Law, Legislation, and Liberty, Volume 19

By F. A. Hayek and Jeremy Shearmur

A new edition of F. A. Hayek’s three-part opus Law, Legislation, and Liberty, collated in a single volume
In this critical entry in the University of Chicago’s Collected Works of F. A. Hayek series, political philosopher Jeremy Shearmur collates Hayek’s three-part study of law and liberty and places Hayek’s writings in careful historical context. Incisive and unrestrained, Law, Legislation, and Liberty is Hayek at his late-life best, making it essential reading for understanding the philosopher’s politics and worldview. 

These three volumes constitute a scaling up of the framework offered in Hayek’s famed The Road to Serfdom. Volume 1, Rules and Order, espouses the virtues of classical liberalism; Volume 2, The Mirage of Social Justice, examines the societal forces that undermine liberalism and, with it, liberalism’s capacity to induce “spontaneous order”; and Volume 3, The Political Order of a Free People, proposes alternatives and interventions against emerging anti-liberal movements, including a rule of law that resides in stasis with personal freedom. 

Shearmur’s treatment of this challenging work—including an immersive new introduction, a conversion of Hayek’s copious endnotes to footnotes, corrections to Hayek’s references and quotations, and the provision of translations to material that Hayek cited only in languages other than English—lends it new importance and accessibility. Rendered anew for the next generations of scholars, this revision of Hayek’s Law, Legislation, and Liberty is sure to become the standard.

• Language: English
• Publisher: University of Chicago Press
• Release date: Jan 24, 2022
• ISBN: 9780226782003

Book preview

Cover Page for Law, Legislation, and Liberty

The Collected Works of F. A. Hayek

Volume XIX

Law, Legislation, and Liberty

Plan of the Collected Works

Edited by Bruce Caldwell

The plan is provisional. Minor alterations may occur in titles of individual books, and several additional volumes may be added.

The Collected Works of F. A. Hayek

Volume XIX

Law, Legislation, and Liberty

A New Statement of the Liberal Principles of Justice and Political Economy

VOLUME 1 Rules and Order

VOLUME 2 The Mirage of Social Justice

VOLUME 3 The Political Order of a Free People

Edited by Jeremy Shearmur

The University of Chicago Press

The University of Chicago Press, Chicago 60637

© 2021 by The Estate of F. A. Hayek

All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission, except in the case of brief quotations in critical articles and reviews. For more information, contact the University of Chicago Press, 1427 E. 60th St., Chicago, IL 60637.

Published 2021

Printed in the United States of America

30 29 28 27 26 25 24 23 22 21    1 2 3 4 5

ISBN-13: 978-0-226-78181-5 (cloth)

ISBN-13: 978-0-226-78195-2 (paper)

ISBN-13: 978-0-226-78200-3 (e-book)

DOI: https://doi.org/10.7208/chicago/9780226782003.001.0001

Library of Congress Cataloging-in-Publication Data

Names: Hayek, Friedrich A. von (Friedrich August), 1899–1992, author. | Shearmur, Jeremy, 1948– editor. | Hayek, Friedrich A. von (Friedrich August), 1899–1992. Rules and order. | Hayek, Friedrich A. von (Friedrich August), 1899–1992. Mirage of social justice. | Hayek, Friedrich A. von (Friedrich August), 1899–1992. Political order of a free people. | Hayek, Friedrich A. von (Friedrich August), 1899–1992. Works. 1989 ; v. 19.

Title: Law, legislation, and liberty : a new statement of the liberal principles of justice and political economy / F. A. Hayek ; edited by Jeremy Shearmur.

Description: Chicago ; London : The University of Chicago Press, 2021. | Series: The collected works of F. A. Hayek ; volume XIX | Includes bibliographical references and index.

Identifiers: LCCN 2021000411 | ISBN 9780226781815 (cloth) | ISBN 9780226781952 (paperback) | ISBN 9780226782003 (ebook)

Subjects: LCSH: Liberty. | Democracy. | Economic policy. | Rule of law. | Legislation. | Social justice. | Liberalism.

Classification: LCC JC585 .H293 2021 | DDC 320.01/1—dc23

LC record available at https://lccn.loc.gov/2021000411

This paper meets the requirements of ANSI/NISO Z39.48-1992 (Permanence of Paper).

The Collected Works of F. A. Hayek

Founding Editor: W. W. Bartley III

General Editor: Bruce Caldwell

Published with the support of

The Hoover Institution on War, Revolution and PeaceStanford University

The Cato Institute

The Earhart Foundation

The Pierre F. and Enid Goodrich Foundation

The Heritage Foundation

The Morris Foundation, Little Rock

Contents

Editorial Preface

Editor’s Introduction

LAW, LEGISLATION, AND LIBERTY

Consolidated Preface to the One-Volume Edition

VOLUME 1   Rules and Order

Introduction

1. Reason and Evolution

Construction and evolution

The tenets of Cartesian rationalism

The permanent limitations of our factual knowledge

Factual knowledge and science

The concurrent evolution of mind and society: the role of rules

The false dichotomy of ‘natural’ and ‘artificial’

The rise of the evolutionary approach

The persistence of constructivism in current thought

Our anthropomorphic language

Reason and abstraction

Why the extreme forms of constructivist rationalism regularly lead to a revolt against reason

2. Cosmos and Taxis

The concept of order

The two sources of order

The distinguishing properties of spontaneous orders

Spontaneous orders in nature

In society, reliance on spontaneous order both extends and limits our powers of control

Spontaneous orders result from their elements obeying certain rules of conduct

The spontaneous order of society is made up of individuals and organizations

The rules of spontaneous order and the rules of organization

The terms ‘organism’ and ‘organization’

3. Principles and Expediency

Individual aims and collective benefits

Freedom can be preserved only by following principles and is destroyed by following expediency

The ‘necessities’ of policy are generally the consequences of earlier measures

The danger of attaching greater importance to the predictable rather than to the merely possible consequences of our actions

