neumann - the change in the function of law in modern society

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The Rul of

Law ndr SigSelected Essays of Franz L. Neumann

and Otto Kirchheimer

EDITED BY

William E Scheuerman

UNIVERSITY OF CALIFORIA PRESS

Berkeley os ngeles ondon



University of California PressBerkele and Los ngeles, California

Uniersiy of California PressLondon England

Copright © 1996 b

The Regents of the Universiy of California

Library of Congres Cataloging-in-Pubication Data

Scheuerman William E.The rule of law under siege: selected essas of Franz L Neumann and

Otto Kirchheimer / edited b William E Scheuerman.p cm

Includes bibliographical references and index ISBN 0 -52-2379-8 (alk paper)

. Rule of lawGeman 2 Legitimac of governmentGerman

3 Rule of law I Scheuerman, William E, 1965- KK442 6R85 1996

34'11d2

Printed in the United States of erica

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96-2157CIP

The paper used in this publication meets the minimum

requirements of Aerican National Standard for Information SciencesPermanence of Paper forPrinted Librar Materials SI Z39481984 @



FOUR

The Change in the Functionof Law in Modern Societyl

Franz L. Neumann

Fascist and socialreformist critics conceive of the liberal state as a "negativestate, and Ferdinand Lassalles characterization of the liberal state as a "night-watchman state is a generally accepted formulation in these circles. Thefact that liberalism too regards its nonexistence as the highest virtue of

the state is so evident that no proof is needed. According to this ideology,the state must function imperceivably and must really be negative. Onewould, however, fall a victim to a historical fallacy if one were to identi"negativeness with "weakness. The liberal state has always been as strongas the political and social situation and the interests of societ demanded. Ithas conducted warfare and crushed strikes with the help of strong navies ithas protected is investments, with the help of strong armies it has defendedand extended its boundaries, with the help of the police it has restored

"peace and order. It has been a strong state precisely in those spheres inwhich it had to be strong and in which it wanted to be strong. This state, inwhich laws but not men were to rule (the Anglomerican formula)thatis, the Rechtsstaat (the German formula)has rested upon force and law,upon sovereignty and freedom. Society required sovereignty in order to destroy local and particularist forces, to ush the church out of temporal affairs, to establish a unied administration and judiciary, to protect bound-aries and to conduct war, and to nance the execution of all these tasks.Political liberty has been necessary to modern society for the safeguardingof its economic freedom. Both elements are indispensable. There is nomodern theory of law and state which does not accept both force and law

Originally appeared in German in Zeitschr fur Soza[orschng , no. (). Reprinted here from Selected Readings, Second Yar Cose in the Stdy of Contempory Society (Social Science II)8th ed. (Chicago: Universit o f Chicago ).

0



02 FRANZ L NEUMANN

even ifte empasis accorded to eac of tese components as varied in accordance wit te istorical situation. ven wen it is asserted tat sover-eignty must be te function of te competitive process, force, unregulated

by law, is still demanded independently of te competitive process.Juridical terminology expresses tis actual contradiction in te two concepts of objective law and subjective rigts (in German, bot meanings canbe covered by te term Recht) "Objective law means law created by tesovereign or, at any rate, law attributable to te sovereign power; subjectiverigts are te claims of an individual legal person. Te one negates te autonomy of te individual te oter presupposes and arms it. Various te-ories ave attempted to reconcile te contradiction expressed by tese toterms. ometimes te subjective rigts are simply declared to be mere re-lections of te objective lawa proposition wic completely denies teautonomy of te individual. (Tis German teory, wic was developedand lourised at te end of te nineteent century, as been adopted byItalian fascism.) ometimes te difference beteen objective law and sub-jective rigts is denied altogeter. ubjective rigts appear as noting butobjective law itself insofar as te latter, by force of te claim to obediencewic it establises, addresses itself to a concrete person (obligation) or isdirected against suc a concrete person (legal claim) . Oter teories again

reduce objective law to patterns of beavior on te part of tose subject tote law.

Te work of te classic liberal Locke does not contain te term "sover-eignty, but te idea is tere. Locke, like all liberal teorists of te state, conceived of man as being good in te state of nature. He tougt of te state

of nature as a paradise tat is supposed to persist even after te formationof te state. It is true, according to Locke, tat laws will prevail (e calledtem "standing laws) wose material content cannot be altered even bydemocratic procedures. But even Locke approves of extralegal force. Hedoes not, owever, call it sovereigny (ever since te frank discussions ofHobbes and te absolutism of te tuarts te word as ad an unpleasantconnotation in ngland) but prerogative. By prerogative e referred to tepower to act, at discretion, beyond or even against te law. Man, after all,sometimes is evil, and Locke recognized tat te positive laws of te stateare but imperfect copies of te laws of nature. Wenever tese evil tendencies nd expression tere must be a power to lead man back to is state ofnatural goodness. Te prerogative, te force unregulated by law, is mostdeveloped in te "federative power, wic Locke puts beside te legisla-tive and te executive. He acknowledged it as a tird independent power.Te prerogative operates in te conduct offoreign affairs wic cannot be



THE CHANGE IN THE FUNCTION OF LAW 03

based on abstract general norms but necessarily must "be left in great partto te prudence of tose wo ave tis power committed to tem, to bemanaged . . . for te advantage of te commonwealt.

Tis fundamental duality is peraps even more clearly expressed by absolutists like Hobbes and pinoza. toug law for Hobbes is pure volutas, identical wit all te sovereign s measures, and notwitstanding te facttat outside te state tere can be no law, e restricts is monistic teory bybasing te state (and ence law) on a natural law wic is not only volutasbut also ratio because it is oriented toward te preservation and defense ofuman life. In case of a conlict between te measures of te sovereignand te ratio of te law of nature, e concedes clear priority to te law of na-ture. "Contracts, wic proibit te defense of one s own body, are null and

void. No one is obliged to confess to a crime, no one to commit suicide orto kill a fellow man. Universal military service is against natural law Lackingis usual lucidity, e writes tat te Law of Nature obliges always in con-science (i for itero) but not always i fo extero3 Te point were teobligation of obedience ceases and te rigt of disobedience (wic is onlygranted in individual cass) commences again is ambiguously dened.

f the svereign cmmand a man, thugh justly cndemned, t kill, undr maim himself; r nt t resist thse that assault him; r t abstain frm the

use f fd, air, medicine, r any ther thing ithut hich he cannt live; yethath that man the liberty t disbey

Here again Hobbess ambivalent attitude is obvious. In accord wit re-quirements of tis epoc te empasis is put on sovereignt, legally un-cecked force, and on te demand for a strong state tat is independentof te warring groups. But liberty is also stressed, owever weakly.

Te conlict in question is even more evident in te case of pinoza, wo

really developed two teories: a teory of te state and a teory of law, between wic tere exists a dialectical relationsip. In pinozas teory ofte state, state absolutism is at least as unlimited as in Hobbes. Te rigtsof te individual are lacking even toug freedom is postulated as te ul-timate aim of te state. ven in matters of religion te subject is entirelysubordinated to te measures of te· sovereign, wic are called laws. "Itis obedience wic makes te subject Only tougt is free. In pinozasTractatus politicus even te last traces of te rigts reserved o te individualave been eliminated, probably owing to te impression tat te murder of

is friend DeWitt left on im. "If we understand by law te law of civil soci-ety . . . ten we cannot say tat te state is bound by law or can infringe onit Te laws of civil society are entirely dependent on te state and in orderto protect its own freedom te state sould act only out of consideration foritself and sould "regard noting as good or evil except wat according toits own judgment is good or evil for itself. 5 Beside tis absolutist teory of



104 FRANZ L. NEUMANN

the state, however, there stands his theory of law, which really represents acorrection of his theor of the state.

The natural right of the totality of nature and consequently of every individual

extends just as far as its power. Accordingly, whatever a person does in fol-lowing the aws of his own nature he does in accor dance with the highest nat

ural law and the justice of his action is proportionate to his power.6

Under normal circumstances the state has supreme power, and hence it hasthe highest right. Should, however, an individual or a group acquire power,then they will be right to a corresponding extent. Spinoza's theo, therefore, is not a system in which the relationship of state and societ is rgidlydetermined. The line of demarcation is lexible. If a social group possesses

enough power, it may acquire for itself as much libert as its power allows inthe face of the power of the state. I t a y ultimately succeed to the directionof the state and transform its power into law and justice. The absolutismof the state is based on considerations identical ith those operative in thecase of Hobbes. But the freedom of individuals is guaranteed by power thatbecomes legal and just and that they are to apply in order to conduct commerce, to exchange goods, and to cooperate in a societ that is based on division of labor. The theory, according to which might is right, serves pri

marily to control the masses which Spinoza hated, but at te same time itcombated monarchy. Spinozas theory is the theory of an opposition thatfeels its strength and that hopes soon to transform is social power into political power.

