This article was published in the Summer 1994 issue of Formulations
by the Free Nation Foundation

The Nature of Law
Part II: The Three Functions of Law

by Roderick T. Long

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Outline (all four parts)

Part I: Law and Order Without Government
- Introduction
- Varieties of Law
- Public Goods vs. Public Choice

Part II: The Three Functions of Law
- Why Three Functions?
- Should Law Be Monopolized?
- Locke's Case for Monocentric Law
- The Lockean Case Against Locke

Part III: Law vs. Legislation
- Socrates on Law
- Two Senses of Law
- Natural Law and Human Law
- Natural Law and Customary Law
- Law vs. Legislation: Documentary Evidence

Part IV: The Basis of Natural Law
- Is There Room for Natural Law?
- Who Has the Burden of Proof?
- Objection One: Natural Law Serves No Useful Purpose
- Objection Two: There Couldn't Be Such a Thing as Natural Law
- Objection Three: Even If There Were a Natural Law, It Would Be Unknowable
- Objection Four: Evolutionary Explanations Make Natural Law Obsolete
- Notes
- John Locke on Natural Law

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Part II: The Three Functions of Law

Why Three Functions?

The purpose of a legal system is to provide a systematic, orderly, and predictable mechanism for resolving disagreements. In order to do its job, any such system must perform three closely connected, but nevertheless distinct, functions: adjudication, legislation, and execution.

The judicial function is the core of any legal system. In its judicial function, a legal system adjudicates disputes, issuing a decision as to how the disagreement should be settled. The other two functions are merely adjuncts to this central function.

The purpose of the legislative function is to determine the rules that will govern the process of adjudication. Legislation tells judicial function how to adjudicate. The legislative process may be distinct from the judicial process, as when the Congress passes laws and the Supreme Court then applies them; or the two processes may coincide, as when a common-law body of legislation arises through a series of judicial precedents.

Finally, the purpose of the executive function is to ensure, first, that the disputing parties submit to adjudication in the first place, and second, that they actually comply with the settlement eventually reached through the judicial process. In its executive function the legal system may rely on coercive force, voluntary social sanctions, or some combination of the two. The executive function gives a legal system its "teeth," providing incentives for peaceful behavior; both domestic law enforcement and national defense fall under the executive function.

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Should Law Be Monopolized?

With regard to these various functions, there are three primary ways in which a legal system may be constituted:

Absolutism: The three functions of law are concentrated in the hands of a single group of decision-makers.
Constitutionalism: The three functions of law are monopolized by a single agency, but distributed among distinct groups of decision-makers within that agency.
Anarchism: The three functions of law are not monopolized.

Various combinations of these are possible, since there are legal systems under which some functions are monopolised while others are not. For example, in the Icelandic Free Commonwealth, the legislative function was monopolized by the All-Thing (althingi), or General Assembly; the judicial function was shared between the Thing courts and the private sector; and the executive function was privatized entirely. [For more information on the Icelandic system, see my "Virtual Cantons: A New Path to Freedom?" (Formulations Vol. I, No. 1), "The Decline and Fall of Private Law in Iceland" (last issue), and Wayne Dawson's review of David Friedman's The Machinery of Freedom (this issue).] This is why the legal system of the Icelandic Free Commonwealth cannot easily be classified either as a pure government or as a pure anarchy.

Most of us have been taught to regard Constitutionalism as the best of the three options. Concentrating the three functions in a single agency avoids the chaos allegedly endemic to Anarchism; while assigning the three functions to distinct sub-agencies within the monopoly agency allows the three branches (legislative, executive, and judicial) to serve as checks on one another's excesses, thus avoiding the potential for abuse and tyranny inherent in Absolutism. This is the "separation of powers" doctrine built into the U. S. Constitution.

In practice, however, Constitutionalism has proved only marginally better than Absolutism, because there has been sufficient convergence of interests among the three branches that, despite occasional squabbles over details, each branch has been complicit with the others in expanding the power of the central government. Separation of powers, like federalism and elective democracy, merely simulates market competition, within a fundamentally monopolistic context.

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Locke's Case for Monocentric Law

In his libertarian classic Two Treatises of Government, the 17th-century English philosopher John Locke offered one of the most famous cases ever made for the monopolization of the three functions of government. Locke believes that all human beings are naturally equal, so that in their natural state each person has as much right as any other to exercise the various functions of law:

This egalitarian distribution of political authority, Locke argues, is required by justice unless individuals voluntarily relinquish their authority to a government. However, Locke thinks that people living in a state of anarchy will find it rational to set up a government in order to gain greater security:

Locke then goes on to list what he sees as the three principal defects of the state of natural anarchy. Although he does not point this out explicitly, the three defects appear to correspond to the three functions of law that I have been discussing, and I have labeled them accordingly:

Locke concludes that these three defects may be remedied by centralizing the legislative, judicial, and executive functions in a constitutional government.

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The Lockean Case Against Locke

I think Locke's arguments for a monocentric legal system contain a serious confusion: the confusion between the absence of government and the absence of law. Locke's arguments are good arguments for a formal, organized legal system; but Locke mistakenly assumes that such a system requires a governmental monopoly. The majority of legal systems throughout history, however, have been polycentric rather than monocentric. Locke did not have the benefit of our historical knowledge however; nor, despite his brilliance, was he able to imagine on his own a legal system that was not a government. The actual history of stateless legal orders shows that they do not noticeably suffer from any of the three defects Locke lists; on the contrary, those defects are far more prevalent under governmental law.

