Rectification of Injustice

Chapter 10 of The Market for Liberty

by Morris & Linda Tannehill (1970)

Since aggression would be dealt with by forcing the aggressor to repay his victim for the damage caused (whenever the use of force was required), rather than by destroying values belonging to the aggressor, the free market would evolve a reparations-payment system vastly superior to and different from the present governmental prisons.

If the aggressor had the money to make his entire reparations payment immediately or could sell enough property to raise the money, he would do so and be free to go his way with no more than a heavy financial loss. Situations of this kind, however, would probably be very rare, because aggression is expensive. Even a small theft or destruction can quickly pile up a fairly large debt when related expenses, secondary payments to others who suffered because of the victim’s loss, cost of defense and arbitration, etc., are taken into account. In a totally free society, men tend to be financially successful according to their merit. Few successful men would desire to commit aggression. Few unsuccessful men could afford to make immediate payment for it.

Assuming the aggressor could not make immediate payment of his entire debt, the method used to collect it would depend on the amount involved, the nature of the aggression, the aggressor’s past record and present attitude, and any other pertinent variables. Several approaches suggest themselves.

If the aggression were not of a violent nature and the aggressor had a record of trustworthiness, it might be sufficient to leave him free and arrange a regular schedule of payments, just as would be done for any ordinary debt. If the aggressor could not be trusted to make regular payments, a voluntary arrangement could be made between the insurance company, the aggressor, and his employer, whereby the employer would be compensated for deducting the reparations payment from the aggressor’s earnings each pay period.

If the aggressor were unable to find or hold a job because employers were unwilling to risk hiring him, he might have to seek employment from a company which made a practice of accepting untrustworthy workers at lower than market wages. (In an economy of full employment, some companies would be motivated to adopt such a practice in order to reach new sources of labor. Although the price of their product would remain close to that of their competitors, as prices are determined by supply and demand, the wages they paid would necessarily be lower to compensate for the extra risk involved in hiring employees of dubious character.)

If the facts indicated that the aggressor was of an untrustworthy and/or violent nature, he would have to work off his debt while under some degree of confinement. The confinement would be provided by rectification companies—firms specializing in this field, who would maintain debtors workhouses (use of the term “prison” is avoided here because of the connotations of value-destruction attached to it). The labor of the men confined would be furnished to any companies seeking assured sources of labor, either by locating the debtors workhouses adjacent to their plants or by transporting the debtors to work each day. The debtors would work on jobs for wages, just as would ordinary employees, but the largest part of their earnings would be used to make reparations payments, with most of the rest going for their room and board, maintenance of the premises, guards, etc. To insure against refusal to work, the reparations payment would be deducted from each pay before room and board costs, so that if a man refused to work he would not eat, or at most would eat only a very minimal diet.

There would be varying degrees of confinement to fit various cases. Many debtors workhouses might provide a very minimum amount of security, such as do a few present-day prison farms where inmates are told, “There are no fences to keep you here; however, if you run away, when you are caught you will not be allowed to come back here but will be sent to a regular prison instead.” Such workhouses would give the debtor a weekly allowance out of his pay, with opportunities to buy small luxuries or, perhaps, to rent a better room. Weekend passes to visit family and friends, and even more extended vacations, might be arranged for those who had proved themselves sufficiently trustworthy.

Other workhouses would provide facilities of greater security, ranging up to a maximum security for individuals who had proved themselves extremely violent and dangerous. A man whose actions had forced his confinement in such a workhouse would find himself at a disadvantage in several ways. He would find he had less liberty, less luxuries, limited job opportunities, and a longer period of confinement because, with more of his earnings spent on guards and security facilities, it would take him longer to pay off his debt.

Since there will be cases of mental imbalance even in the most rational of cultures, it is probably that there will be an occasional individual who will refuse to work and to rehabilitate himself, regardless of the penalties and incentives built into the system. Such an individual would be acting in a self-destructive manner and could properly be classified as insane. Obviously, neither the rectification company, the defense service that brought him to justice, nor the insurance company or other creditor has any obligation to go to the expense of supporting him (as victims are forced through taxation to do today). Nor would they wish to turn him loose to cause further destruction. And if they allowed him to die, they would cut off all hope of recouping the financial loss he had caused. What, then, could they do?

One solution that suggests itself is to sell his services as a subject of study by medical and psychiatric doctors who are doing research on the causes and cures of insanity. This should provide enough money to pay for his upkeep, while at the same time advancing psychological knowledge and ultimately offering hope of help for this aggressor and his fellow sufferers. If such an arrangement were made, it would be in the interests of all concerned to see that the aggressor received no ill treatment. In a rational culture, severe mental illness would be much rarer than it is in ours, and the medical-psychiatric team would not wish to damage such a valuable specimen. The rectification company in charge of the aggressor would be even more eager to protect him from harm, since no arbitration agency could afford the reputation of sending aggressors to a debtors workhouse where there was ill treatment of the inmates.

