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How would an objectivist legal system run?

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I have been discussing the objectivists model of government with a friend and a few points have come up that I would like some clarification on.

So first I would like to lay out my understanding of what an objective legal system would look like.

-There would be no governmental or compulsory regulation, only the possibility of voluntary regulation by independent organizations.

-If a company was found to have committed fraud then the customer/organization could sue the company or the government could charge the company and in both cases, would be brought to trial.

Now we were discussing compulsory medical licensing and I said that under an objectivist government, there probably wouldn't be medical licensing and that doctors could practice how they liked as long as they were not defrauding or intentionally harming anyone. But my friend brought up this point once the case is decided it constitutes governmental prescription of proper medical practice. It is a standard which is used to determine the validity of your suits and your recourse against the use of force (fraud).He argues that that precedent is as legally binding as a medical licensing authority would be.

So with that example in mind, would anyone be able to explain how an objectivist legal system would run?

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For your example about medical licensing (the whole issue of Objective law is a wide one with the subject talked about in depth elsewhere, so for several reasons I'll leave it up to other people and/or sources to cover the subject more broadly once more people are probably awake), I think part of the problem that causes your slight confusion is that you have said not only fraud, but "causing intentional harm" would be barred. Outlawing "causing intentional harm" would take a lot of decisions and such and if put into law probably would end up looking a lot like regulation, however, I don't think that Objective law would bar causing intentional harm so long as any cases of intentional harm didn't also end up being a case of fraud. If somebody wants to needlessly amputate one of their arms and could find a doctor willing to do it, I think it would be very unwise, but they should not be legally barred from doing it (although I'd recommend to the doctor that they get the patient to undergo a psych evaluation first, just in case the person later claims they were mentally incapable of consenting to any contracts of any sort while the ordeal took place and then may later try to go after the doctor in court for performing surgery on them without their real, competent consent.) We may also disagree on interpretations on data of what is worth what potential risks and benefits, but as long as it isn't fraud, it is up to the individuals and those who will be treating them to decide what is legitimately worth what risks. So, problem solved. No licensing and regulation as we typically know of such to mean today, just outlawing force and fraud. Outlawing these things is not the same as licensing anymore than somebody is "licensed" by the government to sell their paintings or tailor clothing.

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-There would be no governmental or compulsory regulation, only the possibility of voluntary regulation by independent organizations.
You will have to explain what you mean by "regulation". Regulations are a form of law, created by a government agency which has specific statutory authority to specify how an authorizing law is implemented. For example, 28 CFR 1.1 (promulgated by the DoJ) states how a person may seek executive clemency; 32 CFR 21.1 controls the loan and sale of army property. Regulations would certainly exist under any rational form of government. The question is what is the proper content of regulations. It is not proper law to prohibit a business practice that might possibly be part of fraud. Nor would it be proper law to prohibit a person from engaging in the medical arts if he does not have a license (but it would be proper to prosecute a person from pretending that he had such a license.
But my friend brought up this point once the case is decided it constitutes governmental prescription of proper medical practice. It is a standard which is used to determine the validity of your suits and your recourse against the use of force (fraud).He argues that that precedent is as legally binding as a medical licensing authority would be.
Suppose Dr. Jones cuts off Mr. Smith's nose, and Smith sues Jones for malpractice. Smith successfully argues that, as a matter of fact, cutting off his nose is not common practice, was not agreed to, and was not medically necessary. The jury awards Smith $1 million. This decision is made by the jury, and enforced by the courts: the trial court has not set precedent.

A trial court does not set precedent, but an appeals court can. Suppose that Jones' attorney challenges a plaintiff expert witness on some crucial point, and on appeal Jones' attorney succeeds in arguing for a limitation on the Daubert standard. This establishes precedent, but not for the specific fact, rather for the legal principle.

The challenge for a system of objective law is to relate the discovery of valid legal principles to a system of explicitly stated code. That is actually what state licensing boards and regulations are about -- they say what the content of an implied warranty warranty of merchantability is or what an implied warranty of professional competence is. The only legitimate function for such governmentally-determined standards is that when there is no express warranty or disclaimer in a contract, the court must determine what principle to follow if there is a claim of contract breach. Thus a principle that "in lieu of a compelling medical reason to do so, a doctor may not cut off a patient's nose without express consent" would be a valid default legal principle.

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[...] under an objectivist government, there probably wouldn't be medical licensing [...]

It's hard to know exactly how a free market in medicine would work but I suspect some form of voluntary licensing would exist. Certain groups of individuals or practitioners or buyers of medical services or insurance companies might have an interest in creating a system for evaluating Doctors and hospitals. If it is rationally conceived it would be a good thing. It would provide information and be a boon to patients. Eventually the cream would rise to the top and rational price levels for different services would arise. And of course no one would be compelled to participate.

[...] and that doctors could practice how they liked as long as they were not defrauding or intentionally harming anyone. But my friend brought up this point once the case is decided it constitutes governmental prescription of proper medical practice.

You are not allowed to harm anyone against their will, it is against their rights. And a court protecting an individual's rights is not a regulation.

