Libertarian Answer Man: On Restitution going Beyond Two Teeth for a Tooth

by Stephan Kinsella on July 30, 2025

From a libertarian friend:

Dear Mr. Kinsella

The last few days I’ve been reading your Legal Foundations of a Free Society. Since I finished reading chapter 5, “A Libertarian Theory of Punishment and Rights,” there’s something troubling me and I think the best I can do is ask you about it.

In the discussion about proportionality, you state (for example on page 102 regarding property crimes), that if, for example, the money stolen from someone is more valuable to him than to the criminal, then the punishment could be, in addition to returning the money (in this case $10,000) and making the criminal pay another $10,000, paying additional compensation for the difference in value.

However, both Rothbard in his natural rights theory and Hoppe in his argumentation ethics emphasize that, when considering aggression, what matters is the physical aggression, not some psychological aggression. They both demonstrated that you can only have right to your physical property and not to the value of your property, which would be absurd because it depends on every individual’s personal preferences.

So, how is this compatible with libertarian ethics?

I look forward to your response.

Thank you in advance,

KINSELLA:

I agree with Hans, and he does argue that there are no property rights in value. Hoppe on Property Rights in Physical Integrity vs Value. I also agree with Rothbard that there must be proportionality in punishing or retaliating against someone (and possibly also in exercising self-defense, although this could lead to escalation as I mention in Dominiak & Wysocki, “Libertarianism, Defense of Property, and Absolute Rights”).

However, as I argued in that same chapter, in a sense restitution is not primary but is just the outcome of giving justice to the victim of crime that has already happened. That is why I say in ch. 5, Part IV.B, that the victim should have maximum options to get the kind of satisfaction he wants, using his right to punish to in effect “bargain” for some payment or compensation, which we may call “restitution” though it is not really true restitution, since is impossible to undo a crime and “restore” someone to the position they would have been in had the crime not occurred. I elaborate on this in a recent post, Perfect Restitution is Impossible; An Unreachable Goal, which I suggest you read and then get back to me with any further questions.

But to answer your question, I don’t quite agree with Walter Blocks’ mechanical “two teeth for a tooth” idea or even Rothbard’s endorsement of it in Ethics of Liberty precisely because value is subjective, and because I realize true restitution is impossible. For example, the victim might have valued the original $10,000 more than the Blockian two-teeth-for-a-tooth-mandated $10,000 penalty payment would have the thief pay me after the fact, but since it is impossible for me to get the “the crime never did happen” option, so maybe instead of an inadequate and already imperfect $10k payment, I would prefer instead to “hurt” him more, or in a different way, by either making him pay more (maybe on pain of enslaving or severely harming him) than to merely get a mechanical $10,000 plus costs.

Remember, the $10,000 paid back to me is not really restitution. True restitution is impossible. It is just one of the options I have because I also have the right to physically harm him, because he committed aggression against me—just like I would have the right to punish a thief who stole from but has no money so would be unable to pay me anyway. So I can use that right to punish bargaining chip, so to speak, to make him pay more—if I prefer this.

This is precisely why my approach solves the so-called millionaire or billionaire problem (see p.251, and also p.529, also see n.76 on p. 102: “Stephen Schafer’s view that punishment ‘should … be equally burdensome and just for all criminals, irrespective of their means, whether they be millionaires or labourers'”). (I also I mention the millionaire problem in KOL338 | Human Action Podcast Ep. 308 with Jeff Deist: Rothbard on Punishment, Property, and Contract and Correcting Some Common Libertarian Misconceptions (2011).)

If you adopt a mechanistic approach a la Walter, you restrict the range of options for the victim, who is already harmed by the very fact that true restitution is impossible and all he is left with is a form of imperfect “secondary” after-the-fact justice. True justice is when rights are respected. After the first injustice has happened, it is impossible to undo this, so all justice requires now is that the victim be “compensated” by respecting whatever rights proportionality allows him to get whatever satisfaction he things will best satisfy him. Who are we to say the victim should accept the $10k payment instead of literally inflicting (proportional) punishment instead on the aggressor—or using this thread to coerce him to pay more, for example. I am reminded here of a scene at the end of the 1987 film Wanted: Dead or Alive, when the Rutger Hauer character, having captured the villain played by Gene Simmons, pulls the pin out of the grenade in Simmons’ mouth, saying “F*ck the bonus”. He preferred the bad guy to die than to collect the reward money.

