Article initialement publié par l'insitut Hayek
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The out-sourcing of legislation
Giovanni Birindelli (Institut Hayek) April 2006
The Hayek-Leoni framework, which could be seen as an intermediate step to common-law for countries having a normative system of law, is definitely more easily "attainable" than a fully common-law system.
Introduction
"(In modern times) law, which in the earlier sense of nomos was meant to be a barrier to all power, becomes instead an instrument for the use of power" (F. A. Hayek, Law, Legislation and Liberty, 1982 Vol. 1 (1973), p. 91).
This drift of the concept of law, and consequently of liberty, seems today irresistible and irreversible, especially in countries based on a normative system of law.
In this article I suggest a speculative idea to invert this trend within the existing institutional framework of countries based on a normative system of law.
The aim of this proposal is to create the conditions for the spontaneous attainment of what I call the Hayek-Leoni framework. Therefore this proposal should be considered as a strategy for the attainment of Hayek's constitutional proposal integrated with Leoni's method.
The medium-term objective: the Hayek-Leoni framework
In his proposal, Hayek suggested a strong separation of powers between a legislative assembly (having the exclusive power to discover the laws, that is the abstract rules which govern a country, and no power in the "administration" of the state) and a government assembly (which would control the government in the administration of the state according to rules which it would have no power to interfere with).
Bruno Leoni, in his theory of law, emphasised the fact that the law is mainly a private matter which should be left to the spontaneous interactions of the individuals to identify. He compared law with the market: as the market price is in fact the effective result of the encounter of different demands (supply is itself a demand for a price), the law is the result of the encounter of different "claims". He did not deny the fact that there are some particular instances where it is necessary to formalize rules through the majority vote, but this should be the exception rather than the rule, since by definition the majority rule goes against minorities. Therefore, Leoni said, it should be demonstrated the necessity of formally approving a law before doing it. The principles on which this demonstration should be based on ("Leoni's method") are explained in Freedom and the Law, 1961.
A combination of these two approaches could be Hayek's institutional framework where the legislative assembly has two powers, namely: a) the power to decide which matters require the formal approval of laws according to Leoni's method and b) the "discovery" and the formal approval of these laws by majority vote. We could call this the "Hayek-Leoni framework".
The Hayek proposal (and therefore even more the "Hayek-Leoni framework") would require today's political parties to deprive themselves of a considerable part of their power: it is not clear to me which are the spontaneous forces that may induce a qualified majority to change the constitution of the country and its entire institutional framework in order to deprive itself of a considerable part of its power.
We Italians are rightly well known for the art of "arrangiarsi", that is the art of finding improvised, second-best solutions in order to bypass a problem. This paper illustrates a proposal for one of these.
The idea
In order to present the basic principle of this strategic approach, I will assume that, in the elections of an imaginary country, there is a coalition competing for power having a liberal approach.
This strategic approach is based on the idea of making legislation work against a part of itself.
Let us consider one country in the period of general elections (say Italy) and let us assume that there are two coalitions competing for power: coalition I ("I" for "interest") and coalition "L" ("L" for "law", or "liberal").
Coalition "I" would compete for power by presenting a program of what it intends to "do" in order to promote particular interests. Therefore, in the case of the last Italian elections, for example, it could be any of the two competing coalitions: let us assume coalition "I" is Prodi's coalition promising to increase the hereditary taxes on the rich and, in order to protect the interests of those already employed against the interests of the unemployed, to eliminate the new "Biagi-law" which increases job-flexibility.
Coalition "L" would not present a program, but instead two documents: Document "A" would illustrate a list of semi-abstract principles the coalition promises to defend (we will come back to the nature of this "semi-abstractness" later), together with their interpretation; Document "B" would present a list of highly qualified philosophers of law who would form a team of external, private consultants. This team, which helped Coalition L in the drafting of Document A, could be formed (actually, as we shall see later, it would be better if it was formed) by international, say EU, members.
