John Rawls: blind bias as impartiality

Before John Rawls (1921-2002), Socialists and Marxists had justified redistribution saying that workers were the ones who had produced the goods unfairly distributed by the capitalist system. In short: it was fair to plunder the rich because the rich had first robbed the workers. Expropriate the expropriators !!! they shouted. In spite of all the complexities of surplus value and exploitation theories, they rested on the very convincing idea of redress.
          That traditional basis had collapsed intellectually long before it ceased to dominate half of the World. Somewhat late, and with a readership composed mostly by academics and scholars, John Rawls provided a new rationalization for a redistribution of goods.

The most that Marxists could do about the thorough refutation that thinkers like Böhm-Bawerk (link to his book on the mistakes of the theory of the surplus value) made of the Marxian system was to avoid mentioning it. But if Marx was wrong and if it wasn't true that value comes from labor alone, then plundering the rich wasn't so clearly fair. The seizure of all productive goods was no longer redress of previous injustice..

By the ‘30s, though some academics still called themselves “Marxists” they no longer used Marx’s economic concepts. They contented themselves and their public with a repetition of some words and gestures. But a new basis was urgently needed.

What justification did Rawls offer in substitution of the Marxian apparatus? In a word, nothing: no justification at all. As to goals, his theory of justice proposed an ideal of egalitarian redistribution where even skill and intelligence were rejected as justifications for a higher income. That first rule was tempered only by a second rule or proviso by which differences would be allowed only if they worked for the benefit of the unskilled and the dumb – whom Rawls called “the less favored by the lottery of nature”. But, how did Rawls argument succeed where Marx failed?

Rawls's strategy

Rawls provided no moral, economic, or historical reasoning –and that was the cleverest part of his theory.  Instead, Rawls asserted that every person would agree to his egalitarian proposals if every person were impartial and had no convictions about what is right and what is wrong.

His justification is similar to what anyone says to an adult who has signed a contract. You don’t need to argue that the deal is good for him. You just point out that without being forced or misled in any way, he signed the contract. Well, Rawls’s justification is pretty much the same. He skips all other considerations, and defeats everyone saying that they would have signed a contract for the making of an egalitarian society. We must bear in mind that, as any contract, Rawls’s agreement would be enforceable –that is, the State would use its force on those recalcitrant. The justification for that use of force comes from the contract: you signed it. Or rather, you would have signed it. So Rawls has to convince you about that and has no need to bother himself with all the issues that have for ages occupied the minds of statesmen, moralists, and philosophers.

Rawls imagined rational people with no moral conviction and no knowledge about their individual characteristics. He prescribed that they should know the laws of physics, economics, psychology, etc. but all knowledge about what makes them individuals has to be excluded. Rawls called it “the original position” and he assumed that it would make people impartial about this agreement. Impartiality is a key requisite in the Rawlsian system, indeed, the only requisite.

Therefore, a fair scheme of rules is not defined by any reference o argument about its content; it is fair because impartial people would agree to it.

Rawls asserted that the agreement would establish “a purely procedural” notion of justice -one that has no independent criterion for justice, except that it is the result of a procedure. This assertion is disputable, but it should be the subject of another article.
         However, we may ask: What about the original position itself? People situated in that imaginary position would agree to a a system of rules where justice is purely procedural. But is the device of the original position in turn purely procedural? I think it isn't. The original position is designed so as to produce a definite contract -a contract that Rawls thinks would establish a just society. 
         Rawls himself acknowledges that he designs the conditions of the original position and the veil of ignorance so as to achieve of a definite outcome, a certain contract he sees as fair (A Theory of Justice, p. 122). 
         As a smaller example of the design of a procedure that must yield a preconceived result, Rawls mentions a procedure for dividing the portions of a cake. Assuming that it is fair to divide it in equal portions, “the obvious solution –says Rawls- is to have the man who divides the cake take the last piece. He will divide it equally, since in this way he assures for himself as large a share as he can”[1]. This is “procedural” but not purely procedural (the looked-for outcome defines the procedure, and not the other way). It excludes any question about justice and takes as indisputable from the beginning that everyone deserves equal pieces (e.g. who made the cake? does not count). Certainly that initial assumption and goal for the system may be wrong. I think that is the case with Rawl's original position.

A new name for bias: impartiality

But we may leave that objection for a future article in order to come to grips with another very odd characteristic of the path to justice that Rawls has designed. People in the “original position” should not ponder about the justice of leaving products in the hands of those who produce them, or about the merits of skill or perseverance. All that is excluded. Otherwise these considerations could lead people to dangerous thoughts about desert and merit and maybe to refuse the Rawlsian contract. After all, even people who ignore their personal qualities may decide that the products of skill belong to the skillful, the results of perseverance to the perseverant, whoever they might be. 
         That is why Rawls must introduce a second condition: people should have no convictions about right and wrong. Each man in the original position should only try to maximize his share of all the goods (like the man dividing the cake). Rawls says that his way of reasoning about justice (or of avoiding reasoning) has the advantage that it is simpler and therefore may command wider assent.

Rawls postulates that in deciding what belongs to whom, people in the “original position” should not apply any conception of justice.[2] Everyone should try to get the largest portion he can get, and if no one is forced to give up his share to others, then the only possible arrangement is that everyone receives an equal part of income and wealth. Nobody can argue higher merit because that is excluded by the “veil of ignorance” (meant to guarantee impartiality). And given the conditions postulated by Rawls, the outcome is evident: he has excluded individual merit, convictions about what is right and wrong, and left only a desire to get the largest piece one can get for oneself.

