Thursday, January 19, 2012

Misreading Friedrich Hayek

It is unfortunate that law scholars usually describe Hayek’s ideas about the rule of law in a way in which he ends up saying the opposite of what he actually said. 
Hayek is usually classified among the few supporters of the formal, or “thin”, notion of the rule of law, as opposed to a thick notion that incorporates –according to the taste of the writer from traditional rights, to economic rights, and even State intervention in the economy. Of course, Hayek himself never considered the choice between a thin and a thick notion –and he did very well in avoiding such misleading dichotomy, coined many years after he wrote his famous books.
In a previous article I have said that the criticism that Joseph Raz directed in the seventies against Friedrich Hayek was based on a fundamental misunderstanding of Hayek’s ideas. The mistake was then enlarged and compounded by others who followed his lead. In his often cited article The Rule of Law and its Virtue (included in his book The Authority of Law), Raz established what came to be the accepted understanding of Hayek’s position. Today, almost every academic article on the subject starts with the classification between thin and thick, puts Hayek and Raz on the thin side, and then goes on to more specific issues. That is correct as concerns Raz, but absolutely wrong when it refers to Hayek.
The origin of the mistake must be traced back to Raz’s article cited above. He said that he agreed with Hayek’s formal understanding of the notion of the rule of law (what today is called “thin” understanding) but that he disagreed on the value that Hayek saw in it. And that is wrong: Raz’s view is not the same as Hayek’s, not only concerning the value of the rule of law, but also concerning the concept. And the difference is not of shades of meaning, but fundamental.
Unfortunately, from then on we see that Hayek is always paired with Raz (who was in fact criticizing him), and not surprisingly, most law scholars find that Raz was right in thinking that Hayek has exaggerated the value of the concept that –as we are told- he shares with his critic. The thin notion is very deficient.
Let’s see what the thin notion is. I will follow professor Brian Tamanaha’s explanation because of his exhaustive treatment of the issue and because he provides an example of the way in which most modern scholars –following Raz’s lead- understand Hayek’s ideas (or rather, the way they misunderstand them).
In his book The Rule of Law, Tamanaha first repeats Raz’s description of Hayek's ideas (see my three articles on Raz’s criticism of Hayek). Assuming that description is accurate, he tells us that the formal notion defended by Hayek and Raz “imposes only procedural requirements, only restrictions about the form that law must take” (94). He adds that “The fact that this version of the rule of law has no content requirements renders it open to a range of ends”. Tamanaha cites opinions of those who see an advantage in that lack of content because it means that it is politically neutral and would be acceptable to people from the right, left, and center. On the other hand, as the formal rule of law is morally neutral it provides no grounds for rejecting the consistent application of pernicious laws like those that legalized slavery. In fact, Tamanaha says, wily tyrants will find in it support for their position (95).
He asserts that “The emptiness of formal legality, to make a broader point, runs contrary to the long tradition of the rule of law, the historical inspiration of which has been the restraint of tyranny by the sovereign. Such restraint went beyond the idea that the government must enact and abide by laws that take on the proper form of rules” (96)
One must notice that all that would mean that Hayek, who claimed to defend the original understanding of the rule of law, who cited and draw support from a long tradition of thinkers, failed to see that he “run contrary” to that tradition. Either Hayek did not understand the tradition, or many of those who read him have misrepresented his ideas.
As to the value of the formal or thin notion, Tamanaha says that “it is correct to conclude that formal legality has more in common with the idea of rule by law than with the historical rule of law tradition” (96). Again, if we say that Hayek adhered to a formal view in which the law is merely the instrument used by good, bad, or tyrannical governments to impose their policies (whatever they might be), then we must assume that Hayek adhered to a view that he himself considered absurd.
We must remember that in The Road to Serfdom he asked who would say that the rule of law prevails in Nazi Germany, only because Hitler obtained his powers according to the constitution then in vigor. In a preface that Hayek added years later, he said that he had meant it as a rhetorical question, and that he found it surprising that a famous jurist (Hans Kelsen) and a British politician (Harold Laski) held precisely that view. What would have been Hayek’s surprise if he had known that many years later, law scholars would ascribe that absurd idea to him.
