Forums of the Libertarian Left

I'm looking for any in-depth studies of libertarian theories of non-contractual detrimental reliance. For example, suppose you ask me what I think about a certain product and I tell you (or perhaps I do reviews for a living) but after buying the product (which turns out to be nothing like I described), you discover that I was biased by receiving a free sample to review or special kickbacks because you mentioned me in the "how did you hear about us?" section of a survey.

I think generally we have an intuition as libertarians of some form of caveat emptor and that just saying something to someone (that they have the freedom) to ignore, can't carry any weight as far as restitution if a contract wasn't involved, e.g. if the offending party is a third-party. But I'd like to know if there are any careful examinations of this "obvious" principle that I can refer to in fleshing out some ideas.

FYI, this came up in think about the FTC's new regulation requiring bloggers to mention (or else be fined) if they received a sample product from a manufacturer if they post a review of that product. The thinking, I suppose, is that you have to protect the consumer that may trust and rely on the review from bribery and bias as regards the reviewer. This seems like obviously wrongheaded paternalism but I want to say something more than that. But before I do, I'd like to know what's already been said. There seems to be reams on contractual stuff but not much on this sort of indirect wronging by omission. The whole thing from the FTC seems to imply some sort of "right to information" and I guess just pointing out the lack of such a right might be the best start. Even though I think it likely a moral issue to withhold that kind of information, the good of it doesn't seem to be a form of aggression despite the property effects (you go out and trade money for goods based on your reliance on the information).

If you have any ideas of some or interesting angles on this scenario, I'd love to hear them. Also, if you don't share the intuition that this is wrongheaded policy (statism aside), I'd like to hear those arguments too.

neverfox wrote:I'm looking for any in-depth studies of libertarian theories of non-contractual detrimental reliance...

If you get a free sample of something that turns out to be a total piece, why would you lie about it? Why flush your career down the toilet over something so stupid? Your point might make sense if it was a continual sampling affair, but that would seem to fall under your second category of special kickbacks.

If you're getting special kickbacks, then you may have a contract hidden in the mix somewhere for working as a representative of the producers of the product. The company may be liable for damages stemming from the sale of the product under false pretenses. You, as a hired representative, may also be held liable.

It doesn't seem like an in-depth study is really necessary here, which may be the reason why you haven't found one yet. Although you could do the work yourself. I'm sure it would be an interesting read.

I should have clarified: I'm looking for libertarian analyses of why there is no such thing as non-contractual detrimental reliance. In other words, I'm currently arguing that it not legitimate to fine or punish someone for leaving out that information. I can see how my post might have been confusing though.

If you get a free sample of something that turns out to be a total piece, why would you lie about it? Why flush your career down the toilet over something so stupid?

That's right. I think that is the best point of all the possible ones you could present: if the lack of disclosure leads to a disconnect between your review and the satisfaction of your readers, then you aren't going to last long. It seems simple to me, but you know how statists can be. They'll argue until their blue in the face about how "yes, but what about the few people that get mislead in the meantime? Some people must be harmed for there to be an incentive to fix the problem. Wouldn't you rather be proactive? Market processes are too slow! Save the children!"

It doesn't seem like an in-depth study is really necessary here, which may be the reason why you haven't found one yet. Although you could do the work yourself. I'm sure it would be an interesting read.

Thanks. I suppose I will. I just didn't want to reinvent any wheels if my time could be better spent elsewhere. I think it is an interesting topic because it goes up against some of the fuzzier arguments for the state like "but is it so hard to comply with this tiny little rule?" etc. It pulls in a lot of topics like public choice theory, revealed preference, consent, contract theory etc.

Also, I think it would be interesting to have the discussion about how to interpret the situations where freed society doesn't generate solutions that we intuitively expect it will. We spend a lot of time giving examples of Iceland or the Law Merchant to show how things we want can come to be without the state. But we don't spend much time talking about what it means when what we expect doesn't happen without coercion. In other words, what some people call "market failure". I know Austrians and Nozickians have a response: there's no such thing as market failure, the outcome on a free market can't be judged as 'bad' if all transactions were free and that calling it 'failure' is projecting personal preferences onto other people. But that response isn't the whole story I don't think because it ignores innovation and innovation is ubiquitous in time or place. But one the other hand, there is some truth in it (especially the last part) and I think that the statist mentality relies too much on the idea that when something doesn't spring up immediately in the absence of government intervention, that it follows that government is the only solution.