The story is well known: Volkswagen introduced some trickery in their software that controls certain diesel engines, software designed to fool the emissions regulators. While being tested, the engine would run cleaner (and presumably with less power and fuel efficiency); under normal operation, the engine would run more efficiently but while producing pollutants in excess of legal limits.
I could keep this short: the government has no business in the regulation of automobile production and performance; the government is interfering in the free market between consumers and producers of automobiles.
This much is true, and would be true (more or less) in a libertarian world. But my “more or less” gives me pause; further, there are other considerations that might be relevant in a world populated by libertarian adherents.
This is the overt “more or less” part, and the only NAP violation (strictly defined) that I can find. I believe it is reasonably well-settled in libertarian circles that pollution is a violation of the NAP. Of course, how such pollution standards will be set, regulated, and monitored make the discussion a bit complex (although I suspect better thinkers than I am have tackled these issues). In any case, in theory pollution is a violation, and as a society flourishes it is reasonable to assume that practice will be developed consistent with the theory.
Volkswagen’s trickeration violated the NAP for this reason. Setting aside that the government set the standard (as it is reasonable to assume that a libertarian world could support a standard in a manner developed consistent with the theory, I can set this aside), VW emitted more pollutants than allowed.
VW trespassed. This is an NAP violation. Technically, I suppose that the owner of the vehicle is the trespasser; of course, this would open a claim against VW by the owner of the vehicle – although this might be more a contractual question than a strictly NAP question.
Which brings me to…
Is violation of a contract also an NAP violation? The answer to this question is somewhat unimportant to me. I have written before, and offer here: for areas that do not fall within the bounds of the NAP, contract (in various forms) will be the perhaps the most important “regulator” in a libertarian world.
In other words, I think it doesn’t matter what libertarian theory offers: in a libertarian world, something will govern relationships. This “something” is contracts.
The most obvious contract violation is regarding the contract that VW has with its customers. The customers each expected some level of performance from the vehicles they purchased. Presumably, each customer valued one or all of the relatively clean level of emissions, a level of fuel economy, or a level of performance in terms of engine responsiveness. It seems clear that VW’s actions and / or the potential solutions will result in something less than the advertised level of performance.
A second violation – and I admit that I am not as clear in my mind on this one – is possibly in the relationship between the management and the owners of the company. The easiest connection would be found in the employment contract and / or company policies. I suspect (but do not know) that there is something in one or the other of these documents that speaks against falsifying data, using deception to trick regulators (the free market will also have regulators), purposely taking actions that put the company assets at risk, etc. Something.
Clearly, management put the company’s assets at risk – maybe even grave risk.
But what if no such agreement exists? It would seem a dereliction of duty in executive management that this would be the case, but is it a contractual violation? Perhaps not – just poor management practice.
One could easily (at least on the surface) make a claim of fraud against VW for their actions. I know there is some debate within libertarian circles – is “fraud” a violation of the NAP? For those who believe fraud is a violation of the NAP, certainly a case could be made.
I have never tackled this question of fraud and the NAP, nor do I have any interest in doing so. Why? First, define the term “fraud.” I find no meaningful definition beyond violation of contract: although not every violation of contract can be deemed “fraud,” every fraud must be a violation of contract (explicit, implicit, whatever).
So, I come back to contract. Without a meaningful definition of the term fraud, I go no further. And with contracts (on questions outside of the NAP) governing relationships, I need not.
While it is easy to find fault in everything associated with the government’s involvement in the automobile market, I think the question in a libertarian world is not answered so simply. Certainly there is an NAP trespass in the pollution, and the violation of contract between the company and its customers is equally a violation in an NAP world. I believe this also applies to the failings of management to the shareholders.