Spurious realism and the courage required to consider utopia

The role of the lawyer in political evolution

The modern development of law has been guided largely by false economics

4. The Changing Concept of Law

Law is older than legislation

The lessons of ethology and cultural anthropology

The process of articulation of practices

Factual and normative rules

Early law

The classical and the medieval tradition

The distinctive attributes of law arising from custom and precedent

Why grown law requires correction by legislation

The origin of legislative bodies

Allegiance and sovereignty

5. Nomos: The Law of Liberty

The functions of the judge

How the task of the judge differs from that of the head of an organization

The aim of jurisdiction is the maintenance of an ongoing order of actions

‘Actions towards others’ and the protection of expectations

In a dynamic order of actions only some expectations can be protected

The maximal coincidence of expectations is achieved by the delimitation of protected domains

The general problem of the effects of values on facts

The ‘purpose’ of law

The articulation of the law and the predictability of judicial decisions

The function of the judge is confined to a spontaneous order

Conclusions

6. Thesis: The Law of Legislation

Legislation originates from the necessity of establishing rules of organization

Law and statute: the enforcement of law and the execution of commands

Legislation and the theory of the separation of powers

The governmental functions of representative assemblies

Private law and public law

Constitutional law

Financial legislation

Administrative law and the police power

The ‘measures’ of policy

The transformation of private law into public law by ‘social’ legislation

The mental bias of a legislature preoccupied with government

VOLUME 2   The Mirage of Social Justice

7. General Welfare and Particular Purposes

In a free society the general good consists principally in the facilitation of the pursuit of unknown individual purposes

The general interest and collective goods

Rules and ignorance

The significance of abstract rules as guides in a world in which most of the particulars are unknown

Will and opinion, ends and values, commands and rules and other terminological issues

Abstract rules operate as ultimate values because they serve unknown particular ends

The constructivist fallacy of utilitarianism

All valid criticism or improvement of rules of conduct must proceed within a given system of such rules

‘Generalization’ and the test of universalizability

To perform their functions rules must be applied through the long run

8. The Quest for Justice

Justice is an attribute of human conduct

Justice and the law

Rules of just conduct are generally prohibitions of unjust conduct

Not only the rules of just conduct, but also the test of their justice, are negative

The significance of the negative character of the test of injustice

The ideology of legal positivism

The ‘pure theory of law’

Law and morals

The ‘law of nature’

Law and sovereignty

9. ‘Social’ or Distributive Justice

The concept of ‘social justice’

The conquest of public imagination by ‘social justice’

The inapplicability of the concept of justice to the results of a spontaneous process

The rationale of the economic game in which only the conduct of the players but not the result can be just

The alleged necessity of a belief in the justice of rewards

There is no ‘value to society’

The meaning of ‘social’

‘Social justice’ and equality

‘Equality of opportunity’

‘Social justice’ and freedom under the law

The spatial range of ‘social justice’

Claims for compensation for distasteful jobs

The resentment of the loss of accustomed positions

Conclusions

Appendix to Chapter Nine: Justice and Individual Rights

10. The Market Order or Catallaxy

The nature of the market order

A free society is a pluralistic society without a common hierarchy of particular ends

Though not a single economy, the Great Society is still held together mainly by what are vulgarly called economic relations

The aim of policy in a society of free men cannot be a maximum of foreknown results but only an abstract order

The game of catallaxy

In judging the adaptations to changed circumstances comparisons of the new with the former position are irrelevant

Rules of just conduct protect only material domains and not market values

The correspondence of expectations is brought about by a disappointment of some expectations

Abstract rules of just conduct can determine only chances and not particular results

Specific commands (‘interference’) in a catallaxy create disorder and can never be just

The aim of law should be to improve equally the chances of all

The Good Society is one in which the chances of anyone selected at random are likely to be as great as possible

11. The Discipline of Abstract Rules and the Emotions of the Tribal Society

The pursuit of unattainable goals may prevent the achievement of the possible

The causes of the revival of the organizational thinking of the tribe

The immoral consequences of morally inspired efforts

In the Great Society ‘social justice’ becomes a disruptive force

From the care of the most unfortunate to the protection of vested interests

Attempts to ‘correct’ the order of the market lead to its destruction

The revolt against the discipline of abstract rules

The morals of the open and of the closed society

The old conflict between loyalty and justice

The small group in the Open Society

The importance of voluntary associations

VOLUME 3   The Political Order of a Free People

12. Majority Opinion and Contemporary Democracy

The progressive disillusionment about democracy

Unlimited power the fatal defect of the prevailing form of democracy

The true content of the democratic ideal

The weakness of an elective assembly with unlimited powers

Coalitions of organized interests and the apparatus of para-government

Agreement on general rules and on particular measures

13. The Division of Democratic Powers

The loss of the original conception of the functions of a legislature

Existing representative institutions have been shaped by the needs of government, not of legislation

Bodies with powers of specific direction are unsuited for law-making

The character of existing ‘legislatures’ determined by their governmental tasks

Party legislation leads to the decay of democratic society

The constructivistic superstition of sovereignty

The requisite division of the powers of representative assemblies

Democracy or demarchy?

14. The Public Sector and the Private Sector

The double task of government

Collective goods

The delimitation of the public sector

The independent sector

Taxation and the size of the public sector

Security

Government monopoly of services

Information and education

Other critical issues

15. Government Policy and the Market

The advantages of competition do not depend on it being ‘perfect’

Competition as a discovery procedure

If the factual requirements of ‘perfect’ competition are absent, it is not possible to make firms act ‘as if’ it existed

The achievements of the free market

Competition and rationality

Size, concentration and power

The political aspects of economic power

When monopoly becomes harmful

The problem of anti-monopoly legislation

Not individual but group selfishness is the chief threat

The consequences of a political determination of the incomes of the different groups

Organizable and non-organizable interests

16. The Miscarriage of the Democratic Ideal: A Recapitulation

The miscarriage of the democratic ideal

A ‘bargaining’ democracy

The playball of group interests

Laws versus directions

Laws and arbitrary government

From unequal treatment to arbitrariness

Separation of powers to prevent unlimited government

17. A Model Constitution

The wrong turn taken by the development of representative institutions

The value of a model of an ideal constitution

The basic principles

The two representative bodies with distinctive functions

Further observations on representation by age groups

The governmental assembly

The constitutional court

The general structure of authority

Emergency powers

The division of financial powers

18. The Containment of Power and the Dethronement of Politics

Limited and unlimited power

Peace, freedom and justice: the three great negatives

Centralization and decentralization

The rule of the majority versus the rule of laws approved by the majority

Moral confusion and the decay of language

Democratic procedure and egalitarian objectives

‘State’ and ‘society’