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Can't a regulatory agency effectively declare harm when no harm has been done? Whereas a court case only comes about in response to a situation where someone was actually harmed?
A court case comes about in response to anything that you could imagine a "cause" to be. That would include people possessing marijuana, or making more profit than is legal, or not paying taxes, or someone getting irritated because they don't like the looks of a building.

A regulatory agency can declare just what congress authorizes it to declare. The DoD cannot declare pollutants to be illegal; Education cannot restrict the importing of foreign currency. Congress has to say what is prohibited or required, and they can leave it to the regulating agency to determine exactly how that is to be done. The secret is, this way Congress gets to pass fairly vague laws with important details not really specified, and leave an agency to fill in the blanks. That way, Congress does not have to take responsibility for the nitty-gritty details.

As for the court / non-court difference, the real difference is that the courts may only react to some stimulus -- someone filing a case -- they cannot declare sua sponte that "conflict diamonds" cannot be imported. Congress, the people, or a suitably-empowered regulatory agency could.

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bluecherry: Are you referring to UNintentional harm? If not, why would a government not protect against intended harm? Surely that is a breach of another persons liberty.

DavidOdden & ZSorenson: So a regulation is the practical implementation of a law? If this is correct then would it be fair to say that an objectivist government would have regulations but only regulations that would aim to protect the freedom of all parties (i.e consumer AND producer) without restricting their freedom? Is that what you meant by "It is not proper law to prohibit a business practice that might possibly be part of fraud." and your post, ZSorenson?

DavidOdden & Marc K: So would the legal precedent only relate to the principal that has been breached, not the actual act itself?

So in the Dr Jones example, if Dr Jones cut off someones nose, lost and then the next day he cut off someones arm and that patient sued on the same grounds as the previous patient, Dr Jones would probably lose due to precedent. However that doesn't prohibit the the amputation of any nose or legs in the future. Would this be correct?

I guess I am confused by this because of the principle that has been trialled is "in lieu of a compelling medical reason to do so, a doctor may not cut off a patient's nose without express consent" then what is a "compelling medical reason"? and once that has been decided, doesn't that essentially act a prescription for medical practice?

DavidOdden: Are you saying that contract law would be the default code of law and that courts would only be used as to trial cases that claim that a party was in breach of a contract?

Grames: So is it correct to say that precedent can be used as a guide for future cases but doesn't automatically dictate how a future case may be decided?

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I was just asking a question.

I was wondering if a regulatory agency had a greater ability to create arbitrary rules than a court because it could anticipate situations in advance and create rules for them, whereas a court is more constrained to respond to situations that have already happened. Or whether there was some difference that made one better/worse than the other in terms of arbitrary laws and protecting rights.

But I guess you're right, better there be no arbitrary laws.

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Are you saying that contract law would be the default code of law and that courts would only be used as to trial cases that claim that a party was in breach of a contract?
Whenever two parties enter into an agreement but then disagree as to what the parties must do, the matter is resolved in court. The court will look at the contract, which will tell them what the proper outcome is. However most contracts are defective in one way or another in the sense that what the contract does or does not cover is not transparent. Sometimes, important matters are simply left unspecified (presumably because the sides each feel that it's obvious what the outcome would be -- only they don't agree on what that outcome is). The legal system needs some set of default assumptions stating what principle will prevail when no principle is expressly agreed on in the contract. For example: the service provider may delegate performance, unless the contract expressly prohibits it. Now suppose you hire Smith to paint your house, and the contract doesn't say whether Smith may or may not delegate his performance. Smith subcontracts to Jones; can the homeowner sue for breach? No, because the contract does not expressly require Smith himself to do the labor. That is an example of providing a "default rule".

Applied to medical practice, it could mean for example that the doctor assumes liability for damages that result from his treatment, unless the patient is advised that the doctor makes no warranty that the procedure is safe, and thus the patient assumes the risk. Or, the patient might by default be absolving the doctor of liability for non-negligent damage. Ideally, the choice would be stated in the contract; but if it is not, the default choice will be known as a matter of contract law.

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bluecherry: Are you referring to UNintentional harm? If not, why would a government not protect against intended harm? Surely that is a breach of another persons liberty.

I think you missed my point. I was trying to say that as long as a competent adult consents with accurate information and doesn't force anything on any nonconsenting part in the process basically, they can do whatever the hell they want with themselves for better or for worse. The government is there to make sure nobody violates your rights, that's it pretty much, and it cannot be a violation of rights if you agree to something knowing damn well exactly what you are agreeing to, no matter how dangerous or harmful to you the choice may be. People have a right to pursue their happiness and well being, not an obligation which we can shove down their throats so long as they leave us bystanders alone. Humans have got to make it by their own exercise of thought in reality, it isn't doing good to try to override people's decisions about their lives with force no matter why we decide to do it.

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DavidOdden: So do you think there can be room for regulations or regulatory branches for an objectivist government?
The concept of a "regulatory branch" of government makes no sense to me. A "regulation", though, only refers to a method of creating law, and there is no reason that all law would have to go through a bicameral-plus-executive creation process. In an Objectivist government, there would be severe limits on the kind of law that could be created, by any means, so environmental regulations, drug-vetting regulations, stock-sale regulations etc. could not exist, as they are outside the proper scope of government. Regulations defining court procedure would.
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