Rights, Risk, and Regulation

May 23rd, 2010 - by Quincy

Libertarians oppose government regulations. This is arguably their defining characteristic. It is also the reason that many Americans reject libertarian political philosophy as unworkable, utopian, or just plain foolhardy. Other political philosophies on both the left and the right embrace government regulation to some degree; they simply disagree about what and how to regulate.

Personally, I feel uneasy about libertarianism’s blanket rejection of government regulation, and for some time I have tried to reconcile this uneasiness with concepts that are critically important to me like self-ownership and individual equality. I have struggled to explain my uneasiness because I believe that no government action can be justified by mere efficiency, expediency, or convenience. I’m not sure I’ve found a good solution, but here’s what I’ve come up with.

Drawing on principles of human equality and individual rights, libertarianism easily seizes the high ground in any discussion of political principles. But there is, I think, a tendency among libertarians—as well as fiscal conservatives, constitutionalists, and anarcho-capitalists—to overstate the reach of these rights-based arguments against government regulation.

Rights-based arguments against government regulation usually run as follows: I have a right to do X; this regulation restricts me from doing X; and since this regulation violates my right, it should be struck down or repealed. This is a persuasive argument, but it is frequently misapplied. The problem, unsurprisingly, is in determining whether the regulated action truly is an individual right.

Generally, individual rights fall into the three categories that were recognized in the Declaration of Independence: Life, Liberty, and Property (Pursuit of Happiness). These rights are phrased broadly, but it is important to recognize that an individual’s rights are always limited by the rights of others. For example, an individual’s right to life evaporates when he attacks someone else: his right to life yields to his victim’s right to life—expressed as the right of self-defense.

It is easy to accept that no individual has the right to intentionally harm innocent others. This is a clear limit to individual rights, and it is fundamental to criminal law. But government regulations go much further. Government regulations often limit actions which are not meant to cause harm, but which create a risk of unintentional harm. Regulations of this kind cause controversy because they restrict actions which may never actually harm anyone. Libertarians seize on this fact and reject these regulations as a violation of individual rights. On its face, this is potent criticism.

True human equality means that individual liberty cannot be restricted unless it is being exercised in a way that violates others’ rights. Actions which don’t in fact harm anyone don’t seem to violate anyone’s rights, so there doesn’t seem to be any principled justification for government regulation. In general, this is an excellent argument, but it fails in the context of unreasonable risk of irreparable harm.

Individuals have a right to be free from unreasonable risk created by others’ behavior. This is heresy to libertarian philosophy, but I think it is right nonetheless. Individuals have a right not to be exposed to unreasonable risk created by others’ behavior. When individuals choose their home, job, transportation method, recreation, and lifestyle, they simultaneously choose to subject themselves to a certain risk level. They accept that risk level because they believe that it is worth it. If that risk level increases because someone in the community chooses to engage in unreasonably risky behavior, then that person has violated the rights of the other members of the community. Differentiating between unreasonable risk and reasonable risk (risk that is just an unavoidable part of life) is difficult, but community standards provide a benchmark.

Unreasonable risk by itself is not enough to justify regulation, however. Regulation is appropriate only when there is unreasonable risk of irreparable harm. Irreparable harm is harm that cannot be undone by the payment of money, such as death and serious bodily injury. If the harm can be undone by payment of money, then the appropriate remedy is a lawsuit rather than regulation. The reason for this is that regulations are necessarily imprecise. Regulations are general rules that cover a whole class of individuals or activities, so, inevitably, some individuals will be included in the class and subjected to the regulation who should not be. If harm can be undone by the payment of money, the individual who was harmed can be put in approximately the same position as he would have been in had the harm never occurred. So the imprecision of regulation is unjustified.

There are easy cases and hard cases, of course, but I think the principles are clear. Consider the following example. A contractor decides to cut costs by storing his dynamite supply in the basement of his home. He does not intend to injure anyone, but he is nevertheless exposing his neighbors to significant additional risk. In a residential community this risk is unreasonable because dynamite storage is more hazardous than most residential activities and dynamite is not commonly stored in residences. Additionally, if the dynamite explodes, it will likely cause irreparable injury. The opportunity to sue in the event of an accidental explosion is not a good solution to this situation because recovering money in a lawsuit is never adequate recompense for death or serious injury. So, a government regulation prohibiting residential dynamite storage is justified and does not violate the contractor’s rights.

I am only tentatively attached to these arguments. The critical leap is the premise that individuals have a right to be free from unreasonable risk of irreparable harm. I think this is right, but this comes more from gut feeling than reasoned argument.

