Rights, Exploitation, and Third Party Harms:

Why Background Injustice Matters to Consensual Exchange

Keith Hyams

Journal of Social Philosophy 43 (2012): 113-124

I

In a key passage of Anarchy, State and Utopia, Robert Nozick writes that:

Some people steal from others, or defraud them, or enslave them, seizing their

product and preventing them from living as they choose, or forcibly exclude

others from competing in exchanges. None of these are permissible modes of

transition from one situation to another.1

Though central to his own libertarian theory of entitlement, the intuitions that Nozick

describes are widely endorsed and common to liberals of many different stripes. There is,

however, something puzzling about the set of intuitions that he describes, in that one of

the modes of transition mentioned stands apart from the others. The first four modes of

transition – theft, fraud, enslavement and seizure – all involve a direct violation or

threatened violation of the rights of the agent who supplies goods or services to the

perpetrator. In these cases, the intuition is that the non-consensual transfer of goods or

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services from the victim to the perpetrator is illegitimate, in the sense that the transfer

creates an injustice that did not exist before the transfer.2 But the last mode of transition –

forcibly excluding others from competing in an exchange – is different. In this case the

victim of the violation or threatened violation is a third party to the exchange that actually

takes place. Furthermore, the exchange is on the face of it an entirely consensual

transaction. So the intuition at work in this case is not the same intuition at work in the

first four cases. Rather, it is that the violation or threatened violation of a third party’s

rights renders illegitimate an apparently consensual exchange of goods or services

between the perpetrator and an agent who is not himself a direct victim of the violation.

In this paper I address the question, why should we sometimes treat as illegitimate

consensual exchanges that are the result of the violation or threatened violation of a third

party’s rights? The case described by Nozick, in which one agent forcibly excludes others

from competing in an exchange, is one such type of exchange; as we shall see later on in

the paper, there are also other ways in which an exchange can be the result of a violation

or threatened violation of a third party’s rights. Liberals have had plenty to say about the

reasons why we should treat non-consensual transfers between two parties as illegitimate,

but much less to say about consensual exchanges involving background injustices

committed against third parties.3 Yet we cannot assume that whatever reasons apply in

the two-party cases also apply in cases involving third parties: it might be, for example,

that the reasons that apply in the two-party case may depend on the fact that the transfer

takes place between the victim and perpetrator, or that the transfer is non-consensual, or

both.

3

In what follows I examine various possible explanations of the intuition that we

should sometimes treat as illegitimate exchanges that are the result of the violation or

threatened violation of a third party’s rights. I begin by considering and ultimately

rejecting the explanation offered by Hillel Steiner, which claims that we should treat

some such exchanges as illegitimate in order to ensure that rights remain compossible, in

the sense that the duties that correspond to the rights must all be conjunctively fulfillable.

I then ask whether exchanges that are the result of the violation of threatened violation of

a third party’s rights should be treated as illegitimate in order to prevent the perpetrator

from gaining by his violation or threatened violation. I argue that this explanation

provides a part of the answer, but that a complete explanation must also explain why any

losses incurred both by the victim of the violation or threatened violation, and by the

agent who exchanges for less than he would otherwise have done, are also unjust. I show

how principles of corrective justice can explain why these losses are unjust, on the

ground that they are wrongful.

II

I begin by examining one prominent explanation, suggested by Hillel Steiner, for the

intuition that we should sometimes treat exchanges that are the result of the violation or

threatened violation of a third party’s rights as illegitimate. Like Nozick, Steiner

discusses cases in which a buyer violates or threatens to violate a third party’s rights in

order to ensure that the seller will exchange with the buyer on worse terms than he would

otherwise have done. Steiner labels such exchanges, cases of ‘liberal exploitation’, and

4

claims that such cases provide the best bet liberals have of ‘[making] sense of what I take

to be the core characteristic of the concept of exploitation: namely, that it involves a

mutually self-interested, consensual exchange in which what one party transfers is – but

need not have been – of greater value than what is received in return’.4

Steiner’s claim to have captured the core characteristic of exploitation has been

questioned, on the ground that it is commonly acknowledged that exploitation can occur

even in the absence of rights-violations.5 Nevertheless, Steiner’s explanation of why

liberally exploitative exchanges should be treated as illegitimate is interesting in itself,

independently of his further claim to have captured the notion of exploitation, since it

offers a rare attempt to explain the intuition that we should sometimes treat as illegitimate

exchanges that are the result of a violation or threatened violation of a third party’s rights.

