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TC Beirne School of Law, The University of Queensland
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Ratnapala, Suri --- "Eighteenth Century Evolutionary Thought and its Relevance in the Age of Legislation" [2001] UQLRS 1; (2001) 12 (1) Constitutional Political Economy 51-75

Last Updated: 8 January 2009


This article was originally published in Constitutional Political Economy published by Springer and reproduced here with kind permission.

S Ratnapala, 'Eighteenth-century Evolutionary Thought and Its Relevance in the Age of Legislation' (2001) 12 (1) Constitutional Political Economy 51-75

Eighteenth Century Evolutionary Thought and its Relevance in the Age of Legislation1

T C Beirne School of Law, University of Queensland, Australia, 4072

Abstract. This essay revisits the evolutionist writings of the eighteenth century to clarify their key ideas concerning legal and social evolution and to assess their relevance in the present era of pervasive legislation. The discovery of the principle of the accumulation of design is traced to these writings and the continuity of twentieth century spontaneous order theory and new institutional economics with this tradition is noted. While highlighting the contributions of other institutional theorists to the elucidation of the role of purposive action in legal evolution the author argues that input designing does not alter the fundamental nature of legal emergence as postulated by the eighteenth century scholars. The essay supports the ideal of legal generality, free speech, property and contractual freedom as normative implications of the evolutionary viewpoint.

Like the winds, that come we know not whence, and blow withersoever they list, the forms of society are derived from an obscure and distant origin; they arise, long before the date of philosophy, from the instincts, not from the speculations, of men.

The croud of mankind, are directed in their establishments and measures, by the circumstances in which they are placed; and seldom are turned from their way, to follow the plan of any single projector.

Adam Ferguson (1966:122)

Key words
Evolutionary jurisprudence – eighteenth century evolutionists – ‘Darwinians before Darwin’ constitutional political economy – emergent complexity – roles of judge and legislator – common law

  1. Introduction

The second half of the twentieth century has witnessed a resurgence of evolutionary theory in both the natural sciences and the social sciences. The most significant feature of this movement has been the extension of the Darwinian theory of evolution or more accurately the neo-Darwinian synthesis, to human culture in order to explain such phenomena as scientific and technological development, the emergence of formal and informal social institutions, language acquisition and even mind and consciousness. Evolutionary accounts of legal emergence, have figured prominently throughout the twentieth in cultural anthropology and within branches of economics, most notably the Austrian and the institutional economics traditions. Although American jurisprudence was quick to embrace evolution after Darwin, there has been only sporadic attention to contributions to evolutionary accounting of law during much of the twentieth century. (Ruhl 1996: 1412-1413). The situation has changed somewhat recently with the persistent efforts in law and biology by scholars associated with the Gruter Institute for Law and Behavioral Research (Elliot 1997: 596) and the nascent complexity and law movement. (Ruhl 1996)

It is not widely appreciated, except in circles such as the readership of this journal, that the current blossoming of evolutionary theory in relation to culture has a distinguished historical precedent which pre-dates Darwin’s breakthrough and, indeed, provided Darwin with the intellectual tools with which to uncover the idea of natural selection.2 The work of these pre-Darwin scholars is particularly significant in legal theory as they drew their greatest inspiration from the shining example of the common law and proceeded to establish a solid foundation for an evolutionary jurisprudence. The recent developments in evolutionary scholarship allows us to build on this foundation, a richer account of the law in both its customary and statutory forms. Such a jurisprudence may be developed by drawing together, the eighteenth century evolutionist thought, the neo-Darwinist synthesis, evolutionary epistemology, the emerging science of complexity and self-organization and the central ideas developed in institutional economics. That task is beyond the scope of this essay, but I hope to kindle interest in such a project by clarifying the central ideas of the eighteenth century evolutionists and by assessing their relevance in the era of pervasive legislation in the light of recent developments in the aforementioned fields. In what follows, I will explain the need for an evolutionary jurisprudence, discuss the key ideas of the eighteenth century evolutionary viewpoint, consider the development of that viewpoint in the twentieth century and draw some of the normative implications from the evolutionary approach.

  1. The need for an evolutionary jurisprudence

The idea that all law stems from the will of an identifiable law maker remains influential in law schools despite being contradicted by the natural history of the human race and by what we know of contemporary society. It would be a rare cultural anthropologist who would deny that law existed before there were legislators or courts. Although legislation and judicial precedents form the major sources of law today, it is evident that law formation is a complex and dynamic process grounded in social realities that are beyond the comprehensive control of any authority. Despite its best efforts, the state has failed to monopolize the enterprise of law. As the frontiers of human experience expand, rules become modified by practice to meet the coordination needs of the new field of experience. This phenomenon has been observed throughout history and is illustrated in our age by the continuing evolution of the common law and the emergence of new rules of behavior fields such as transnational commerce and new technologies.

Mainstream jurisprudence typically responds to the presence of such rules by ignoring them, by denying them the name ‘law’ or by treating them as the vicarious achievements of the official legal system. Jurisprudence which limits its concerns to the description of state law and consigns non-state law to other disciplines admits failure. Sophisticated analytical positivists such as Herbert Hart, Neil MacCormick and Joseph Raz have abandoned the dogma that law is any command of a sovereign political authority that has capacity to enforce its commands in favor of an idea of a legal system which establishes the ways in which norms become laws that attract the coercive attention of the state. However, the concept of a legal system developed by these writers, though internally coherent, does not explain satisfactorily the nature of the legal system as part of the overall dynamic order of society. In particular, it leaves to other disciplines, the following questions: (1) How do legal systems arise and change over time? (2) How do we account for the continuing emergence of rules which not only exist side by side with state law but also supply some of the normative content of new state law? It is proposed that these questions should be addressed within jurisprudence and that the evolutionary approach outlined in this essay is appropriate to that task.

  1. Argument from design versus the principle of the accumulation of design

To appreciate the achievement of the pre-Darwin evolutionists, it is necessary to recall the ascendancy of what is known as the argument from design. The human intellect tends to divide the world into two categories, the natural and the artificial, with nothing in between. Structures like machines, buildings and organizations are identified as artificial, being the products of human intelligence and labor. There are other structures, physical and biological which are considered to be beyond the creative power of humans and hence are treated as natural. However, the diversity, complexity and beauty of the natural structures, and the way they reflect the adaptation of means to ends have intrigued thinkers. The minds of our ancient ancestors could only come up with the anthropomorphic answer that they were the work of a supernatural Intelligent Artificer. As Hume’s Cleanthes in the Dialogues Concerning Natural Religion, put this argument, ‘The curious adapting of means to ends throughout all nature, resembles exactly, though it much exceeds, the productions of human contrivance; of human design, thought, wisdom, and intelligence ... hence we are led to infer ... that the Author of nature is somewhat similar to the mind of man’. (Hume 1947:143).
This argument from design would not have mattered much in legal theory had there not been three different types of law: 1. legislation 2. customary law and 3. higher natural law. Legal enactments of human agencies were considered artificial and later came to be known as positive law. There was another kind of law which existed from time immemorial with no evidence of human authorship. Every society, including the oldest, has its inheritance of laws which cannot be attributed to human legislators. The ancients had little choice but to assign these to the natural category and hence to supernatural design. Hayek thought that the Greeks recognized a separate category of structures established by convention that included things such as custom, law, language, morals and money, only to lose it in terminological confusion. This category comprised things that were neither natural nor artificial but were as Adam Ferguson was to describe later, ‘indeed the result of human action, but not the execution of any human design’ (1966:122). There was certainly another close encounter with this third kind by the medieval schoolmen but they, like the Greeks before them eventually classed it as natural (Hayek 1973:20-21). Whichever way the law was classified it was thought to have been designed like everything else.

