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“The great aim of the struggle for liberty has been equality before the law.”
The term ‘rule of law,’ since reformulated by A.V. Dicey in the 19th century, has traditionally meant to include such notions as supremacy of standing law over arbitrary power, equality before the law (which applies also to government officials), and a binding constitutional framework. In the broader context of Hayek’s work in political philosophy, his idea of equality is meant to incorporate these notions. The following essay sketches out some highlights of the struggle for this ideal, and then address the role that equality before the lawand the rule of law more generallyperforms in allowing modern civilization to prosper.
In The Constitution of Liberty Hayek explains that only equality before the law, and not equality of outcomes, is consistent with a free society. Material inequality is in fact a necessary by-product of freedom. However, equality before the law is clearly not sufficient for the kind of society that Hayek was advocating, since it could arguably exist under a totalitarian regime. It must exist as part of the rule of law, or a “meta-legal doctrine or political ideal” that puts limitations on what laws ought to be.
The notion of equality before the law arose soon after government was established in its earliest form, for it only makes sense once people move out of family or small tribal communities into larger, impersonal societies. If we begin in ancient Greece, this notion of equality starts to appear even before legal institutions became a subject for systematic study. Aristotle spoke of the rule of laws instead of men, and Pericleswhom Hayek quotes approvinglythought this to be a distinguishing characteristic of Athens. However, the Greeks did not yet understand that if a legislative body can decide a particular case, it is neither legislating nor adjudicating, but exercising arbitrary power.
Nor was this fully understood by the Roman Republic, although as this was the beginning of law in its modern sense, some of its weaknesses might be forgiven. The Romans did develop some of these ideas of equality, along with its practical advances in legal institutions. The failure of Greek law, by contrast, was the lack of a competent tribunal to apply the private law to its citizens. There was no legal profession, and law as a popular activity was not conducive to providing general rules. These defects were partly remedied in Rome, and “[t]he result,” according to Zane, “was that among the Romans there was a rule of law.” Courts began the process of resolving particular cases according to general rules, and writers such as Cicero argued that not all enacted laws are necessarily just. Although Rome was a hierarchical society, Hayek admired the late republican period for its advances, until these were reversed during the Empire. The emperors of Rome decreed themselves to be above the law (something which would be reincarnated many times in European history), but even they felt the need to justify their power as coming from the will of the people.
The idea of the rule of law would survive howeverif a bit bloodiedthrough the Germanic kingdoms of the Dark Ages. In early medieval political theory, which was dominated by the Church, rebellion against the king was not permitted, but the idea of the king being bound by the law was seen throughout the period. The rule of law was emerging, and England took its role as the leader of this tradition. The Magna Carta was the first step in a process that would culminate in the Glorious Revolution nearly a half-millennium later. Of course even England did not realize the ideal of individual liberty during this long evolutionary period, but it was developing a legal tradition that would set it apart from the Continent.
Following Hayek, we can jump ahead in our story, as “individual liberty in modern times can hardly be traced back further than the England of the seventeenth century.” And as J.M. Kelly noted, “[Equality before the law] is a value which, in a Europe full of privilege, found a full expression only in the voice of the English revolution.” The ideas were heard most clearly from the Levellers during the English Civil Wars, and then from Locke, whose most influential works would come after the Glorious Revolution. The sole function of the government, according to Locke, was the protection of property in the broad sense, meaning ‘lives, liberties and estates.’ And even though he would endorse majority rule, he also argued that the legislature should not have arbitrary power. Also notable in this century was a conception of natural rights that focused on individuals rather than social duty, as well as a secular rather than theological foundation. Outside of England, for example, Pufendorf would anticipate Kant: “Let no one act towards another in such a way that the latter can justly complain that his equality of right has been violated.”