I shall argue, however, that the explanation does not succeed in providing the answer that

it purports to provide.

Steiner argues that we should treat liberally exploitative exchanges as illegitimate,

in order to ensure that rights remain compossible.6 The notion of compossibility, taken

from Leibniz, is central to Steiner’s view about rights. A compossible set of rights is one

in which the obligations entailed by the set of rights are capable of being conjunctively

fulfilled, without any conflicts between rights or duties emerging in the course of such

fulfilment. Rights must be compossible, Steiner argues, in order to avoid the ‘nightmare’

of deciding between the claims of agents who assert conflicting yet equally valid rights.7

Steiner’s argument for treating liberally exploitative exchanges as illegitimate therefore

depends on the key claim that, if an exchange resulting from a violation of a right were

5

allowed to be bestow valid titles, then an incompossible set of rights would result. Hence

exchanges cannot bestow valid titles when they result from a violation.

The appeal to compossibility cannot do the work that Steiner wants it to do here.

That is, it cannot be the case that we should treat liberally exploitative exchanges as

illegitimate in order to preserve compossibility. For even if Steiner’s background

assumption is true, that a set of valid rights must be compossible, it is simply not the case

that an exchange that resulted from a violation, or a threatened violation, would yield an

incompossible set of rights. In order to see this, consider the following example.

Arthur is seeking to sell his water pistol. Barny wants to buy Arthur’s water pistol

and offers Arthur £3 for it. Charlie is willing to pay more than £3 for the water pistol, but

Barny beats up Charlie and thereby hospitalises him, so that Charlie cannot make Arthur

an offer for his water pistol that would compete with Barny’s own offer. As a result,

Arthur ends up agreeing to sell his water pistol to Barny for £3, whereas Barny would

have paid more for it in order to outbid Charlie, had he not instead forcibly prevented

Charlie from competing in the exchange. According to the intuition expressed by Nozick,

and endorsed by Steiner, the exchange that takes place between Arthur and Barny –

Arthur’s water pistol for Barny’s £3 – is illegitimate, because it is the result of Barny’s

violation of Charlie’s rights.

According to Steiner, if Arthur’s exchange of his water pistol for Barny’s £3 were

treated as bestowing valid titles, then an incompossible set of rights would result. But if

the exchange were treated as bestowing valid titles, the resulting set of rights would in

fact be entirely compossible. First, Charlie’s rights to his (unspent) money would be

preserved (this would be true even if Barny had prevented Charlie from exchanging with

6

Arthur by stealing Charlie’s money). It is true that Charlie’s ability to exercise these

rights has been constrained. But that is not the same as having his rights removed. If

Charlie’s rights against Barny’s interfering with the use of his money had been removed,

there would be nothing wrong with Barny’s preventing Charlie from using his money,

which there clearly is. Second, Barny would now have rights associated with his

ownership of what was formerly Arthur’s water pistol, since ex hypothesi the exchange

would be legitimate. Third, Arthur would now have rights associated with his ownership

of the £3 that Barny gives him in exchange for the water pistol. There is nothing

incompossible about this set of rights. All the duties which correlate to the rights

mentioned could be conjunctively fulfilled, without any conflicts between rights or

duties.8 So it cannot be the case that we should treat liberally exploitative exchanges as

illegitimate in order to preserve compossibility, because compossibility would be

preserved even if we were to treat liberally exploitative exchanges as legitimate.

How does Steiner end up concluding that we should treat liberally exploitative

exchanges as illegitimate in order to preserve a compossible set of rights? He is misled by

an unjustified assimilation of liberal exploitation to the case of theft. ‘A thief’s title to his

gains is invalid,’ writes Steiner, ‘as is that of anyone to whom he transfers those gains, as

is that of anyone (including himself) to the proceeds from the sale of those gains or to

objects purchased with those proceeds, or to objects exchanged for those objects, and so

forth.’9 Even if we grant that everything Steiner says about this example is true, the

example nevertheless tells us nothing about the validity of titles obtained by liberal

exploitation. Steiner argues that liberal exploitation is akin to theft, insofar as the

violation or threatened violation that results in the exploitative exchange renders the

7

victim’s potential consideration partly beyond the victim’s control. But this assimilation

does not show that liberal exploitation is akin to theft in the relevant respect – that in

both cases the threat of incompossibility looms – and as such the assimilation fails to

demonstrate that titles obtained by liberally exploitative exchanges are invalid for the

same reason that titles obtained by theft are invalid. The danger of incompossible rights

in the case of theft would arise if the thief claims or seeks to bestow titles to the stolen

goods: the rights associated with such titles would be incompossible with the rights over

the stolen goods held by the victim of the theft. In cases of liberal exploitation, however,

the exploiter neither claims nor seeks to bestow any titles to the victim’s consideration,

which his violation or threatened violation renders partly beyond the victim’s control.