II

The antithesis of sovereignt and law corresponds to o ifferent concepts

of law: a political and a rational concept. In a political sense every measureof the sovereign power, regardless of its material content, constitutes law.Declaration of war and concusion of peace, tax laws, and the code of civilaw, the policeman's command and that of the bailiff, the decision of theudge and the legal norm upon which the decision is based-in fact, all utterances of the sovereign, because they are uterances of the egn areaw. This concept of law s exclusvely genetcally dened. Law s volunt

and nothing else. Insofar as a legal theory accepts this political concept oflaw, it may be called a "decisonist theory. However, there is also the ratio

nal concept of law, whic is based not on the source of law but on its material content. Not every measure of the sovereign, and not only measures ofthe sovereign, are law. aw is here a norm that is intelligible and containsan ethical postulate which is frequently tat of equality. Law, then, is rai

an not necessarily as at the same tme. Ths ratonal law need not,but can, emanate from the sovereign. For this theory of law, especially in the




form of the heory of naural law, assers ha maerial laws may exis wi-ou reference o he will of he soveregn. I defends he validiy of a sysemof norms even when he posive law of he sae ignores is posulaes Todayhere wo conceps o law are sricly separaed.

There is no such separaion in he Thomis sysem of naural law Therevoluntas and ratio are sill one. No every measure of he auhoriy is law.Only hose measures are law ha a correspond o he equiremens ofhe law o naure. Lw is he basis, he sandard, he regla artis, by eans of

which a jus decision is o be obained Agains a law ha conradics eprinciples of lex naturalis, passive resisance is no only jusied bu i becomes raher a duy, because even God canno dispense wih he lex natu-

alis. he Thomis sysem, he law of naure i sufcienly concreized and,

in par, insiuionalzed: Thomism derives from i a number of concree demands on he legsaor. A he same ime he recognion of he righ of aeas, passive resisance makes possible he realizaion of he law of naurein he face of a conlicing law of he sae

The separaion of he wo conceps of law is underaken by he Nominaliss and in he conciliar heor. Sice hen law has been viewed a heconscious creaion of civil socie. The deachmen of he polcal concepo la w from nonsecula naural la w was consummaed in he couse of he

sruggles beeen church and sae and o he inernal conlics wihin hechurch and he emporal oder. The Nominaliss, who represened specically bourgeois ineress oposed he papal demand for he subordinaionof he emporal power. During hese conlics naural law underwen a series of meamorphoses, servng a one ime a revoluioary ncio and aanoher a conservaive one, a sill anoher a criical funcon, and henan apoogeic one. Whenever a poliical group aacks he powerfully inrenched posiions of anoher group, i will use revouionary naural law asan implemen and will derive from naural law even he righ o yrannicideWhenever such a group has succeeded, i will abjure all is former ideals,suppress he revoluionary implicaions of naural l, and ransform i inoa conservaive ideology. Marsilius of Padua, owing o his anagonism owardhe ecclesiascal claim for emporal sovereign was forced o resric herule of he emporal sovereign by reognizing a ype of naural law ha suppored demands for freedom. The legislaor, he pars principans, is no wihou resricions, bu is placed under he dominaio of uiversal norms ofnaural law, which are, o a high degree, concreized and insiuionalized

A he same ime, however, Marsilius, in order o receive scien popularuppo was f orced o posulae democraic righs of paricipaion in whichhe conceives of he people no as he oaly of all ee and equal ciizensbu only as he pars valentio: The conciliar heoriss, Gerson and Nicoas ofusa, were driven o he accepance o he same posulaes in consequenceof heir conlic wih he claims of he pope for ecclesiasical sovereign




Gerson reduced the will of the church to the individual wills of the members of the ecclesiastical aristocrats who were assembled at the council.Nicolas of usa went even further and made the ecclesiastical power subject

to the general norms of natural law while denying the validit of papal measures which contradicted these universal laws.Beginning with the fourteenth centur, the identit of political and ra

tional law ceases to be insisted on. The political law is regarded onl as themeasure of the sovereign. Natural law, as expressed in universall, generallvalid norms, stands in opposiion to the political law and plas a restrictiverole with reference o it; natural law points in a denite direction and contains social demands which usuall refer to the preservation of private propert and to political liberties. Furthermore, it contains the demand for

equalit bef ore the law. This tpe of natural law, as in the case of the Monarchomachs, is alwas put forward b an attacking group. Bodin, who produced the rst modern sstem of legal and political theor, accepts soveeignt as an absolute and permanent power as unequivocall as he acceprational law which restricts that absolute power.

III

In the age o f liberalism, natural law declines to the same degree as democrac and the social-contract theor nd acceptance. The generalit of thepositive law acquires a position of central importance in the legal sstem.Onl a norm, which has a general characte is eaed as law. It s sometimes asserted that the dierence etween the general law and the individual measure is onl a relative one, because each command of the superiorto the subordinate has some degree of generalit with respect to the act tobe executed since the executor alwas possesses a certain amount of initia

tive, however, small. Those legal theorists who accept as legitimate onlthose concepts that lend themselves to a logicall unambiguous formulation, and who will reject ever decision as subjective and therefore arbitrar,will also reject the distinction between general norms and particular measure. We concee of a lea norm as a hpothetical ugmen the eregarding the future conduct of its subjects, and the statute is the inpaorm n wc this lea norm appeas

Three elements are relevant in the characterization of the law: the law

must be general in its formulation, its generalit must be specic, and itmust not be retroactive. Rousseau formulated the claim for the generalitof formulation as follows:

When I say that the object of law is always general, I mean that the law con-

siders subjects en masse and actions in the abstract, and never a particular per

son or action. Thus the law may indeed decree that there shall be privileges,



THE CHNGE IN THE FUNCTON OF LW 107

but cannot confer them o n anybody by name ....In a word, no functionwhich has a particular object belongs to the legislative power.7

This rst requirement is isucient, however, for

right receives only by becoming law not ony the of its geneality but alsoits true determinateness Therefore in considering the nature of lawmaking,one shoud not dwell only upon the rst ma aspect of a law, namey that it

declares something as the universally valid rule of behavior.Rather it is moeimportant nd ess entiat consider the contents of a aw and to recognize thatthese contents partake of a specic, dened generali

Bt what is the substantve content of this geeralty? In oder to deducetis concrete denition, we distinuish between specic laws and" lea prin

iples or leal standards of conduct (Gealklauseln as tey are called inGermanjurisprudence) Propositns like the folloin, that contracts thatolae public poicy or are unreasonable or immoral (Section 138 of theGerman Civil Code BGB) are null and void, or that he who damaes someone in a way that violates ood morals s responsible for indemnties (Section 826), or that he "who commits an act which has en declared punishable under the law or which is deservin of puishmet because it is iconlict wth healthy popular sentiment shall be punished (Secon 2 of the

Crminal Code for the German Reich as formulated by the Lw of June 28935) are not specc laws with true enerali They embody rather a spurious enerali. Because in pesent-day society there cn be no unanimityon whether a iven action, in a concrete case, is immoral or unreasonable,o whether a certain punishment corresponds to or runs counte to"healthypopular sentimen, they have no specic content A leal system which deriv its leal propositions primarily from these socalled eneral principles(Generalauseln or from "leal standards of conduct is nothin but a masknde which individual measures are hidden On the other hand rules likethe followin, that the leal existence (rihts and resposibilites) of a peson beis with hs brth (Secton of the German BB), or that the transfer of landed property is fected by areement of he parties concernedand reistration n the reistry of landed property (Secton 873 of the German BGB), are rl leal norms becuse all the essential facts to which thenorm refers are clearly dened and because there is no reference to moralstandards that are neither enerally bindin nor accepted as bindn. If thefundamenal principles or the essential parts of a leal system are placed

under the rule of such Generalklauseln then one can no loner speak of therule of a eneral law

Te foa structure of a eneal lawand herein es the third elementof eneralitycontains also a minimum of ubstanve content The enerallw which is dened in such a manner urantees to te ude a minimumof independence because it does not subordnate him to the indvidual



108 FRNZ L NEUMNN

measures of the sovereign. Likewse a general la w contains the demand forthe nadmissibility of retroactivity. A law which provides for retroactivtycontains particular commands inasmuch as the facts to whch the law refers

alread exist.The facts that are regulated b general laws are to be found either in

spheres of free choice or in institutions whch guide and control behavor.Liberty, n the legal sense, has an exclusivel negatve meanng. It is merel

"absence of external compulson (Hobbes). This

negative freedom or this freedom as conceived by the intellect is onesided;but this onesidedness always contains in itself an important determination Itis therefore not to be discarded The shortcoming of the intellect is, howeer

that it elevates a onesided determination into an exclusive and dominant one9

Itis necessay, however, to do more than ndcate the existence of a sphereof freedom from the state. It s important in this connection to point outa distnction, however supercial, beteen the various knds of legal free-dom. We dstnguish n general four separate legal freedoms:

1. Personal freedom, which comprses the rights of the isolated indvdual, such as the provision that a person can be arrested onl on the

basis of laws and b means of legal procedures; and domiclar andpostal involablity.2 Poltcal freedom, which political because t obtans its signicance

onl on the basis of an organized socal life withn the framework ofthe state. It includes, for example, freedom of assocation and assem-bl, freedom of the press, and the right to the secret ballo. Theserights are lberal as well as democratic. The are lberal in so far asthe guarantee freedom to the indivdual n certain spheres offe

and democratc insofar as the are means to the democratc determnation of state polc.

