A Case for the Civil Law over Common Law: Response to Hayek

0:00My paper is basically serving as a response to F.A. Hayek's criticism of civil law. A few things, I actually rewrote this last night, because the last time I gave this presentation it was to a group of civilian lawyers, and it was very widely received there as I'm sure you can imagine. But for those who saw me frantically writing next door, I actually also rewrote it in the last hour. The big thing I want to start off with that I forgot to do is definitions. When we talk about civil law, we're not talking about any type of codified law. We're talking about law that's in the tradition of Roman law. There are actually civil law countries that don't have a code. Scotland and South Africa both are civilian countries that have no code.

0:45And in fact, as we see, the whole world is now codified. I would not classify that as civil or Roman law. Law. This has been the agreed upon term for a while, but I just want to make sure that the definitions are straight going forward. These definitions are obviously very debatable, but that's what I'm going to be using for this presentation. So you guys heard all about his legal views, so I'm not going to go into that too much. I'm just going to put out this one fact about the law and economics movement. Hayek would have been a critic of this movement, I believe. Richard Posner and Professor Boudreau from from George Mason University have conflicting law review articles about this. Hayek believed that the judges should not enforce what they believe the law should be on the people. Right?

1:31And so he believed in this random order. Posner disliked this about Hayek and he wrote a law review article about it who drove, thoroughly defended Hayek. Hayek's criticisms of the The Civil Law are the very classical criticisms. He calls the civil law created while the common law is discovered. And I'll go into what that means in a couple seconds. And the other criticism is that it's just too rigid of a system. The judges can't operate within it. Why is this important? This is why. The blue is civil law. And by the way, the brown that you will see my home state of Louisiana in, we are not a civil law jurisdiction, we are a mixed jurisdiction.

2:19You will not hear me mention civil, sorry, Louisiana law here today, because we're not civilian, we're mixed. That was the only project for this before in the last paper, by the way. So creative versus discovered, what does this mean? Created law is when a group of people get together and write down what the law should be. How do I assert my will over you? Discovered law is a sporadic process of mostly common law cases, and out of this will come some sort of pattern. We see it in economics as prices. In the common law, we get rules. For any of you who have been to law school after Langdell from Harvard Law School came out, We now talk about rule statements. For those of you who have been to law school, you do outlines based on these rule statements, hundreds of them, way too many.

3:12So let's see if this test of is the civil law really created holds up over time. Hayek concedes that the 12 tables is good law. That is so-called discovered law. So I'm going to use that as my premise, I'm going to use that as my starting point, and from there we're going to go into the jurists of the Roman law period. I'm not going to have time to go through all of this, I really apologize about that, but I don't want to bore y'all to death either. So basically what they did is they wrote down opinions, right? They advised judges, they advised the different parties about what the law is. And they would summarize these into what they called soumets, and they would do this completely free, and they would basically, the soumets became treatises basically.

4:02What happened to this document, the soumets? They went to Gaius and his institutes. There he had a law school, if you will, and they just read these, and they just expounded on these and discussed these. The twelve tables and the soumets were their starting point. After Gaius came Justinian, and he is the big guy. I wanted to give him a full slide, but I just couldn't find the time. Justinian wrote a digest, a code, and novels, which was legislation. The only one that we're going to be focusing on is the code. He borrowed heavily from Gaius and early Roman law. A lot of people, myself included, believe he kind of cheated and said that, and said that, oh, look how smart I am, and Hayek, if you will, would agree with this, I believe, and he said, you know, that at the end of the day, Justinian very heavily borrowed from Gaius, maybe a little bit too much.

