[Adapted from Rothbard’s book review of Freedom and the Law by Bruno Leoni. This review first appeared in New Individualist Review, edited by Ralph Raico.]
[In his book Freedom and the Law,] Professor [Bruno] Leoni’s major thesis is that even the staunchest free-market economists have unwisely admitted that laws must be created by governmental legislation; this concession, Leoni shows, provides an inevitable gateway for State tyranny over the individual. The other side of the coin to increasing intervention by government in the free market has been the burgeoning of legislation, with its inherent coercion by a majority—or, more often, by an oligarchy of pseudo-“representatives” of a majority—over the rest of the population. In this connection, Leoni presents a brilliant critique of F.A. Hayek’s recent writings on the “rule of the law.” In contrast to Hayek, who calls for general legislative rules as opposed to the vagaries of arbitrary bureaucracy or of “administrative law,” Leoni points out that the real and underlying menace to individual freedom is not the administrator but the legislative statute that makes the administrative ruling possible.  It is not enough, demonstrates Leoni, to have general rules applicable to everyone and written down in advance; for these rules themselves may—and generally do—invade freedom.
Leoni’s great contribution is to point out to even our staunchest laissez-faire theorists an alternative to the tyranny of legislation. Rather than accept either administrative law or legislation, Leoni calls for a return to the ancient traditions and principles of “judge-made law” as a method of limiting the State and insuring liberty. In the Roman private law, in the Continental Civil Codes, in the Anglo-Saxon common law, “law” did not mean what we think today: endless enactments by a legislature or executive. “Law” was not enacted but found or discovered; it was a body of customary rules that had, like languages or fashions, grown up spontaneously and purely voluntarily among the people. These spontaneous rules constituted “the law”; and it was the works of experts in the law—old men of the tribe, judges, or lawyers—to determine what the law was and how the law would apply to the numerous cases in dispute that perpetually arise.
If legislation is replaced by such judge-made law, says Leoni, fixity and certainty (one of the basic requirements of the “rule of law”) will replace the capriciously changing edicts of statutory legislation. The body of judge-made law changes very slowly; furthermore, since judicial decisions can only be made when parties bring cases before the courts, and since decisions properly apply only to the particular case, judge-made law—in contrast to legislation—permits a vast body of voluntary, freely-adopted rules, bargains, and arbitrations to proliferate as needed in society. Leoni brilliantly shows the analogy between these free rules and bargains, which truly express the “common will” of all participants, and the voluntary bargains and exchanges of the free market.The twin of the free-market economy, then, is not a democratic legislature ever grinding out new diktats for society, but a proliferation of voluntary rules interpreted and applied by experts in the law.
While Leoni is vague and wavering on the structure that his courts would take, he at least indicates the possibility of privately competing judges and courts. To the question, who would appoint the judges? Leoni answers with the question, who now “appoints” the leading doctors or scientists in society? They are not appointed, but gain general and voluntary acceptance on their merits. Similarly, while in some passages Leoni accepts the idea of a governmental supreme court, which he admits becomes itself a quasi-legislature, he does call for the restoration of the ancient practice of separation of government from the judicial function. If for no other reason, Professor Leoni’s work is extremely valuable for raising, in our State-bemused age, the possibility of a workable separation of the judicial function from the State apparatus.
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