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BOOK REVIEW – Hayek’s The Constitution of Liberty: An Account of its Argument

  • hayekHayek’s The Constitution of Liberty: An Account of its Argument, by Eugene F. Miller
  • Institute of Economic Affairs (www.iea.org.uk), 2010
  • Get your copy HERE.

Eugene Miller, who sadly died earlier this year, wrote a summary and commentary on Hayek’s book of 1960 where he explained a modern version of classical liberalism in relation to political theory, public policy, law, and history, as well as economic principles.

Together with Law, Legislation and Liberty (1979), The Constitution of Liberty is Hayekʼs fullest presentation of his
version of classical liberalism. It is probably more widely read than the later text, and is one of the key texts in Twentieth Century liberal thought.

It is not a very difficult book to read, but it is long and it does integrate a very wide range of material, so there are strong reasons for publishing an introductory version, with guidance for the reader. Hayekʼs book of over 400 pages is condensed into a summary, together with comments, into less than 200 pages. Miller puts passages into the context of other works by Hayek, and sometimes the history of liberal thought. The reader gets a good idea of the issues in The Constitution of Liberty and the flow of arguments, along with a few ideas about how to interpret and contextualise.

Miller points out that the proposed policies in The Constitution of Liberty will not satisfy the most radical libertarians, though though Hayek’s analysis can be used for more radical ends. Hayek himself did not use the word “libertarian”, because he considered it an artificial substitute for the word liberal; and he did not support the idea of a radical lurch in society of the kind that “libertarianism” might suggest. Hayek regards the state as having a legitimate role, not only in the night watchman functions of law and order, and national security, but also with regard to maintaining the incomes of the poorest, and providing core public services. Hayek emphasised the improved efficiency of government as well as reducing the size of government. The two go tother to some degree, as over-extended government becomes inefficient, but Hayek did not think that smaller meant better in every circumstance. He suggests that the tendency for government to do to much went back to the 1870s, when classical liberalism started giving away to a “progressivist” statism, trying to find, and impose, state solutions for everything.

The reasons that large government is inefficient, and threatens liberty, were explored by Hayek in earlier books and papers on economics, most famously in The Road to Serfdom (1944). What Hayek adds in The Constitution of Liberty in particular is more detail about dysfunctional planning, and an overview of the development of law. As Hayek had already argued, any planning agency has limited information about the economy it is trying to plan, and the consequences of intervention. This problem cannot be solved by more information, as the agency will never match the constantly changing totality of information, that individuals in aggregate have through the price mechanism. Since this mechanism conveys dynamic information about the constantly changing preferences of many individuals, no plan can capture it. Even by 1960, Hayek suggests, state socialism in the sense of the state owning everything in the economy, was an exhausted ideology. However, statism was still growing, and has since, through attempts to improve society from above.

What makes this book most distinct in relation to Hayek’s earlier work, is the emphasis on law. Hayek obtained a doctorate in law before his fame as an economist and political thinker, and here he puts an interest in the history and theory of law to great use. Hayek had developed a strong belief in the benefits of evolutionary law, or law as a discovery procedure, that is law that evolves through judgements in particular cases. Hayek opposed an evolutionary understanding of law, in terms of legal theory, to the major schools of positivism and natural law. According to positivism, law is the system of legal commands issued by the sovereign power; according to natural law, law is the commands deduced from basic natural rights.

Hayek thinks that we know what ‘law’ is from the activity of judges as opposed to the commands of any sovereign body, or any notion of what is right by nature. This gives Hayek a basis for criticism of legislation, which goes beyond what emerges from the independent judicial process. The evolutionary understanding of law led him to highly value the British common law tradition, of law from precedent; and German administrative law before it became absorbed into a centralised state system in the late Nineteenth century. Administrative law comes from the continental European tradition of courts, which evaluate acts of the state machinery, and which clarify, and refine, the principles that underly them. Miller is particularly helpful in providing contextual information on Hayek’s attitude to law, referring to lectures Hayek gave in Cairo in the 1950s; and he explains how Hayek used the trip to Cairo to follow the European travels of John Stuart Mill, a great hero of Hayek’s, particularly in his earlier years.

Through this kind of analysis, historical information, Miller succeeded in providing an ideal introduction to the reading of The Constitution of Liberty, and interpretation of it. Those new to Hayek will find this the perfect introduction to his thought, along with The Road to Serfdom, and The Use of Knowledge in Society (1945). Those already familiar with Hayek will also find it very useful as a thought provoking overview.

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