So here I list the ten non fiction books that were, and remain, most important to me, more or less in order of significance.

F. A. Hayek, Law, Legislation and Liberty, Volume I: Rules and Order. Hayek’s explanation of the difference between “law” and “legislation” was eye-opening to me when I first read this book as an undergraduate in the 1970s. Until then I assumed, as most people do, that legislation is law. It’s not. Indeed, legislation frequently is the antithesis of law. Like prices and other market institutions, law emerges—”evolves”—spontaneously from the choices and actions of countless individuals interacting with each other. Legislation, in contrast, typically is created de novo by legislators and written down in statute books.

Legislation is written commands enforced at gunpoint. Law is expectations and norms that reside mostly in people’s minds, in their cultural understandings, and are enforced with tools much broader than threats of violence.

Because this distinction is so foreign to the modern mind, it’s extraordinarily difficult to grasp. But Hayek’s profound and scholarly explanation makes grasping this distinction easy for the careful reader.

Richard Dawkins, The Blind Watchmaker. While this book is not one in the social sciences, its unparalleled elucidation of natural selection, along with Dawkins’s stunning clarity at explaining complex scientific principles, makes this book a treasure. Reading it greatly improved my understanding of the logic of natural selection, of competition, and of the spontaneous order. Reading this book also drove home to me the conviction that nothing is too complicated to explain clearly and engagingly.

Because Dawkins is the foremost living Darwinian biologist, many religious people avoid his works. This strategy is a mistake. While I myself am not religious, I’m confident that even the most devout fundamentalist can learn much of value from Dawkins without feeling obliged to abandon his or her faith.

Joseph Schumpeter, Capitalism, Socialism, and Democracy: Actually, it’s only Book 2 of this volume that is important—but oh how important it is! No explanation of market competition rivals this one. Not only are these the pages on which appear Schumpeter’s justly famous “creative destruction” insight, they are also pages that reveal better than any place else that competition is a process. No other work so effectively exposes textbook models of “competition” to be hogwash, models that confuse more than they enlighten.

Fernand Braudel, The Structures of Everyday Life: This massive work of history tells how ordinary Europeans lived during the Middle Ages—what they ate, what they wore, how they worked, how they housed themselves, how they died. Such knowledge is one of the best ways I know for modern people to put our own prosperity in perspective. Reading Braudel teaches that there was no precapitalist golden age in which peasants were simple but happy, the environment unspoiled, work hard but satisfying, food wholesome and plentiful, neighbors kindly and wise, life satisfying and secure. The exact opposite is true. Our pre-industrial ancestors lived lives that were absolutely poor, wretched, filthy, ignorant, and dangerous. Capitalism rescued us from a misery that we today would find unbearable.

Tyler Cowen, In Praise of Commercial Culture: Especially since the fall of Soviet communism, fewer people argue that the market doesn’t deliver the material goods. More and more, arguments against the market are along the lines of: “The problem with the market is that it delivers the goods too well! By obsessing on producing, the market destroys non material things of value, such as culture.” Cowen mixes accessible and unassailable economic reasoning with many facts about cultures, past and present, to show that commercial cultures are invariably rich, interesting, and decidedly not homogeneous. Commerce and culture go hand in hand. No one explains and documents this fact more clearly than does Tyler Cowen.

Harold Berman, Law and Revolution: Why is the West free and prosperous? Why is eastern Europe less free and less prosperous? There are no easy answers to these questions. But no answers should even be attempted without the insights that run through this important book. Berman shows that, unlike in eastern Europe, sovereignty in western Europe following the collapse of the Roman empire was always fractured. The crown competed for power throughout western Europe with the church, with merchants, with feudal barons, and with independent cities. (And, of course, after Martin Luther came along, religious authority itself split into several churches, thus further increasing the number of competitors for power and authority.) This competition in the West among different sources of authority—many of them seeking absolute dominion—ensured that ordinary men and women were not trapped by rulers with unchecked power. Notions of individualism and constitutionally limited government arose from this competition.