4:55What happens from there? The Glossators are enormously important. I know this is boring, y'all. I'm really sorry. This is just really important. The Glossators write thousands and thousands and thousands of gloss in this code that came from Justinian. What is a gloss? It is simply a small note of a case that has come up. So they'll write, ah, here we have sale of a hope. In this case they said this was allowed. In this case they said it wasn't allowed. So basically it's adding footnotes of what the law was, not what they thought the law should be. What happens when there's a hole in this code is the obvious question they put in the societal norms. okay they put in the they put in what they saw happening around them there is no evidence that they put in what they thought the law should be so then we go to canon law which is happening the same time as the glossators okay the canon law

5:53is this church system I don't want to focus on this too much I think a lot of people do want to focus on this the the canon law provided the structure for the The Future System. That's the most important part of Canon Law. Before this, it was kind of this willy-nilly little, well, there's this rule over here, there's this rule over here. Canon Law provided the structure for what they could impose the rules in. Now we get to the codification part. Pufendorf, Pottier and Doma, by the way, in my opinion, Pufendorf would have been not nearly as famous, if his name was not Pufendorf, because that name is awesome. But what do Pouffendorf, Pottier and Douma do? They take these thousands of gloss, thousands of gloss, and put them into the code based off of Justinian.

6:41And what do they do? They get rid of all the citations. Okay, before this, I mean, it's just not, I mean, books and books and hundreds and hundreds of books of books. I mean, just, you could never use it. They made basically the code usable. And once again, if there was anything that the code was missing, that a case came up, they would use custom. This led to the French and German codes, which were almost verbatim copied from Poitiers and Dommas. An interesting question is, why did this happen? The French code is supposed to be the most important piece of legislation to have ever been on the planet, and it is. But why would they basically copy from Poitiers and Dommas? Well, they had to write the code in four days, all right?

7:29Four days is not a lot of time to write an entire civil code. So what did they do? They summarized a potent doma, but most of the time they copied it verbatim. Almost no difference. So before I go into the next part, which is discussing the rigid code, how am I doing on time, by the way? Oh, buddy, I'm made in the shade. So what happens here is I want to take a note of what we've seen and what we haven't seen. By the way, I'm sorry I walk. I usually walk all up and down the aisles, but I was told I would get yelled at if I do that, so I won't do that to y'all. What we have seen is we've seen custom time and time again. We have seen them write down what the case law was like back in their day.

8:15What we have absolutely not seen is we have not seen them creating law. What a very odd way to create law to simply copy the generation before you. How very odd. I'm going to get into why I think, I don't want to spoil the punch line if you will, but I'm actually going to defend Hayek's interpretation at the end of this. So don't think I'm laying the bond too thick on him right now. I promise I'll come back. Don't boo me off the stage yet, that's what I'm trying to tell y'all. The next thing I want to discuss is this rigid code theory. So what does this mean, right? This means that we don't think that we can take this premise of the code, add on some facts, and out comes this magical outcome.

9:03Because what if the societal expectations, which is what Hayek really wants to come out of this system, What if that comes against what the code says to do? How absurd of a result would you accept? It's too rigid, you're going to create absurd results. Well, we'll see if that happens. My hypothesis, and I think I was proven correct in this, is that the civil law will create a semi-black market, if you will, of judicial opinions, where the legislature will tell the courts, whatever you do, follow the code. And the court will say, yeah, okay, I got you, I got you. Only the code, only the code. that sneak in something that's far above the code, expand the code if you will, and I think we see this time and time again. Although I promise not to mention Louisiana law, I guess I'm like a liar of myself, this has been a habitual problem in Louisiana.

9:55It's been written about extensively that our civil code is no longer a civil code at all, it's actually now a digest. That's shocking to civilian lawyers by the way, but that's fine. So, now we're going to go into this rigid code. I just discussed Hayek's views. You can't get to the desired result, we've gone over that. So basically what he's arguing is that this civil code will tie the hand of the judiciary to the point where they can't get the outcome that they need. Well, let's start with Germany. Okay, Germany is a good place to start because it's the only civil law system that Hayek had anything good to say about. And what did he say about the German legal system? Thank God it wasn't the French legal system. That's the only good thing he said about the Germans. So let's see what we got here.

10:42Let's talk about the World War I reparations. I'm guessing you guys know at least a good deal about this. Hyperinflation through the roof. I mean, the hyperinflation that we're worried about now is nothing compared to what they had to go through through the day. As a matter of fact, I can see my last point here. Every single mortgage in Germany, every single one, If you combine them all, by the end of this recession, was worth less than one third of one U.S. penny, this creates enormous problems. So this first case that we're going to go through is based on section 242. What's 242? Good question.

