The larger the transfer of rights, the more it demands of the state to enforce it. You cannot have maximal contracts maximally enforced by a minimal state.
I disagree about this. There is a stable equilibrium in which the state is known to be fast, effective, reliable, and uncompromising in enforcing the rules, and in which transgressions are consequently extremely rare (and swiftly punished when they occur), so that the resources devoted to judiciary and law enforcement can be very small. Such an equilibrium in which little enforcement effort is necessary in practice is possible with contracts too, not just with criminal law.
(In fact, large resources devoted to law enforcement are usually a sign of the state’s weakness, not strength. They indicate widespread law-breaking, which in turn indicates that a lot of people are in a position where it seems like they can get away with it—and the state is, for whatever reason, incapable of making law enforcement more effective and pushing things towards the above described equilibrium, and instead responds by throwing more resources into the existing ineffective system.)
Contracts are very rarely enforced, in the literal sense of forcing the parties to carry out their promises. (Joining the army is the only common exception.)
That’s not completely true. Specific performance orders are given by courts in other kinds of cases too, typically when the contract is about something unique, i.e. when the exact same thing can’t be obtained elsewhere, like a piece of land or an artwork. (In other cases, such an order wouldn’t be in the plaintiff’s interest anyway, since the defendant would presumably provide the worst quality work/goods he could get away with.)
To some degree, you can even stipulate specific performance in case of breach, although I have no idea to what degree this is enforceable in different jurisdictions.
On the other hand, regarding this:
That a contract literally transfers the rights stated in the contract from one person to another is in fact not what a contract is, at least in Western society. [...] In ordinary, non-libertarian states, all you risk by failing to perform on a contract is your assets and reputation. Your rights in your person are generally not transferable by any contract. That they should be seems a strange thing for a libertarian to be arguing for.
This is basically a question of definition. If you insist on using the name “contract” only for those contracts that are enforceable in today’s Western societies, fair enough. However, the following must be taken into account:
The limitation that your rights in your person are not transferable by contract is just one example of the limitations I was mentioning. This limitation didn’t exist (or was far weaker) even historically in Western societies, let alone in others.
This limitation, while seemingly reducing to a simple statement, is by no means straightforward when you consider its implications in practice. For example, what exact types of marriage contracts would be implicitly disallowed by it? Trying to answer that question leads immediately to deep ideological clashes.
This limitation, even under the broadest interpretation, is by no means the only one that exists in modern Western societies, both with regards to marriage and all other voluntary arrangements.
Finally, however you turn it, this limitation is ultimately a limitation on freedom. If I’m forbidden to sell my car, this diminishes my rights in my car; similarly, if I’m forbidden to sell myself into slavery, this diminishes my rights in my person. This conclusion is very unpleasant for libertarians, but the fact is that a libertarian must make some sort of unprincipled exception to libertarian principles to disallow slavery contracts. (There is a very well written article titled “The Libertarian Case for Slavery,” which was intended as satire, but there’s absolutely nothing in it, save for the sneer in its last sentence, that is not perfectly logical and valid reasoning from libertarian principles.)
(Of course, it may be that for game-theoretic reasons, such limitations on freedom ultimately increase total freedom by some reasonable measure—“freedom may be freedom to capitulate,” as Schelling says. But once you admit exceptions to libertarian principles on these grounds, the slope is very slippery and steep.)
I didn’t mean it to be. I was just pointing out that the rules written on a contract and the rules which the state applies in case of dispute are two different things. They are drastically different in Western societies, where breach of contract is a civil matter, usually incurring only damages, but the distinction applies everywhere. On the one hand is what the parties to a contract promise, and on the other, what the state does if the promises are broken. There is no a priori reason that these two things should be brought into coincidence. I don’t even see it as a reasonable place for discussion to start.
There is a very well written article titled “The Libertarian Case for Slavery,” which was intended as satire, but there’s absolutely nothing in it, save for the sneer in its last sentence, that is not perfectly logical and valid reasoning from libertarian principles.
Are you being as satirical as Philmore? If so, I’m wasting my breath here, but on the supposition that you aren’t:
Whether well-written, I think Philmore’s article is not well argued (reading it straight, not as satire). “Slavery” in the article ranges from an absolute property right in someone’s whole person, which he does not defend (nor, for that matter, condemn, or it would undermine his satire), to the mere sale of one’s lifetime labour, which he regards as equivalent to the daily or monthly sale of labour that constitutes typical modern employment.
I am paid monthly. However, I am free to just walk, at any time. No-one will drag me back to my employer and chain me to a desk. My former employer merely ceases to pay me. If my departure is sufficiently abrupt, I will forgo my last month’s pay, but that is all. All employment contracts in the UK are of that form.