The only titles bestowed in cases of liberal exploitation are, first, the title which the seller

bestows by transferring to the buyer his own valid title over his own consideration; and

second, the title that the buyer bestows by transferring to the seller his own valid title

over his own consideration. So even if we agree with Steiner that if a thief’s transfer of

his ill-gotten gains were to create valid ownership rights then an incompossible set of

rights would result, this does not imply that liberally exploitative exchanges poses a

similar threat to compossibility. Liberally exploitative exchanges cannot therefore be

deemed ineffective in order to preserve compossibility.

As I noted above, the intuition that exchanges that are the result of a violation or

threatened violation of a third party’s rights are sometimes illegitimate is a widely

endorsed intuition, common to liberals of many different stripes. Nevertheless, the

conclusion that an appeal to compossibility cannot justify treating such exchanges as

illegitimate is of particular relevance to libertarian theories of justice, with their emphasis

8

on the historical pedigree of entitlements. Steiner claims that the compossibility condition

can justify ‘an important part of the “historical entitlement theory” of just rights’. He

footnotes this claim with a reference to Nozick’s entitlement theory in Anarchy, State,

and Utopia. But whilst the compossibility condition might justify at most an entitlement

theory of rights, the argument above suggests that the compossibility condition cannot

justify the entitlement theory defended by Nozick.

In order to demonstrate this, we can distinguish between libertarian entitlement

theories, one version of which Nozick adopts, and what I will call ultralibertarian

entitlement theories. Both libertarian and ultralibertarian entitlement theories do not

entitle a thief to his ill-gotten gains, nor do they entitle anyone (except the victim of the

original theft) to whom the thief transfers his ill-gotten gains to the items. However,

whereas libertarian entitlement theories do not entitle anyone to items gained in other

ways as a result of a violation or threatened violation, ultralibertarian entitlement theories

have no objection to such gains. What the argument thus far has shown is that Steiner’s

compossibility condition can justify at most an ultralibertarian entitlement theory, but not

a libertarian entitlement theory. It has shown that even if the compossibility condition

requires that thieves not gain valid titles to their ill-gotten gains, it does not require that

titles brought about in other ways by rights-violations or threatened rights-violations be

treated as invalid.

At most, then, an appeal to compossibility can justify treating as invalid a thief’s

title to his ill gotten gains, and the title of those to whom the thief transfers the goods. But

one might doubt even this much, because even in straightforward cases of theft, it is not

clear that the compossibility requirement itself entails that a thief must not gain a valid

9

title over his ill-gotten gains. The compossibility requirement does entail that a thief must

not gain a valid title over his ill-gotten gains at the same time as the original owner

retains his valid title over the stolen items. But this entailment would be satisfied if the

valid title over any stolen item, at the moment of theft, transferred from the original

owner to the thief. It is a matter of substantive morality, rather than a direct consequence

of the compossibility requirement, that valid titles over stolen items remain with their

original owner rather than transferring to the thief. Either way, compossibility would be

preserved.

III

If an appeal to compossibility cannot explain the intuition that exchanges that are the

result of a violation or threatened violation of a third party’s rights ought sometimes be

treated as illegitimate, what can? One possible explanation is suggested by what I have

referred to elsewhere as the no-gain principle, according to which the perpetrator of a

rights-violation or threatened rights-violation should not be permitted to gain as a result

of his violation or threatened violation of another’s rights.10

This principle explains why

we think that those who achieve gains by violating the rights of others ought forfeit their

gains even when those gains do not come at the expense of any other agent. For example,

the principle can explain why we should deprive an agent of his catch of fish, if he goes

fishing in a boat that he has borrowed without permission from another agent, even if the

latter agent had no use for the boat at the time and suffers no loss as a result of the theft.

