Free Markets & Harmful Provisions

by Tibor R. Machan

In a free society it is law and not the government bureaucracy thatadjudicates claims about people causing harm to others. In other words, ifsomeone believes another has caused harm to him or her, that's a claim tobe adjudicated. Government regulation, on the other hand, pre-empts allthis and thereby involves a kind of prior restraint, which is a grossviolation of due process.

You remember due process? It means that no one may be imposed upon withun-assumed burdens, fines, costs, etc., unless proven to have violatedanother's rights. This is one reason self-incriminatory testimony may notbe coerced out of a witness—the burden of showing that force may beinflicted upon someone lies with the prosecution, with those leveling acharge against someone. No one needs to prove his or her lack of guilt!

Government regulation violates this sterling principle of a free societyby pre-emptive intrusion on people's productive and other economicactivities. Yes, the law is contradictory—it both bans and permits suchpre-emptive intrusion. But that's not the point—the laws of countries areoften terrible and it takes examination and criticism to set them right.Blind faith in the law leads to tyranny.

Even when harmful products are sold to people, the only requirement thatcan reasonably be made is that the harm be noted up front. So, forexample, when cigarettes are sold, the seller needs to alert buyers thatordinary use of the product can produce maladies that no one reasonablywould want to experience. But even there, only after the fact may someonebe found guilty of having harmed someone—although if the punishment forinflicting the harm is efficient and prompt, this will send a message toproducers and pretty much eliminate the problem.

This means that, yes, a free society will welcome litigation but notgovernment regulation. (There are non-government regulations in freesocieties, of course, as when insurance companies make it a condition fortaking on a client that provision of goods and services avoid seriousrisks!)

Now why, if this is how a free country should deal with hazards in themarketplace, is there so much government meddling in market relationships?Plainly, because not enough people want to live in a free society—theywant government to run their lives. This is what some critics ofcapitalism have called "soft paternalism." Trouble is, softpaternalism is imposed on us all, not only on those who want it. I maysign up for someone caring for my health and fitness but I may not sign upsomeone else, who hasn't agreed to the arrangement.

So while it is quite OK to be pre-emptive with one's own risk—which is tosay, to foot one's own cost for precaution—it is wrong to involveunwilling others in such a scheme, ones who may well not wish to pay forthe arrangements. And it is no excuse to say, well, we have decided thisdemocratically. Democracy does not sanction rights violations—that wouldthe tyranny of the majority, not the properly limited democracy of a freesociety.

In any case, one reason these notions are strongly resisted, including bysome influential legal scholars, is that legal traditions in mostcountries, including America, have transmitted the old fashioned statismof the feudal era, when the king was deemed to be the keeper of the realm.Sure, we no longer have a king but unfortunately too many of the powers ofmonarchies are now held by the various governments of our putatively freesociety. In effect, the previous powers of the king are now those of thedemocratically elected government. That is why government regulation isstill with us—it is plainly a reactionary political economic device.

Bad habits linger on both in the lives of individuals and the legalsystems of societies. To be rid of them there needs to be constantvigilance, constant reminders that a just society must, first andforemost, be a free society.