The message Coalition L would give the electors would be more or less the following: "Document A illustrates the abstract principles we believe in and which we promise to defend. Any individual (person or organization) who, on the grounds of a real situation, feels that an existing law regulating that particular situation goes against any of these principles, can submit his motives, in a pre-defined structured way and through a professional, to the team of external consultants shown in Document B who a) will filter and group the demands according to priority b) will analyse and discuss the issues submitted on the grounds of the abstract principles and their interpretation contained in Document A.
"In particular, the team of external consultants will investigate: i) if it is proved that the law in question needs to exist according to Leoni's method and ii) in case, if it violates any of the principles contained in Document A c) in positive cases, will publish some recommendations for the legislator (which could be for instance the elimination/modification of that specific law, or of the parts of it which they consider being in contrast with the principles of Document A).
"After our own brief counter-examination, we commit ourselves to start a process for the implementation of the recommendations agreed upon. This process may be gradual or immediate according to the characteristics of the situation".
If Coalition L had a liberal approach, it would be very likely that the progressiveness of taxes, for example, would go against its basic principles: in this case, to prove it, it would be sufficient to copy and paste Pascal Salin's "L'arbitraire fiscal", 1996). But, as prof. Salin himself suggests, the abolition of progressiveness cannot be immediate but gradual and continuous.
Advantages
At first sight, it may seem absurd that a "private" team of philosophical "consultants", who do not directly represent any citizen, and a considerable part of which comes from countries different from the country whose laws they advice to change, have a role which seems to be more similar to that of a constitutional court than to a consultant.
At a closer look, however, things are not like this. Law is intermediate between a "measure" and a constitutional principle, especially in terms of abstractness and change time.
In terms of abstractness, a measure has no level of abstractness at all, it is just a command for the attainment of a specific purpose. Its only link with abstractness is that it should not be allowed to violate any abstract principle regulating it. On the other hand, a constitutional principle has the maximum level of abstractness, as it usually describes a "fundamental principle" which identifies the greatest number of, if not all, the citizens (however, this is not the case for the Italian constitution which, for example, contains a non-abstract principle saying that every citizen is "entitled" to a job, which is contradicted by a truly abstract principle, still included in the same constitution, saying that every citizen is equal before the law).
Therefore, in terms of change time, the time required to "make" or change a measure is immediate, while the constitution should change, if ever, only in the longest time.
The law is therefore the fundamental intermediate link between these two opposites, it is the rule which has a sufficient level of abstractness to be general (and therefore limited in number and knowable, or better felt, by any citizen) but it still refers (again, in an abstract way) to the issues it regulates. Therefore its change time will also be intermediate between the "measure" and the constitutional principle. This is one of the most important characteristics of the law: only the law can adapt slowly but continuously the regulation of a world in continuous change. A measure cannot because its lack of abstractness prevents it from regulating, it allows it only to command. A constitutional principle cannot because its absolute level of abstractness is too high (and, in addition to this sufficient reason, also because this level of abstractness would prevent the constitution from changing at a pace similar to that of reality).
Going back to the opening quotation from Hayek, today, especially in normative systems, the law has become something very similar to a "measure": it is "made" on the moment by the majority of the day in order to protect particular interests of one part or the other: the particular has replaced the abstract. Therefore we could say that that fundamental intermediate link between the state conceived as an organization and the state conceived as a set of fundamental principles, that is the state conceived as a spontaneous order of (semi-)abstract rules, in many instances does not exist anymore. This may perhaps contribute to explain the drift of liberty in some countries.
Therefore the first advantage of the proposed strategy is to use legislation against itself by gradually adding elements of semi-abstractness into the immense space left void by the law. This addition would be semi-spontaneous as, on the one hand, it would arise from citizens' requests made on the grounds of particular situations (an artificial in-vitro reconstruction of one of the advantages of a common-law system); on the other hand, for practical reasons (and this is in fact a drawback), it would be semi-arbitrary because the requests would be filtrated and prioritized with a certain degree of arbitrariness by the team of philosophical consultants.