Under Philmore’s concept of slavery, having sold my lifetime’s labour, I would similarly be free to depart at any time, subject only to the return of what I was paid, pro rata, whch he calls self-manumission.
Why does he call this slavery? It gives him a catchy title, and he gets to satirically claim that libertarians should approve of “slavery”. However he has only done this by diluting the word so far as to deprive it of most of its ordinary meaning: people as property, having no right and little real possibility to change that state without the agreement of their owner. That is how slavery was practiced in the American South. There are variations on the concept, and other names, but that is what is meant, in everyday discourse, when any situation is likened to slavery: being prevented from leaving the coercive control of one’s “owner”.
Of course, it may be that for game-theoretic reasons, such limitations on freedom ultimately increase total freedom by some reasonable measure—“freedom may be freedom to capitulate,” as Schelling says. But once you admit exceptions to libertarian principles on these grounds, the slope is very slippery and steep.
I don’t see such a slope. The freedom to become a slave in the ordinary meaning of the word is the freedom to deprive your later selves in perpetuity of their freedom. There may be room for a discussion about the extent to which, in effect, your future selves should be the property of your present self, but merely waving “libertarian principles” is not that discussion.
No, I’m not being satirical. Your effort in explaining is not wasted, and in fact, I think I’ve located the root of our disagreement.
In your argument, you assume the legal framework of the modern liberal states. In these states, there is a sharp distinction between criminal and civil law, the former enforced with fines, imprisonment, and loss of citizen privileges (in some places also the death penalty), and the latter enforced by awarding monetary damages. Moreover, in these states the government has a complete monopoly on violence in law enforcement—aside from a few narrow exceptions like self-defence or citizen’s arrest, and some very mild uses of force like e.g. throwing out a trespasser, if violence is necessary to enforce a law or a court decision, you must call the police to do it. As you note, in this system, contracts fall under civil law, and the worst that can befall you for breaking a contract is losing money and perhaps bankruptcy. (Where even in the latter case, you are allowed to keep some assets and thus protected from falling into complete indigence.)
You are right that a slavery contract within this system, even if it were enforceable, wouldn’t be deserving of the name. The master wouldn’t be able to punish and coerce the slave using private force, but only by suing him. And the slave, even if penniless, would always have the option to walk away and simply declare bankruptcy when sued. You are also right that Philmore fails to discuss this point clearly, and this is indeed a significant problem with the essay. (I can see this myself now that I have re-read it after several years.)
Now, where we disagree is our view of the relationship between the above-described modern liberal legal framework and libertarian principles. You seem to take this framework as given, and understand libertarian principles only as implying freedom of contract within this framework. However, I consider the rules of this framework as themselves highly un-libertarian, and significantly limiting the freedom of contract. It has always seemed to me that the principles of self-ownership and freedom of contract—if one accepts them axiomatically; I’m not saying I do—imply that one should be able to enter a contract where one gives the other party the permission to use private force to enforce its terms, and where one may take up liabilities and obligations without the safety net of comfortable bankruptcy. (Such contracts, at least in some forms, used to be legal and widespread in the Western world. Notably, North America was settled to a large degree by indentured servants, whose contracts allowed the masters to use private force to prevent them from escaping and coerce them into obedience.)
Therefore, I see the prohibition of such contracts as just one of the many historical steps towards the modern institutions of paternalistic regulatory state and welfare state that libertarians otherwise decry. I really don’t see any principled difference between eliminating people’s freedom to take up obligations that can’t be evaded with a comfortable bankruptcy and any other paternalistic regulation. (When libertarians yearn for some golden age of classical liberalism, which they imagine roughly as freedom of contract within the limits of the above described modern liberal legal framework, they are at best yearning for a brief and transient phase of the historical descent down this slippery slope.)
I really don’t see any principled difference between eliminating people’s freedom to take up obligations that can’t be evaded with a comfortable bankruptcy and any other paternalistic regulation.
I do. What is a contractual obligation? It is not a magic spell that creates a reality that it would require some positive action to depart from. It describes a promised reality that takes positive actions to attain. If the parties to a contract disagree over its attainment, then in the first place they must try to resolve the matter themselves. If they fail to agree, and neither party can impose a solution by force, then nothing further can happen, without some third party entering on the matter.
That third party might be the wisdom of the tribal elders, or a magistrate who on local matters combines in one person the power to make, judge, and enforce the law, or a Western-style framework of laws and courts, or many other possible institutions. But in all cases, the dispute is resolved by that institution using its resources to impose a verdict. (I include in that the case where the institution does not enforce it directly, but by proclaiming a verdict that gives one party a right to use force against the other which it would not otherwise have had.)