David Friedman, The Machinery of Freedom: Short yet covering much territory, and aggressive yet soundly reasoned, this book raises the defense of freed om to a new level. It’s daring, asking why must the likes of highways, courts, and even defense from foreign aggressors be supplied by government. Whether you agree or disagree with Friedman’s case for a stateless society, his explanation of how to think about such a society—and about how such a society might work in practice—enriches your thought and deepens your understanding.

Buchanan and Tullock

James M. Buchanan and Gordon Tullock, The Calculus of Consent: This book is a deep work in both economics and political philosophy. It remains the keystone of Public Choice analysis—namely, the use of economics and rational thought to study politics (as opposed to the all-too-common practice of assuming that government is some magical, romantic force on a mission to make us all healthy, wealthy, wise, and great). This book sharpens readers’ analytical skills so that they are better equipped to make sense out of what’s happening politically.

Frederic Bastiat, Economic Sophisms: Seeing the essence of an issue with crystal clarity is always impressive. But being able to explain what is seen so that those of us with more clouded analytical vision can understand the issue clearly is a rare and wonderful talent. Bastiat possessed truckloads of that talent. Exposing all manner of economic “reasoning” as malarkey, Bastiat teaches the economic way of thinking in a style that’s great fun to read—and useful, for the same malarkey that Bastiat exposed in the 1840s continues today to spill forth from the mouths of politicians and pundits.

Geoffrey Brennan and Loren Lomasky, Democracy and Decision: By far the most academic volume on my list, this book noticeably deepened my understanding of politics. It rounds out Public Choice economics by explaining how ideology and beliefs can and do play a significant role in politics. And it does so while always working within the tradition of Public Choice.

Any list of favorite books will be somewhat arbitrary. Already my mind is filled with titles of other works that taught me much—works such as Ludwig von Mises’s Socialism, Robert Higgs’s Crisis and Leviathan, Hayek’s The Counter-Revolution of Science, Bruce Benson’s The Enterprise of Law, Paul Heyne’s The Economic Way of Thinking, Richard Posner’s Economic Analysis of Law, Israel Kirzner’s Competition and Entrepreneurship, and Leonard Read’s Anything That’s Peaceful.

But rather than agonize over whether my list of ten books is as accurate as it can be, I rejoice that we have access to such a large number of creative and brilliant scholars who will teach us if only we will learn.

Law and economics, or the economic analysis of law, is a relatively new discipline. It was launched in the late 1950s and early 1960s and has grown in importance and in the number of its practitioners ever since. It uses key principles of economics—such as self-interest, rationality, efficiency, and externalities—to predict the intended and unintended effects of different legal rules and to explain why we have the particular legal rules we do and why some legal rules might be considered better than others. Aaron Director and Ronald Coase, to whom the book is dedicated, and Judge Richard Posner, to whom the author refers in several chapters, have been major contributors to the field.

David Friedman is an economist and a professor of law at the University of Santa Clara School of Law. This book is one of his best efforts. His style makes it great fun to read, and it is filled with intriguing insights. Because of its comprehensive scope, it could easily be used as a text in an introductory course in law and economics. For example, it includes a chapter on antitrust law that I wish Joel Klein and Judge Thomas Penfield Jackson had read before they proceeded to punish Microsoft for being too effective a competitor.

Friedman’s early chapters explain basic economic concepts vital to understanding law. A transition chapter explains the structure of the American legal system, and the later chapters apply economics to the analysis of such things as criminal law, tort law, contract law, and marriage, sex, and babies. One especially interesting chapter is devoted to a law-and-economics analysis of three alternative legal systems—saga-period Iceland, eighteenth-century England, and Shasta County, California.

Law’s Order is more than an introductory text, however. For example, in Chapter 5 Friedman goes far beyond the usual exposition of the Coase Theorem. He illuminates the differences between property rights and liability rights and how the choice of efficient rules depends on such things as the free-rider problem among joint buyers and holdouts among joint sellers. A reader is well advised to read this chapter carefully, with pencil and paper at hand since it is basic to much that comes later.

