 I am not late. The schedule I am given says I am to be here at 9.45 so I am early, but I now understand that this is like a courtroom. I must be on guard at all times such that other lawyers may take advantage of the situation. Every year I come to Exxon-Provence. I am a commentator and Christian Mouly, he is the speaker. And he is supposed to speak for half an hour and then I will speak for 15 minutes and every year Christian Mouly speaks for an hour and I then can speak for five minutes or three minutes. So this year I am the speaker. But what do I find when I arrive at the conference? Christian Mouly is speaking. He spoke five minutes. Before I begin my presentation I wish to say something to the people, the students who are here from the East, from the Eastern Europe and what used to be the USSR. I wish to, how many students this morning are from the East? Well, maybe. I wish to address you on another subject than my talk. I first wish to congratulate you on the wonderful events that have occurred over the past few years and especially on the joyous occasion of the August Revolution. I wish to tell you that you are faced now with a magnificent opportunity. You have an opportunity to change the world. And by the world I don't mean your world, the world of Eastern Europe or Russia. I mean the entire world. It is the same opportunity that we had in the United States in the 18th century to change not only our world but the entire world. We learned from Europe in the U.S. We learned the good things that Europe had done. We also appreciated the bad things, the mistakes that Europe had made. And we improved on the situation in the U.S. We did not copy Europe. We did not imitate Europe. We took the good and we made it better. You now are faced with the same opportunity and you should do the same thing. You should not copy Europe. You should not copy the U.S. You should learn from the good that Europe has done and learned and you should learn from the good that the U.S. has done and then you must make it better. You owe this not only to yourselves but you owe it to the rest of the world. You can be the leader of the world the way the U.S. has led liberals for some time. The leadership can go to you because the U.S. cannot improve at the rate you can improve. Everything is possible for you. It is much more difficult for us now. So this is your challenge. This is your opportunity not to copy, not to imitate but to learn from our mistakes which means we sometime must dwell on the negative. We must tell you what we have done wrong so that you may not repeat this mistake. Now this will be dangerous, of course, risky. Things could go badly. But it will be no more dangerous from now on than it has been up until this point. So this is the thing you must do and I, in a way, I envy your situation. I wish a comparable opportunity for change existed in my country that I could participate in. Well, let me now speak about my topic, the relation. Thank you. Let me now speak about justice and law. I said to many people last night that if I felt very spontaneous this morning I might instead speak on law and justice. I shall basically discuss the relationship between these two ideas, the idea of justice and the idea of law. What is the relationship between these two ideas? We must first realize that they are ideas. They are concepts. So what is the relationship between these two concepts? The concept of justice and the concept of law. There are three types of relationships I shall mention this morning. The first is that there is no relationship between justice and law, which I represent as the first. Justice and law are separate. There is an expression, law is law and no more. This is a view associated with positivism. The second view, which is a view that is compatible with liberalism and many philosophies, is that justice is higher than law, which I represent as the second chart, the second diagram. Justice is higher than law, superior to law. While I think that both of these two views contain some truth, there is a separation in some sense between law and justice and in some respects, law and justice I believe is higher or better than law. These two ways of thinking of the relationship between justice and law are misleading, I believe, and it would be better I think to think of justice and law as equals of the third chart. Each concept, each set of concepts influencing the other, each serving as it were, as a check on the other, a constraint on the other. Let me briefly define what I mean by justice. Without defending this conception, just offer you a definition. By justice I mean rights, the rights of the people. Rights are the means by which justice is recognized or in perhaps in French droire would be the term for justice or right. Law, on the other hand, by law I mean the rules, the specific rules and principles to guide individual conduct. What is written and said specifically, who gets which property, what is necessary to make a will, et cetera. How many witnesses do you need to a will or a contract? If justice then, rights are very abstract, they are very general, they lack specificity. The rights I have in mind are the right of private property, the right of freedom of contract. These are the two central pillars of rights that liberalism adheres to, that defines liberalism. But they are very abstract. They do not apply themselves automatically to a context, to a specific problem that may arise between two people, between Professor Mouli and myself, let's say. We know we both agree about property rights, we both agree about freedom of contract as it were, but perhaps we don't agree on what the time of this session is to begin or who is to speak first. What then do I posit to be the relationship between justice or abstract rights on the one hand and law or specific rules and principles on the other? The key to understanding the relationship between the two, well let me correct that. In answer to the positivist conception that these two are totally separate things, you have law, you have justice, they are