Balneus

Australian Lefty on Politics, Governance, Science and Info Management

Homelessness and efficient breach

Posted by Dave Bath on 2009-10-27


There is a pernicious bit of contract law theory called "efficient breach", beloved of unscrupulous capitalists, "the view that a party should be allowed to breach a contract and pay damages, if doing so would be more economically efficient than performing under the contract".

But would they want long-term homeless folk reading Posner, breaching not a contract to supply widgets, but the social contract?

Consider, by breaching the social contract, beating well-heeled older capitalists to death, (adult kids, hefty life insurance, it’s a minimal impact murder if such a thing exists), and then immediately surrendering to police, the punishment is a long term guarantee of food, shelter, clothing, medical care, and even TV and other recreation facilities.

That’s certainly "economically efficient" for a homeless person!

So why doesn’t this "efficient breach" of the social contract, major crimes by homeless folk, happen more frequently?  After all, the damages/punishment cause the state to actually take responsibility, accepting duties that (unless you have committed a major crime) are so obviously, frequently, and cold-heartedly abrogated by governments.

Could it be that homeless folk have higher moral standards than the advocates of "efficient breach" theory?

I suppose Posner would have to commend a starving person who mugged or murdered a silvertail on their supreme legal reasoning capabilities, or be branded a hypocrite.

I wonder too, whether for all their mouthings, all the political parties, and indeed the population at large, practice efficient breach when it comes to homeless folk.  Why bother putting in the effort to solve the problem, to prevent the causes of homelessness and address the results, when the homeless have no political voice because they have no fixed address and are not on any electoral rolls, when they can be made invisible by council by-laws against "begging", when through the privations of the weather and poor nutrition, the problem of any individual resolves itself in death relatively quickly.

When a few hundred thousand healthy people lose their houses in bushfires, instantly as many tents, blankets, toys, phone charging stations and cheap loans are provided.  Instantly mountains of food appear.

Every time there is cheering for the promises of lower taxes that mean winding back the social wage and the programs that protect those most poorly served by our society, the applause is for "efficient breach" theory.

Yet every time a corporation uses efficient breach against a single consumer, paying for good lawyers to achieve a minimal rap over the knuckles… shock… horror!

Maybe next time someone on the street asks for help, take a minute or two, get them the tram ticket, a carton of milk, a piece of fruit… and don’t ask for thanks but forgiveness.

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8 Responses to “Homelessness and efficient breach”

  1. Consider, by breaching the social contract, beating well-heeled older capitalists to death, (adult kids, hefty life insurance, it’s a minimal impact murder if such a thing exists), and then immediately surrendering to police, the punishment is a long term guarantee of food, shelter, clothing, medical care, and even TV and other recreation facilities.

    There’s plenty of people out there who beat old ladies to steal their handbags and wouldn’t care less if the old lady was a poor as they were or if they died in the process. The reason, and the only reason, there is not more of what you mention above is because of the cost of this action. This occurs at a number of levels. Firstly, even if your target is older and appears infirm, you might get an unpleasant surprise. Or another one of their kind might see you who isn’t infirm and give you more than just an unpleasant surprise. Furthermore, people in civilised communities who don’t live by this code will put in processes to prevent this from happening or to deal with it if it does, for example, moving to an area full of people like themselves with less crime (sometimes en masse, for example, through the phenomenon known as ‘white flight’). Economists call these middle class suburbs, latte lefties call them the bourgeois, hard working people who haven’t managed to move in (and are still having their stuff stolen and getting mugged) call them silvertails, and people who live at the expense of others call them ‘rich cunts’. Finally, at the higher level, there are the institutions the productive people pay for such as welfare and the police, who may catch them – and although for a few jail might be nice, their lives often aren’t that bad due to the ability to keep up their lifestyle choice, for example, drug use. The generous welfare may mean living a day-to-day existence, but a relatively comfortable one when compared to working.

    It is these factors that stop people beating capitalists to death. For as long as there has been someone who showed initiative, was willing to work hard and live as a productive rational being, there have been others who have looked at them, not as an example of what they also might be able to do, but as a free ride to the satisfaction of their needs and wants, and some immediate gratification.