A game according to rules can never know justice of treatment

The para-government of organized interests and the hypertrophy of government

Unlimited democracy and centralization

The devolution of internal policy to local government

The abolition of the government monopoly of services

The dethronement of politics

Epilogue: The Three Sources of Human Values

The errors of sociobiology

The process of cultural evolution

The evolution of self-maintaining complex systems

The stratification of rules of conduct

Customary rules and economic order

The discipline of freedom

The re-emergence of suppressed primordial instincts

Evolution, tradition and progress

The construction of new morals to serve old instincts: Marx

The destruction of indispensable values by scientific error: Freud

The tables turned

Author Index

Subject Index

Footnotes

Editorial Preface

Hayek initially intended to bring out Law, Legislation, and Liberty as a single volume. As he explains in his ‘Consolidated Preface’, he was led to bring it out as individual volumes in 1973, 1976 and 1979. In 1982 a one-volume edition was published. In this, each of the volumes – with chapters followed by their notes – was printed sequentially, with an index which covered all three volumes. Some corrections and revisions were made to the 1982 edition. This single-volume edition was reprinted in 1993 and 1998, and then with a short ‘Foreword to the Routledge Classics Edition’ by Paul Kelly, in 2013.

The text for this Collected Works edition was based on that of the latest University of Chicago Press edition of Law, Legislation, and Liberty. This was then checked against, and supplemented from, Hayek’s own copy of the Routledge one-volume edition. In addition to the ‘Consolidated Preface’ that Hayek provided, I have reproduced the material that appeared in the Prefaces to the different individual editions insofar as this was not included in the ‘Consolidated Preface’. Another significant change is that the endnotes used in earlier editions have been rendered as footnotes, to make it easier for the reader to access them.

Hayek’s copy of the book included various small corrections which he had marked into his copy for a ‘Revised’ edition. These have been included in this edition. Where they amounted simply to corrections to spelling or grammar, they have been made silently. Where Hayek has changed his wording, this has been noted. After consultation with the General Editor it was decided to include these changes, even though they seem all to be of a cosmetic character. Sometimes, Hayek’s corrections did not work; in such cases I have changed the text to render the material grammatically coherent and have indicated what I have done in a note. I have also silently corrected small errors in spelling and grammar, more generally. As I mention in the Editor’s Introduction, Hayek normally had his English texts read over and corrected by a native English speaker. This happened only to a limited extent in the present volume. In particular, Hayek seems to have extensively revised the chapters that formed volume 2, after he had received input on the style of his earlier text. The result is sometimes Germanic in its style, or not fully idiomatic English. No attempt has been made to revise this. Similarly, I have not tried to eliminate the repetitions that Hayek noted that the work contained. The text follows Hayek in using British spelling and punctuation, other than in quotations.

Hayek was an elderly man when he wrote Law, Legislation, and Liberty. It is full of striking ideas. But the previously published versions exhibited some problems in respect of references and quotations. Hayek seems to have made notes onto filing cards, which he then transferred to his manuscripts. Numerous errors crept into this process. In this edition, these have been silently corrected (although when some explanation is required, this has been provided). The errors were so numerous that it would have been problematic to indicate all of them. Editorial corrections have been added in square brackets and where pertinent indicated ‘Ed.’ Hayek himself made some interpolations in square brackets into quotations; I have changed Hayek’s own use of square brackets to curly brackets. I have also on a few occasions (e.g., where Hayek has quoted material from many pages of a book as a single block) inserted page numbers in square brackets to indicate the source of material.

Hayek worked on this book over many years, and in many different locations, which has made the checking of references and quotations an extremely lengthy and difficult procedure. I have kept Hayek’s sources where I could do so, but in other cases I have provided references to more accessible or standard editions, or to what was most readily available in, say, the Library of Congress or the British Library. If readers wish, for scholarly purposes, to refer to the specific editions that Hayek cited, or to see what his references originally were where they have been corrected, they should consult the older editions of his book; but in the light of the problems about his references, those doing so may also need to keep this edition to hand.

It is time for acknowledgements and words of appreciation for those who have helped me in this endeavour. I would like, first of all, to thank my wife for her assistance with various stages in the production of this volume and for putting up with my working on it for more time than is reasonable. Similar thanks also must be given to Bruce Caldwell, the General Editor of the Collected Works, for his encouragement, advice and some particularly helpful criticism. My thanks to Brandon Beck for his initial preparation of the text.

Not only did Hayek write in German and English, but he also read French and Italian, and in this volume, he sometimes quoted – often without translation – material in German, French, Italian, Spanish and Latin. I am most grateful for the assistance of Carolin Benack, Yasmin Shearmur, Alberto Mingardi and Pier Luigi Morbidoni for translations (and in the case of Pier Luigi, for assisting me in sometimes fruitless quests to work out what Hayek might have been referring to in certain of his Latin references). Their translations follow the foreign-language material, in square brackets. I would particularly like to thank Viktor Vanberg for his assistance, not least in identifying just what Hayek was referring to in specific editions of German books which were not accessible to me in Australia, the US or the UK, and many other scholars who assisted me on specific points. I would also like to thank particularly Susan Tarcov, who copyedited this volume for the University of Chicago Press and who made numerous suggestions and corrections which have greatly improved the volume.

The work on the volume has taken longer than had been expected, principally owing to the vast range of work which Hayek referred to or cited. In checking references, I made use of – and would like to thank – the following libraries for access to their collections, and for assistance from their staff: The Australian National University; The National Library of Australia; St. Mark’s College, Canberra; Stanford University; Stanford University Law School; UC Berkeley; The Library of Congress; The Library of Congress Law School; The Folger Library; Duke University Library; The British Library; The British Library of Political and Economic Science; The Warburg Institute, University of London; Senate House Library, The University of London; The Institute of Advanced Legal Studies, The University of London; The Institute of Classical Studies, The University of London; Lambeth Palace Library; the National Library of Scotland; The University of Glasgow; the University of Edinburgh; The University of Amsterdam; the Bundeswehr University, Munich; and Bayerische Staatsbibliothek.

