Monday, February 28, 2011

Anarchy in the UC

Hayekian anarchism

Edward Peter Stringham & Todd Zywicki
Journal of Economic Behavior & Organization, forthcoming

Should law be provided centrally by the state or by some other means? Even relatively staunch advocates of competition such as Friedrich Hayek believe that the state must provide law centrally. This article asks whether Hayek's theories about competition and the use of knowledge in society should lead one to support centrally provided law enforcement or competition in law. In writing about economics, Hayek famously described the competitive process of the market as a “discovery process.” In writing about law, Hayek coincidentally referred to the role of the judge under the common law as “discovering” the law in the expectations and conventions of people in a given society. We argue that this consistent usage was more than a mere semantic coincidence — that the two concepts of discovery are remarkably similar in Hayek's thought and that his idea of economic discovery influenced his later ideas about legal discovery. Moreover, once this conceptual similarity is recognized, certain conclusions logically follow: namely, that just as economic discovery requires the competitive process of the market to provide information and feedback to correct errors, competition in the provision of legal services is essential to the judicial discovery in law. In fact, the English common law, from which Hayek drew his model of legal discovery, was itself a model of polycentric and competing sources of law throughout much of its history. We conclude that for the same reasons that made Hayek a champion of market competition over central planning of the economy, he should have also supported competition in legal services over monopolistic provision by the state — in short, Hayek should have been an anarchist.

(Nod to Kevin Lewis)


Tom said...

Spontaneous order in everything!

The paper contains this gem: "Anthropologists such as Scott (2009) make the case that in the totality of human history, stateless has been the norm, so one should not assume that a monopoly over law is the only way of organizing society."

My education has been lacking.

Matt said...

So basically, the idea is that, had Hayek taken his methods to their logical end, he would have been Murray Rothbard? Austrians have been decrying Hayek's tepidity for decades... but this is seen as something new?