Whither Justice In Transaction?

As our technologies have ramified, certain aspects of knowledge have become more, not less, problematical. Much of this stems from the recognition that a new device or practice can have long-range effects that might not be visible in the near term. Much of the rest arises from the entirely excusable ignorance of the average citizen about, well, just about everything.

The extremely simple legal environment of the nineteenth century was founded on a set of extremely simple principles, which are no longer honored. One of these, the doctrine of assumption of risk, undergirded all commercial transactions. It made it possible for employers and employees to contract for any sort of labor, under any sort of conditions, and for vendors to sell potentially harmful products to customers, without fear that a lawsuit might reverse their a priori agreements to indemnify / hold harmless. But assumption of risk came under heavy fire in the early twentieth century, and began to be displaced by the doctrine of informed consent: the principle that a man could not be bound by a contractual agreement of any sort unless he had been fully informed of all the pertinent risks and had explicitly consented to them.

Informed consent has been taking a beating these past few decades, mostly because of Calabresian "legal positivism" and "deep pockets" liability theory. In essence, the prevailing view in American civil courts today is that, given the complexity of technology and society, no one is sufficiently well informed of the risks pertaining to anything to enter into a binding agreement to indemnify or hold harmless any other involved party under any conceivable set of circumstances. In consequence, such agreements, wherever we may find them -- and they're more numerous than one might imagine -- are considered "flypaper," and are dismissed or rewritten by judges at whim. The same is true for every sort of contract, for, once accepted, the assumption that only judges have the insight required to write a binding agreement knows no bounds.

The rot in our tort law proceeds directly from this absence of contractability. Without the ability to enter into a binding contract, persons desirous of transacting with one another must commit to a sequel of infinite uncertainty. Each is at the mercy of the intentions and character of the other. Under these circumstances, the most valuable thing a man can have, the sole protection he can offer a would-be partner in commerce, is an unstained reputation...the very thing one can most easily lose in a milieu where law is infinitely luxurious and infinitely elastic, slander is commonplace and usually escapes punishment, and no standard of proof can free a man from the invidiousness of the lumpenproletariat or the Fourth Estate. It puts one in mind of a passage from Atlas Shrugged:

Rearden, that evening, his coat collar raised, his hat slanted low over his eyes, the snow drifts rising to his knees, was tramping through an abandoned open-pit coal mine, in a forsaken corner of Pennsylvania, supervising the loading of pirated coal upon the trucks which he had provided. Nobody owned the mine, nobody could afford the cost of working it. But a young man with a brusque voice and dark, angry eyes, who came from a starving settlement, had organized a gang of the unemployed and made a deal with Rearden to deliver the coal. They mined it at night, they stored it in hidden culverts, they were paid in cash, with no questions asked or answered. Guilty of a fierce desire to remain alive, they and Rearden traded like savages, without rights, titles, contracts, or protection, with nothing but mutual understanding and a ruthlessly absolute observance of one's given word. Rearden did not even know the name of the young leader. Watching him at the job of loading the trucks, Rearden thought that this boy, if born a generation earlier, would have become a great industrialist; now, he would probably end his brief life as a plain criminal in a few more years.

However, few legal scholars -- Thomas and Epstein are exceptions -- are willing to consider returning even to an informed-consent standard, much less the sterner assumption-of-risk rules that governed the Nineteenth Century.

From where is the next fundamental principle of justice-in-transaction to come? Will it be some product centuries in the making, slowly turned by jurists from Blackstone through Holmes on the lathe of our legal system, or will it arrive all at once, a jewel unearthed by a single brilliant mind in a flash of unprecedented insight, as the theory of property rights occurred to John Locke?

More important, with the costs of human interaction mounting steadily in consequence of the mounting uncertainty of all dealings, what, apart from our sterling characters, shall we use in the meantime?