For a private law society

For a private law society by Sauvik Chakraverti
Posted: Tue, Jan 5 2010. 9:03 PM IST The Live Mint

The coercive power of law lies in the idea that it can be centrally made. We need to kill this notion

Friedrich Hayek pointed out the phenomenon of “fragmentation of knowledge” in markets—the butcher, the baker and the barber—showing that central economic planning can never work, because such knowledge can never be centralized. However, it is Hayek’s friend Bruno Leoni, the great Italian classical liberal, lawyer and legal philosopher, who provides us with the parallel insight: that this very same problem affects centralized lawmaking, which is democratic legislation, or “public law”. We do not study the works of Leoni only at our own peril, for when the law goes wrong, society cannot function as it should.

How is public law created? A description of a division bell at the House of Commons, the acknowledged “mother of all parliaments”, by Anthony Sampson in his Anatomy of Britain goes somewhat as follows: The MPs are all at the bars, drinking and talking, when the bell rings. They leave their drinks and rush to the doors of the House, where they are met by their party whips, who direct them which way to vote. They troop in and vote. They promptly troop out again, back to their drinks, which are kept lying exactly as and where they left them. Cheers!

The other method of arriving at law is through the decentralized actions of individuals in markets. In this method, each of the two persons in a dispute engages a private scholar in law to argue their respective cases before an impartial judge. These private scholars—lawyers—scour through the books for past decisions in similar cases. Here, the law is not “made”; it is “found”. The law always comes from the past. Very rarely does a judge set a “precedent” by which the law advances a small step.

However, under public law, all law is “new law”. Legislatures manufacture such spurious new laws every day. This is “democratic tyranny”—and it plays a crucial role in imposing not only socialism, but also bureaucratization, both inter-related phenomena. It is through coercive legislation that socialist governments attempt to direct all economic activity. It is “subordinate legislation” that empowers all the bureaus. This is how tyrannies are multiplied; how liberty is lost.

If history is to be our guide, then it must be concluded that neither in ancient Rome nor in “common law” England did centralized lawmaking play an important role. According to economic historian Sudha Shenoy, ordinary English people of the Middle Ages looked upon legislation as the king’s instrument, as an interference in their lives. For justice, they always turned to the common law, which was “found”: Stare decisis, as they say.

The great 13th century English judge Bracton writes that whereas on the continent they had written laws, the English never had them, preferring custom and tradition to written law—the law being “found”. Bracton, it is said, modelled himself after Ulpian, the great Roman jurist. Both were private scholars in law. In Rome, as in England, society lived in harmony under private law. None presumed to know how to make laws for all. Even Justinian’s Corpus was a compilation of old laws and decisions, including the opinions of private jurists such as Ulpian.

We all make private law. A tenancy agreement that is binding on the parties who sign it is an example of law that is privately made, as is a deed of sale. The world of private law is a world of property, contracts and torts. Indeed, as Professor Bruce Benson points out in his classic The Enterprise of Law, among the ancient Anglo-Saxon tribes there were no “crimes” except crimes against individuals, which were torts. Greedy Norman kings legislated “crimes against the king” in order to appropriate the fines established by the old tort laws. In the end, this is why we suffer under state police forces all over the world today. And victims are never compensated. Benson underlines the fact that tort laws are the oldest laws of the Anglo-Saxons. In India, we do not have them. But we have a state police. And all crimes are “crimes against the state”. Victims get nothing—see Bhopal. Or take the case of traffic accidents, or hooch tragedies, or building collapses. Further, property titles don’t work for a majority of the population. Contract enforcement is poor, too. We need to strengthen private law—not turn to the state for help.

What is public law meant for? The only purpose of democratic assemblies today is “running the government”. They control the budgets and the powers of the various departments of their government. The public law should only apply to these departments. It is precisely these which are “lawless” today, in the strict sense of the word. The best democratic society, then, is one in which there are clear and separate spheres of private law and public law. Civil society lives under private law; the constitutional government functions under public law.

Law is a very serious thing. It is the protection for every individual. Today, especially in socialist India, the law is but naked coercion, offering zero protection. At fault is the pernicious idea that law can be centrally made. Or, to put it another way, law is that which is “legally made”. Kill this idiotic idea—and we will not only be secure, but also free.

Sauvik Chakraverti is an author and columnist. He blogs at sauvik-antidote.blogspot.com Comments are welcome at theirview@livemint.com