Hayek, Free Society, Law, and the Welfare State

Jamesvansteel By Jamesvansteel, 10th Oct 2014 | Follow this author | RSS Feed | Short URL http://nut.bz/1ywylfhd/
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An essay presenting the views on liberty and law held by Hayek (leading intellectual in 20th century libertarian thought) regarding socialism and the modern welfare state. A review of three chapters in F.A. Hayek's "The Constitution of Liberty" (Chapters 15-17) for one of my university classes.

Hayek, Free Society, Law, and the Welfare State

In The Constitution of Liberty, F.A. Hayek proposes to engage in a meaningful discussion of the definition, purpose, and conditions for individual liberty in political society by means of a theoretical, historical, and practical study into its nature and philosophical conception. Defined plainly as “that condition of men in which coercion of some by others is reduced as much as possible in society,” Hayek argues that liberty understood as such plays an essential if not the key role in creating and maintaining a free society (Hayek, 57). Toward the end of Part II and beginning in Part III, Hayek moves through examinations of law, market function, and the legitimate spectrum of government action to show that misunderstandings and misevaluations of these concepts have led to detrimental social and political consequences as well as the rise of the so called “welfare state”. He argues that disregard for the rule-of-law through of legal positivism, among other intellectual trends, has degraded a vital separation between law and administration, thus facilitating the slow erosion of personal liberty and fostering injurious methods in the attainment of social ideals. The inversion of liberty and coercion as foundational values is exemplified most starkly for Hayek by soviet Russia, and yet for him, similar if not more nefarious corrosions of individual liberty were already festering in the expanding Western welfare state.
If individual liberty is as vital to the existence of a free society as Hayek claims, then it follows that its preservation against arbitrary coercion should be a chief consideration of political theorizing. This preservation, however, has been largely replaced by a new political locus of Western societies, social justice. Supported by different conceptions of the purpose of society and unconcerned with the radical changes involved in direct pursuit, Hayek argues that the means of attaining justice as substantive equality often tend to undermine the political structures safeguarding liberty. For him, the most important among these is the rule of law which has suffered under arguments for expediency despite the fact that, “the rule of law provides the criterion which enables us to distinguish between those measures which are and those which are not compatible with a free system” (331). Hayek’s formulation of law, here, differs markedly from mere regulation or policy, since liberty itself is a consequence of its correct functioning. Rather than legislation or enforcement, the rule of law requires that the laws themselves, being coercive action, be concerned with “general and timeless purposes, not specific ends,” placing universal principles over momentary or discriminating initiatives (335).
Hayek considers as well that such general principles alone do not provide the necessary protections for personal liberty that a free society strives for, noting that the rule of law ought also to establish a good framework for enabling human choice (332). Laws given both for the preservation of liberty and for the creation of a social order that makes possible real human efficacy in enacting those choices requires that the limited coercion they exert be employed to productive ends. Hayek asserts that coercion as an exclusive power of the government must reside within a “permanent legal framework which enables the individual to plan with a degree of confidence and which reduces human uncertainty” (331-332). This conception of the purpose of the rule of law as ensuring consistency and predictability in the public and private spheres leads to the possibility of a functioning economic market through which wealth and individual potential can flourish. Together, rule of law guided by general principles and a legal framework whose content ensures that “the market will work tolerably well,” function as robust safeguards of individual liberty and engines of “social justice” sans arbitrary coercion (338).
After Hayek lays out his theoretical understanding of the relation of the rule of law and stable market conditions for preserving liberty, he undertakes a discussion of how these concepts have been disregarded, misunderstood, or entirely forgotten in the previous 100 years. Although his treatment of this unfortunate development considers four distinct theoretical trends that contributed to the transition, it is primarily the rise of legal positivism that he feels has wrought the most havoc for liberty in general.
As a foundation of a free society, the rule of law provides a basis for determining the legitimacy of government action in relation to those overarching principles mentioned above. These principles, abstract in their nature, are of necessity “meta-legal”, existing outside of the details of actual law but providing a spirit and direction for their synthesis. Their origin is the philosophical notion of natural law which “are not of the deliberate making of any lawgiver,” and contends that enacted law is validated by these pre-existing rules that “provide both the criterion for the justice of positive law and the ground for men’s obedience to it” (346). Legal positivism, conversely, denies the existence of such “meta-legal” abstractions and asserts vehemently that law is fully and solely a function of the social will. For this school of thought, liberty and prosperity are not social values to be preserved through the rule of law but creations of law itself, and law being a function of human will, mere legality of coercion is self-justifying and constitutive of justice (346).
Hayek observes the damage this inversion causes to individual liberty as the distinction between general rules and laws in the formal sense dissolves, and all questions of the “purpose of the state or the limits of its competence” are left behind (347). The very ideal upon which free society rests, that laws ought to limit coercion of the individual as much as possible, is inverted as well as government action becomes synonymous with law. A “science” of administration separate from law or economics emerges, subsuming the limits of its own power as impediments to the social will and relegating to courts, once defenders of the individual against arbitrary coercion, merely those decisions regarding under which jurisdiction unlimited coercion rests (359). From German legal positivism, the basis of liberty in natural law fell and the social will as a supreme force manifested its intellectual victory in the explicitly coercive Soviet totalitarianism. Hayek notes that “the inseparability of personal freedom from the rule of law is shown most clearly by the absolute denial of the latter,” wherein the absence of protective laws leaves the individual politically naked in the face of unlimited governmental authority (350).
Despite the power accumulated in governments through these ideas, absolute coercion and state monopolies proved themselves untenable in that their function was less productive than free enterprise, their goals of social justice created arbitrary power structures, and despotism was the final result (370). In America and the United Kingdom, the appeal of socialist methods fell away under their own weight, but what remained were still the ideals of social justice without the direct power to achieve them. Thus began the West’s current experiment with the “welfare state”, a parental entity that gradually assumed authority under ambiguous auspices of working toward these ideals. By degrading the characteristic limited government that preserves liberty and promotes markets, Western welfare states sought to foster justice through redistribution. Hayek explains that what results from such disregards for law and liberty is “not a modification of the existing order, but its complete abandonment and its replacement by an altogether different system – the command economy” (341).
Although this political experiment had not been completed by the publishing of The Constitution of Liberty, nor have its ideals been realized today, the trends toward Tocquevillean soft despotism that Hayek identifies in the welfare state continue to develop. A gradual denial of limited government, a trust in administrative discretion as opposed to restraint from coercion, and a deference to courts as arbiters of jurisdiction rather than bastions of legal principles increasingly exemplify the American political system. It remains to be seen if we as a nation can recognize these trends and radically alter or reassert our values in defense of the liberty our country was founded on.

Works Cited
Hayek, F.A. The Constitution of Liberty. Definitive ed. Chicago: The University of Chicago Press, 2011. Print.

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author avatar Nancy Czerwinski
3rd Nov 2014 (#)

Great article! Congratulations on being author of the day!

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