    Every time there is cheering for the promises of lower taxes that mean winding back the social wage and the programs that protect those most poorly served by our society, the applause is for “efficient breach” theory.

    Here’s a compromise. Lets put in a social wage. The criteria is it applies to ‘average’ people, meaning everybody but children under 18, elderly people over 67, and the disabled or chronically ill who are dealt with under different systems (with the standards for being disabled or chronically ill being high – eg partial back pain or depression doesn’t cut it). For average people this is the only form of welfare available. Every Australian citizen receives the tax free social wage equally, and may earn as much additional income as they like without it being reduced. It is considered the inalienable right of every citizen to receive this money from the government. There is a constitutional clause to afford a right that no more than 30% of an individual citizen’s income will be taxed away. If the social wage goes up for anyone it also goes up equally for everybody else. I’m willing to sign up to this, are you?

    Maybe next time someone on the street asks for help, take a minute or two, get them the tram ticket, a carton of milk, a piece of fruit… and don’t ask for thanks but forgiveness.

    I was living in Stanmore in 1993/1994 (at my first attempt at uni) and had no money, lived in pretty shitty conditions. I was walking under the tunnel in Petersham railway station if I remember correctly. There was a middle aged guy asking for money. I’d seen him there before and by his physical state it was clear he lived on the streets. At that stage I was a devout raving fundamentalist christian (the sort who asks you to bible discussions in the mall) at the most fundamentalist time in my christian life (and although it was a decade later that I admitted it to myself, this was the time that I realised christianity was a load of shit). Concerned that he would spend the money on drugs I offered to buy him a sandwich. He thought about it like he could take it or leave it, then suggested a hamburger. I thought about it, and thought fair enough, and we started to walk to the shops which were maybe 150m away. After a few steps he went ‘don’t worry about it’ and walked back to his place in the tunnel. When I relayed the story to my flatmates they asked me if I knew why he disappeared for long periods. I said I thought it was because he was doing drugs. They said it was because he gets caught robbing children and younger teenagers and he’s either doing a stint in jail or the police are hounding him away.

  2. Dave Bath said

    Michael@1
    I’ll definitely come back for more comment on this… and you’ve made my jaw drop… pleasantly. (Oh, the moderation kicked in for “sh*t”)

    I mentioned the buying of a ticket, or food, or something, because that’s the best way I know how to differentiate between someone in genuine need and someone who isn’t. You seem to have had the same theory. It certainly avoids the "they’ll only spend it on drugs|cigarettes|booze" objection. (Mind you, I’d refuse the hamburger, but ask for a cheaper red-meat-thing instead: egg muffin no bacon or something).

    On your libertarian offer of a social wage… hmmmm…. definitely going to think about that one. There are a couple of discussion points: what levels of service are provided? you say "equal", but I’m a bit concerned about those with greater needs if you are talking equal expense, and the social wage I’d imagine as non-monetary, involving shared use of resources (education, parks, libraries). A social wage NOT based on money, but on services, ensures that state funds aren’t misdirected, especially if that misdirection is likely to lead to a chronic condition (yoof buying volatile organics in aerosol cans for chroming, leading to horrible chronic problems, for one).

    So in principle… I don’t have a knee-jerk reaction against your idea, indeed it has some appeal… but devil in the details as they say. Looks like libertarian you and lefty me have something to put on the table! Woohoo!!

    The other issue of course is that many folk will be suffering depression that got them into the homeless situation, or as an inevitable result of chronic homelessness. Lefty paternalism kicks in then, in my view.

  3. Every time there is cheering for the promises of lower taxes that mean winding back the social wage and the programs that protect those most poorly served by our society, the applause is for “efficient breach” theory.

    Here’s another interesting thought for you. America has the Second Amendment and, I believe, a third of the worlds firearms held in private hands. Lots of people keep crapping on about how bad the poor have it in America and what a large percentage of the American population are in this situation. If everyone can get an assualt rifle, and easily and instantly be part of delivering an ‘efficient breach’, why hasn’t the revolution arrived?

