More on Law as Spontaneous Order

by Don Boudreaux on December 14, 2006

in Law

In my column in today’s Pittsburgh Tribune-Review, I discuss many of the aspects of law and legislation that I discussed with Russ on a recent EconTalk podcast.

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{ 11 comments }

Trey Tomeny December 14, 2006 at 8:35 am

A very good column. Another interesting case is "common law" that is not as settled as the parking lot example. Different people have different ideas as to what this law is and therefore confrontations result.

"Selfish mergers" are often denied access to the open lane ahead of them by selfish merge deniers who position their vehicles halfway into the open lane in order to prevent the selfish mergers from proceeding and merging where the two lanes actually come together instead of sooner.

I've seen and been in ugly finger waving confrontations between selfish mergers and selfish merge deniers.

On the basis of economics (I know little of traffic flow dynamics), I side with the selfish mergers. By using the open lane until forced to merge they are using the resource (lane space) more fully.

Years ago, I was in the D.C. area driving on the Beltway. There were numerous signs indicating construction ahead, merge right. As a young selfish merger I of course moved to the left hand lane and went as fast as practical while the two right hand lanes were at a standstill.

After about two miles of this I got to the construcion site where the construction crew had packed up for the day and was just beginnng to go back and remove the lane closed ahead signs. Meanwhile, thousands of motorists were in a huge trafic jam because they chose to believe the signs rather than test their validity by driving in the fast flowing left lane.

Ken Willis December 14, 2006 at 12:21 pm

The podcast was a joy to listen to and the concept of spontaneous order is intellectually exciting. I wonder if a synthesis is possible with similar concepts, such as evolution by natural selection, to provide a general theory of order and compexity.

If so, it will frustrate all corners of the political spectrum since liberals tend to believe that the only fair and efficient economic system is one ruled by a small cadre of elites making decisions for the masses, and conservatives recoil at the idea that life on earth could have come about in any way other than by an "intelligent designer," namely God.

Randy December 14, 2006 at 12:24 pm

Great post Don.

It kind of ties into something I've been thinking about here lately – the idea that no law (legislation) which will directly authorize or result in the use of force should be passed with less than a 2/3 majority vote. Among ourselves, we should have law – that is, we should try to agree. But we should use force (legislation) only against those we oppose, and we should not assume that disagreement equates to opposition.

jp December 14, 2006 at 12:59 pm

Prof. B —

This doesn't seriously affect your article's thesis, but there is some doubt as to the accuracy of the conventional story you repeat regarding the embracing of the law merchant by the common law. See, e.g., James S. Rogers, The Early History of the Law of Bills and Notes (Cambridge 1995). See also Charles Donahue, Jr., "The Empirical and Theoretical Underpinnings of the Law Merchant," 5 Chi. J. Int'l L. 21 (2004), from which the following quote is taken:

"It is well known that throughout the medieval and early modern period courts throughout Europe modified their procedures to accommodate merchants. These tribunals adapted their procedures to the perceived needs and desires of the merchants (1) by devising mechanisms whereby specific mercantile customs could be alleged before the court, (2) by speeding up the process of litigation and removing formalities, (3) by permitting proof of mercantile transactions different from the proof that they would allow for other kinds of transactions, and (4) by providing mechanisms for rapid execution of judgments. . . . [This] does not mean, however, that these jurists and legislators responded by incorporating into their own law some customary body of law called lex mercatoria or ius mercatorum. Indeed, the very diversity of the mechanisms by which the different regions and ultimately different states achieved these common results would suggest that this was not the case."

Something to consider.

Ken Willis December 14, 2006 at 1:22 pm

I see that Karen Vaughn of George Mason University has already thought of a synthesis of biological and cultural evolution. In the comments to Barry's thesis she asks, "….. is there a natural selection process at work for human culture analogous to the natural selection process hypothesized for the biological world?"

The existence of bad societies is not necessarily evidence that spontaneous order may result in bad as well as good outcomes. Rather, it might be evidence that the occurrence of spontaneous order can be frustrated when just a few people are able to impose their control on the whole society. Even in those societies there may be pockets of order and efficiency in certain areas where the ruling elite have failed or been prevented from decisively imposing their will.