If the institution looks at the terms of the contract and declines to have anything to do with the matter (as was once the case in England regarding gambling debts—unenforceable at law), that is not a limitation on anyone’s freedom to enter into such a contract. They can still write that contract. They merely do not have a claim on anyone else’s assistance in enforcing it against the will of the other party. I think this is entirely in accordance with libertarian principles. Nobody is being coerced when the state declines to coerce someone on your behalf just because they have broken a promise to you. And it is surely the opposite of paternalism for the state to limit its involvement.
I am also sure that if Robin Hanson has not yet argued for making breaking a promise a criminal act, he will.
What are these libertarian principles, anyway? You refer to them but distance yourself from them, suggesting that you are arguing a point of view you do not hold, a situation vulnerable to letting a finger nudge the scales. Indeed, what is satire but a bottom-line-driven argument from your opponent’s position to an unwelcome conclusion, the cloak of satire giving deniability to refutations of the argument? (ETA: I’m not accusing you of bad faith. It’s just that you seem to be saying, “this is what libertarian principles imply”, without necessarily subscribing to those principles yourself. It’s very easy to go wrong in arguing someone else’s point of view for them, especially if in fact you disagree with them.)
If the institution looks at the terms of the contract and declines to have anything to do with the matter […] that is not a limitation on anyone’s freedom to enter into such a contract. They can still write that contract. They merely do not have a claim on anyone else’s assistance in enforcing it against the will of the other party.
The problem with this argument is that in the modern liberal order (and again ignoring some marginal exceptions), the state has a monopoly of violence, including violence that may be necessary to enforce a contract. Therefore, the state not only refuses to apply violence to enforce your claim based on such a contract, but will also intervene violently to stop you if you try to enforce it with private force. It is a criminal offence to breach the peace even in the course of privately enforcing a valid contractual claim, let alone one that is legally declared void.
So however you turn it, this is a limitation on people’s right to enter such contracts, as well as their other rights that depend on this. If the state told you that from now on it would refuse to enforce car-selling contracts to which you are a party, your freedom to own a car would be gone, regardless of whether you’d be allowed to perform the legally void act of signing such a contract. You wouldn’t be able to buy a car, since if the seller failed to deliver it, you couldn’t use private force to take possession of it. You wouldn’t be able to own one, since the previous owner or manufacturer could just steal it back as soon as you turned away from it. And as the most pertinent analogy, you couldn’t even sell a car you already have, since the buyer would have no guarantee that you wouldn’t fail to deliver it upon payment. (Admittedly, for relatively minor dealings, perhaps even including cars, the situation would be remedied somewhat by private reputational mechanisms.)
All this is by no means idle theorizing, even with respect to the normal everyday business. For example, where I live, the government has declared various provisions of tenancy agreements unenforceable, like for example no-pets rules. You are still allowed to put such provisions in the contract, and many landlords do, probably counting on the tenants’ ignorance of the law, or perhaps appealing to their consciences. However, there is no way to enforce them against a tenant, and as a result, it’s hard to find very nice places for rent, except at a high price that includes implicit insurance against such tenant misbehaviors. (It’s fairly easy to screen away people who will fail to pay the rent or who will behave downright destructively, but even very nice, affluent, and accomplished people may end up getting a cat whose hair the subsequent occupants will be finding in their dinner for years, or a dog that will ruin the wood floors in a way that they could excuse as normal wear and tear if you sued them over it.) As someone who is in the market for nice rentals, and would gladly assent to no-pets and other presently unenforceable provisions for keeping the place tidy and undamaged, I really don’t see how this is not a very real and costly limitation on my (and the landlords’) freedom of contract.
What are these libertarian principles, anyway? You refer to them but distance yourself from them, suggesting that you are arguing a point of view you do not hold, a situation vulnerable to letting a finger nudge the scales.
I’ll clarify how I see the libertarian position, and please tell me if you think I’m distorting it.
Regardless of the issue of the legitimacy of private versus state violence, where there is much disagreement among them, libertarians agree that there is a certain set of property rights that a person can legitimately claim, and that people should be free to enter voluntary contracts by which they exchange these rights (i.e. alienate some and acquire others) and thus incur mutual obligations. There is of course a lot of further disagreement over the exact criteria for what makes a property right valid, but if there is any meaningful agreed-upon content to the notion of libertarianism, it is that once a property right has been established, one should be free either to keep and enjoy it unmolested or to exchange it or give it away—including the rights transferred by a voluntary contract from someone else.