I also found invaluable the electronic digitization of books undertaken by Google, Hathitrust, and the first-rate portal to German and other digitizations, not least of Latin texts, at KVK - Karlsruhe Virtual Catalog. I am also particularly grateful for Google’s search facility (and Google Scholar); to Worldcat; and to Liberty Fund for their digitizations of some important books in the history of political thought. I would also mention the importance for my work of Amazon, Bookfinder, AbeBooks, Alibris and UsedBookSearch.co.uk, which enabled me to purchase a large number of works at a reasonable price, which it would not have been feasible to visit a library to consult, and for Amazon’s Kindle, the search facility of which enabled me to locate a lot of material in a range of books – not least in Law, Legislation, and Liberty – which would otherwise have presented many difficulties, and also for the similar facility for electronic books on Google Play.

I would particularly like to thank those foundations and institutions that supported this work over the years. A grant administered by the Institute for Humane Studies enabled me to spend some very productive time at the Hoover Institution at Stanford University and at the Library of Congress. I also benefited greatly from a semester at the Center for the History of Political Economy at Duke University.

I can only conclude by saying that as I have worked on this volume, I have been acutely aware not only of my own fallibility, but of the way in which future work – not least in archives – might well throw further light on issues that I have discussed in my introduction, or in my editorial notes. As I mention in my introduction, what Hayek retained relating to his own writings and correspondence was patchy. The problems of discovering where other relevant material might be held, as well as the fact that some of it may well be in private hands, mean that the task of providing a definitive version of Law, Legislation, and Liberty is – in the words Karl Popper used for the title of his Autobiography – an Unended Quest. If readers have queries, or spot errors, I would be delighted if they contact me.

Jeremy Shearmur

Emeritus Fellow, School of Philosophy, Australian National University

Resident in Dumfries, Scotland

[e-mail]

Editor’s Introduction

1. Law, Legislation, and Liberty

Hayek’s Law, Legislation, and Liberty was written over many years – from 1963 to 1978. It is a rich work which contains important contributions on a variety of topics. Hayek’s main reason for writing it seems to have been that he had become concerned about the way in which the classical liberal social order of the sort that he had described in his Constitution of Liberty¹ was being undermined. Institutions which had served to constrain governments and to preserve people’s liberty and kinds of ‘spontaneous order’ which allowed people to co-operate with, and make use of the information held by, numerous other people with whom they could not enjoy face-to-face relationships were under pressure. Hayek, in this volume, offers a diagnosis of what is happening, and why. He also offers some suggestions for how we might respond to these problems.

Hayek’s book also offers some striking arguments, which parallel those of his Road to Serfdom.² There, Hayek argued that attempts to superimpose economic planning onto a market economy open up a path to the destruction of that economy and the loss of personal freedom. In this book, Hayek argues that the pursuit of ‘social justice’ (understood as the attempt to make market prices track individual virtue, or what is morally worthy) leads us in much the same direction.³ Hayek also argues that a conception of law as being simply the command of the sovereign, as has been championed by legal positivists since Hobbes, serves to undermine the legal order of a free society. What is striking about Hayek’s argument is that he is critical of legal positivism not from the perspective of some form of natural law theory, but, rather, from a view of law as a form of spontaneous order, developing from shared customs, but gradually being refined and developed by judges. (There are parallels between Hayek’s views here and those of common law theorists such as Sir Edward Coke, and also of the Scottish philosopher David Hume.) There is, however, even more. For Hayek offers a powerful critique of the way in which the operation of contemporary interest-group politics also has destructive effects on a liberal constitutional order. Hayek’s argument here sometimes makes common ground with Mancur Olson’s The Logic of Collective Action.

What is remarkable about Law, Legislation, and Liberty is that Hayek not only offers critiques of the ideas that in his view have given rise to our problems but suggests alternatives to them. He develops a striking account of spontaneous orders and their development and presents a distinctive view of law which builds on a common law approach. He also explains the view of the constitutional constraint of government that he favours as it was rooted in the classical liberal tradition, and why it has broken down, but then offers some radical suggestions about how these problems might be resolved.

At the same time, it should perhaps be stressed that Law, Legislation, and Liberty is not an easy read. It is a large book, and – as in The Constitution of Liberty – Hayek often pauses to illustrate his ideas by drawing many historical parallels. In various of his publications, Hayek had had accomplished native speakers of English read over his work and make suggestions about style. This occurred to an extent with Law, Legislation, and Liberty. But in this book, notably in the material that was published as volume 2, Hayek worked on his text subsequently to having receiving these suggestions. One consequence of this is that some of that volume makes for very heavy reading. Further, not only is Law, Legislation, and Liberty itself long. But Hayek also stressed – see, for example, his ‘Consolidated Preface’, text following note 12 – that it builds on and supplements his Constitution of Liberty, which Hayek urged the non-specialist reader to read before proceeding to the more detailed discussion of problems in Law, Legislation, and Liberty.

In approaching the book, it is important that the reader looks at it as a whole and does not take what Hayek might say at any one point – especially in brief statements – as representing his overall view on any issue. This is especially important on the topic of social justice, where the reader needs to bear in mind not only what Hayek said about the idea being meaningless within a spontaneous order⁴ and social justice not being something for which there could be a rule or principle,⁵ but also that he favoured the idea of ‘providing outside the market a uniform minimum income for all those who for some reason are unable to earn at least that much in the market’.⁶ All this – and also the details of his argument – needs to be taken into account if one is to get to grips with what he is proposing and what his arguments for it are.

The book has three key themes which I will briefly introduce.

The first – which Hayek discusses in his ‘Introduction’ – is that a constitutional order that was intended to limit arbitrary government no longer serves that purpose. There are many strands to his discussion of this, of which I will mention but two. One is that rather than (as Hayek would urge) seeing law as a spontaneous order of rules (including extra-legal rules) and their interplay with concrete circumstances, which needs to be revised with the greatest care by people who have a good sense of how the system operates, it is seen, instead, simply as being whatever the sovereign commands. Second (for which he refers to writers as diverse as Carl Schmitt⁷ and Mancur Olson⁸), the operation of interest-group politics within democracies has had destructive consequences for the rule of law and constitutional order in the sense in which he favours it.