10

The no-gain principle offers a prima facie attractive explanation of the intuition

that exchanges that are the result of a violation or threatened violation of a third party’s

rights ought sometimes be treated as illegitimate. According to this explanation, such

exchanges ought be treated as illegitimate when, and because, the exchange involves a

gain on the part of the perpetrator of the violation or threatened violation. Barny’s

purchase of Arthur’s water pistol, for example, ought be treated as illegitimate because

Barny acquires the water pistol at a lower price than he would have done as a result of his

violating Charlie’s rights.11

One attractive feature of the no-gain explanation is that it captures a range of

three-party cases, in addition to cases of liberal exploitation, in which an exchange ought

intuitively be treated as illegitimate because it was brought about by the violation or

threatened violation of a third party’s rights. Liberal exploitation concerns cases in which

the buyer’s violating or threatening to violate a third party’s rights intentionally brings

about the exchange by causing the third party to perform an omission. But there are also

intuitively illegitimate exchanges captured by the no-gain principle in which the buyer

intentionally causes the third party to perform an act which brings about the exchange.12

For example, suppose that Charlie is the owner of a bridge across which he allows

members of an island community freely to cross in order to reach the mainland. Charlie

has a right that they not cross his bridge, but chooses to waive the right. Suppose further

that Arthur is the owner of the island store, and that he relies on the bridge to cross to the

mainland to collect supplies for his store. Noticing a money-saving opportunity, Barny

threatens to beat up Charlie unless Charlie requires that Arthur, in order to cross the

bridge, sell his water pistol to Barny for a lower price than he would otherwise have sold

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it for. Charlie duly complies, and having no reasonable alternative but to sell the water

pistol to Barny at a low price in order to reach the mainland to buy supplies for his store,

Arthur sells his water pistol to Barny at a low price. The exchange is brought about by

Barny’s violating Charlie’s rights, and so by the standards of the no-gain principle should

be treated as illegitimate.

Other cases in which a buyer intentionally brings about an exchange by violating

or threatening to violate a third party’s rights involve neither an act nor an omission by

the third party. Whereas in cases of liberal exploitation the buyer’s violation or threatened

violation brings about the exchange via the third party’s intervening agency, in other

cases the buyer’s threatened violation might directly bring about the exchange. Such

cases include hostage-type cases in which the seller agrees to the exchange in order to

avoid some threatened violation of the third party’s rights by the buyer. For example,

Arthur might agree to sell his water pistol to Barny at a low price in order to avoid

Barny’s carrying out his threat to beat up Charlie if he fails to do so. Once again, Arthur’s

exchange is brought about by Barny’s threatened violation of Charlie’s rights, and so

should be treated as illegitimate according to the standard of the no-gain principle.

An explanation in terms of the no-gain principle of the intuition that exchanges

that are the result of a violation or threatened violation of a third party’s rights ought

sometimes be treated as illegitimate is, then, prima facie attractive. The explanation

appears able to accommodate intuitions both about liberally exploitative exchanges, and

about a range of other relevantly similar three-party cases. Nevertheless, the no-gain

explanation cannot on its own offer a complete explanation of all of our intuitions about

these cases, since without additional principles it faces two clear difficulties.

12

The first difficulty faced by the no-gain explanation is that it cannot account for

the intuition that not only the perpetrator’s gain, but also the losses of the agents at whose

expense the perpetrator gains, are morally problematic. In the various examples involving

Arthur, Barny, Charlie and the water pistol, our concern is not only that Barny acquires

the water pistol at a reduced price, but also that Arthur sells the water pistol at a reduced

price and that Charlie also suffers losses such as, in the liberal exploitation case, the lost

opportunity to buy the water pistol himself. That is to say, the exchange is illegitimate not

only because it creates an injustice in the form of Barny’s gain, but also because it creates

two further injustices in the form of Albert monetary loss and Charlie’s loss of

opportunity. If, subsequent to the exchange, Barny was stripped of his gain by a court, we

would still not be satisfied that justice had been fully restored.

The second difficulty faced by the no-gain explanation is that it provides no

grounds for treating as illegitimate any exchanges in which not only the victim but also

the perpetrator is a third-party to the exchange. Yet at least some such exchanges seem,

intuitively, to be illegitimate. Suppose, for example, that Duncan tells Arthur that he will

beat Charlie up, unless Arthur sells his water pistol to Barny at a reduced price. Barny’s

subsequent purchase of Arthur’s water pistol at a reduced price seems illegitimate, even

though neither of the agents involved, Arthur and Barny, are themselves party to the

threatened violation. This illegitimacy cannot merely be a function of complicity in the

threatened violation on Barny’s part, since the exchange would be illegitimate even if

Barny was not aware that the threat had been issued.

