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The People’s Law

January 29, 2013

Law

Law

Nothing is more obvious than the fact that U.S. laws are made by Congress, and that these laws are needed to maintain social order. But, are these statements actually true? Human beings are social animals that have needed rules and laws to regulate their social relations since the origin of the species and certainly long before the 19th century nation-state came into being. It’s simply not true that laws have to come solely from judges and legislators. If the law is considered as “the enterprise of subjecting human conduct to the governance of rules,” then this enterprise is also being carried out by, for example, everyone who drafts and administers rules governing the internal affairs of organizations such as clubs, churches, schools, labor unions or professional associations.

As Nobel prize winning economist Friedrich Hayek noted, laws evolve spontaneously and the most successful laws (for example, those pertaining to private property) have a tendency to spread because they are seen as contributing to human flourishing. It is true that laws can be formalized into statutes by legislative bodies, but in a sense, these are no more than commandments from on high. The concept of law as governance by rules and norms is more fluid, more organic, more natural than statute law. As William Graham Sumner, arguably the first person to teach a course in Sociology, wrote in his book Folkways (1906):

“We learn the mores unconsciously as we learn to walk and eat and breathe…The justification of them is that when we wake to consciousness of life we find them facts which already hold us in the bonds of tradition, custom, and habit. The mores contain embodied in them notions, doctrines, and maxims, but they are facts. They are in the present tense. They have nothing to do with what ought to be, will be, may be, or once was, if it is not now.”

In Moby-Dick, Herman Melville describes how conflicts often broke out between whalers. For example, after a tiring and dangerous chase a whale might get loose from one ship because of a storm and drift away only to be captured with ease by a second whaling ship which tows it to shore with no real effort or risk. Melville concludes:

“Thus the most vexatious and violent disputes would often arise between the fisherman, were there not some written, universal, undisputed law applicable to all cases…The American fisherman have been their own legislators and lawyers in this matter.”

The fishing law Melville refers to was not made by any legislature, rather, it emerged spontaneously over time. In fact, rather than copying existing imperfect laws, whalers chose to create new laws. Subsequently, in those cases in which ownership of a whale carcass was contested, judges regarded themselves as bound to honor whalers’ usages and the precedents set at trials.

Similarly, during the early years of the California gold rush, miners ruthlessly enforced their own mining laws. The simple processes and laws they established together with the quick acting justice they dispensed, contrasts strongly with the bloated and expensive system of justice operated today. Each miner had one vote and acted as his own legislator. When the miners could not come to a settlement of some dispute among themselves, they would leave the decision to a jury of miners. When a miner’s court was to be held, a formal notice was sent to all the prospectors within two or three miles, requesting them to assemble at the claim in question. Although the time spent was so much money out of the miner’s pocket, it was common for most of the residents to turn out as they all had an interest in supporting local laws.

As Tom Bell describes in his Chicago Law School  paper on The Jurisprudence of Polycentric Law, the United States has a rich history of groups producing private law: the early Puritan, Quaker, and Dutch settlers; the many 19th century utopian communities; merchants; labor/management councils; the newly freed slaves; the Mormons; the Chinese and Jewish immigrant communities; pioneers moving beyond the reach of state law; land clubs; cattleman’s associations and wagon trains.  Bell notes that while many of these organizations provided law in areas that the state had overlooked or deliberately ignored, in recent years privately produced law has grown most rapidly in an area where it competes directly with the state – commercial arbitration. The growth of private arbitration has removed entire classes of disputes from state courts and the insurance, financial services, construction, stock exchange and textile industries (among others) all make heavy use of arbitration for the simple reason that private courts offer greater speed and efficiency.

In non-business disputes most American adults go through their lives without ever hiring an attorney to help resolve a non-spousal dispute. Most people know the basic rules that govern ordinary interpersonal relationships and would rather use their own knowledge to resolve disputes than pay good money to hire an attorney. Robert Ellickson’s masterful study of how neighbors settle disputes in rural Shasta County reveals that most residents resolve cattle trespass disputes, “not according to formal law but rather according to workaday norms that are consistent with an overarching norm of cooperation among neighbors.” Ellickson finds that not only are most trespass disputes in Shasta County resolved according to extralegal rules, but most enforcement actions are also extralegal, ranging from negative gossip to threats of physical retaliation against the offending animals.