separate. The key to understanding the deficiency of this view is the term or the word legitimacy, legitimacy. What is it about law that creates a duty to obey it? Another way of putting it, the way Aquinas put it. What quality has law, why is it that law creates, I'm sorry, that law binds in conscience? Why is law binding in conscience, in your conscience? Why is it if someone says this is the law that somehow you must do something different because it is the law? Why? Well, if law is law, law is simply whatever the command is, there is nothing that is binding in conscience. You have no duty of obedience. It is no more than if I told you you must do something or not do something. If law is, but we all believe that there is something about law that is binding in conscience that creates a duty of obedience, we think we do, we think we believe this, so what is this quality that law must have if it is to have this consequence, if it is to deserve this benefit that we give to it of saying if it is the law then we must obey it at least unless we are sure not to, but I mean at least presumptively we should obey it. What is it about law? What it is in my view is that law must be connected with justice. If law is unconnected with justice, it has not this quality. It only deserves this quality of creating a duty of obedience if it is connected with justice or rights. Now to fully appreciate the relationship between law and justice, it is necessary to become more, to understand better what rights are and why some things are rights and other things are not rights. And unfortunately in the time I have here I cannot really go into the analysis of rights. But let me simply say as a conclusion, as an assertion without argument, without even much explanation because of time, that in my view the concept of rights is a social concept, a concept that has a social function. If it had no social function we would not talk about it. And the function it has is to solve problems, problems that cannot be solved any other way than to go along with these concepts. And there are three large categories of problems that I shall only name, I shall not explain, that I believe rights solve. And these are the problems, the social problems of knowledge, which those of you who have read Hayek know something of what I mean. The problem of interest, for example, the fact that we all want to benefit ourselves perhaps at the expense of others, and the problem of power. These are large categories of problems that I cannot explain this morning, but I believe my conclusion is that the rights that liberals believe in, property and freedom of contract, are imperative because only property, by me as I mean private property and freedom of contract, can solve the social problems of knowledge, of interest and of power. Law is related to justice or rights because, again, I must simplify a more complex analysis. Law enables us as individuals to know what justice requires of us specifically. Without law, with only a knowledge of property rights and contract, freedom of contract, in the abstract, we would not really know who is to speak first, who is to use this room, who is to drive which car, etc. You need more specificity than justice by itself can provide. Law provides this knowledge. It solves a problem of knowledge also. Not the problem of knowledge Hayek talks about, but a further problem of knowledge that arises when we use justice to solve the problem of knowledge that Hayek does talk about. That is, how do we know justice? We know it by law. In addition, rules, specific rules, help us to detect partiality, which is a problem of interest, partiality in the judges who would rule for one person not because of justice, but because of money or because of influence. General rules that are specific help us to detect when this has happened. Law also helps us to avoid problems of power. It helps us to identify when power is being used incorrectly in error. It helps us to identify when power is being abused. In this respect, we may see law as a means of achieving the end of justice. Law as a means of achieving the end of justice. But does this not suggest the second conception of law, which is that justice is above law. Law as a means, justice is the end. What I have said suggests my sympathy with this conception. But now I wish to disagree a bit with this conception. The reason why it is misleading to place justice above law is because it suggests to liberals, especially liberal ideologues, of which I include myself as an ideologue. Ideologue is not bad. But it suggests to many liberals and other ideologues that you can deduce the specific rules of law directly or logically from the abstract principles of rights, biological deduction, so that if you really knew, if you really understood all the rights in the abstract very well, then if you think about it hard enough, logically, you can logically derive a rule to decide a particular controversy between two people. And I imagine that as I say this, many people in the room are recognizing that they themselves believe this to be true. But as a lawyer, I can tell you that this is not true. I believed it was true once when I was a law student and I went to school and I was reading all these cases and the professors were tormenting me with many problems and I had these liberal principles and I was supposed to, in my own mind, come up with the right answer and I found I could not. And I believed it was not simply my own failing in this regard, but I went once when I was a first-year law student to New York and I had spent an evening with Murray Rothbard. You may have heard of Murray Rothbard. He is a U.S. liberal and this evening while I was a first-year law student, my friend who was also a student went to Murray Rothbard and said, well, what about this fact situation and what about that fact situation we had heard in school? And Murray Rothbard, who of course knew all there was to know about these abstract principles, he said, what, what? Geez, I don't know. I don't know what to do. I don't know what the