IV

13

The considerations just canvassed suggest that any attempt to explain the intuition that

we should sometimes treat as illegitimate consensual exchanges that are the result of the

violation or threatened violation of a third party’s rights cannot provide the full story, if it

does not identify some reason to treat as unjust not only the perpetrator’s gain but also the

losses suffered by the victim of the violation or threatened violation and the losses

suffered by the agent who exchanges for less than he would otherwise have done.

In two-party cases, the losses of the victim are thought to be unjust because they

are wrongfully inflicted on the victim. Can we say, likewise, that in three- and four-party

cases, the losses suffered by the victim of the violation or threatened violation and the

losses suffered by the agent who exchanges for less than he would otherwise have done

are also wrongful? Certainly we can say that the losses suffered by the victim in three-

and four-party cases are wrongful, just as they are wrongful in two-party cases: that other

agents are also affected in three- and four-party cases provides no reason to treat the

victim any differently to the victim of a violation or threatened violation in a two-party

case. But what about the losses suffered by the agent who exchanges for less than he

would otherwise have done? Can these losses also be treated as wrongful?13

Here there is

an initial obstacle to treating the losses in question as wrongful. The obstacle arises

because the wrongful loss view, associated in particular with Jules Coleman, requires us

to treat wrongfulness as a property of the relation between perpetrator and victim.14

The

view requires us to treat wrongfulness in this way, in order to explain why the perpetrator

in two-party cases is thought to have a special duty to compensate the victim of his

violation or threatened violation, a duty which other agents do not have. The thought is

14

that if the losses suffered by the victim in two-party cases were not problematic for some

reason essentially bound up with the relation between perpetrator and victim, then there

would be no reason why, for example, perpetrators could not compensate each other’s

victims for their losses. Since we in fact think that perpetrators should compensate their

own victims for their losses, the wrongful loss view plausibly claims that we need to cash

out the wrongfulness of the loss in terms of the relation between perpetrator and victim.

The relational understanding of wrongfulness invoked by the wrongful loss view

allows the view to explain our intuitions about two-party cases. But the relational

understanding of wrongfulness at the same time serves as an obstacle to applying the

view to the losses of the agent who exchanges for less than he would otherwise have done

in three- and four-party cases. For in three- and four-party cases, the agent who

exchanges for less than he would otherwise have done is not a direct party to the

relationship between perpetrator and victim. The loss that he suffers cannot therefore be

wrongful simply because it is the result of the violation or threatened violation of

someone else’s rights.

There is, however, a ready answer to the problem posed. Even if it is true that

wrongfulness is a relational property that exists between perpetrator and victim, this

requirement need not prevent us from treating the losses of the agent who exchanges for

less than he would otherwise have done as wrongful. Whilst we may not be able to treat

such losses as wrongful on the ground that they are the result of a violation or threatened

violation of a third party’s rights, we can nevertheless treat such losses as wrongful on the

ground that they are occasioned by a separate wrong committed against the agent who

exchanges for less than he would otherwise have done. For both the wrongful loss view

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and the actual practice of tort law, which the wrongful loss view seeks to explain, agree

that one can wrong an agent in ways that do not involve violating or threatening to violate

his rights. In particular, they maintain that, whenever one’s unjustifiable behaviour

injures another agent’s legitimate interests – that is, interests unprotected by rights, the

pursuit of which would not itself be wrongful – then one has wronged the agent in a

manner which renders one liable to compensate the injured agent for his losses.15

In the

cases of present interest, we can therefore say that the perpetrator commits a wrong,

distinct from the wrong that he commits against the victim of the rights violation or

threatened rights violation, against the agent who exchanges for less than he would

otherwise have done. That wrong consists in the perpetrator’s injuring the agent’s

legitimate interest in exchanging for as high a price as the market yields, by engaging in

unjustifiable behaviour.16

It is the wrong that the perpetrator commits against the agent

who exchanges for less than he would otherwise have done, and not the wrong that the

perpetrator commits against the agent whose rights he violates or threatens to violate,

which explains why the loss of the former agent is wrongful and unjust.

