caveat emptor economics

Editorial
caveat beware government

Caveat Emptor, Venditor, Dominator, Civis, Scriptor, Lector

Fred Foldvary
by Fred E. Foldvary, Senior Editor

Suppose you buy something, and it breaks or makes you sick or does not work as advertised. Who is responsible?

If the buyer is responsible, this is called caveat emptor, from Latin, meaning 'let the buyer beware.' Caveat emptor makes sense when the buyer has more knowledge and control than the seller. This applies, for example, when the buyer does not follow the directions of the label. If somebody buys pills which are supposed to be taken until use up, but he stops using them before that, he is responsible for the consequences. The seller has no knowledge or control over the behavior of the buyer.

When the seller typically has more knowledge than the buyer, then caveat venditor should apply. For example, if you buy pills which react dangerously with alcohol, and the buyer typically does not know this, it is the moral responsibility of the seller to inform the buyer.

The law recognizes both caveats, and often applies them reasonably. There are labels on cigarettes warning people that they are health hazards. If you hit your thumb with a hammer, this is your problem, not the problem of the manufacturer or seller.

Where the law becomes unreasonable, especially in the USA, is when people have been warned, or do things beyond the control of the maker and seller, but then the buyers sue the seller and maker of the product. Sellers of fast food, for example, are being sued when people eat the food and then get fat. The seller has no control or knowledge of the overall diet of the buyer. The buyer knows he is ingesting calories. They sue the sellers because US law has become dysfunctional. Responsibility has shifted to venditor when it should be caveat emptor.

The lawyer lobby has made it this way. Hundreds of millions of dollars have been awarded in lawsuits regarding asbestos, tobacco, firearms, and medical malpractice. Often, real victims get little or nothing. Much of the gain often goes to the lawyers. Lawyers dominate legislatures and prevent tort reforms that would eliminate such exploitation.

There is a third caveat, for government. Caveat dominator means let the governor beware. When the government has more knowledge and control than the citizen, it is the moral responsibility of government officials to warn the citizens and to be responsible for any damage.

But quite often, the officials fail to apply caveat dominator. They impose regulations without warning citizens of the damage to enterprise and employment. They impose income and sales taxes without letting people know that there is an excess burden being imposed, that will increase poverty and reduce economic growth. They take the nation to war without following Constitutional requirements and without disclosing the costs.

There is also caveat civis, let the citizen beware. When a citizen votes, he should beware that politicians do not follow through on promises, and that one is delegating power to someone he does not know and who may turn out to be a disappointment or even dangerous. This is why I vote for the candidates of the minor parties. I take caveat civis seriously, and don't want to be responsible for electing a tyrant or incompetent.

Caveat scriptor means let the writer beware, as a writer has the responsibility to be honest, clear, and interesting. But there is also caveat lector, let the reader beware. The reader has the responsibility of being skeptical and thinking for himself, of analyzing what he reads to see if the propositions are warranted by logic and evidence. Caveat lector also involves the principle of charity, so that the reader should presume good will and not jump to hasty conclusions.

Knowing these caveats makes us more aware, more careful, and more responsible.

-- Fred Foldvary      



Copyright 2004 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.

Email this articleSign up for free Progress Report updates via email


What are your views? Share your opinion with The Progress Report:

Your name

Your email address

Your nation (or your state, if you're in the USA)

Check this box if you'd like to receive occasional Economic Justice announcements via email. No more than one every three weeks on average.


Page One Page Two Archive
Discussion Room Letters What's Geoism?

Henry Search Engine