What does this have to do with laws? It relates to the idea, expressed in part III, that individuals are expected to police themselves. We expect individuals to take normal care whenever they act, and to bear the consequences if things go wrong. Or at least, we used to. Now that we have "strict liability," organizations are responsible for things that go wrong even if no reasonable person could have foreseen the risk, and even if the injured party did not take normal precautions on his way to hurting himself.
People tend to think of liability in terms of large corporations. They make many millions of dollars, so what difference does a lawsuit matter to them? Indeed, it can be difficult to punish a corporation adequately for misdeeds because the corporation is so large that any normal fine is easily written off. Even when it comes to suing small business or individuals, people brush off large settlements by concluding that it isn't the individual's money, it's the insurance company's. But of course, this ignores the cost of insurance premiums, which drive up the cost of products and prevent many small businesses from ever getting started.
The number of things we can't do or don't have because of strict liability is staggering, and depressing. I will only provide two more examples, from opposite ends of the spectrum -- I'm sure you have your own. One is a product that was shut down by the government before there were lawsuits. The company that created the enormously popular rare-earth magnets known as "Bucky Balls" is no longer in business because small children who swallow the magnets can be seriously injured. Never mind that the company never marketed the toys to children, and labelled the packaging for ages 13+; the Consumer Product Safety Commission deemed them dangerous because some toddlers had swallowed the magnets and been hospitalized. The company's owner issued the following statement on shutting down:
"Due to baseless and relentless legal badgering by a certain four letter government agency, it's time to bid a fond farewell to the world's most popular adult desk toys, Buckyballs and Buckycubes. That's right: We're sad to say that Balls & Cubes have a one-way ticket to the Land-of-Awesome-Stuff-You-Should-Have-Bought-When-You-Had-the-Chance."
The other example concerns my homeowner's association. People had taken to walking in the office parking lot for exercise. The association, on advice from its lawyers, had to order the people to walk elsewhere for fear of lawsuits. Someone could step in a pothole and injure himself, and then the association would be liable.
This is a legal problem, but it is also a social problem. Citizens sitting on juries continue to rule in favour of massive judgments for injured people in the face of all common sense. The premise is that other people should make our world completely safe, regardless of how irresponsibly we act. Computer security expert Bruce Schneier has a timely article on just this question of our obsessive, and self-destructive, pursuit of security. An article in Reason magazine discusses the scientific side of poor risk evaluation. (There is a whole branch of science called "prospect theory" that has grown up around this question.)
The social problem is hard to fix, but the legal issue could be addressed by repealing the concept of strict liability. Justice Oliver Wendell Holmes, Jr. devoted a significant section of his book "The Common Law" to the question of liability. The prominent legal principle in the matter was that "a man acts at his peril," i.e., he was responsible for his actions even if he could not reasonably anticipate their results. Justice Holmes spends several paragraphs showing the problems with this based on other case law, and concludes his section with what I think is a very apt discussion of the social issue at stake.
"[T]he public generally profits by individual activity," he writes. "As action cannot be avoided, and tends to the public good, there is obviously no policy in throwing the hazard of what is at once desirable and inevitable upon the actor." He then explains the practical problems with making the state into "a mutual insurance company against accidents," but concludes that the most serious problem is "one of offending the sense of justice. Unless my act is of a nature to threaten others, unless under the circumstances a prudent man would have foreseen the possibility of harm, it is no more justifiable to make me indemnify my neighbor against the consequences, than to make me do the same thing if I had fallen upon him in a fit, or to compel me to insure him against lightning."
We have become a society in which "a man acts at his peril." Society no longer encourages activity -- or does so to a much smaller degree than it used to -- but instead hems public action in at all turns with threats of liability, a great hidden tax upon the creative powers of our country.