The Nature of Law

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Outline (all four parts)
Part I: Law and Order Without Government - Introduction - Varieties of Law - Public Goods vs. Public Choice
Part II: The Three Functions of Law - Why Three Functions? - Should Law Be Monopolized? - Locke's Case for Monocentric Law - The Lockean Case Against Locke
Part III: Law vs. Legislation - Socrates on Law - Two Senses of Law - Natural Law and Human Law - Natural Law and Customary Law - Law vs. Legislation: Documentary Evidence
Part IV: The Basis of Natural Law - Is There Room for Natural Law?
- Who Has the Burden of Proof?
- Objection One: Natural Law Serves No Useful Purpose
- Objection Two: There Couldn't Be Such a Thing as Natural Law
- Objection Three: Even If There Were a Natural Law,
It Would Be Unknowable - Objection Four: Evolutionary Explanations Make Natural Law Obsolete - Notes - John Locke on Natural Law
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Part I: Law and Order Without Government
Most people take the terms order, law, and government to be coextensive. Without government, there would be no law. Without law, there would be no social order. In fact, however, the three concepts are distinct.
Law may be defined as that institution or set of institutions in a given society that adjudicates conflicting claims and secures compliance in a formal, systematic, and orderly way. Law thus defined is one species of social order, but not the whole of it; there are also less formal mechanisms for maintaining social order. Indeed, the vast bulk of cooperation in society in fact depends on informal order rather than on law.
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Varieties of Law
Law may be subdivided into voluntary and coercive law, depending on the means whereby compliance is secured. Voluntary law, as the name implies, relies solely on voluntary means, such as social pressure, boycotts, and the like, in order to secure compliance with the results of adjudication. Coercive law, on the other hand, relies at least in part on force and threats of force.
Coercive law in turn may be further subdivided into monocentric and polycentric coercive law. Under monocentric coercive law, there is a single institution that claims, and in large part achieves, a coercive monopoly on the use of force to adjudicate claims and secure compliance in a given territorial area. This institution is called a government, and everyone other than the government and its agents is forbidden to adjudicate by force. Under polycentric law, by contrast, no one agency claims or possesses such a monopoly.
An anarchist, then, is not someone who rejects order or law or even coercive law, but rather one who rejects government. The anarchist argues that informal order, voluntary law, and polycentric coercive law are sufficient to maintain social cooperation; the advocate of government argues that monocentric coercive law is needed in addition, and indeed typically maintains that the amount of social order that can be maintained through non-governmental sources alone is quite small.
Yet a great deal of social order is maintained through informal means alone. In Order Without Law: How Neighbors Settle Disputes, economist Robert Ellickson has shown how disputes over land use are frequently resolved informally, without recourse to official adjudication, and certainly without recourse to legal statutes (the relevant statutes being generally unknown to the disputing parties in any case). More broadly, Robert Axelrod in The Evolution of Cooperation has explained why cooperation is generally a successful strategy and thus why it tends to be "selected for" by the market, as cooperative relationships emerge and grow spontaneously without being directed by any authority.
When there is a need for the more formal mechanism of law, this law may be voluntary rather than coercive. An example of voluntary law is the Law Merchant, a system of commercial law that emerged in the late Middle Ages in response to the need for a common set of standards to govern international trade. The merchants, fed up with the excessive rigidity of governmental laws regulating commerce, and frustrated by the lack of uniformity among the commercial codes of different nations, simply formed their own Europe-wide system of courts and legal codes. For enforcement, the Law Merchant relied not on state-imposed penalties but on credit reports; those who refused to abide by the system's rules and decisions would have a hard time finding other merchants willing to deal with them. (The case of the Law Merchant shows that systems of private law need not depend on kinship or other local ties for their success.)
When law is coercive, it need not be monocentric. For example, under early Anglo-Saxon law, Kings made foreign policy only; domestic policy was left to local courts called Moots, which simply enforced agreed-upon local customs. Neither Kings nor Moots had any power of domestic enforcement; it was up to individuals to enforce the law by private coercion. Such individuals generally formed associations called borhs, pledging security for one another's reliability; even here, much enforcement was through social sanction (being denied membership in a borh) rather than coercion.
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Public Goods vs. Public Choice
Thus private law, whether strictly voluntary or also coercive, has proven itself historically as an effective provider of social order. But the anarchist's point is not simply that monocentric law is not necessary in order to maintain social order, but more fundamentally that introducing monocentrism into the picture actually decreases social order.
Advocates of government assume that non-governmental mechanisms for achieving order will be ineffective because of public-goods problems — specifically, the problem that unless people are forced to cooperate, each person will have an incentive to free-ride on the cooperation of others without cooperating himself. This argument is often taken to show the necessity of government.
But if market solutions are beset by perverse incentives caused by public-goods problems, governmental solutions are likewise beset by perverse incentives caused by public-choice problems: monopolies that collect revenues by force are not accountable to their clients, and state officials need not bear the financial cost of their decisions; inefficiency is the inevitable result. Since both systems involve perverse incentives, the important question is: which system is better at overcoming such incentives?
And here the answer is clear. Under a market system, entrepreneurs stand to reap financial rewards by figuring out ways to supply "public" goods while excluding free riders. Thus the system that creates the perverse incentives also creates the very incentives to overcome them. That's why every so-called "public" good has been supplied privately at one time or another in history. Governments, by contrast, must by definition forbid competition. Thus governments, unlike markets, have no way of solving their incentive problems. We would be well-advised, then, to buy our law on the market rather than from the state.
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