Tamanaha then turns to the question of what the formal, or thin (or empty, as he aptly describes it) notion of the rule of law rules out. And he finds that it is very little. Raz stated some formal requirements about the rules themselves like generality and clarity, but most of his requisites relate to court procedure. Of course, that would allow ruthless dictatorships and discrimination. Following Raz’s thin notion, professor Tamanaha tells us that this understanding (remember it is also presented as being Hayek’s notion) is compatible with socialism: “Social welfare systems, however, as well as socialist ones, also rely upon rules to function. When rules exist and are honored by the legal system formal legality operates. The essential question is: in what areas, or with respect to what activities, should legal rules govern? Formal legality has nothing to say about this question” (97).
However, Hayek seems to have cherished the idea that, when he revived the notion of the rule of law, he was saying something against socialism. He even thought and wrote that socialism was the Road to Serfdom, not to the rule of law. He seems to have imagined that there was some contradiction between them. Again, either his intellect was not as good as many people think, or his notion of the rule of law has been somewhat misunderstood by law scholars.
But let’s examine more closely why Tamanaha asserts that under the formal notion of the rule of law, there is no objection to the welfare state. Why? Because these are new areas of government intervention, so there were no previous laws about it. There is more law, not less law and that should make Hayek happy. Tamanaha reasons thus: “Hayek cannot resort to formal legality to complain about this development, as formal legality only addresses the form that law should take, not the proportion of circumstances of its application. Outside the administrative context, in areas of private law there has been an increase in the use of open-ended standards, like fairness and reasonableness, and an increase orientation of judges to achieving justice in individual cases. Yet these changes have not altered the overall rule-bound character of the legal system; nor have they led to any significant reduction in the degree of predictability, nor have they led to any evident adverse consequence on commercial transactions. If anything, modern complaints are about too much law –the vast bulk of which satisfies formal legality- not too little” (98). Tamanaha seems to declare that  Hayek could have complained only if there have been fewer laws; but the more the merrier.
Tamanaha reaffirms his (mis)understanding of Hayek’s basic ideas in his book Law as a Means to an End. Threat to the Rule of Law. After justly criticizing the modern notion of the law as a mere instrument for whatever ends, Tamanaha goes on to classify Hayek as a supporter of that pernicious view. He transcribes a tiny portion of Hayek’s characterization of the rule of law (exactly the same cited by Raz) and writes: “The formal rule of law is complementary to an instrumental view of law when considered in connection with legislative declarations of law. Both the formal rule of law and an instrumental approach hold that law is an empty vessel that can consist of any content whatsoever to serve any end desired. Lon Fuller, as indicated earlier, remarked that the formal rule of law is ‘indifferent toward the substantive aims of the law and is ready to serve a variety of such aims with equal efficiency’. That is precisely how the instrumental approach portrays law: open with respect to content and ends” (227-228).

The fundamental mistake
Hayek said that according to the ideal of the rule of law, laws are indifferent to goals: they are like signposts on the road; they do not tell you where you have to go. Joseph Raz, said that he shared with Hayek the view that the ideal of the rule of law itself is indifferent about the goals that laws might have. The use of the word “indifferent” hides the fact that these are two opposite views.
         That is the mistake in a few words, now let's examine it more closely. As said, in describing the "thin" notion of the rule of law (supposedly Hayek's notion) I have used professor Tamanaha’s books because they are representative of today’s understanding among law scholars concerning Hayek’s contribution to the study of the rule of law. I haven’t chosen his opinions for being particularly shocking or especially misleading. On the contrary, I could have cited more extreme examples. Tamanaha’s books and articles on the subject show learning, are fully guarded by caveats and disclaimers, and his deficient representation of Hayek’s ideas is no more and no less than standard academic thought. That is in fact what makes them more worrying.
Just on the Social Science Research Network I could have cited more extreme examples: scholars who suggest that strong state intervention in the economy is compatible with the rule of law, others who claim that state allocation and redistribution of resources is a requirement of the rule of law, and yet others who claim that in my country, Argentina, a president who fired the judges who said it was against the Constitution to take dollars from private bank accounts and forcibly exchange them for devaluated pesos (Argentine Constitution declares that property is “inviolable”), a president who replaced these judges with others more pliable to his plans, with the new judges shortly after declaring that taking the dollars was perfectly in accordance with the Constitution, yes, that president took a right step on the path that leads to the rule of law.