An example might be the rise of the Samizdat in the former Soviet Union, which had become a fairly efficient and benevolent system of information exchange.

The United States is a good society with pockets of disorder resulting from rules imposed by political elites preventing individual choice. The E.U. is an even better [worse] example.

Gavin Kennedy December 14, 2006 at 6:27 pm

Smith never called an economy the ‘result’ of ‘the invisible hand’. Smith only mentioned ‘an invisible hand’ twice, first as a metaphor for the unintended consequences of individuals whose ‘natural meanness and rapacity’ is curbed by the minimal subsistence required to keep a population multiplying (Moral Sentiments, IV.1.10: p 184), and second for the risk aversion of traders preferring to trade locally and not abroad, which concentrates their capital accumulation domestically and enables the national interest (domestic wealth, or, today, GDP), to grow faster than it would if their capital necessarily was spread thinner, or what amounts to the arithmetic of the ‘larger whole is the sum of its larger parts’.

Smith had a social-evolutionary method of analysis that began with the origins of phenomena, like language, morals, political economy, forms of government and law (the negative virtue of justice), and he used it to show the ‘connecting links’ of disparate phenomena (from his History of Astronomy). The same social-evolutionary approach permeates all of his work. His theory of how economies evolved and work is in this analysis, and not in a metaphor.

To use a metaphor to describe a natural ‘iron law’ as its participants are being ‘led by an invisible hand’, adds nothing to the sense of his examples, nor does it detract from it (providing that metaphor is appropriate, is not forced, is self-consistent and has its own ‘beauty’; see Adam Smith, 1762: Lecturers in Rhetoric and Belles Lettres’, Lecture 6, Liberty Fund, 1985).

Ken Willis December 15, 2006 at 12:01 pm

The common law is based upon stare decisis and the basis of stare decisis is that the law should reflect the reasonable expectations of the parties before any dispute arose. This brings the common law squarely within the realm of spontaneous order which develops by established custom and the fulfillment of reasonable expectations.

At least that was the case until the postmodern era we now live in where the basis of the law is no longer the reasonable expectations of the parties but rather it is the political opinions of the judge. Thus, we now have spontaneous chaos instead of order.

Isaac Crawford December 18, 2006 at 6:53 am

The idea of "law" as thought of by Hayek is nice enough, but it seems only useful in cases where there is some homgenaity in thought between the parties. The lunch room and speeding ideas are pretty straight forward, but what about things like abortion, gay marriage, or other divisive issues that do not seem to have any sort of consensous. What is a Hayekian judge to do with those issues? What kind of "law" can a judge discover when members of the same household disagree, let alone the society at large? It seems to me that legislation has a very important role to play when no law is appearent…

Isaac

Sudha Shenoy December 18, 2006 at 9:15 am

Re the post above (by Isaac Crawford):
1. Why should there be a law? What sort of dispute can come before the judge with respect to the issues you mention? Judges can only decide on cases actually brought before them.

2. In Australia 'de facto' relationships are already recognised by courts.

jp December 18, 2006 at 9:40 am

Isaac — I don't think Prof. B. was arguing that state-created & -enforced law is totally unnecessary. He was arguing that the state is not the *only* source of law.

Granted, some people (anarcho-capitalists) have taken a crack at demonstrating that state-made law *is* unnecessary. See, e.g., "The Machinery of Freedom," by David Friedman. But I think most libertarians realize that some minimal amount of state-made law is needed in order to keep the peace and protect individual rights.

Isaac Crawford December 19, 2006 at 7:31 am

But the prof. made a distincttion between "law" and legislation, the implication that government legislation is not law. I agree for the most part, but it seems to me that this distinction can really only work with rather trivial cases and require everyone to be on the same page. Conflicting Hayekian "laws" behind things like abortion and gay marriage seem to exist at the same time. A large number of people think that it morally reprehensible to get an abortion and another large group thinks the opposite. The trouble is that these populations are dispersed throughout this nation, so what does the Hayekian law theory have to say about a situation like this? My gut feeling is "not much."

On the other hand, you could assume that there are two, diametrically opposed laws present in this country and the legislation goes against (to some extent) both laws. Not really sure what this approach accomplishes, but it seems like this is the accurate Hayekian description…

Isaac

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