In the 18th century, we begin to see the split in intellectual traditions that Hayek often addressed. The rationalists, most notably in France, wanted to start anew and base everything on reason, while the thinkers of the Scottish Enlightenment (whom Hayek admired so much) did not, but instead wrote of ‘establishments which are indeed the result of human action but not the execution of human design.’ It was in fact the unintended consequences of the early rationalist view that led to setbacks for liberty, rather than a deliberate strategy advocating centralized power. During this time, the call for laws to be subject to reason was a reaction to the arbitrary rule and privileges of the elite, so the intentions of these writers and activists were consistent with what would become classical liberalism. Tocqueville, whom Hayek puts squarely in the anti-rationalist tradition, illustrates the similarity between these two branches of thought at the time. In summing up the theme of the Enlightenment writers, Tocqueville writes:
They all started with the principle that it was necessary to substitute simple and elementary rules, based on reason and natural law, for the complicated and traditional customs which regulated society in their time...The whole of the political philosophy of the eighteenth century is really comprised in that single notion.
It was only when the rationalist vision was brought to its logical conclusion in the French Revolution that it became antithetical to liberty. Edmund Burke would become a fierce critic of the Revolution and its intellectual foundations, and his claim for the superiority of organically grown systems over those designed in the name of reason would be repeated by Hayek.
The rationalist school of thought would continue to have great influence, and it led to the codification of laws in continental Europe and the reform movements from the 19th century to the present day. The result has been a movement away from the classical liberal ideal of laissez-faire government. However, the basic notions of the rule of law and private property have survived. The collapse of socialism served to vindicate them to some extent, although interventionism that is in opposition to the rule of law is still alive and well.
Finally, Hayek and others saw the early United States as taking over the tradition of individual liberty from England, as the colonists objected to the increasingly arbitrary power of the British Parliament. They saw the necessity of a written constitution to limit the power of any particular branch of government, and saw it also as laying down general principles to prevent arbitrary rule. It so happens that this attempt at division of powers has not succeeded, nor did the attempts to limit legislative power to strictly enumerated functions, but certainly the intentions of the Framers were in line with this classical liberal tradition. An important point is that despite appearances, the American constitution was not a product of the rationalist ‘French tradition,’ as the government emerged from general principles and its structure even a few years later could not have been anticipated by its framers. While there are many examples when the legislature and courts have ignored these general principles, there survives something of a consensus that prevented an even greater encroachment of liberty. The U.S. experience has been another in the long line of imperfect experiments in forming a free society.
The Functions of Liberty
According to Noel B. Reynolds, “The rule of law is a solution to a problem, and as the classical liberal tradition has always recognized, the problem is tyranny.” Hayek would hardly disagree, but incorporating his insights on how markets work, he saw the fundamental problem solved by a free society to be the use of dispersed knowledge that can never be known to a centralized body. Giving people equal opportunities to use their knowledge for their own ends not only fulfills the Kantian maxim of respecting the autonomy of the individual, but is how society adapts to new conditions and discovers new ways to live. As Hayek put it, “a condition of liberty in which all are allowed to use their knowledge for their purposes, restrained only by rules of just conduct of universal application, is likely to produce for them the best conditions for achieving their aims.”
This may seem uncontroversial, but the opposing mindset tends to ask the question: Why shouldn’t the government attempt to use our inherited knowledge of society and scientific method to improve on institutions that have evolved without conscious direction? The fact that many people, and especially our political leaders, would surely think this to be a reasonable goal shows that Hayek was not merely arguing against a straw man, nor was his analysis only appropriate for central planning of the early 20th century variety.
It should be pointed out that the formula ‘equality before the law’ is not a simple guide to policy, nor is anything like ‘laissez-faire’ or ‘respecting private property.’ So the question is how to define the private sphere of action in which individuals can use their own knowledge for their own ends. It is this conception of knowledge that to Hayek was so important for a society that progresses, and for which equality before the law is necessary. In most of his writings, Hayek was more concerned with the process in which this these limits were decided, rather than laying out the proper functions of government in any detail. This is why he often advocated the adjudication by courts as opposed to legislation; the former is more adaptable, more likely to incorporate local knowledge of the parties involved, and less likely to result in restrictions on parties not involved in a particular dispute.