V

I have argued that Steiner’s claim that rights must be compossible cannot explain why we

should sometimes treat exchanges that are the result of the violation or threatened

violation of a third party’s rights as illegitimate. Rather, I have argued, we should treat

such exchanges as illegitimate when, and because, such exchanges give rise to at least

one of the following three distinct injustices. First, such exchanges may generate unjust

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gains on the part of the perpetrator. The injustice of these gains is to be explained by the

no-gain principle, which requires that perpetrators of violations and threatened violations

not gain as a result of their misdeeds. Second, the violation or threatened violation itself,

and/or the subsequent exchange, may generate unjust losses on the part of the victim of

the violation or threatened violation, including in cases of liberal exploitation the lost

opportunity to bid for the item exchanged. The injustice of these losses is to be explained

on the ground that they are wrongful because occasioned by the violation or threatened

violation of the victim’s rights. As such, the perpetrator ought be held responsible for

remedying them. Finally, such exchanges generate unjust losses on the part of the agent

who exchanges for less than he would otherwise have done. These losses can also be

treated as unjust on the ground that they are wrongful, but that wrongfulness must be

grounded in the independent wrong that the perpetrator commits against the agent

himself, and not in the violation or threatened violation of the third party’s rights. Once

again, the perpetrator ought be held liable for remedying these losses.17

For helpful comments on previous versions of this paper I thank Chris Essert, Chris

Nathan, John Gardner, Michele Loi, Tim Meijers, Hillel Steiner, Patrick Tomlin and the

late Jerry Cohen. This research was generously funded by the Arts and Humanities

Research Council and the British Academy.

1 Robert Nozick, Anarchy, State and Utopia (Oxford: Basil Blackwell, 1974), p. 152.

2 To say that something is not a ‘permissible mode of transition’ is, for Nozick, to say that the event does

not preserve the justice of a previously just distribution, in the sense that it creates a mismatch between

entitlements and reality. More generally, to accommodate cases in which there is already some existing

17

background injustice, we may say that an impermissible mode of transition is one that creates a new

injustice. I follow Nozick in using the terms ‘legitimate’ and ‘illegitimate’ to refer to permissible and

impermissible modes of transition respectively.

3 Of interest are those cases in which an exchange is shaped by the violation or threatened violation of a

third party’s rights, whether the violation or threatened violation takes place either at the same time as the

exchange, or at some point in the past. Cases of the latter type are commonplace in the real world, in

which consensual exchanges take place against an economic background shaped by past violations of the

rights of third parties. When considering the impact of violations that took place a long time ago,

additional complicating factors may apply. For example, some have thought that changing background

circumstances (e.g. Jeremy Waldron, ‘Superseding Historic Injustice’, Ethics 103 (1992): 4-28), or the

passage of generations (e.g. Christopher W. Morris, ‘Existential Limits to the Rectification of Past

Wrongs’, American Philosophical Quarterly 21 (1984): 175-82), provide sufficient reason to disregard

the effect of the past violations. Such discussions often assume, however, that were it not for the change

of circumstances or passage between generations, and in cases where such problems do not occur, we

would have, and do have, a reason to treat present exchanges that have been affected by past violations as

illegitimate. The present paper asks why, and when, even this much should be true.

4 Hillel Steiner, ‘Exploitation: A Liberal Theory Amended, Defended and Extended’, in Andrew Reeve,

ed., Modern Theories of Exploitation, (London: SAGE Publications, 1987) pp. 132-48 at p. 132; see also

Hillel Steiner, ‘A Liberal Theory of Exploitation’, Ethics 94 (1984): 225-41, and Hillel Steiner,

‘Exploitation Takes Time’, in John Vint, J. Stanley Metcalfe, Heinz D. Kurz, Neri Salvadori & Paul

Samuelson, eds., Economic Theory and Economic Thought: Essays in Honour of Ian Steedman (London:

Routledge, 2009) pp. 20-29. In ‘Exploitation Takes Time’, Steiner allows that liberal exploitation could

take place between two agents, where a prior violation of the agent’s rights has affected his present

negotiating position. Such cases share at least two features with the three-party cases of interest, in that

the exchange is apparently consensual, and the exchange is not itself a part of the violation or threatened

violation. The violation provides a background to the exchange in the sense that it occurs in the past,

even though it does not provide a background in the different sense that it was committed against who

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was not party to the exchange. My objection to Steiner’s compossibility explanation, and the positive

account that I provide in its place, apply to two-party cases of this type just as they apply to three-party

cases.

5 E.g. Steven Walt, ‘Comment of Steiner’s Liberal Theory of Exploitation’, Ethics 94 (1984): 242-7; Alan

Wertheimer, Exploitation (Princeton: Princeton University Press, 1999).

