THE EMERGENCE OF TRADITIONAL LEGAL PRINCIPLES ACCORDING TO MENGER, HAYEK, AND LEONI
The traditional, universal legal principles we dealt with in the last section in relation to the irregular deposit contract have not emerged in a vacuum, nor are they the result of a priori knowledge. The concept of law as a series of rules and
institutions to which people constantly, perpetually and customarily adapt their behavior has been developed and refined through a repetitive, evolutionary process. Perhaps one of Carl Menger’s most important contributions was the development of a complete economic theory of social institutions.
According to his theory, social institutions arose as the result of an evolutionary process in which innumerable human beings interact, each one equipped with his own small personal heritage of subjective knowledge, practical experiences,
desires, concerns, goals, doubts, feelings, etc. By means of this spontaneous evolutionary process, a series of behavior patterns or institutions emerges in the realms of economics and language, as well as law, and these behaviors make life in society possible. Menger discovered that institutions appear through a social process composed of a multiplicity of human actions, which is always led by a relatively small group of individuals who, in their particular historical and geographical circumstances, are the first ones to discover that certain patterns of behavior help them attain their goals more efficiently. This discovery initiates a decentralized trial and error process encompassing several generations, in which the most effective behavior patterns gradually become more widespread as they successfully counter social maladjustments.
Thus there is an unconscious social process of learning by imitation which explains how the pioneering behavior of these most successful and creative individuals catches on and eventually extends to the rest of society. Also, due to this evolutionary process, those societies which first adopt successful principles and institutions tend to spread and prevail over other social groups. Although Menger developed his theory in relation to the origin and evolution of money, he also mentions that the same essential theoretical framework can be easily
applied to the study of the origins and development of language, as well as to our present topic, juridical institutions.
Hence the paradoxical fact that the moral, juridical, economic and linguistic institutions which are most important and essential to man’s life in society are not of his own creation, because he lacks the necessary intellectual might to assimilate the vast body of random information that these institutions
generate. On the contrary, these institutions inevitably and spontaneously emanate from the social processes of human interaction which Menger believes should be the main subject of research in economics.
Menger’s ideas were later developed by F.A. Hayek in various works on the fundamentals of law and juridical institutions, and especially by the Italian professor of political science, Bruno Leoni, who was the first to incorporate the following in a synoptic theory on the philosophy of law: the economic theory of social processes developed by Menger and the Austrian school, the most time-honored Roman legal tradition, and the Anglo-Saxon tradition of rule of law. Indeed, Bruno Leoni’s great contribution is having shown that the
Austrian theory on the emergence and evolution of social institutions is perfectly illustrated by the phenomenon of common law and that it was already known and had been formulated by the Roman classical school of law. Leoni, citing
Cicero’s rendering of Cato’s words, specifically points out that Roman jurists knew Roman law was not the personal invention of one man, but rather the creation of many over generations and centuries, given that there never was in the world a man so clever as to foresee everything and that even if we could concentrate all brains into the head of one man, it would be impossible for him to provide for everything at one time without having the experience that comes from practice through a long period of history.
In short, it was Leoni’s opinion that law emerges as the result of a continuous trial-and-error process, in which each individual takes into account his own circumstances and the behavior of others and the law is perfected through a selective evolutionary process.
