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Responsibility and Consent: The Libertarian's Problems with Freedom of Contract*

  • Leo Katz (a1)


Libertarians believe certain things about rights and responsibilities, about when one person is to be held responsible for invading the rights of another. Libertarians also believe certain things about consent, about when someone should be held to a contract he has entered into. What they don't realize is that the first set of beliefs doesn't mix well with the second set of beliefs—that their intuitions about rights and responsibilities quite simply don't square with their intuitions about consent. Or so I shall be trying to show in this essay.

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1 Nozick, Robert, Anarchy, State, and Utopia (New York: Basic Books, 1974).

2 Ibid., 262.

3 Ibid., 263.

4 Laidlaw v. Organ, 15 U.S. (2 Wheat.) 178 (1817). For an excellent discussion of such cases, see Scheppele, Kim Lane, Legal Secrets: Equality and Efficiency in the Common Law (Chicago: University of Chicago Press, 1988).

5 Nozick, , Anarchy, State, and Utopia, 57.

6 Some people might take exception to my saying that by omitting someone's rescue I cause his death; a few might even object to my saying that by ducking I cause someone's death. There is a lively debate on the question of whether omissions ever cause anything. Some philosophers have tried to split the difference by distinguishing between negative and positive causation, and saying that omissions are only capable of the former. In this particular context I do not believe much hangs on the question. When I say “cause,” I really only mean to refer to the presence of some kind of causal relationship, which I cannot imagine anyone would deny to exist between either an omission and an unprevented but preventable harm, or between a ducking and an unprevented but ducking-preventable harm. Note that when consequentialists talk about bringing about the best possible consequences, they mean by “consequences” events that stand in a causal relationship to prior decisions of the decision maker, but not necessarily events that were caused by them (if, that is, one uses “cause” in a narrower sense than causal relationship)—which is why they would blame me equally for a death which I acted to bring about and a death which I omitted to prevent, or for a death which I brought about by a shielding and a death which I could have prevented by not ducking. For a bit more discussion of this and some bibliographic references on the debate about whether omissions can be said to cause harm, see Kagan, Shelly, The Limits of Morality (Oxford: Oxford University Press, 1987), 9293.

7 Simons, Kenneth W., “Assumption of Risk and Consent in the Law of Torts: A Theory of Full Preference,” Boston University Law Review 67 (1987): 213–87, offers a superb examination of the legal discussions of these kinds of cases.

8 The seminal article that first uncovered the ducking-shielding distinction is Boorse, Christopher and Sorensen, Roy, “Ducking Harm,” Journal of Philosophy 85 (1988): 115.

9 Thomson, Judith Jarvis, “The Trolley Problem,” in Thomson, , Rights, Restitution, and Risk (Cambridge, MA: Harvard University Press, 1986), 94116.

10 Kamm, Frances M., Morality, Mortality, vol. 2 (New York: Oxford University Press, 1996), ch. 6, is the most up-to-date and thoroughgoing examination of the trolley problem, and is quite amazing in its ingenuity. However, there is by no means universal agreement that the trolley case really is different from the transplant case. German criminal-law scholars generally seem to think there is no difference. See Neumann, Ulfrid, “Rechtfertigender Notstand,” in NOMOS Kommentar zum Strafgesetzbuch, ed. Neumann, Ulfrid and Schild, Wolfgang (Baden-Baden: NOMOS Verlagsgesellschaft Baden-Baden, 1997), commentary accompanying section 34 of the German criminal code, dealing with what Anglo-American law calls “necessity.”

11 The depth and significance of path-dependence in law and morality are explored at length in my book Ill-Gotten Gains: Evasion, Blackmail, Fraud, and Kindred Puzzles of the Law (Chicago: University of Chicago Press, 1996).

12 Further peculiarities about the way in which consent and path-dependence interact are explored in my Ill-Gotten Gains, Part II, examining the long-standing legal paradox of blackmail.

13 Aivazian, Varouj A., Trebilcock, Michael, and Penny, Michael, “The Law of Contract Modification: The Uncertain Quest for a Benchmark of Enforceability,” Osgoode Hall Law Journal 22 (1984): 173212; Hillman, Robert A., “Policing Contract Modifications under the UCC: Good Faith and the Doctrine of Economic Duress,” Iowa Law Journal 64 (1979): 849902.

14 This argumentative strategy figures especially prominently in the landmark treatise on corporate law by Easterbrook, Frank and Fischel, Daniel, The Economic Structure of Corporate Law (Cambridge, MA: Harvard University Press, 1991), especially in their treatment of so-called “Corporate Control Transactions” (chapter 5) involving what at first appears to be unfair arm-twisting of minority shareholders by the controlling majority.

