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Law, Legislation and Liberty, Volume 3: The Political Order of a Free People

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Volume 3 of Law, Legislation, and Liberty is in part an attempt at identifying the reasons why, in Hayek's opinion, the principles of liberty he articulated in The Constitution of Liberty do not find greater subscription. Majoritarian democracy is not inherently just, since it is based on interests rather than justice. The majoritarian democratic system consists of people each pursuing their own interests: citizens want spending programs with others paying for them, elected officials generally want to be reelected, government workers prefer large over small government in order to enhance job security. The result is an aggregation of special interests, and not even the general, or common interest, let alone justice. The laws that end up being enacted are intended to serve specific administrative purposes rather than general principles.

With a system of progressive taxation, the aggregate tax burden is no longer felt by the entire population. People end up exerting political pressure for expenditures for which they believe others will pay. In such a system, any normal type of cost-benefit analysis of government programs disappears. The inevitable result is an ever-growing government sector.

The basis of the book is straight public choice theory (pp. 13-17 would make a splendid concise introduction to the field). Even a legislature elected by a democratic majority needs to have constitutional restrictions placed upon it, lest it become a form of tyranny. Hayek proposes "a model constitution" that attempts to rectify some of the shortcomings inherent in the existing democratic system. Laws should be general not specific. They should be about principles rather than benefits, i.e. they should protect citizens' life, safeguard their liberty, and help create an environment in which they are free to engage in the pursuit of happiness. Laws should not discriminate between different individuals or groups, not even based on their wealth or income. Laws passed must apply to everyone, including those who pass the laws, i.e. the legislature. This also goes for taxation: the burden of taxation is to be felt by all who benefit from the existence of government.

Law, Legislation, and Liberty was intended as a sequel to The Constitution of Liberty, in that Hayek wrote it to "fill in the gaps" that he felt existed in his argument in that earlier work. He wrote and published Law, Legislation, and Liberty on and off over a time-span of approximately 15 years (early-mid 1960 to mid-late 1970s), which were in part interrupted by ill health. Hayek admits that the result is at times repetitive and lacking in organization. The reason why he did not go through the effort of redoing the entire work upon completion is because he thought he might at that rate never finish it (he was 80 years old by the time volume 3 was published).

There are still plenty of great insights, which Hayek argues persuasively and in doing so manages to portray as common sense. There are also plenty of flashes of that true rhetorical brilliance characteristic of Hayek that can make his writings such a feast to the ear and mind. On the downside, however, these rhetorical gems are hidden in a large volume of pages that at times do indeed seem tedious, repetitive, and unorganized, unlike with The Constitution of Liberty, where they literally seem to jump off the page at you. All in all, read The Constitution of Liberty first, as Hayek himself suggests. And if you're not up for reading the approximately 500 pages that make up the complete Law, Legislation, and Liberty, two chapters (30 pages total) in the book The Essence of Hayek make for a comprehensive summary exposition of the ideas in the entire trilogy ("Principles of a Liberal Social Order", ch. 20 in The Essence of Hayek, covers vols. 1-2, and "Whither Democracy?", ch. 19, covers vol. 3).

In this third and final volume of Law, Liberty, and Legislation Hayek makes his case for a classical liberal constitutional order. True liberalism is the philosophy of free trade and association, and limited government. The modern corrupted version of liberalism stems from a host of fallacies and misconceptions. The Law Liberty and Legislation trilogy was intended to complete the case that Hayek made for classical liberalism in The Constitution of Liberty. This trilogy combines with the Constitution of Liberty to make a powerful case for strictly limited government and free enterprise. You should read The Constitution of Liberty before starting this trilogy, but be sure to read both.

I first became familiar with the ideas in this book in James Buchanan's class on Constitutional Political Economy. This was one of the more intruiging sections of this class. While this book has its critics, it derives from sound reasoning and plausible arguments. While the Law, Liberty, and Legislation trilogy is important in its own right, these books do not stand alone well. Welfare state liberals will find it naïve, even utopian. Hayek makes his case for the legal order of free markets without really explaining why free markets are superior to state controlled systems. Skeptics must refer to Hayek's "Individualism and Economic Order" to get a more detailed explanation of why free markets outperform government regulated systems. Better still, read "Human Action" by von Mises, if you can find the time to wade through it.

