Tuesday, July 19, 2005

The Principle of Actionable Harm


Glen Whitman of Agoraphilia writes about Will Wilkinson's flaying of Richard Layard, who
has devised a new kind of negative externality argument. He observes that inequality of status makes many people -- specifically, envious people -- unhappy. As a result, any productive effort to improve one'’s position creates a negative externality by reducing the relative status, and thus happiness, of others. Using standard Pigovian logic, Layard concludes that we ought to discourage (e.g., tax) productive effort in order to correct the externality.
Whitman and Wilkinson spend a lot of words to prove Layard wrong -- which he is, of course.

My initial reaction to Layard's observation that envious people are made unhappy by the relative success of others is this: "That's tough; get over it."

I follow that observation with this one: If feelings count, then government's effort to make the envious happy must make the objects of their envy unhappy, which must -- by Layard's logic -- call for a restoration of the status quo ante. In other words, why should government be in the business of kow-towing to envious persons; why should the feelings of the envious be privileged? I would adapt what I wrote here to suggest that it is the envious, not the envied, who do harm:
1. Government should not act or condone action except when it seeks to deter, prevent, or remedy an actionable harm to liberty.

2. An actionable harm to liberty is one that arises or would arise directly from the commission of an overt act or acts by any person or entity, domestic or foreign.

3. An expression of thought cannot be an actionable harm unless it
a. intentionally obstructs or would directly obstruct governmental efforts to deter, prevent, or remedy an actionable harm (e.g., divulging classified defense information, committing perjury),

b. intentionally causes or would directly cause an actionable harm (e.g., plotting to commit an act of terrorism, forming a lynch mob),

c. purposely -- through a lie or the withholding of pertinent facts -- causes a person to act against self-interest in an economic transaction (e.g., misrepresenting a product, inflating a corporation's statement of earnings), or

d. purposely -- through its intended influence on government -- results in what would be an actionable harm if committed by a private entity (e.g., the taking of income from persons who earn it, simply to assuage the envy of those who earn less).
4. Government should act to prevent, deter, or remedy the actionable harms described in 3.a, 3.b, and 3.c. By the same token, government should avert actionable harms of the type described in 3.d. With those exceptions, a mere statement of fact, belief, opinion, or attitude cannot be an actionable harm or indicate the existence of an actionable harm, regardless of the subject of the statement, unless it amounts to slander or libel (both of which are actionable harms). Otherwise, those persons who do not care for the facts, beliefs, opinions, or attitudes expressed by other persons would be able to stifle speech they find offensive merely by claiming to be harmed by it. Similarly, those persons who claim to be offended by the superior income or wealth of other persons would be entitled to recompense from those other persons.

5. An act of omission (e.g., the refusal of social or economic relations because of some form of bias), other than a breach of contract or duty, cannot be an actionable harm. It is incompatible with liberty for government to judge voluntary actions that are not otherwise actionable harms.
Governmental intervention in our affairs -- for any reason but to deter, prevent, or remedy an actionable harm to liberty -- is harmful in many ways, among them economically. The right to strive uninhibitedly toward economic advancement (without committing actionable harms) has great potential benefits -- for the envious as well as the envied. As I have explained here, it is thinkers like Layard who have robbed all of us of a huge share of those benefits.