Martha Stewart and the anticooperative effect of law:

Eric Rasmusen and Duncan Frissell make an interesting point about the false statements statute, 18 USC sec. 1001: Cases such as Martha Stewart’s may discourage people (even innocent people) from talking to federal authorities at all, because they might fear that some error on their part may be characterized as a lie, and might thus mean criminal punishment. In some cases (though not in all), the person may conclude that the better course is just to say nothing. That may already often happen to witnesses who are themselves being investigated for a crime, since they are often advised to say nothing in any event. But 18 USC sec. 1001 risks also discouraging cooperation by people who are just seen as witnesses.

     It’s hard to tell just how serious a problem this might be, and 18 USC sec. 1001 does indeed have potentially beneficial effects, too, since it may often encourage witnesses to tell the truth. But it’s worth recognizing that the law can also encourage witnesses to say as little as possible, an “anticooperative effect” that might undermine the law’s beneficial effect. I discuss this general problem in my Duties to Rescue and the Anticooperative Effects of Law — but as Rasmusen and Frissell point out, the problem extends far beyond just duties to rescue.

     For much more on the legal issues raised by the Stewart case, include the 18 USC sec. 1001 issue, see Stephen Bainbridge’s posts.

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