Friedrich Hayek Politics and Legal Order

Hayek Society, Hayek Political

Of course, Hayek's reputation does not rest solely on his achievements as an economist and since the publication of The Road to Serfdom (1944) the bulk of his work has been in political and legal philosophy. Yet there are clearly strong connections between his economics and his politics for it is the case that his theory of how free economies are transformed into directed economies is part of a general social theory.

The evolution of a stable legal order (Hayek, 1973, 1976b) can be explained by principles not unlike those used to explain the economic order. A legal order that survives through time and economises on knowledge is the product of evolution rather than design. It is another example of the phenomenon of unintended consequences of human action proving to be beneficial. While it is true that a legal order could be created by a deliberate act of will this is likely to be less stable and less efficient than an evolutionary system. What Hayek has in mind is the difference between a legal system based upon the commands of a sovereign and one based on the common law. Since it is impossible for any one mind or institution to possess the knowledge that exists in a decentralised form in a modern industrial society it is impossible to design a system of statute law which can handle all possible cases; a more complex order will develop if a system of general rules is allowed to evolve in a case by case manner. Since the judiciary in this type of system is engaged in seeking to find an objective solution to a problem within an ongoing set of rules it is not making policy or implementing collective purposes. The system of impersonal rules that emerges in this manner is capable of dealing with future unknown cases and is appropriate for individuals in a 'Great Society' who cannot possibly know the intentions and purposes of more than a minute fraction of the total population.

Nevertheless, Hayek himself concedes that systems of rules do not always spontaneously develop in the desired manner, that of facilitating individual exchanges so as to bring about a more complex social order, and may have to be supplemented by positive legislation. In fact, some thinkers who are friendly towards Hayek's social theory are not as optimistic as he is with regard to the spontaneous development of legal orders and maintain that individualist systems have to be rationally demonstrated and embodied in positive law.

It is recognised by Hayek that there has to be government and that the law by which it operates is different from the rules of just conduct that guide individual action. Since government does exist to implement common purposes its 'rules' will take the form of commands and directions, Hayek argues that if the government is limited to supplying 'public goods', i.e. goods such as a police and defence system which cannot be provided adequately by normal market processes, the fact that it acts by command and regulation need not undermine liberty. In fact, Hayek even concedes that government may intervene in commerce and welfare as long as it does not claim a monopoly in any field.

Freedom and law are consistent only if law meets the criteria specified by the concept of the 'rule of law'.

This means that laws must be perfectly general, non­discriminatory, and binding on governments as well as on governed. Freedom is not simply a function of the range of choices open to the individual but depends upon whether the law directs the individual to do certain tasks. According to Hayek a perfectly general rule which forbids a certain course of action is consistent with liberty since the individual may plan his life so as to avoid that rule. Other libertarians, however, are deeply unhappy with this account of liberty since Hayek's formulation legitimises restrictions on free exchanges as long as such restric­tions are cast in the form of general laws. They maintain that if an exchange is uncoerced the law must not intervene and they have thus been in the forefront of the demand for the removal of restrictions on the sale and consumption of addictive drugs and on various forms of unconventional sexual activity. Also, Hayek is inconsistent with his own definition of liberty when he says that conscription is legitimate, since this is clearly a direct command. Nevertheless, Hayek's argument that the rule of law provisions enable individuals to predict how the law will affect them is essential for the understanding of a free society.