We must realize that Rawls adopts a very objectionable notion of impartiality. His impartial man should adopt general rules (enforceable on everyone) considering his own advantage and nothing else. In evaluating the portions that would be allocated to skilled and unskilled people he must have in mind that he might come to be one of the most able as well as one of the most incompetent of men. Only that calculation matters, with no consideration to desert. Understood in this way, impartiality requires absolute personal bias. Impartial people are those who seek their own advantage by means of rules and force –not by means of skill and intelligence. Rawls notion of impartiality would fit well in the Ingsoc’s Newspeak.

I have found that an expounder of the Rawlsian system writes that we shouldn’t think that people in the original position “are purely self-interested, like rational egoists”.[3] Professor Freeman claims that “they are not egoists any more than chess players who play to win or buyers who shop for the lowest price are egoists. Just as chess players and ordinary consumers usually have all sort of moral convictions and motives a well, so parties in the original position are assumed to have them too. Indeed, their moral interests and benevolent concerns are among the interests they aim to protect in their choice among principles of justice.”[4] (link to his article)

Certainly, this is such a complete misrepresentation of Rawls’s requirements for the “original position” that professor Freeman must add that “But for the purposes of this particular decision –namely, deciding on principles of justice for the basic structure of society– the parties do not act from their benevolent affections and moral sentiments. They ‘take no interest in one another’s interest’ as contracting agents but are concerned only with promoting their own interests”.[5]

Professor Freeman’s assertion that signatories to Rawls’s agreement have moral convictions, except that they are suspended for the purposes of judging the agreement reminds me of a personal anecdote. It was a very hot summer in La Plata (Argentina) where I live. I was walking at noon in the city’s center; the rather short buildings provided no shade at all. Then I glimpsed a Restaurant with a billboard saying “Air conditioned inside”. I entered and ordered some meal. Then I realized that the restaurant was as hot as the street. When the waiter returned with the meal I asked about the “air conditioned” advertised outside. Unmoved, he answered that they had air conditioned indeed, except that it was turned off and they had no intention of turning it on.

Professor Freeman’s explanation would seem perfectly natural in Argentina, but perhaps attitudes and standards are different in other nations. Certainly, people in the original position have all sorts of moral convictions and benevolent sentiments. But they turn them off for the purpose of judging the general arrangement of their society.
              Rawls himself tries a similar argument in a later book, Political Liberalism p. 310. He says that people would have all sorts of convictions, but the contract will be signed in the original position by representatives (not by themselves) and he postulates that these representatives must not know what moral convictions the people they represent have (only that they have moral convictions of an unknown nature).

Let’s see: why is Rawls so sure that rational people would unanimously mandate that higher skills don’t justify higher earnings? Because each one of them knows that there is the risk that they might be among the unskilled or the stupid –and they have no moral standard, only the wish to take the most they can get. In the original position they still defend their own interest, they aren’t really impartial. Rawls lets them know only the chances and the risk. If they are rational but have no moral convictions whatsoever, each will try to get the largest part they can get from the others. They will settle for an equal division. Rawlsian justice has been made.

Blind bias is no impartiality. Suppose a judge must decide a case concerning the ownership of some property. In the non-Rawlsian world, the fact that one of the parties is a friend, an enemy, a gorgeous girl, or a repulsive man must have no weight in his mind. It would be wrong for him to make it a factor; it would be immoral, partial, and illegal (indeed, he might have to leave the case if there is a risk of bias).

However, we might adopt the Rawlsian inversion of the notion of impartiality: we might postulate that in order to be impartial and fair, the judge should consider only his bias. He must have in mind only that there is a chance that his friend, or his enemy, or the gorgeous girl, or the repulsive man, is one of the parties in the case. Well then, if the chances are even, he will decide the case according to justice, isn’t it? No, no, he shouldn’t bother about titles and proof. That would make him partial towards truth and justice. No, no, we must eliminate also his moral convictions and any standard of what is right and wrong. To be impartial, the judge must consider his own propensities and aversions and nothing else. He will divide the property in two. That is the new name for impartiality.

I would say that old Karl Marx’s attempt was much better than this. At least he tried hard with arguments about plus value, interest, variable capital, and exploitation. He was wrong of course, but he didn’t start by assuming that his egalitarian proposals were right –as Rawls did. Why should it be seen as fair that I try to establish rules that will force others to improve my own living conditions, just in case I happen to be unskilled or dumb? Rawls confuses two things

1) that in adopting general rules I shouldn’t try to improve my own situation (or that of friends, relatives, etc.) over that of other people

2) that I may try to get rules that work to my advantage, but I must calculate without knowing my own situation, only the chances.

Only the first is right. Rawls actually argues for the second as if it were the embodiment of impartiality, but whatever looks convincing in his reasoning comes from the appearance that he is arguing for the first.

Rawls’s sole formula for justice is impartiality, and his sole formula for impartiality is blind bias. After that, the egalitarian outcome is guaranteed.

A new justification for coercion

I have no objection against those who seek their own advantage. What I find objectionable is that they would use force for that purpose.

Let’s see: Why shouldn’t I try to get advantages for myself when adopting rules? Because they imply coercion; rules are meant to be enforced. The exploits of robber barons and the gain from predatory incursions have not been celebrated by the bards for quite a long time. We think that gain may come from free agreements among the parties concerned, but it is not to be mandated in any way. We may have special provisions for children, the elderly, and the sick, but they are exceptions, not the basic arrangement of society.

Then Rawls comes and says: what if we had an agreement about forced advantages for some people at the expense of others? If everyone agrees to it, even those to be exploited, we can remove the objection against advantages taken by force. But how would it be possible? Rawls answers: make people blind about what makes them individuals, and make them blind about moral convictions. That is the only way in which they may sign to a contract that would justify the use of violence for personal gain. Rawls chose to call it “the original position”.