This free-market system of debtors workhouses would have numerous practical advantages over the Dark Ages barbarity of the present governmental prison system. These advantages are a necessary consequence of the fact that the system would be run for profit—from the standpoint of both the insurance companies and the rectification companies operating the workhouses. In a laissez-faire economy, it is impossible to make consistent profits over a long-range period unless one acts with maximum rationality, which means: with maximum honesty and fairness.

A practical example of this principle can be seen in the results of the insurance company’s desire to recoup its loss quickly. Because it would be in the insurance company’s interest to have the aggressor’s reparations instalments as large as possible, it would have him confined to no greater degree than his own actions made necessary, since closer confinement means greater expense, which means less money left for reparations payments. Thus, it would be the aggressor himself who would determine, by his character and his past and present behavior, the amount of freedom he would lose while repaying his debt and, to a certain degree, the length of time it would take him to pay it. Furthermore, at any time during his confinement, should the aggressor-debtor show himself to be a good enough risk, the insurance company would find it in their interest to gradually decrease his confinement—an excellent incentive to rational behavior.

Because both the insurance companies and the rectification companies would want to run their businesses profitably, it would be in their interest to have debtors be as productive as possible. In an industrialized society, a laborer’s productivity depends not on his muscles but on his mind, his skills. So the debtor would be allowed to work in an area as close to the field of his aptitudes as possible and encouraged to develop further productive skills by on-the-job training, night school courses, etc. All this would help prepare him for a productive and honest life once his debt was paid. Thus, the application of free-market principles to the problem of aggression provides a built-in rehabilitation system. This is in sharp contrast to government-run prisons, which are little more than “schools for crime,” where young first offenders are caged with hardened criminals and there is no incentive or opportunity for rehabilitation.

A system of monetary repayment for acts of aggression would remove a great deal of the “profit” incentive for aggressors. A thief would know that if he were caught he would have to part with all his loot (and probably quite a bit of his own money, too). He could never just stash the booty, wait out a five year prison term, and come out a rich man.

The insurance company’s desire for speedy repayment would be the aggressor-debtor’s best guarantee against mistreatment. Earning power depends on productivity, and productivity depends on the use of the mind. But a man who is physically mistreated or mentally abused will be unwilling and even unable to use his mind effectively. A mistreated man is good for little more than brute physical labor—a situation of prohibitively low productivity.

Another strong guarantee of good treatment for the aggressor-debtor is that, in a laissez-faire society, every man would be fully responsible for his own actions. No guard in a debtors workhouse could beat a debtor and get away with it. The mistreated debtor could complain to a defense service agent or to the insurance company to whom he was making reparations. If he could prove his assertion of mistreatment, the guilty guard would soon find himself paying a debt to his former prisoner. Furthermore, the guard’s employers would never dare to support their guard if the debtor had a good case, because if they knowingly permitted the guard’s sadism the debtor could bring charges against them, too.

A guard in a government prison can treat the prisoners as less than animals and never be brought to account for it, because he is protected by his status as part of the policing arm of the government. But a guard in a debtors workhouse couldn’t hide behind the skirts of the rectification company which employed him, the way the prison guard hides behind the skirts of the government. The debtors workhouse guard would be recognized as an individual, responsible for his own actions. If he mistreated a debtor in his custody, he would be held personally responsible, and he couldn’t wriggle out of it by putting the blame on “the system.”

A free-market system of dealing with aggression would operate with a maximum of justice precisely because it was based on the principle of self-interest. The entirety of a man’s self-interest consists of rational thought and action and the rewards of such behavior; the irrational is never in man’s self-interest. As long as a man is behaving rationally, he cannot intentionally harm any other non-coercive person. One of the reasons for the success of a laissez-faire society is that the free-market system impels men to act in their own rational self-interest to the extent that they wish to successfully paricipate in it. It thus rewards honesty and justice and penalizes dishonesty and the initiation of force. This principle would work just as well if the market were free to deal with the problem of aggression as it does when the market deals with the supply of food or the building of computers. There have been several questions and objections raised concerning the proposal that payment for aggression be made in monetary terms. For instance, it has been objected that a thief could “get off the hook” simply by voluntarily returning the stolen item. But this is to overlook two important facts—additional expenses and loss of reputation. First, as long as the thief held the item in his possession he would be causing its owner inconvenience and expense, plus the ever-mounting cost involved in the owner’s attempt to recover the item, all of which would be part of the debt created by the thief’s act of aggression. In aggressive acts of any seriousness at all, it would be almost impossible for the aggressor to return the stolen item quickly enough to avoid incurring additional costs. For example, suppose a man stole $20,000 at gunpoint from a bank, but, regretting his action a few minutes later, came back and returned the money. Could he get by without paying any further reparations? No, because his irrational actions interrupted the bank’s business and may have caused a financial loss, for which he is directly responsible. In order to get the money, he had to threaten force against the teller and possibly other bank employees and customers, so he would owe them reparations for endangering their lives and safety. Also, as soon as he left the bank, the teller undoubtedly tripped an alarm, summoning the bank’s defense agency, so the aggressor is responsible for paying the cost of the defense agency’s coming to answer the call, plus any other related expenses.

