Iron Fist's Tort Law Lesson
By now, most of us have finished our binge-watch of Netflix's latest Marvel series Iron First. Billionaire Danny Rand gets stranded in the Himalayas at the age of ten after a plane crash and is raised by warrior monks who turn him into a superhero sworn to fight against the evil Hand organization. I am a mega-geek when it comes to anything Marvel, and my Austrian economics loving libertarianism is generally on hibernate mode until I've completed my twelve-hour marathon of these shows.
But there was one scene, which I suspect is easy to overlook in the middle of an action-packed superhero show, that I believe offers a wonderful lesson about the consequences of government regulation on the market mechanism of private tort law.
Early into the fifth episode, Rand Enterprise executive Joy Mecheam (played by Jessica Stroup) is meeting with a lawyer who is bringing suit over pollution that has allegedly caused cancer to a number of people within a one-mile radius of the company.
Meachum responds to this accusation by saying, "We have been compliant with every applicable environmental law and regulation." After the lawyer pushes further, she goes on to say, "If you do manage to establish a connection to the emissions from our plant, our company still followed the law."
In other words, the lawyer had no case. Even if his clients were legitimately harmed by pollution from Rand Enterprise that permeated into their own private property, the company was protected by the federal environmental regulations. The victims have no recourse.
This scene, which was bluntly written by people who likely think they are making a grand statement against the evils of private corporations, gives an inadvertently accurate description of one of the most significant consequences of environment regulation and the centralization of the American court system.
In a previous article, Ryan McMaken asks the question "Are Libertarians Too Anti-Pollution?" In it, he details the function of tort law in a libertarian society. Pollution is, in the view of Murray Rothbard, a violation of the property rights of the owners of polluted property. In this scene from Iron Fist, the property under dispute are the bodies of the cancer victims. Such pollution is therefore an act of aggression and creates a legitimate claim for restitution on behalf of the victims.
In our modern legal system, though, this avenue can only be taken against polluters who are found to be in violation of the government regulations crafted with the intent of preventing such problems. In other words, the environmental regulations serve to actually protect the polluters from having to pay legitimate restitution. As long as they can show they were in compliance with federal laws, the government court systems are compelled to rule in favor of the property rights violator.
Under a pure property rights system with private courts, recourse against polluters through the tort mechanism would be much easier. This would effectively constitute a market regulation on pollution as well as many other regulated industries. Instead, as McMaken points out, "a polluter can legally spew poison into the air right up to the limits allowable by law."
Tort law remains a semi-private branch of the American legal system, but government intervention into many areas of supposed "negative externalities" or "social costs" have interrupted this legal mechanism for handling such property rights disputes. A victim can only sue a company who is in violation of government regulations. This demonstrates how the anti-business left who laud the Environmental Protection Agency and other regulatory bureaucracies are ironically protecting the very companies they despise from the natural market consequences of property violations.