You will be forced to work for the advantage of other people simply because you would have agreed to it. In the actual world, you don’t sign because you know yourself and what your work has produced, but that is what makes you partial. You would be impartial if you sought gain for yourself without knowing or caring about whether there was any justification for it.

Philosopher’s blind spot

That inversion brings to mind Orwell’s Newspeak. Besides, the name “original position” seems to me very misleading because there was never such an origin.

But we must return to the justifications for coercion, and realize that this has been the blind spot of XXth century political and moral philosophers. That was a complete reversal in the direction of Western thought. Since at least the XVII century, the main concern of political and moral philosophers was the limit of power. How power could be controlled, how its excesses avoided, how its bad tendencies could be spotted before they become dangerous to liberty? Locke, Montesquieu, Burke, Constant, Humboldt and many others that followed their path dedicated their efforts to the task of taming power.

The XXth century seems to have felt that the dangers counted for nothing when compared with the good things that might come from the use of the State’s power. Marx was ahead of his time in that respect –he never seemed to be worried about the dangers of a dictatorship of the proletariat. What if the dictators decide to send millions to labor camps? Well, that was excluded by the theory, wasn’t it? Rawls too wasn’t much interested about the limits of power and the connection between economic liberty and all other liberties. Against all historical evidence, against the examples of his own time, he joined -or led- the large number of thinkers blind to the dangers of a State that would dictate who owns what.

Note: I have modified the first paragraphs of this article after it was posted, without change in the meaning.

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[1] Distributive justice. Included in Collected Papers, 2001 p. 148).

[2] A theory of justice p. 125.

[3] Samuel Freeman: Introduction, p. 13. In Samuel Freeman and others. The Cambridge Companion to Rawls, 2003

[4] Op. cit. p. 14.

[5] Op. cit. loc. cit.

Distributive justice is primitive justice

Distributive justice according to Aristotle

It is agreed that it was Aristotle who introduced the notion of distributive justice. In his Nicomachean Ethics, and at the side of the general notion of justice, he mentioned special kinds of justice, which he called corrective justice and distributive justice.

The idea of corrective justice does not seem to have inspired much interest, as it is only the reversal of injustice done in the past. Therefore, it is entirely dependent on the more general or plain notion of justice. It can hardly be justified as a special concept, as it cannot “correct” anything that wasn’t unjust according to the general notion of justice, and it cannot (must not) provide reasons or criteria for acting in a way that is different from that recommended by plain justice.

In contrast, the other special justice mentioned by Aristotle seems to have aroused much interest –even passion. It is distributive justice.

What is it according to Aristotle? In a few words, it is the kind of justice that pertains to the distribution of things shared in common among a number of people. Aristotle introduces the concept of distributive justice in chapter 2 of book V of his Nicomachean Ethics. He writes (I cite the well known translation by W. D. Ross): “one kind [of justice] is that which is manifested in distributions of honour or money or the other things that fall to be divided among those who have a share in the constitution (for in these it is possible for one man to have a share either unequal or equal to that of another)”

In chapter 3 of the same book, Aristotle adds that there are quarrels “when either equals have and are awarded unequal shares, or unequals equal shares. Further, this is plain from the fact that awards should be 'according to merit'; for all men agree that what is just in distribution must be according to merit in some sense, though they do not all specify the same sort of merit, but democrats identify it with the status of freeman, supporters of oligarchy with wealth (or with noble birth), and supporters of aristocracy with excellence.”

Later, when in chapter 4 he introduces the other kind of special justice –corrective justice– Aristotle points out that it is different from distributive justice “For the justice which distributes common possessions is always in accordance with the kind of proportion mentioned above (for in the case also in which the distribution is made from the common funds of a partnership it will be according to the same ratio which the funds put into the business by the partners bear to one another); and the injustice opposed to this kind of justice is that which violates the proportion. But the justice in transactions between man and man is a sort of equality indeed, and the injustice a sort of inequality; not according to that kind of proportion, however, but according to arithmetical proportion. For it makes no difference whether a good man has defrauded a bad man or a bad man a good one, nor whether it is a good or a bad man that has committed adultery; the law looks only to the distinctive character of the injury, and treats the parties as equal, if one is in the wrong and the other is being wronged, and if one inflicted injury and the other has received it”.

From all this, we can draw two conclusions. First, that the concept of distributive justice presupposes that a number of people have a share in some goods. If they don’t have a share, the concept does not apply to them. Distribution in that case would be another name for robbery. Secondly, that distribution may not be equal, it must be proportionate to the share one has in the common goods –the “common goods of a partnership” as Aristotle calls them in the paragraph just cited.

So far, everything is very abstract and (perhaps for the same reason) unobjectionable. Now, one can ask, how is that some people come to get a common share in goods? We may think of partners that contribute funds to a common enterprise. That seems unproblematic too. More difficult questions arise when we consider Aristotle’s assertion that distribution should be made according to merit and to the part each one has in the common goods (and honors) according to the constitution. In modern societies, constitutions do not assign goods to anyone. And it would look odd (to say the least) that honors were to be assigned to any man or group of men by the constitution in proportion to ideas about their merit.

Of course, all that made more sense more than 2000 of years ago. Social ranks were important and stable, wealth and honors were determined mostly by a man’s position, by the fact that he belonged to a family of patricians, or of slaves. Land was the main source of wealth. Its cultivation and the use of the profits were largely determined by ancient customs and laws.

Primitive justice

Hunting large animals involves a concerted effort, especially if one has only primitive weapons. The distribution of meat, skins and the like must have been regulated by very stable customs. Effort was probably taken into account, but also position and prestige. In this way, primitive societies provided opportunities for applying distributive justice that make no sense in the modern world. Of course we have partnerships, but distribution in them is regulated by contract. If you don’t think that the deal is fair you don’t sign. There is no need to argue about justice in the distribution.