Now, what about the state? As per the above, both anarchist and minimal-government libertarians agree that the state should not limit the people’s right to enter voluntary agreements concerned purely with their own rights and obligations. Such limitations may be in the form of outlawing the contract itself (for example, in many places you can go to jail for trying to negotiate a prostitution deal). However, as I explained above, they can also have the form of the state wielding its monopoly of force in contract enforcement selectively, so as to eliminate the freedom of particular kinds of contracts in practice, in order to further some other goals. Whether a libertarian is an anarchist who believes the state should get out of the enforcement business altogether and let people enforce contracts with private force, or a minimal-statist who believes it should limit itself to enforcing valid rights claims, I don’t see how this selective enforcement can be reconciled with any coherent statement of the above-described libertarian principles.
This of course runs into the already mentioned problem: if I own my person and my labor, why can’t I sell them in some sort of slavery contract? If I sell my car and then refuse to deliver it, Rothbardian anarchists would say that the buyer is entitled to come and subdue me and seize it by force, and non-anarchist libertarians would say that the buyer should be able to call the cops who will then subdue me and seize it for him. Similarly, why shouldn’t I be able to sell my person too, so that if I try to escape, either my owner himself or the cops acting on his complaint would seize me and haul me back to his service?
This is where I see what looks, from the above described perspective, like a paternalistic slippery slope. The state won’t enforce a slavery contract just like it won’t enforce a no-pets clause of a rental contract where I live, even though in both cases the contract is about an exchange of what both parties otherwise uncontroversially claim as their property rights. And I don’t see any potential stable Schelling points except either allowing both kinds of contracts or recognizing that the state can allow or disallow contracts at its pleasure in order to further paternalistic, ideological, or whatever other aims.
Finally, what about my own disagreement with the libertarian principles? I don’t consider them workable in any general and absolute formulation, for a multitude of reasons, one of which is that all realistic human societies will consider many (though possibly different) things implied by them as impermissible. But insofar as these principles exist in a coherent and agreed-upon form, I think I am presenting them fairly.
The problem with this argument is that in the modern liberal order (and again ignoring some marginal exceptions), the state has a monopoly of violence, including violence that may be necessary to enforce a contract. Therefore, the state not only refuses to apply violence to enforce your claim based on such a contract, but will also intervene violently to stop you if you try to enforce it with private force. It is a criminal offence to breach the peace even in the course of privately enforcing a valid contractual claim, let alone one that is legally declared void.
“Illegal contracts” is a misleading term here. These are not contracts that are illegal because they stipulate some action that is ipso facto criminal (like e.g. an illegal drug sale contract) or because they stipulate a transfer of rights that is inherently unenforceable in the existing law (like e.g. an indentured servitude contract). Rather, the issue is about perfectly normal and ordinary transactions that just happen to run afoul of the law in some relatively minor way, as in the given examples of ordering a meal in a restaurant that stays open beyond its licensed hours, or hiring a gardener who doesn’t report this income for his taxes.
The relevant questions here are how severe such violations have to be to void the contract altogether, and how eager the government will be to prosecute the violators if this information comes out when a breach of contract is adjudicated in court. Obviously, in any legal system, both issues are a matter of degree, and clearly different countries will have different systems, with Germany apparently being unusually lenient on both counts. With this in mind, I fail to see any relevance of this fact for my above cited argument.
Irrelevant. The question isn’t whether the state refuses to enforce all illegal contracts but rather if it refuses to enforce some; no state enforces all illegal contracts.
Most jurisdictions in the U.S. enforce some illegal contracts. It depends mostly on the comparative culpability of the parties and the importance of the public policy making the contracts illegal.
The ‘modern liberal order’ does have a monopoly on violence, or at least something very close to one. That’s a fairly central point of having a civil court system.
The linked article doesn’t seem to relate to that, anyway. The German government isn’t permitting people to hire private enforcement for their illegal contracts.
Though presumably only ‘grey market’ contracts are being enforced.
I imagine any attempt to enforce, for example, a slavery contract while maintaining illegality would lead to international and continuous outrage (among other things). The degree of social proscription is too strong.
With any general philosophy or morality, one can tie it in a knot by asking how it applies to itself. What is the empirical evidence for empiricism? Does positivism satisfy its own verifiability criterion? What is the utility of utilitarianism? What is the inductive evidence for induction?
Libertarianism places a high, even paramount value on freedom, and a correspondingly negative value on coercion. So, playing the circularity game, we can ask: does freedom include the freedom to give up one’s freedom? Is coercion allowed if it was previously agreed to but is against one’s current will? Whatever institution is set up to provide resistance to coercion for those unable to resist it themselves, should it not merely ignore, but join in with such coercion? Either way, it will be applying coercion against one party or the other. I don’t see a slippery slope when the state decides to cut off the entire tangle without going even one turn around the loop, and decides that such contracts are void.