6 Steiner, ‘A Liberal Theory of Exploitation’, 230-2. No mention of compossibility is made in Steiner’s

most recent statement of his view in ‘Exploitation Takes Time’ (although he does not repudiate the

explanation in terms of compossibility). Instead, Steiner suggests that exchanges are problematic when

they involve an exchange of unequal value, where the value of item is taken to be that price that would be

paid in the event that the exchange was not affected by a rights-violation or threatened rights-violation.

We can restate this suggestion, without mention of equality, as claiming that exchanges are morally

problematic when one agent exchanges for less than he would otherwise have done had the exchange not

been affected by a rights-violation or threatened rights-violation. Since the suggestion provides no

independent reason for treating such exchanges as morally problematic, it really amounts to a

restatement, rather than an explanation, of the intuition that we should treat liberally exploitative

exchanges as illegitimate. Steiner does on one occasion refer to the gains and losses as ‘wrongful’, which

might suggest the sort of explanation which I develop below, even though Steiner does not himself

expand on or justify this description of the gains and losses.

7 Hillel Steiner, An Essay on Rights (Oxford: Blackwell, 1994), pp. 81ff.

8 One might think that an incompossible set of rights does result, on the ground that Charlie and Arthur

have rights to compensation from Barny, and that these rights are incompossible with Barny’s continued

ownership of that money which is claimed by way of compensation. But this line of argument

misunderstands the nature of compensation. Compensation is a requirement of corrective justice which,

like consent, does not multiply property rights but rather requires that property rights be transferred from

one agent to another. That is, the requirement to compensate does not simply assign to the claimant a

new property right in the money that is claimed by way of compensation, a right that would be

incompossible with the perpetrator’s continued property right in the money. Rather, the requirement to

19

compensate requires that the property right in the money claimed pass from perpetrator to victim, thereby

avoiding any incompossibility.

9 Steiner, ‘A Liberal Theory of Exploitation’, p. 230.

10 I discuss the no-gain principle and the underlying grounds for asserting the principle in Keith Hyams,

‘When Consent Doesn’t Work: A Rights-Based Case for Limits to Consent’s Capacity to Legitimise’,

Journal of Moral Philosophy 8 (2011): 110–138 at 122. For further discussion see Jules L. Coleman,

‘Corrective Justice and Wrongful Gain’, The Journal of Legal Studies 11 (1982): 421-440.

11 It is worth noting that not all transfers that Steiner would count as liberally exploitative ought be treated

as illegitimate according to the no-gain principle. This is because, in order for the transfer to count as

liberally exploitative, Steiner requires a weaker relation to exist between the transfer and the buyer’s

violation than the relation required for the applicability of the no-gain principle. He implies that it

suffices in order for the consent to be liberally exploitative that the transfer would not have occurred on

the terms on which it did occur, had the violation or threatened violation not occurred (Nozick makes an

analogous suggestion when he discusses the principle of rectification on pp. 152-153 of Anarchy, State,

and Utopia). As Walt notes, this characterisation casts far too wide a net and may well require us to treat

nearly all consensual exchanges as liberally exploitative, since ‘most if not all titles have a far from

“clean” causal history’ (‘Comment on Steiner’s Liberal Theory of Exploitation’, p. 242). On the other

hand, I have argued that, in order for an exchange to be illegitimate under the no-gain principle on the

ground that it was brought about by a violation or threatened violation of rights, it does not suffice that

the exchange would not have occurred on the terms it occurred had the violation or threatened violation

not occurred. Rather, in accordance with the legal doctrine of proximate cause, the violation or

threatened violation must have ‘special finality’ in explaining why the exchange occurred on the terms

that it did occur (for discussion of what ‘special finality’ requires in such cases, see Hyams, ‘When

Consent Doesn't Work’, pp. 129-133). The no-gain account therefore avoids Walt’s objection by insisting

on a closer relation between the exchange and the violation or threatened violation. (The further

explanations that follow in the remainder of the paper, which appeal to the losses suffered by the seller

and victim to explain why the exchange is illegitimate, also avoid Walt’s objection, since they also

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require that the losses be proximally caused by the violation or threatened violation in order to be of

concern.)

12 By focussing in these two paragraphs on cases in which the perpetrator intends to bring about the

exchange, I do not mean to imply that the exchange would never be illegitimate when and because the

violation or threatened violation in fact brings about the exchange, even though the exchange was not an

intended or even foreseen result of the violation or threatened violation. In many such cases, where the

violation or threatened violation was a proximate cause of the exchange, and where the perpetrator’s

conduct may be treated as negligent, unreasonable, or unjustifiable, I think that many will want to say

that the exchange was indeed illegitimate. Nevertheless, I focus on cases in which the exchange was an

intended result of the violation or threatened violation since these are the least contentious cases of all,

and therefore the ones that most demand an explanation.