Primitive societies confronted yet another and very common situation that demanded the application of the concept of distributive justice. It was another kind of hunting: the hunting of human beings and the pillage of their belongings. That was a source of profits very highly regarded in primitive tribes, as well and in ancient civilizations.

At the beginning of the Iliad we have an example of a quarrel about distributive justice that conveys to us, modern men, the atmosphere and the assumptions that must have underlined the application of the concept by the ancients.

Agamemnon, the most powerful military leader of the Greeks who siege Troy is asked to give up a girl he had received as part of the booty. He must do that in order to placate the gods –the enslaved girl is the daughter of a priest. Agamemnon acquiesces, but says that then he will take another girl from the ones given to other chieftains. He takes Briseis, who had been given to Achilles.

Achilles protests that this amounts “to rob me of the prize for which I have toiled, and which the sons of the Achaeans have given me. Never when the Achaeans sack any rich city of the Trojans do I receive so good a prize as you do, though it is my hands that do the better part of the fighting”. Here we see a dilemma: should distributive justice be made according to the part which Achilles took in the common effort, or according to the undisputed higher status of Agamemnon?

Of course, today it shocks us to read that men would engage in a dispute about the ownership of a slave and the shares that belong to those who sacked a city, and that they would have the effrontery of talking of justice. However, distribution of land and prisoners taken in war was a common practice in antiquity. It was practiced in the West by Greeks, Romans, Vikings, Normans, etc. It was very well known in the East too and in America before the arrival of Europeans. Moreover, as a source of wealth the sword was generally much more highly esteemed than the plow. Its profits fell in the realm of distributive justice, and certainly not as a minor issue.

The famous jurist Rudolf von Ihering tells us in his book Prehistory of the Indo-Europeans that conquest was one of the main sources of the right to property among the nomadic peoples that populated Europe in ancient times. Perhaps some of his conclusions might be disputed today, but the testimony of the Iliad shows that Ihering’s conclusion wasn’t far off the mark.

Again, none of that applies to modern societies. Two thousand years ago there was a major issue that provided an occasion for the application of the notion of distributive justice –distribution of booty. It doesn’t exist today. Modern wars are seldom profitable. But even if they were, few people would think that it makes sense to use the concept of justice in a discussion about the distribution of the spoils of war.

The French historian Fustel de Coulagnes says in the introduction to his book The Ancient City that we have a natural but misguided tendency to think that the ancients meant for liberty something similar to our own notion. He writes that in ancient Greece and in primitive Rome: “The human person counted for very little against that holy and almost divine authority which was called country or the state. The state had not only, as we have in our modern societies, a right to administer justice to the citizens; it could strike when one was not guilty, and simply for its own interest”. He added that “There was nothing independent in man…His fortune was always at the disposal of the state. If the city had need of money, it could order the women to deliver up their jewels, the creditors to give up their claims and the owners of olive trees to turn over gratuitously the oil which they had made”.

In the introduction to the book Fustel de Coulagnes says that the infatuation of many thinkers with the collective liberties of the ancients has created confusion and an obstacle to the progress of individual liberties among modern men: “Having imperfectly observed the institutions of the ancient city, men have dreamed of reviving them among us. They have deceived themselves about the liberty of the ancients, and on this very account liberty among the moderns has been put in peril.”

The French historian died in 1889. Had he lived to see Communists, Fascists (“everything within the state, nothing outside the state, nothing against the state”), Nazis, Peronists, and the myriad of “modern” collectivistic parties, he would have said: I warned you about that!

By the way, if for a moment we do not take into account the slave’s wishes, which did not count at the time, we modern people tend to think that Achilles case was better, that he was unfairly treated. But we must not forget that Achilles himself recognizes that Agamemnon has a point. Achilles says: “I shall fight neither you nor any man about this girl, for those that take were those also that gave”. In our own modern times, many a receiver of government’s handouts must often see the truth in Achilles words.

The justice of the ancients compared with that of the moderns

Modern people do not depend for their subsistence on any distribution made of common property or of the spoils of war. Of course there is the exception of welfare recipients; nevertheless we can say that contracts for business or for work–and not distribution by some authority– is the characteristically modern way of earning a living.

In modern nations wealth does not come –as it did thousands of years ago– mainly from the possession of land. And even land is no longer possessed according to rank or military services paid to some chief. Land changes hands as any other good: by mutual agreement (Hitler found that very objectionable in Mein Kampf). Moreover, although commerce and industry have always played a role, today they are the main sources of wealth (Hitler regretted that too). Transactions are regulated by contracts so there is no room for anyone to place himself in the role of a distributor of the profits.

I doubt whether we modern people have fully realized what these changes mean for our notion of justice.

I think that there is a parallel between the historic changes that took place more than two centuries ago concerning the notions of liberty and of justice. In his remarkable essay The liberty of the Ancients compared with that of the Moderns, Benjamin Constant said that many of his contemporaries had not realized that liberty meant something different in ancient city states and in the XIXth century. For the modern man liberty means the right to follow his own way of life, to choose his own line of work, to use and dispose of his property, to choose his religion (or choose none), to travel within and outside the country, to speak his mind –to do all that without having to depend on the opinion of any authority.

The ancients knew a very different kind of liberty. Constant wrote: the ancients carried out collectively but directly many of the functions of government. They debated and made decisions about war and peace; common citizens passed judgments, and imposed even capital punishment; they voted laws. On the other hand, all of them were subject to the collective will. In Greece, anyone could be expelled from the community by ostracism. In Rome, the censors had a right (and a duty) to intrude in anyone’s personal life. Thus, the ancients combined collective freedom with the complete subjection of the individual to the authority of the group.