In any case, that is why I say true justice, when crime has already happened means giving the victim as wide an array of options as possible to take into account that true restitution is impossible, as I note in LFFS, ch. 5, Part IV.G, at p. 96, and as I pointed out in Perfect Restitution is Impossible; An Unreachable Goal.

If you deny the victim this option to demand something more than the $10,000 stolen, what if the thief is a millionaire and can thus run around stealing from people with impunity and paying them $10k damages back? What if the criminal is poor? Are you out of luck? No, you can punish him etc. As I point out on pp. 108–109,

For poor aggressors, there is no property to take as restitution, and the mere infliction of pain on the aggressor may not satisfy some victims. They would be entitled to enslave the aggressor or sell him into slavery or for medical testing to yield the best profit possible.

So my solution is flexible and gives maximum rights to the victim so as to reduce the harm done to him, based on the recognition that he can never receive primary justice: which is the aggression never having happened. Once the crime has occurred we are faced with secondary justice. (Gary Chartier, Anarchy and Legal Order: Law and Politics for a Stateless Society (Cambridge University Press, 2013), Ibid., ch. 5.I, 5.C.1, 5.C.2, pp. 263, 265, 266 et seq., also deals with rectification in the section dealing with what you do after the rights protected by property are violated:

Just legal regimes could safeguard peaceful, voluntary cooperation by ensuring that people and their possessions were protected from aggression, that aggression already underway was stopped, and that remedies were provided for injuries resulting from aggression. Such regimes would not address these injuries using the essentially statist category of crime, but would instead feature remedies offering restitution for all kinds of injuries caused by aggression, supplemented by mechanisms for the restraint of the persistently aggressive (Part II). A just legal regime could deal appropriately with environmentally mediated injuries and with harms to vulnerable persons and nonhuman sentients (Part III). Just legal regimes in a stateless society could respond effectively and appropriately to injuries to bodies and possessions alike (Part IV). [p. 263]

I point out that I disagree with Walter’s restitution rule here: KOL020 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 3: Applications I: Legal Systems, Contract, Fraud” (Mises Academy, 2011):

And then there’s caveat emptor, which is the buyer beware. Was he defrauded, or did he—should he have known better? And then Walter Block and Murray Rothbard’s idea where they say, well, there should always be the two-teeth-for-a-teeth punishment rule. I mean I understand the sympathy there and the reasoning, but it seems to me a little mechanical and a little bit armchair. We can’t say it would be exactly two teeth for a tooth.

See also my mention of my disagreement with Walter’s mechanical approach in “A Tour Through Walter Block’s Oeuvre” and “Compensation Ratio” Restitution vs. Block’s “Two Teeth for a Tooth”.

So I do not believe my approach is contrary at all to Hoppe’s view that there are no property rights in value. I agree with him. This just means you have no property right in the value of your property and thus no claim to stop someone from harming the value of your property, by for example cutting down their rose garden that you like to look at and that enhances the value of your own property, or a right to a reputation (Defamation as a Type of Intellectual Property), or by competing with them in the absence of IP laws preventing you from doing so, and so on. So Hoppe’s insight simply explains that all rights are rights to the physical integrity of an embordered, scarce resource, and not to its value. But this does not mean that once trespass has happened that a reasonable justice system cannot try to give the victim whatever satisfaction it can–a type of secondary, not primary, justice, and based on the recognition that perfect restitution is almost never possible, because crimes cannot be undone; and that the right to proportional retaliation is primary, and “restitution” is only the word we use to describe a monetary payment that you can bargain for using your right to punish.

I cannot speak for Hans but we agree on most such matters, so I would be surprised if he disagreed; he is the one who published that original chapter in the Journal of Libertarian Studies back in 1996, after all. And if I had to guess, he does, or would, agree with me on this.

Again, keep in mind that property rights are meant to prevent aggression and trespass; this is primary justice. But moral laws are not causal laws and because people have free will they can violate rights. In fact any society without crime is unthinkable precisely because the future is uncertain and people have free will. Even if there is no state committing institutionalized aggression, in any society some sociopath on the margin will eventually be incentivized to rob from people who do not even bother to lock their doors anymore.