3 A thrd categor consttuted b economc freedom, that is, freedomin trade and industr.

4. In the period of democrac the poltcal rghts of lberty nd expression also in the social sphere b the recogniton of a right of association on the part of emploees.

Ths fourfold classication does not claim exhaustveness ether logicall orhstoricall. These freedoms ordinaril are not constitutionall guaranteedas unrestricted rghts. Such guarantes would be absurd. The are guaranteed exclusivel within "the framework of the law. Interference with these

rights is therefore permitted onl on the bass of legal provsions. It s themost important and perhaps the decsve demand of lberalsm that inter ference ith the rights reserved to the ndvdual s not permtted on thebasis of ndivdual but onl on the basis of general laws.




In addition to dening areas of freedom, general laws also regulate human insitutions. By instution we mn an enduring, dominational or

cooperative asciation for the continuance of social life. (These relation

ships can be forme either beteen dfferent properties or beteen dirent people or beteen ersons and properties.) This denition is purely de

scriptive and has nothng to do with pluralistic theories of the state or withThomism or the Nationa Socialist philosophies of law, both of which haveattached central signicance t "instution. Thi concept includes all sor

of associations, the foundation, the factory, the business enterprise, the cartel, and the institution of maiage Above all, it comprises the most important institution of all historical sociees-private propert in the mns ofproduction Private propert as such is a subjecve and an absolute right

which lends to the proprietor lega defenses against anyone who iner ereswith possession or enjoyment of the propert. n addition, however, privatepropert in the means o production is also an initution I is destined tobe enduring; its nctions in the maintennce and continuance of social

lie it assigns to man a place in a dominational structure.There are denite and denable relations beteen institutions and the

various liberties A certain libert may be a principal fedom and for theguarant of its operation it may require a complex of auxiliary liberties and

auxiliary instituons. institution likewise may also require auxiliary liberties. Private propert as the centra institution of modern society in theage of competitive capitalism requires the decisive auxiliary liberties offreedom of contract and freedom of enterprise. The owner of capita musthave the libert to establish or discontinue a busines enterprise; he mushave the right of concluding all sort of contracts, since he can operate only

if these particular rights are recognized. These economic liberties are notprotected for their own sake, bu only because in a particular phase of eco

nomic evolution their potecon is necessary for the nctioning of theprincipal institution The contract-that is, the legal form in which manexercises his libertis, in the peod of ee competition, a constituentelement of modern societ. The contract terminates the isolation of the individual proprietors and constute a means of communication beteenthem It is theref ore as indispensable s propert itself To bng about "that may own propert not only by means of a thing and my own subjective will,but also by means of anoter will, and hereby in a common will-this con

sttutes the sphere of contract.0

Liberalism egards as the rule of aw exclusively the rule of statute l,

and not that of customar or natural law. Actually, natural aw disappearedin England under the rule of Henry V t was during this period that boththe supemacy of parliamentary laws and the dut of the judge to obey

these laws became undeniable. Hence, already in the sixteenth cenry theprevailing formula o te rule o law meant only the rule of laws passed by



0 FRANZ . NEUMANN

Parliament. During the Puritan revolution, of course, there emerged strongnaturallaw tendencies, hich were used not only by the Republicans in theirstruggle against monarchism but were also employed by the Royalists i de-

fense of their own position. Since that time the rule of natural law has neverbeen asserted either in juridical literature, jurisprudence, or judicial prac

tice. Even Blackstone (17231780), who in the rst volume of his Commetaries copied the naturallaw system of Burlamaqui and who acknowledgedthe rule of an eternal and immutable natural law, was compelled to admit(when discussing the sovereignt of Parliament) that Parliament can dowhatever it desires and that he knew of no way of realizing the rule of thenatural law that he postulated.

In Germany natural law experienced a different fate. At rst it changed

its character; nally, it disappeared altogether. Natural law can provide atheory of liberty. In this form it represents the critical theory of a bourgeoisopposition at war with absolutism, or it appears as an apologetic doctrine le-

gitimating not a liberal system but the sovereignt of the state. In Englandthere was no reason for the futher retention of either of these kinds of natural lawfor neither the liberal tpe, since the bourgeoisie had acceded to

political power in the seventeenth century, nor the absolutist tpe, becausesince Henry VIII the unit of the state had been unquestioned (even during

the Puritan revolution). In Germany, however, neither of these events hadyet occurred. The most pressing task was the establishment of a unied statein order to provide an important precondition for industrial and commer-cial expansion. Pufendorf's system of natural law, which exerted extraordinary inluence upon the jurists of the seventeenth and eighteenth cen-turies, served the purpose of justiing, by means of natural law, the power

of the state. Human nature, according to his theory, is dominated y two

impulsesthe impulse of sociabilit and the impulse of selfpreservation.

Since there is no natural harmony among these instincts, harmony must beachieved by compulsion. Natural law, however, because it has no sanction atits disposal, is unable to accomplish this task. The execution of the law ofnature is entirely dependent on the fo divio et coscietiae This, however,is insufcient. Sanctions, therefore, are applied by the state, which has beenfounded by contract and which mus be an absolutist one. The law of thestate is the command of the sovereign it is pure volutas The right of re-sistance which Pufendorf includes in his system is only of secondary signicance. In Christian Thomasius's system, natural law offers only a body of

counsel from which certain moral obligations follow. However, as law andmoralit are distinctly separated and as the supreme criterion of law is its

compulsory character, Thomasius's system of natural law likewise serves to

make compulsion on the part of the state legitimate. However differentChristian Wolff's point of departure is, however determinedly he stressesthe validit of a Lex aetera he too arrives at the conclusion that only the



THE CHANGE N THE FUNCTON F LAW

state is able to assure a well-ordered social ife. The only dfference from therationalistic theories of Pufendorf and homasus lies in the fact that Wolffassigned to the state the additinal tasks of promoting welfare and cltureHis system was as adequate to the governments that Frederick of Prussiaand Joseph II of Astria had set up, s the systems of Pufendorf and Thomasius were expressve of the state that the Elector Frederick Wlliam hadestabished

Kant's legal theory is examined apart from his ehics, it is found atnatural law has completely dsappeared from it. The state is viewed as an organization that is to guarantee that individuals can be free without interfering with the freedom of their fllow men. But the decision is deliveredot by he autonomous individual but by the absolute state, which is the log

ical postulate derived from the state of nature under which, i turn, the existence of provisional pivate property and of the rule of pacta sunt servanda

are already asserted as a dogma. According to Kant, the freedom of the legalsubject is guaranteed solely by the requirement that the state must rule onlyon the basis of general laws But this postulate s asserted with rigorous consistency. Kant even rejects the sftening of the strict legal system, as it is codied by (statutory) general laws, through the law of euity. For "equity is adumb goddess who cannot claim a hearing of right. Hence it follows that

a Court of Equity for the decson of dsputed matters of Rgh would involvea contradiconI From the tme of Kant until the end of the nineteenthcentuy the demad for the generality of law forms the ceter of Germanlegal theory. By demanding that the domination of the state be based ongeneral laws Kant adopted the theories of Montesquieu and Rousseau.

The demand that the state must rule only by means of general laws is per haps most clearly voiced in Montesquieu's Esprit des Lois. Montesquieu, byway of Malebranche, was inlueced by Descares. The unverse, according

to Descartes, is governed by general mechanical laws which even God is unable to alter because individual measures are alien o him, and because Godwithdraws from the universe and becomes immense, spirituel et ini According to Montesquieu, the laws of the state are general and inaccessibleto the measures of the sovereign in the same w The French Revolution wasmost profoudly ffected by the docries of Rousseau and Montesquieu.Mirabeau, the charman of the committee for the draftng of the ights ofMan proposed, on August 17, 1789 the following provision: Beng the expression of the general will [volnt grale] the law must be general with

respect to its object. Hence, one article of the Declaration of the Rights ofMan and Citzen contans a provsion that the law is the expression of thegeneral will (volnt gnrale) This was rstated in Aticle 6 of the Declaration of 1793 nd in Article 6 of the Constution of the Anne . Duringthe Revolutio, i the Constitution of 1791 and theJacobnst Costutionof 793, a dstnction was made beteen laws (lois) and decrees (dc).The



112 FRANZ L. NEUMAN

Girondist Constitution of 1793, which was under the decisive inluence ofCondorcet, emphasized sharply in Section 2 of Article 4: "The distinctivecharacteristics of laws are their generality and their unlimited duration,

and it distinguishes laws from measures (msures) for an emergency case.The German doctrine is deeply indebted to the French doctrine but, to-

ward the end of the nineteenth century, it diverged widely from it Robert

von Mohl, Lorenz von Stein, and Klueber viewed the demand for the gen-

erality of the law as the central problem of political theory . Yet under the

pervasive inluence of Paul Laband this doctrine became enfeebled and was

replaced by the distinction beeen formal law and material law Every u

terance of the will of the state s consdered as formal law, whereas ol

those utterances which conain a legal norm, that is, which produce uj

tive rights and duties, are considered as material laws. The budgetary law, in this sense, is not a material law since it only enables the state to make ex-

penditures within the framework of the budget. This dualistic theory was

generally accepted by German jurisprudence.

