Four Solutions to Sandefur’s Problems

Timothy Sandefur has produced an interesting and thought provoking essay on Friedrich Hayek’s conception of spontaneous order. I have a slight quibble with his title, “Four Problems with Spontaneous Order,” however. On my reading, it appears that Sandefur is discussing two problems with spontaneous order and two problems with Hayek’s jurisprudential philosophy. In my judgment, Sandefur’s problems with the conception of spontaneous order are rather easily resolved. In contrast, Sandefur’s objections to Hayek’s jurisprudence are well-taken, but nevertheless are ultimately unimportant because Hayek’s basic jurisprudential approach can be salvaged from Hayek’s own errors.

Problem 1: The Difference between Spontaneous and Constructed Orders

Sandefur argues that there is no principled distinction between spontaneous and constructed orders. He contends that,

The distinction between spontaneous and constructed orders dissolves upon rigorous inspection. Any action by any individual or firm in the market looks on close-up view like a constructed, artificial order. But take three steps back, and from a distance the same action looks like part of the bustling, experimental give and take of spontaneous order…

If the observer draws a circle narrowly around a single transaction, a single reform proposal, a single firm, a single state, or a single nation, then the order appears constructed. But take a step back and look at the transaction in the context of the multitude of interactions between individuals and firms — “the system of rules as a whole” — and even the most radical, state-implemented reform is just a tiny experimental particle in the flux of spontaneous order.

Now, I may be missing something, but I would have thought the principled distinction between constructed and spontaneous orders was patent — constructed orders have a designated final decision maker; spontaneous orders do not. A single firm or state may consist of many independently functioning parts, but there is always some person or group of persons authorized to decide how the firm or state will act as a collective entity. A spontaneous order has no such centralized, collective decision maker. This is precisely how we distinguish a market from a firm or system of customary/common law from legislation. Spontaneous orders are evolving systems. What makes the state the state is its power to stop evolution. In short, spontaneous orders are systems of individual choice. Constructed orders are systems in which there is an official organ of collective choice.

If there is anything more to this problem, I am blind to it. Spontaneous orders are the product of human action but not human design; constructed orders are the product of human design. That’s about it. The former implies the absence of a conscious final decision maker; the latter implies its presence.

Problem 2: The Normative Critique of Constructed Orders

The solution to the first problem pretty much takes care of the second as well. Sandefur argues, “If there’s no conceptual distinction between constructed and spontaneous order, there can be no foundation for a normative critique of constructed orders.” Because there is a conceptual distinction between constructed and spontaneous order, the consequent of Sandefur’s conditional does not follow.

However, this leaves open the question of whether there actually is a good ground for criticizing a constructed order qua constructed order. As Sandefur points out, “It is true that order can emerge from particular actions, but that is not a good argument against implementing planned or constructed approaches to social problems.” Why prefer a spontaneous ordering process to a constructed one?

To answer this question — and to avoid running headlong into Hume’s is-ought problem — one must show that spontaneous orders advance a legitimate moral value more effectively than do constructed orders. They do. That value is peaceful cooperation.[1]

It is not a coincidence that what Hayek termed the rules of just order — purpose-independent, neutral, universally-applicable rules[2] — evolved through customary/common law processes while almost all the rules designed to exploit or oppress others originated in legislation. The essential characteristic of spontaneous orders — the absence of a conscious final decision maker — means that the rules of the system are always subject to re-evaluation. Rules that are regarded as unsatisfactory by any significant portion of the population, such as those that privilege the interests of some groups over others or otherwise work harsh or unfair results, stimulate increased conflict. This gives rise to increased litigation, which in turn increases the opportunity to try different rules that may be more productive of peaceful interaction. In contrast, rules that facilitate peaceful and cooperative human interaction — Hayek’s rules of just conduct — tend to reduce interpersonal conflict. As a result, there is less litigation, the rules are less frequently challenged, and hence they tend to survive and become a stable part of the order.

Constructed orders — whose essential characteristic is the existence of some person or persons invested with the power to make collective choices for the entire order — function under a different set of incentives. Even with the best of intentions, the inherent limitations on human knowledge make it unlikely that the collective decision makers can accurately identify rules of just conduct in advance of experience. But the combination of human beings’ limited capacity to recognize and admit their own mistakes, lobbying by interested parties, and the effect of basic human prejudices and normative preconceptions not only makes it difficult to correct any initial errors; it also makes it much more likely that exploitative or oppressive rules will become stubbornly entrenched within the order.

Spontaneous orders are normatively superior to constructed orders because the incentives in spontaneous orders make them relatively more likely to produce rules that facilitate peaceful cooperation while the incentives within constructed orders make them relatively more likely to produce rules that facilitate exploitation and oppression.