Scholars in the field of law, biology and economics are working together to try and understand why there is such a ubiquity of co-operation among self-interested individuals. Why do listeners send contributions to public radio, why do business executives prize reputations for honest dealing, why do neighbors ignore the law in favor of acting ‘neighborly’, and why do banks share ATM networks with competitors?  The answer appears to be that under certain conditions a ‘tit-for tat’ type strategy of cooperation is one that maximizes the welfare of group members. Under these conditions statute law ceases to be central to social order.

____________________

“Shame may restrain what law does not prohibit.”  Lucius Annaeus Seneca

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About Malcolm Greenhill

Malcolm Greenhill is President of Sterling Futures, a fee-based financial advisory firm, based in San Francisco. I write about wealth related issues in the broadest sense of the word. When I am not writing, reading, working and spending time with family, I try to spend as much time as possible backpacking in the wilderness.

View all posts by Malcolm Greenhill

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39 Comments on “The People’s Law”

  1. WB Says:

    Very good article, makes you wonder.

    Reply

  2. aurorawatcherak Says:

    Thank you! You explained the conservative civil libertarian American mindset very well.

    Reply

    • Malcolm Greenhill Says:

      I’m a little confused about your use of the term ‘conservative’. Private law is definitely not a conservative position.

      Reply

      • aurorawatcherak Says:

        Maybe not in England and it may not be a Republican position in the United States — of course the GOP isn’t really the “conservative” party it pretends to be. It is a conservative position in the United States, most often voiced by libertarians who believe that we could do with a whole lot less law if neighbors would just cooperate with one another instead of calling an attorney.

        Reply

        • Malcolm Greenhill Says:

          Well, I will concede that private law has Burkean elements, but if you are calling it ‘conservative’ then I don’t think you appreciate the radicalism of the position. Taken to its logical conclusion private law would lead to competing legal systems, something advocated by some libertarians such as David Friedman (son of Milton Friedman) but certainly not by any conservatives I know.

        • aurorawatcherak Says:

          I think if you actually look at the American movement for conservativism, you’ll see a thick streak of libertarianism in there. The American founders were more or less libertarians and it is toward the founders that most American conservatives look.

        • Malcolm Greenhill Says:

          Thank you for opening up this line of discussion. My reading of American history is that at the time of the Revolution conservatives were members of the group who wanted to retain a connection with Britain and if they failed in that they wanted a powerful central government to maintain the status quo. The revolutionary party (the radicals) wanted independence from the beginning of the struggle and they insisted that there was no legislature superior to that of the local colonial legislatures. Jefferson was more or less libertarian, Hamilton was not. If American conservatives look to the founders for inspiration which founders are we talking about?

        • aurorawatcherak Says:

          You’re right. We’re running up against a British versus American divergence here. And it is confusing. If William Buckey were still alive, I might ask him why he chose “conservative” for the movement’s title because modern American conservatives look back toward the classical liberals who founded our country. Alexander Hamilton was a minority voice in the founding generation — he was really a monarchist who disliked the British crown, but was perfectly willing to make George Washington our new king in its place. That was a more or less conservative position for his time. Classical liberalism had a range of choice. John Adams recognized the need for government, but recognized the need to constrain it. Thomas Jefferson was really more of an anarchist. He wanted no government, but recognized that we needed some government. For him, restrained government was a necessary compromise to natural liberty.

          So conservatives today revere liberals of the 18th century. The modern conservative movement might better be explained as a constitutional movement aimed at returning liberty to the American people from the control exercised by progressives in both national parties, some of whom call themselves liberal, but who wouldn’t recognize liberty if it bit them on the nose.