Nowithstanding the fact that the theory of the supremacy of Parliamentwas victorious in England, there too the general character of law was notneglected. Blackstone even asserted that an individual law is "a declaration rather than a law.12 Even Austin, the most extreme representative of

Hobbes's concept of political law, asserted that one could speak of a law onlyif it has a general character. But in the only case in which an English courtdealt with the question of whether individual measures have the characterof law, this question was answered in the afrmative. This decision is of thegreatest interest because the judges discussed the reasons why in this particular case an individual measure must e a law. The decision deals with thevalidity of a measure of a colonial high commissioner, by which a native wasdeprived of his freedom. The question was how far such an individual mea

sure could suspend liberties that had been guaranteed by the Habeas Corpus Act. LordJustice Farwell deduced the legality of the measure as follows:

The truth is that in countries inhabited by natives who outnumber the whites,such laws [Habeas Corpus] although bulwarks of freedom in the United King-dom, might very probably become the death sentence of the whites if theywere applied there [i.e. in the colones].

LordJustice Kennedy added that legislation that is oriented toward a single

person is a privilege, and generally, so I hope and believe, such legislationrecommends itself to a British legislator just as little a it appealed to thelegislators of ancient Rome.13 This case clearly stresses the double-edgedcharacter of the general law in a societ characterized by decisive conlicts

of interests.The postulation of the generality of law is accompanied by the repudia

tion of the retroactivity of law.



THE CHNGE IN THE FUNCTION OF LW 113

Retroaction is he most evil assault which the law can commit. It means hetearing up of the social contract, and the destruction of the conditios on he

basis owhich societ eoys the right to demand he individual's obediencebecause it deprives him of the guarantees of which socie assured him and

which were he compensatio for the sacrice which his obedience enailed.Reroaction deprives the aw of its real egal characer.A retroactive aw is no

aw a all.

This is the way in which Benjamin Consan characerized he reroacionoflaws.4adopted by he Declaration of the Rights of Man and Citizen, by the Constituionof 1793 and by the Consiuion of he Anne III, alhough oday there ex-iss neiher in England nor in France any obsace agains he enacmen ofreroacve laws.In Republican Germany, however, he Weimar Consituionassigned he satus of a consiuiona guaran to the prohibiion of rero-

acive crimina aws.Such a heory of the formal structure of law leads auomaically o a spe

cic heory of he relation beween he judge and he law.f the law andnohing bu he law rules,ones Juges, as Monesquieu had remarked, are ly "the mouthpieces ofhe aw and inanimate hings Owing o his alleged insignicance, he acts

of he judge are en quelque faon nul5 his phonographic heory of the judicaure is, of course, cosely bound up wih the heory of he separaionof powers, ha is, wih he asertion ha creaion of law and legislaionare identical, and tha, apar from he process oflegislation, law can be creaed neiher by socie, by judges nor by adminisative ofcials.Cazas expressed his noion mos clearly when he said, "In any poliical socie hereare merely wo powers, one ha creaes law and anoher one ha sees o isexecuion.The power of he judges ...exiss only in the plain and simple

apicaion of he aw."16

Similar ideas, however, were already to be found inh Federalist in Hobbes, and in Hales HistO of the Common Law.

The lega sysem of liberalism, herefore, was regared as a closed sysemwithou gaps ll he judge had o do was o apply i. The juridica thinking of his epoch was called positivism or normaivism, and he inerpreaion of he laws by he judge was caed he dogmatic inerpreaion (inGermany) or exegeica interpretaion (in France) Benham, oo, in ordero achieve complee inelligibili and clariy in he lega sysem, recom

mended he codicaion of English law, for

a code foed upon these principles woud no require schoos for its expla-

nation woud not require casuiss o unravel its subtleties. It would speak aanguage familiar o everybody: each one might consult it at his need ...Nodecision of any judge, much less he opinion of any individual should e al-

lowed to be cited as law until such decision or opinion have been embodiedby he legisltor in the code ... If any commentary should be written on this



1 1 4 FRANZ NUMANN

cde ith a vie f pinting uth at is the sense theref all men shuld berequired t pay n regard t such cmment neither shuld it be aed tbe cited in any curt f justice in any manne haoee If any udge

hd in he ce of hs pacice ee ccasin t remark any thing in it thatappear t him errneus in pint f matter let him certi such bservatin t the legislature ith the reasns f his pinin and the crrectin heuld prpse

It is o f great importance that, above all, the French Revolution was not con-tent with the merely octrin form of the proposition that juges may notcreate law but attempte to institutionalie it. This evelopment startewith the famous formulation of Robespierre:

The statement that law is created by the court . . must be expelled from ourlanguage. In a State which has a constitution and a legilature, the jurispru-de1Ce of the law courts consists only in the law. IS

The ecrees of August 6 an 24 790, consequently, prohibit the inter-pretation of laws on the part of the juge an request him to appeal, in alloubtful cases, to the legislature. The functions of the socalle Rfr Lg-islatifwere fullle later by the Tribunal e Cassation an, subsequeny, bythe Cour e Cassation, which institutions were constitute no as cours buas a part of the egisative Later owing o he inuence of ortal is this im-practicabe ocrinaire aiue was given up an in the Coe Civil freeomof inerpreaion on the part of the juge was restablishe. Accoring toortalis, thejuge is suppose to ll any legal gaps in accorance with " thenatural light of legal sense an common sense. But this iea was not in-corporate into French legal theory; on he contrary, especially after 830,the exegetical school was victorious. The year 830 really is the turningpoint in French legal theo. Henceforth laws are interprete in a ogmaic

manner, the legal system is regare as a cose one, he "phonographtheory is rigorousy appie an he awcreating function of the juge isenie. Henceforh here is no recourse to consierations of justice orappropriateness

Similar evelopments took place in Germany. On April 4 780, Freerick II of russia prohibite the intepretation of laws Article 4 of the In-trouction of the All gemeies Ladrecht prohibite interpretations which conicte with the literal sense of the wors of grammatica contexts in which

the laws were frame. Feuerbach is probaby he auhor of he Bavarianorer of October 9 , 8 3, which prohibie he wriing, by ofcials anprivate schoars of commenaries on the Bavarian coe of criminal law of 8 3 On his point Feuerbach's aversary, Savigny, took the same view. Savigny an the historical school of law regare only law, the folkspirit, ancustomary laws as genuine sources of law. Savigny likewise viewe the legalsystem as close, unie, an complete, the juge having only to apply the



THE CHANGE IN THE FUNCTION O LAW 115

truh, not o creae i. During the whole of he nneeenh ceury he Ger-man heory of he applicaion of law was dogmaic.

The heory of he separaion of powers, upo which his heory of lega

appcaon depends, does no mply, however, ha he hree divided pow-ers are of equal value. Since Locke i h ways assered he preeminenceof he legislaive power. Hence, during he wole of he nineeenh cenand n Germany uni 99, he rgh of he judcary o examine laws hahave been properly enaced was deied German consiuion heory wasspli i his respec, he liberalsfavoring judicial review, he conservaives re

jecing i. Ye alhough he majory a he fourh annual meeig of Ger-man juriss in 1863 declared iself in favor of judical review, he number ofis proponens declined rapidly under he rule of Bismarck. In pracice sucha righ ws conssenly rejeced and only he examinaio of laws wih referece o he compabiliy of sae law and federal law was permied.

Wha are he social causes and consquences of he heory of he ruleof law, of he denial of naural law and of he absolue subordiaion ofhe judge o he law? In England, in Germany, ad in France he belief nhe rue of law expressed oh he srengh and he weakness of he bourgeosie. The proposiion of he sremacy of sauory law implied he addona proposon ha socl change may be carried ou only by legisla

io. The prioriy of legslaion is mainined because he mddle classes, aleas in Engand and France, paricipaed o a signcan degree i he egislaive process Laws, however, always involve iterferences wih libery orpropery. If such inerfereces can only be underake on he basis of laws,and if he bourgeosie is, o a decisive degree, represened i Parliamenhen his docrine mlies ha he social class which is he objec of intervenion will iself deermie the conten of hose inerferences and willof corse, see o i ha is own ineress are aken ino accoun. If Parla

men is he chief age of socal change he he rule of he laws of ariamen will also operae as an insrmen o preven, or a leas o reard,socil progress This docrne, therefore, veils the unwillingness of he rulingclasses o give way o social reforms, for he slowness of he parliamearymachinery ransforms he sole means of legal change ino a means for hepreservaion of he saus quo. Fnally, e docrine has an ideological funcion, namely, tha of disguising he real holders of power n the sae. Theivocation of he law as he sole sovereig and he dicum ha sovereignyis "a governmen of laws and no of men make i superluous o menonha, n realiy, men do rule, even when hey rule within the framework ofhe law Hence, he supremacy of he laws of arlamen forms he cener ofhe consuoal docrne only as long as he middle classes are able o

wield decisive nluence in arliamen. soon as his inluence wanes,here appear new nar law dcrines ha are designed o redce he predominance of a arliamen in whch represenaves of he working classes




also exert inluence. At th same time, the doctrine of the supremacy of Parliament hides the weakness of the middle classes. The dictum that socialchanges can be attained only through laws enacted by parliament, and hat

administrative agencies and judges may only apply law but not create it, isan illusion that also serves to deny the law-creating capacit of extraparliamentary forces. This doctrine clearly reveals the ambivalent position ofmodern manthe emphatic assertion of the autonomy of man is accompanied by the equally passionate insistence on the rule of the state.