Second, there are Hayek’s ideas about a legal order and, more generally, inherited social institutions as spontaneous orders. (Spontaneous orders, it should be stressed, are not for Hayek something that necessarily have to arise spontaneously.⁹) These ideas play a key role in the book, but they are complex. They need also to be related to other work on which Hayek was engaged subsequent to the publication of his Constitution of Liberty. Hayek refers in this context to material published in his Studies in Philosophy, Politics and Economics and his Freiburger Studien. To this could usefully be added his New Studies, while in his Epilogue, Hayek refers to his Sensory Order, which is also important for understanding Hayek’s view of rules and their significance.¹⁰

Third, there is Hayek’s treatment of law. On the one side, and by sharp contrast with many legal positivists from Hobbes to Hans Kelsen, Hayek stresses what might be called the Humean view of law as originating in custom not command,¹¹ something to which Hayek offers a distinctive twist by relating it to his own ideas about spontaneous orders and their evolution. On the other side, Hayek offers his own ideas about the way in which judges might best revise and develop the law. This might be seen as a restatement and re-interpretation of the case for law as the product of ‘artificial reason’ which Coke, Sir Matthew Hale and other theorists of common law defended,¹² and which Hobbes criticized. Hayek thus stressed the significance of the development of common law from a basis in traditional practices, refined by judgements involving tentative statements of legal principles by judges.¹³ He also drew certain parallels with Karl Popper’s account of scientific method.¹⁴ It is important to bear all this in mind when one considers the character of Hayek’s critical engagement with legal positivism. For critical exchanges about legal positivism are often represented in terms of arguments about the authority of law, and of challenges to law as it currently exists from proponents of natural law theory who argue that something is not valid law unless it is morally just. Hayek’s concern is not with this argument. Rather, his concern is to defend a tradition-based or a common-law approach to law against the idea that law must be the result of legislation or of the declarations of a sovereign.

It is, however, worth noting explicitly that Hayek argues that this developing system may stand in need of reform by a legislature.¹⁵ He also discusses the way in which the development of law has been adversely affected by a particular kind of class bias, which may stand in need of remedy.¹⁶ A general theme in Hayek’s work from ‘Freedom and the Economic System’ in 1939¹⁷ was the need to reform law on the basis of what might be called a highly attenuated form of utilitarianism,¹⁸ and Hayek, it seems to me, writes things in the present volume – e.g. in chapter 15 – which might (in the light of his earlier statements referred to in the two previous footnotes) invite interpretation in such terms. What is not altogether clear is how and where such specialized scrutiny is to take place within the constitutional ideas that Hayek sets out here.

This relates to three other important themes in Hayek’s work.

The first of these is how to resolve the problems of constitutional constraints on government. Here, he takes up an idea to which he briefly referred in The Constitution of Liberty:¹⁹ that there should be two elected chambers, one of which lays down general rules, within the confines of which the other – which plays the more familiar roles of government – operates. The idea of such a split in functions is familiar enough from the ‘republican’ tradition. Indeed, Rousseau’s Social Contract offers a striking example of this, with citizens making general laws which they agree to impose on themselves, and with there also being a quite separate body which deals with particular issues, within the constraints of those laws. Hayek’s proposal differs from this, because he suggests that citizens should be elected by cohorts of people when they have reached a certain age. But it is not clear how their role (and what would look to me to be their lay knowledge) is to relate to that of the specialized common-law judges who in Hayek’s account spontaneously develop legal and constitutional ideas, or how the kinds of technical reform to which I have just referred are to be undertaken.²⁰

The second is that of the evolution of undesigned orders. The notion that we have inherited functional institutions which we have not designed runs right through Hayek’s work from his discussion of aspects of Ludwig von Mises’ work on socialism, in his ‘The Trend of Economic Thinking’ (1933), onwards.²¹ Hayek has been much concerned with issues relating to the development of and selection for, and also the inheritance or imitation of, un-designed systems of rules. In the first chapters of Law, Legislation, and Liberty, Hayek offers an account of spontaneous orders as developing, but also as being open to improvement in the light of critical reflection – as, for example, in the case of the legal order, which he discusses in chapter 7. In the Epilogue to Law, Legislation, and Liberty, and then subsequently in The Fatal Conceit, Hayek further stresses the evolutionary side of this. Hayek’s ideas here are striking and most interesting. But it would seem to me that one needs to be careful when looking at this material to ask just what, for Hayek, counts as an evolutionary account,²² and to bear in mind that he also endorsed a reflective, critical rationalism, rather than simply an uncritical acceptance of whatever we have inherited.

Third, there is the issue of ‘social justice’. Hayek offers an extended critical discussion of this idea. It is striking, however, that he is largely concerned with it as a kind of modern attempt at a ‘just price’ theory, where those who favour the ideal of social justice are seen as aspiring to change the basis on which a market economy operates, so that people would be rewarded on the basis of merit. Hayek’s discussion is powerful. As I have mentioned above, he also raises other issues – e.g. as to whether social justice could work on the basis of a principle.

I would stress that the issues that I have raised here are offered as not so much a criticism of Hayek as a suggestion to the reader that on these matters – and indeed on many other topics with which Hayek is concerned – his discussion is complex, and that it is important not to take a single statement, however clear it might be, as representing all that Hayek has to say about an issue in this volume.

2. A Swift Tour through Law, Legislation, and Liberty

It is not for me, as an editor, to try to explain to the reader what Hayek meant, as he is perfectly capable of doing this for himself. But some brief comments on the different chapters might be found useful by some readers.

The book starts with Hayek’s ‘Consolidated Preface’. This is invaluable, as Hayek’s own guide to his writing of the book. If readers are interested in this aspect of Hayek’s work, they should also look at the first or second notes to each of Hayek’s chapters, as in these he often writes about the history of the chapters (e.g. as to whether they have a prior publishing history) and how they relate to other papers of his which discuss similar issues. The ‘Consolidated Preface’ is followed by Hayek’s ‘Introduction’. This develops in a powerful manner one of the key issues that Hayek addresses in the book. This is the decline of constitutional constraints on government, and thus of limited government. He indicates in broad terms what he takes to be responsible for this, what his response to this problem is, and also says a little about the relationship between Law, Legislation, and Liberty and The Constitution of Liberty.

