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The Invisible Hand in Legal Theory

25 Pages Posted: 10 Nov 2009  

Adrian Vermeule

Harvard Law School

Date Written: October 6, 2009

Abstract

Theorists have offered invisible-hand justifications for a range of legal institutions, including the separation of powers, free speech, the adversary system of litigation, criminal procedure, the common law, and property rights. These arguments are largely localized, with few comparisons across contexts and no general account of how invisible-hand justifications work. This essay has two aims. The first is to identify general conditions under which an invisible-hand justification will succeed. The second is to identify several theoretical dilemmas that arise from the structure of invisible-hand justifications and that cut across local contexts. These are the dilemma of norms, which arises because norms of truth-seeking, ethical action or altruism can both promote and undermine the workings of the invisible hand; the dilemma of second best, which arises because partial compliance with the conditions for an invisible-hand justification can produce the worst of all possible worlds; and the dilemma of verification, which arises where theorists claim that an invisible-hand process functions as a Hayekian discovery procedure -- a claim that is empirical but pragmatically unverifiable.

Keywords: invisible hand, Adam Smith, separation of powers, free speech, adversary system, common law, criminal procedure, property rights

Suggested Citation

Vermeule, Adrian, The Invisible Hand in Legal Theory (October 6, 2009). Harvard Public Law Working Paper No. 09-43. Available at SSRN: https://ssrn.com/abstract=1483846 or http://dx.doi.org/10.2139/ssrn.1483846

Adrian Vermeule (Contact Author)

Harvard Law School ( email )

1525 Massachusetts
Griswold 500
Cambridge, MA 02138
United States

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