In Argentina Friedrich Hayek is often dismissed as a mere defender
of privilege. But in the early 90's an academic, Carlos Santiago
Nino, still thought it necessary to provide some arguments before
rejecting Hayek's ideas. I would like to examine Nino's objections to
the notion of spontaneous order.
Carlos Santiago Nino (1943–1993, link to the wikipedia) was an
Argentine jurist and philosopher. He was very influential in the 80s,
especially when Argentina returned to democracy after the defeat in
the Falklands war. He became personal assistant to President Ricardo
Alfonsin and coordinator of the Council for the Consolidation of
Democracy, a body created by the new government for the purpose of
designing institutional reforms.
Nino was what Americans call “a liberal”. He took the ideas of
the academics that dominated the American and British universities
–among others, John Rawls, Joseph Raz, and Jeremy Waldron–
summarized them and made them popular among Argentine academics. Most
importantly, in a country in which few people are able to read
English, he put everything in Spanish. But he didn't just copy;
though it is true that he adopted the theories that were already
influential in American and British universities in his time (and
remain dominant today), he was a capable thinker himself.
Nino accepted Waldron's idea that the moral justification for
property rights must lead to a redistribution of wealth, even to
limitations on the kind of goods that people are allowed to possess.1
He endorsed the idea of collective rights2,
and made the usual objections against both the efficiency and the
morality of free markets.3
From what I have written about Nino's mentors in this blog, it must
be clear that I disagree with him. Nevertheless, Nino was much better
than the kind of intellectual that dominates Argentina at the
beginning of the 21st century. While Nino provided
arguments (flawed in my opinion) academics like Eugenio Zaffaroni use
invective and scorn. Nino was under the spell of Oxonian
Analytic-Philosophy. Professor Zaffaroni, recently retired from
Argentine Federal Supreme Court, is an admirer of Michel Foucault. In
fact Nino challenged Zaffaroni's theories in a very instructive
debate. No academic seems able to find courage to do it today.
In the 80's, Nino's friend and like-minded liberal Genaro Carrió had
a very civilized debate with Sebastián Soler, a “liberal” in the
19th century sense. At the beginning of the 21's century,
Soler is simply dismissed and insulted. The change in the ideas that
dominate Argentine universities is made clear by the fact that Nino's
main disciple, professor Roberto Gargarella, is a Marxist.4
Nino against spontaneous order
In his book Foundations of Constitutional Law (Fundamentos de
Derecho Constitucional) Nino defended the notion of “positive”
rights –sometimes called economic and social rights– that is,
rights to a positive delivery of goods or services, usually from the
government. In that context, he charged against Hayek's notion of a
spontaneous order. He asserted that it was false and based on a
series of confusions. Nino argued (I translate from p. 399) that “the
market's order is based on the structure of property which, as it is
obvious, is established by statutes deliberately dictated which
validate certain acts of possession and transmission of goods -which
may have not been recognized by them- and attribute to these acts
certain rights and obligations -which may have been given different
effects- statutes that establish punishments against those who interfere with
those rights. Secondly, these statutes are enforced by courts and the
police who are sustained by the product of the obligation to pay
taxes. In the third place, the market works through contracts which
demand statutes, courts, officials, and taxes to sustain them. In
fact, to a greater autonomy of individuals it must correspond a
larger State interventionism in the form of contract execution. And
as more causes of contractual nullity are recognized, there will be
less State interference, in the form of a negative to provide the
public service of coercion to enforce those contracts”.
What is spontaneous order?
It is clear to me that Nino failed to understand Hayek's argument.
First of all, he failed to see what is spontaneous: it is
nothing less that the very activity that drives the life of a nation.
Laws establish the formalities of contracts and how they are
enforced, but they neither establish the purposes of these contracts
nor the kind and quantities of things that people buy and sell.
Statutes regulate the rights of inventors and innovators, but they
neither create those inventions nor decide which of them will be
successful in the market.
The French economist Frederic Bastiat pointed out that we should
marvel at the fact that a big city like Paris is provided with all
sorts of food, clothing for summer and winter, tools, bolts,
cigarettes, and toys, without any authority's decision about how much
fruit, flour, shirts, overcoats, pliers, and teddy bears are to be
produced. Nobody decides how many trucks are needed to move all these
goods. Nevertheless, they arrive in time, each one in proper
quantities, and very little is wasted. That is the fundamental
spontaneous order. That is the order on which the well-being of
people, often their very survival, depends. But we don't marvel at
it, it is so essential to our lives and so pervasive that we take it
for granted.
