The Political Order of a Free People

F.A. Hayek's prescriptions fall short of ensuring political freedom

Law, Legislation and Liberty. Vol. 3: The Political Order of a Free People, by F.A. Hayek, Chicago: University of Chicago Press, 1979, 244 pp. $14.00.

It has taken roughly five years for F.A. Hayek's eagerly awaited trilogy, Law, Legislation and Liberty, to be available to the public in completed form. In his final volume, Hayek takes up a time-honored issue: the appropriate form of government.

After a brief preface announcing some changes in terminology from the earlier volumes and apologizing for a certain "lack of system" and "unnecessary repetitions," Hayek plunges right into both a criticism and a defense of democracy. It is "the basic ideal of democracy"—associated with such values as personal liberty, the peaceful transfer of power, and laws supported by the majority—that he holds in high regard. But he wastes no time making clear that the interest-group democracy of contemporary Western societies is a "miscarriage of the democratic ideal."

It's not that we have failed to construct the machinery of democracy. Yet the products emanating from our current political mechanisms are generally laws and programs that (a) would not receive the support of the majority if given a chance to vote directly on the programs and (b) contradict one another. The enigmatic result is "majority government [that] does not produce what the majority wants."

How did we come to this pass? By supposing, says Hayek, that if only we have the machinery of democracy in place, no other limitations on government are necessary. But without such limitations, it is "inevitable" that conflicting interest groups will develop and utilize governmental power toward ever-more interventionist ends. There is nothing in "democratic" procedure to stop a group from proposing a measure favorable to only a small number of individuals, and then it is only a matter of time before other special interests are willing to support it in exchange for support of their own program. Thus begins the slide down a slippery slope toward total interest-group warfare.

A NEW GOVERNMENT

Hayek has an alternative, a proposed structure of government incorporating limitations to circumvent the pitfalls of democracy alone. As he brings his trilogy to a close, and building on the earlier volumes' work on principles of justice and political economy, he sets out a "model constitution."

His basic proposal is a simple and intriguing one. He suggests two distinct assemblies, differently composed. One, a legislative assembly, would represent the opinion of the people; the other, a governmental assembly, would represent the will of the people (where will, although it is not entirely clear, seems to mean "resolve" or "decision to implement").

Here, Hayek is drawing on a distinction made in an earlier chapter on the separation of powers within a democratic State. Part of our problem, he maintains, is that we have entrusted one representative institution—"legislatures"—with two distinct tasks: legislating and governing, or the making of rules of conduct and the "administration of common means for public purposes." Whereas justice requires that laws be universally applicable and largely negative (see my reviews of Hayek's first two volumes in REASON, Nov. 1975 and Nov. 1977), effectiveness requires that decisions about the resources placed at government's command take into account particular interests and competing purposes. To confuse the two functions is, disastrously, to allow law making to become particularized.

The guts of Hayek's system is thus a constitution stipulating that freedom of individual action cannot be restrained except by the legislative assembly, which is itself bound to pass only universally acceptable rules of just conduct. Particular interests and special cases limited to specific instances cannot be considered by this body.

WHAT DO THE PEOPLE WANT?

But what is the connection between this legislative assembly passing only universal rules and its supposed representation of the opinion of the people? In his first chapter, in criticizing "majority government [that] does not produce what the majority wants," Hayek seems to argue that general rules will ensure a "true majority." They will also have the advantage of giving the majority control over the market, because of the democratic nature of the market itself, when that market is not altered by special interferences. Hayek says that the majority will have this control despite the fact that "the concrete results [of the market] are in conflict with [the majority's] wishes."

But this raises the first doubt about whether Hayek's proposed system could accomplish what he wants it to. One begins to wonder whether there might not be an inevitable conflict between majority opinion and the rule of law. If the majority will not like the results of the market, is it not possible that the majority will come to dislike the cause of those results—universal and negative rules? Which, then, is more fundamental, the rule of law or the opinion of the people? Is the rule of law to be imposed despite the wishes of the majority? Or is it to be sacrificed to popular opinion?

I suspect, however, that these may be false alternatives for Hayek. As one reads volume three, one gets the impression that the rule of law just is the true wish of the majority and vice versa. Since there seems to be little empirical evidence to support the strong connection between the two, the only way I can understand Hayek's view is, following a suggestion of Professor John Gray's, to suppose that it is akin to Rousseau's notion of the general will. In other words, there is a kind of transcendental will of the majority that necessarily dictates universal and negative rules, despite any appearances to the contrary.

DEMOCRATIC ABUSES

Hayek states the heart of the issue about his proposal for dual assemblies when he admits that "the whole arrangement rests on the possibility of drawing a sharp distinction between enforceable rules of just conduct…and the conduct of government power." But this distinction is open to question. It is one thing to assert that there must be a distinction and another to argue about how it would be maintained.

There are certainly reasons to believe that even if the legislative assembly would stick to passing the kinds of rules Hayek desires, the governmental assembly might interpret those rules in many perverse ways (and even have court support for those interpretations). One need only look to the many perversions of the US Constitution to see the possibility of this. And since Hayek gives total decisionmaking power on concrete matters to the governmental assembly, I suspect that the real power would move in that direction, such that the legislative assembly would turn into a body passing ever more abstract, formal, and thus contentless law.

On a more fundamental level, however, the fact that group and party interests would be played off against one another in the governmental assembly means that the same kinds of processes Hayek objects to in contemporary democracies would arise in this assembly as well. Hayek cannot argue that those abuses would be precluded by the type of laws emanating from the legislative assembly, for if the day-to-day application of those laws were an unproblematic issue, there would be no need for the governmental assembly at all—it could be replaced by an executive arm of the legislative assembly.