Friedman introduces each new concept with an actual or hypothetical example that puts the reader in the center of the issue. Frequently, he comes to what seems a reasonable conclusion and in the very next paragraph he explains why it is wrong. In one case, the issue of whether, on efficiency grounds, we need criminal law at all, he goes through seven rounds of arguments changing his answer each time. He offers this “as evidence of how risky it is to go from the existence of an argument for the efficiency of some particular rule to the conclusion that the rule is in fact efficient.” It is also an effective expository device because it engages the reader. I tried to anticipate the arguments in each round before I read them. I was often wrong, but I learned something useful every time.

Judge Posner is famous for his conjecture that the common law, which develops over time through judicial precedents and decisions, consists of legal rules that are, for the most part, economically efficient. Friedman gives many examples—for example, the negligence doctrine in torts—consistent with Posner’s conjecture, but he also gives a few—such as product liability rules—that aren’t. Posner’s great contribution, according to Friedman, has been to direct attention to the question of economic efficiency in the law. “We do not know whether the law is efficient. We do know that the question ‘What is the efficient legal rule?’ converts the study of law from a body of disparate doctrines into a single unified problem.”

The book is filled with elegant, instructive arguments. Consider just one. Burglary, Friedman argues, should be a tort rather than a crime, and denting a fender should be a crime rather than a tort. The basis of those startling assertions is the incentive for potential victims to undertake efficient preventative measures. In tort law, successful plaintiffs are made whole through compensatory damages. In criminal law, victims do not receive compensation. If the penalty is a fine, it is the state that receives the money, not the victim. If the penalty is imprisonment, the victim suffers an additional loss in taxes to pay for the incarceration. Therefore, potential victims of crimes are more likely to undertake efficient prevention measures than are potential victims of torts. Preventative measures are more effective for dented fenders than burglaries. Under the general rule that incentives should be placed where they do the most good, denting a fender should be a crime, and burglary a tort.

Finally, the book has no footnotes and very few references. Friedman and his publisher have set up a Web site for his readers to obtain the missing information online. Friedman chose this option to make the book more user-friendly for the intelligent layman who will read it for general information and entertainment rather than as an academic resource. Icons in the margins of the hard copy point to corresponding online icons. I think this bit of entrepreneurship will pay off and thus become widely imitated.

Charles Baird, a professor of economics and the director of the Smith Center for Private Enterprise Studies at California State University at Haywood, is a quarterly columnist for Ideas on Liberty.

Natural law has always had vigorous opponents who believed, with the early nineteenth-century English philosopher Jeremy Bentham, that the theory was nonsense upon stilts. Before the twentieth century, the accusation of absurdity was usually hurled by people hostile to individualism, or at least by those who wished to assign a higher priority to some other social consideration, such as utilitarianism. Sir Robert Filmer’s Patriarcha, a defense of the divine right of kings, critiqued the natural-law theory that existed prior to 1640. Within the individualist tradition itself, however, natural law remained a prevailing and well-regarded theory.

Then in the late nineteenth and early twentieth centuries, natural-law theory came under sustained and derisive attack from individualists. The situation was especially contentious in the United States, where individualists who espoused what Benjamin Tucker called “society by contract” began to deride natural rights as being patently absurd.^[1] The leading wedge of ridicule was Tucker’s individualist-anarchist periodical Liberty (1881–1907), which was key in transmitting and preserving individualist ideas in post-Civil War America. Liberty, for example, was one of the main conduits of Herbert Spencer’s thought to America.

Unfortunately for natural-law advocates, contributors to Liberty also translated into English the thought of Johann Kasper Schmidt—more popularly known as Max Stirner—who believed natural rights were “ghosts” in men’s minds. The spread of Stirnerite egoism within American individualist ranks emanated from Stirner’s pivotal work on law, property, and the state, The Ego and His Own. The debate that ensued centered on two issues: first, whether egoism or natural rights formed the proper basis of radical individualist theory, and second, whether those who advocated rights were mad.

By contrast, many contemporary individualists find it possible to disagree with natural rights without declaring them to be nonsensical. For example, David Friedman’s latest book, Hidden Order: The Economics of Everyday Life, argues for freedom on purely economic, rather than moral or natural-law grounds. Rather than causing a schism, however, Friedman’s different approach offers valuable insights into the tradition. In Human Action, the Austrian economist Ludwig von Mises goes one step farther and explicitly argues against natural law. But he presents a reasoned argument. Although he is a staunch opponent, he is not a detractor—a difference that may explain why so many natural-rights advocates consider themselves Misesians.