The classification of the inherited customary law with things natural created two major problems for legal theory. As mentioned, there was a third type of law with a long standing claim to the name ‘natural law’. This natural law comprised the fundamental, universal, and immutable principles of justice and morality the violation of which, was said to deprive human (positive) laws of their validity on the principle lex injusta non est lex. (Unjust law is not law. Alternatively, non lex sed legis corruptio: not law but corruption of law.) The first problem was that the equation of the inherited customary or folk law with this higher unchanging natural law further obscured the organic or evolutionary character of that law. Customary law was adaptive, not immutable like the higher natural law. The second problem was that this classification suggested that customary law as natural law was inviolable by human legislators. This implication was clearly incompatible with the legislative power of sovereign rulers who claimed the right to abrogate customary law. In societies where legislation is uncommon and customary morality and customary law are hard to separate, the problem is not acute. The situation is very different where the ruler’s power to make and unmake the law co-exists with a substantial body of inherited customary law as was the case in England. This problem was recognized by Hobbes and Locke, the seventeenth century social contract theorists. Their response was to remove customary law from the category of the natural to the artificial. Though the classification changed, the argument from design remained.

Both Hobbes and Locke thought that law began only with the establishment of sovereign political authority by the social contract which brought society itself into existence. Indeed the very purpose of the social contract, they said, was to escape the condition of lawlessness, which according to Hobbes made life ‘solitary, poore, nasty, brutish and short’ (1991:89). Locke’s state of nature was a little more benign, but still ‘full of fears and continual dangers’ (1988:350) because, in the absence of established and known laws and organized executive power, each individual was his or her own lawmaker, judge and executioner (1988:351). According to both theorists the social contract established a supreme legislature to which was entrusted the exclusive power to make law. Though both believed in the existence of a higher natural law, they insisted that the only source of human law was the sovereign person or assembly. Locke denied custom any legal force, treating the legislative as antecedent to all positive law (1988:373). According to Hobbes customs were ‘antiently Lawes written, or otherwise made known, for the Constitutions, and Statutes of their Soveraigns; and are now Lawes, not by vertue of the Praescription of time, but by the Constitutions of their present Soveraigns’ (1991:186). Hobbes insisted that law should not only be designed, but to be valid, its designer or Author should be sufficiently known (1991:189). Thus, with respect to law, social contract theory further entrenched the argument from design.
It is generally thought that until Charles Darwin and Alfred Russell Wallace stumbled upon the idea of the evolution of species by natural selection, there was no alternative to the argument from design. The basic idea of natural selection is very simple though its implications are endless. Animals give birth to off-spring who have varying qualities. Offspring who are better adapted to their environment tend to survive to produce more offspring like themselves while those who are ill-adapted tend not to survive to a reproducing age. Over very long periods of time, this game of statistics leads to the gradual evolution of some species and the extinction of others. One of the principal insights from this idea is that the incredibly complex life forms that we observe and their remarkable adaptation of means to ends can result from this simple algorithmic process without the intervention of an Intelligent Artificer. This insight discloses what is known as the principle of accumulation of design, according to which the R & D that complex and adaptive structures require are attained through the slow build up of their design features in the course of natural selection (Dennett 1995:68). It was certainly Darwin who demonstrated this principle in relation to biological evolution. However, as shown in the next section, the principle of accumulation of design was discovered in relation to social evolution more than one hundred years before the publication of Darwin’s Origin of the Species, by eighteenth century scholars in England and Scotland.

  1. The common law beginnings and the Darwinians before Darwin

The fact that the first understandings of the principle of accumulation of design occurred in eighteenth century England perhaps had something to do with that country possessing one of the most unambiguous illustrations of the principle in action in the form of the common law. Even before the Napoleonic Codification, the lex scripta (written law) was a major source of law in the nations of continental Europe. The law of these nations were amalgams of the written Roman Law, local statutes and local custom. The dominance of the lex scripta obscured the evolutionary character of the law. In England, by contrast, the common law reigned in its classical form without serious challenge from the Roman law or legislation. It was in this context that the Chief Justice Sir Matthew Hale observed that law is ‘accommodate to the Conditions, Exigencies and Conveniences of the People’ and ‘as those Exigencies and Conveniences do insensibly grow upon the People, so many Times there grows insensibly a Variation of Laws, especially in a long Tract of Time’(Hale 1971:39). Hale also understood the self-ordering nature of the common law that enabled it to maintain itself while undergoing constant change. Hale identified the two properties of the common law which reveal its essentially evolutionary character. The first is that the common law has no author or designer but grows endogenously over long periods of time through the process of accumulation. The second is that common law is part of the process by which the social order adapts to emergent reality.

The first of the eighteenth century evolutionary thinkers was Bernard Mandeville a Dutch physician practicing in London, to whom Hayek pays the extraordinary compliment that he made Hume possible (Hayek 1978:264). In his startling parody, the ‘The Grumbling Hive; or Knaves turn’d Honest’, Mandeville argued that if all self-interested acts were vices as the moral rigorists of the time believed, then the public good must result from vice since human beings act in their self-interest (1924: vol. 1, 44ff). Mandeville’s message was that if every individual was acting in his or her self interest, what we call culture could not have been designed by anyone but must be the unintended result of individual strivings. In elaborating on this process, Mandeville anticipated the principle of the accumulation of design. In his third dialogue, Cleomenes says, ‘That we often ascribe to the Excellency of Man’s Genious, and the Depth of his Penetration, what is in reality owing to length of Time, and the Experience of many Generations, all of them very little differing from one another in natural Parts and Sagacity’ (1924: vol. 2, 142). In the sixth dialogue, Cleomenes compares the process by which the law attains its sophistication to the mechanical process of weaving stockings (id:32). Compare these with Dennett’s paraphrasing of Darwin’s principle: ‘What Darwin saw was that in principle the same work [previously attributed to a designing agent] could be done by a different sort of process that distributed that work over huge amounts of time, by thriftily conserving the design work that had been accomplished at each stage, so that it didn’t have to be done over again’ (1995:68).
Mandeville’s pragmatic view of cultural evolution became in Hume’s hands, an epistemological thesis. The profound connection between Hume’s skeptical view of knowledge and the natural selection paradigm is not well recognized even by evolutionists. Even today, when the Darwinian theory of evolution is generally accepted, there is a general reluctance in philosophy and social science to concede that the process of blind variation and selective retention explains the achievements of the mind and its capacity to reason. In Hume’s time the idea was mind-boggling. Yet, in A Treatise of Human Nature (1839-1840), Hume argued that reason alone can never give rise to any original idea and that the basis of our knowledge was nothing more than custom or accumulated experience (Hume 1978:157).