Moreover, experience shows that it is precisely when authorities
decide that they can impose a better order and take to themselves the
task of deciding how much flour and shirts will be made that these
goods become scarce and poorly made. Socialists of all parties seldom
learn from these experiences; they don't stop and think about the odd
fact that life went better without their orders. As they are unable
to conceive that order might be spontaneous the only lesson they
learn from disaster and hunger is that next time they will appoint
better planners and regulators.
In Italy, Fascists thought that they had found a better way than
marxists and socialists: production would be regulated by boards of
employers and employees. They created corporations where each group
in society (or rather, the groups in which they thought society was
divided) had a place reserved, no matter how many votes they would
have had in a regular election. That system didn't work either.
Nevertheless, in Argentina a large number of people still believe
that order would be better established if only the representatives of
each relevant “sector” of society agreed to “sat down to a
table” (that is the set phrase), have a talk, arrange their
differences, and issue a plan that would secure everyone's
well-being.
Plan by a single authority is bad; plan by committee is worse. What
must be understood is that the problem is not how or by whom these
decisions are made; the problem is that such order won't be
spontaneous.
Furthermore, we must be aware that “spontaneous” does not mean
“thoughtless”. There is much more thought and care involved in
spontaneous order than in any plan or regulation. Except that they
are the thoughts and goals of millions of people who interact and
adapt to each other without anyone bossing them about and telling
what they have to do.
Hayek wrote in his book 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, p. 136). That is the fundamental
spontaneous order, the one that is defined by the fact that it
requires no agreement on collective goals. Marxists, Nazis,
corporatists, nationalists, and socialists of various kinds, thought
(and still think today) that such common goals are indispensable.
They can't conceive an order without them. So fundamental are they
for these groups, their leaders, and intellectuals, that in default
of agreement they are prepared to force people to adhere to their
goals. That they describe them as national purposes, race
world-views, or class interests, is –according to Hayek–
secondary to the fact that all of these doctrines reject an order
that is spontaneous and has not to be directed.
It is sad that well educated people and even academics like Nino fail
to see that they get most of the goods that made life enjoyable –even
possible– by an order that is spontaneous. The essential order to
which Bastiat, Menger, and Hayek pointed out is not the system of
laws, which of course they acknowledged, but the order that is
established when millions of individual plans –each one different!–
adapt to each other.
The legal system
But even laws and codes have much that is spontaneous.
Nobody invented the notion of a contract, or of credit, or of paid
services. Today we have laws about such things, but the practice, and
the very concepts, originated long before those laws. Some people
started exchanging food, firewood, or tools, and many others realized
that they could improve their well-being in that way.
They started using some forms, some words, ceremonies, and written
documents for their agreements. Some thought that it would be a good
idea to produce things they didn't need, just in order to exchange
them for goods they needed. That is the beginning of specialization
and the division of labor. Many of them found that there are certain
goods that are readily accepted by most people, goods that are easy
to transport, and don't get spoiled by the passing of time. Whenever
they were uncertain about their future needs, or whenever they
couldn't find the products they needed, they chose to exchange their
products for those goods, as an intermediate step. These were, with
various degrees of success, chunks of salt, hides, spices, gold,
silver, and many other things. That is, according to the Austrian
economist Carl Menger, the origin of money. In time, laws established
coins and much later, paper money. But contracts, wills, marriage,
property, and money started spontaneously, as parts of an order that
laws secured and modified but seldom (if ever) they created.
Socialists of all parties prise themselves for their realism,
nevertheless they seem to assume that nobody exchanged berries for
firewood, nobody left his cows to his children, before some authority
called people from the villages and adjacent farms and told them that
from then on they will have an institution called “contract” and
another called “will”.
Those who write statutes and codes find these things already
working; they settle some
things, modify others, but seldom invent a new practice from scratch.
Even in the introduction of the French Civil Code, the jurist
Portalis wrote that “codes are made by time, but to speak more
properly, one does not make them”.
1
See his Fundamentos de Derecho Constitucional (Foundations of
Constitutional Law) p. 364.
2
Op. cit. p. 371.
3
Op. cit. p. 372-373.
4
A translator and follower of British Marxist Gerald Cohen.