I wish to argue for the non-absurdity of natural law and for the need to tolerate any approach to freedom that is peaceful. But, to do so, it is necessary to first explain what natural-law theory is.

The Theory of Natural Law

Although it consists of only two words, the term “natural law” has long been a battlefield of semantics. The simplest term to grapple with is “law.” It is not used in a legal sense, as in legislation. Rather it refers to a principle, much as you might speak of the laws of physics.

The other word, “natural,” has a more complicated history. The first question to ask is, natural as opposed to what? This particular question has occasioned great debate within the tradition of natural law. Some argue that the word is used as a term of distinction from “supernatural,” or the will of God. Others, such as Thomas Aquinas and those in the Thomistic tradition, interpret natural law in a somewhat more theistic context. Such great ambiguity exists in the term “natural” that long debate has raged over whether there is one tradition or many traditions of natural law.

As Mises explains in Human Action, “From the notion of natural law some people deduce the justice of the institution of private property in the means of production. Other people resort to natural law for the justification of the abolition of private property in the means of production.” In a compelling critique, Mises claims, “There is . . . no . . . perennial standard of what is just and what is unjust. Nature is alien to the idea of right and wrong. ‘Thou shalt not kill’ is certainly not part of natural law. The characteristic feature of natural conditions is that one animal is intent upon killing other animals.”

Mises’s point is well taken if it is directed at the more extreme traditions of natural-law theory, which do cling, in Mises’s words, “to the doctrine that what is right and what is wrong is established from the dawn of the remotest ages and for eternity.” Some natural-law theorists go so far as to say that values are a category of fact.

But there is a more flexible interpretation that better withstands Mises’s criticism. It makes the far more reasonable statement that human values should be grounded in, or based upon facts, and discovered through a process of reason. This version does not extend its theory to include animals other than human beings. It makes no comment on, again Mises’s words, “the many species [that] cannot preserve their own life except by killing others.” It comments only on human nature and assumes that as human beings interact some concept of right and wrong inevitably evolves.

This contention is based partly on history. Even the most primitive of human cultures evolved some standard of right and wrong behavior. Although “Thou shalt not kill” may not be writ in nature, every society has prohibited murder. Indeed, one of the few points on which all societies agree is that the killing of another human being is presumed to be wrong unless somehow justified.

Equally, some concept of right and wrong seems to evolve naturally within the psychology of individuals. A child who is hit for no reason has an automatic reaction to the effect: “He shouldn’t have done that.” He feels wronged. This childlike response may be crude and perhaps merely an emotional one. But it shows that considering the right and wrong of actions is, on some level, a human response to circumstances.

In its simplest statement, then, the more flexible form of natural law is an attempt to ground human values in the facts of reality and of human nature. But given what we know of those facts, is it possible to reason out a code of behavior that maximizes man’s well-being?

Classical liberalism’s answer, which emerged in the seventeenth century through the political analysis of John Locke, is the concept of natural rights—rights being principles of how to behave toward others. Such principles derive from the facts of human nature, and men observe them because rights are conducive to their own well-being. Consider your chances for happiness within society. Certainly happiness is a personal matter that cannot be divorced from the actions you take on a purely individual, nonsocietal level. But it is valid to ask, “Are you more likely to achieve happiness in a violent totalitarian society or in a society that respects your right to peacefully interact with others?”

Approaching the same point from a different angle, consider the question: Why is it wrong to initiate force? The advantages of violating rights are obvious. You can steal money rather than work hard to obtain it; you can eliminate people you find disagreeable. The advantages of respecting rights may not be as clear. In many cases, respecting rights seems to involve sacrificing self-interest. The onus of proof seems to be on the advocate of natural law to explain why rights are in your self-interest.

Return to the question of whether a peaceful society promotes happiness more than a Hobbesian one. Answering this question requires a theory of how society relates to happiness and why life in society is preferable to dwelling alone on a desert island. After all, a desert island offers absolutely unbridled individual freedom. In society, there is always the threat of violence. Why associate with people and run such a risk?

