Common Law Liberalism: A New Theory of the Libertarian Society by John Hasnas. Oxford University Press 2024. 328pp.
John Hasnas, who teaches law and philosophy at Georgetown University, has written one of the most valuable books about libertarian theory that has appeared in several decades. Its principal value is that, although Hasnas has not been influenced very much by Ludwig von Mises and Murray Rothbard, he arrives at many of their insights in his own way, often adding illuminating details. In what follows, I’ll try to indicate a few of these.
Hasnas argues that mainstream neoclassical economists who are quick to call for the state to “fix” alleged market inefficiencies rely on a false dichotomy. Their contention is that the market works fine if two people engaged in exchange bear all the costs of their actions. In that case, both parties benefit; each is better off by his own lights. Sometimes, though, economic actors can pass some of the costs of their action onto others; a polluter might not care that his production emits soot near his factory, as he does not live in the neighborhood. In cases such as this, it is alleged, the state must step in to require people to “internalize their externalities.” In that case, each person bears the costs of his economic actions, and there is no gap between individual benefit and “social benefit.”
Economists who argue in this way are ignoring “the gorilla in the room.” Hasnas refers here to a classic experiment in which those who were watching a video of people passing a basketball did not notice that someone in a gorilla costume had entered the video. The people had been asked to count the number of times the ball was exchanged, losing sight of what was in front of their eyes.
The gorilla in the room that those who demand the state step in ignore is that our ancestors devised rules within which market activity could take place, and these rules were “the products of human action but not of human design.” In small groups living together, it is essential that resort to arbitrary violence be avoided. People will work out arrangements that vary according to custom but in all cases aim to deflect violent conflict, which disrupts everyone’s plans. In brief, the “market-failure economists” do not take account of the existence of civil society but wrongly assume that there is nothing intermediate between “self-interested maximizers” and the state.
If it is countered to this that civil society is the creation of the state, Hasnas has a clever retort. The state extracts money from people in taxes and thus could not exist unless people had resources to give it.
The system Hasnas has in mind is embodied in the common law of England, which grew “from precedent to precedent,” after the collapse of the Roman empire. Here the dominant aim of the law was to restore an injured person to a condition as close as possible to his earlier condition. Blood feuds were inimical to group survival and were replaced by a system of fines, setting forward the compensation that would be exacted for each type of wrong. Hasnas notes a system of this sort is not a mere theoretical construct but existed in Ireland for one thousand years. Those who refused to accept the ruling of a recognized judge, perhaps after one of two appeals, would be treated as outlaws in a society in which isolation meant a sentence of death. Those who were willing to accept the court’s judgment but couldn’t pay the fines could be compelled to work for their victims until the fine was paid off. It would be to the advantage of victims to treat these temporary slaves well, so that they could get their compensation as soon as possible. Readers of Murray Rothbard on the common law will not find any of this surprising.
It might be objected that the fines were, in some cases, morally unfair. For example, injuring a wealthy person would require greater compensation than injuring a slave, but in the circumstances, perfect justice cannot be achieved; and major inequities would be resolved by a trial-and-error process.
Yet another objection is that rich people could do as they liked to the poor, because they could easily pay the fines. Hasnas responds that this situation offers an opportunity for alert entrepreneurs. They can buy up large batches of these claims and initiate class action suits. Competition among the entrepreneurs would ensure that they would not gouge their clients out of all the benefits of compensation.
Hasnas proceeds in a painstaking way. He does not claim to have shown that civil society works better than the state in providing for social order (though he clearly thinks that it does) but only that this alternative to the state ought to be considered. If this is done, there is every reason to think that the state is the inferior option. Hasnas emphasizes that legislative representatives do not have much incentive to pay attention to the wishes of their constituents. The expenses of running for office are so great that it would be difficult for a competitor in a modern state like America to be able to raise the funds for a successful campaign. (I wonder whether Hasnas makes too much of this point. Wouldn’t a representative who didn’t give the public what it wanted for a sufficient length of time be eventually removed from office?)
Indeed, Hasnas goes further. He thinks that, in some cases, the state might be able to cope with certain social problems better than people in civil society can do and he suggests a way in which the state could supervise the decisions of private arbiters.
Readers will not fail to have noticed that Hasnas has assumed that the socially-evolved rules of society are “better” overall in the results they achieve, even if unfair. Is he wrongly assuming that the spontaneous outcome of a decision procedure must be morally acceptable? There are, after all, spontaneous processes that make things worse. But Hasnas stands acquitted of this charge.
People do not agree about what is the correct moral system, and there is little chance that a consensus can be achieved. What people can agree on, though, is that peace is an instrumental goal. Regardless of what you want, you must value social peace, and a good that practically everybody accepts as an instrumental good counts as an objective good, if anything does.
Mises saw matters in exactly this way. He says,
Society is not merely interaction. There is interaction--reciprocal influence--between all parts of the universe: between the wolf and the sheep he devours; between the germ and the man it kills; between the falling stone and the thing upon which it falls. Society, on the other hand, always involves men acting in cooperation with other men in order to let all participants attain their own ends.