11:28It deals with good faith and contracts, okay? So this was, this basically said, you've got to perform in good faith, right? If I offer to sell you my page of notes for $10, which I'm willing to do, and you say yes, I have to give you my notes, okay? It's just that simple. And in fact, it was discussed. In the legislature, does this change? Circumstances doctrine. Everybody but six people said absolutely not. This is not to cover changed circumstances. One of the main reasons they changed their code 30 years prior to this crisis was that they thought the judge was getting a little too powerful. He said, no, no, no, the judge, you're not supposed to, this is not a changed circumstances doctrine, your job is to discuss the code.

12:17One legislator, which I found fascinating, one legislator said this though, he said, If you don't put in exchange circumstances doctrine, if you close that door, it's going to come in through the window. Let's see what happens. The course dramatically expanded Code 242 during this period. The case that I based this quote off of, this quote came from, is a person in Africa tried to pay back his mortgage very quickly after the inflation hit a pretty high rate. No, no, no, I don't want your money. I want way more than that. The bank said this. This money is now useless. No, no, no. We had a deal. I told you I'd pay you, let's say, a thousand marks. I gave you a thousand marks. I want my house.

13:07No, no, no. And they sue. So what do we see here? This is a direct quote from that case. The permissibility of revalorization can also be shown by way of an interpretation of the contract in which the court considers what the parties would have wanted if they had foreseen the possibility of a considerable degree of inflation. What they would have wanted. What is this code for? Not civil law code, a regular code for. It's code for change circumstances doctrine. It came in through the window. It came in through 242, even though the legislature explicitly told the courts not to. How odd. This is not anywhere in the code what they wanted to do. How does the legislature respond to this affront to their power?

13:56They endorsed the court by altering the code to add 18 circumstances doctrine. You don't need to read it unless you're really into German law. What does this mean? The court got to what the societal expectations wanted and the legislature endorsed this view. In a very famous case dealing with housing, and they said, I won't tell that story right now, I lied. So difference between France and Germany. French courts are very weak. I'd argue that they're some of the weakest in the world. Their legislature is very strong. This is kind of why Hayek was very, very critical of the French legal system.

14:48So what happens here? So liability in France is somewhat similar to the United States in that we can base our liability for tort, which is personal harms, I guess if you will, based off of intentional or negligence. They also had strict liability for two, maybe three things, depending on how you interpreted the code. You have strict liability for collapsing buildings and strict liability for your animals. Those are directly in the code. The one that people were kind of maybe about was this weird code that said, you are also strictly liable for things that are in your guard. Guard kind of means possession. So think of it that way, this guard statute was only used for if my son hits you, you can come after me. Or if my employee hits you, you can come after me. So basically if you hold my kid liable, I'm liable to pay it. That's all that's ever been used for.

15:54So we have this new problem called the industrialization era, tons of steel moving around, what was happening was some of the makers of tugboats weren't building their boilers properly, and they were exploding and killing people, small problems. And so what happened was the widow would sue, the widow would say, hey you killed my husband, you owe me some money, you gotta prove negligence, you gotta prove negligence, they could never The people were crying out for strict liability in these circumstances. They said, you have to do this. The times are changing. And the court said, it's not anywhere in the code. Then came little tugboat Marie. This was the tugboat's name.

16:40Same exact case I described, boiler explodes. No problem. What happened is that the court started to use guard-strict liability. They said, you had guard to the corporation, the corporation had guard not only over the boat, but over that specific boiler. Please note that this is not at all what the definition of guard has ever meant in France. The court used this anyway to dramatically expand the code. They wanted to get to the corporations and they found a way to do it. Now let's look at the next case. This is the tugboat Grange case. Same exact facts, only one major difference.

17:25An independent group said, and proved I guess to some degree, that the boat owner was not negligent. Now keep in mind, this doesn't matter under tugboat Murray. Under tugboat Murray, negligence does not matter. It is strict liability. What do we see? Opposite background. Opposite outcome. Why? Tugboat Marine ranks them up differently because they said, hey, you did everything you could. You did everything you could. It doesn't matter that you're strictly liable. You did nothing wrong. We're not going to hold you liable.