The answer is clear: because association offers tremendous benefits, including friendship, expanded knowledge, a division of labor, and romantic love. Society can maximize your choices if only because many of your decisions, and some of the most important ones, require the presence of other people, for example, the decision to have a child. Yet you can imagine a society from which you would gladly flee into solitude—to name one, a plantation community in which you were a field slave. To the extent a society relies on force, it minimizes choices and becomes a disadvantage. Seen through this lens, rights set a peaceful context that maximizes choice and thus maximizes the chances of individuals attaining happiness within society.

The Charge of Absurdity

Having sketched a version of natural-law theory, I want to leap over the process of defending it—which is not my purpose—and address instead the consequences of contemptuously dismissing natural rights as absurd. Consider an incident that occurred within the nineteenth-century individualist movement in America, specifically, in Benjamin Tucker’s Liberty.

The March 6, 1886, issue of Liberty printed a watershed article by James L. Walker (using the pen name Tak Kak) entitled “What is Justice?,” which advanced the Stirnerite egoist perspective. In a later article in Liberty (April 9, 1887), Tak Kak explicitly attacked the notion that people should abide by principles. Indeed, he claimed, “A declaration of rights is often the pitiful expression of a lack of power. . . . The devotee of a fixed idea is mad. He either runs amuck, or cowers as mesmerized by the idea.”

Tak Kak went on the attack, not only in his arguments but in his attitude. For example, he offered sharp commentary on an earlier article in Liberty penned by the natural-rights advocate Gertrude B. Kelly. Kelly—in the belief that all men are “brothers”—had cried out against acts of brutality committed by white American workers against Chinese workers who had been “imported” as cheap labor. Tak Kak provocatively replied that the Chinese were fitted by nature and heredity to remain slaves. He directly accused Kelly of being a victim of the “fixed idea” that there was a common humanity among the races.

The natural-rights side of the debate (Gertrude Kelly was joined by John F. Kelly, Sidney H. Morse, and William J. Lloyd) accused the egoist side (Tak Kak, Tucker, George Schumm) of destroying not only natural rights but also the individualist criticism of government.

Shortly thereafter, John F. Kelly (Gertrude’s brother) wrote Tucker that he would no longer distribute Liberty. Kelly never again contributed to the publication. His sister also withdrew from its pages, as did Sidney H. Morse. With these losses, the natural-rights position was only weakly represented in future issues. As a result, the diminutive individualist movement shrank further, and muted some of its most passionate voices. The schism seemed to result not so much from disagreements in theory as from an inability to discuss those differences without descending into ad hominem attacks.

Are Egoism and Natural-Rights Theory Irreconcilable?

The main loss from accusing an honorable opponent of being not only wrong but also a fool is the debate that does not occur. If an issue is hotly debated between vigorous minds, the participants will surely learn much from one another.

The egoists and natural-rights advocates in Liberty agreed on more than they realized or, at least, on more than they were willing to admit. They agreed, for instance, on a key theoretical point: namely, human beings act in their own self-interest. (Oddly, the Stirnerite egoists never considered that statement of fact to be a “fixed idea.”) Even John F. Kelly acknowledged the primacy of self-interest when he wrote in Liberty, “If we regard . . . all forces pushing us to action as pleasures,—relief from pain being classed as a pleasure,—and all those tending to make us abstain as pains,—deprivation of pleasure being counted a pain,—then it is evident that we act egoistically . . . since we only act because the pleasures exceed the pains.”

With the natural-law side making such concessions, it is difficult to believe that both sides could not have come to a common understanding. Consider one issue: the role of rights in the act of contracting. The egoists believed they were reducing the concept of rights to its proper place as an artificial, but useful, construct with which to organize society. Tucker continued to believe in what he called “society by contract,” but he came to view rights as the byproducts of contracts between individuals, not as entities existing on their own. Writing in his newspaper, he suggested that rights were “a tacit agreement or understanding between human beings . . . not to trespass upon each other’s individualism, the motive of this agreement being the purely egoist desire of each for the peaceful preservation of his own individuality.”