The rule of law is, moreover, necessary as a precondition of capitalistcompetition. The ned for and dependabilit in the legal sstem and in admsaion ws oe o the motves for restricting the powerof the pamoia nes and of feualis eading ultimately to the es

tablishment of Parliament, with the help of which the bourgeoisie controlled the administration ad budget while participating in the modication of the legal system. Free competition requires the generalit of lawbecause it is the highest form of formal rationality. It requires also the absolute subordination of thejudge to the law and therewith the separation ofpowers. Free competition depends upon the existence of a large number ofcompetitors of approximately equal strength who compete in a free market.Freedom of the commodity market, freedom of the labor market, free se

lection within the entrepreneurial class, freedom of contract, and, above all,calculability of the decisions of the judiciary are the essential characteristicsof the liberal competitive system which, through continuous, rationalistic,and capitalistic enterprise, produces a steady low of prots. It is the primarytask of the state to create such a legal order as will secure the fullment ofcontracts. A high degree of certaint of the expectation that contracts willbe executed is an indispensable part of the enterprise. However, this calculabilit and predictabilit, if the competitors are approximately equal in

strength, can be attained only by general laws. These general laws must beso denite in their abstractness that as little as possible is left to the discretion of thejudge. In such a societ the judge, therefore, is forbidden to haverecourse to Genealklauseln The state, if it intervenes in the individual's disposition of his libert or propert, must render its interventions calculablein advance. It may not interfere in a retroactive manner, for that wouldnegate all existing expectations. It may not intervene extralegally becausesuch an intervention would be unpredictable. It may not intervene by individual measures because such an intervention would violate the principle ofthe equalit of competitors. The judge, moreover, must be independentand litigations must be decided without regard for the desires of the government. Hence there must be a separation of powers which, quite apartfrom its political signicance, is of the greatest importance for the organization of the competitive system since it provides for a division of competences and xes the limits among the various activities of the state, guaran-



THE CHANGE N THE FUNCTON OF LAW 117

teeing thereby the rationality of law and its application. This scheme solves

e appae coadicio i he libeal aiude owad legis laio. This

contradiction, which Ros coe Pound detected in the attitude of the Ameri-

can Puritans, consis ts, on the one hand, in the negative attitude toward ever

kind of egisation and, on the other hand, in the rm beief in legisation

ass ociated with the re jection of customary law and the law of equity. This is

he aiude o oy of Puiaism bu of ibeaism as a whoe The ae

postulated the superiority of parliamentary legislation in order to prevent

legislation or, a f ar as that is impossible, to make this legis lation serviceable

o he inees of he bougeois ie. In pincipe, iberaism aways disiked

s tate intervention.

The theoy of he ue of eea laws as, of couse, eve bee fuy

realized in any stage of the development of competitive capitalism. Liberalsociey is not a rational one, and its economy is not planfully organizedHamoy ad equiibium ae o, a ay give mome, auomaicay restored. Measures of the sovereign and "general principles are, at all stages,indispensable. The contrac becomes he insume fo disodgig feecompetition, terminating therewith the rule of the contract and of the general law on which the contract in the economic sphere is based. Accordingo he ega heoy of ibeaism (ad hee i is i opposiio o Adam

Smith), freedom of contract mplies the right of the entrepreneur to formorganizations, cartels, corporations, syndicates employers' associaions, andnay the monopolistic trust which dominates the market. Since the legaltheory of liberalism discarded the social postulates of Adam Smith's classica ibea heo-amey, his obecio o unrestrited compeiio,19 hisdemand that the competitors be equal, his ght against monopolies, hisdeclaration for the unication of the capitalproviding and the managerialncions in he same individual (that is, in the propertwner), and, ac

cordingly his ght against the joint stock companyit arrived unanimouslyahe cocusio ha feedom of coac mea ohig bu he feedomto conclude freely any kind of contract if there were no express legal prohibitions, even such contracts a would mean the end of free competition.The asfomaion of he concep of the freedom of contract from a socialconcept, implying the exchange of equal values among equally strong compeiors io a fomaluidical cocep coibued o he deveopme ofthe system of monopolistic capitalism, in which contract and general lawswere to play a strictly secondary role.

IV

Yet general laws and the principle of the separation of powers have stillanother function. This function is ethical in character and is most clearlyepessed i Rousseau's phiosophy of aw The geeai of aws ad he




independence of the judge guarantee a minimum of personal and politicalliberty. The general law establishes personal equality, and it forms the basisof all interferences with liberty and property. Therefore the character of thelaw that alone permits such interference is of fundamental signicance.Onl when such interferences are controlled b general laws is libert guaranteed, since in this manner the principle of equality is preserved. Voltaire'sstatement that freedom means dependence on nothing save law20 refersonl to general laws. If the sovereign is permitted to decree individual measures, to arrest this man or that one, to conscate this or that piece of propert, then the independence of the judge is extinguished. The judge whohas to execute such individual measures becomes a mere policeman Realindependence presupposes the rule of the state through general laws. Gen

erality of the laws and independence of the judge, as well as the doctrine ofthe separation of powers, have therefore purposes that transcend the requirements of free competition. The basic phenomenon underling thegenerality of law-namel, the legal equalit of all men-has never been disputed b liberalism. Equality before the law is, to be sure, "formal, that is,negative But Hegel, who clearl perceived the purel formalnegative nature of libert, alread warned of the consequences of discarding it.

All three functions of the generality of laws-obscuring the domination

of the bourgeoisie, rendering the economic sstem calculable, and guaranteeing a minimum of libert and equality-are of decisive importance andnot just the second of these functions, as the proponents of the totalitarianstate claim. If one views-as, for example, Carl Schmitt does-the generality of laws as a means designed to satis the requirements of free competition, then the conclusion is obvious that with the termination of free competition and its replacement b organized state capitalism, the general law,the independence of judges, and the separation of powers will also disappear and that the true law then consists either in the Fhrer's command orthe general principle (Generalkluseln).

v

The juridical forms that were created b the competitie society of the nineteenth centur were dierent in German and England. The specicallGerman phenomenon is the Rechtsstt; the specicall English phenomenon is the supremac of Parliament combined with the rule of law.

The idea of the Rechtsst is perfected in Kant's sstem. There it appearsas the creation of the German Brgertum-an economicall ascending butpolitcall stagnant class. Ths class was content with the legal protection ofits economic libert and was resigned to its exclusion from a share in political power The essence of this concept of the Rechtsstt consists in the distinction of the al o from the otca structure of the state. This iso




lated legal form, independent from the poltical structure, ws to constitutethe guaranty of freedom and security. This was th fundamental dfferencetween German nd English theory. In the formr th Rechtsstaat did not

develop into a speciclly juridcal form of democracy, as was the casei England. t rather assumed a neutral attitude toward the form of thestate. his indirent attitude is mos early expressed in the wriings ofFriedrichJulius Stahl.

The stae should becme a Rchstaat This is he sluin f ur prblemsand he mtvaing frce f ur age. . The stae shuld dene and secure he mdes and limis f is wn aciviies a well as he ci tizens' sphere f

freedm in stric accrdance wih law. I shud n reaize he ehica ideadirecy (i.e, in a cercive manner) beynd he limis f legaliich

means shuld, in his sphere n aemp t d mre han he ms indispensable "fencing in. The cncep f he Rchstaat des n men ha hestae merely manages he ega rder whu adminsraive aims nr ha t

merely precs the righs f he individual I des n refer he ga rcnen f he saes aciviy a all bu nly the mde and characer f heir

realizain21

Stahl's denition was accepted even at times explicitly by the liberal heorists of the Rechtsstaat: Gnist,22 Robert von Mohl,23 Otto Baehr,24 and

Welcker.25 his conception o the Rechtsstaat, which Stahl elaborated in passionate critcsm of de Maistr and Bonald, culminates in the denial that themonarch is the Lord's represetative on earth and concludes with the assertion that the monarch may rule not against the law but only ogether "iththe representatves of the peope ad only by means of the bueaucracyStahl's denition reveals to things distinctly: 1. he state also has administrative tasks which are not controlled; 2. the legal form, on the otherhand-that is, the rule by law-s indepndent of the form of the state.