Constant traced these differences back to the conditions of life that prevailed in ancient city-states and in modern nations. Here I must direct the reader to his enlightening analysis. What I want to point out now is this: much as liberty changed, so did justice. Nations that no longer live from the products of a land possessed according to rank and tilled by slaves, men who earn their own living without ever dreaming of the part they might receive as property taken from enemies, must have a notion of justice that is different from that which belonged to an age when these conditions prevailed.

Constant wrote that many of the misfortunes and horrors of the French revolution came from a misguided attempt to force upon people the liberty of the ancients, when in fact they wanted and needed the liberty of the moderns. The French ideologues had been inspired by their reading of Greek and Roman authors. They made vehement speeches about the collective will of the citizens without giving a thought to the differences between ancient Greece and modern nations.

Aren’t we doing the same with the notion of justice? Aren’t we still using notions of justice that no longer make sense? Aren’t we merely repeating opinions received from the ancients but without confronting them with the conditions of our own age?

Let’s distribute your property among us

We read all the time alarming statistics: the upper 10 per cent of the country’s population gets a disproportionate share of the “national product”. Worse still: we are told that a few developed nations in Europe together with the United States, Canada, and Japan get a disproportionate share of the world’s production of iron, energy, computers, mobile phones, everything! Isn’t that unfair? In view of it, is it not plain that the government should step in and distribute the product of the whole nation more fairly among its inhabitants? Does it not apply also to the entire world’s population? Is it not a scandal that a Swiss receives a bigger slice than a Somali?

Certainly, all that would make sense if we were talking of the distribution of things held in common according to ancient custom, or land taken from an enemy we have defeated. But it is entirely wrong that we modern people go on reasoning as if it were a natural thought that there is a common pool of “wealth” out there that simply has to be seized and distributed. That made some sense with land and slaves, but not with industry and commerce. By the way, this difference also explains why modern revolutionaries so often see that the wealth they have taken from their class enemies melts away in their hands. You can conquer land; you cannot conquer a modern enterprise. Many ideologues still don’t understand the difference.

After the roman legions had conquered a city, the land around it still produced crops. The gold and the slaves taken to Rome as booty from war actually increased the wealth of the Roman citizen. But modern revolutionaries have found time and again that when they confiscate finance and commerce, they destroy it. Popular tribunals can in a couple of hours send thousands of entrepreneurs to prison, but then they will find that the thousands of companies they seize do not increase the wealth of anyone (except perhaps a dozen commissars). They will have nothing to distribute to the millions of followers who still wait eagerly for the spoils. In the end, they will receive their fair share of poverty.

When Margaret Thatcher remarked that “the problem with Socialism is that eventually you ran out of other people’s money” she showed, not only her wit, but also that she understood the consequences of the changes in the way modern people produce wealth –something that has yet to penetrate the head of many an Oxford’s professor.

Justifications for distribution

I have said that too many ideologues and their followers eager for a share of other people’s money have not considered sufficiently the differences between ancient times and modern times. They pretend to be modern when in fact they have yet to understand the modern world. And that is confirmed, not only by the poverty they have brought about wherever they have been allowed to govern, but by the contempt these ideologues have shown for history and experience in formulating theories that justify distribution of other people’s wealth.

In all cases, the trick consists in presenting the wealth they want to distribute as an undifferentiated common pool. Marx tried it in the XIXth century with his elaborate theory of the work-value –that was perhaps the best attempt ever made, although it had been thoroughly refuted by Böhm-Bawerk before the XIXth century came to a close.

John Rawls tried a different justification in the XXth century but he mostly rested on ex cathedra assertions to convince his readers that skills and ingenuity must be treated as a common pool unfairly distributed among human beings. Skilled and clever people must be made to atone for that.

In the XXIth century, Barak Obama justifies higher taxes by telling Americans “you didn’t build that”. The infamous phrase is a good summary of the main argument in the book The Myth of Ownership by professors Murphy and Nagel. I have criticized that book in seven articles.

Though presented as philosophical advances over older ideas, these theories still rest on primitive notions that are out of touch with the modern world. None of those who promote a greater distribution by the coercive apparatus of the government seem to have grasped the differences between the justice of the ancient and the justice of the moderns

Ludwig von Mises and moral relativism

About a century ago, most economists had already understood that the theory that explains the value of economic goods (the value of railways, oil, wood, or computer games) cannot be based on the amount of labor invested in making them.

First of all, there is the objection that comes from the usual experience most of us have of having worked many hours on some useless piece of trash of no value at all. To avoid this objection the labor theory of value must be supported with some props that deviate it from its simple formulation. But there are more objections, and more props have to be added, until we realize that the theory does not help to explain anything, and only those who have invested many useless academic years in defending it would insist in adding more props, ad-hoc limitations, and caveats to salvage it. In many respects, their efforts can be compared to those of Ptolemy astronomers, who tried to shield their cherished theory from the criticism of Copernicus by adding more celestial spheres and epicycles to explain away the facts that contradicted it.

Karl Marx was the last of those Ptolemy economists. He still adhered to the old theory he had learned from classic English economists and never realized that, by the end of his life, younger generations of economists were making their own Copernican revolution. Theirs is called sometimes "the marginalist revolution", though that name points out to only one of their innovations.

These newer generations of economists argued that the value of goods cannot be deduced from any of their physical characteristics, or from labor invested in them, but from the utility they provide to a particular man, in specific circumstances, at a determined time. That change of perspective, from the goods themselves to the individuals, allowed the new economists to see what was wrong in many questions that had puzzled people for centuries. For instance, they realized that it was misleading to ask why is it that gold is more valuable than water when it is clear that we can survive without gold, but not without water. They said: don’t argue in the abstract, don’t ponder about the goods in themselves; instead, consider individual circumstances in full context, without leaving out time, place, and resources, and you will see that for men with plenty of water at their disposal (as most of us are), another glass of water may have very little value. In those circumstances, gold may reasonably have more value than water.