Finally, what about my own disagreement with the libertarian principles? I don’t consider them workable in any general and absolute formulation, for a multitude of reasons, one of which is that all realistic human societies will consider many (though possibly different) things implied by them as impermissible.
This is true of all principles. None of them are workable in any general and absolute formulation.
(In fact, large resources devoted to law enforcement are usually a sign of the state’s weakness, not strength. They indicate widespread law-breaking, which in turn indicates that a lot of people are in a position where it seems like they can get away with it—and the state is, for whatever reason, incapable of making law enforcement more effective and pushing things towards the above described equilibrium, and instead responds by throwing more resources into the existing ineffective system.)
Are you aware of any research done on this question? Granted, Russia and Mexico have cops everywhere, but so does Singapore and Monaco.
On theoretical grounds, I would expect there to be little correlation between resources devoted to law enforcement and amount of law-breaking, whether across or within societies, with such lack of correlation having little implication for causal connections between the two. Someone must have studied this question, but not being a sociologist I don’t know. Is there anyone here who can point us to actual data and inference from such data?
I disagree about this. There is a stable equilibrium in which the state is known to be fast, effective, reliable, and uncompromising in enforcing the rules, and in which transgressions are consequently extremely rare (and swiftly punished when they occur), so that the resources devoted to judiciary and law enforcement can be very small. Such an equilibrium in which little enforcement effort is necessary in practice is possible with contracts too, not just with criminal law.
(In fact, large resources devoted to law enforcement are usually a sign of the state’s weakness, not strength. They indicate widespread law-breaking, which in turn indicates that a lot of people are in a position where it seems like they can get away with it—and the state is, for whatever reason, incapable of making law enforcement more effective and pushing things towards the above described equilibrium, and instead responds by throwing more resources into the existing ineffective system.)
That’s not completely true. Specific performance orders are given by courts in other kinds of cases too, typically when the contract is about something unique, i.e. when the exact same thing can’t be obtained elsewhere, like a piece of land or an artwork. (In other cases, such an order wouldn’t be in the plaintiff’s interest anyway, since the defendant would presumably provide the worst quality work/goods he could get away with.)
To some degree, you can even stipulate specific performance in case of breach, although I have no idea to what degree this is enforceable in different jurisdictions.
On the other hand, regarding this:
This is basically a question of definition. If you insist on using the name “contract” only for those contracts that are enforceable in today’s Western societies, fair enough. However, the following must be taken into account:
The limitation that your rights in your person are not transferable by contract is just one example of the limitations I was mentioning. This limitation didn’t exist (or was far weaker) even historically in Western societies, let alone in others.
This limitation, while seemingly reducing to a simple statement, is by no means straightforward when you consider its implications in practice. For example, what exact types of marriage contracts would be implicitly disallowed by it? Trying to answer that question leads immediately to deep ideological clashes.
This limitation, even under the broadest interpretation, is by no means the only one that exists in modern Western societies, both with regards to marriage and all other voluntary arrangements.
Finally, however you turn it, this limitation is ultimately a limitation on freedom. If I’m forbidden to sell my car, this diminishes my rights in my car; similarly, if I’m forbidden to sell myself into slavery, this diminishes my rights in my person. This conclusion is very unpleasant for libertarians, but the fact is that a libertarian must make some sort of unprincipled exception to libertarian principles to disallow slavery contracts. (There is a very well written article titled “The Libertarian Case for Slavery,” which was intended as satire, but there’s absolutely nothing in it, save for the sneer in its last sentence, that is not perfectly logical and valid reasoning from libertarian principles.)
(Of course, it may be that for game-theoretic reasons, such limitations on freedom ultimately increase total freedom by some reasonable measure—“freedom may be freedom to capitulate,” as Schelling says. But once you admit exceptions to libertarian principles on these grounds, the slope is very slippery and steep.)
I didn’t mean it to be. I was just pointing out that the rules written on a contract and the rules which the state applies in case of dispute are two different things. They are drastically different in Western societies, where breach of contract is a civil matter, usually incurring only damages, but the distinction applies everywhere. On the one hand is what the parties to a contract promise, and on the other, what the state does if the promises are broken. There is no a priori reason that these two things should be brought into coincidence. I don’t even see it as a reasonable place for discussion to start.
Are you being as satirical as Philmore? If so, I’m wasting my breath here, but on the supposition that you aren’t:
Whether well-written, I think Philmore’s article is not well argued (reading it straight, not as satire). “Slavery” in the article ranges from an absolute property right in someone’s whole person, which he does not defend (nor, for that matter, condemn, or it would undermine his satire), to the mere sale of one’s lifetime labour, which he regards as equivalent to the daily or monthly sale of labour that constitutes typical modern employment.
