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No One Has a Right to a Good Reputation

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08/10/2019

Irving Shipbuilding Inc. (headquartered in Halifax, Nova Scotia) has multi-billion-dollar contracts (see here and here ) to supply various ships to the Canadian government. Major news outlets (Postmedia, Globe and Mail) have posed questions to the government about, and raised concerns about, various aspects of these contracts. The government has been quick to alert Irving to these media inquiries. In turn, Irving has been quick to threaten media outlets with lawsuits.

The Globe and Mail “received a letter from an Irving lawyer threatening legal action if the article contained any allegations of improper conduct.” Irving president Kevin McCoy informed various government officials about litigation to be initiated if Postmedia “published anything that impugned our professional reputation.” Litigation was threatened, according to Irving spokesman Sean Lewis, because these two news outlets “had highly inaccurate information that would cause our company, and the reputation of our hardworking employees, considerable reputational damage.”

The Problem with Defamation Litigation

Defamation litigation is a complete waste of resources. The freedom of speech includes the freedom to make allegations of improper conduct, and the freedom to publicize inaccurate information. No one is obligated to accept such allegations and information at face value. Moreover, no person, no company, no government, has a right to a reputation. A reputation is simply a reflection of the thoughts in the minds of other people. Since I own my mind and thoughts, but not the minds and thoughts of other people, I cannot own a reputation. As Murray Rothbard (economist/historian/philosopher) wrote in The Ethics of Liberty:

Smith has a property right to the ideas or opinions in his own head; he also has a property right to print anything he wants and disseminate it. He has a property right to say that Jones is a “thief” even if he knows it to be false, and to print and sell that statement. The counter-view, and the current basis for holding libel and slander (especially of false statements) to be illegal is that every man has a “property right” in his own reputation, that Smith’s falsehoods damage that reputation, and that therefore Smith’s libels are invasions of Jones’s property right in his reputation and should be illegal.

Yet, again, on closer analysis this is a fallacious view. For everyone, as we have stated, owns his own body; he has a property right in his own head and person. But since every man owns his own mind, he cannot therefore own the minds of anyone else. And yet Jones’s “reputation” is neither a physical entity nor is it something contained within or on his own person. Jones’s “reputation” is purely a function of the subjective attitudes and beliefs about him contained in the minds of other people. But since these are beliefs in the minds of others, Jones can in no way legitimately own or control them. Jones can have no property right in the beliefs and minds of other people.

We can, of course, readily concede the gross immorality of spreading false libels about another person. But we must, nevertheless, maintain the legal right of anyone to do so. Pragmatically, again, this situation may well redound to the benefit of the people being libelled. For, in the current situation, when false libels are outlawed, the average person tends to believe that all derogatory reports spread about people are true, “otherwise they’d sue for libel.” This situation discriminates against the poor, since poorer people are less likely to file suits against libellers.

Hence, the reputations of poorer or less wealthy persons are liable to suffer more now, when libel is outlawed, then they would if libel were legitimate. For in that libertarian society since everyone would know that false stories are legal, there would be far more skepticism on the part of the reading or listening public, who would insist on far more proof and believe fewer derogatory stories than they do now. Furthermore, the current system discriminates against poorer people in another way; for their own speech is restricted, since they are less likely to disseminate true but derogatory knowledge about the wealthy for fear of having costly libel suits filed against them. Hence, the outlawing of libel harms people of limited means in two ways: by making them easier prey for libels and by hampering their own dissemination of accurate knowledge about the wealthy.

Economic Consequences

When the government forbids actions which do not harm other people or their property, the inevitable result is a misallocation of resources, often resulting in a degree of economic regression. For example, defamation litigation requires a time commitment from plaintiffs, defendants, witnesses, lawyers, judges, juries etc., all of whom should be allocating their time to more productive pursuits.

Another example, as Rothbard noted, when defamation is illegal, a poor victim of libel will probably not hire a lawyer. Therefore, because the victim is not defending herself, people may tend to believe that the lies are actually true. This might limit her employment prospects and/or the emotional anguish she experiences might adversely impact her job performance, both with obvious economic consequences.

Conclusion

In a free society, defamation would be a nonissue. No one would be able to use the courts to punish other people for the things they say or write. The only exception would be if a person voluntarily signed, then violated, a contract or other document (e.g. non-disclosure agreement) wherein they agreed not to reveal specified information.

Libel and slander – lying – are illegal. But notice the double standard. These laws are made by politicians, who have, throughout history, proven themselves to be the most prolific liars among us. As Andrew Coyne wrote in the National Post: a good short definition of an election campaign would be “a sustained, intense, all-party burst of falsehood, slander and misrepresentation.”

Following a 23-year career in the Canadian financial industry, Lee Friday has spent many years studying economics, politics, and social issues. He operates a news site at www.LondonNews1.com

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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