Moreover, they said that we have to consider each man’s own valuation of that good, not our own. Not value as seen by an economist, a philanthropist, or a central planner, but by each man and woman that decides that some good is useful to them. Of course, we might see no value in many of the goods that crowds of people buy eagerly. But then it is nevertheless certain that such trash will sell for a good price. That is what counts for the economist.

I won’t dwell more deeply on these new economic theories (that is, “new” more than a century ago), which form today the basics of economics. For those who want to learn more about them, I recommend the books of Carl Menger, Eugene Böhm-Bawerk, and Ludwig von Mises (in my view, Menger and Böhm-Bawerk are still today the clearest expositors of that conceptual revolution). What I want to point out is that these new views, by focusing on each man’s valuation –and not on a supposedly objective value determined by some expert- made them friends of free markets and led them to discover new objections to central planning. Indeed, the Austrian von Mises and the Norwegian Trigve pushed these ideas to their logical consequence, and showed that without the price system that results from individual’s free choices, central planners have no way of making economic calculations. They can play with statistics, with tons and kilowatts, but they cannot make calculations with them. You need a unit. You cannot multiply numbers of kilowatts by numbers of penicillin doses, and substract hours of packaging work. Only prices provide a way to do it. An entrepreneur takes into account the prices of raw materials, wages, etc. But planners fix all prices, so prices provide no data to them.

Another Austrian, Friederich von Hayek, explained that market prices work as signals that provide people with information about each other’s needs and valuations. When planners try to replace the market with their decrees, they cut out these channels of information. Of course, some entrepreneurs may be stupid and fail to pay attention to prices (at their peril). Some may fail to hear the signals prices convey. But without a market, planners have no way of getting such information, they have no signals. Certainly they can put prices to goods as they please, but then they will always hear their own echo.

In this way, the change a new generation of economists thought necessary in one of the most basic economic concepts –the concept of value-, led them to appreciate the importance of free markets. That put them at odds with the tendencies that prevailed among politicians and the public (and indeed, among most of their colleagues) during the last decades of the XIX and the beginning of the XX centuries. By that time, most people were being converted to the ideal of central planning.

On the other hand, that same change in the concept of value seemed to place these economists closer to a tendency that was becoming popular among the intellectual elites. That was moral relativism, or perhaps we could say, moral irrationalism.

Against the wisdom of all previous ages, philosophers had started to argue that moral principles have no rational basis. They taught that all moral choices are ultimately irrational. Slowly permeating to the public at large, that new view led to horrible consequences. People started to get used to the notion that the essence of politics was struggle, and not rational debate. It was significant that new parties started to call their followers “militants”.

I think that the first of those two intellectual links, the one with free markets, is correct and logical (the expression “free market” is, of course, a redundancy, like “free exchange of ideas”). But I think that the second link, the one with moral irrationalism, is wrong because it does not really derive from the new ideas about value introduced by economists. Unfortunately some among them, most notably Mises, seem to believe the contrary.

Subjective economic value and a non sequitur

The expression “subjective value”, so much in use in economic theory, is very apt to lead to confusion. It would be better to call it “individual value”, or “personal value”. Certainly “subjective” value is opposed to “objective” value such as labor-value. But this is only because “labor” value is not linked to any person’s values, neither rational and sound nor irrational and stupid. It was a value deduced from hours of work. That was a mistake corrected by the conceptual revolution in economic thought that took place at the end of the XIX century. But from that –which was right- some have thought it necessary to derive another conclusion: that we cannot distinguish between sound and stupid preferences. That was wrong, a non sequitur, i.e. a conclusion that does not follow from the premises.

Of course, one might try other arguments in order to show that values are irrational, and that they cannot be defended and rejected by objective reasons. But then one should look for arguments elsewhere: modern economic theory provides no basis for it.

It is easy to understand why even foolish economic decisions count for the science of economics; there is no need to justify that with moral relativism and to deny that indeed people often make very stupid economic decisions. Of course, the entrepreneur must take prices as they are. He may rightly deplore the fact that in some neighborhoods men buy more gin than tea, but he cannot ignore it. The economist is in the same position: no matter how much he abhors videogames, there still will be prices paid for them. Neither the entrepreneur nor the economist can force you not to pay for them. However, that doesn’t mean that they can’t try to convince you.

It is not relativism but true morals that determine that my preferences cannot replace yours. Your choices or my choices may be foolish, and sometimes they are plainly foolish. There is no impediment to acknowledge that. What is wrong, but has been attempted many times, is to force us not to be fools. If we are adults and do not violate the law, then we are free to make our foolish choices. Again, this does not mean that other people can never be certain that we are wrong (as if it were an epistemological impossibility) or that other people must refrain from saying that we are wrong (as a matter of political correctness). Or that each of us can objectively realize that we have made mistakes in our choice of ends.

That a man examines objectively his own actions poses no problems. They begin when he does the same with the actions of others. However, this shows that the problem is moral and political, not epistemological. Of course, when it comes to other people’s decisions, constitutional experience and a long tradition of political thought tell us that we must be very careful. And apart from that, just from the economic point of view, even plain prudence tells one that one often lacks the information -and the wisdom, and the creativity,…and the luck- that one would need if one wanted to replace others in making their personal decisions. Hayek stressed that point. But prudence and relativism are different.