I am paid monthly. However, I am free to just walk, at any time. No-one will drag me back to my employer and chain me to a desk. My former employer merely ceases to pay me. If my departure is sufficiently abrupt, I will forgo my last month’s pay, but that is all. All employment contracts in the UK are of that form.
Under Philmore’s concept of slavery, having sold my lifetime’s labour, I would similarly be free to depart at any time, subject only to the return of what I was paid, pro rata, whch he calls self-manumission.
Why does he call this slavery? It gives him a catchy title, and he gets to satirically claim that libertarians should approve of “slavery”. However he has only done this by diluting the word so far as to deprive it of most of its ordinary meaning: people as property, having no right and little real possibility to change that state without the agreement of their owner. That is how slavery was practiced in the American South. There are variations on the concept, and other names, but that is what is meant, in everyday discourse, when any situation is likened to slavery: being prevented from leaving the coercive control of one’s “owner”.
I don’t see such a slope. The freedom to become a slave in the ordinary meaning of the word is the freedom to deprive your later selves in perpetuity of their freedom. There may be room for a discussion about the extent to which, in effect, your future selves should be the property of your present self, but merely waving “libertarian principles” is not that discussion.
No, I’m not being satirical. Your effort in explaining is not wasted, and in fact, I think I’ve located the root of our disagreement.
In your argument, you assume the legal framework of the modern liberal states. In these states, there is a sharp distinction between criminal and civil law, the former enforced with fines, imprisonment, and loss of citizen privileges (in some places also the death penalty), and the latter enforced by awarding monetary damages. Moreover, in these states the government has a complete monopoly on violence in law enforcement—aside from a few narrow exceptions like self-defence or citizen’s arrest, and some very mild uses of force like e.g. throwing out a trespasser, if violence is necessary to enforce a law or a court decision, you must call the police to do it. As you note, in this system, contracts fall under civil law, and the worst that can befall you for breaking a contract is losing money and perhaps bankruptcy. (Where even in the latter case, you are allowed to keep some assets and thus protected from falling into complete indigence.)
You are right that a slavery contract within this system, even if it were enforceable, wouldn’t be deserving of the name. The master wouldn’t be able to punish and coerce the slave using private force, but only by suing him. And the slave, even if penniless, would always have the option to walk away and simply declare bankruptcy when sued. You are also right that Philmore fails to discuss this point clearly, and this is indeed a significant problem with the essay. (I can see this myself now that I have re-read it after several years.)
Now, where we disagree is our view of the relationship between the above-described modern liberal legal framework and libertarian principles. You seem to take this framework as given, and understand libertarian principles only as implying freedom of contract within this framework. However, I consider the rules of this framework as themselves highly un-libertarian, and significantly limiting the freedom of contract. It has always seemed to me that the principles of self-ownership and freedom of contract—if one accepts them axiomatically; I’m not saying I do—imply that one should be able to enter a contract where one gives the other party the permission to use private force to enforce its terms, and where one may take up liabilities and obligations without the safety net of comfortable bankruptcy. (Such contracts, at least in some forms, used to be legal and widespread in the Western world. Notably, North America was settled to a large degree by indentured servants, whose contracts allowed the masters to use private force to prevent them from escaping and coerce them into obedience.)
Therefore, I see the prohibition of such contracts as just one of the many historical steps towards the modern institutions of paternalistic regulatory state and welfare state that libertarians otherwise decry. I really don’t see any principled difference between eliminating people’s freedom to take up obligations that can’t be evaded with a comfortable bankruptcy and any other paternalistic regulation. (When libertarians yearn for some golden age of classical liberalism, which they imagine roughly as freedom of contract within the limits of the above described modern liberal legal framework, they are at best yearning for a brief and transient phase of the historical descent down this slippery slope.)
I do. What is a contractual obligation? It is not a magic spell that creates a reality that it would require some positive action to depart from. It describes a promised reality that takes positive actions to attain. If the parties to a contract disagree over its attainment, then in the first place they must try to resolve the matter themselves. If they fail to agree, and neither party can impose a solution by force, then nothing further can happen, without some third party entering on the matter.
That third party might be the wisdom of the tribal elders, or a magistrate who on local matters combines in one person the power to make, judge, and enforce the law, or a Western-style framework of laws and courts, or many other possible institutions. But in all cases, the dispute is resolved by that institution using its resources to impose a verdict. (I include in that the case where the institution does not enforce it directly, but by proclaiming a verdict that gives one party a right to use force against the other which it would not otherwise have had.)
