Hey, just wondering if anyone could direct me towards any really good discussions of the idea of compensation. I’m familiar with Bruce Benson’s essay, Restitution in Theory and Practice, and I’ve read Nozick’s Anarchy, State, and Utopia, but I’m still not completely happy with my understanding of the issue. The problem, as pointed out by Nozick, is that a rule by which it’s always permissible to infringe others’ rights, so long as compensation is paid, seems to take insufficient account of the inviolability of individuals. This is especially true since, as Benson points out, the determination of what constitutes fair compensation necessarily cannot take full account of the subjectivity of value. I understand the idea behind demanding compensation once the rights-infringing act has already occurred, but I’m a little shaky on the idea of doing something which will foreseeably infringe upon rights, when you’re willing to pay compensation. Any help on this would be greatly appreciated.
bump?
I can’t point you towards any good sources, but I can throw out my opinion to see if it can generate any discussion here.
You’re on to something about restitution being an insufficient deterrent in certain situations. This is the case whenever someone can profit or achieve other goals that outweigh the costs of paying compensation. Often there are other factors to consider, like being a well-liked citizen, but this isn’t always the case.
For example, suppose a company makes false representations to sell a product. It knows that it’s pretty likely that some customers will come for restitution when they realise they’ve been misled. But it calculates that it will make a greater profit by making the false representations because many customers won’t realise they’ve been misled, or they won’t bother making a claim because the costs of doing so will exceed what they’ll recover. If that’s the case, then the rational decision for the company is to make the false representations. One way to address the problem is through class actions, which make pursuit of claims like this economical (although I don’t really see how class actions could work in a stateless society).
Another type of problem is one where the wrongdoer knows that there’s a low chance of being caught. If someone can get away with something 2 out of 3 times, then it’s not going to be much of a deterrent to make them pay back what they gained from the 3rd event – they’re still up by 2. A way to address this type of problem is to make the wrongdoer pay double or triple damages (or whatever amount is needed to make their decision uneconomical). The damages don’t all have to go to the victim if there’s concern about windfalls. After the victim has been fully compensated, the rest could be distributed to charities that are somehow related to the issue. (This is a method that is often used in class actions where damages are proven, but not all class members collect.)
I don’t have any references either but…
Isn’t the whole idea of ‘compensation’ to do away with any arbitrage opportunities to make the violation of someone else’s rights an uneconomic act?
Randy Barnett has some really good essays on restitution on his website. I think he discusses how the right to self-defense enables preventative measures in “Getting Even.” Roderick Long also has a good essay here on restitution. Hope this helps!
Thanks a lot, guys. Callisthenes, I agree that it can’t be as simple as saying that we may do as we please without moral fault, so long as we pay any compensation for which we are held liable in a court of law. But I’d point out that I’m focusing on the morality of actions, as opposed to the legal status of those actions. I think it’s pretty clear that anyone who knowingly puts out a defective product which will harm his customers, with the knowledge that he will be able to make more money than he will be found liable for in court, is not behaving morally, and is treating his customers as mere means to the end of his profit, and not as ends in themselves. Perhaps others disagree?
Wombatron, thanks so much for those links; I’ll definitely look into them.