Certainly, professor Tamanaha also indulges in some curious attacks against classic liberalism. He warns us that around 1948, just when the notion of the rule of law started to receive much attention (?) “Hayek astutely, though by all indications with true conviction, hitched his liberalism to the rising star of the rule of law” (The Dark side of the Relationship between the Rule of Law and Liberalism, 24). Hayek hitched the two things together? This is like telling us that a man writing about the history of theatre has astutely hitched the name of William Shakespeare to a play called King Lear, but that as far as we know, the poor man made the connection in good faith. 
          However, even that comparison involves an understatement: for you can understand King Lear without knowing it was written by Shakespeare. But you will have a very deficient understanding of the ideal of the rule of law if you fail to make the connection with classic liberalism.
           In the same article, professor Tamanaha tells us that the rule of law is used by international aid agencies as the "front-man"  for the liberal package and against democratically elected governments in non-Western nations. Nevertheless, also these statements seem to be representative of the convictions that prevail among law scholars.
But I am not concerned with details at this moment. I would like to point out what I think is the fundamental mistake in the usual (mis)representation of Hayek’s thought. What Hayek truly wrote was that under the ideal of the rule of law, laws have no altruistic aim to impose on people, no worldview, and no goal of favoring one man or one class. That was precisely what socialists had for decades criticized as being bourgeois law. In their view, it lacked substantial justice. It failed to treat poor people differently. It assured to anyone the right to apply for a job, but not the job. It guaranteed to anyone the right to pursue happiness, not happiness. In Anatole France’s celebrated phrase “the law, in its majestic equality, forbids the rich and the poor alike to sleep under bridges, to beg in the streets, and to steal bread”. That was in their view not equality but a sham. Socialists saw no value in the rule of law because, in Harold Laski’s words, without economic security, liberty is not worth having.
Hayek turned the tables on the socialists. He argued for the moral as well as the economic value of a law that imposes no social goal on people. That is the essential message of The Road to Serfdom. For whatever reasons, Raz failed to understand it. While Hayek has written that formal law imposes no goal, Raz assumed that Hayek argued for a law that could be used to impose any goal. While Hayek wrote that the ideal of the rule of law means that law is indifferent concerning the goals pursued by individuals, Raz assumed that it means that the ideal of the rule of law is indifferent concerning the goals that might be imposed by governments on individuals.
Skipping Hayek’s arguments entirely, Raz then repeated the original objection of the socialists: what? An ideal that says nothing about the goals of the law? How can it do any positive good? Of course, there was a difference in style: Raz used the highly abstract language of analytic philosophy and not the colorful descriptions of the socialists.
I must say that the socialists had a better insight than Raz concerning the meaning of the rule of law. They were wrong about its value, but they understood its meaning. They never charged the rule of law for being an instrument that could be used for whatever purpose as long as it was stated in general and clear terms so as to guide people to that end. Their objection was that the rule of law required laws to be indifferent to ends, and they saw no good in it. To that, Raz added: then it is an instrument that can be used for very bad purposes, for discrimination, etc. Socialist thinkers must have seen that this second charge required a misunderstanding of the very meaning of the ideal of the rule of law.
In view of the abundance of confusions, I have tried in the previous paragraphs to show the contrast between Raz and Hayek in the clearest way. It might be argued that I have used a broad brush. However, though I have omitted details, the contrast is there and is fundamental. As with every academic work, one can find disclaimers and nuanced remarks in Raz’s article that could be used to soften the contrast. Nevertheless, I do not think that they can be used to deny it.
Hayek said that according to the ideal of the rule of law, laws are like signposts on the road: they do not tell people where to go. They have no preference about that; they are indifferent concerning directions. Raz assumed that indifference meant that law could be used to impose any direction. If it has no goal, then it could have any goal, so long as it is stated in general terms. That was turning Hayek’s explanation on its head.
Hayek wrote in The Road to Serfdom: “The distinction we just used between formal law or justice and substantive rules is very important and at the same time most difficult to draw precisely in practice. Yet the general principle involved is simple enough. The difference between the two kinds of rules is the same as that between laying down a Rule of the Road, as in the Highway Code, and ordering people where to go; or, better still, between providing signposts and commanding people which road to take” (50th edition, 82) . Raz, and others who followed his lead, understood that explanation as if it meant that the ideal of the rule of law had nothing to say about the direction authorities could give to the content of laws. After that fatal mistake, law scholars can assuredly write that Hayek could not resort to the ideal of formal laws to complain about the barrage of regulations of the welfare state. Since that ideal refers only to the form of the law, to procedure and not to content, then it looks right to say, as does professor Tamanaha, that such formal ideal is very deficient, and very close to government by laws.