Hume observed that there are only perceptions and the memory of perceptions present to the mind. The objects that cause our perceptions are not knowable directly. What we do not perceive directly, we infer on the principle of cause and effect. Causation is a relation and not a thing. We infer from the presence of one thing, the presence of another as when we associate fire with heat. Yet, however hard we try, we cannot show the essence that connects the two. We cannot infer that one object causes another on the first occasion that we perceive them. It is only our past experience of their repeated conjunction that gives rise to the expectation that where one is found the other will also be found. Hence, our expectation that the future will resemble the past is based on nothing better than custom (id:104-106). Hume rejected the notion of innate ideas. We can, of course, construct theories and test them by controlled experiments, but this process too is based on the ‘general habit, by which we transfer the known to the unknown, and conceive the latter to resemble the former’ (1975:107). Even scientific theorizing depends in part on experience and in part on ‘blind’ speculation. In a startling pre-emption of not only Darwinism but also modern evolutionary epistemology, Hume declared in An Inquiry Concerning Human Understanding that ‘experimental reasoning itself, which we possess in common with beasts, and on which the whole conduct of life depends, is nothing but a species of instinct or mechanical power, that acts in us unknown to ourselves’ (id:108).

This theory of knowledge led Hume to his view that social institutions originated in convention not design or agreement. Social order reflected the build up of experience, not the outcome of reason. Hume rejected the social contract theory of the establishment of law and society, in both its naive historical form as well as its idealized expository form. He argued that law and society could not have been established by a promise as the institution of the promise was itself an unintended result of social life. In short, the social contractarians were guilty of putting the cart before the horse! Hume, has to be read with extreme care in order to avoid misunderstandings of his views on law and justice. Hume retained the natural - artificial dichotomy and placed justice in the artificial category. However, he was at pains to explain that justice belonged to a subset of artificial things which arose from convention as opposed to reason. He wrote, ‘Tho’ the rules of justice be artificial, they are not arbitrary. Nor is the expression improper to call the Law of Nature; if by natural we understand what is common to any species, or even if we confine it to mean what is inseparable from the species’ (id:484). The rules of justice arise out of a sense of mutual need. This shared sense does not result from verbal exchanges but through the coincidence of behavior as when ‘two men, who pull the oars of a boat, do it by an agreement or convention, tho’ they have never given promises to each other’. Thus, rules of justice, like other conventional things such as language and currency, ‘arise gradually, and acquire force by a slow progression, and by our repeated experience of the inconvenience of transgressing it’ (id:490). In these passages, Hume struck upon the quintessentially evolutionary idea that rule formation is a process of habit meshing that occurs through the proclivity of punishing encounters to extinguish and rewarding encounters to re-enforce behavioral tendencies of interacting parties (Cf. Campbell 1965:32-33).
Hume regarded law as antecedent to government for though men can maintain ‘a small uncultivated society without government, ‘tis impossible they shou’d maintain a society of any kind without justice and the observance of the three fundamental laws concerning the stability of possession, its translation by consent and the performance of promises’ (1975:541). According to him, government did not originate from a necessity to make law but from the need to impartially administer the law (id:537).

Like Hume, Adam Smith rejected social contract theory and treated social order, law and government as the outcomes of ‘the natural progress which men make in society’ (Smith 1981: vol. II, 710). The starting point of Smith’s philosophy is the concept of ‘the original passions of human nature’. One of these passions is ‘fellow feeling’ or ‘sympathy’. Though man is selfish by nature ‘there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it’ (Smith 1976:9). This sympathy is the origin of the ideas of beneficence and of justice. The absence of beneficence or of the sense of justice in a person evokes disapprobation. However it is only unjust conduct that inspires the stronger feeling of resentment and leads to the demand for retribution. This is a critical distinction. Beneficence involves positive action but justice is concerned with the breach of prohibitions cast in negative terms. That one should show gratitude to one’s benefactor is a principle of beneficence. That one should not steal another’s belongings is a rule of justice. A person could be just without being beneficent. As Smith wrote, ‘We may often fulfil all the rules of justice by sitting still and doing nothing’ (id:82). How does the sense of justice, which is hardwired in us give rise to the rules of justice? Rules arise because our sense of justice fails us when we most need it. We cannot make reasoned judgments before every action not only because of the lack of time but also because we are driven by our passions. Afterwards, if we have acted unjustly, we are prone to forgive ourselves (id:157). This flaw in our nature is overcome by other instincts which, through the observation of the conduct of others, ‘insensibly lead us to form to ourselves certain general rules concerning what is fit and proper either to be done or to be avoided’ (id:159). We avoid self-deception through rule following and rule formation occurs insensibly by the coincidence of individual behavior. Smith could have been more reductionist in his search for the origins of rules in the manner of later game theorists who attributed the evolution of cooperation to the dominance of the ‘tit for tat’ or ‘eye for an eye’ strategy. (Axelrod 1984). However, Smith deserves credit for noticing that cooperation is the outgrowth of not only the instinct of retribution but also of the instinct of sympathy.

Smith’s theory is strikingly Darwinian and, in fact, avoids a mistake commonly made even by Darwinists. Smith argued that though social life is impossible without the rules of justice, it is not this consideration which animates the rules of justice initially, but our natural passions (id:89). The human species did not acquire its sense of justice and make itself social rules because they helped it to prosper, but rather, the race prospered because its members inherited a sense of justice and the instinct for rule following. Smith also brought out the underlying unity of the social, economic and legal evolution throughout his work. A clear demonstration of this unity is offered in his speculation concerning the emergence of the division of labor and money. The division of labor, Smith maintained, is not the product of human wisdom that foresees its great advantages, but ‘is the necessary, though very slow and gradual consequence of a certain propensity in human nature which has in view no such utility; the propensity to truck, barter, and exchange one thing for another’ (1981: vol. 1, 25). This propensity to exchange, which could be said to be driven by the more basic instincts of self-advancement brings about the practice of contracting. However, barter is a severely limited form of exchange as one has to always keep a quantity of things which others commonly need such as oxen, salt or pelts, in order to gain what one wants. No exchange will take place where people have no need for is being offered. This problem activates a Darwinian type selection whereby certain kinds of metals survive the elimination process to become standard currency for exchange. The emergence of this practice has a catalytic effect on both commerce and commercial law. The need to certify the weight or value of the metals lead to the practice of official coinage and hence, we might add, to the law of financial institutions (id:41-46).
The idea that social patterns emerge through the cumulative effects of the adaptive behavior of individuals responding instinctively to local conditions was systematically developed by Adam Ferguson in his An Essay on the History of Civil Society, first published in 1767. Ferguson clearly perceived that human beings are able do the right thing in particular instances without knowing the reason why it is right. We derive general rules of morality, law, language and so forth by observing the consistency of these unrationalised particular actions. Such is the ability of the uneducated peasant or child to reason and judge, and speak his language with discernment consistency and regard to analogy, that logicians, moralists, and the grammarians, are perplexed when they find the underlying principles or general rules which they appear to be unknowingly observing (Ferguson 1966:34). Ferguson argued, that the sense of legal right inheres in human nature. ‘Every peasant will tell us, that a man hath his rights; and that to trespass on those rights is injustice’. If we ask him what he means by ‘right’, we force him ‘to substitute a less significant, or less proper term, in place of this; or require him to account for what is an original mode of his mind, and a sentiment to which he refers, when he would explain himself upon any particular application of his language’ (ibid).

Ferguson was conscious that human learning was radically different from other animal learning as the human race can accumulate knowledge from generation to generation (id:5). Yet, like Hume and Smith, he anticipated the Darwinian insight that all human knowledge gains are achieved without prescience. ‘Every step and every movement of the multitude, even in what are termed enlightened ages, are made with equal blindness to the future; and nations stumble upon establishments, which are indeed the result human action, but not the execution of any human design’ (id:122). With Hume and Smith, he rejected patriarchal and contractarian theories of state, observing that they ‘ascribe to a previous design, what came to be known only by experience, what no human wisdom could foresee, and what, without the concurring humor and disposition of his age, no authority could enable an individual to execute’ (id:123).