ROMAN JURISPRUDENCE
The greatness of classical Roman jurisprudence stems precisely from the realization of this important truth on the part of legal experts and the continual efforts they dedicated to study, interpretation of legal customs, exegesis, logical analysis, the tightening of loopholes and the correction of flaws; all of which they carried out with the necessary standards of prudence and equanimity. The occupation of classical jurist was a true art, of which the constant aim was to identify and define the essence of the juridical institutions that have developed throughout society’s evolutionary process. Furthermore, classical jurists never entertained pretensions of being “original” or “clever,” but rather were “the servants of certain fundamental principles, and as Savigny pointed out, herein lies their greatness.” Their fundamental objective was to discover the universal principles of law, which are unchanging and inherent in the logic of human relationships. It is true, however, that social evolution itself often necessitates the application of these unchanging universal principles to new situations and problems arising continually from this evolutionary process. In addition, Roman jurists worked independently and were not civil servants. Despite multiple
attempts by official legal experts in Roman times, they were never able to do away with the free practice of jurisprudence, nor did the latter lose its enormous prestige and independence. Jurisprudence, or the science of law, became an independent profession in the third century B.C. The most important jurists prior to our time were Marcus Porcius Cato and his son Cato Licianus, the consul Mucius Scaevola, and the jurists Quintus Mucius Scaevola, Servius Surpicius Rufus, and Alfenus Varus. Later, in the second century A.D., the classical era began and the most important jurists during that time were Gaius, Pomponius, Africanus, and Marcellus. In the third century their example was followed by Papinian, Paul, Ulpian, and Modestinus, among other jurists. From this time
onward, the solutions offered by these independent jurists received such great prestige that the force of law was attached to them; and to prevent the possibility of difficulties arising from differences of opinion in the jurists’ legal writings, the force of law was given to the works of Papinian, Paul, Ulpian,
Gaius, and Modestinus, and to the doctrines of jurists cited by them, as long as these references could be confirmed upon comparison with original writings. If these authors were in disagreement, the judge was compelled to follow the doctrine defended by the majority; and in the case of a tie, the opinion of Papinian was to prevail. If he had not communicated his opinion on an issue, the judge was free to decide.
Roman classical jurists deserve the credit for first discovering, interpreting, and perfecting the most important juridical institutions that make life in society possible, and as we will see, they had already recognized the irregular deposit
contract, understood the essential principles governing it. The irregular deposit contract is not an intellectual, abstract creation. It is a logical outcome of human nature as expressed in multiple acts of social interaction and coopera-
tion, and it manifests itself in a set of principles which cannot be violated without grave consequences to the network of human relationships. The great importance of law in this evolutionary sense, distilled and rid of its logical flaws through the science of legal experts, lies in the guidance it provides people in their daily lives; though in most cases, due to its abstract nature, people may not be able to identify or understand the complete specific function of each juridical institution. Only recently in the historical evolution of human thought has it been possible to understand the laws of social processes and gain a meager grasp on the role of the different juridical institutions in society, and the contributions of
economics have been mostly responsible for these realizations. One of our most important objectives is to carry out an economic analysis of social consequences resulting from the violation of the universal legal principles regulating the mon-
etary irregular-deposit contract.
The knowledge we have today of universal legal principles as they were discovered by Roman jurists comes to us through the work of the emperor Justinian, who in the years 528–533 A.D. made an enormous effort to compile the main contributions of classical Roman jurists and recorded them in four books (the Institutiones, the Digest, the Codex Constitutionum and Novellae), which, since the edition of Dionysius Gottfried, are known as the Corpus Juris Civilis. The Institutiones is an essential work directed at students and based on
Gaius’s Institutiones. The Digest or Pandecta is a compilation of classical legal texts which includes over nine thousand excerpts from the works of different prestigious jurists. Passages taken from the works of Ulpian, which comprise a third of the Digest, together with excerpts from Paul, Papinian, and Julianus, fill more of the book than the writings of all of the rest of the jurists as a group. In all, contributions appear from thirty-nine specialists in Roman classical law. The Codex Constitutionum consists of a chronologically-ordered collection of
imperial laws and constitutions (the equivalent of the presentday concept of legislation), and Novellae, the last work in the Corpus, contains the last imperial constitutions subsequent to the Codex Constitutionum.
Now let us follow up this brief introduction by turning to the Roman classical jurists and their treatment of the institution of monetary irregular deposit. It is clear they understood it, considered it a special type of deposit possessing the essential deposit characteristics and differentiated it from other contracts of a radically different nature and essence, such as the mutuum contract or loan.
