December 2009: Hayek and the Common Law

About December 2009

Among non-economists, Nobel laureate Friedrich A. Hayek is perhaps best known for two things: his seminal book The Road to Serfdom, and his defense of the theory of spontaneous order. Briefly stated, the theory of spontaneous order holds that many of the most useful social institutions are the product of human action, but not of human design.

Examples abound. No one individual or committee sets market prices; those who have tried have always failed. No designer created the English language, and artificial languages have never met with any great success. Scientific discovery through repeated experiment causes truth to emerge, but scientific truth is not forged through rationalistic design. Instead, it is a product of many uncoordinated searches, serendipity, and replication across the scientific community.

Arguably the greatest example of spontaneous order outside the market, however, is the development of the common law, a legal tradition that proceeds incrementally, case by case, privileging precedent and continuity. No one individual or committee created the common law. Indeed, it is said that the common law is discovered by judges rather than created by legislatures. The common law is robust for the same profound reason that markets and language are robust, and each therefore deserves great deference.

Yet, argues lead essayist Timothy Sandefur, there are problems with the concept of spontaneous order, especially as it regards the law. As virtually everyone acknowledges, the mere fact that a law has been in force for a very long time doesn’t necessarily prove its rightness. Hayek, too, allowed that the common law may change over time, and he attempted to integrate this notion into the theory of spontaneous order. Yet there are clearly some changes that are not properly a part of spontaneous order. How do we separate the good changes from the bad? We must seemingly reach outside the spontaneous order for our normative supports.

Commenting on Sandefur’s essay will be legal and business scholar John Hasnas of Georgetown University, economist Daniel Klein of George Mason University, and economic historian and Hayek biographer Bruce Caldwell of Duke University.

Lead Essay

Four Problems with Spontaneous Order by Timothy Sandefur

In his lead essay, lawyer and legal theorist Timothy Sandefur proposes that Friedrich Hayek’s understanding of law and justice is flawed: Spontaneous order may be a descriptively accurate concept, but it has little or no effective normative content. Depending on how one chooses to focus, those who wish to reform a spontaneous order are either constructive rationalists – thus, outside the order, and presumptively bad – or they are manifestations of the spontaneous order itself, which changes over time. He suggests that the Hayekian approach to legal reform is simply “be careful,” and that this is not terribly helpful advice.

Response Essays

Four Solutions to Sandefur’s Problems by John Hasnas

In his response essay, John Hasnas offers solutions to Sandefur’s problems. He suggests that genuine spontaneous orders can be recognized as having no final decision makers, and hence as recognizing a multitude of individual choices. Constructed orders have a final decision maker, and do not respect individual choice. The normative benefits of a spontaneous order are therefore clear: It offers a greater scope for peaceful cooperation, while tending to reduce coercion incrementally. Still, Hasnas admits, spontaneous orders will always be “riddled with injustice,” in part owing to our own limited knowledge and virtue. He suggests that one key missing insight helps rescue much of Hayekian legal thought: the notion that laws, too, respond to market forces.
Liberty between the Lines in a Modernist Age by Daniel B. Klein

Daniel Klein argues that much of the fuzziness in Hayek’s writing was strategic – designed to bring lapsed liberals back into the fold, or to appeal to people who would never accept an unvarnished liberalism. Still, Klein finds great value in Hayek’s work. He argues that, while out of fashion at the time, Hayek’s own willingness to be indeterminate, and to embrace indeterminateness, was both consistent with the Smithian understanding of the social order – and predictive of some of the best work being done today in economics and in other social sciences.
Making Sense of Hayek on Spontaneous Order by Bruce Caldwell

Bruce Caldwell proposes two solutions to Sandefur’s problems. The first is to acknowledge that Hayek was a rule utilitarian, albeit one who recognized that the rules we have inherited are the products of a spontaneous order. The second is to claim that Hayek wasn’t proposing any normative conclusions at all – he was simply making observations in a value-neutral way, as might befit a member of the Austrian School, which was deeply influenced by Max Weber’s ideal of a value-neutral social science. Both approaches have their strengths and weaknesses, Caldwell admits, yet in the end he cannot accept Sandefur’s claim that there is no meaningful distinction between spontaneous and designed orders. Although the difference can be difficult to put into words, we know them when we see them.

Lead Essay

Response Essays

The Conversation

Related at Cato