Buchanan takes a similar approach:
Each man counts for one, and that is that...Once this basic premise is fully acknowledged...[a] criterion for ‘betterness’ is suggested. A situation is judged ‘good’ to the extent that it allows individuals to get what they want to get, whatsoever this might be, limited only by the principle of mutual agreement. Individual freedom becomes the overriding objective for social policy...
The alternative to this is to use the subjective valuationsusually in the guise of objectivityof some particular person or group. Yet Buchanan also argued that anarchy was not practicable. So for him the question was also how to define the limits on freedom, and he also places emphasis on the (individualist) process by which this is determined, rather than specific outcomes.
The rules defining individuals’ protected domain must solve certain problems that are inherent in a modern society. Besides the division of knowledge, there is the tendency for people to favor their own interests, and also the problem of power, or enforcement abuse. The latter refers to problems inherent in allowing a monopoly on coercionin other words, the erroneous or improper use of force. The rule of law is the most effective way yet discovered to deal with all of these issues. A proper conception of this ideal leads to a process for delimiting private property and enforcing contracts, which allows individual knowledge to be used effectively and for disparate aims to be reconciled. In particular, the process consistent with this is an evolutionary growth of law guided by general principles, hence the emphasis on adjudication by courts.
To take a more concrete example, consider the provision of public goods. It is often claimed that government is necessary to overcome the free-rider problem. To argue this, however, it is not only necessary to show that free-riding is sub-optimal, but also that taxation and government provision is an improvement. This is not obvious once you consider the knowledge and interest problemsthat is, in not using local and individual knowledge that may be able to provide this good, and ignoring the incentives faced by government officials. Private property and freedom of contract, which is part of the framework that naturally evolves from the conception of the rule of law, do provide incentives (however imperfect) to solve the free-rider problem.
It is important to keep in mind that even Hayek’s richer development of the notion of the rule of law may not be enough to guarantee a liberal society. The conditions of generality and abstractness of law that he emphasized can conceivably occur in a non-liberal regime, and Hayek was led to make concessions to government intervention that would likely be rejected by many other classical liberals. This is part of the reason to emphasize the historical development of the rule of law, as Hayek was always aware of the evolutionary nature of changes in society. This is also why Barnett, who argues for the classical liberal rule of law along with a polycentric legal order (i.e. one without a coercive monopoly), points out that whether this order will be liberal will depend on how it comes abouta violent overthrow is likely to have different consequences than a peaceful reform movement.
No one is suggesting that issues of path dependence, evolved cultural differences, and entrenched interest groups are problems to be ignored when it comes to reform. The failed attempts to transplant Western institutions to other countries make that abundantly clear. But of the ways that people have tried to organize themselves in society, the most successful have followed, at least in part, this classical liberal tradition. How these foundations can be improved even further, and how to implement and maintain them in different societies, are questions that are still seeking answers.
Just as private property benefits even those who don’t own any, we might also say that equality before the law also benefits those who never need to exercise it, or are blissfully unaware of it. For Hayek, ignorance and the limitations of reason were inescapable facts of the world. But he put great importance on the battle of ideas, and to understand liberty requires knowledge of the rule of law.
 F.A. Hayek, The Constitution of Liberty (Chicago: University of Chicago Press, 1960), p. 85.
 See Todd Zywicki, “The Rule of Law, Freedom, and Prosperity,” Supreme Court Economic Review, Vol. 10, 2003, pp. 1-26.
 Even more insightful is Hayek’s explanation of how inequality is necessary for experimentation and progress. See Hayek, supra note 1, at pp. 42-49.
 See Ibid., at 205-210 and F.A. Hayek, The Road to Serfdom (Chicago: University of Chicago Press, 1972 ), ch. 6.
