Law and Order: A Review of F. A. Hayek’s Law, Legislation, and Liberty, Volume One

F. A. Hayek is most remembered for his critique of socialism in The Road to Serfdom (1944) and his articulation of the knowledge problem in “The Use of Knowledge in Society” (1945). But he also wrote an important trilogy, Law, Legislation, and Liberty, themed around rules and order, the concept of social justice, and the political order of a free people. Engaging both law and political theory, this series of texts epitomizes Hayek’s mature thought while synthesizing notable ideas in earlier works.

This essay provides both an exposition and contemporary contextualization of volume one of Law, Legislation, and Liberty, focusing on themes of law and order and showing the relevance of Hayek’s analysis today. Given the rise of positive legislation that departs from customary law, as well as the ascendance of institutions with soft law that privilege planned order over spontaneous order, Hayek’s insights remain a powerful alternative to current tendencies toward positive law and planned order. But the critical dichotomy he draws between spontaneous order and organization is called into question by economic programs that reconcile the two, and by the productive results of deliberative democracy—itself shaped by organization.

The theme of order is very strong in Hayek’s thought. It is rooted in a distinction between different kinds of rationalisms, corresponding to his discussion in The Constitution of Liberty of British empiricism and French rationalism. Hayek identifies an evolutionary or critical rationalism, where order results from emergence rather than design. This approach to rationalism contrasts with constructivist or naïve rationalism, which sees all social institutions as the product of deliberative design. Hayek finds this latter view erroneous; it cannot explain the evolved reality of language or the informal social norms that support economic activity.

From this context, Hayek distinguishes between spontaneous order and planned order or organization, though one must note the ambiguity here: spontaneous order is itself a form of organization. Hayek grounds these concepts in the Greek distinction between kosmos for a grown or spontaneous order, and taxis for a made order or organization. Similarly, he appeals to Scottish Enlightenment thinkers, like Adam Ferguson, who distinguished between action and design. This informs Hayek’s formulation that spontaneous orders result from human action but not human design.

One feature of spontaneous orders, then, is that they allow for coordination that emerges when people follow abstract rules that are themselves spontaneous orders. Meanwhile, planned orders or organizations result from deliberative design and human purpose. Hayek’s thinking here informs his insight into the “knowledge problem.” Since much social knowledge is dispersed and tacit, indeed inarticulable, involving knowledge of time and place, no state planner could direct society effectively. This vindicates the primacy of spontaneous orders like free markets over central planning.

We can see the presence of spontaneous orders in language, the world economy, and common law, contrasting with planned organizations like firms, bureaucracies, and, especially, the state. The state can be regarded as the most paradigmatic form of planned order. It reveals a high degree of deliberate design, and it often persists in the work of economic planning despite the insight of the knowledge problem. That said, when we move from the state to society as a whole we can see a spontaneous order reliant on rules.

Hayek finds modern society to be a spontaneous order with a high degree of complexity:

Because society is a spontaneous, rather than planned, order, Hayek argues that it is not possible to assign a purpose to it. Therefore, one cannot say that a society is just or unjust because the idea of social justice with its purposes cannot apply to a spontaneous order—only to human action. Although Hayek does not elaborate on social justice at length in volume one, he does note that redistributive justice tends to undermine the foundations of rule-​based order and individual liberty. This is especially so considering Robert Nozick’s insight that attempts to impose a distributive pattern require continual interference with liberty.

Since the theme of order is very strong in Hayek’s thought, some scholars have argued that Hayek is a natural law thinker. Erik Angner relates Hayek’s distinction between spontaneous order and organization to the distinction between natural law and positive law. Natural law thinkers appeal to those principles that inhere in nature and the structure of reality, rather than the artificial or conventional, features shared with spontaneous order. But Angner recognizes that Hayek found the term “natural law” misleading for his thought given its theological associations.² Nevertheless, there is still a primacy of the evolutionary and customary over the designed in Hayek’s thought, and it can be seen as an evolutionary interpretation of natural law—aligned with the sociological natural law theory of Tanaka Kōtarō, a twentieth-​century jurist and international lawyer.³

Law is another prominent and interrelated theme in volume one of Law, Legislation, and Liberty. Hayek’s philosophy of law follows from his theory of order, and just as he attributes a primacy to spontaneous order over organization, so too does he prize law over legislation. Law refers to evolved and customary rules of just conduct, while legislation refers to positive law or deliberate legal commands that issue from human design. Law precedes legislation, and since it arises from custom, it can be considered grown law—an insight echoed by legal scholar Roberto Ago in his distinction between spontaneous law and posited law.⁴

Yet this distinction between law and legislation does not dissolve into a dichotomy. Rather, Hayek sees an interdependent dynamic between law and legislation. He notes that grown law may often possess desirable properties not present in the commands of a legislator. But he also recognizes that law can develop in non-​ideal directions: traditions can contain privileges, outdated rules, or remnants that no longer serve human freedom. When this happens, there arises a need for correction by deliberate legislation to more fully define property rights and enforce contracts. Hence, legislation is not entirely eliminated but can play a corrective role.

Hayek further argues that modern societies adhere to the prevailing view that legislation simply is law, and thus confuse the two, failing to recognize the primacy of higher law. This drives his discussion of rule of law, which requires general, predictable, and abstract rules applied equally to all, rather than created commands that purposefully aim at certain outcomes or groups and do not result from spontaneous order. Similarly, Hayek centers common law traditions and evolved institutions. He finds they retain a rightful place for the accumulated wisdom of experience, in contrast to the centralized and deliberate design of planned orders.