Chapter 1, ‘Reason and Evolution’, sets out some of Hayek’s key themes: the difference between evolved social orders and organizations and his dissent from that aspect of the Cartesian tradition which would see social institutions, if they are to be adequate, as having to be the products of human design. He criticises the idea that there is a simple dichotomy between what is ‘natural’ and what is ‘artificial’ – a theme to which he also returns in a striking manner in his ‘Epilogue’ to the book. Hayek also explains his own espousal of a ‘critical’ rationalism. Chapter 2, ‘Cosmos and Taxis’, explains in some detail Hayek’s ideas about ‘spontaneous orders’ and their dependence on rules that people follow, rules of which they may well not be consciously aware. In chapter 3, ‘Principles and Expediency’, Hayek explores the dependence of various social benefits on our following rules, the rationale of which may not be clear to us, and the dangers that may arise from the direct pursuit of social reform if we are not aware of the significance of the rules upon which social order – and various general social benefits – depend.

In chapter 4, ‘The Changing Concept of Law’, Hayek starts to apply these ideas to our understanding of the law. He argues for the importance of recognizing law as developing from customary practices and their interpretation, rather than from legislation. But he also discusses how it was that we moved away from such a view. He argues that his approach – which is linked to his discussion in the first three chapters – gives us a picture of law which differs significantly from the view that law is the product of legislation (although, as I have mentioned, he also argues that it may sometimes be necessary to correct such a developing system of law by means of legislation). Chapter 5, ‘Nomos: The Law of Liberty’, discusses his view of law in more detail, stressing the significance of the protection of some but not all expectations, and the role, in this approach, of a judge. Chapter 6, ‘Thesis: The Law of Legislation’, discusses a contrasting view of law, one based on ideas about the rules on the basis of which organisations – rather than spontaneous orders – operate. He discusses issues about the inter-relationship of the two different forms of law (and orders), and also how there has been a shift towards taking the legislation-based view as primary, with which he takes issue.

The next group of chapters appeared as volume 2 of Law, Legislation, and Liberty. They include some material which does not make for easy reading, in part because the issues with which Hayek is dealing are difficult, but also because his style is sometimes rather dense and Germanic. Chapter 7, ‘General Welfare and Particular Purposes’, stresses the significance in an extended social order of our being guided by general and abstract rules. Hayek takes issue, here, with utilitarianism when understood as a theory concerned with the appraisal of actions on the basis of a knowledge of their consequences, which he sees as linked to the ‘constructivism’ in social theory of which he is systematically critical. While this is a matter of controversy concerning the interpretation of Hayek’s work,²³ it is worth noting that Hayek mentions that there is another, wider, sense of utilitarianism which he argues could be applied to Aristotle, Aquinas, Hume, and also to his own discussion.²⁴ Chapter 8, ‘The Quest for Justice’, is concerned in part with the idea that we should think of justice as a negative virtue, in the sense of our concern being to avoid unjust conduct; in part with a critique of legal positivism. Chapter 9, ‘Social or Distributive Justice’, is an extended critique of the ideal of social justice. Hayek is concerned, in this chapter, with several strands of argument. He raises the question of against whom claims for ‘social justice’ could be understood as legitimate, within a spontaneous order; he argues that there could be no general rule on the basis of which claims to social justice could be formulated.²⁵ Perhaps central to the chapter, however, is an argument that to expect prices to reflect ‘merit’ or some idea of ‘social justice’ is incompatible with the basis on which an extended market order needs to function – in which prices provide signals relating to people’s future conduct. Hayek draws parallels here – and elsewhere – between his argument and that of some late Scholastic writers when they discuss a ‘just price’.²⁶

Hayek’s Chapter 9 is followed by an Appendix, ‘Justice and Individual Rights’, in which Hayek offers some well-placed criticism of the UN Declaration of Human Rights. One argument here which is particularly striking (and which he documents from statements made by those involved in drawing it up) is that the UN Declaration was a product of a compromise between people coming out of different kinds of social system. This, Hayek argues, led to some formulations of rights which made sense in a liberal spontaneous order, while others would be sensible only within a social order which operated as an organization.

In chapter 10, ‘The Market Order or Catallaxy’, and chapter 11, ‘The Discipline of Abstract Rules’, Hayek discusses – in quite general terms – the character of the economic order that he favours, its broad characteristics, and what we can – and what we should not – hope for from it. In the second of the chapters, he brings out some of the problems that face us when living in such a society. In particular, he discusses the way in which many of the expectations that we have inherited from life in the smaller-scale societies in which humans originally developed may be problematic if we pursue them within a large-scale catallactic society, and the way in which they can serve to lead us to demand arrangements which can be satisfied only within organizations. He concludes by pointing to the significance for the maintenance of classical liberalism of the development of voluntary associations.

The next group of chapters appeared as volume 3 of Law, Legislation, and Liberty. Chapter 12, ‘Majority Opinion and Contemporary Democracy’, explores the problems facing democracy when it is seen as properly allowing for the exercise of unconstrained powers by a majority, and the particular problems that emerge when this is coupled with a politics which consists of coalitions of organised interests. Chapter 13, ‘The Division of Democratic Powers’, looks at the way in which we have moved away from older ideas about the proper scope and character of a legislative body. Hayek’s discussion here draws in interesting ways on the eighteenth-century work Cato’s Letters, the writings on these issues by Sir Courtenay Ilbert and M. J. C. Vile’s Constitutionalism and the Separation of Powers.