4.6 Eighteenth century evolutionism and the German historical approach
In summary, the pre-Darwin evolutionists developed in relation to social phenomena the following key ideas that anticipated Darwin’s theory concerning the evolution of species.

(1) Human beings inherit certain instincts, dispositions and passions as part of the natural characteristics of their species. These would be identified today as genetically transmitted qualities that have been selectively retained but this knowledge was unavailable to eighteenth century thinkers.

(2) Human beings also inherit through cultural means a fund of knowledge. This knowledge is embodied in the form of convention or custom and results from a process of insensible accumulation based on the experience of successive generations.

(3) New knowledge (that is knowledge not acquired through deductive inference from conventional knowledge), is acquired without prescience through blind theorizing. This type of knowledge becomes conventional knowledge if not falsified by experience.

(4) Social and legal rules are formed through the blind process of habit meshing involving the selective retention of rewarding behavioral tendencies. Initially, as we have no prescience, we do not possesses the knowledge of the general rules of social life but only know how to act in specific situations guided by instincts. We gain knowledge of the general rules when regularities of behavior are observed.

(5) Initially state authority is not the source of law, rather, authority is necessitated by the presence of law requiring enforcement.

It is worth emphasizing the difference between the principle of accumulation of design discovered by the evolutionists and the idea of the people’s consciousness as the source of law popularized for a time by the historical school founded by F C von Savigny. According to the evolutionists, law is not derived from society but rather, the emergence of law through the process of sedimentation brings about social life. Savigny and his followers completely reversed this order of cause and effect. According to them, law was derived from the common consciousness of a people (Volkgeist) who already exist as an ‘active personal subject’ (Savigny 1867:15). Savigny explicitly rejected the idea of the initial insensible emergence of law as custom and claimed that the opposite is the truth. The law lives in the common consciousness which is ‘diametrically opposite to bare chance’. Moreover, the law lives in this consciousness not as rules but as ‘the living intuition of the institutions of law in their organic connection’. When the need arises for a rule to be conceived in a logical form, ‘it must be formed by a scientific procedure from that total intuition’ (id:13). What Savigny meant by ‘scientific procedure’ is a process whereby the specific rules of law reveal themselves through symbolic acts. Initially, we recognize the law ‘when it steps forth in usage, manners, custom’ (id:28). Later, two other ‘organs’ of the people’s law appear in the form of legal science and legislation. Savigny contemplates the possibility that ‘the law forming energy departs from the people as a whole’, so that the law will live only in these two organs (id:40). Whereas the volksgeist eventually runs out of steam, the algorithmic process of design accumulation works incessantly at all levels of legislative and juristic activity.
5. The evolutionary thought after the Scots: the Austrian School and spontaneous order
The independent discovery of the process of evolution of species through natural selection by Charles Darwin and Alfred Wallace occurred in the middle of the nineteenth century. The excitement and controversy that ensued, if anything, distracted scholarly attention from the older evolutionary tradition in the social sciences. The carriage of that tradition into the twentieth century owes much to the work of the Austrian school of economics that sprang chiefly from the work of Carl Menger. Although the Scots appear to have had little influence on Menger, his view of the emergence of social order was remarkably similar. In his critique of the historical school, Menger wrote:

National law in its most original form is thus, to be sure, not the result of a contract or of reflection aiming at the assurance of common welfare. Nor is it, indeed, given with the nation, as the historical school asserts. Rather, it is older than the appearance of the latter. Indeed, it is one of the strongest ties by which the population of a territory becomes a nation and achieves state organization. (Menger 1963: 227)

The initial impetus for the revival of evolutionary thinking was the realization by Jevons, Walras and Menger that the search for inherent value of goods and services was doomed. Menger went furthest in grasping that the price of a good or service was the unintended result of the actions of millions of interacting persons pursuing their own disparate ends. (Menger 1963: 146). So too are many other social structures. Menger perceived that the formation of economic phenomena was closely related to the unitentended and spontaneous emergence of social structures. Structures such as law, language, the state, money and markets result from the same dynamic of social development (id: 147). These are complex self-ordering systems in which constituent parts and the whole were mutually dependent much like organic systems (id: 129-130). Menger appreciated that not all social structures were unintended outcomes and that the analogy between social and organic phenomena was incomplete.Yet, Menger argued that this analogy, incomplete as it is, had profound implications for the method of the social sciences. It meant that we cannot make precise predictions about social phenomena but can only determine their general features and the processes by which they emerge. It also meant that in relation to many social structures, and indeed, in relation to society as a whole, our capacity to produce specific outcomes by deliberate intervention is severely limited, for we cannot precisely control the behavior of their innumerable members.
The theory of complex orders blossomed in the twentieth century through the work of the Austrians Ludwig von Mises, Friedrich Hayek and their followers who continued investigate the epistemological problem ignored in the classical tradition, namely the disequilibrium of the market and imperfect information. The idea of self-ordering system or spontaneous order was systematically developed by Hayek who worked out most of its implications for economics and jurisprudence. Hayek distinguished spontaneous order (cosmoi) from made order or organizations (taxeis). Spontaneous order was found in complex systems in which constituent members have freedom of action but are coordinated in their interactions by the observance of general rules. These general rules are themselves the unintended results of the coincidence and meshing of behavior on the part of members responding to local stimuli in the pursuit of disparate ends.

In Israel Kirzner’s work on the equilibrating process of markets, we find further refinements of the theory of spontaneous order. Although Kirzner does not use evolutionist language, the evolutionary implications of his work are clear. Following von Mises and Hayek, Kirzner critiques the neo-classical equilibrium model as non-reflective of how markets actually work. In a universe of perfectly informed wealth maximizers there would be no scope for entrepreneurship or discovery. The consequences of market events are foreordained within a given set of market data and genuine unprogramed change can only result from exogenous shocks to the system. (Kirzner 1997: 35). In short, in the equilibrium scenario of mainstream economic theory, there cannot be evolution in the adaptive sense but only change in the computational sense. In the Scottish and Austrian tradition, Kirzner recognizes actors in the market as imperfectly informed and lacking in prescience. Hence their entrpreneurial activity has less to do with search than with discovery. Search presupposes knowledge of the value of information sought and the cost of acquiring it whereas discovery consists of noticing information that is costless, but which has been previously overlooked (id: 32). What is previously overlooked represents an opportunity for pure profit. The human propensity to sense such opportunities leads to the systematic correction of errors that is the feature of the market process. Paradoxically, markets tend to equilibrate not because choices are clear to individual decision makers but because ‘of the unsystematic human efforts to cope with open-ended uncertainties of the great unknown’ (id: 27).