A second advantage of this strategy is its relying on spontaneous forces within the existing institutional framework. On the one hand, since the elected members of parliament would be still those who formally "make" and "delete" laws in parliament (and since nothing prevents them from asking for advice), the proposed strategy adapts itself to the existing institutions of normative systems. On the other hand, however, Coalition L's legislation activity would be based on the spontaneous initiative of individuals who, moved by their own particular interests, and by that only, are willing to sustain some costs (we will come back to this later) to formulate and submit (assisted by a professional) the abstract reasons for which an existing law goes against the semi-abstract principles declared by the coalition. In other words, it could be a legal application of Adam Smith's invisible hand principle: by acting for its own interest, and for that only, every citizen may have the opportunity to use its own specific knowledge to act for the general interest without even realizing it or caring.
A third advantage would be the artificial, though only partial, division of powers between a "separate" and "informal" legislative assembly and a "formal" government assembly. In other words: why is it necessary a separate team of consultants to do this job? Why could not the elected members of parliament do it? because the consultants would not have the power to pass any "measure", and therefore they would not have either the power or the incentive to protect particular interests. It is true that they could be corrupted by vested interests but no more so than actual members of parliament could (and without their immunity) and, above all, their advice has to be re-examined by the coalition, who can refuse to approve it if it feels that it is contrary to the principles of Document A which it contributed to draft.
It is clear that well devised "Chinese walls" have to exist between Coalition L and the consultant's team.
A fourth advantage, partially related to this one, is given by the international (initially it could be assumed European) composition of the members of this private team of high-profile consultants: it would be a first, very small step towards a European political integration not conceived as a design made by some enlightened bureaucrats but as the result of a spontaneous order of rules based on abstract common principles. (Incidentally, it may be more difficult to corrupt a team of individuals coming from different countries than a team of individuals coming all from the same country).
A fifth advantage is that, if it worked (admittedly a big "if"), in the long run this strategy could lead spontaneously to the Hayek-Leoni institutional framework, which would be nothing else than the institutionalisation and perfection of a successful practice or, in other words, the acceptance of reality and of the advantages that could come from not hiding it. To understand this point, it may be useful to see what is happening in the US regarding the Kyoto protocol: the federal government did not sign it, some states enforced rules reproducing the Kyoto protocol in their own territory, and now the businesses which were against the Kyoto protocol are asking the federal government to adopt it in order to have the higher level of "predictability" of an official (and in that case centralized) institutional framework.
Disadvantages
Being the result of the art of "arrangiarsi", this strategic approach has many disadvantages.
A first disadvantage is arbitrariness: for practical reasons, the team of consultants would be forced, in order not to be paralysed, to select the "cases" on the grounds of judgements on priority which would necessarily have a certain degree of arbitrariness. This arbitrariness is the other side of the lack of both formal representation and formal power. This situation, however, may be better than the current one where the definition of the details of law are left to bureaucrats nobody even knows or can control: that is bureaucrats who have no representation but a great power.
More in general, probably one of the most critical disadvantages of this approach is the definition of the limits of the consultants' informal power. This is something which could be regulated by a public and previous agreement with Coalition L, but which cannot overrule the fact that in the existing institutional framework the coalition has not only the power but also the responsibility of legislation (together with the power and responsibility of administering the state). Therefore the informal power of the team of philosophical consultants would not exceed that of an external expert whose advice the coalition has promised electors to take into the most serious consideration. On the other hand it is clear that if Coalition L's legislation activity would continuously disappoint the team's recommendations it would break its electoral promise.
Another disadvantage is that legislation would still remain centralized, though somehow less than before, at least in an informal way and especially in the origination phase.
Among the many disadvantages, there are some connected to practical and financial issues, which are discussed in the next paragraph.