13 Did Nozick think that the losses of the agent who exchanges for less than he would otherwise have done

are unjust, or would he have been satisfied to explain his intuition about illegitimate exchanges by appeal

to the gains of the perpetrator and the wrongful losses of the victim? Based on what Nozick says about

rectification in the remainder of the paragraph in which the text quoted above appears, it seems

reasonable to attribute to Nozick the view that the losses of the agent who exchanges for less than he

would otherwise have done are at least sometimes unjust, and that they ought to be remedied under a

principle of rectification. Nozick also allows that agents other than the victim of a rights violation may

deserve compensation, even though they themselves did not have their rights violated, when he discusses

the general fear caused by rights violations (Anarchy, State, and Utopia, pp. 66-68).

14 The thought that wrongfulness is a relational property is not so much in evidence in Coleman’s earlier

statements of his view, in which he says that ‘losses are wrongful if they result either from wrongdoings

or wrong’ (Jules L. Coleman, Risks and Wrongs, (Oxford: Oxford University Press, 1992), p. 332). More

recent statements, however, appear to endorse a relational conception of wrongfulness (e.g. Jules L.

Coleman, ‘Mistakes, Misunderstandings, and Misalignments’, Yale Law Journal Online 121 (2012): 541-

566, http://yalelawjournal.org/2012/03/20/coleman.html, at 548-552). The case for a relational

conception of wrongfulness is most forcefully put by Weinrib (Ernest J. Weinrib, The Idea of Private

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Law (Cambridge, Mass.: Harvard University Press, 1995), pp. 158-164), who argues both that the

majority judgement in the famous case of Palsgraf v. Long Island Railroad, 162 N.E. 99 (N.Y. C.A.,

1928) (see below) is best explained as invoking a relational conception of wrongfulness, and that a

nonrelational conception of wrongfulness cannot explain why a perpetrator should be specially liable to

compensate his victim, and not anyone else.

15 See Coleman, Risks and Wrongs, pp. 330-332.

16 Behaviour can be justifiable in respect of the injury that it causes to one agent, even though it may not be

justifiable in respect of the injury that it causes to another agent. This is the key lesson of the majority

judgement in the Palsgraf case (see Weinrib, The Idea of Private Law, p. 160), in which the defendants

pushed one agent, thereby harming another agent, the plaintiff, in an unexpected way. The defendants

were not held liable for the harm caused to the plaintiff: even though they had acted unjustifiably towards

the agent whom they pushed, they were not held to have acted unjustifiably towards the plaintiff, since

they did not impose unreasonable risks on the plaintiff. So in the cases of present interest, the reason that

the perpetrator’s behaviour is unjustifiable in respect of the injury that it causes to the agent who

exchanges for less than he would otherwise have done is not merely that the behaviour involves violating

or threatening to violate the rights of a third party. Rather, the reason is that the behaviour involves

unjustifiable interference with (what is taken to be) legitimate market competition in a manner expected

to reduce the selling price of the agent’s consideration. (If there were some justification for interferring in

the market, then the injury might not be wrongful.)

17 It is a strength of the explanation of the injustice that I have recommended that, unlike Steiner’s

compossibility explanation, it does not require that we merely treat exchanges relevantly brought about

by a violation or threatened violation as failing bestow valid titles. In at least some cases the requirement

to remedy unjust gains and losses demands that a different pattern of titles be brought about to that which

would be generated if we merely treated the exchange as failing to bestow valid titles. Suppose, for

example, that in the original example of liberal exploitation involving Arthur, Barny and Charlie, it is an

apple rather than a water pistol that Arthur seeks to sell. If we were merely to treat the liberally

exploitative exchange between Arthur and Barny as failing to bestow valid titles, then we would require

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that Barny return the apple to Arthur, and Arthur the £3 to Barny. But this would not much help Arthur

or Charlie: by the time Charlie gets out of hospital, the opportunity for Arthur and Charlie to exchange

will have lapsed, since the apple will have gone mouldy. So without additional compensation from

Barny, both Arthur and Charlie will still have suffered unjust losses. Indeed, Arthur’s loss would actually

be even greater if his exchange with Barny fails to bestow valid titles than if the exchange succeeds: if

the exchange fails then Arthur ends up with a mouldy apple, if it succeeds then he at least ends up with

£3.