        • Malcolm Greenhill Says:

          Thank you for this clarification. I would love to believe that American conservatives look “toward the classical liberals who founded the country” but I just don’t see it that way. While Bill Buckley started out being very libertarian it soon became very clear that all libertarian principles could be thrown overboard because of the “aggressiveness of the Soviet Union” and as a result Buckley threw his weight behind Big Government for the duration of the Cold War. We now know that Buckley, for the two years prior to establishing National Review, was a CIA agent in Mexico City. His sister Priscilla, who became managing editor of National Review, was also in the CIA and other editors, James Burnham and Willmoore Kendall had been recipients of CIA largesse in the anti-communist Congress for Cultural Freedom. In addition, James Burnham has been identified by two reliable sources as a consultant for the CIA in the years after World War II. Moreover, Garry Wills relates in his memoirs of the conservative movement that Frank Meyer, to whom he was close at the time, was convinced that the National Review was a CIA operation designed to transform the right wing from an isolationist to a global warmongering anti-Communist movement. The true test of a classical liberal position is a passion for both small government and isolationism. I am aware that a few conservatives today claim to want a smaller government, but where is the anti-war passion?

        • aurorawatcherak Says:

          Anti-war passion goes out the window when terrorists fly jetliners into your civilian buildings, I think.

          Although, I think like Joe B, you’re confusing the Republican Party with conservatives. Many conservatives vote with the GOP in the silly hope that the GOP will act like a conservative party, but the GOP is really a moderate progressive party that merely panders to conservatives.

          I think the true test of classical liberalism is a passion for liberty, which is only possible through restrained government. Isolationism worked well for the US in an era where our enemies had to cross oceans to get to us, but I’m not sure how practical that principle is today. Certainly the US could reduce its military budget by pulling back into our borders and ignoring the pleas of those who ask for our help. I’m all for the second one; not sure of the practicality of the first. We can’t keep the whole of our military on our own soil — they’ll start oppressing the citizens just for something to do. We can’t release them from service when the economy can’t employ the existing civilian workforce adequately. And, then there’s the simple military strategy of “breaking china” on someone else’s soil. If we defend ourselves on our own soil — as we certainly will be called to do — we count the cost of war in our own devastation as factories, towns and roads burn. The US has not had to do that since 1814 and it has been one of our strengths.

          In theory, the principles are good, but in practice — well, we all have to live in the world that exists, don’t we?

        • Malcolm Greenhill Says:

          Well, I’m glad we both share a passion for liberty but I do think we have reached the point at which the modern conservative and the classical liberal tradition go their separate ways. Just as Bill Buckley was willing to accept Leviathan until the evil empire of communism had been subdued so the modern American conservative is willing to compromise on liberty until the war on terrorism is won. The true student of liberty knows that war is always and everywhere the health of the state.

  3. Michael R. Edelstein Says:

    Thank you for your excellent exposition of how well societies function without the heavy hand of the State compelling it, and you suggest a reciprocal mindset as the explanation.

    How would you account for the practice of leaving a tip in a restaurant during a one-time visit to a foreign city?

    Michael Edelstein
    http://www.ThreeMinuteTherapy.com

    Reply

    • Malcolm Greenhill Says:

      Good question. I did say “under certain condition” and having a close-knit community would certainly be high on the list when it comes to reciprocity. I think most people tip because they feel it is the right thing to do irrespective of whether they are going to return to the restaurant. I should add that when you live in an exchange economy you develop a certain mindset about exchanges. Knowing that the waiter relies on tips for a large part of his or her compensation and that they have gone out of their way to make the dining experience special why should it be such a surprise that people are willing to tip even when there is no hope of reciprocity?

      Reply

  4. becwillmylife Says:

    In my personal life I live in a world where neighbors and family understand the unspoken social laws if you will. I am not as fortunate in my professional life. My job is coaching our staff through paperwork and discussions about how to avoid legal traps with parents. Special education has turned into quite a beast of late.

    Reply

    • Malcolm Greenhill Says:

      Thank you. This raises some interesting follow-up issues about what type of policies enhance community and what type of policies destroy community. In my neck of the woods special education is virtually the exclusive domain of government so, not surprisingly, an entitlement mentality prevails.

      Reply

      • becwillmylife Says:

        In my neck of the woods as well….we are heavily regulated by both state and federal government. Entitlement was foreign to me as a youngster growing up in a large, blue collar family. Feeling you are entitled….it’s a mentality like no other.