This wisdom of experience is exemplified by Hayek’s rules of just conduct, a distinctive but underappreciated feature of his thought. As he defines these rules:

For Hayek, these abstract rules—generally revolving around rule of law, private property, contracts, and non-aggression—enable individuals to pursue their own plans through self-​ownership, all while peacefully coordinating action with others. This focus on individual liberty through pursuing one’s own plans in peace drives Hayek’s normative view of law, particularly whether the direction of law is ideal or non-​ideal. Notably, Hayek is clear that the rules have no purpose and merely reflect the effective functioning of a spontaneous order. As such, they are evolutionary and customary rather than normative. But one could identify a moral valence to some of them, particularly non-​aggression. This ideal evinces a vision of society that preserves the good of negative liberty, a necessary condition for enabling individuals to pursue their own plans.

In Hayek’s account, even though the rules of just conduct are largely unwritten and have not attained conscious awareness by most persons, they nevertheless drive the effective functioning of societies. In his reading, the rules cannot be executed the way the commands of legislation can be. This has to do with the rules’ evolved and customary character—they simply unfold rather than rely on conscious execution by a sovereign.

These rules of just conduct also intersect with Hayek’s political theory. While he understood the value of democracy, he was concerned about the ways that democracy’s undue valorization as the highest end could ultimately suppress liberty. For Hayek, freedom has less to do with democratic participation alone and more to do with limiting coercion to drive liberty through stable rules of conduct.

Hayek’s prioritizing of customary rules informs his stance on jurisprudence. He was critical of legal positivism, particularly its notion that law derives from authority or the commands of a sovereign. Instead, Hayek argues, authority derives from law “in the sense that authority commands because (and so long as) it enforces a law presumed to exist independently of it and resting on a diffused opinion of what is right.”⁶ Hayek notes both higher law’s primacy as well as the way it reflects the evolutionary and spontaneous order of the people.

Hayek’s theory of law and order contains insights that are still relevant today. The reality of spontaneous order continues to persist, seen for instance in global supply chains with a high degree of complexity. Recent developments in global politics further attest to the ascendance of Hayek’s concept of organization. In particular, institutions of global governance have developed apace, and they manifest a high degree of conscious organization rather than customary legitimacy. Yet this conscious, complex organization takes place among unelected technocrats, one reason why global governance is viewed by many as lacking legitimacy. Hayek’s ideas might question whether this structure inhibits effective action.

These themes intersect with Hayek’s critique of the priority of legislation over law, exemplified by the rise of soft law—non-binding legal norms rather than hard treaty law or custom—such as the Sustainable Development Goals (SDGs), themselves driven by international organizations. These goals have a clearly designed purpose. It is difficult to find in them a connection to the evolved reality of customary international law. Instead, they come across largely as posited, even utopian, soft law.

Hayek would likely be critical of this project for the reasons outlined in his philosophy of law. The SDGs deviate from the organic reality of rules of just conduct and seek to impose a vision of social justice on world society, failing to recognize that society—especially world society in its complexity—is a spontaneous order and hence cannot be deemed just or unjust. Though their goal may seem noble, those who designed and seek to implement the SDGs demonstrate a lack of awareness that these planned systems will impose costs through seeking to control economic coordination.

Hayek’s theory of order further seems to draw a dichotomy between spontaneous order and organization. One wonders what he would make of theories or programs that synthesize both features. A clear example of this would be social democracy or “market socialism.” These societies retain a role for markets and entrepreneurial activity but also accord a large role for state action in ensuring equity. What would Hayek make of this synthesis, long prominent in European societies with large welfare states? And would he still identify a dichotomy between two kinds of order? No nation perfectly embodies the spontaneity of order in its economic policies, though the existence of spontaneous order in the world economy’s complexity remains indisputable. That said, one can hazard a Hayekian response related to his insight that any form of socialism interferes with the informational role of prices.

Furthermore, Hayek’s analysis also calls into question features of democracy today. Arguably, the deliberative democracy that is increasingly valorized today through lottocracies, or political systems where citizens are randomly selected to legislate, such as citizens’ assemblies, is an example of organization or “structure-​induced equilibrium.” If citizens and policymakers purposefully engineer democratic institutions, is that overly designed, or is it justified in contrast to the chaos of agonistic democracy, i.e., democratic contestation driven by emotions rather than rational deliberation? To what extent should citizens allow the demos to unfold naturally, or is some structure needed? It is crucial to note, however, that deliberative democracy has often yielded productive results, such as in Australia’s Citizens’ Jury on Nuclear Waste, that could be said to advance human freedom. These results contest the largely critical valence in Hayek’s analysis of non-​spontaneous order.

Hayek’s philosophy of law and order in the first volume of Law, Legislation, and Liberty delivers a compelling analysis that still resonates today. His insight into spontaneous order, rooted in Scottish Enlightenment thinkers, remains incisive in seeking to understand the workings of the world economy and society at large. Meanwhile, his priority of law over legislation helps to grasp the vitality of evolved and customary law over positive legislation, recognizing that unwritten rules of just conduct advance societal order in ways that legislation does not. While the dichotomy he draws between spontaneous order and planned organization is challenged by models of social democracy and deliberative democracy, Hayek’s ideas still prove illuminating in understanding the foundational drivers of order.