In English constitutional theory both actossoveeiy of Parliamentad the ule of law-receive equal emphasis. his was aleady visible inBlackstone he Englsh middle classes, in contrast to the German, saeguarded heir economic feedom not materilly, tha is by establishing barrirs against the legislation of Parliament, but geneticlly, that is, throughparticipation in the making of laws h Englsh theory is, however, notreally indirent toward the structure of the concept of law (d. Dicey's

fmous Intrduction to the Study of the Law of the Constitution).26 he Germantheory of law had little interest in the genesis of laws and concerned it

self with the interpretation of positive laws rgardless of their origin heEnglish middle classes tok an essentially political interes in the genesisof laws he Geman theory is liberalstconstitutinal; the English theoryis democraticconsttutional. he English bourgeoisie expressed its preerence through the medium of Parliament; the German borgeoisie foundthe laws of constitutional monarchy in exstence and systemaized and




interpreted them in order to secure a minimum of economic libery in theface of a more or less absolute state. In the English theory, therefore, thereis no serious discussion about the formal structure of laws, whereas, German

theory is replete with investigations into the nature of law.27 The Germanory i the views of its foremost representative, Paul Laband, whose ideaso became those of the dominant circle of legal theorists, clearly anifeststhe political weakness of the German bourgeoisie.

After 1848 the independence of the judge was no longer contested.He applied the laws literally. Discretion, which is mos isible in "generalprinciples (Generalklauseln), plays no role. In the rst thrty volumes of decisions of the Supreme Court, "general principles are hardly ever mentioned.2 The police article of the Allgemeine Landrecht the most important

"general principle of administrative law, likeise had fallen into oblivion. late as 191 the Second Congress of German judges adopted the follow

ing resolution:

(1) The power of the judge is subordinated to the law. The judge, therefore,

is never alowed to deviate from the law (2) Ambiguity of the content of a lawdoes not entitle the judge to decide according to his own discretion; doubtsare to be dissolved by interpretation of the law with regard to its meaning and

purpose, and, wherever possible, by analog (3) If a law is subjet to divergent

interpretations the judge has to give preference to that interpretation whichcorresponds best to legal undersanding and to current social needs.9

This attitude of the judges toward the law during the period of Wilim II is understandable. The state, then, knew how to retain its inluenceover he judge despite the latter's independence. The social position of the

judge was denitely xed. e began his career as a reserve ofcer and thuslearned the signicance of obedience and discipline. Chief justiceships

and court presidencies were almost exclusively lled by former state attorneys, who, in contrast to the judges, had previously been public ofcialscontrolled by orders from above. aving become court presidents, they stillknew how to full the wishes of ministers, even when these were not distinctly expressed. Finally, the Prussianjudge, especially if compared with hisEnglish colleague, was a poorly paid ofcial. e had to wait for years bef orehe was nally appointed, so that only members of the moderately well-offmiddle classes could afford to enter the profession. The judge of this periodexhibited all the characteristics of the class of his origin: resentment against

the manual worker (especially when he was organized and well paid), reverence toward throne and pulpit, and, at the same time, complete indifference toward nancial capitalism and monopoly capitalism. The judgesrepresented the alliance between crown, army, bureaucracy, landlords, andbourgeoisie. Their interests and those which sprang from the constellation



THE CHANGE IN THE FU TlON OF LAW 12

o f the above strata were identical, and since the laws corresponded to theseinterests there was no reason to appy them in any but a itera manner. Neiher was ther any rm for any kind of natural law. The German bour

geoisie was satised with its reatons wit the state. Judges and jurists nolonger had to appeal to a natural-law system in order to ght a system of positive law which was hostile to them Hence, both natural law and philosophyof aw disappeared Positim was ictorious not ony as regards the appication of law (in that respect it was progressive) but also as far as the theoryof aw was concerned, which amounted to doing away with all legal theoryand uncritical acceptance of supine relativism The complete repudiationof natural law during the second half of the nineteenth and the beginningof the twentieth centuries was most denitey oiced by Windscheid: "Yeswe do not mind saying it The law which we have and which we create is notthe aw. In our eyes there is no absoute law The dream of natural law hasbeen dissipated. 30 This striVing for legal security was sharply expressed byKarl Bergbohm when he remarked that whoever thinks of a law which isindependent of human creation has been "corrupted by the idea of natural law.3!

Een though it represented the coaition of the ruing casses, the Rstaat was not, however, a desposm. The generality of the law and the inde

pendenc of the judge contained both elements transcending the functionsof obscuring the actual distribution of power and the mantenance of caculability. The separation of powers was, it is true, not only an organizationa dision of powers; it was at the same time, a distribution of poiticawer among the various groups of that coalition. Yet this class rule was calcuabe, predictabe, and, hence not arbitrary. Furthermore owing partlyto the fusion of the Prussian-conservative proponents of the police statewith largescale industrialsts and partly to the concessions that the state had

to make to the proetariat which was increasing in strength the poor andthe workers beneted to a large extent from the rationality of law. This wasa the more true after the deeopment of a system of aw permitting poorpersons to sue without cost, which after 1918 experienceda extraordinaryexpansion and made the legal system of the Weimar period the most rationalized system in the world. It was ratioal not ony in the sense of creatingcalculability but also in an eminently social sense insofar as the advantagesof rationa aw aso beneted the working casses and the poor This eoution represents a contrast to England, where even today a rationality whichfaors the status quo is guaranteed by the totally inadequate developmentof the poor law and by the fact that owing to the extraordinarily high costsof legal proceedings and the concentration of the administration of justice in the High Court of Justice the broader srata of the popuation arepractically without legal protection. The legal system of the period under



1 FRANZ L NEUMANN

discussion thus centers around the following elements: personal, political,and economic liberties that imply the priorit of these liberties vis--vis thestate. The structure of the system may be summarized as follows:

1. The formal structure of the legal system. These liberties were guaranteed by formal, rational la, that is, by general laws and by their strictapplication by independent judges, by the rejection of legislation bythe judiciary, and by the opposition to "general principles (Geneml-

klauseln) 2 The material structure of the legal system. This legal system was ori

ented, economically, toward free competition. It found expression inhe auxiliary guaranties of private propert and in the freedom of con

tract and enterprise.3. The social structure of the legal system. Socially it was oriented toward a situation in which the working class did not constitute a serious threat.

4 The political structure of the legal system. Politically it was orientedtoward a system in which the separation and distribution of politicalpower prevailed: in Germany, toward a situation in which the bourgeoisie did not play a politically decisive role; in England, on the otherhand, toward one in which the bourgeoisie determined the content ofthe law and in which the power of Parliament was distributed amongcrown, aristocracy, and bourgeoisie.

VI

During the period of monopoly capitalism, which in Germany began withthe Weimar Republic, legal teory and legal practice have undergone a de

·cisive change. To facilitate an understanding of these legal changes, it ismore useful to consider the political structure of the Weimar democracythan to describe economic developments which have moreover been extensively treated elsewhere. The decisive political characteristic of the Geran republic was the signicance of the workers' movement after 1918.

he middle classes were no longer able to ignore the existence of class concs as the earlier liberals had done. They had ather to acknowledge thisconlict and to try somehow to construct a consttuton ght of t. Here,too, the contract was the technical means used since it alone makes possle

the ecessy polial corose The contention that civil societ originated the social contract implies the insight that contractual relations represent a deeply important component in the functioning of society. Modernsociet does, indeed, exist in large measure through contractual relations,and not only in the economic sphere. Powerful social groups unite, maketheir interests appear as the only legitimate ones, and thereby sacrice



THE CHAGE I THE FUCTIO OF AW 123

those of the population at large. The formation of the German Republiclaid bare the true function of the social contract. The Republic began withthe following contracts: the most important one was the contract beteen

Ebert, on the one hand, and Hindenburg and Groener, on the other hand(its conditions have been outlined by Groener as one of the witnesses of the"stab in the back trials at Munich) . This contract provided on the positiveside, for the reestablishment of "peace and order, and, on the negativeone, for the ght against bolshevism. The socalled StinnesLegien Agreement of November 1, 1918, was to effect the same result in the socialsphere employers promised not to tolerate "yellow labor unions and torecognize only independent unions, to cooperate with them, and to xworking conditions by means of wage contracts. Actually this agreement not

only meant the end of bolshevism but it also meant the end of the possibilit of any kind of socialism and provided the basis of the system under whichGermany lived from 1918 to 1930. On Marc 4 1919, the Social Demo-cratic Part of Berlin and the Reic government agreed on the introductionof factory councils and the legalization of their position in the Constitution.It was made clear that suh factory councils would have nothing to do withthe revolutionary workers' and soldiers' councils or Soviets. By the agreement ofJanuary 26 1919, between the Reich and the federal states, the fed-

eral setup of the Reich was preserved The fth and nal contract (whichreally included all the preceding ones) beteen the three Weimar partiesthe Center, the Social Democatic, and the Democratic partiesprovidedfor the preservation of the old bureaucracy and judiciary, ejected the Soviet system, stabilized the political power of the church, sanctioned civil lib-erties, even though they were somewhat restricted by new social fundamen-tal rights, and introduced parliamentary democracy.