In chapter 14, ‘The Public Sector and the Private Sector’, Hayek discusses what he takes the legitimate role of the government to be, but also some of the problems posed by the provision by government of various services. In chapter 15, ‘Government Policy and the Market’, he offers a striking discussion of what we can expect from a competitive market process, what kind of policy by government is needed by it, and also the dangers of shaping our expectations of the market, and of policy towards it, by ideas about ‘perfect competition’. Chapter 16, ‘The Miscarriage of the Democratic Ideal: A Recapitulation’, sums up briefly Hayek’s general argument in the book so far. This prepares the way for his chapter 17, ‘A Model Constitution’, in which Hayek presents his positive proposals for addressing the problems of the lack of limitations on government. His suggestion is that we should consider having a two-chamber governing body, each democratically elected, in which one of the chambers is tasked with the formulation of the general rules under which the second – which is concerned with the day-to-day conduct of government, and thus with politics in the more familiar sense – would operate. Hayek spends some time in exploring the details of the particular arrangements that he favours for the first chamber – involving election by people when they reach the age of 45. Chapter 18 argues for the importance of the delivery of concrete government services by way of local government.

The volume concludes with Hayek’s ‘Epilogue: The Three Sources of Human Values’. This is a powerful re-statement of Hayek’s views about the significance of rules and structures which have developed over time, and which are neither natural – in the sense of being innate – nor the products of convention in the sense of deliberate design. This material links up with what Hayek said about evolutionary themes in the first chapters of the book. But he develops it here by way of an interesting critique of Freudian and Marxian views. The style of the piece, as Hayek indicates, foreshadows an approach which he was to develop at greater length in his The Fatal Conceit.²⁷

3. The Writing of Law, Legislation, and Liberty

But how did the book itself come to be written – and why did it take so long for Hayek to finish it? Hayek’s ‘Consolidated Preface’ is a valuable source on all this. It is important to note that, in 1962, Hayek moved from Chicago to the University of Freiburg in Germany. There he was engaged in teaching and research. He had access to a good scholarly library and interacted with a lively academic community. He was given emeritus status in 1967 but continued to teach there until 1969.²⁸ However, in 1969 he moved to the University of Salzburg. The move did not go well. He became ill, in a manner that sapped his ability to undertake academic work at the same level as he had managed before; this lasted for a number of years. He also no longer had access to an academic library of the kind that he had been used to in Chicago or Freiburg. As he notes in the part of his ‘Consolidated Preface’ in which he discusses volume 2, discussing the central chapter of that volume, ‘in re-writing that chapter I no longer had that easy access to adequate library facilities which I had when I prepared the first draft of this volume’.

Indeed, Hayek’s work – and progress on Law, Legislation, and Liberty – seems to have been affected badly by this.²⁹ Hayek was able to get back to work only in the spring of 1974. In October 1974, he was then awarded the Nobel Prize. This led to a very demanding schedule of visits and lectures, internationally, and he was also involved in work which resulted in a small book, Denationalisation of Money.³⁰ All this put Law, Legislation, and Liberty further on the back-burner. One other source of delay was that Hayek became enamoured of the project of a public debate – which he thought should be held in Paris – on the theme: ‘Was Socialism a Mistake?’. Hayek was concerned with this prior to his completing the third volume of Law, Legislation, and Liberty. He issued letters of invitation for people to participate in such a debate in May 1978,³¹ while he reports in a letter to Arthur Shenfield,³² in June 1978, that his concern was now with fund-raising for this purpose. In the event, Hayek agreed, at the Mont Pelerin Society meeting in Hong Kong in 1978, that he would write a kind of background paper as the basis for the event. By January 1979, Hayek was referring to what he was working on as a book to be called Was Socialism a Mistake.³³ It was this which eventually developed into The Fatal Conceit.

I would first like to say a little about the earlier progress of the work. In a letter to the Italian lawyer and Mont Pelerin Society member Bruno Leoni of April 4th, 1962, Hayek says that he not only enjoyed Leoni’s book Freedom and the Law but that it gave him new ideas. After discussing these briefly, he continues:³⁴ ‘If I can find the time I hope before long to do a little pamphlet on Law, Legislation and Liberty in which I want to deal with these problems and my idea of an ideal constitution’. The ideas prompted by Leoni were an interpretation of classical liberal ideas about the rule of law in terms primarily of common law rather than legislation or legislated codifications of the law. I will discuss this, and Hayek and Leoni, later in this introduction.

As to the book, Hayek had initially agreed to publish Law, Legislation, and Liberty in a series called ‘The Principles of Freedom’. This was a series of mostly semi-popular works, in which people who were members of the Mont Pelerin Society were often involved as academic sponsors or writers. The series seems to have originated from discussions between a journalist, Ruth Sheldon Knowles, and people in the oil industry. From this developed the idea of a series of publications which were to come out in association with some academics at Wabash College in Indiana: John van Sickle, who was a professor of economics there, and Benjamin Rogge, who was a dean.³⁵ Karl Popper, who along with some other members of the Mont Pelerin Society had agreed to be an academic sponsor of the series, had written to Hayek in December 1962 to complain that the series had ended up being about just economic liberty. Hayek responded: ‘I myself intend to contribute a volume [to Van Sickle’s series] under the title Law, Legislation and Liberty, which is to deal mainly with the extent to which totalitarian conception[s] have permeated public and constitutional law – a very serious development’.³⁶ On January 26th, 1963, Hayek wrote to his friend Fritz Machlup: ‘I am currently working on a small book for the Van Sickle series (Law, Legislation and Liberty) in which I want to develop the idea systematically’.³⁷ (He refers, without discussing what was involved, to something that he had dealt with in a lecture given in Frankfurt.)

A problem was that Hayek’s book, as it developed, became increasingly unsuitable for inclusion in a series of semi-popular books. But Van Sickle, who was editor of the series, was very reluctant to lose a particularly distinguished author. On April 18th, 1969, Van Sickle wrote to the Principles of Freedom Committee: ‘Professor Hayek has submitted a first draft of his Law, Legislation and Liberty with the warning that it is growing bigger and bigger and less suitable for the Series . . . much too abstract, philosophical and difficult. Its inclusion in the Series is still to be determined’.³⁸

Benjamin Rogge was asked to review the manuscript and wrote a brief report on it. He wrote to Van Sickle on April 8th, 1969, asking what he should do with the manuscript.³⁹ To this, there is no response on file; the manuscript is not in the Rogge archive at the Hoover Archive (although a couple of other non-Hayek MSS by other authors are). At this point, the plans for the inclusion of Hayek’s book in the series seem to have been dropped.