18:11Keep in mind that in one case they're saying negligence doesn't matter. In the next case, literally two days later, they're saying negligence does matter. Obviously, what they're doing is a balancing test, like we do in the United States, like we do in almost every country. How does the legislature respond? Once again, it's just the front of their power. Brandt surely will take a hard stand. No, they won't. What happens is that they say, we're going to create workman's compensation law. And I'm not here endorsing workman's compensation law. I want to make that very clear. I think that that's, you know, we can get to the cost benefits of that. We can get to the cost benefits of that a little bit later. I'm just going to say that they make the, they make the, this makes it into the code.

18:58One second, if you'll.

19:05If the mic picks it up, that's good for the recording. Oh, I apologize. I didn't know it was being recorded. We'll just leave it like this then. I'll try to stay still. Alright, perfect. Sorry again, y'all. I'm not, I'm not very good. So, we see this exact same thing happen in car accidents. I'm not going to go through the whole history here, but it's important to note that the same exact transition happens. We see the code say one thing, the legislature expand it, then the legislature come about and say, okay, okay, you're right, you're right. So societal expectations, which is what Hayek says is important, is still being met perfectly fine in civil law country.

19:54I'm going to get back to that. I need to make a few more points because I'm perfect. Glad I practiced last night.

20:08Hayek makes one error that I really don't like. Up until this point, I've been disagreeing with Hayek, but I hope everybody understands that if I didn't respect Hayek so much, I wouldn't have taken the time to be here or to read his books. I am a Hayekian guy, okay? I don't want people to go and say, oh, he's wearing red, he must be one of them communists, all right? That's not it. I love Hayek. This is just one of those things that you have to do if you respect somebody is critique it. He makes one mistake though that kind of does bother me. He says that the code doesn't add certainty. Right? The code doesn't add certainty. The code was never meant to add certainty.

20:56The code was meant to give access to citizens. And that's actually why I support it. I don't have my laptop here, but it's the second most viewed website versus Google, don't get your heads there. And so the first, so the second thing I look at almost every day is the code. I'm always looking at it. You know, oh, you know, what happens in this case in Louisiana, what happens in that case in Louisiana? This is good. People should have access to laws. I, even as a law student, I ain't that much y'all, people should have the right to access the laws that we expect them to live by, if we expect them to live by it, I'm not saying that's good or bad, my paper doesn't address that topic.

21:42So I'm going to go a little bit now, my paper and others in context, Hayek has been absolutely destroyed by, for his economic, for his law theories, this quote right here kind of shows, I'm not going to read it because I don't have all that much time, It basically kind of gives him some ill impression saying, oh geez, if Hayek hadn't been so biased, his theory would have been way better. And people really have attacked Hayek for his legal views. By the way, who published this kind of harsh critique? The Cato Institute. This isn't in the Wall Street Journal op-ed pieces. This isn't in the New York Times. The libertarian groups have done quite a bit of damage to Hayek as well.

22:32So my point that I want people to think away from this is Hayek is still right if you look at his premise. His main premise in rules and order was that people should be expected to live by the laws they expect. Okay, let me break it down a little bit, very little bit. If I contract with you $10 for my notes, offer's still good, what should happen is we should have to live by the rules that we expected to take place. So I should have to give this to you. That was my word. My word is my bond. I should give this to you. The rules governing that transaction should be the ones that we all believe will rule the day. This point has been somewhat lost in all of the papers, and I'm making a very strong point to make sure it's not lost in mine, And that although I think he was way off on history, and I think he was, his overall point

23:29is still correct. And that's kind of what I want to leave y'all with. Oh, and this point right here, I mean, if they look back at my work, you know, in fifty I've lived many years and I was wrong on two things that aren't even at all related to my main point. I'll have lived a very good life. Although we kind of like to say, oh geez, he's wrong about this too, he's wrong about this too. We need to also remember this is a man who fought back socialism at every single point he could. He fought back central planning at every single point he could. This disagreement should not define him or me, mainly him. He was a good, great economist and a great jurist, and other than that I'll turn it over with a minute to spare, not bad.