Neutralizing Friedrich Hayek
Hayek’s insight into the concept and value of the rule of law is a precious gift. It sheds light on a subject where confusions have led, and still lead today, to poverty, injustice, and often to death. Hayek wrote in Law, Legislation, and Liberty: The possibility of men living together in peace and to their mutual advantage without having to agree on common concrete aims, and bound only by abstract rules of conduct, was perhaps the greatest discovery mankind ever made” (vol. 2, 136). He never meant to say that the precious discovery was that legislators can impose whatever goals they want, as long as they state them in general terms, and provided there are unbiased trials based on biased laws, with a right to plead and be heard before a sentence is pronounced.
We are not discussing here whether there can be entities devoid of form and accidents, or whether it is in the nature of causes that they must act through a medium. People do not die because of mistakes made on such questions. It is not the same with the concept of the rule of law. Unfortunately, the understanding of Hayek’s contribution that prevails among law scholars (though perhaps not among economists) misleads people about its meaning.
In turn, the confusion about the concept produces a second negative consequence: it gives plausibility to a rejoinder that simply skips Hayek’s arguments against the traditional objections raised by collectivist thinkers. Socialists, Communists, Fascists, and Nazis charged bourgeois law for being indifferent to its consequences, for a lack of moral content and direction. Because of the confusion about Hayek’s arguments, scholars writing in the XXI century repeat the same objections, though in a style better adjusted to prevalent academic taste.
But there is yet another, even worse consequence of the confusion. It also gives plausibility to a “solution” for the “shortcomings” of the rule of law that simply destroys its base. Let’s see how Raz did it. It is a recipe that others have adopted with small variations but with the same unsavory consequence. After proving to his own satisfaction that the idea that he supposedly shared with Hayek has only a negative value, after comparing it with a sharp knife, after denying any moral value to it, Raz concluded that we should not simply accept the ideal of the rule of law on its face value. It is not a universal good. We have to balance it against other social goals we want to pursue. We must not, as Raz says in concluding his article, sacrifice them on the altar of the rule of law.
So we must balance goals and values. And we must evaluate them “on their merits”, which means: considering the circumstances as they present themselves in each case. We cannot state in advance that elementary education is in all circumstances more valuable than higher education, and cannot fix once and for all that environmental considerations must prevail over the goal of keeping jobs. For a detailed and superb explanation of what decisions “on the merit” entail, I recommend chapter VI of The Road to Serfdom and chapter XVIII of vol. 3 of Law, Legislation and Liberty.
Certainly, when one reads academic contributions on the subject, one should always stop after each “we” and be certain as to whom it refers. When one reads that “we must balance”, that “we must decide between competing values”, one must understand that on this our planet, it means that some authority will decide it. And, since it is a State’s authority, one must realize that the decision will be imposed with the full force of the State.
Now, the ideal of the rule of law means precisely that authorities must not do that. The solution suggested by Raz and the large number of scholars that follow him on this subject, is not a way out of a problem, it is a way out of the ideal of the rule of law. It cuts it from its base. It places “judgment on its merits” as the arbiter of whether the law should rule or public officials should decide.
Of course, neither Hayek nor any other defender of the ideal of the rule of law has argued that discretion must or can disappear altogether. What they have said is that progress means a reduction of discretion, that people will do well in distrusting and distasting discretion, and that most of the “competing goals” that do-gooders want to see imposed by governments can be better pursued by remaining faithful to the ideal of the rule of law. Friedrich Hayek did not discover that ideal, he only reminded us about it. It was not an ideal shared only by Englishmen; W. von Humboldt had written about it already at the end of the XVIII century, and in Prussia no less.
But Hayek’s contribution was fundamental. He did a magnificent work in explaining the concept and in relating it to the values on which Western civilization was built, the values for which that civilization was once admired by the rest of the world. Moreover, Hayek wrote at a time when most people had been converted to the notion that the rule of law was a matter of the past; only a stumbling block on the way to progress. Today, more than half a century after The Road to Serfdom was written, we must recover again that ideal, not from oblivion, but from confusion.

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