Problems 3 and 4: Recognizing and Reforming Injustice

Hayek was a brilliant economist and an innovative political thinker who graced the world with several wonderfully fertile insights that continue to bear fruit. Hence, I find it difficult to hold the fact that he was not the greatest philosopher or legal historian against him.

There is much that is wrong with Hayek’s jurisprudential thought. Sandefur highlights the difficulties Hayek becomes enmeshed in by denying any independent grounding for ethics outside of the process of social evolution and by attempting to make purely formal and essentially vacuous values such as generality and consistency do substantive normative work. And this is just the tip of the iceberg. Hayek also anachronistically reads the twentieth century common law process back into the past, inaccurately depicting the common law as a product of judges assimilating new standards into an existing body of rules. Further, despite his denial of any externally derived standards of value, Hayek clearly views the preservation of individual liberty as the proper normative end of the legal system. Sandefur is quite right to point out that by admitting the necessity of the “deliberate efforts of judges (or others learned in the law)” to ride herd on the spontaneous growth of the common law, Hayek simultaneously and inconsistently treats the common law as both a spontaneous and a constructed order.[3]

To the extent that Sandefur is criticizing Hayek’s ethical and jurisprudential theory, I have little disagreement with him. But in doing so, Sandefur is not identifying problems inherent in the concept of spontaneous order itself, but in Hayek the economist’s effort to apply the concept to Anglo-American common law — a field that, by his own admission,[4] he was not familiar with. Hayek’s failure in this regard should not trouble us overmuch. He was a brilliant, original thinker, and it would be uncharitable of us to criticize him for not doing all of the work himself. I, for one, am glad that he left something for us to do.

Hayek was unable to consistently apply his insight about spontaneous order to the law. He was unable to see the law as just another product of market forces. Like virtually everyone of his generation and, for that matter, like virtually everyone today, he saw the law as a unique monopoly, necessarily separate and apart from the market for which it supplied the rules of the game. His belief in the absolute need for a definite set of rules to undergird the market process — his rules of just conduct — made it impossible for him to treat the law as a truly spontaneous order. As a result, he spent much of Law, Legislation and Liberty searching for the square circle — a spontaneous order in which certain human beings were authorized to make collective choices for the entire order.

We, as Hayek’s heirs, however, need not fall into the same trap. I have no difficulty treating ethics as an independently grounded philosophical discipline rather than an inevitable product of social evolution. This provides me, and anyone else, with an Archimedean fixed point on which to stand to criticize any of the rules of a spontaneously evolving legal order as unjust and to call for the reform of those rules.

And indeed, there will be nothing surprising about the continual existence of such criticism. For it is in the nature of a spontaneous order to be riddled with injustice at any point in time. One cannot defend a spontaneous legal order on the ground that it will deliver the perfectly just society. The defense of a spontaneous legal order derives from the Hayekian recognition that limitations on human beings’ knowledge and virtue makes the realization of the perfectly just society impossible, and that the best we can do is subscribe to a flawed but self-correcting process that promises continual marginal improvement over time.

When we appreciate that the defining characteristic of a spontaneous order is the absence of a conscious collective decision maker, it becomes clear that there is nothing inconsistent about recognizing injustice and advocating for reform within a spontaneous legal order. In fact, such advocacy is essential to the proper functioning of the system. After all, a spontaneous order is nothing more than myriad individuals pursuing their individual plans in an environment that allows order to develop without an overarching human intelligence. It is the input of autonomously conceived individual plans and values that drives the system forward.

All we need do to correct Hayek’s mistakes is relinquish the belief that law is a unique realm standing outside of the market that must be consciously regulated to ensure the production of the proper rules of just conduct. I understand that this is not an easy thing to do. The allure of the constructed legal order is almost irresistibly enticing. It offers us the prospect of the just society as an end state that can be reached rather than as a remote limit that can only be approached incrementally. Nevertheless, it is a siren’s song luring us toward disaster on the rocks of the unanticipated consequences, rent-seeking, and venial power struggles that always accompany the existence of a mechanism for collective choice. In the end, the essence of the argument for a spontaneous legal order is, perhaps fittingly, the economic insight that the perfect is the enemy of the good.

[1] I have defended this claim at greater length elsewhere. See John Hasnas, “Toward a Theory of Empirical Natural Rights,” Social Philosophy and Policy 22:111, 140-42 (2005).

[2] See Friedrich A. Hayek, Law, Legislation, and Liberty, vol 1, pp 85-86 (1973).

[3] I have treated this subject at length elsewhere. See John Hasnas, “Hayek, the Common Law, and Fluid Drive,” New York University Journal of Law & Liberty 1:79 (2005).

[4] See Friedrich A. Hayek, Law, Legislation, and Liberty, vol 1, p 116 (1973).

Also from this issue

Lead Essay

  • 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

  • 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.

  • 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.

  • 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.