The traditional, universal legal principles we dealt with in the last section in relation to the irregular deposit contract have not emerged in a vacuum, nor are they the result of a priori knowledge. The concept of law as a series of rules and
institutions to which people constantly, perpetually and customarily adapt their behavior has been developed and refined through a repetitive, evolutionary process. Perhaps one of Carl Menger’s most important contributions was the development of a complete economic theory of social institutions.
According to his theory, social institutions arose as the result of an evolutionary process in which innumerable human beings interact, each one equipped with his own small personal heritage of subjective knowledge, practical experiences,
desires, concerns, goals, doubts, feelings, etc. By means of this spontaneous evolutionary process, a series of behavior patterns or institutions emerges in the realms of economics and language, as well as law, and these behaviors make life in society possible. Menger discovered that institutions appear through a social process composed of a multiplicity of human actions, which is always led by a relatively small group of individuals who, in their particular historical and geographical circumstances, are the first ones to discover that certain patterns of behavior help them attain their goals more efficiently. This discovery initiates a decentralized trial and error process encompassing several generations, in which the most effective behavior patterns gradually become more widespread as they successfully counter social maladjustments.
Thus there is an unconscious social process of learning by imitation which explains how the pioneering behavior of these most successful and creative individuals catches on and eventually extends to the rest of society. Also, due to this evolutionary process, those societies which first adopt successful principles and institutions tend to spread and prevail over other social groups. Although Menger developed his theory in relation to the origin and evolution of money, he also mentions that the same essential theoretical framework can be easily
applied to the study of the origins and development of language, as well as to our present topic, juridical institutions.
Hence the paradoxical fact that the moral, juridical, economic and linguistic institutions which are most important and essential to man’s life in society are not of his own creation, because he lacks the necessary intellectual might to assimilate the vast body of random information that these institutions
generate. On the contrary, these institutions inevitably and spontaneously emanate from the social processes of human interaction which Menger believes should be the main subject of research in economics.
Menger’s ideas were later developed by F.A. Hayek in various works on the fundamentals of law and juridical institutions, and especially by the Italian professor of political science, Bruno Leoni, who was the first to incorporate the following in a synoptic theory on the philosophy of law: the economic theory of social processes developed by Menger and the Austrian school, the most time-honored Roman legal tradition, and the Anglo-Saxon tradition of rule of law. Indeed, Bruno Leoni’s great contribution is having shown that the
Austrian theory on the emergence and evolution of social institutions is perfectly illustrated by the phenomenon of common law and that it was already known and had been formulated by the Roman classical school of law. Leoni, citing
Cicero’s rendering of Cato’s words, specifically points out that Roman jurists knew Roman law was not the personal invention of one man, but rather the creation of many over generations and centuries, given that there never was in the world a man so clever as to foresee everything and that even if we could concentrate all brains into the head of one man, it would be impossible for him to provide for everything at one time without having the experience that comes from practice through a long period of history.
In short, it was Leoni’s opinion that law emerges as the result of a continuous trial-and-error process, in which each individual takes into account his own circumstances and the behavior of others and the law is perfected through a selective evolutionary process.
