On Friday, I attended a talk by Claire Finkelstein on contracts under coercion. I've been trying to attend a lot of colloquia recently, as they can be a source of ideas and it seems to be a good thing to be getting out and talking to other philosophers. Discussion at this one was spirited.
Finkelstein's argument centered around an example; a robber threatens to kill me unless I can pay him, and I have no money on me, so I promise I will get the money and pay him tomorrow. Obviously, this is of no value unless the robber actually believes I will pay, so in order for this move to save my life, I must somehow bring it about that the robber believes this. It would thus be very much in my interest if it were possible for me to call on some external enforcement mechanism, to sign a guarantee of some sort which, say, the state would compel me to honor.
Of course, as the law stands now, I could not do such a thing; contracts entered into under coercion are unenforceable. And so my situation is hopeless; I can't provide the money now, and my promises to do so in the future are not credible, so the robber will shoot me. It seems that I should wish that the law did not take this stance on coerced contracts.
Finkelstein supposes that the reason we do not enforce coerced contracts is that we wish to discourage people from engaging in coercion, by reducing the rewards, but she notes that this not only imposes a cost on the one engaged in coercion (who is denied access to some rewards) but also on the victim (who is denied the possibility of a less bad escape). She considers it quite unfair to impose this further cost on the victim, and so suggests that we really ought to be increasing the penalty to the robber in other ways (since there are always other ways to ramp up punishment), finding ways that don't impose a cost on the victim. So she argues that coerced contracts should be enforced.
Endless complications and debate arose, and my own general reaction was that, as usual, sorting through the strained and tortured logic of consent and voluntary action and rationality reinforced my fondness for utilitarianism. It may be hard to figure out what will produce the best outcome, and sometimes the advice is unpleasant, but other approaches seem to provide even sillier results, when they provide any results at all.
At the dinner after the talk, I was pointed toward a presentation of an extraordinary view. Finkelstein told us that Richard Posner had argued that criminal activity in general could be seen as all involving bypassing of efficient market mechanisms, and so that the interest of the state in enforcing criminal law could be seen as entirely concerned with protecting the market. He actually suggests in one paper that even rape fits this model; it can be seen as bypassing implicit markets in dating.
Posner considers the possibility that the rapist may want non-consensual sex specifically, something in which there is not (and cannot be) a market, and on that issue Finkelstein was actually slightly unfair to him; she reported him as saying that it was too hard to distinguish such cases from other cases of rape, so although the state had no interest in discouraging rapes of that form as such, they should still as a practical matter be punished like other rapes.
In fact, Posner isn't quite that silly in the paper, though I can see where Finkelstein gets that impression. He does suggest the approach Finkelstein reported, but he also allows that there are situations where people's interests are in conflict, where there is no consensual market solution to the conflict. He does not actually say the state has no interest in such cases; he suggests that when leaving it up to the people involved to resolve it without interference produces decreased utility, that also constitutes a form of inefficiency, and he explicitly puts rape in this category. However, this seems to undermine Posner's central point, since it concedes that bypassing market mechanisms isn't really the only way to go wrong. Perhaps Finkelstein was charitably seeking a more consistent interpretation of Posner.