Unfortunately, though he was a great economist and made fundamental contributions to his science, Ludwig von Mises seems to have thought that he had to complement his magnificent economic lessons with moral relativism. He wrote in his rightly celebrated book Human Action, page 721:

“…it is obvious that the appeal to justice in a debate concerning the drafting of new laws is an instance of circular reasoning. Delege ferenda there is no such thing as justice. The notion of justice can logically only be resorted to de lege lata. It makes sense only when approving or disapproving concrete conduct from the point of view of the valid laws of the country…There is no such thing as an absolute notion of justice not referring to a definite system of social organization. It is not justice that determines the decision in favor of a definite social system. It is, on the contrary, the social system which determines what should be deemed right and what wrong”.

The latin expressions he used mean: de lege ferenda = evaluating whether a proposed law is good or bad; de lege lata = evaluating human action according to already enacted laws (without judging whether the law is good or bad). But I think that even without these translations Mises thought is clear: total moral relativism.

Earlier in the same book he had written (page 19):

“Human action is necessarily always rational. The term rational action is therefore pleonastic and must be rejected as such. When applied to the ultimate ends of action, the terms rational and irrational are inappropriate and meaningless. The ultimate end of action is always the satisfaction of some desires of the acting man. Since nobody is in a position to substitute his own value judgments for those of the acting individual, it is vain to pass judgment on other people’s aims and volitions. The critic either tells us what he believes he would aim at if he were in the place of his fellow, or, in dictatorial arrogance blithely disposing of his fellow’s will and aspiration, declares what condition of this other man would better suit himself, the critic.”

But then, how does Mises justify his books –and they are very good indeed- against interventionism and Marxism? He says that he just points out at contradictions between the ends that interventionists and Marxists pursue and the actions they take. He explains that he doesn’t question the ends themselves. But even this justification fails, because he has told us that human action is always rational by definition. Perhaps Mises would say that though he never objects to ends, he might uncover contradictions between declared purposes and the purposes that reveal themselves in actions. For instance, he might discover that if the goal is to annihilate a racial minority at the lowest cost, then it is contradictory to use bullets instead of gas. But then, what is the point of being so testy about that? If I cannot judge, why not leave brutes alone with their bullets versus gas choices, and their regulation versus deregulation preferences?

Confusing the moral with the epistemological

Of course we can pass judgment on other people’s actions. Even relativists do it, if only surreptitiously. Of course we can say that a child is wrong in eating too many sweets and making himself sick. And we can say that a grown-up man is doing even worse if he makes himself sick by drinking too much. There is no epistemological barrier that forbids us to realize that.

It is morals and not epistemology that tells us that we should not force a grown up man to be good and reasonable. There is a long experience and many excellent books that explain why it is so, starting with Humboldt’s The limits of State Action. Of course, I won’t try to sum up these books here.

Mises confusion is very unfortunate because it misleads people into thinking that modern economic theory supports moral relativism. I live in Argentina where easy indifference and nihilism are the marks of politics, and even of social life. In this my land, governments find it easy to take away from us liberties and rights that other peoples have surrendered only at the point of a gun. But most Argentines just yawn and repeat that nobody can be sure about what is right and what is wrong. If that is the present of a nation that once was among the most promising in the world, we’d better think again about the basis and the consequences of moral relativism.

Moral relativism is no safeguard against tyrants

The confusion between what we can know and say about morals and what we can impose on other people is very dangerous. Some may conclude, as apparently did Mises, that if we must not impose our convictions on other men, it is only because we have no rational basis for judging their actions. However, from the same confusion others will deduce that, as indeed we may pass judgment on other people, the only objection against directing their actions disappears. Both are wrong. Western civilization learned to distinguish these two questions long ago, and we shouldn’t forget it.

In any case, we shouldn’t assume that relativism is a safeguard against tyrants and busybodies. At the end of the day, all that relativism tells us is that there is no rational basis for moral convictions. It doesn’t deny that people make choices and have preferences. Then, if there are no rational arguments for one or the other, we must look for other means: power struggle by treats and threats.

I have a limited experience with politicians, functionaries, judges, and people in positions of power. But that experience tells me that those who see no role for reason in morals are seldom inclined to allow a free debate about ideas and choices. They say: what basis can that man have for opposing my will? Surely, not reason. When he counters my plans with “objective” arguments he is only trying to pull the wool over my eyes. I know very well that everything is just about national or class interests that can never be called just or unjust. I have read it in the back covers of many famous books.

Distaste for arbitrary power: Orwell and Dicey

In two former articles (The Power of Illusions, You don't shoot a man who is running with his trousers down) I have tried to show why George Orwell’s description of English attitudes about law might still be important for us today. Those attitudes can be found outside England: in the US, in Switzerland, but they are becoming rare –perhaps they are already fading in England. This explains why law rules only in a few countries and arbitrary men rule everywhere else. If Orwell was right in his description of English people, then a power that follows no rules will be detested by them, even when that power is exercised for good causes.

I was born and have lived all my life in Argentina. I was a law student at a time when my country was governed by a military junta, and tried hard to understand why dictatorship was possible in Argentina, and unthinkable in countries like Britain, the US, or Switzerland. I first got some grasp of the reasons when I read Orwell. By describing English attitudes, he taught me the meaning of the rule of law better than any of the books we read at the university. Distrust against arbitrary power –or better perhaps, distaste for it– seems to me the cornerstone of the law of the land (of Orwell’s land). This must have been an old English peculiarity: already in the XVII century, John Locke warned that a good king is more dangerous to liberty than a bad one because then it is easier to persuade people to brush aside their scruples about legality and so set a precedent for abuse. When the purpose seems good, it looks mean to quibble about legal restraints. Very often and in many places in the world, arbitrary power will be readily accepted if it seems to be the way to fight “imperialism”, or a tool to achieve full employment. People often think that arbitrary power is not just a way, but the only way to achieve good results –and this seems to be the prevalent opinion in many countries. But not in Orwell’s England.