Understandings concerning spontaneous order developed by the eighteenth century evolutionists and later by the Austrian School have been deepened by research programs in many scientific disciplines that focus on the study of complexity and self-organization. Complexity theory seeks to explain how order as found in dynamical systems emerges without design. Living systems, whether they be single cells, individuals or societies need to be both dynamic and stable, for life is not sustainable in static or chaotic states. Such systems allow unpredictable behavior of its elements towards their local conditions while withstanding the resulting perturbations. (Kauffman 1995:89; Levy 1992:127) They occur, in the words of Kauffman, ‘at the edge of chaos’. As observed previously, complex systems, of which societies are prime examples, result from the regularities that arise in the course of interaction among individual agents pursuing their disparate ends. These regularities themselves come under selection pressures and survive to the extent that they are retained by surviving groups. The evolutionary process is further complicated by the fact that selective retention of living systems occurs simultaneously at different levels in nested hierarchies. The environment that selects the genotype includes the phenotype of the organism, the physical surroundings and the cultural environment. Each of these levels has levels within them. Simpler lower level systems coagulate to form the complex upper level systems which in turn provide the ecologies for future selection at the lower levels, causing systems at the lower levels to change further. (Campbell 1987:54-73; Hahlweg 1989:58-62). The survival of systems depend on their capacity to maintain their stability through this two-way feed back. This makes the task of controlling living systems to produce desired results that much harder. These observations apply equally to the complex order of society.
Kauffman summons ideas developed by the Scots such as the invisible hand and the blind watchmaker to explain the emergence of such order. He states, ‘Even when human agents plan and construct with intention, there is more to the blind watchmaker at work than we usually recognize’. (Kauffman 1995: 246) The studies in general confirm views developed in social science that attempts to design or micro-manage complex systems are self-defeating.

  1. Legal evolution - the institutionalist viewpoint

Whereas the spontaneous order tradition of Scottish and Austrian schools highlighted the emergence of social structures as the unintended results of human action, twentieth century scholars concerned with law and economics began to focus their efforts on the study of the role of purposive human action in legal evolution. The idea that law is the creation of human agencies is deeply ingrained in the popular mind and, in itself, is hardly novel. Legal obligations may arise through voluntary undertaking as in contract or may exist independently of individual will, by force of laws that are deliberately made or grown in the form of custom. Obligations under tort law and criminal law constitute the latter category. Rights concerning person and property are directly or indirectly delineated by these two kinds of obligations. Institutionalists have been interested in the study of the evolution of both these forms of legal obligations. However, in relation to contract, institutionalists commence with the pre-existence of the rudimentary form of contract and examine the ways in which contract forms have changed over time (Macneil 1980) and how contract leads to the emergence of the firm (Coase 1937, Williamson 1975 et al).

The significance of the work of the institutional economists lies in their integration of purposeful action in the evolutionary process in a way that highlights human design and effort in legal evolution. Yet, the differences between the spontaneous order tradition and the old institutionalists should not be exaggerated. There is no fundamental inconsistency to be found between the two approaches and as discussed below, many institutionalists consider the abstract principles of spontaneous order to be equally applicable to designed social organizations. The spontaneous order tradition does not deny the role of human actions in legal evolution. Indeed they regard institutional change as the result of human action though not necessarily of human design. What they deny on epistemological grounds is that human beings act with prescience, not that they act with intent. Human designs, they maintain, are but hypotheses that stand the test of history or are edited by it. Conversely, there is no denial in the work of the institutionalists of the fallibility of human design and the unpredictability that attends all human action. What they seek to demonstrate is that purposive human action has a great deal to do with legal evolution, a fact not denied by spontaneous order scholars. The key differences between the approaches concerns focus. While the spontaneous order tradition looked at the abstract nature of the process of legal change, the old institutionalists studied the actual actions that cause such change. We need to be careful not to extrapolate from the work of the old institutionalists a theory that human beings are in command of their destiny. Provided we do this, their, work helps us anchor the evolutionary thinking developed by the Scots and Austrians to concrete developments in modern market based economies and to gain a deeper appreciation of the type of pressures that influence the directions of legal evolution.
Of the many approaches of institutional theory, three are of particular relevance to this study. The first is associated with the ‘old institutionalist’ scholars who highlight the role of purposive human action in legal evolution. The second represents evolutionary game theory and the third emphasizes the role of history in determining the choices available to human agents seeking legal change. The central concern of the latter school, known also as the new institutional economists is the problem of path dependency in institutional change.

The start of institutionalism has been identified with Veblen’s 1898 essay, ‘Why is Economics not an Evolutionary Science?’. (Seckler 1975: 11). Veblen argued for the abandonment of the idea of the economic person as a free choosing agent in favor of one caught in an institutional web handed down inter-generationally and subject to change through exogenous shocks such as war, famine, disease and technological change. (Id: 8) The institutions themselves are transformed in response to changing conditions in industrial society, but there is always a time lag in adaptation that leaves some institutions maladapted to modern life. In contrast to Veblen, Commons took a more positive and optimistic view of the human capacity to direct the course of institutional evolution.

J R Common’s and artificial selection in legal evolution

The starting point of Commons and most later institutionalists is the individual transaction between persons. They seek to explain how these discrete transactions cumulatively lead to the emergence of legal structures. In Legal Foundations of Capitalism (1924), J R Commons argued that economic and legal evolution involves artificial selection ‘like that of a steam engine or a breed of cattle, rather than like that of a continent, monkey or tiger’. (Commons 1924: 376). What he meant was that law making authorities (legislators and judges) are continually selectively retaining those laws that serve known purposes and eliminating those that are detrimental to them. Unlike Hayek who regarded the cultural universe as comprising made orders (taxeis) that are created for known purposes and spontaneous orders (cosmoi) that have no purpose, Commons saw that universe in terms of ‘going concerns’. The going concerns consist of series of transactions of individuals interacting for various purposes. They include the corporation, the church, the club, the family, the government and state. A going concern exists before its legal recognition ‘in the intentions and transactions of its members’. Its internal rules have built up through customs, practices, habits, precedents, methods of work and such like. Law is born when functionaries of the state find a going concern ‘already in a trembling existence and then proceed “artificially” to guide the individuals concerned and give it a safer existence’ (id: 145). The law evolves as courts and legislators seek to fix problems and to eliminate impediments in the way of going concerns achieving their purposes. The law maker’s task is thus similar to that of a mechanic fixing a Ford. They determine the organization’s purpose, find out the problem and then modify the applicable working rules (ibid).
As Vanberg (1997) points out, the analogy of lawmaking with animal breeding and manufacture is misleading and legal evolution could be said to be artificial only in the sense that it results from actions of human agents as Ferguson averred. It is not artificial in the sense that lawmakers can have requisite knowledge, resources and command of process to engineer law to attain precise ends. (Vanberg 1997: 112). Commons’ view that laws evolve through purposive human acts of selection is highly contestable. Human acts are elements in a complex selecting environment. One person’s act can never be a selector in relation to the law. Indeed, the selecting environment will usually be made up of countless acts that express no preference at all for the selected law. This is obviously the case with customary law, but on examination is equally true of legislative acts. Deliberate enactments whether executed by legislators or by judges undoubtedly change the law, but they are ultimately also selectively retained (and eliminated) by an environment that consists only partly of purposive human actions many of which say nothing about the laws in question.