answer is. So he could not solve these problems. These problems are not solved this way in law. No. In fact, the truth is that we know what we do about justice, about property rights, about freedom of contract from the law. We did not have rights first in the sense of in our minds conceiving of rights first and then go out and make a legal system. We had a legal system first, deciding every case, attempting to do justice one by one without a concept in mind. And from this, spontaneously, has evolved a series of decisions and a certain amount of knowledge on our part from which we can generalize, coupled with our understanding of economics and philosophy, we can generalize and decide that certain things like private property and freedom of contract are essential principles of right. But the law was always there first. Well, if you cannot derive law directly or logically deduce it from justice, then what is the relationship between justice and law? The reason you cannot derive law from justice is because law, the specific rules are conventional. They are by agreement in a sense. They could be different and still be good or just. An example. It is, we are indifferent as to whether we drive on the left side of the road or on the right side of the road. Either way of driving is equally good. But it is imperative that we all decide to drive on one side or on the other side. So we could say in the situation that the natural right of the situation, I use this only as an analogy, but the natural right of the situation is that there must be one side of the road, must be one side of the road. That is the, and so, but the natural right of the situation is not that it is left or right. Whether it is left or whether it is right is by convention. So we can say a rule that says drive on the left is consistent with the natural right. A rule that says drive on the right is consistent with the natural right. But a rule that says drive on whichever side you like is inconsistent with the natural right. This is an analogy. It suggests that justice or rights can be used to criticize a rule as being contrary to the requirements of justice outside the boundary of defined by justice. But within the boundaries defined by justice, many different sets of rules can serve us equally well. So to use an example, a real example, not an analogy, the French law of contract law is completely different than the U.S. law of contract. The rules of contract are different in France than they are in America. But given the same facts of a lawsuit, French courts using French law totally different will reach essentially the same answers as the U.S. courts using U.S. law totally different reach basically the same answers. If you must think of an analogy to understand how this is possible, think of a computer, an IBM computer. There is an IBM computer and there is an IBM clone, IBM compatible computer. The microchip inside the computer of the IBM compatible computer is completely different than in the IBM computer. That's why it doesn't infringe the patent. It's completely different. But it is constructed in such a way that if whatever you type in, it will come out the same as an IBM computer. What is inside the chip is by convention in a sense, but the outward constraints you need, the keyboard input, you need the screen output. This is all the same. Two things that are different operate functionally the same. This is true of law. Two sets of laws can be different, but they can operate functionally the same. And what we want to do with justice is to see if the way they operate is compatible with justice or rights or incompatible with justice or rights. So to summarize what I have said so far, justice does not dictate a unique set of rules or law, but justice can be used to constrain law by saying some things are impermissible to do with law. This way law is used in the case by case to discover what we know about justice. The arrow goes one way and justice is used once derived, once discovered as we have in many respects is used as a criterion for evaluating the law we have in any given situation. The arrow goes the other way too. In that sense they both are necessary and in some sense equal. Both are necessary. Neither is sufficient by itself. Now let me now turn my attention from this rather conceptual discussion to a discussion of how this works in practice. How is it we can establish this reciprocal relationship between justice and law in practice? What we need, what we require, is a system that imparts legitimacy on law. We need a legal order that is such that the laws that result from the legal order are going to be just. Earlier in the week, Eamon Butler referred to a remark made by Bismarck that is to the effect that you do not wish to know how sausages are made and also you do not wish to know how law is made. The reason is of course there it is both the disgusting processes both. But I wish to pursue this analogy that Bismarck mentions a bit further because when you go to the store and you buy a sausage you do not test that sausage to see if it is wholesome or to see if it is infected. You assume it is wholesome. How is it that you assume this? In a sense that sausage has legitimacy not legitimacy with respect to justice but legitimacy with respect to hygiene or disease. It is presumed to be wholesome or good. Why? Because there is reason to be confident that the way it is made is the way to produce healthy sausages. That even in the sausage factory they don't look at every sausage as it comes off the line. They maybe inspect one randomly and they inspect another but they basically don't inspect all the sausages. But they have designed a system that if it works the way it is supposed to will generally produce good sausages. So the system must be designed away so that we have confidence that without testing each sausage we believe each one is probably okay. Knowing of course a bad sausage can also exist occasionally. Laws are similar. We cannot test every law individually each person to see if each law is consistent with justice. It is