Consider first the judicial defect: the worry that, in the absence of common authority, each individual would have to act as a judge in his or her own case, with all the problems of bias and partiality that entails. Locke is correct in thinking that submitting disputes to impartial third-party arbitration is generally preferable to acting as one's own judge and jury (except, of course, in emergency cases in which one must act quickly and no such impartial judge is available). But such third-party judges will always be available, whether or not there is a government. There is a widespread tendency to suppose that if something is not supplied by the government, it cannot be supplied at all; I call this "the invisibility of the market." (The problem with invisible hands is that you need libertarian lenses in order to see them whereas everyone can see the visible hand of government.) Polycentric legal systems have always had plenty of third-party judges, from the relatively formal Moots of early Anglo-Saxon law (in which disputants were judged by their peers on the basis of local custom) to the relatively informal arrangements of the American frontier (in which each disputant would pick an arbiter, the two arbiters together would pick a third, and the judgment of the three together would be binding). History shows that stateless legal orders tend to create powerful incentives for people to submit their disputes to arbitration wherever possible, in order to avoid the appearance of being an aggressor (and thus the target of defensive coercion oneself). Anarchy does not suffer from Locke's judicial defect.

But government does. In any dispute between a citizen and the state, the state must by necessity act as a judge in its own case since, as a monopoly, it can recognize no judicial authority but its own. Hence governments by their nature must be subject to the judicial defect. Constitutionalism is supposed to remedy this defect by separating the judicial branch from the executive and legislative branches, so as to prevent the judging agency from being a party to the dispute. But what if the citizen's quarrel is with the judicial branch itself? In any case, even if the quarrel is solely with the legislative or executive branch, it would be naive to assume that the judicial branch of a monopoly will be unsullied by the interests of the other branches. No one with a complaint against the marketing division of General Motors would be satisfied to have the case adjudicated by the legal division of General Motors! The solution to the judicial defect, then, is not a monocentric judiciary, but a polycentric one.

Next, consider the legislative defect: the worry that without government there will be no generally known and agreed-upon body of law. Why not? We should rather expect markets to converge on a relatively uniform set of laws for the same reason that they tend to converge on a single currency: customer demand. The late-mediæval private system of mercantile law known as the Law Merchant (lex mercatoria), for example, offered a more unified body of law than did the governmental systems with which it competed.

This should be no surprise. Why are there no triangular credit cards? The reason is not government regulation, but rather that given our current system that relies on rectangular cards no one would accept it (unless the government made them accept it, thus preventing the market drive toward uniformity). Similar reasons explain why the market no longer carries both VHS and Betamax video cartridges, but only VHS; the market creates uniformity when customers need it, and diversity when they need that instead. It's a good thing that video cassettes come with lots of different kinds of movies, and so the market ensures this; it would be a bad thing if video cassettes came in fifty different shapes and sizes, and so the market prevents this.

Indeed, it is not polycentric legal systems, but rather monocentric ones, that suffer from the legislative defect, since a mountain of bureaucratic regulations that no one can read is in effect equivalent to an absence of generally known law. Under a private legal system, changes in law occur as a response to customer needs, and so the body of law is less likely to metastasize to such unwieldy proportions. The solution to the legislative defect is not to monopolize legislation, but rather to privatize it.

Finally, consider the executive defect: the worry that without government there would be insufficient power on the part of private individuals to enforce the law. It is true that under anarchy each individual has the right to exercise the executive function on his or her own, but it does not follow that law enforcers will in practice be solitary and unaided. On the contrary, voluntary associations of enforcers typically emerge as in the case of the thief-takers' associations of early 19th-century England, or the vigilance committees of the old American frontier. Hollywood movies have accustomed us to think of the latter associations as unruly lynch mobs, and have depicted the frontier as nightmarishly violent; in historical fact, the level of criminal violence in frontier society was far lower than in our own, and the protective associations were, for the most part, reliable organizations that gave their defendants fair trials (at which defendants were often acquitted not the mark of a kangaroo court). Indeed, the whole notion of an organized police force is a relatively modern concept; police were extremely rare throughout ancient, mediæval, and modern history, until about the mid-19th century. (Indeed, even the notion of a distinct governmental military is fairly unusual historically; in most societies, both law enforcement and national defense have been the job of the armed citizenry.)

If there is an executive defect, it applies not to private law but to public law, in which individuals typically lack the power to withstand the arbitrary caprice of the state. Against one marauding band one can form one's defensive band; but who can resist the overwhelming force of an organized government? Let the victims of Warsaw, Tiananmen, or Waco judge whether the centralization of law enforcement enhanced the security of their lives, liberties, and estates.

Abuse of power by law enforcers is in fact much easier to keep in check under the discipline of a competitive market system. The LAPD would have gone bankrupt overnight after the Rodney King beating if it had been a private security force with competitors in the same territory; but as matters stood, despite the public outcry, the LAPD's "clients" had nowhere else to go, and so the LAPD's incentive to reform its behavior is much weaker.

In short, then, the three defects Locke cites as objections to anarchy are in fact much more effective objections to government. None of the three functions of government executive, legislative, or judicial should be assigned to an exclusive monopoly. In the words of F. A. Hayek: "Law is too important a matter to be left in the hands of government." D

For more information about the stateless legal systems described in this installment, see the bibliographic essays "Polycentric Law" by Tom Bell and "Institutional Bases of the Spontaneous Order: Surety and Assurance" by Albert Loan, both in Humane Studies Review, Vol. 7, No. 1, 1991/92, published by the Institute for Humane Studies at George Mason University, 4084 University Drive, Fairfax VA 22030.

  Next installment: Law vs. Legislation.

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Roderick T. Long is Assistant Professor of Philosophy at the University of North Carolina at Chapel Hill. He is currently completing a book on the free will problem in Aristotle.

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