  4. Dave Bath said

    Michael@3: Probably because efficient breach is recognized as objectionable, and most halfway reasonable people recognize it as such… so why is it looked upon kindly by some legal theorists?

    Besides, the big wheels rarely travel down those dark paths where live those unfortunates in circumstances that make a 10-year stretch in prison look comfortable. If criminals are given greater care by the state than the non-criminal unfortunates (homeless or at-risk), as is the case, do you think that is civilized?

  5. Probably because efficient breach is recognized as objectionable, and most halfway reasonable people recognize it as such.

    Talking to a good percentage of the left you

    If criminals are given greater care by the state than the non-criminal unfortunates (homeless or at-risk), as is the case, do you think that is civilized?

    No. But if you tried to treat criminals any differently you’d get howls from our lefty friends, even if you posed the argument you stated above, and justified the lowering of convicted criminals standard of living in order to raise the standard of the unfortunates. Someone who is kept in jail is easier to point to as an example, which is why they get the attention. BTW, I also think people serving around 12 years inside for murder is ridiculous. To plenty of people this would be worth it so how can an average citizen feel protected by this system? The reason we treat criminals so well, and also impose such low sentences for very bad crimes, is because our justice system is as much based around social engineering as it is around objective law. We want the ability to lock people up for PC crimes, like denying the holocaust, and we want to treat people who reject state authority, such as tax evaders, like murderers. If you actually treated these people badly there would be some serious kickback, so we make the crime sound bad by putting it on par with truly bad crimes, but we actually don’t treat anyone too badly.

  6. Sorry, the top paragraph is meant to read:

    Probably because efficient breach is recognized as objectionable, and most halfway reasonable people recognize it as such.

    Talking to a good percentage of the left you wouldn’t get this impression. They love the idea of eating the rich, or at least shooting them. What they find objectionable is that there may be some risk to themselves when they try to do this.

  7. I know, I know, I’m supposed to be resting. But I’m sitting here on a ventolin nebuliser with nothing to do, so I thought I might as well read your post.

    I think Posner would respond to your post by saying that efficient breach is allowed where it results in a more efficient allocation of resources. Hence, if A contracts with B, but then sees a more profitable opportunity with C, that should be allowed because it will result in a more efficient allocation of resources.

    While a homeless person getting resources from a business man is certainly more efficient for the homeless individual concerned, I think Posner would argue that it is not more efficient for society in general. He sees efficiency as a generally utilitarian principle – something that produces the best outcome for society in general, even if it results in a bad situation for one individual (in our contract above, obviously B loses out). Because a homeless person would arguably not use the money in a more efficient way than the original owner of the money, such a breach of the social contract would be inefficient.

    Actually, as you well know, I think the whole efficient breach thing is a crock. It presumes that efficiency is the be-all-and-end-all, and ignores things like the importance of promise-keeping in the business community and the importance of security of transactions. Nonetheless, if a person enters an agreement and something changes, we don’t want to bind them to their obligation too strongly – circumstances can change, and it should be recognised that there are situations where a party may wish to breach. The question is then what remedies we grant (and I think my thesis will answer that question…)

  8. Dave Bath said

    LE@7 said "I think the whole efficient breach thing is a crock."
    I might have said the same thing less politely!

    LE also said "While a homeless person getting resources from a business man is certainly more efficient for the homeless individual concerned, I think Posner would argue that it is not more efficient for society in general."

    Hmmm, well because of the laws of diminishing returns ($100 in the pocket of a poor person increasing the sum total of human happiness much more than the same $100 in the pocket of a rich person, to whom $1000 is a trifle), either Posner is not a utilitarian (greatest good of greatest number, and by the most efficient means), or a hypocrite. You could also argue similarly for the allocation of resources generally (just think of the relative carbon emissions of the rich versus the poor, either on an individual or global scale).

    BTW: This extends into my thinking that penalties for rule breaking should be based on the principle of equivalent deterrence – e.g. traffic/parking violation fines being proportional to the average price for the type of vehicle the offence was committed in (e.g. same offence in Lamborghini would cost 100 times as much as if done in a beaten-up 1970s Toyota).

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