7 Responses to “Rights, Risk, and Regulation”

  1. Sean says:

    I think that’s a fairly good way of looking at what should and shouldn’t be regulated. I think an easier example to make your point is drunk driving. Any particular drunk driver carries only the risk of harm to others, and most of those arrested for DUI haven’t harmed anyone. But most thinking people believe drunk driving should be prohibited.

    I’m uncomfortable with the litigation solution for all other ills. I suspect that forcing everyone to court for all non-irreparable harm damages is good in theory, but a lousy solution in reality. The costs of court – not just attorney fees, but education, time & opportunity costs – are significant and create a fairly high threshold for getting into court by default.

    The left doesn’t like this solution because the poor are much less likely & able to use courts (or “have access”). The right doesn’t like this solution because the costs often make it cheaper for defendants to fold on a nonmeritoroius claim than fight it. And nobody likes that this solution funnels vast amounts of money through attorneys to resolve situations that could be resolve more cheaply by statute or prevention.

    If the costs & requirements of going to court as a plaintiff or defendant were negligible, and courts could reliably get damages right, I’d agree with you. But disproportionately large damage awards, filing fees, defense fees, discovery costs, etc – all those things suggest to me that courts should be used only in “big” instances of harm, not in all non-irreparable instances.

    This is why I think some regulation ought to go past preventing non-irreparable harm. The question of whether regulation should focus on prevention or reparation hinges on the nature & extent of the damages. I know that erases any nice bright line – the type of lines that libertarians love to draw – but I don’t think life has easy bright lines.

  2. Jamie says:

    “You know Mr. Rearden, there are no absolute standards. We can’t go by rigid principles, we’ve got to be flexible, we’ve got to adjust to the reality of the day and act on the expediency of the moment.”

    Ayn Rand from Atlas Shrugged, illustrating the opposite end of the spectrum.

  3. Quincy says:

    Sean,

    I recognize and accept the point from an efficiency standpoint, but I just can’t get around the need for a principled justification for any and all government infringements of liberty.

  4. Quincy says:

    Jamie,

    Don’t get me started on Ayn Rand. She had some good ideas, but her unnecessary and rather misguided hostility toward religion may have damned the libertarian movement to eternal obscurity.

  5. Quincy says:

    Here is a good explanation of the difference between economic libertarians and natural rights/deontological libertarians. The most relevant portion begins at 30 minutes in.

  6. Stephen says:

    I find the individual rights discussion often leaves me frustrated. I do believe that people have the right to pursue their individual needs, to a certain point, but unfortunately many people take that right to mean they should not be hindered in any way. We live in a “society” that by its very nature requires that we share a common space and resources – thus always demanding some level of accomidation for others needs. Unfortunately, many of the “individualists” that seem to resent the required consideration of others needs, do not seem to have any problem utilizing the societal benefits such as roads, electricity, hospitals, clean water and an ample food supply. In summary, if one does not want to consider the needs of others at some level, I would ask (strongly encourage) them to live alone, far away from everyone else.

  7. Quincy says:

    Stephen,

    Individual rights must be defined precisely, or, like you said, many individuals will claim to have a right to do something which causes havoc for their neighbors. But this isn’t a problem with individual rights, it is simply confusion about what is a right and what isn’t.

    Frequently, these issues arise in the context of property use. For example, an individual may claim to have a right to heat his home by burning wood in his fireplace. But if he is causing wood smoke to drift across his neighbors’ property and into their homes, he has exceeded the limits of his right and begun to infringe on the rights of his neighbors.

    Of course, people cannot live in a community without some give-and-take, because they crowd each other with the activities of their daily living. But that doesn’t mean that the individual rights discussion should be discarded. No other philosophy of government has legitimacy. Fascism, socialism, communism, dictatorships, etc. may be efficient and easy to administer, but there are more important values than efficiency and ease.

    As for your comment about societal benefits, I have to disagree. Roads, electricity, hospitals, clean water, and an ample food supply are not the property or product of society; they are the product of individuals–sometimes working in collaboration–to produce goods. Society as such does not produce anything. Every act is done by an individual. If a group of men build a road, it is not society that has built it, it is those men, and they have the right to it. If another group has paid for the building of the road, then the have purchased the builders’ rights. The road doesn’t come from or belong to society; it belongs to those who have paid for it. Sadly this easy tracing of property rights becomes all muddled when government taxes the citizens and then pays for things using the tax money.

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