If the institution looks at the terms of the contract and declines to have anything to do with the matter (as was once the case in England regarding gambling debts—unenforceable at law), that is not a limitation on anyone’s freedom to enter into such a contract. They can still write that contract. They merely do not have a claim on anyone else’s assistance in enforcing it against the will of the other party. I think this is entirely in accordance with libertarian principles. Nobody is being coerced when the state declines to coerce someone on your behalf just because they have broken a promise to you. And it is surely the opposite of paternalism for the state to limit its involvement.
I am also sure that if Robin Hanson has not yet argued for making breaking a promise a criminal act, he will.
What are these libertarian principles, anyway? You refer to them but distance yourself from them, suggesting that you are arguing a point of view you do not hold, a situation vulnerable to letting a finger nudge the scales. Indeed, what is satire but a bottom-line-driven argument from your opponent’s position to an unwelcome conclusion, the cloak of satire giving deniability to refutations of the argument? (ETA: I’m not accusing you of bad faith. It’s just that you seem to be saying, “this is what libertarian principles imply”, without necessarily subscribing to those principles yourself. It’s very easy to go wrong in arguing someone else’s point of view for them, especially if in fact you disagree with them.)
The problem with this argument is that in the modern liberal order (and again ignoring some marginal exceptions), the state has a monopoly of violence, including violence that may be necessary to enforce a contract. Therefore, the state not only refuses to apply violence to enforce your claim based on such a contract, but will also intervene violently to stop you if you try to enforce it with private force. It is a criminal offence to breach the peace even in the course of privately enforcing a valid contractual claim, let alone one that is legally declared void.
So however you turn it, this is a limitation on people’s right to enter such contracts, as well as their other rights that depend on this. If the state told you that from now on it would refuse to enforce car-selling contracts to which you are a party, your freedom to own a car would be gone, regardless of whether you’d be allowed to perform the legally void act of signing such a contract. You wouldn’t be able to buy a car, since if the seller failed to deliver it, you couldn’t use private force to take possession of it. You wouldn’t be able to own one, since the previous owner or manufacturer could just steal it back as soon as you turned away from it. And as the most pertinent analogy, you couldn’t even sell a car you already have, since the buyer would have no guarantee that you wouldn’t fail to deliver it upon payment. (Admittedly, for relatively minor dealings, perhaps even including cars, the situation would be remedied somewhat by private reputational mechanisms.)
All this is by no means idle theorizing, even with respect to the normal everyday business. For example, where I live, the government has declared various provisions of tenancy agreements unenforceable, like for example no-pets rules. You are still allowed to put such provisions in the contract, and many landlords do, probably counting on the tenants’ ignorance of the law, or perhaps appealing to their consciences. However, there is no way to enforce them against a tenant, and as a result, it’s hard to find very nice places for rent, except at a high price that includes implicit insurance against such tenant misbehaviors. (It’s fairly easy to screen away people who will fail to pay the rent or who will behave downright destructively, but even very nice, affluent, and accomplished people may end up getting a cat whose hair the subsequent occupants will be finding in their dinner for years, or a dog that will ruin the wood floors in a way that they could excuse as normal wear and tear if you sued them over it.) As someone who is in the market for nice rentals, and would gladly assent to no-pets and other presently unenforceable provisions for keeping the place tidy and undamaged, I really don’t see how this is not a very real and costly limitation on my (and the landlords’) freedom of contract.
I’ll clarify how I see the libertarian position, and please tell me if you think I’m distorting it.
Regardless of the issue of the legitimacy of private versus state violence, where there is much disagreement among them, libertarians agree that there is a certain set of property rights that a person can legitimately claim, and that people should be free to enter voluntary contracts by which they exchange these rights (i.e. alienate some and acquire others) and thus incur mutual obligations. There is of course a lot of further disagreement over the exact criteria for what makes a property right valid, but if there is any meaningful agreed-upon content to the notion of libertarianism, it is that once a property right has been established, one should be free either to keep and enjoy it unmolested or to exchange it or give it away—including the rights transferred by a voluntary contract from someone else.
Now, what about the state? As per the above, both anarchist and minimal-government libertarians agree that the state should not limit the people’s right to enter voluntary agreements concerned purely with their own rights and obligations. Such limitations may be in the form of outlawing the contract itself (for example, in many places you can go to jail for trying to negotiate a prostitution deal). However, as I explained above, they can also have the form of the state wielding its monopoly of force in contract enforcement selectively, so as to eliminate the freedom of particular kinds of contracts in practice, in order to further some other goals. Whether a libertarian is an anarchist who believes the state should get out of the enforcement business altogether and let people enforce contracts with private force, or a minimal-statist who believes it should limit itself to enforcing valid rights claims, I don’t see how this selective enforcement can be reconciled with any coherent statement of the above-described libertarian principles.
