A Note on Institutions as Aids to Intertemporal Division of Labor and Guarantors of Liberty

Long lived institutions promote an intertemporal division of labor. Our forbearers solved particular problems. Institutions allows us in the present to rely on the wisdom of the past concerning these problems and work on more pressing issues. Hayek notes in The Constitution of Liberty that we do not, “as Thomas Jefferson believed… ‘ascribe to the men of the preceding age a wisdom more than human, and… suppose what they did to be beyond amendment.” There is here a confusion between the wisdom of a particular person and the collective wisdom of persons across many generations:

Far from assuming that those who created the institutions were wiser than we are, the evolutionary view is based on the insight that the result of experimentation of many generations may embody more experience than any one man possesses.

The formation of institutions across time represent the creation and application of information to relevant social problems. These solutions, as embodied in common law, have tended to increase freedom of the individual. The weakening of these institutions by increased reliance on legislation diminishes the freedom procured by this knowledge. It is this danger that Hayek refers to in his critique of rationalism. If the state is empowered to make too swift of changes too often and to deviate from the principles that underlie a liberal society, those principles, which secure the freedom to engage in any action not restricted, may be lost:

Not only is liberty a system under which all government action is guided by principles, but it is an ideal that will not be preserved unless it is itself accepted as an overriding principle governing all particular acts of legislation. Where no such fundamental rule is stubbornly adhered to as an ultimate ideal about which there must be no compromise for the sake of material advantages – as an ideal which, even though it may have to be temporarily infringed during a passing emergency, must for the basis of all permanent arrangements – freedom is almost certain to be destroyed by piecemeal encroachments.

It is on this intellectual foundation that one might argue for an encumbering of legislative action and increased reliance on common law as a means for promoting the general welfare.