Today, we continue to examine the sometimes mystical approach that Austrian thinkers take towards the law.
Much like Menger, Hayek placed the origin of law before recorded history, and indeed even before language: “one might say that the development of universal rules of conduct did not begin within the organized community of the tribe but rather with the first instance of silent barter when a savage” placed a gift at the border of his territory in expectation of reciprocation. (2085)
Also like Menger, Hayek writes that law predates state enforcement, but can be established by “the factual observance” of rules. (2369) While law can be observed through the actions of individuals, “it is the efficiency of the resulting order of actions which will determine whether groups whose members observe certain rules of conduct will prevail.” (1930) In primate societies, “the process of selective evolution has produced highly ritualized forms of behavior governed by rules of conduct which have the effect of reducing violence and other wasteful modes of adaptation and thus secure an order of peace.” (1949) Likewise, in more developed societies, some laws are better than others because they create “an effective order” even among people who do not know one another. (2428) Language becomes a mechanism for teaching and transmitting the rules, which are still only abstract propensities to act or not act in certain ways that compete with impulses to guide behavior.
As chiefs emerge, they attempt to teach the rules – both those that they inherited, and those that they create in order to carry out purposive action. People would debate the existence of the former type, while the existence of the latter is evidenced by the presence of a command. The need to verbalize the content of the inherited law would arise in dispute settlement, and would be a means of developing consent about its content. (1970-2001) Hayek notes that early attempts to codify law (Hammurabi and the authors of the Roman Twelve Tables) were represented as mere statement of what the law had always been. (2064) In the Middle Ages, even novel disputes were resolved by reference to laws that were said to have always existed.[i] This did not mean that there was no development: market law, merchant law and the ius gentium continued to change law, but not through some leader’s intention or design. (2086) Hayek sees England as the only country that maintained this non-purposive approach to law, which is not of the king but equally binds the king; where “general principles” are derived from the existing stock of cases (2153, 2174)[ii]
Hayek defined law (as opposed to statute) as: “purpose-independent rules which govern the conduct of individuals towards each other, are intended to apply to an unknown number of further instances, and be defining a protected domain of each, enable an order of actions to form itself wherein the individuals can make feasible plans.” (2174) Elsewhere, he calls this type of law “lawyer’s law” or “nomos.” Alternative customs and morals compete with one another; the more effective ones lead to the success of the group, who may then consider using these as a model for law. (5410)
Judges play a key role in enforcing these abstract qualities of law. Unlike social scientists or revolutionaries, judges by their method make reference to what has come before, with an effort to make the whole framework consistent. Judges are…
“…called in to correct disturbances of an order that has not been made by any one and does not rest on individuals having been told what they must do. In most instances no authority will even have known at the time the disputed action too place what the individuals did or why they did it… the efforts of the judge are thus part of that process of adaptation of society to circumstances by which the spontaneous order grows. He assists in the process of selection by upholding those rules which, like those which have worked well in the past, make it more likely that expectations will match and not conflict.” (2327, 2817)
Judges attempt to determine which expectations parties to a dispute could have “reasonably formed” on the basis of the practices and customs known to all. The judge will not judge whether parties’ conduct is right or wrong by reference to some external criteria, but only by whether it “conformed to recognized rules.” In settling the dispute, these factors (rather than social justice or state requirements) will be determinative. Indeed, judges deny (in a way that Hayek believes leaders could not) themselves access to information and considerations which are not relevant for settling the dispute. The common law judge is particularly capable of serving as a guardian of abstract rules, because his mind is disciplined through the constant sifting of past cases to distinguish between binding precedent and non-binding dicta. In all of these roles, lawyers and judges are not conscious initiators of change, but “unwitting tools” of the spontaneous order. When legislators attempt to introduce alien elements into the law, judges may overturn it “because their technique leads them to give preference to what is still the predominant part of the law.” (1763, 1783, 2174-2214, 2369, 6758)
The judge serves as an unwitting change agent by laying down new rules to protect existing expectations, an action which in turn creates new expectations that are difficult for anyone to predict ahead of time. (2475) Not all expectations are equally valid – for one party’s expectation to be upheld, another has to be disappointed. The judge decides which expectation to uphold by determining how to “maximize the fulfillment of expectations as a whole.” (2496) It would not be a legitimate expectation to think that other’s behavior would never change, because circumstances are always changing. (Hayek says these types of static expectations explain the failure of central planning.) He writes: “Maintaining the overall flow of results in a complex system of production [which is what Hayek believes the judge ought to do] requires great elasticity of the actions of the elements of that system, and it will only be through the unforeseeable changes in the particulars that a high degree of predictability of the overall results can be achieved.” (2515)
It seems difficult to imagine that whose expectations are deemed legitimate would not largely overlap with who has power in a society. Likewise, it seems like protecting anyone’s expectations is in dynamic tension with the market order’s need to constantly upset expectations. Hayek ends up drawing the line between legitimate and illegitimate expectations by stating that judges “demarcate for every individual a range of permitted actions by designating (or rather making recognizable by the application of rules to the concrete facts) ranges of objects over which only particular individuals are allowed to dispose and from the control of which all others are excluded.” (2578) In short, property, which Hayek deems “the only solution” to the reconciliation of freedom with absence of conflict. Or, as Hayek quotes Robert Frost as saying, “good fences make good neighbors.”
[i] Hayek does not question whether this is just a legitimating gesture. The medieval church, for instance, used invocation of custom and superstition to expand its base of power. (Sedgwick, 2011, Chapter IV)
[ii] This seems to be an overstatement of the difference between common law and civil law systems. As (Merryman and Pérez-Perdomo, 2007, at 46) have written, civil law justices also refer to precedent, and their method is similar in many but the most formal respects.