This is the final part of a four-part series presenting a praxeological theory of the origin and character of law. Parts one, two and three.

In a very primitive society, the situation where one person is significantly stronger than another creates the potential for bullying. The bully enjoys a surfeit of rights vis-à-vis others weaker than himself. Simple verbal dispute in a primitive society does not provide any means to solve this problem. Other, more sophisticated social structures – such as the division-of-labor and specialization in the production of security – must emerge before the bully problem can be solved.

However, it is important to note that the bully problem is not solved by government, contrary to common belief. Hoppe ridicules the State:

Moreover, as ultimate judge the state is also a monopolist of taxation, i.e., it can unilaterally, without the consent of everyone affected, determine the price that its subjects must pay for the state’s provision of (perverted) law. However, a tax-funded life-and-property protection agency is a contradiction in terms: an expropriating property protector. [Emphasis added]

Hans Hoppe – State or Private Law Society

The State can just as well be described as a “bullying bully-stopper”, an equally absurd notion. The bully never actually engages in dispute-resolution because he does not need to. He simply imposes a condition that Mises termed autistic exchange on the terms of settlement:

Action always is essentially the exchange of one state of affairs for another state of affairs. If the action is performed by an individual without any reference to cooperation with other individuals, we may call it autistic exchange. An instance: the isolated hunter who kills an animal for his own consumption; he exchanges leisure and a cartridge for food.

…

Where there is no intentional mutuality, where an action is performed without any design of being benefitted by a concomitant action of other men, there is no interpersonal exchange, but autistic exchange. It does not matter whether the autistic action is beneficial or detrimental to other people or whether it does not concern them at all. A genius may perform his task for himself, not for the crowd; however, he is an outstanding benefactor of mankind. The robber kills the victim for his own advantage; the murdered man is by no means a partner in this crime, he is merely its object; what is done, is done against him.

Ludwig von Mises – Human Action

The position of the State as the universal bully is precisely why I contend that statutory law is not law at all. Rather than allowing people to choose their own terms of dispute settlement, there is a universal generator of dispute-settlements (the State’s courts) which all disputants are compelled to patronize. The opinion of the individuals involved in the dispute regarding the quality and long-term workability of the imposed terms of settlement (judgment/decree) is mostly or completely irrelevant to the monopoly courts.

Another Approach to Property Rights

Although bullies get their way, nobody believes (except the bullies themselves) that it is right that bullies should get their way. That is, nobody believes might makes right. The bully system of “law” is as an example of double-standards. There is one way for the bully and another way for everybody else.

The Austrian account of property rights – as exemplified in the writings of Hoppe or Rothbard – begins with two basic principles. The first principle is that of self-ownership. The second principle is that of original appropriation or homesteading. A corollary to these two principles is voluntary exchange.

The unspoken assumption of the homesteading principle is that, absent some reason why something should belong to one person rather than another, no one has any better claim to it than anybody else. Who owns the moon? Who owns Mars? There is a slice of the Antarctic continent, called Marie Byrd Land, which is not claimed by any sovereign nation. Who owns it? I can give no good reason why I have rights to exclusive use of some portion of the Moon or a portion of Marie Byrd Land. So, no portion of the moon or Marie Byrd Land is my property. These questions open up the larger question of how any physical thing came to be owned in the first place.

To grant some individuals a priori primacy in property claims is equivalent to the bully system of law – it is the grant of privilege or double-standards. I term this dual-law. The choice is between some version of homesteading on the one hand or dual-law on the other hand. A better reason must be given for why someone owns something than “because he’s stronger than everybody else” or else we have acquiesced to a social order where property rights are assigned by a system of privilege, that is, dual-law.

But can we deduce a perfect system of property rules (rules for the resolution of property disputes) solely by means of reflection, that is, from the armchair? I think the answer is no unless we mean meta-rules that are completely devoid of normative content, such as the rule that “some kind of reason must be given why a thing belongs to one person rather than another because this is constitutive of what it means to have a property dispute.” Normative laws, on the other hand, regarding the resolution of property disputes (that is, property rights) are no different than any other kind of law and emerge in exactly the same way – through a process of discovery by trial-and-error.