In Common’s theory, the working rules of a going concern result from the problem of scarcity. Lawmakers, whether they be judges, executives or legislators, are engaged in ‘proportioning the inducements which collective power creates’. (Commons 1974: 365). Commons is unclear as to the principle that guides this proportioning. He suggests that officials are guided by ‘the sense of fitness and unfitness arising out of habit and custom, which is but the sense of the proper and the improper proportioning of limiting and complementary factors needed to bring about what is deemed to be the best proportioning of all’. (id: 366) As to the sense of fitness, he states that it is ‘that feeling of harmony and unity attained by fitting the immediate transactions under discussion to the whole scheme of life as perceived and habitually accepted’ (ibid). Though unclear, this explanation of lawmaking draws Commons closer to the spontaneous order paradigm. Compare in this respect, Hayek’s view that the efforts of the judge who decides the hard case is part of the process of adaptation of society to circumstances by which the spontaneous order grows. This is because the judge’s function is not to create new order but to ‘maintain and improve a going order’ (Hayek 1982: I, 119). The judge performs this function by ‘piecemeal tinkering’ or ‘immanent criticism’ (id: 118). A dispute comes before a judge when a person’s expectations as to another’s conduct are defeated or when contending parties hold conflicting expectations. Where an existing rule provides no clear answer the judge must supply a rule that will tend to match expectations and not promote conflict. The Hayekean judge is directed back to the abstract rules of the spontaneous order upon which expectations were initially founded in order to devise a rule that is in harmony with that order. Thus, both Hayek and Commons, the duty of the magistrate is to supply a law that fits the ongoing order.
Vanberg argues that the value of Commons’ work lies in its demonstration that we are not passive sufferers of a given evolutionary destiny but that we can and should assert a positive influence on the direction of legal evolution in much the same way that the German school of ordo-liberalism proposes.. (Vanberg 1997: 114). Vanberg acknowledges that neither the Scots nor the Austrians had a wholly agnostic view of evolution. (Vanberg 1994: 465-66).

Evolution of organizations

The spontaneous order tradition does not deny that there are created organizations based on deliberately created rules. What they maintain is that ultimately these organizations are also subject to the same principle of unforeseeable and unintended consequences as both made and grown orders belong and interact in the same overall spontaneous order that no authority can control. There are many selectionist explanations of the emergence and ubiquity of headship institutions or governmental organizations. The idea of a single coordinator or communications clearing house has been suggested by Guetzkow, Leavitt, Bavelas, Campbell and others (Guetzkow 1961:187-200; Campbell 1965:29). Campbell has suggested for the evolution of species from the solitary to the social state generally, the selective advantages of the economy of cognition (information sharing), the economy of specialization and division of labor and the economy of mutual defense (Campbell 1965:44-45).Whatever, may have been the causes, it is evident that government having legislative power and near monopoly of coercive power is a common occurrence in social evolution.

However, governments are not the only kinds of organizations found in a large society and we observe a wide range of private voluntary organizations directed to all manner of purposes. Until Ronald Coase’s 1937 essay on ‘The nature of the firm’, the question why individuals form organizations and surrender their market power in exchange for central planning within firms received little attention. Coase’s investigation of this puzzle lead to new insights concerning the role of purposive action in legal evolution through purposeful action. Coase argued that the firm was a long term contract among previously independent owners of labor, capital and raw materials who agreed to place themselves under the management of an entrepreneur in preference to engaging in free exchange to produce goods or services. Whether a firm would arise from contract or not would depend on the marginal cost of using the price mechanism (Coase 1937: 390). Where production reaches a certain scale and complexity, normal contracting impractical as too many contracts are needed to marshal labor, capital and raw materials in a highly competitive and volatile market. A firm thus formed will not expand indefinitely because at some point the capacity of management to efficiently deploy factors of production suffers. Coase concluded that ‘a firm will tend to expand until the costs of organizing an extra transaction within the firm become equal to the costs of carrying out the same transaction by an exchange on the open market.’ (Coase 1937: 394-395).
Coase’s theory was neglected for more than thirty years until Williamson elaborated it by aligning changes in organizational structure to changes in the transactional environment. Williamson explored the conditions under which firms would resort to markets to secure services or would make long term contracts. Thus factors such as uncertainties caused by opportunistic behavior of others, the recurrence of similar transactions and the specificity of human and physical capital militate against market operations in favor of contractual arrangements. (Adelstein 1998: 63). Williamson used Macneil’s taxonomy of contractual forms to argue that firms oscillate between classical, neo-classical and relational contracts, along the chain of production as they seek to maximize profits. (Williamson 1979: 248). The classical contract is the discrete contract where two strangers come together just for the purpose of the contract and also can reasonably foresee the consequences of their bargain In these cases, the courts usually hold parties strictly to the terms. The neo-classical contract occurs where parties have on going concerns but may not be able to predict accurately the consequences of particular bargains. Thus, the importer and the exporter of an agricultural product on a long term contract may have to leave room for future adjustments of prices. Relational contracts are observed where economic factors create strong ongoing interdependencies within a wider community. (Macneil 1980)

The selectionist nature of organizational evolution even when it is the consequence of purposive actions is emphasized by Alchian (1950), Friedman (1953) and Becker (1962) who argue that even if entrepreneurs in real life do not engage in profit maximization through marginal analysis as assumed in the neoclassical theory, the model holds good when it is viewed in relation to industries as opposed to single firms. All three theorists take the Humean and Popperian view that a theory may hold good even if its assumptions are unproved. (Friedman 1953: 9, 14; Becker 1962: 12). Even if individual entrepreneurs are not driven by profit maximization, in the context of an industry, firms that survive are those whose conduct approximate to the model of profit maximization. As Alchian contends we cannot know in advance what subjective preference in relation to risk will yield the better results, rather we only know with hindsight what actions have yielded the higher profits. (Vromen 1995: 22). In a pervasively uncertain world characterized by omnipresent chance, the winners are not always those who act rationally on the best market intelligence but may be those who are less prudent but more daring. The trick as Alchian sees it is to back away from the trees representing the optimizing calculus of individual units so we can better discern the forest of impersonal market forces operating in disequilibrium. (Alchian 1950: 213). The critical lesson here is that it is more useful to look at what has worked than to look at what is proposed. It is not surprising, therefore, to find entrepreneurs placing reliance on patterns (rules) of behavior that appear to have been successful. Rules of behavior, of course, may be prove unsuccessful over an extended period as the environment to which they are adapted is continually changing. Hence, there is a continual revision of plans as a consequence of the disappointment of earlier plans. (Kirzner 1962: 381).
Evolution of commercial law

The emergence of rules of conduct in commercial dealings through purposive actions of individual actors has received much attention in law and economics literature. The mainstream view of contract is that it is not law in its own right but is the outcome of law, or at best, derivative law binding only on the parties to the contract. Thus pacta sunt servanda (promises must be kept) is the law and the content of the promise is the outcome of the law, or at best, law that is applicable only between the parties. However, it is evident that private contracts are a major source of law in the field of commerce. Standard form contracts devised to suit the convenience of particular groups of traders may become trade norms if adopted by a critical mass of traders. (Rubin 1995: 155). Trade and industry associations formed nationally and internationally contribute to law formation by the formulation of rules based on trade custom that may be adopted by parties through abbreviated reference in contracts. In the field of commerce contract and custom may interact in a mutually re-inforcing manner. Just as successful contractual terms become custom through widespread adoption, successful customary practices are selected for application to particular transactions by explicit adoption in contract. (Benson 1998: 89). Contract is seen as part of the selection process by which law evolves. There is, perhaps, no clearer example of this process than the so-called Incoterms (International Commercial Trade Terms) initially formulated by the Paris based International Chamber of Commerce in 1936. As the ‘Introduction to the Incoterms’ state their purpose ‘is to provide a set international rules for the most common trade terms in foreign trade’. They are periodically revised (most recently in 2000) to reflect changing customs in international trade. Conversely, they set standards that become customary law through adoption by traders the world over.