ROMAN JURISPRUDENCE
The greatness of classical Roman jurisprudence stems precisely from the realization of this important truth on the part of legal experts and the continual efforts they dedicated to study, interpretation of legal customs, exegesis, logical analysis, the tightening of loopholes and the correction of flaws; all of which they carried out with the necessary standards of prudence and equanimity. The occupation of classical jurist was a true art, of which the constant aim was to identify and define the essence of the juridical institutions that have developed throughout society’s evolutionary process. Furthermore, classical jurists never entertained pretensions of being “original” or “clever,” but rather were “the servants of certain fundamental principles, and as Savigny pointed out, herein lies their greatness.” Their fundamental objective was to discover the universal principles of law, which are unchanging and inherent in the logic of human relationships. It is true, however, that social evolution itself often necessitates the application of these unchanging universal principles to new situations and problems arising continually from this evolutionary process. In addition, Roman jurists worked independently and were not civil servants. Despite multiple
attempts by official legal experts in Roman times, they were never able to do away with the free practice of jurisprudence, nor did the latter lose its enormous prestige and independence. Jurisprudence, or the science of law, became an independent profession in the third century B.C. The most important jurists prior to our time were Marcus Porcius Cato and his son Cato Licianus, the consul Mucius Scaevola, and the jurists Quintus Mucius Scaevola, Servius Surpicius Rufus, and Alfenus Varus. Later, in the second century A.D., the classical era began and the most important jurists during that time were Gaius, Pomponius, Africanus, and Marcellus. In the third century their example was followed by Papinian, Paul, Ulpian, and Modestinus, among other jurists. From this time
onward, the solutions offered by these independent jurists received such great prestige that the force of law was attached to them; and to prevent the possibility of difficulties arising from differences of opinion in the jurists’ legal writings, the force of law was given to the works of Papinian, Paul, Ulpian,
Gaius, and Modestinus, and to the doctrines of jurists cited by them, as long as these references could be confirmed upon comparison with original writings. If these authors were in disagreement, the judge was compelled to follow the doctrine defended by the majority; and in the case of a tie, the opinion of Papinian was to prevail. If he had not communicated his opinion on an issue, the judge was free to decide.
Roman classical jurists deserve the credit for first discovering, interpreting, and perfecting the most important juridical institutions that make life in society possible, and as we will see, they had already recognized the irregular deposit
contract, understood the essential principles governing it. The irregular deposit contract is not an intellectual, abstract creation. It is a logical outcome of human nature as expressed in multiple acts of social interaction and coopera-
tion, and it manifests itself in a set of principles which cannot be violated without grave consequences to the network of human relationships. The great importance of law in this evolutionary sense, distilled and rid of its logical flaws through the science of legal experts, lies in the guidance it provides people in their daily lives; though in most cases, due to its abstract nature, people may not be able to identify or understand the complete specific function of each juridical institution. Only recently in the historical evolution of human thought has it been possible to understand the laws of social processes and gain a meager grasp on the role of the different juridical institutions in society, and the contributions of
economics have been mostly responsible for these realizations. One of our most important objectives is to carry out an economic analysis of social consequences resulting from the violation of the universal legal principles regulating the mon-
etary irregular-deposit contract.
The knowledge we have today of universal legal principles as they were discovered by Roman jurists comes to us through the work of the emperor Justinian, who in the years 528–533 A.D. made an enormous effort to compile the main contributions of classical Roman jurists and recorded them in four books (the Institutiones, the Digest, the Codex Constitutionum and Novellae), which, since the edition of Dionysius Gottfried, are known as the Corpus Juris Civilis. The Institutiones is an essential work directed at students and based on
Gaius’s Institutiones. The Digest or Pandecta is a compilation of classical legal texts which includes over nine thousand excerpts from the works of different prestigious jurists. Passages taken from the works of Ulpian, which comprise a third of the Digest, together with excerpts from Paul, Papinian, and Julianus, fill more of the book than the writings of all of the rest of the jurists as a group. In all, contributions appear from thirty-nine specialists in Roman classical law. The Codex Constitutionum consists of a chronologically-ordered collection of
imperial laws and constitutions (the equivalent of the presentday concept of legislation), and Novellae, the last work in the Corpus, contains the last imperial constitutions subsequent to the Codex Constitutionum.
Now let us follow up this brief introduction by turning to the Roman classical jurists and their treatment of the institution of monetary irregular deposit. It is clear they understood it, considered it a special type of deposit possessing the essential deposit characteristics and differentiated it from other contracts of a radically different nature and essence, such as the mutuum contract or loan.
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