        Reply

  5. The Savvy Senorita Says:

    Hi Malcolm,
    Interesting article. Perhaps a version of mutual reciprocity keeps people associated with certain groups; it is favourable to maintain good relations?? They need one another, hold and share the same aims; perhaps they have familiarity with one another, and also the same business interests. Disarray wouldn’t get them far, or serve their interests in the long run.
    It is interesting how regardless of the competition they each pose to one another they adhere to rules. I think people know rules (especially those agreed together), are beneficial, as without them nothing could be achieved and no progress could be made. Everything that would be done, could be undone, if a level playing field wasn’t applied when issues or disruption occurred.
    The general laws of any land are quite archaic anyway, and often don’t reflect current societies requirements. So making rules to suit your circumstances or needs makes sense. General overarching laws are inflexible, laborious to pursue and in some cases left to the interpretation of someone above (a Judge). These resultant rulings and decisions made by any ‘superior’ person, will often make no sense to the people receiving the ruling. So, if laws could be remade, I can understand why groups of people wouldn’t want to emulate what already is and often doesn’t work!

    Bex

    Reply

    • Malcolm Greenhill Says:

      Good points. Also, when rule making is not decentralized there is a greater incentive for vested interests to capture the rule making authority to benefit themselves as the banks have recently done.

      Reply

      • The Savvy Senorita Says:

        Thank you.

        It is so true that laws can be ‘misused’ for another’s incentive. This would be detrimental to those ordinary people, who perhaps cannot wield or mould the law to reflect their interests. There becomes an almost two tier system of law and application of it. Those with the authority, power and of course money can have successes through the law; while ordinary people know very little about their rights or how to protect themselves with it. I think the law can be quite inaccessible to everyday people, and having something more decentralised could indeed benefit the everyday person.

        Reply

  6. Remi Zaidan Says:

    I can’t help but to think of laws in the sense you are describing in terms of Darwinian evolution: maybe it’s because of my scientist mind which tends to always look at the very fundamental aspect of things.
    It is amazing how such a simple principle can have such a powerful effect and such a wide range of domain of validity. Not only biological evolution, but also language, culture, religion, economy, politics, legislation and many other aspects of human sociology, all evolve according to the same very simple principle: survival of the fittest.
    Richard Dawkins, the modern days protagonist of Darwinian biology, has shown using computer simulations that the “tit for tat” type of altruism, which is very common in animal species and more so in primate species, is the best winning strategy for the survival of the “gene” that encodes it, among several other strategies ranging from complete egoism to complete altruism.
    So it is not so surprising that the notion of “laws” are somehow intuitive to our human psychology, and in many cases don’t need to be written on paper.
    As for the laws formulated by governments to maintain order in society, although they tend to be more efficient at solving a different spectrum of problems than those encountered by every day individuals, they also tend to follow the same principle. The laws formulated by a given generation of “legislators” are reviewed and amended by the next generation based on the balance between “problems” they solve vs. “problems” they don’t or sometimes even create (“problems” here is a subjective term which may change meaning with time and with political and social context). Eventually, the result you get is what you have elegantly described in this article.

    Reply

  7. TAE Says:

    Your post is as usual well written and researched, and you’ve probably read more books that I ever could.
    I think people’s law works just fine in a society of peers (neighbors for example), where nobody has the power of coercion be it through money, resources or force or whatever. In an unequal society (the US in imho is very unequal) with lots of “incumbents” (for lack of a better term) we need some written statute law. And I’m not saying that all current law is reasonable or sensible (heck no), there’s lots to reform. But if you let stark inequality be, you need statutes. I think this is where many US “libertarians” are (maybe deliberately) naive.

    Reply

    • Malcolm Greenhill Says:

      Thank you for your kind words. I think it important to recognize that most worthwhile statute law (there is some) is just a codification of the common law that evolved over time. Most tort law, property law, contract law, commercial law and even criminal law evolved in this way. This decentralized process naturally tends to weed out bad laws over time.This is not the case with statutes that have suddenly been socially engineered into existence. The latter have been nurtured and cared for by a slew of solicitous lobbyists to ensure favorable treatment for the interests they represent and once these laws are in-force they are virtually guaranteed to stay in-force until money ceases to talk. However, the essence of law is that it should affect everyone equally so it is only reasonable to be wary of giving anyone a monopoly on the making of law.