And once an act of crime happens, it is impossible to undo it. Think of someone murdered, or tortured, or raped. No amount of money can restore them. We are stuck here with an imperfect remedy so all justice can do at this point is not to prevent the crime, since it is too late, but to let the victim do what they want. That is why the primary right is retribution or retaliation, which is up to the victim in its form, as long as it’s within reasonable bounds of proportionality; the victim may use this right to punish, or to forgive, or to forgive in exchange for payment; we may refer to this payment, this “ransom” from punishment, as “restitution” as long as we keep in mind that it is not genuine or perfect restitution.

This is obvious to people for violent crimes. They recognize no monetary payment, no “restitution,” can bring the victim back or undo the crime. But the recognize this and that all that is possible is a monetary payment, as a means of secondary justice, so they are in favor of that as a second best. And yet by denying the victim the right to actually punish the aggressor, and leaving the victim only with some monetary compensation and maybe with the satisfaction of seeing the state incarcerate the criminal (at the expense of the victim and other taxpayers), the victim is harmed by denying them a preferred remedy.

But in the case of property crimes like theft, it’s not so obvious that actual restitution is not possible, at least sometimes—if the criminal steals your $10k and you find it and get it back, and you take another $10k from him, hey, you’re square, right? Of course, no criminal ever has $10k to pay you back with anyway, so this is la la land anyway. But the restitutionist thinks, well I admit that in cases of murder or rape, a damages payment is not real restitution but it’s the best we can do; but in cases of theft, real restitution is at least sometimes possible! But it’s not, not even here.

I think the mistake is that most libertarians prefer a restitution system instead of the carceral state or punishment; as do I, as mentioned in Fraud, Restitution, and Retaliation: The Libertarian Approach. So in the “simple” cases of theft of money, they imagine that at least in this simple case, true restitution is possible, even if it is not in cases like murder or rape. So if you catch the bad guy and if he has your original $10k and another $10k and some additional money for costs of capture, then if he pays you, there is “restitution.” I don’t agree. Even here there is not.

Again, you can see this in the case of rape or murder; any money damages paid might be called restitution but is it real restitution? No. Or if the criminal is an evil billionaire, he can just keep doing what he wants and easily pay the “restitution” fine. No! He should not be allowed to do this. Or if the criminal is poor and has no money to repay the victim, he can punish the criminal and get some satisfaction that way. No? So why is the criminal in the middle able to get off scot free? I don’t think he should. If the victim doesn’t want the $10k damages but prefers some other remedy, like punishing him, why can’t he? And this right-to-punish could be used to bargain for more than the mechanical $10k. If it’s Bill Gates who robs me I might say “I don’t want your $10k, I want to imprison and torture you for a month.” He might say “Okay, how about if I pay you $10million to forgive me and call it even?” Now that would be justice!

But please read through this and also my linked posts above, esp. the recent one about how genuine restitution is impossible, and let me know if you have followup questions. Meanwhile I’ll post this on my site so I don’t waste this effort only on one inquiring mind–! 🙂

***

From a followup:

I understand perfect restitution is impossible, and thus, we should find ways to punish crimes like murder or rape in an adequate way. And I understand your logic when discussing the case of theft. However, in the case of theft, how can one know what punishment is proportional?

see ch.5, part IV.G: “The Burden of Proof”. If we do not know, we put the burden even of theorizing and arguing on the criminal:

Once this burden is carried, however, it is just to place the burden of proof on the aggressor to show why a proposed punishment of him is disproportionate or otherwise unjustified. The justice of this point is again implied by the logic of estoppel. The aggressor was not put in the position of justifying how much force he could use against the victim before he used such force; similarly, the victim should not be put in the position of justifying how much force is the appropriate level of retaliatory force to use against the aggressor before retaliating.
As pointed out above, because it is the aggressor who has put the victim into a situation where the victim has a limited variety and range of remedies, the aggressor is estopped from complaining if the victim uses a type of force against the aggressor that is different from the aggressor’s use of force. The burden of proof and argument is therefore on the aggressor to show why any proposed, creative punishment is not justified by the aggressor’s aggression. Otherwise, an additional burden is being placed on the victim in addition to the harm already done him. If the victim wants to avoid shouldering this additional burden, the aggressor is estopped from objecting because it was the aggressor who placed the victim in the position of having the burden in the first place. If there is a gray area, the aggressor ought not be allowed to throw his hands up in mock perplexity and escape liability; rather, the line ought to come down on the side of the gray that most favors the victim unless the aggressor can further narrow the gray area with convincing theories and arguments, for the aggressor is the one who brings the gray into existence.
…
there are indeed gray areas in which it is difficult, if not impossible, to precisely delimit the exact amount of maximum permissible punishment. However, this uncertain situation, this grayness, is caused by the aggressor. The victim is placed in a quandary and might underpunish, or underutilize his right to punish, if he has to justify how much force he can use. Or he might have to expend extra resources in terms of time or money—for example, to hire a philosopher or lawyer to figure out exactly how much punishment is warranted—which would impermissibly increase the total harm done to the victim.
It is indeed difficult to determine the bounds of proportionality in many cases. But we do know one thing: force has been initiated against the victim, and thus force, in general, may be used against the victimizer. Other than for easy or established cases, any ambiguity or doubt must be resolved in favor of the victim unless the aggressor bears his burden of argument to explain why the proposed punishment exceeds his own initial aggression.[1]

^[1] Many crimes would have established or generally accepted levels or at least ranges of permissible punishment—for example, as worked out by a private justice system of a free society or by specialists writing treatises on the subject. For further discussion of the role of judges or other decentralized law-finding fora, and of legislatures, in the development of law, see “Legislation and the Discovery of Law in a Free Society” (ch. 13). No doubt litigants in court or equivalent forums, especially the defendant, would hire lawyers to present the best arguments possible in favor of punishment and its permissible bounds. In a society that respects the general libertarian theory of rights and punishment developed herein, one could even expect lawyers to specialize in arguing whether a defendant is estopped from asserting a particular defense, whether a given defense is capable of being made universal or particular when the burden of proof for each side has been satisfied, and the like.
With regard to the concept of making a prima facie case and switching the burden of proof from the plaintiff to the defendant, Richard Epstein has set forth a promising theory of pleadings and presumptions whereby one party who wishes to upset the initial balance must establish a prima facie case that may be countered by a defense, which may be met with a second round of prima facie arguments, and so on. See Richard A. Epstein, “Pleading and Presumptions,” U. Chicago L. Rev. 40 (1973), p. 556. For its application to the fields of torts and intentional harms, see idem, A Theory of Strict Liability; idem, “Defenses and Subsequent Pleas in a System of Strict Liability”; and idem, “Intentional Harms.”
… Thus, the consequence of the aggressive violence might be that, in addition to endangering the victim’s very life and causing pain, the victim suffers a huge amount of mental and financial damage. It might take cutting off all four of the aggressor’s limbs or even decapitating him to inflict that much damage on him. We know that it is permissible to employ violence against an aggressor. How much? Let the aggressor bear the burden of figuring this out.

He goes on:

Taking your Bill Gates example, how do we know torture is a proportional punishment for the $10,000 he stole? If it’s up to the victim, who thinks Bill Gates values not being tortured as much as he valued the $10,000 Gates stole, then it would be arbitrary, as we can’t know what Bill Gates thinks. And what would estop Bill Gates from objecting? When he stole the $10,000, he accepted that stealing $10,000 is legitimate, thus he would be estopped from objecting to his punishment of paying back those $10,000 and paying another $10,000. But how is he estopped from objecting to torture? The only way to estop him from objecting would be accepting that one can punish someone for damaging the value of your property. Then, what would estop me from forcing you to pay me $10,000 if you damage my reputation, which I valued at $10,000? Of course, in this case, you never trespassed my property, so you could object to me trespassing your property. But under the same logic, why would Bill Gates be estopped from objecting to being tortured if he never tortured the victim?

Kinsella:

We can assume that in a developed legal system there are established limits and tests. The jury would have to hear arguments and the evidence and use their intuition and judgment to apply it. Then both parties would know.