But the second factor, loss of reputation, would be even more damaging to the aggressor. Just as specialized companies would keep central files, listing poor contractual risks, they would also list aggressors so that anyone wishing to do business with a man could first check his record. Insurance companies in particular would make use of this service. So our bank robber would find insurance companies listing him as a very poor risk and other firms reluctant to enter into contracts with him. Thus, if a man were foolish enough to engage in such a whim-motivated action as this bank robbery, he would find that he had caused himself considerable expense and loss of valuable reputation but had gained absolutely nothing.

In a similar vein, it has been objected that a very rich man could afford to commit any number of coercive acts, since all he would lose would be a little of his vast fortune. It is a bit difficult to imagine such a mentally ill person being able to continue existing uncured and unchallenged in a predominantly rational culture, but, assuming that he did, he would immediately find that money was hardly the only loss his actions cost him. As soon as his career of aggression was recognized for what it was, no honest man would take the chance of having anything to do with him. The only individuals who would not avoid him like The Plague would be those who felt they were tougher or craftier than he, and their only purpose in risking an association with him would be to part him from as large a share of his money as possible. Furthermore, he would run an immense risk of being killed by some victim acting in self-defense. Considering his reputation for aggression, a man would probably be justified in shooting him for any threatening gesture. So, in spite of his ability to pay, his life would be miserable and precarious, and his fortune would probably dwindle rapidly.

Again, it has been said that if a man confined himself to thefts so petty that the recoverable amount would be smaller than the cost of recovering it, thus making prosecution of the case economically unfeasible, he could get away with a career of aggression (of sorts). But such a “bubblegum thief” would lose much more than he could possibly gain, because he would lose his good reputation as his acts of aggression were discovered and recorded.

In each of these incidents, it is obvious that the aggressor’s loss of reputation would be at least as damaging as his financial loss and that his lost reputation could not be regained unless he made reparations for his aggressive act and showed a determination to behave more reasonably in the future. He might shrug off the financial loss, but the loss of a good reputation would force him to live a substandard life, cut off from insurance protection, credit, reputable business dealings, and the friendship of all honest persons.

All the foregoing objections to a monetary payment assume that it would not be sufficiently costly to deter aggression, or, in other words, that it is severity of punishment which deters aggression. The untruth of this assumption should be evident from an examination of such historical eras as Elizabethan England, in which punishments of extreme severity prevailed, including physical mutilation and hanging for petty theft. Yet in spite of the great loss of value imposed on criminals, crime rates were very high. The reason for this is that it is not severity, but justice, which deters aggression. To punish the aggressor with more severity than his actions warrant—that is, to impose on him a greater loss of value than that which is necessary for him to make reasonable reparations to the victim—is to commit an injustice against him. Injustice cannot be a deterrent to injustice. The aggressor who is treated with such excessive severity feels, quite rightly, that he has been victimized. Seeing little or no justice in his punishment, he feels a vast resentment, and often forms a resolve to “get even with society” as soon as possible. Thus, in dealing with aggression, excessive severity, as much as excessive laxity, can provoke further aggressive acts. The only valid answer to injustice, is justice! Justice cannot be served by excessive severity or by taking revenge against the aggressor, or by pacifism, but only by requiring the aggressor to pay the debt which he has created by his coercive action.

Dealing with a man justly helps him to improve himself and his life by inducing him to act in his own self-interest. In the case of an aggressor, justice induces him to want to, and be able to, live a productive, honest, non-coercive life, both while he is paying the debt he owes to his victim, and afterwards. Justice helps a man get on the right track by sending him the right signals. It penalizes him for his misdeeds—but only as much as he actually deserves. It also rewards him when he does the right thing. Injustice sends out incorrect signals which lead men astray. The injustice of letting an aggressor get away without paying for his aggressions teaches him to believe that “crime pays,” which induces him to commit more and bigger crimes. The injustice of punishing an aggressor by making him pay more than he really owes the victim teaches the aggressor that he can’t expect justice from others, so there’s little point in his trying to treat them justly. He concludes that this is a dog-eat-dog world and that his best course is to “do it unto others before they do it unto him.” Only justice sends the aggressor the right signals, so only justice can be a satisfactory deterrent to aggression.

It may be objected that some men will attempt to take advantage of a free-market system of dealing with aggression. This is true, as it is true of any other social system. But the big advantage of any action of the free market is that errors and injustices are self-correcting. Because competition creates a need for excellence on the part of each business, a free-market institution must correct its errors in order to survive. Government, on the other hand, survives not by excellence but by coercion; so an error or flaw in a governmental institution can (and usually will) perpetuate itself almost indefinitely, with its errors usually being “corrected” by further errors. Private enterprise must, therefore, always be superior to government in any field, including that of dealing with aggressors.

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