15 A survey of the most significant scholarly, statutory, and case-law treatments of this problem is to be found in Hettinger, Michael, Die “aclio libera in causa”: Strafbarkeit wegen Begehungstat trotz Schuldunfaehigkeit? Eine historisch-dogmatische Untersuchung (Berlin: Duncker and Humblot, 1988). For two of the most important scholarly treatments of the topic, see Hruschka, Joachim, Strafrecht nach logisch-analytischer Methode: Systematisch entwickelte Faelle mit Loesungen zum allgemeinen Teil, 2d ed. (Berlin: Walter de Gruyter, 1987); and Neumann, Ulfrid, Zurechnung und “Vorverschulden”: Vorstudien zu einem dialogischen Modell strafrechtlicher Zurechnung (Berlin: Duncker and Humblot, 1985). In English, probably the most recent explorations of the topic are Robinson, Paul H., “Causing the Conditions of One's Own Defense,” Virginia Law Review 71 (1985); my own Ill-Gotten Gains; and my “Playing By, With, Around, Under, and Above the Rules: An Essay For and About Fred Schauer” (Festschrift for Fred Schauer, forthcoming in 1999).

The literal translation of “actio libera in causa”is “an action free in its origin.” It refers to the fact that if I deliberately put myself in a situation of duress in which I then commit criminal actions, those actions are not free in and of themselves, but they are “free in their origin,” since I freely set in motion the chain of events that led to my eventually finding myself under duress.

16 See, for instance, Epstein, Richard, “Covenants and Constitutions,” Cornell Law Review 73 (1988): 906; Ellickson, Robert C., “Cities and Homeowners Associations,” University of Pennsylvania Law Review 130 (1982): 1519; and Easterbrook, and Fischel, , Economic Structure of Corporate Law.

17 The disharmony between contract and tort law is a long-standing topic in legal scholarship. One of the most famous explorations thereof is Gilmore, Grant, The Death of Contract (Columbus: Ohio University Press, 1974).

18 The claim advanced in this essay is slightly less unprecedented than it would appear to be at first. Over the last few years—decades really—a literature has started to emerge which in different ways points in the same direction. None of the prior pieces in that literature that I know of make precisely the same points I make here, but they arrive at conclusions that have a distinct affinity with what I say. Here is a short list of some of those pieces: (1) In 1970, Amartya Sen published what has come to be known as Sen's Libertarian Paradox, according to which a certain very plausible understanding of rights is inconsistent with the Pareto principle; see Sen, , “The Impossibility of a Paretian Liberal,” Journal of Political Economy 78 (1970): 152–57. Inasmuch as voluntary bargains, struck in the absence of force, fraud, or adverse third-party effects, are Pareto-optimal, Sen was suggesting—as I am in this essay—that certain ideas we have about rights do not square with freedom of contract. The source of the tension he identified was a little different, however, from the sources I identify. On the other hand, he was not claiming the source he identified to be the only possible one. Sen's claim has been controversial. When Nozick, Robert published Anarchy, State, and Utopia, he thought he had a way of answering it. His answer did not satisfy Sen and appears to no longer satisfy Nozick either. I infer this from a passing, cryptic remark in a more recent book by Nozick, , The Nature of Rationality (Princeton: Princeton University Press, 1993), in which he writes that “Amartya Sen's work on the Paretian liberal paradox shows that a very natural interpretation of the scope of individual rights and liberties and of how the choices of society should be rationally organized, cannot be easily fit together. These notions need a new structuring” (ibid., xv). Related to Sen's paradox and usually debated alongside it is Allan Gibbard's paradox; see Gibbard, Allan, “A Pareto-Consistent Libertarian Claim,” Journal of Economic Theory 7 (1974): 366410. (2) Kamm, Frances, in her recent book Morality, Mortality, vol. 2, ch. 11 (“Agreements”), advances arguments and examples that have numerous affinities with mine here. (3) Broome, John, in Weighing Goods (Oxford: Basil Blackwell, 1991), and Levi, Isaac, “Pareto Unanimity and Consensus,” Journal of Philosophy 87, no. 9 (09 1990): 481–92, have argued for the unacceptability of the Pareto principle in bargains involving uncertainty when both parties to a bargain differ radically in their assessment of the pertinent probabilities. (4) In retrospect, the longstanding objections to hypothetical contracts can be taken to point in the same direction as this essay. (A particularly compelling discussion of those objections is to be found in Dworkin, Ronald, A Matter of Principle [Cambridge, MA: Harvard University Press, 1985].) It is hard to read those objections and not wonder whether some of them couldn't be extended into arguments against actual, as opposed to merely hypothetical, contracts. (5) My own work on blackmail and related criminal bargains suggests that ideas about responsibility alone justify the ban on blackmail, and it indirectly suggests that, by similar logic, many other bargains should be treated as suspiciously as blackmail. (6) One can read the literature about the problematic nature of plea bargains and settlements acs pointing in the same direction. See, e.g., Alschuler, Albert, “The Changing Plea-Bargaining Debate,” University of California Law Review 69 (1982): 652; Coleman, Jules and Silver, Charles, “Justice in Settlements,” Social Philosophy and Policy 4, no. 1 (Autumn 1986): 103; and Fiss, Owen M., “Against Settlements,” Yale Law Journal 93 (1984): 1073. This does not exhaust the list of convergent developments, but it should serve to provide a bit of context.

* This essay has greatly benefited from the comments of the other contributors to this volume, but most especially from the extended comments of Ellen Frankel Paul and Claire Finkelstein.


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