The role of contracting in legal evolution is closely tied to private dispute resolution. Forms of private dispute resolution such as commercial arbitration, mediation and negotiation are themselves forms of contracting whereby parties agree to abide by third party determinations or reach new agreements concerning rights and obligations through direct or third party assisted discussion. There is some debate on the question whether private dispute resolution can produce clear rules. Landes and Posner, for example, argue that profit maximizing private judges have little incentive to clarify the rules upon which they determine disputes as clarity will reduce the incidence of disputes. (Landes and Posner 1979: 238-39). Others such as Fuller (1981) Benson (1997) and Lew (1978) contend that incentives exist for the clarification and justification of decisions in the context of existing custom. The success of trade and industry associations in attracting dispute resolution business is explained not only by their technical expertise in their economic sectors but also by the reliability and predictability of their decisions. At any rate, it seems reasonable to assume that traders submitting disputes to commercial ADR organizations do not see themselves as entering a lottery conducted by persons having no regard to practices and expectations seen as legitimate within the trade.

Evolution of liability rules concerning tort and crime

The emergence of liability rules in tort and criminal law has been the subject of studies by Calabresi and Melamed (1972) and Adelstein (1998) and others. Building on Coase’s insight concerning the effect of transaction costs on what transactions will actually take place among agents, Calabresi and Melamed developed a unified theory of property rights and tort liability in which the state is seen as the allocator of power to impose costs on others without compensation or liberty to be free from such imposition. (Adelstein 1998: 64) Coase’s theory that in zero transaction cost conditions the initial allocation of rights would not matter as they would gravitate to those who value them most had been refined by Posner’s corollary that where transaction costs are prohibitive, efficient allocation of rights will occur only if the state initially allocates them to the highest valuing actor. Calabresi and Melamed argued that the state was engaged in just such an exercise in establishing property rights and liability rules driven, though not exclusively, by efficiency considerations. The difference between property rules and liability rules is a matter of different governance structures. Whether the allocation was protected by property rules or liability (tort) rules depended on the transaction cost situation. Where transaction costs are low, transfer of rights is left to contract. Where transactions costs are too high as in the case of state appropriation of property for public purposes or in the case of negligent or intentional damage as in classical tort, the liability rule requires retrospective compensation determined by a third party. The distinction between the governance structures drawn by Calabresi and Melamed dissolves when subjected to a Hohfeldian analysis. Hohfeld (1913) demonstrated that compound concepts such as rights in rem are reducible to bilateral right-duty relationships between the property owner and each and every other person. A person is prohibited from taking a another person’s property without that person’s consent not by a property rule but by a tort, and probably, a criminal law rule. The property rule is relevant to ascertaining whether a tort or crime has been committed, but itself is incapable of protecting property. Adelstein extends the liability rule analysis to criminal law pointing out that the distinction between tort and crime referable to the difference in the number of victims. He proposes that crimes are ‘involuntary transfers of a multitude of individually held entitlements to be free of these indirect costs, and it is to the compensation of this class of victims, not individually through money payments but collectively and in kind through the infliction of suffering proportioned to the moral costs of the act, that the criminal process is addressed’. (Adelstein 1998: 64)

There is no suggestion by these institutionalists that the state is either capable of or indeed motivated to engage in efficiency analyses of liability rules. Public choice theory that exposes the way in which legislators get elected and trade votes precludes such a conclusion with respect to the allocational function of legislation. The liability rules of tort and crime were developed, in fact, by common law courts through the process of litigation that resembles much more closely the spontaneous order model of legal evolution. (Ruhl 1996a, 1996b) Similarly, the delictual liability in Roman Law predated codification and arose in ancient custom. The point is that a selectionist explanation similar to that advanced by Alchian, Friedman and Becker with regard to the emergence of the firm may be applied to deliberately created liability rules. While legislatures may be motivated by multifarious considerations including the vote delivering capacities of interest groups, inefficient rules will be subject to constant selection pressures. However, while we may remain optimistic about this process, there is no guarantee that the end results will be efficient rules even if we agree on the economic notion of efficiency. The reasons have to do with the non-linear dynamical nature of the evolutionary process which presents many pitfalls from which subjects may not recover easily, if ever. The integration of this factor in institutional theory is the major contribution to evolutionary jurisprudence of the new institutionalists. In doing so, the new institutionalists reconnect old institutionalism to the spontaneous order tradition of the Scottish and Austrian schools.

  1. Pathways of legal evolution: the lessons from new institutionalism

Game theoretic models indicate that conventions or self-executing patterns of behavior emerge in populations of interacting agents who adjust their behavior over time in response to the payoffs that various choices have historically produced. Axelrod’s idea that cooperation results from ‘tit for tat’ strategy among agents suggests that over repeated encounters, agents will learn to avoid punishing behavior and to repeat rewarding behavior. (Axelrod 1984). As agents are mostly strangers in larger societies, they are dependent on a process of social learning through reliance on patterns of behavior that appears to be successful. Accordingly, game theoretic models take as given, the idea that patterns of behavior that appear to be successful increase their representation in the population. (Mailath 1998: 84)
However, it is often observed that forms of behavior that appear to be successful in some communities are not prevalent in others. This fact does not contradict the assumptions of the game theoretic models but alerts us to the presence of factors that make the adoption of particular forms of behavior too costly in some communities. North claims that game theory provides an inadequate account for the ‘the complex, imprecise and fumbling way by which human beings have gone about structuring human interaction’ (North 1990: 15) Though this criticism may seem too harsh, North is certainly right to point out that we will not get far in understanding social evolution if we disregard the critical role of institutions in the process. As the Scots and the Austrians realized, the origins of some of the most fundamental social norms are lost in the mists of time and some norms predate the emergence of human capacity to express them in words. They arose not from rational calculations but from regularities of action and the advantages they conferred on groups who happened to observe the regularities without any foresight of those advantages. (Hayek 1982: I, 19). However, while the search for origins of social structures is doomed, we can yet learn from observation, some aspects of their growth and change over time. It is here that the new institutional economics has made an important contribution to evolutionary legal theory by highlighting the problem of path dependence in institutional change.

Although evolution is a process of blind variation and selective retention, the variations that take place are themselves constrained by history and environment. This is a consequence of the principle of accumulation of design that the Scots discovered. As Gould puts it, ‘The constraints of inherited form and developmental pathways may so channel any change that even though selection induces motion down permitted paths, the channel itself represents the primary determinant of evolutionary direction’ (1982:383). Natural history is a constant reminder that biological evolution often proceeds down one way streets and, as presently observed, so does cultural evolution.
The human race, because of its intellectual abilities and cultural institutions, has a limited capacity to change their evolutionary course. However, it is apparent that human development is critically dependent on cultural inheritance. Although in comparison to biological emergence, the break outs in social evolution occur more frequently and more visibly, the process remains fundamentally that of accumulation of design. A major part of the cultural inheritance of a society is in the form of institutions that constitute the framework of rules within which social life is played out. (North 1990:4-5). In this sense laws are quintessential institutions. They are not the only institutions, there being other formal and informal constraints such as the constitution, conventions, ethical codes, etiquette, religious beliefs and superstitions. The higher order institutions such as the constitutional dispersal of power, the representative principle, judicial independence, due process, property ownership and freedom of contract crucially determine information flow and influence the emergence and modification of lower order institutions. Institutions are critical to legal evolution for three reasons. 1. They are important as historical determinants of evolutionary pathways. 2. They form part of the current selective environment. 3. They provide the agencies through which legal change is effected.