impractical. We are not knowledgeable enough. We don't have a good enough perspective. We are too partial in our views. We just impractical. We also are too busy with our own affairs to test the justice of every law that is made. In this case how is it we can achieve a correspondence between justice and law? We must have a procedure of making laws such that given our experience like our experience of making sausages we can have some confidence that if a law emerges from this procedure then presumptively not absolutely presumptively it is probably a just law. So our emphasis must be at this point on what is the procedure what is the system that would support this confidence that would justify this confidence that would justify a presumption of legitimacy for any law that happens to be enacted. Therefore we cannot be neutral about the procedures by which law is made. We must be critical to see that it is procedures that give rise to confidence not just any procedure that may happen to be. There are many aspects of procedure that are necessary for this legitimacy to occur and I cannot speak of all of them. But in the interest of the Eastern Europeans and the Russia and the former USSR people especially I wish to talk about some because you are now in a position to actually you might in fact you must figure out what sort of legal system you will have from now on. You must in a sense make this world anew and so I will discuss a few principles I believe are necessary that must be incorporated into a system. There are many ways to incorporate these principles but I believe these principles are essential to keep justice and law together together in a legal system. The first is to have a place in the legal system where in a sense we explicitly try to make law correspond to justice. A place where someone is thinking is this law just. So someone must have some idea of justice and they must be looking at a law and they must evaluate it somewhere and who is this someone usually but a judge. So somewhere in the system a neutral magistrate between the lawmaker the legislature and the people or the individual who is subjected to the law a neutral magistrate must evaluate the law to see if it is just. In the U.S. this concept is known as judicial review judicial review it is controversial sometimes because people wonder what gives judges the right to do this but it is essential. And in the U.S. also judicial review is done sometimes on the basis of a bill of rights. It is not essential that it be a bill of rights but this is one of the purposes of a bill of rights that sometime a judge can say hold a law up against the rights when a citizen is complaining and say the law is consistent with rights or the law is inconsistent with rights and if the law is inconsistent with rights it is no is no it's not a law. It is outside the boundaries of justice and law and therefore it is not good it is null. In addition the other people in society who are to evaluate the law to see if it is just besides judges are professors are theorists philosophers these people all have a right and a ability to make judgments about the justice of a law. Economists of course we know have no such ability it is a joke. So there must be other observers outside the system to make these judgments but the people in the system must be told to listen to these people as they are told in some European countries by means of the code the civil code tells them to listen. Okay that's one element judicial review actually explicitly thinking is this law consistent with rights. Now let me talk about some things that are not explicit some structural aspects of a legal system that are necessary to achieve a relationship between justice and law. This is not a complete list I shall speak of two principles that have proven valuable in the West in the US. The first is the principle of separation of powers I shall say more in a second. The second is the principle of reciprocity establishing reciprocity reciprocity between reciprocity between the law giver the law maker and the person who must follow the law. Now how are these two principles achieved separation of powers and reciprocity between law maker and law receiver. In the US this has been done by a formal separation of powers formal separation of powers between the judiciary the judges the executive the president and the bureaucracy and the Congress the legislator legislature formal separation as well as a separation between the federal government and the state governments many separations of powers. This has proven this is good but it has proven to be deficient because eventually these formal separations break down these so-called separate groups cooperate with each other at the expense of justice at the expense of the people and it is difficult to separate them again or to resist them once they have joined together as they have but the idea of separation of powers is good it is the implementation of the principle that has been deficient. The second principle of reciprocity between law giver and law receiver has been attempted by means of voting. You elect your representative your representative goes to the legislature and there is supposed to be reciprocity therefore between your representative and the voter the citizen such that if the representative acts improperly you don't vote again for them. This has proven not to work very well either. For two reasons mainly one is the citizen doesn't know enough about what the representative does to judge the representative accurately. This is a problem of knowledge. The second is that the citizens themselves begin to vote out of interest rather than justice. This is it or shall I say some citizens have an interest in voting certain ways because they are special interests and they vote as a block whereas other citizens have very diffuse interests and are not involved enough because of the diffuse interest to vote a certain way. So the special interests have undue influence this way over the legislatures not the average citizen. Both of the deficiencies of structural