Hayek's The Constitution of Liberty - Institute of Economic Affairs

h ay e k ’ s t h e c o n s t i t u t i o n o f l i b e r t y
o r i g i n s a n d d e v e l o p m e n t o f t h e r u l e o f l aw
north German states. Prussia’s growing dominance and its 1870
victory in the Franco-Prussian War led to the formation in 1871
of the German Empire as a constitutional monarchy, with King
Wilhelm of Prussia as German Emperor and Otto von Bismarck
as Chancellor.
Hayek gives a mixed verdict on Prussian influence. Looking
back to the eighteenth century, he credits Frederick II’s civil code
of 1751 with initiating a rapidly spreading movement ‘for the codification
of all the laws.’ Hayek regards this movement ‘as one of
the most important aspects of the endeavor on the Continent to
establish the rule of law’ (197). In this atmosphere Immanuel Kant
and later the young Wilhelm von Humboldt wrote highly influential
treatises on moral and educational freedom; and liberal movements
emerged with the broad aim of limiting government by a
constitution and general laws. Yet by the 1860s and 1870s, Prussia
had become a ‘police state,’ defeating efforts to bring Prussia itself
and the broader political entities it dominated under the Rule of
Law (199–200).
The liberal movement in Germany had two main goals: establishing
the Rechtsstaat (or law state) and achieving the ideal of
constitutionalism. In the Cairo Lectures, Hayek gives considerable
attention to writers, especially in southern Germany, who helped
develop the theoretical conception of the Rechtsstaat after 1800;
but he omits this review in Chapter 13 of The Constitution of Liberty
(cf. 1955: 21–3).
The Rechtsstaat was designed primarily to curb the arbitrary
exercise of power by the expanding bureaucracy. In all of
con tinental Europe, and especially in Prussia, there developed ‘a
powerful centralized administrative machinery’ with ‘a body of
professional administrators who had become the main rulers of
the people’ (193). Initially liberals saw their choice as one between
either depending on the ordinary courts to decide whether administrative
acts were lawful and consistent with private rights or,
in line with French practice, establishing ‘quasi-judicial bodies
inside the administrative machinery’ to decide on the lawfulness
of administrative acts (196, 199–201). For a long time the liberal
supporters of the Rechtsstaat advocated the first approach, which
would depend on the ordinary courts to limit the administration.
This approach came to be known as ‘justicialism.’ By the 1860s
liberals had turned to a different conception, which in effect
modified the first approach so as to avoid placing judicial responsibility
inside the administration.
Rudolf von Gneist was the main architect of the new system.
Von Gneist and his supporters called for the creation of a
separate system of courts, alongside the regular ones, to hear
cases involving administrative actions. These ‘were meant to be
completely independent courts,’ not judicial bodies inside the
administrative apparatus; and it was hoped that they would,
in the course of time, ‘assume a strictly judicial control over all
administrative action.’ To defend these special courts, advocates
reasoned that ‘the ordinary judge, trained mainly in private
or criminal law,’ cannot be expected to possess the specialised
knowledge required to settle disputes over administrative actions.
This argument won over liberal supporters of the Rule of Law.
Thereafter the Rechtsstaat came to mean a system of independent
administrative courts rather than a reliance on the ordinary
courts. Indeed, this new approach was seen as the Rechtsstaat’s
crowning achievement. Most German administrative lawyers
backed it; and a system along these lines was introduced in the
German states in the 1860s and 1870s (200–202).
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