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.
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.