constraints structural separation of powers and voting can be found in the literature of public choice. The public choice school of economics discusses the deficiencies of these principles the deficiencies of the implementation of these principles. So if you were interested in this more you should read in this literature of public choice. How is it that we as liberals can perhaps conceive of a better legal order than these and a better way of putting into effect into practice separation of powers and reciprocity. I shall make a suggestion now and then that this will be the end of my talk. Essentially what I believe is necessary and at this point I speak only for myself. I do not speak for all liberals. But what I believe is the real constraint well the problem with the strategies already attempted is that they are political strategies solely involves political systems, political rights, political procedures, politics. But the real constraints that we know as liberals exist are market constraints. Those are genuine constraints, political constraints are illusions often. They are what James Madison, founding father of the U.S., author of the U.S. Constitution, referred to as parchment barriers, paper barriers, political constraints or paper barriers. Market constraints are genuine barriers. So we must somehow I believe infuse the legal system with market constraints. The way we want wish to infuse the automobile system, the food system, all the other systems with market constraints. And how is this to be done? This is very new. This is very different. It seems, it sounds. There are two principles by which we create market constraints. The first principle is that of freedom of entry and exit. Firms are constrained because others may freely enter their market and they may be forced to exit the market. That is a genuine constraint. Freedom of entry and exit. The second genuine constraint from the market that the second principle by which the market provides constraints is consumer choice. I buy Toyota instead of General Motors. That's a genuine constraint. Neither of these constraints exists presently in the legal system to a great enough extent. There is no freedom of entry and exit to provide legal services. And there is very little consumer choice as to which legal system you will participate in. The only way you exercise any choice as to which legal system you participate in is by what country you choose to live in or what state of a union you choose to live in. And this is a very costly choice to exercise. To exercise a choice for Canada as opposed to the U.S., I would have to leave my whole life behind. So I am unlikely to do this. Whereas I can exercise a choice for Japanese cars over American cars very simply. I can stay right where I am. Exercise this choice. Similarly, unlike the automobile companies which are prohibited from putting out of business their Japanese competitors, they should be anyway, the legal system can put out of business any competitor. It assumes a monopoly unto itself. And thereby there is no constraint. There is no market constraint. So the two principles that must be infused in a legal system for it to be under genuine constraints is first that it cannot have a monopoly. It cannot put rival legal systems out of business by force. And this is a simple application of the liberal principle of freedom to contract. It cannot interfere with a agreement between you and another legal system that they should be your legal system. That is your freedom to contract with another legal system. To interfere with this is to interfere with freedom to contract. And the second characteristic a legal system must have is it cannot confiscate its revenue by force the way it does. Denying consumers any choice and obtaining the money whether the consumers like the service or not. It must charge fees and it must be concerned that if its fees are too high or unreasonable you will go to another legal system for its services. This is another genuine constraint. It must also be responsive to the consumers in terms of the law it provides as well. Because if it's the law is unjust then you can go to another system where perhaps the law may be more just. Now this may sound very radical and it is a change. But it is there are elements of this in our own history. There are elements even now of this sort of thing. There are for example many different court systems in every country. First of all there are many countries each with its own court system. And then there are within countries like the U.S. there are many different court systems. And in history in England for example before the rise of the hierarchical state there were many competing court systems. And this story of the competing court systems can be found in two books that you may wish to look at. The first book is called Law and Revolution by Berman. And the second book is The Enterprise of Law by Benson. Bruce Benson is a historical book. The story of the origins of law in the West which was competitive and how it became subsumed by both the church because of the church and the state into a hierarchical system which it had not been before. The Benson book is Benson is an economist and he discusses the economics situation the economics of this sort of thing and as well as contemporary and historical examples. So I urge you if this interests you to look at these things. So even though these proposals to infuse the market into the legal system sound radical they are in fact really only a small departure in theory from things we have already experienced. And I would be happy to explain more about this perhaps in the question period if I have the opportunity. These two principles yes these two principles no jurisdictional monopoly and no confiscation of income will enable us to put into practice the principles of separation of powers genuinely and the principles of real reciprocities. Though they sound radical even if they are the events of the recent weeks as if it has taught us nothing else it has taught us that even radical things are possible.