      Reply

  8. Argus Says:

    Methinks the ‘law’ is often invoked to gain pecuniary advantage: “Right or wrong, may the better lawyer win!” (And share the spoils, of course.)

    Some are now saying that with something like a million laws (or was it a million pages of law?) every person in the USA commits untold crimes/felonies/sins every day and can be selectively nailed (picked off) as and when required. Such ‘law’ and defence against it is big business—insurance must of necessity make a huge collateral killing too.

    Time for a major overhaul? How about for every new law brought in, half a dozen old laws get wiped? Continue until reality is re-established? Write new/revisited laws in easy to comprehend and use format?

    Reply

  9. Jackson Williams Says:

    Reblogged this on New American Gospel! and commented:
    — J.W.

    Reply

    • Malcolm Greenhill Says:

      Thank you for reblogging another post of mine. I’m honored.

      Reply

      • Jackson Williams Says:

        Not a problem, Mr. Greenhill. Though we are probably at different ends of the political spectrum — I consider myself left-of-center — I’ve always really dug the posts of yours I’ve read. Keep up the good work, dude.

        — J.W.

        Reply

        • Malcolm Greenhill Says:

          Jackson, thank you. You raise an interesting issue. Maybe the traditional political spectrum needs redefining? That’s definitely another post 🙂

        • Jackson Williams Says:

          Go for it, dude, because I would definitely read it. Thoughts for your (future) POLITICAL SPECTRUM POST:

          From about fourteen & fifteen to twenty-two, I’d be what you’d consider a “militant, sign-waving liberal”…whatever the hell that means, anyways. Call it college, call it whatever you want. But, over the past year or so — I’m twenty-four now — I’ve made a bee-line towards the center/an area that is slightly left-of-center. Winston Churchill said this was normal, but whatever; so, nowadays, instead of being a “full-on college liberal,” I’m now more of a moderate who happens to register Democrat (fiscally-conservative + socially-liberal). Does this mean that I’m actually a Libertarian with some liberal-leanings?

          Yes? No? I am lost.

          This stuff can be waaaaayyyyy too confusing sometimes, which is why I believe your article = necessary. It’s thrown my own “political spectrum” in to a state of absolute chaos. 😉

          — J.W.

        • Malcolm Greenhill Says:

          Jackson, I would not be in too much of a hurry to find a label for your political beliefs. Labels have a way of constraining both our thinking and the thinking of others about us. Best just to think deeply and read widely about individual issues. At some point you will find an intellectual tradition that feels like home.

    • Argus Says:

      Redefining the traditional political spectrum? Yes and no … total replacement would be better. Face it, always the same thing regardless of the (transient) names and faces.

      Time to climb out of that blasted box …

      Reply

  10. Aquileana Says:

    A very interesting post, Malcom!.
    I truly agree with you when you say that laws probably are a result of the need to solve conflicts, thus that they emerge spontaneously over time.
    The practice lead to the implicit acceptance of laws. Then the laws are written, but mainly there are because they were proved to be effective, before being in force.
    As to Jurisprudence its value is undeniable.. But it is even more important in USA that in other countries which don’t follow the Anglo-Saxon tradition.
    Kelsen’s system was basically “Pure” and not so open to exogenous influences, such as other sources of laws, meaning specifically: Jurisprudence and legal doctrine!~
    Thanks for sharing and all the best to you, Aquileana ⭐

    Reply

    • Malcolm Greenhill Says:

      Yes, it’s definitely in the common law tradition and it’s the “purity” that us anglo-sphere traditionalists find so frightening – the separation of law from morality. Thank you for commenting and starting the discussion with your post on Kelsen.

      Reply

  11. Malcolm Greenhill Says:

    Thank for referencing ‘The People’s Law’ in your excellent post on Darwinian Evolution.

    Reply

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  1. The biological and not so biological aspects of Darwinian Evolution | Science and Society - February 9, 2013

    […] recently read an article describing how local groups of people come up with their own law systems in order to organize […]

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