The argument against defamation law

Published on the ALS Thoughts on Freedom blog & LibertyWorks blog on 31 January 2010.

Most people accept anti-defamation laws as a legitimate restriction on free speech. For a starters, the laws have always existed so it just seems normal to keep them. If we remove them then society would be plunged into chaos as everybody accused everybody of being a paedophile, a thief, or a murderous nutcase… and if those rumours are believed then they could cause lots of damage to the victims, such as loss of work and/or loss of friends. And that’s just not fair.

Perhaps. But before we give up on fully free speech we should fully understand the arguments and implications.

Defamation involves (1) somebody lying about you, leading to (2) other people holding a bad opinion about you, leading to (3) a bad outcome for you because of lack of trade. None of these things are nice. But they are all voluntary and, all else being equal, none of them should be illegal.

There are two common confusions at this point. First, some people suggest that they “own” their reputation and so if you damage their reptuation then you have effectively stolen from them. This is clearly untrue. A reputation comes from people’s opinion, and each person owns their own opinion. If you have an opinion about me, that opinion is owned by you, not me. So you are entitled to change your opinion at any time for any reason and you have not stolen from me.

Second, some people take the bad outcome to be proof that something must be wrong. But here they misunderstand two very different sorts of bad outcomes. There is an important difference between stealing something (so you have made somebody worse off) and refusing to give something (so you have refused to make them better off). With defamation, the bad outcome comes because people refuse to interact with you. People may refuse to buy from you, or people may refuse to be your friend. But in a free society nobody has an inherent right to the property or friendship of other people.

So in a perfectly free society (where all human interaction is voluntary), defamation would be legal. But sometimes the voluntary outcome is not the best outcome, and so we should at least consider whether the government should over-ride freedom to try and create a better outcome.

The goal of anti-defamation laws is to ensure that other people can’t ruin your life by spreading lies about you. That is a worthy goal. But does it work?

As David Friedman showed in his popular economics book “Hidden Order“, the best way to establish a good reputation is to actually be a good person. If most people like you and trust you, then even if some people said bad things about you, you will build a good reputation. If most people don’t like you and don’t trust you, then even if some people vouch for you, you will end up with a bad reputation. For the vast majority of people, this is how reputation is built and maintained. Some people may lie about you, but ultimately the truth is more likely to win out. Or as Thomas Jefferson said “The man who fears no truth has nothing to fear from lies”.

And more to the point, the majority of people cannot manage the cost and complexity of defamation laws, which effectively puts them out of the hands of lower and middle-income families. For most of us (and for most people around the world and through history) it is as though defamation laws don’t exist.

This may lead to the conclusion that defamation laws are irrelevant, but there is one way that defamation laws do change behaviour. Larger organisations and high-income people are able to afford the cost and so are in a position to sue people (or threaten to sue people) who they see as lying about them.

The problem with legislating about lying is that one person’s lie is another person’s truth… and we don’t have a perfect angel available to uncover who is right. In some cases it’s subjective. In some cases we guess at the truth. In some cases people may know the truth, but be unable to prove it. A law against lying  can easily turn into a law against saying anything unapproved by an official authority.

Of course, large organisations and rich people are the least in need of anti-defamation laws because they are most able to loudly and convincingly defend their reputation. But anti-defamation laws gives them another weapon. For people who want to be critical of large organisations or rich people, the threat of being sued (even if there is only a 10% chance of being found guilty) is a strong incentive not to say anything negative. This stiffling of free speech is very real, but impossible to measure; we cannot count the number of statements that were not said.

The consequence is an uneven playing field where larger organisations and rich people have an extra advantage over the rest of us.

A more balanced playing field would be achieved by having an independent 3rd party (like a court or another trusted institution) making a determination, but without any legal sanction. It could be like a non-government “court of truth” where people go to defend their reputation, but without restricting freedom of speech. People could speak freely without threat of being sued, and people could rest comfortably knowing that they will always have the opportunity to defend their reputation.

A final problem with anti-defamation laws is that once you start undermining freedom of speech it becomes easy to find numerous other excuses to restrict free speech. Consequently, we are now facing a range of laws that prevent people from giving offense, such as anti-vilification laws. It is not nice to lie about people, or to vilify people, or to tease people or offend people… but that is what freedom of speech means. If we re-define “freedom of speech” to mean “saying only nice things approved by the government” then we are making a mockery of freedom.

Author: John Humphreys

Chief Economist at The Australian Taxpayers Alliance, Sessional Lecturer at the University of Queensland, and National President of the Liberal Democrats.

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