This of course runs into the already mentioned problem: if I own my person and my labor, why can’t I sell them in some sort of slavery contract? If I sell my car and then refuse to deliver it, Rothbardian anarchists would say that the buyer is entitled to come and subdue me and seize it by force, and non-anarchist libertarians would say that the buyer should be able to call the cops who will then subdue me and seize it for him. Similarly, why shouldn’t I be able to sell my person too, so that if I try to escape, either my owner himself or the cops acting on his complaint would seize me and haul me back to his service?
This is where I see what looks, from the above described perspective, like a paternalistic slippery slope. The state won’t enforce a slavery contract just like it won’t enforce a no-pets clause of a rental contract where I live, even though in both cases the contract is about an exchange of what both parties otherwise uncontroversially claim as their property rights. And I don’t see any potential stable Schelling points except either allowing both kinds of contracts or recognizing that the state can allow or disallow contracts at its pleasure in order to further paternalistic, ideological, or whatever other aims.
Finally, what about my own disagreement with the libertarian principles? I don’t consider them workable in any general and absolute formulation, for a multitude of reasons, one of which is that all realistic human societies will consider many (though possibly different) things implied by them as impermissible. But insofar as these principles exist in a coherent and agreed-upon form, I think I am presenting them fairly.
Germany reportedly enforces illegal contracts.
“Illegal contracts” is a misleading term here. These are not contracts that are illegal because they stipulate some action that is ipso facto criminal (like e.g. an illegal drug sale contract) or because they stipulate a transfer of rights that is inherently unenforceable in the existing law (like e.g. an indentured servitude contract). Rather, the issue is about perfectly normal and ordinary transactions that just happen to run afoul of the law in some relatively minor way, as in the given examples of ordering a meal in a restaurant that stays open beyond its licensed hours, or hiring a gardener who doesn’t report this income for his taxes.
The relevant questions here are how severe such violations have to be to void the contract altogether, and how eager the government will be to prosecute the violators if this information comes out when a breach of contract is adjudicated in court. Obviously, in any legal system, both issues are a matter of degree, and clearly different countries will have different systems, with Germany apparently being unusually lenient on both counts. With this in mind, I fail to see any relevance of this fact for my above cited argument.
Irrelevant. The question isn’t whether the state refuses to enforce all illegal contracts but rather if it refuses to enforce some; no state enforces all illegal contracts.
Most jurisdictions in the U.S. enforce some illegal contracts. It depends mostly on the comparative culpability of the parties and the importance of the public policy making the contracts illegal.
I was pointing out a false generalization. “the modern liberal order” indeed.
What illegal contracts are enforced in U.S. jurisdictions?
The ‘modern liberal order’ does have a monopoly on violence, or at least something very close to one. That’s a fairly central point of having a civil court system.
The linked article doesn’t seem to relate to that, anyway. The German government isn’t permitting people to hire private enforcement for their illegal contracts.
Though presumably only ‘grey market’ contracts are being enforced.
I imagine any attempt to enforce, for example, a slavery contract while maintaining illegality would lead to international and continuous outrage (among other things). The degree of social proscription is too strong.
The argument is vanishing up its own fundament.
With any general philosophy or morality, one can tie it in a knot by asking how it applies to itself. What is the empirical evidence for empiricism? Does positivism satisfy its own verifiability criterion? What is the utility of utilitarianism? What is the inductive evidence for induction?
Libertarianism places a high, even paramount value on freedom, and a correspondingly negative value on coercion. So, playing the circularity game, we can ask: does freedom include the freedom to give up one’s freedom? Is coercion allowed if it was previously agreed to but is against one’s current will? Whatever institution is set up to provide resistance to coercion for those unable to resist it themselves, should it not merely ignore, but join in with such coercion? Either way, it will be applying coercion against one party or the other. I don’t see a slippery slope when the state decides to cut off the entire tangle without going even one turn around the loop, and decides that such contracts are void.
This is true of all principles. None of them are workable in any general and absolute formulation.
Are you aware of any research done on this question? Granted, Russia and Mexico have cops everywhere, but so does Singapore and Monaco.
On theoretical grounds, I would expect there to be little correlation between resources devoted to law enforcement and amount of law-breaking, whether across or within societies, with such lack of correlation having little implication for causal connections between the two. Someone must have studied this question, but not being a sociologist I don’t know. Is there anyone here who can point us to actual data and inference from such data?