The Weimar system has been called "collectivist democracy because, os

tensibly, the formation of political decisions was to be achieved not onlytrough the summation of the wills of individual voters but also through theagency of autonomous, social organizations. The state was to remain neu-tral visvis tese free organizations. To the extent that this occurred, theWeimar state fullled the program of political pluralism. The sovereigntof the state was no longer to be exercsed by an independent bureaucracy,by the police and the ay, but was supposed to rest in the hands of theentire populace which, for this purpose, would organize itself in voluntaryassociations. This pluralistic system did not ignore the class struggle butattempted rather to transform it into a form of interclass cooperation.Hence, the Weimar democracy rested to a decisive extent on the idea of par-ita parit beteen social groups, beteen Reich and states, and beteenthe various churches. Although this phenomenon occurred in its purestform in Germany, parallel tendencies existed in England and France.

A contractual system can exist only as long as the parties exist, as long as




they esire to aintain the contracts, ori in the event that they o not wishor are unable o full he, here is a coercve agenc whch can efocetheir execution In Gerany, however, the Deocratic party isappeae al

ost copletely. New partiesabove all, the National Socialist Partywerefone whch by 1 9 3 , srpasse the ol parties in nuerical strength.The eveloping crisis ae it ipossible for the capitalistic partners to thecontracts to full their contactual obligations, especially those bearing onthe aintenance of the social institutions. A neutral coercive power natrally i not exist, the iea of the neural state being onl a ction A alreay entione, in the sphere of public law as well as in that of private law,the contract necessarily prouces power In other wors, the syste of conacs, he polcal sphee oo, coans wh self he elees of sown estruction. The proponents of pluralis who seek to realize the "peoples state by recing the part playe by the inepenent bureaucracy, bythe ary an the police an by hanling the affairs of the state thoughagreeents of voluntary associations, increase in reality the power of bueaucracy, reuce the political an social signicance of the voluntary associations, an thus strengthen the tenencies which lea to the authoritarian state In Gera, b 9 3 the sse of wage bagang ha aloscease to function. While copulsory arbitration by the state was, accor

ing to the oiginal intention, to coe into play in the relations between eployers an eployees only when in exceptional cases the parties wereunable to agree, state intervention actually becae the noral case an voluntary agreeents were reache only in orer to avoi coplsory intervention. oreover, structural changes in the organization of prouctionan istributionfor exaple he rationalization an echanization of in-ustryha powerful consequences for the working class. The balance ofpower shifte an the ecisive position of the ol unions of highly skille

wokes passe, o he oe ha o he foee an oher supevsoryworkers, an, on the other han, to the large ass of unskille an seiskille workers, who were ore ifcult to organize This evelopent,of course, ipaire the power of the labor unions very consierably. Theywere furthe weakene by the econoic crisis an by the strength of theironopolistic aversaies. Strike statistics e onstate how little will to ghtthey retaine The equilibru of the classes ha foun its constitutionalexpresson n he secon pa of he Rech Conso, whch boe he le"Funaental Rights an Funaental Duties of the Geran Citizenry.There the ol classical an the new social rights ae juxtapose in an unrelate anner so that it was justiable to say that the Weiar Constitutionwas a ecisionless constitution4 Structuraleconoic changes in conjunction with the increasing ipotence of Parliaent ae teenously tothe strength of the bureaucracy The increent in strength was especiallygreat in the case of he iniseial bureaucracy




These changes in the economic and politica structure were accompanied

by profound changes in legal theory and legal practice.35 It has been statedaready above that, under the inluence of Laband, German legal theory

had discarded the concept of the generality oflaws and had set up nsteada division into formal and materia laws. Suddeny, however, the postulate ofthe generality of lawsw revived, partcularly in the writings of Carl Schmittand his school. Schmitt asserted that the ter "law, as far as it had beenused in the Weimar Constitution, referred merely to general laws, and thatthe Reichstag, therefore, could oly create general laws. The legslativepower of the Reichstag consequently was restricted by its inability to decreeindividual measures In order to prove his thesis he referred to the histori-cal developments mentioned above, and to Article 109 of the Weimar Con-sttution, which states that all Gemans are equal before the law. The teoythat the state may rule only thrugh general laws apples t a specic economic system, namely, one of free competition. But t was exactly with respect to the economic sphere that Schmtt's thor indcated te polateof the rule of genea laws. The political eaning o ts enassance is notdcult to perceive Schmtt himself developed this thesis at rst for thepurpose of showing that the laws providing for the expropriation of the German prices had been unconstitutiona because they violated the pinciple

of equaity befoe the law and the postulate of the generaity of laws. YeSchmitt's theory presupposes that the principle of legal equality relates notonly to the administration and the judiciay but also to the legislative powerthat is in Schmtt's opinion the principle did not mean only what it hameant formerly, namely, that promulgated laws must be dutifully applied bystate ofcals regardless of dirences n the status o citizens, wthout hared, and wihout prejudice For Schmitt it also man hat the pnclebinds the legislative powe itself ad prevents it from creating laws i which

qual situations were ffereny treated It is o course true than Haee,te lberal constutional jurist an po iian once supported this thesis inhis arguments against Bismarck's laws expropriating the Polish minorityBut his hesis had been univesally rejected Now this old idea was revvedn order to add new checks to the sovereignty of Parliament in addition t 0those which were already povded by constitutional clauses concerningchanges n the Constitution. einrich Tiepel was the rst to try to provthat the principle o equali would pohibit, in the case of the federal decree concerning gold balances, depriving stockholders of the value of theirshares Soon an enormous literature arose n order to prove that this princile of lega equality, at bottom, represented the basc fundamenta rightand that the Parliament was as much bound by it as were the administratonand the judiciary

But even if the principle of equality before the law is also supposed to bebinding for the legislative, t does ot at all follow that such equality is



126 FRANZ L. NEUMNN

attainable only through general laws. The assertion tat equality can be re-aized onl b general norms is a reteration of Rousseau's demand which,in his case, is reasonable and intelligible because he was discussing general

law with reference to a society in which there was to be onl small propertor common property. Private propet, which is sacred and inviolable, according to Rousseau, is propert onl to the extent that it remains an individual and particular right.

If it is regarded as common to all citizens, it is subject to the general will[volnte genal] and may be infringed on or denied by this will Thus thesovereign has no right to touch the property of one or several citizens. But hemay legitimately seize the property of all.36

On the other hand, Rousseau also postulates the rule of general laws forsituations in which propert is socialized, as he has described it in his pro-jected Corsican Constitution

Far from desiring that the state be poor I prefer on the contrary that it shouldpossess everything and that individuals share in the common wealth only inproportion to their services.37

Thus Rousseau believed that the volante generl could be exressed in gen-

eral laws onl in societies with equall distributed small property holding orwith socialized propert. The rule of law reall obtains in Rousseau's sstem,and there is no room for foce since in the social sstem which Rousseaupostulated the state has no functions.

Since individual property ownership is so slight and dependent, the govern-ment has little need for force and controls the citizenry with gestures of the

nger so to speak. 38

In a monopolisticall organized sstem the general law cannot be supreme.If the state is confronted onl b a monopol, it is pointless to regulate thismonopol b a general law. In such a case the individual measure is the onlappropriate expression of the sovereign power. Such an individual measureneither violates the principle of equaity before the law nor runs counter tothe general idea of the law, as the legslator is confronted onl with an individual situation. Thus in the economic sphere the general law presupposeseconomic equality within the capitalist class. German legislation beteen1919 and 1932 did indeed create special measures wth regard to individual monopolistic enterprises; the emergenc decree of the president of theReich of Jul 13, 1931, prohibited the application of the regulations concerning insolvenc to the insolvent Darmstaedter Bank, and therewith or-dered a special regulation for one powerful monopol because onl thisone vital bank was in danger. The postulate that the state should rule onl




by gneral laws coms asurd in th conomic sphr i th lgslator isdaling not with qually strong comptitors ut with monopolis which rvrs th principl of th fr markt. Th raissanc, udr th Wimr

dmocracy, of th notion of th gnralty of laws and ts indiscriminat appicaon o prsonal political, and conomic lirtis, was thus usd as advic to rstrict th powr of th Parliamnt which no ongr rprsntdxclusivly th itrss of th ig landows, of th captalists, of th army,and of th uraucracy. Now th gnral law, within th conomic sphrw usd in ordr to prsrv th xisting proprty systm and to protct itagaist intrvtion whr such was rgardd as incompatil with intrstsof th aov-namd groups.

