to become the insurer of last resort, the conditioner of minds. In other words, offensive regulations become the backbone of interference in people’s lives.

    If one talks of individual rights, and the regulations involved, they will likely be defensive. If one talks of Human Rights (and its list of entitlements), they will likely be offensive.

    Having said all this, a libertarian with a Jeffersonian bent will concede that even a State based soundly in the defensive construct will inevitably morph into the latter kind and some readjustment will be necessary at some point.

  • Nick M

    On the subject of firearms. I read somewhere (The Times or Private Eye) recently that since Dunblane and the handgun ban shootings have increased four-fold.

    Perhaps we need even tighter gun laws to address this.

    Or just perhaps we need a government that doesn’t act like a compulsive gambler, always trying to win back his losses by going back to the roulette table…

  • Dale Amon

    As one who once worked in the security, fire and life safety equipment industry in the US, I can certify that the most important regulations to us at the time were the ones of UL, NFPA and FM, all of which are private standards bodies.

  • Walter E. Wallis

    Vengence is mine, sayeth the Lord. Let the courts order compensation for actual harm and some for pain and suffering, but if punitive damages are assessed they must go to the State, not to plaintiff or the lawyer.

  • freestater

    Mr. Marks:

    I not sure if you were addressing me regarding “well-regulated.” Be assured that I was only joking. Some of us remember, and you and I are in accord.

  • Paul Marks

    freestater.

    In spite of having a weak sense of humour, I did know you were joking.

    However, I know from experience that everything has to be explained (there are always some people who do not understand something out there – and I do not like to write them off, as they are not always bad people).

    In the past it is the points in posts or comments I have made where I have thought “such and such is obvious, I will not need to spell it out” that have caused confusion.