September 8, 2005

Law and Spontaneous Order: The Inaugural Friedrich A. von Hayek Lecture in Law

The NYU Journal of Law & Liberty, a student-born publication “devoted to the development and analysis of classical liberal thought,” held its first Friedrich A. von Hayek Lecture in Law on September 7, 2005, and featured the energetic and engaging Professor Richard Epstein as its inaugural speaker. In front of a standing-room-only crowd in Greenberg Lounge, Dean Richard Revesz introduced his guest by saying, “If you could pick anyone in the world to be the inaugural Hayek lecturer, there would be no better person to do it than Richard Epstein.”

Epstein, the James Parker Hall Distinguished Service Professor of Law at the University of Chicago Law School, was in residence at the NYU School of Law for two weeks, and kicked off his brief on-campus stay with the presentation of his lecture entitled “Intuition, Custom and Protocol: What are the Sound Sources of Human Knowledge?"

Visiting Professor Richard Epstein after delivering his lecture

Friedrich A. von Hayek, an Austrian-born Nobel Prize-winning economic liberalist, was a proponent of voluntary exchange within a free market system and staunchly opposed socialism and central planning as means toward economic development. “Spontaneous Order” was Hayek’s idea that the cooperation of individuals within a society will lead it toward equilibrium. Epstein used his lecture as an opportunity to apply Hayek’s philosophy to legal theory, and to explore its margins in relation to human nature and the choices we make.

Intuition, as Epstein defined it, relies on a set of three basic societal norms: Condemnation of acts of aggression, reciprocity in social transactions and revulsion of acts of deviance. Natural law determines these three norms, which serve as a cornerstone of Roman and Talmudic law; controlling violent crime, defining contracts and prohibiting taboo acts. Epstein, however, described the limitations of Hayek’s belief that an individual’s moral compass guides a society toward order. People will inevitably question and circumvent these norms (killing in self-defense, violating contracts) and so the creation of laws is necessary; human intuition can’t always be relied upon to do the job.

Next, Epstein cited the development of language as an example of custom. No centralized government agency forms a language, rather, it is a collective product agreed upon and utilized by individuals gradually over time. However, in order to resolve extremely critical issues facing a society (the depletion of natural resources, unfair compensation for land), custom may need to be forsaken, allowing a forced evolution to take place in the form of legislation—something somewhat contradictory to Hayek’s laissez-faire philosophy of Spontaneous Order.

Epstein compared his final topic, protocol (which he defined as, “a rigorous program that you follow, come hell or high water”), to intuition by highlighting how in modern day cases of risk assessment and liability, stringent steps need to be taken and regulations must be observed in order to keep society safe. Epstein explored Hayek’s theory’s restrictions by suggesting that protocol based on data, and instituted by one central organization, will serve society better than multiple individuals deciding things for themselves. “Intuition is just terrible,” he said, “because once you’re trying to figure out these diagnostic situations, all the prejudice that you have from these built-in mechanisms on reciprocity and non-aggression are not worth a hill of beans.”

Summing up, Epstein remarked that the Hayekian model of a legal system would “have sharp boundary lines, and then once those boundary lines are clear, let individuals figure out what to do.”  He said that Hayek argued a dispute with the Federal Communications Commission (FCC) in 1944, during which New Deal Justice Felix Frankfurter said that the government should draw those boundary lines, and, as with a highway, also control the traffic’s flow.  “Hayek said that the reason why highways work is that we set the rules and you figure out where to go,” Epstein recounted, adding, “We have had an empirical test: highways do just fine—the FCC doesn’t do so good!”

–Graham M. Reed