 As Zane put it, “In order to insure equal laws it was found, long ages after the Greeks and Romans, that the judicial power must be separately and independently exercised.” John Maxcy Zane, The Story of Law, 2nd. ed (Indianopolis: Liberty Fund, 1998), p. 105.
 Ibid., p. 183.
 Hayek, supra note 1, at 162.
 J.M. Kelly, A Short History of Western Legal Theory, (Oxford: Clarendon Press, 1992), p. 236.
 Quoted in Ibid., p. 226. For Hayek’s emphasis on Kant’s importance, see Chandran Kukathas, Hayek and Modern Liberalism, (Oxford: Clarendon Press, 1989) and Hayek supra note 1, at pp. 196-197.
 See in particular, “Individualism: True and False,” in F.A. Hayek, Individualism and Economic Order, (Chicago: The University of Chicago Press, 1948).
 Adam Ferguson, quoted by Hayek supra note 1, at p. 57.
 Quoted in Kelly, supra note 9, at p. 251.
 F.A. Hayek, Law, Legislation and Liberty, Vol. 1: Rules and Order, (Chicago: University of Chicago Press, 1973), p. 1. See also James Buchanan, The Limits of Liberty: Between Anarchy and Leviathan, (Indianapolis: Liberty Fund, 2000 ), p. 19. Hayek’s point of course is not that all checks have been eliminated, but the conclusion hardly seems as controversial as it might at first glace, given a casual investigation of Congressional acts or popular beliefs about states’ rights vs. centralized power.
 Hayek supra note 1, at pp. 183-84.
 Hayek writes approvingly of the Supreme Court’s rejection of FDR’s attempt at accumulating discretionary powers for specific ends. See Ibid., pp. 190-91.
 Quoted in Zywicki, supra note 2, at p.5.
 For Hayek’s classic exposition of the role of knowledge in the price system, see “The Use of Knowledge in Society,” in Hayek, supra note 11.
 Hayek supra note 13, at p. 55.
 Bruno Leoni made similar points in arguing against legislation. See Bruno Leoni, Freedom and the Law, (Indianapolis: Liberty Fund, 1991), pp. 6, 22.
 Buchanan, supra note 13, at p. 4.
 See Randy Barnett, The Structure of Liberty: Justice and the Rule of Law (Oxford: Clarendon Press, 1998), and Hayek supra note 13, at p. 107.
 For the preceding discussion, see Barnett, supra note 21, at pp. 162 ff. The point is similar to Demsetz’s distinction betweeen the ‘nirvana approach’ and the ‘comparative institution approach.’ See Harold Demsetz, “Information and Efficiency: Another Viewpoint,” J. Law Econ., Vol. 12, No. 1 (Apr., 1969), pp. 1-22. For some classic examples of market solutions for provision of public goods and solving externality problems, see Ronald Coase, “The Lighthouse in Economics,” J. Law Econ., Vol. 17, No. 2 (Oct., 1974), pp. 357-76, and Steven N S Cheung, “The Fable of the Bees: An Economic Investigation”, J. Law Econ., Vol. 16, No. 1 (Apr., 1973), pp. 11-33.
 For some of Hayek’s (sympathetic) critics on this point, see Kukathas, supra note 10, and Norman Barry, “The Tradition of Spontaneous Order”, Literature of Liberty, Vol. V, No. 2 (Summer 1982), pp. 7-58. One example of Hayek’s controversial policy positions is his view on compulsory military service; see Hayek supra note 1, at p. 143.
 As a response to this general line of criticism, Barnett argues throughout his book that the formal requirements of the rule of the law do place limits on substance.
 For path dependence and the role of institutions, see Douglass North, Institutions, Institutional Change, and Economic Performance, (Cambridge: Cambridge University Press, 1990), esp. ch. 12.
 See Hayek supra note 13, at p. 121.