John Kelly attacked Tucker’s theory as self-contradictory. Kelly, responding in Liberty, wrote that “the binding effect of a particular contract can not be due to the contract itself.” Pointing out what he believed to be the major philosophical flaw of Stirnerite egoism, he contended that a contract presupposes a moral system—for a contract is nothing more than a voluntary exchange of what is mine for what is yours. Embedded in the very idea of contract, therefore, is the concept of voluntary versus forced exchange, and the concept of property. Contracts make sense only in the context of rights. To claim that rights spring from contract is to invert the logical order.

A full and dispassionate debate on this point would have been a fascinating chapter in American individualism. It never occurred. Each side became so bitter that productive discussion became impossible. And so the fledgling individualist movement splintered and shrank. Yet the disastrous controversy was avoidable. After all, Tucker managed to remain civil to British individualists such as Wordsworth Donisthorpe, with whom he conducted an extended debate over anarchism versus limited government. But then that debate dealt with arguments, rather than personality.

Debate and passionate discussion are part of the intellectual vigor that draws the best minds of an age to a movement or to an issue. Intolerance and dogma are part of what drives those same minds away. Allow me to put in a good word for intellectual good will.

1. Although there is a technical distinction between natural law theory and natural rights, for the purposes of this article the terms are interchangeable.

Mr. French is a vice president in commercial real estate lending for a bank in Las Vegas, Nevada.

Anyone who has met David Friedman knows he is a man looking to pick an argument. Only the naive or foolish will attempt to joust with him. Careful study of Friedman’s new book, Hidden Order: The Economics of Everyday Life, will make the reader a better thinker and a more skilled debater, whether the topic is economics, politics, crime, or love and happiness.

Economics is not just the study of satisfying insatiable wants with limited resources, as so many Econ 101 textbooks contend. Economic science encompasses all human behavior: people acting rationally to reach objectives. Those objectives include such everyday dilemmas as deciding which checkout lane at the supermarket will be fastest, dating and finding the right person to marry, voting, and protecting one’s property.

Friedman is at his best in the book’s second half, analyzing everyday situations. For instance, the public is outraged, believing that criminals are getting off lightly because of plea bargaining. But Friedman points out that punishment is more severe because of plea bargaining. How?

Defendants must decide whether they wish to roll the dice by going to trial with only a 10 percent chance of acquittal, or take the sure bet of some jail time. Rational criminals will accept the plea bargain if it makes them better off. The district attorney’s limited budget can then be spent convicting those who won’t take a deal. As Friedman points out, [a]ll criminals would be better off if none of them accepted the DA’s offer, but each is better off accepting.

Ever notice how many religious radio stations there are? A bunch. By comparison, the number of religious magazines, books, and newspapers is a small percentage of all print media. Why the difference? Radio broadcasts are a public good. And because people who listen to religious programs are religious, believing that donating money is virtuous, the religious broadcaster is better able to get the listener to pay for them. The religious publisher has no corresponding advantage over the secular publisher.

Friedman also explores whether stricter enforcement of drug laws increases or decreases violence. He concludes that no matter what, [a]ll [possibilities] imply that legalizing drugs would eliminate drug-related crime.

What’s behind the decline in American marriage? A decline in family values? Hardly. It used to be that a man would marry his baker or brewer, someone who could cook and clean while he toiled in the fields. Moreover, a high infant mortality rate required that a woman produce children continually, so that the couple might see two or three survive to adulthood. Today’s conveniences and low infant mortality rate make being a housewife a part-time job. Thus, as Friedman points out, [w]ith fewer children and less spouse-specific capital, the costs of divorce are much lower than they were a few generations ago.

Unfortunately, before Friedman gets to the fun stuff, he spends a third of the book getting bogged down with David Ricardo’s debunked labor theory of value, which Karl Marx embraced. Friedman writes: price equals both cost of production and value to the user, both of which must therefore be equal to each other. Subjective value, the insight of the Austrian school, is never mentioned. If value exactly equals price, why would anyone ever make the trade? Besides, what I pay for an item or service, does not depend on how much it cost to be produced, but the value I place on the item at that particular moment.

Despite those shortcomings, Hidden Order is a book spiced with jokes, anecdotes, and riddles that will keep the reader laughing, learning, and (especially) thinking.