In 1968–9, Hayek accepted an invitation to be the Visiting Flint Professor at the University of California, Los Angeles. While he was there, he delivered an undergraduate course called ‘The Philosophy of Social Science’ and also gave graduate seminars on Law, Legislation, and Liberty.⁴⁰ A cyclostyled version of the MS was prepared and made available to those participating in the seminar. One of these certainly exists, but it is in private hands and I have not been able to gain access to it.

When Hayek was writing The Constitution of Liberty, a graduate student of his, Edwin McClellan, assisted him by reading through the MS and suggesting improvements to the English.⁴¹ Hayek was, with the assistance of the Relm Foundation (which had provided support for McClellan to work with Hayek on The Constitution of Liberty⁴²), able to secure his assistance again with the production of Law, Legislation, and Liberty. There was correspondence between them from 1967 to 1971, with Hayek sending him copies of his manuscript and McClellan sending him back suggestions.⁴³ The McClellan version of the manuscripts is not in the Hayek Archive, and his son has told me that it was not to be found in McClellan’s office on his death.

In January 1968, Hayek sent a copy of his entire manuscript, as it then stood, to the Relm Foundation for safekeeping. But Hayek subsequently wrote to them: ‘There is now no need to hold yourself responsible for [the typescript of the book], and much of the version which you have has, indeed since been completely re-written. I would, however, appreciate it, if you could send me the whole of Part I, that is up to p. 239 which is in semi-final form and will still be useful. All the rest can now be destroyed’.⁴⁴ The manuscript was returned to Hayek.

4. The Development of Hayek’s Ideas

But what about the development of Hayek’s ideas which are to be found in this book? Alas, there is no significant material relating to Law, Legislation, and Liberty in the Hayek Archive. It is always possible that further material may come to light. But Hayek tended not to retain manuscripts and drafts once a work had been published (he also did not systematically retain correspondence⁴⁵), and in some cases even the texts of unpublished public lectures were not retained. Law, Legislation, and Liberty went through a number of different versions, as I have indicated above. But none of them are to be found in the Hayek archive – or, indeed, as far as I have been able to discover, in any publicly available resource.

Hayek himself gives information, from time to time, about the history of ideas that go to form different chapters, in the first or second notes to those chapters. In some cases, chapters draw on material which he published prior to its inclusion in Law, Legislation, and Liberty, as he explains in footnotes to those chapters; in other cases, Hayek tells us briefly about the development of his ideas, as such.

First, as Bruce Caldwell has noted in his ‘Hayek’s Nobel’,⁴⁶ during the initial period when Hayek was at work on this volume, he was also pursuing a variety of concerns which, while ranging much more widely, were closely related to it. Some ideas about the scope of this may be discerned from the papers included in his Studies in Philosophy, Politics, and Economics; New Studies; and his Freiburger Studien.⁴⁷ One theme which is of particular note is culturally inherited rules which may not be known to people consciously. He became interested in problems about their transmission across generations and had plans for an ambitious seminar on this theme, to which he invited a number of distinguished participants including John Rawls and the social psychologist Roger Brown.⁴⁸ Hayek’s idea for the topic of the meeting was set out in a letter that he sent to Rawls: ‘The problem which it is intended there to discuss is essentially that outlined in my essay on Rules, Perception and Intelligibility and more precisely the method of the transmission of unarticulated rules from generation to generation’.⁴⁹

In the event, the seminar did not take place in quite the form or with the participants that Hayek had hoped for. But two things are striking about Hayek’s plans for it. First, there are close inter-connections between Hayek’s ideas from The Sensory Order (and methodology) and his ideas about the development of social institutions. Second, it becomes clear that he was trying to bring together ideas from these different areas, and – as is shown by the first part of Law, Legislation, and Liberty – he saw them as connected to his social, legal and economic ideas. In fact, his hope of making these connections was of long standing. For he had written, to his friend Fritz Machlup, in October 1950: ‘It is difficult to explain what exactly I am working on, but my two interests in psychology and economics seem gradually to merge into something tangible and I am beginning to see the outline of a book, the subtitle of which will be something like The creative powers of a free civilization’.⁵⁰ This, however, was written about his plans for what became The Constitution of Liberty, in which these hopes of Hayek’s to bring together his different interests were not, in the end, realized. It seems clear from the material on which Hayek was working subsequent to the publication of The Constitution of Liberty that this was a programme on which he was still working. However, it was not to be fully realized in Law, Legislation, and Liberty, either; but readers concerned with these issues can put together a conception of the fuller scope of his concerns from the sources to which I have referred.

Hayek’s ideas about the main elements in his book seem to have formed fairly quickly. Hayek discussed his ideas about a second chamber which would set the (general) rules under which government in the more ordinary sense would operate in a talk entitled ‘New Nations and the Problem of Power’ given originally on the BBC Third Programme.⁵¹ There then followed a number of further discussions of the idea – as Hayek sets out in detail in note 2 to chapter 17. When he had first referred to the idea in The Constitution of Liberty (see above), Hayek did not refer to the members of or voters for the rule-making assembly as being of any particular age. But from ‘New Nations and the Problem of Power’ onwards, he developed his ideas in the context of proposals which he was eventually to set out in detail in chapter 17, in which he argued for election on the basis of cohorts by age, as people became 45, on the details of which he elaborated. This has had the unfortunate consequence that attention has tended to be focussed upon these details, rather than on his more general concerns about the collapse of constitutional constraints and his broader suggestions and their rationale. Indeed, one finds a writer as otherwise sympathetic to Hayek as Deirdre McCloskey writing of Hayek as having advanced ‘a bizarre suggestion for age restrictions on voting’.⁵²

Hayek’s other key idea in the book – the idea of interpreting the rule of law in terms of common law, and treating it as a developing spontaneous order – was also developed quite swiftly. It was connected, in Hayek’s work, with other ideas such as the contrast between a spontaneous order and an organization, and his critical engagement with legal positivism. Hayek wrote on these issues in a number of different papers over the years. In some cases, as Hayek mentions in footnotes to his various chapters, he then based chapters in this book on that material. In other cases, the material is to be found in his Studies, Freiburger Studien and New Studies. As Hayek often treated this material in an inter-linked manner, in single papers, to