Practical aspects and finance
The amount of "cases" submitted to the team of philosophical consultants could be enormous, making it very difficult to read them, let alone analyse them. Standard, automatized on-line submitting procedures based on a good classification system, and the necessity of the assistance of a lawyer for each case, may help a little, but it would be fundamental to create a filter for "quality" based on incentives.
On the other hand, the organization of the work could also be, for the same reasons, quite expensive, therefore it would be necessary to find a way to finance it.
Taken together, these two problems could offer a solution: the filter could be the fee which the team of consultants would charge those who submit the case. The fee would be paid at the time of the submission, therefore it would be independent from its outcome. The level of this fee, which should be high enough to discourage the submission of "junk cases", could be decided by the market (after all, this team would be an entirely private entity). One could argue that this system would give the possibility of changing the law only to the rich, and that therefore it would be anti-democratic.
There is a part of truth in this, but not necessarily in the way a socialist would see it. Since the law would change according to the semi-abstract principles (illustrated in Document A) which were known before the election, and which (in our hypothetical example) gave the electoral victory to Coalition L, there would be, admittedly, a form of tyranny of the majority. But, while I see some reasons why this would be less tyrannical than the present situation, I see no reasons why this should be more so.
First of all, it would be a tyranny based on open principles and not purely on hidden particular interests. Therefore, as compared to the present situation, at least this tyranny would be less hypocritical.
Secondly, if Coalition L had a liberal approach, its legislation activity would be used to reduce the number of issues that require legislation, and therefore the discrimination of minorities through majority rule. If Coalition L did not have a liberal approach, the situation would not be worse than it is today, where the expansion of legislation, and therefore of majority rule/discrimination of minorities, is continuous and based on interests rather than on principles. But in fact it is quite unlikely that Coalition L had a purely collectivist approach since this, which is necessarily based on law intended as a "design" "made" by a group of enlightened individuals for the "universal good", is quite incompatible with an approach based on a distributed and relatively unpredictable origination of legislative activity.
Thirdly, we can assume that the cases submitted at expense of the rich would benefit at least the majority (otherwise the majority would not have voted for those principles). In other words, in the law-discovering process the rich could be allowed to have a "social" function which is similar to that which they have in the economy and which, though clearly expressed by Hayek, is often today not recognized: as in the market they make possible the development of those new goods which constitute today's luxuries and tomorrow's needs by willing to pay more for them in their initial phase than those who will buy them later (may suffice as example the price-difference between a Rome-London flight ticket in the ?50s and a Ryanair ticket for the same destination today), in the legislation process they could be allowed to fight for the abolition or modification of some laws whose insanity afflicts not only them, and whose modification would benefit immediately also the rest. In this respect, this approach has some points in common with Leoni's parallelism between the law and the market.
In addition to this, it would not be surprising if individuals (including organizations) would spontaneously group together to share the costs of the cases which affect the interests of each one of them and for which they believe there is a contradiction between the present law and the semi-abstract principles published by Coalition L.
Finally, it is clear that competition would work its magic also regarding to the consultants' fees.
Long-term objective: common-law
What we called the "Hayek-Leoni institutional framework", which may arise spontaneously from the adoption of the strategy described, could also be seen as an intermediate step of the long-term transition from a normative system to a common-law system. In fact, Hayek's proposal shares with the common-law system the abstractness of the rules and the general spirit, but, on the other hand, it is still based on a form of centralization of the legislation process. The window left open to the "private" definition of law ("Leoni's method") could be a ground on which common-law could start being discovered.
In fact, an institutional framework such as the one proposed would have in itself a dynamic factor which could help this transition: since the first power of the legislative assembly would be to decide which matters require legislation, in a long term perspective this power could be used to gradually decrease their number. As society learns itself in time, it needs less to be regulated by majority rule.
Conclusions
At the end of the day, the idea is quite banal: it consists merely in one coalition admitting (and managing to communicate to electors) that administering a state requires skills quite different from those required to discover the rules which govern a country, and therefore looking for external professional advice until the day this admission will have produced positive results and will be institutionalized.
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