Arnold Kling  

Bruno Leoni vs. Paul Romer

Financial Regulation and Publi... One-Party State Watch...

In 1961, Leoni wrote,

In reality, the law is something which is not pre-fabricated in some specially-designated place, by some specially-designated producer and with some pre-established technique. In much the same way, no followers of the artificial languages such as Esperanto and Volapuk have yet succeeded in finding a substitute for the language that we speak every day, which also is not pre-fabricated. The law is in the last analysis something which everyone makes every day with his behavior, his spontaneous acceptance and observance of the rules that everyone helps to establish, and finally, even if it seems paradoxical, with the disagreements themselves which eventually arise among the various individuals on the observance of these rules.

Paul Romer, in presenting his idea for charter cities, makes it sound as though we can take rules "manufactured" in, say, Canada, and export them anywhere in the world. Leoni would say that instead most law is embedded in social customs In fact, my daughter who just spent the summer in Tanzania, says that the custom of seeing law as something that ought to be obeyed is not nearly as natural there as it is here.

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COMMENTS (10 to date)
Pedro writes:

Is this a strategic thing? He seems to recognize that much of the value of his proposal is in generating a trial and error process from which nearby countries can learn, and to which they can point as evidence for the efficacy of proposed policies.

Pietro Poggi-Corradini writes:

For Hayek knowledge is dispersed and local, i.e. hard to communicate. For Romer knowledge is nonrivalrous and nonexcludable. Maybe they're talking about different things.

DC writes:

"my daughter who just spent the summer in Tanzania, says that the custom of seeing law as something that ought to be obeyed is not nearly as natural there as it is here."

Depending on the law, so much the better for Tanzania...

Niccolo writes:

I've been to four continents in the world and I echo your daughters sentiment. In fact, I've never been to a country or met a person of a different nationality that is quite as obsessed with what the law says as Americans. Well, I'd say Canadians are a close second, but maybe that's just a North American thing?

Jason writes:

Wouldn't there be a difference between laws differentiating social and economic behaviour? I'm not sure that the economic laws are so intuitive and deeply embedded in a culture. These seem to be the laws that Romer is more focussed of exporting.

Isegoria writes:

I suspect there's a difference between exporting Canadian rules to Tanzania and exporting Canadian rules to a city-state along the coast of Tanzania, full of Canadian merchants and self-selected Tanzanians looking to work for and with those Canadians.

Alan Forrester writes:

My understanding was that a new city would be started in an uninhabited place in Cuba, say, under the auspices of the British, or the Americans, or whoever and then if Cubans wanted to go there then they could do that and if they didn't then they wouldn't. Cultures change by lots of individuals slowly and subtly changing their ideas and charter cities provide a way to expose more people to more aspects of Western culture. People even within a given culture are highly variable and some individuals will take to Western ideas like the rule of law more easily than others and it might be a good idea to try to give them the opportunity to do this through charter cities. In addition maybe some of the people who try it and don't like it will be subtly influenced by the experience and will take slightly better ideas back to their homes. Both the West and the places with the charter cities might also benefit from the trade that takes place there.

Colin K writes:

Paul Johnson's History of the American People has us as taking the British importance of law to uniquely-refined heights. Partly this was driven by the absence of authority otherwise provided by aristocrats and nobles, and in part by the fact that as a fast-growing and highly dynamic country, we had a lot of legal disputes to settle (like land claims) in relatively short periods of time. In his telling, new towns attracted lawyers as fast as they attracted blacksmiths and saloons.

As a businessman I am no great fan of lawyers. On the other hand, it is interesting to ponder what the alternative to them might be. Corrupt bureaucrats and oligarchs are hardly an improvement.

David Wolff writes:

But... Esperanto is a perfectly good substitute for everyday use, at least among people who speak it! For example at the annual world convention, thousands of people from dozens of countries use it without needing their "non-prefabricated" languages...

Please, if you're going to use Esperanto as a metaphor or an example, get it right.

happyjuggler0 writes:

Hmmmmm. Disrespect for law and a pathetic economy, or respect for law and one of the world's greatest economies?

I think Romer is more on the ball on this issue than the Kling clan. No disrespect intended.

It is one thing to presume to impose law that hasn't gone through dispersed discovery on a people who have preexisting law.

It is another thing entirely to graft law (that has succeeded fabulously somewhere) onto an empty piece of land, and then invite outsiders who want to participate under those laws to subject themselves to that law.

Surely the latter has better odds, if nothing else, and the Leoni quote is only applicable to a certain set of circumstances which don't apply here.

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