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Quotations about Liberty and Power

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Leoni berates economists who, in most cases, can see the benefits of decentralised, rivalrous activity in purely economic activities, but do not see that the same situation exists with legal services which, in the modern world, have been the exclusive preserve of a centralised, national, government monopoly. He slyly suggests that this is a result of the lack of historical knowledge on the part of these economists who not not realise that historically in Ancient Rome, in the free medieval cities, and in the Anglo-Saxon world such legal services have been provided in exactly this manner. A close reading of Adam Smith shows that he was aware of the fact that different courts competed for business and charged different fees for their services in his own day.

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30 October, 2006

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Bruno Leoni notes the strong connection between economic freedom and decentralized legal decision-making (1961)

Read the full quote in context here.

In the Introduction to Freedom and the Law the great Italian legal scholar and past President of the Mont Pelerin Society, Bruno Leoni, noted the strong connection between economic freedom and decentralized legal decision-making:

Unless I am wrong, there is more than an analogy between the market economy and a judiciary or lawyers’ law, just as there is much more than an analogy between a planned economy and legislation. If one considers that the market economy was most successful both in Rome and in the Anglo-Saxon countries within the framework of, respectively, a lawyers’ and a judiciary law, the conclusion seems to be reasonable that this was not a mere coincidence.

The full passage from which this quotation was taken can be be viewed below (front page quote in bold):

If we contrast the position of judges and lawyers with the position of legislators in contemporary society, we can easily realize how much more power the latter have over the citizens and how much less accurate, impartial, and reliable is their attempt, if any, to "interpret" the people’s will.

In these respects a legal system centered on legislation resembles in its turn?as we have already noticed?a centralized economy in which all the relevant decisions are made by a handful of directors, whose knowledge of the whole situation is fatally limited and whose respect, if any, for the people’s wishes is subject to that limitation.

No solemn titles, no pompous ceremonies, no enthusiasm on the part of applauding masses can conceal the crude fact that both the legislators and the directors of a centralized economy are only particular individuals like you and me, ignorant of 99 percent of what is going on around them as far as the real transactions, agreements, attitudes, feelings, and convictions of people are concerned. One of the paradoxes of our era is the continual retreat of traditional religious faith before the advance of science and technology, under the implied exigency of a cool and matter-of-fact attitude and dispassionate reasoning, accompanied by a no less continual retreat from the same attitude and reasoning in regard to legal and political questions. The mythology of our age is not religious, but political, and its chief myths seem to be "representation" of the people, on the one hand, and the charismatic pretension of political leaders to be in possession of the truth and to act accordingly, on the other.

It is also paradoxical that the very economists who support the free market at the present time do not seem to care to consider whether a free market could really last within a legal system centered on legislation. The fact is that economists are very rarely lawyers, and vice versa, and this probably explains why economic systems, on the one hand, and legal systems, on the other, are usually analyzed separately and seldom put into relation to each other. This is probably the reason why the strict relationship between the market economy and a legal system centered on judges and/or lawyers instead of on legislation is much less clearly realized than it should be, although the equally strict relationship between a planned economy and legislation is too obvious to be ignored in its turn by scholars and people at large.

Unless I am wrong, there is more than an analogy between the market economy and a judiciary or lawyers’ law, just as there is much more than an analogy between a planned economy and legislation. If one considers that the market economy was most successful both in Rome and in the Anglo-Saxon countries within the framework of, respectively, a lawyers’ and a judiciary law, the conclusion seems to be reasonable that this was not a mere coincidence.

[More works by Bruno Leoni (1913 – 1967)]