In fact, if we say that the rules of property can be deduced solely by means of reflection, then we are doomed to Marxism. The reason is simple – since no one has any better claim to anything than anybody else, nobody owns or can come to own anything. The homesteading principle would have to be dismissed as a piece of capitalist propaganda designed to lure the masses into accepting their own enslavement in a system of privilege through “property rights.”

But the fact of the matter is that the practice of owning things, of homesteading them, and so on is an integral part of human action. It is a brute fact of human action, and the disputes that arise in the process are also brute facts of human action. And the means which have been successful in settling these disputes in the past – property law – are also brute facts of human action. Hence, property rights emerge from the resolution of disputes about who owns what and the normative content of property rights is filled out by the same process of discovery through trial-and-error as any other law.

The Utilitarian Approach to Law

Utilitarianism is another approach to discussing law.

A … reason to use practical rather than ethical arguments is that I know a great deal more about what works than about what is just… I think more is known about the consequences of institutions than about what is or is not just–that economics is a much better developed science than moral philosophy.

David Friedman – Machinery of Freedom

Friedman is correct as far as it goes – economics is in better shape than moral philosophy. However, the obvious question left unaddressed is why. Why is moral philosophy in such bad shape? Because the means by which social norms of any more consequence than please-and-thank-you are developed has been stunted. Specifically, we live in a world of statutory law. Law is centrally planned and the consequences to the quality of legal norms are no different than the consequences of central economic planning on prices. Rationality in law is impossible because we have removed the feedback which used to inform the law: the success or failure of a variety of terms of settlement in preventing further conflict. Law is no longer a process of trial-and-error, it is almost completely a planned process and we are all reduced to “groping about in the dark” on questions of law which, in turn, stunts moral philosophy.

As Bastiat notes, we intuitively expect the law to conform to our moral notions. A world in which rape is legal and giving to the poor is illegal would seem terrible and alien to any normal person. The line between law and moral norms is fuzzy (when do you scold someone versus sue them?) But they are only different in degree, not in kind. It is my view that the stagnation of moral philosophy vis-à-vis other disciplines is correlative with the stagnation in law itself. Without the crucial process of discovery through trial-and-error, we have no way to know what should be legal or illegal. That is, we have nothing better than force of opinion on which to argue what is right and what is wrong.

Conclusion

In part 1 of this series, I gave the following definition: Law is a body of terms of settlement of disputes that usually succeed over time in preventing further open conflict which has been discovered through a process of trial and error. Statutory law (consisting in judicial, legislative or tyrannical dictates or bureaucratic regulations), by contrast, is centrally-planned law and suffers from a general calculation problem similar to the economic calculation problem that Mises expounded for centrally-planned economies.

Law informs the individual’s calculation of the tradeoffs regarding the risk of conflict with others versus the private benefits of a given course of action. Law is circularly related with morality and is part of the mechanism by which social norms are formed. Thus, the stagnation in modern law – a result of the stunting of the process of legal discovery through trial-and-error by statutory law – is correlative with the stagnation in moral philosophy.

A revolution in ideas about law is needed. Nevertheless, this revolution must acknowledge the crucial importance of the status quo in law – in however bad repair modern law may be, it is still all we have. And it must also acknowledge the crucial importance of rebooting the process of trial-and-error in the resolution of disputes (that is, curtailing the making and enforcement of statutory law) in the lives of individuals. Some specific, concrete steps that can be taken toward this end include:

Increasing reliance on arbitration instead of government courts (this requires the government courts to acknowledge the validity of arbitrated disputes).

Eliminating all statutory regulation of entrance into the legal profession by anything other than private reputation systems.

Reducing the subsidy of public prosecutors and investigators.

Admitting change-of-venue to jurisdictions outside of the national courts hierarchy. In other words, permitting cases to be moved to other national courts or private systems of arbitration, particularly in cases of conflict-of-interest between the venue – the government’s court – and the defendant, such as defending against legal action by the tax revenuer.

The moral confusion of society will continue to grow worse until the process of discovery by trial-and-error by which bad social norms can be selected out and good social norms can be preserved is restarted.

Clayton –