And in fact, one finds that Hayek explicitly allows for numerous governmental activities that would seem inevitably to lead to those abuses. He devotes a chapter on the public and private sectors to indicating "the wide range" of activities which, "as the administrator of common resources, government may legitimately undertake"—broadly, any activity that "cannot be met better in other ways." As long as competition with the government is left open, there is nothing in principle that may not involve the government. More specifically, he argues for public or governmental involvement in at least the following: correcting neighborhood effects such as air and water pollution (p. 43), support of the arts (p. 49), restricting immigration (p. 56), education (p. 61), licensing and certification (p. 62), eminent domain (p. 63), conscription (p. 111), and regulation of safety, health, production, and construction (p. 115).

ENTER PRAGMATISM

In most cases Hayek does not demand governmental administration of all such programs. He more often prefers public financing with some other "nongovernmental" group doing the administrative work. And where the government is to manage a program directly, he would prefer management on a local level. Apart from whether any real advance is made by having local or nongovernmental groups manage publicly supported projects, it seems that Hayek falls prey to Ludwig von Mises's argument about acts of intervention requiring further interventions to correct the consequences of the first intervention.

Consider Hayek's argument for restrictive immigration: because wealthy countries will guarantee a minimum standard of living (first intervention), which is likely to attract members of poorer surrounding nations and thus increase the welfare rolls (consequence), we must, to avoid the swelling of the welfare rolls, restrict immigration (needed intervention). But, of course, to restrict immigration means more police, a lack of people to do the work immigrants are willing to do, the removal of illegal aliens now in employment, etc. These measures will in turn cause other problems (for example, higher prices for farm products), which would also have to be corrected. And so on down the road to unlimited government.

Perhaps the most problematic feature of this discussion of Hayek's is his allowing for "collective goods" that are peculiar to particular regions (thus producing a tension with his requirement of universalism) and his claim that "it will clearly be in the interest of the different individuals to agree [to] compulsory levying of means to be used also for purposes for which they do not care so long as others are similarly made to contribute to ends which they desire but the others do not." Hayek asks us to look at this procedure as an "exchange" process.

If this kind of arrangement does not set the stage for interest-group warfare over "collective goods," then nothing will. Moreover, since "collective goods" can be localized, and since what the market can do more effectively than the State may be perceived in different ways by different people, Hayek has opened the door for almost anything to be a "collective good." It is only a short step from here to saying that universal rules are themselves suspect, because they do not recognize the different needs of different communities, and thus that these universal rules ought to be replaced by more "pragmatic" policies.

THE REAL CULPRIT

Is it not because people have come to see the State as the instrument for parceling out goodies, rather than that the two functions he advocates have not been kept distinct, that we face the problems we do? This points up the chief defect in Hayek's theoretical approach: the supposition that the structure of the system is all that matters. In this respect, he is subject to the same accusation he levels against those who believe that constructing democratic machinery is enough to ensure that the system's output will conform to majority opinion.

This confidence in the structure of the system underlies Hayek's contention that, with his arrangement, we would not need a bill of rights, because no right is immune from limitation by general rules of law and also because the traditional list of rights does not include the only ones necessary to limit arbitrary power. We have a bill of rights, however, not only to limit power but to exhibit the basic ideals of the republic. To suppose that it is sufficient just to limit the legislature to a type of legislative enactment is to suppose that concretely stated ideals serve no purpose in orienting people toward a liberal order. Without a statement of basic rights, there may develop a lack of understanding about the type of political order in which we live. The upshot might be a failure to appreciate the very purpose of rules of just conduct.

Even if Hayek's proposals were instituted tomorrow, any real improvement would be unlikely, since human beings are ingenious at getting around legal or institutional obstacles placed in their way. Unless people's attitudes and moral values changed, Hayek's proposals would be no more successful than any other restructuring of institutions. And it is the refusal throughout the three volumes to take seriously the moral issues that leads eventually to the belief that the real culprit in political life today is merely the structural arrangement of our institutions.

In a sense Hayek recognizes some of the truth of this criticism when he talks in his last chapter about the abuses and changes of language with respect to such terms as democracy and justice. Although this is not a discussion of moral outlooks, it is a recognition of the fact that how words are used will affect the way people perceive events and institutions.

NUGGETS OF WISDOM

Hayek's third volume is not without its insights. In his chapter on government and the economy he is at his best, focusing his attention on the role of competition in a market economy. For example, Hayek argues that rational behavior is not a premise of economics. Rather, competition makes it necessary for people to act rationally in order to maintain themselves—that is, since rational behavior confers benefits, rational methods will "progressively be developed and be spread by imitation." It might be said that rationality is discovered—not presupposed—by a market order.

Another example is Hayek's pointing out the destructiveness of the ideal of having all social groups organized. The belief that the defects of the democratic system will be remedied when every group is represented is really an attempt to freeze a given social structure in the face of changing conditions. To complete the organization of all groups would simply create a deadlock between them, which "only the force of some dictatorial power could break."

Nevertheless, the original insights are few and far between in this book, and the argument, when there is argument and not mere statement, is often confusing. It is not up to the standards one would expect from Hayek. The work should be purchased to complete the three-volume set and for the insights one does find. Also, the chance to gain some idea about Hayek's institutional programs makes a purchase of this volume worthwhile. But if you do plan to purchase it, do so with lowered expectations.

Douglas Den Uyl recently achieved his doctorate in philosophy from Marquette University. He has published in various journals and REASON and is coeditor of a forthcoming collection of essays on Ayn Rand's thought.