The Hayekian intellectual revolution is brewing and it is just a matter of time before it explodes into the mainstream. What many refer to as Austrian economics, in other words, the proper understanding of the market process and how it creates the social order.... and evolutionary psychology, are finally being recognized as simply being manifastations of the single simple theory which explains both biological and social orders. Natural selection. Hayek understood how natural selection works at the level of societies, groups... To this day most evolutionary biologists are too focused in their tiny micro world of genes and they completely overlook natural selection working at a more macro level(I hate using the words micro and macro.. it makes it seem like there is some point where a difference exists while there is none) . I can't say I've read that many books, but I have read many great books from Mises, Rothbard, obviously Hayek, Hazlitt... ie.. the REAL economists... and plenty from the evolutionary psychology camp like Dawkins, Ridley, Pinker, etc... The epilogue to this book, page for page(24 of them) might very well be the most insightful and farseeing piece of writing published in the 20th century. This was the last work in a trilogy that tried to explain in more depth concepts discussed in hayek's "constitution of liberty" and the epologue is a great summary of Hayek's ideas.... He concludes with

"Man is not and never will be the master of his fate: his very reason always progresses by leading him into the unknown and unforeseen where he learns new things.

In concluding this epilogue I am becoming increasingly aware that it ought not to be that but rather a new beginning. But I hardly dare hope that for me it can be so"

Fortunately Hayek lived long enough to work on his final work "The Fatal Conceit".

A lot of people... unfortunatly many current and well respected Austrian economists whom I have learned much from and really like, dismiss hayek or like to label him as some kind of "statist". I understand that Hayek has written some very statist sounding things.. but I belive that much of this has been taken out of context. And even if he has made some mistakes there, it is a MONUMENTAL mistake to dismiss his body of work, which in my opinion, happens to be the single greatest contribution to the proper understanding of how the world works by a single human being. This mistake was unfortunately made by none other than the great Murray N. Rothbard who basically only credits hayek with a few clarifications or additions here and there to Mises business cycle theory, and sticking with mises while the world was being swept by keynes and his inflationary communism.. which is true. No disagreement here that Mises was the greatest economist of the 20th century. But to ignore and dismiss hayek's contributions via his "sensory order" and work on cultural evolution and the evolutionary processes that shape the social order, "spontaneous order", religion and its evolution and importance and many other things... is, again, a MONUMENTAL mistake, especially when such dismisal comes from other great minds... But anyways... eventually the right ideas are naturally selected in a free environment.... They grow and spread through amazon.com reviews and many others.... It is just a matter of time...





I can't say I've read much in my short years, but thus far, the Epilogue to this book is page for page the most in

¿Por qué esta obra es tan importante y el autor, uno de los más serios de este siglo? Porque se trata de una comprension cabal del funcionamiento de nuestra civilización occidental. El libro (los tres volúmenes)es una desmitificación de ciertos conceptos harto conocidos, de clara tendencia socialista, a través de los cuales se ha pretendido transformar sociedades enteras. El concepto de justicia social es uno de ellos, en virtud del cuál se han encarado acciones políticas con resultados conocidos por todos. Esta obra de Hayek es la obra de alguien que ha entendido profundamente al ser humano y su sociedad, y que ha comprendido que es un estado de libertad su ámbito natural. La teoría de la Evolución, parece confirmarle esto al autor. De todos modos, uno se encontrará con grandes argumentos y exposiciones a partir de los cuáles, si es que todavía no se ha convencido de las bondades del liberalismo; tendrá un gran motivo para empezar a hacerlo.

Neoliberalism was born on September 11, 1973, when a US-backed military coup murdered the democratically elected President of Chile and ushered in the tyranny of General Pinochet who murdered and tortured thousands, closed parliament, and outlawed political parties and trade unions. If that doesn't give you pause about the compatibility of neoliberalism and democracy, read this book.

In Hayek's model of an ideal constitution each citizen is given one vote per lifetime when they reach the age of 45 (page 113). Then, Hayek decides that's probably too generous, and calls for an "indirect method of election" where the legislature would appoint regional delegates who would appoint new legislators, without any popular vote at all (page 114).

Neoliberals hate democracy, in both theory and practice, and are much more comfortable with an oligarchy.