Distaste for arbitrary power and confidence in rules. Nothing can be understood about English law if one forgets it. Once on the track, I saw that others had stressed the same point. Alfred Dicey, a law professor writing at the close of the XIX century, confirms Orwell’s description. Explaining in his book The Law of the Constitution why English people rejected censorship –which involves a large amount of discretion on those who decide what is to be published–, he wrote “even at a time when the people wished the Crown to be strong, they hardly liked the means by which the Crown exerted its strength. Hundreds of Englishmen who hated toleration and cared little for freedom of speech, entertained a keen jealousy of arbitrary power, and a fixed determination to be ruled in accordance with the law of the land”. Nothing describes the attitude better than this example, says Dicey. It was not a triumph of toleration, he adds, but of legalism.

I would say that most people in most countries hold exactly the opposite view: they would welcome an arbitrary leader, or a supreme court that openly distorts the law, if it serves them in their fight for freedom of speech –or against it. The goal is everything, the legal scruple is nothing.

Today, many years after Dicey and Orwell have died, I am not sure the view they described still prevails among ordinary English people. At any rate, it seems there is no place for it in academic debates, which are concerned mostly with the design of a new structure that will closely follow those found in continental Europe. Scholars find it objectionable that the English constitution lacks a declaration providing higher protection for a number of fundamental rights. Perhaps they do not realise that this is because English law protects each and every right equally. Every right, as long as it is really a right and not a wish, is fundamental. The rule of law is a powerful illusion, but once the spell is broken, once people get used to the idea that the beloved leader of the nation may trample on one right in order to promote another, they lose their scruples –their taboos, as Orwell said. They lose their distaste for arbitrary power. They scorn the gentle-man and respect only the ruthless-man.

Once that happens, nothing else will help. I am not sure English people still realize –as they did in Orwell’s time– that there is no institutional device, no legal text, no matter how carefully they are crafted, that would provide common decency when men and women –those in power and those who empower them– no longer care about it. Written constitutions often guarantee what nobody can guarantee, and though their declarations look grand, they are very misleading. They make it possible to think that eternal vigilance will no longer be the price of liberty. Once rights have been listed, we can rest. Judges and NGOs will take care.

Six years ago I visited London and went to the Imperial War Museum. On a wall in the section dedicated to the Holocaust, I read words attributed to Edmund Burke: “All that is necessary for the triumph of evil is that good men do nothing”. It has been pointed out that it is not certain whether Burke ever wrote these words. It does not matter really because he said the same thing in a thousand ways. Moreover, English people seem to have known it instinctively –perhaps they still do. While other peoples see haughty inaction as the highest moral position one can adopt, English people feel it is right to do something –late sometimes, as against Hitler, but better late than never. While other peoples see arbitrary power as the shortest path to success, English people think it better to stick to the law of their land –well, most of the time. They would think that half a loaf is still bread. They will never understand why their doing a bit of what is right is called hypocrisy by those who do a great deal of what is wrong. They acknowledge the shortcomings of the gentleman –sometimes too readily. I hope they will never learn to worship the ruthless man.

Elizabeth Warren’s non sequitur about taxes

People tend to think that theoretical and philosophical stuff can be left to professors, to the kind of people ready to write 100 page papers to argue a minor point (or no point at all). Common people tend to think that no harm may come from theory, even very bad theory. Unfortunately, it is not so. Ask the Germans, ask the Russians.

Elizabeth Warren, an American politician in the Obama administration, and also a Harvard law professor, made use of the arguments about taxes and ownership that professors Murphy and Nagel presented in their book The Myth of Ownership (Amazon). Here is Elizabeth Warren repeating the argument:

I have dedicated seven posts to the analysis of that very deficient argument: 
Murphy, Nagel, Sunstain, and Dworkin on property rights
Murphy, Nagel, and Lenin, on ownership
Rhetorical devices in The Myth of Ownership
Murphy, Nagel, and Marx on surplus value
Philosophers on the efficiency of Taxes and Welfare
Nagel and Hayek on government and wealth
Who needs a replacement for Marxism?


The main book, the most extensive defense of the fallacy, the source where everyone who wants to justify higher taxes goes for inspiration is The Myth of Ownership. But it is not the only source, as I mentioned in the posts cited above. Cass Sunstein, Obama’s regulation Tzar, has adopted it too. So has done Ronald Dworkin, a law professor whose influence extends even to Argentina, where I was born and live. Argentines in high positions have a peculiar taste for unsound ideas.

What prompted me to publish the posts about the issue was the astonishing fact that, with the exception of a reviewer, nobody seemed to have contradicted the main argument of The Myth of Ownership, now repeated by Elizabeth Warren. And I have learned that when very bad ideas, presented by famous professors, praised by other professors, by reviews and newspapers, when these ideas meet little or no resistance, they become undeniable truths –the kind of truth that only ignorant people ignore, and half-educated people don't dare to question. Professor Sunstein feels that it is safe to write that those who refuse to accept the argument are “comically implausible”.

Elizabeth Warren is merely repeating an idea that has reigned almost unchallenged in the academia. Certainly, I have read that some journalists have attempted to defend Warren’s argument by diluting the poison in it. She doesn’t argue for collectivism, they say, only for higher taxes. But how high? And more importantly: on what grounds? For the grounds on which the higher taxes are justified will define the limits of the State that will impose them (or whether any limit will remain).

The grounds are collectivistic. As I have tried to show -see the second post on the issue- the argument runs against the most fundamental ideas that define property rights and contractual liberty, against the assumptions we share when we buy a car, start a company, or collect our salary. That is to say, it runs against the way we live our lives.

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” (50^th 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.