Once a law (or less formal rule or practice) is established, individuals and organizations are likely to adapt and arrange their lives in such ways that they count on that law remaining in force. It is also likely that organizations will arise to fill the niches created by the law. As public choice studies demonstrate, laws become difficult to repeal when the individuals and organizations who rely on them have greater bargaining power in the political system than those who are harmed by them. Such ‘lock ins’ result from the dependence of economic actors on the incentive structures created by the evolved institutional framework (id:7-8). Such laws predispose the legal order to evolve in particular directions. Laws that impose price controls on goods and services may, for example, engender black markets the suppression of which require further controls on trade. The immense volume of laws in the form of statutes, regulations, orders, discretions and official polices that make up the welfare state shows how the legal system can gather momentum of its own after it is set on a particular course producing consequences which no one foresaw or desired. In a world of perfectly informed persons and zero transaction costs, dysfunctional laws would be quickly revised, or more likely, would not get enacted at all. But, in the real world people work with very imperfect subjective models of their environment which rely to a large extent on their cultural inheritance in the form of institutions or what Hume called custom. The extent to which the models get revised depends on the feedback they receive and the quality of the feedback depends partially on the institutions themselves.

  1. Does evolutionary theory provide normative options?

The idea of evolution in the sense of blind variation and selective retention suggests the tautology: what is retained is retained and what is eliminated ceases to exist. On this view, our moral standards themselves are products of selection pressures and hence we have no independent yardstick by which we to evaluate the direction of evolution. However, it does not follow from our lack of independence from the evolutionary process that we cannot or should not make judgements concerning evolutionary directions or provide inputs to the process. Deliberate inputs are perfectly compatible with accumulation of design. As Vanberg argues, ‘there is no contradiction between the notion of deliberate institutional design and the notion of a competitive evolutionary process, just as there is no contradiction between the notion of deliberate organized production and the notion of a spontaneous market process in which such deliberate production experiments compete’. (Vanberg 1994: 437). In fact, evolution itself renders redundant the question whether human beings should seek to influence their own evolution. We have evolved into a race of incorrigible, theorists, designers and constructivists. As evolutionary epistemologists led by Popper claim, cultural evolution is part of a continuum with biological evolution representing a process of knowledge growth through trial and error. (Popper 1963) While it is clear that design inputs are integral to the process of cultural evolution, it remains to consider what normative lessons concerning interventions the evolutionary process itself offers. There are two aspects of the evolutionary process that have normative implications. The first is the selection-competition aspect and the second, the orderliness aspect..

The trial and error process by which human problems are solved may be enhanced by the proliferation of hypotheses and their testing in competitive conditions. Just as scientific hypotheses seek to explain physical reality, normative rules of the legal system may be regarded as hypotheses about ‘social reality’. These hypotheses, as the spontaneous order theorists assert, are tacitly generated by the regularities of the behavior of individual agents adapting to local conditions. The social system also generates through its scientific and political activity, numerous hypotheses in the form of legislation. The process of theory production and testing is encouraged by open political systems where competitive conditions are secured by constitutional rules, constitution being understood in the wider economic sense. Constitutional safeguards of the freedoms of communication and association, the representative principle in government and rule of law conditions directly and indirectly create the competitive conditions that encourage knowledge growth through trial and error. In the case of tacit hypotheses, information exchange occurs not through formal discussions but through conduct of persons pursuing their own different ends. In this process, hypotheses are generated through the equilibrating process resulting from the revision of behavior by agents responding to trial error feedback. Freedom of contract and the freedom to hold, enjoy and dispose of property are seen as critical to the process of information exchange through conduct. In this respect, the general prevalence in the legal system of abstract and impersonal rules of conduct as opposed to discretionary powers fixing rights and duties in the individual case is seen as a clear advantage. It provides stable areas of autonomy that allows agents to utilize knowledge that they alone possess, enabling richer hypotheses to emerge through exchange. Unlike patternless interventions, abstract rules also provide contestable standards that are susceptible to revision.

The importance of spontaneous order in the evolutionary process also carries normative implications. Evolution is a feature of complex spontaneous orders that occurs at the edge of chaos. As Kauffman points out, spontaneous order undergirded all stages of evolution and has even ‘undergirded the very capacity to evolve itself’. (Kauffman 1995: 71) Static things such as tables and chairs or even completely programed things such as clocks do not evolve. Nor does matter in chaotic conditions. An adaptive system needs to maintain stability while allowing its members local freedom. This is the character of all spontaneous order including human societies. If the members are fully controlled the system will lose its adaptive capacity and ultimately die. If they obey no rules too, the system will die by descending into chaos. In society, coordination and stability are achieved through abstract laws that allow members to utilize knowledge about their own circumstances. The paradox is that adaptive order is actually made possible by the simplicity and generality of laws. If there are no rules at all there are no prospects for coordination of agents and if the law dictated the behavior of each person in great detail, the system will be less, not more, adaptive. This is a point which Hayek made in 1973 in his Rules and Order (1973:49). More than two decades on, scientists investigating complexity and the laws of self-organization are coming to similar conclusions from experimental data (e.g. Kauffman 1995:86-92). In his incisive book, Simple Rules for a Complex World (1995), Richard Epstein argues that our complex social world works best on a handful of simple rules.
Eighteenth century evolutionary thought as later amplified by the Austrian school brought to light the nature of legal emergence as a process of accumulation of design much like the work of the unseen hand or the blind watchmaker. It introduced the idea that while we may certainly engage in social problem solving through legislation, we may do so only within the constraints imposed by the spontaneous nature of social order. With reference to law, this viewpoint informs us that by attaining legislative power, the human race did not gain an unambiguous advantage. Once its emerges, legislative power frequently falls into the hands of individuals and groups who use it in their own interests. Obviously, in such situations, the information that is used in law making is extremely limited. All too frequently legislation that such rulers enact to achieve their ends take the form of ad hoc commands made directly or through functionaries to whom the power of command is delegated. As we have seen, this form of law incorporates even less information. Where legislative power is exercised by assemblies which are periodically elected by the people, the potential for abuse is reduced. However, as the public choice literature illustrates, the electoral process tends to become a marketplace where legislative power is bought with redistributional policies favorable to particular electoral constituencies.

As North and other institutional historians have pointed out, bargaining democracy (Hayek’s term) has become entrenched because of the increasing returns which it provides to organizations that have evolved to take advantage of it and the prohibitive transaction costs of changing it even at the margins. However, evolution time and time again surprises us by the unexpected and unintended break outs of systems from apparent blind alleys. Although the cost of directly changing the institutional environment remains high, the cost of exit has been falling in relative terms owing to the globalization process, liberalization of international trade law and new technologies. Exit provides powerful feedback concerning constitutions and law to national and territorial governments and the constituencies that elect them. Yet, there is no reason for us to be passive observers optimistically awaiting evolutionary corrections that are impossible to predict. We could be pro-active in constitutional design without pretense that we are in total command of our destiny.


  1. This essay was researched and written during the author’s tenure as a Visiting Scholar of the Social Philosophy and Policy Center, Bowling Green State University during the Fall Semester of 1998. The support of the Center is gratefully acknowledged. The essay was enriched by the author’s numerous discussions with Professor Young Back Choi and Mahesh Ananth and by the comments of the anonymous referees.


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