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
Liberal hopes of imposing independent judicial control over
an entrenched bureaucracy would be disappointed: ‘Just as the
new device was introduced, there commenced a major reversal of
intellectual trends’ – a reversal that was occasioned by the ‘new
movement toward state socialism and the welfare state.’ This new
movement began to gather force in the 1870s and 1880s, just as
the system of administrative courts received its final shape in the
German states. The new movement favoured widening administrative
discretion rather than confining it by judicial review.
Consequently the liberal conception of the Rule of Law, whose
centrepiece had been the Rechtsstaat, was abandoned as a practical
measure. The Germans were thus ‘the last people that the
liberal tide reached before it began to recede’ (202).
Hayek warns us not to underrate the theoretical achievement
of German liberals. Despite their lack of political success, they
were the ones who applied the old ideal of the Rule of Law to the
problem of restraining the modern administrative state: ‘they
represent in some respects the last stage in a continuous development
and are perhaps better adapted to the problems of our time
than many of the older institutions.’ The rise of the administrative
state began in continental Europe; but in the twentieth century,
it ascended in Britain and the USA as well. Thus the ‘power of
the professional administrator … is now the main threat to individual
liberty;’ and the ‘institutions developed in Germany for the
purpose of keeping him in check deserve more careful examination
than they have been given’ (202).
In this context Hayek criticises A. V. Dicey, whose study of
the English constitution he generally praises, for making ‘the
possibility of a review of administrative acts by the ordinary
courts’ the chief test of the Rule of Law. Dicey here overlooked
the independent administrative courts that were central to the
idea and practice of the Rechtsstaat. In this way Dicey contributed
much ‘to prevent or delay the growth of institutions which could
subject the new bureaucratic machinery to effective control.’ His
influence ‘blocked the development which would have offered the
best chance of preserving’ the Rule of Law (203–4).
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