Bfo 1914 th discssion concrning th formal structur of laws was

xclusivly thortical, caus, as has n statd th xamination of lawso th part of th judg (dal viw) was not prmittd. Now ths thortical discussions cam poitical qustions of grat practical impotanccaus th Grman suprm court suddnly accptd th principl ofjudicial rviw In its dcision of April 28, 1921,3 th suprm court assrtdtha it had always uphld its right of xamining whthr laws wr costitutonalan assrion which, as th tchnical litatur statd almost unanimously, was a shr alshood. At any rat, th rcognition o judicial r

viw rprsntd a rdistriution of powr twn stat and socity. Tgratr th powr of th stat th mor radily will th judg sumit to itauthority. Th wakr th stat, th mor h will try to raliz his prvatcla intrsts. Th rcogntion of judical rviw opratd favoraly o hxisting social ord This is unmstakaly shown y an analysis of all thosdcisions which armd th court's powr of rviw.4 ll ths dcsosdalt with th qustion of whthr a particular law violatd Articl 15 ofth Wimar Constution, which guarantd th scurity of privat proprty.

Th suprm court likwis accptd th thory that th principl of lgalqualit ound th Parliamnt, s that "aritrary laws wr to considrd as ng unconstitutional. Thus, n oth hory and practc Articls109 and 15 of th Wimar Constitution srvd to prvnt intrfrnc

with th xistig proprty systm.This rcours to th idas of lgal quality and gnrality is rally a d

guisd rvval of natural law that is now fulling countrrvolutonayfuntions. Th oldr systm of positvism would, in th priod aftr 1918, havimprild th position of monopolis caus th posiv lgal ordr nolongr corrspondd with th inrsts of th monopolis Hnc th xstnc of a systm of naural law was now opny dscussd Carl Schmitt,y adopting th mrican thory of th "inhrnt limitations uon thamdig powr trid to distinguish tn amnding and violatingmodcations of th Constitution. H was of th opinion that amndmnts



128 FRNZ L. NEUMNN

to the Constitution could not assai the "Constitution as a basic decision.Constitutiona amendments might modi ony certain aspects of the Constitution. The fundamenta decisions regarding vaue preferences that theConstitution embodies, Schmitt thought, coud not be modied even bythe quaied pariamentary majorit which had the power to amend theConstitution. The membes of the supreme court were moved by a simiar thought when, during a meeting in 1924, they commented upon therevauation decree (which was the rst emergency taxation decree). Theydecided:

This notion of good faith [Treu und Glauben stands beyond individual lawsand beyond individual positive-legal provisions. No legal order which deseres

this title of honor can exist without this principle. Hence, the legislator by hispower, cannot obstruct a result which is imperatively demanded by good faithTreu und Glaub. It would be a grave offense against the prestige of the government and the sense ofjustice if someone who based his claim on a new lawwould be dismissed by a law court because his appeal to the law violated the

principle of good faith41

The judges of the supreme court ikewise announced that a contractor of amortgage who woud base his caim on the above-mentioned emergency

taxation decree woud ose his case because his defense against the mortgagee woud have to be considered as vioating the principe of good faith.James Godschmidt, professor of crimina and civi procedure at the University of Berin, supported the judges of the supreme court, and in orderto prove the correctness of their decision he invoked the od principes ofnatura aw and the right of resistance of the peope against the unawfu exercise of power by the state.42 Hermann Isay even went farther and conceded to the judge the right of examining each aw as to its compatibii with the popuar sense of justice. A vast body of iterature was written on

the subject, and a new kind of natura aw seemed to be in the process ofestabishment.

However, a kind of secret natura aw had been continuousy appiedthroughout this period. The period from 1918 to 1932 was characterizedby the amost universa acceptance f the doctrine of the "free aw schoo,by the destruction of the rationait and the cacuabiit of aw, by the restriction of the system of contracts, by the triumph of the idea of commandover that of the contract, and by the prevaence of "genera princi pes over

genuine ega nos. The "genera principes transformed the whoe egasystem. By their dependence on an extraega order of vaues they negateforma rationaity, give an immense amount of discretionary power to the judge, and eiminate the ine of division beeen judiciary and administration so that administrative decisionsfor exampe, poitica decisionstake on the form of decisions of the ordinary civi courts. Before the war of




19118 the "free law school had conducted an energetic but hopelessbattle against legal positivism.4 According to this school, law is not exclusively contained in statutes and the legal system is not closed and free of

gaps. The lling of these gaps, then, must be accomplished through legalnorms, for the decision of the judge must be a legal one. And the normsmust have a general character because the administration of law must follow the principle of legal equalit. These norms are to be created by thejudge, who has therefore not only the task of applying law but also that ofcreating it. This freelaw theory of legal sources is usually connected witha new policy in the application oflaw. This postulate is most clearly statedin the famous pamphlet of Hermann antorowicz44 and in the numerouspublications of Ernst Fuchs. It demands that the freedom that must be conceded to the judge with regard to legal provisions must be as vast as possible so that the free discretionary power of the judge may be elevated to therank of the basic principle of the application of law. These two aspects of the"free law school, the theoretical and the political, must be strictly distin-guished. To the extent that the "free law school demands a new theory ofthe application of law, i t demands the substitution of formalrational law by"general principles. Kantorowicz, the founder of this school in Germany,in his later writings focused his attention more on the theoretical problems

of the school. His disciples, however, who were less qualed in theoretical matters, dealt rather with its policy for the application of law and insisted, as in the case of Ernst uchs, that the German civil code containedonly one good passage, namely, where it ceases its abstract treatment ofcases and erects a signpost with the inscription "Entrance to the free seaof legal needs. This passage is Section 22, and for Fuchs it is the Archi-median point permitting the old legal system to be transformed. It was thispractical aspect of the doctrine of free law which became dominant.

Before 1918 the "free law school demanded discretionary power forthe judge in order to infuse progressive ideas into a reactionary legal system. But already in 1911 Max Weber warned,

i t is mrever nt at all certain that the classes which tday enj y nly negative privileges, particularly the wrking class, can expect the gains frm an infrmal administratin flaw that the rists assume will lw frm it.45

In order to point out the function of "general principles it is necessaryto examine the elds of law where "general rinciples are invoked and the

functions they full there. To begin, it may be stated that "general principles are always invoked when the state is confronted by powerful privategroups. Whenever parties which do not have the same rights engage in theexchange of goods and where one powerful part faces other less powerfulprivate parties or the state, rational law ceases to obtain and "general prin-ci pes are resorted to. The decision of the judge then takes the form of a



3 FRANZ . NEUMNN

political or of an administrative order by which antaonistic interests areadjusted. This politial order employs, however, the form of a court deci-sion. It is interesting to investigate the utilization of "general pnciples in

the eld of labor law which regulates the legal relations beteen employeesand employers. The power of private groups is most clearly perceivable inthe eld of labor relations. According to German law, the legal admissibility of labor conlict was determined by the standard that is provided for inSection 826, BGB. This law provides that he who causes damage to someone else in a way that violates "good morals is liable to the payment of indemnities. What violates "good morals can never be decided in a universally binding way. The supreme court for many decades had employed theformula that those actions are contrary to "good morals which contradictthe sense of equity and justice of the whole people. This, of course, is apurely tautological denition which adds nothing to what the law has al-ready expressed. A binding standard as to the legality of a strike is not attainable on this basis. An employer, at bottom, sees every strike as a disturbance of the sacred order, whereas an employee will regard no strike as aviolation of "good morals. Every "concrete formulation which the Reichs-gericht has enunciated on this question is nothing but a reiteration of thetautological denition. Or, to discuss another difcult problem of labor

law: if a worker accepts a lower wage than the contracted one, has he renounced the dierence beteen the contracted wage rate and the wage actually paid? The supreme court always decided this question on the basis ofSection 22, BGB, which provides that the debtor has to full his obligationwith regard to good faith Treu ud Glaube) The federal labor court con-sequently refused to decide unambiguusly either way. It preferred to decide each case on the basis o the concrete situation, to take into account alldetails that might have been relevantabove all, the question of whether

the worker, when he accepted the lower wage rate, had been subjected to"economic pressure. Another central question of labor law was the ques-tion whether a worker who is willing to work loses his claim for pay when theemployer cannot put him to use for some such reason as technical disrup-tions, luctuations in the market, or such social disturbances as a strike inhis own or in another's factory. This question is, as such, clearly dealt withby Section 61, BGB, which provides that the worker in such cases mayclaim his wages, the legislators having intended to fasten the risks on theentrepreneur. Both supreme court and federal labor court declined, how-ever, to apply the unambiguous norm of Section 61, basing their decisionsolely upon Section 22, BGB. In this case, too, the specic individual circumstances are to be taken into account in each case. Following this de-cision, the federal labor court developed a number of principles that wereof extraordinary juridical ad political signicance. It declared the Fac-tory Council Law had created a "working and factory community beteen



THE CHANGE IN THE FUNCTION OF AW 3

worker an d entrepreneur and that, consequently, t he worker is to share inthe fate of the enterprise. I f te enterprise i s shaken i n it s foundations bysome disturbance, the worker has to bear the whole or part of the risk.There is another principle that was developed on this occasion and whichis of farreaching importance. If a plant is slowed down or shut by a strike inanother plant or by a strike of certain workers in the same plant, the claimfor payment of wages on the part of workers who are prepared and willingto work is to be denied because of the bond of solidarity among all workers :the responsibility for any strike, therefore, must be attribued to every individual worker who is not working because of it. These are only a few examples from the very important eld of labor law.

The rediscovery of "general principles serves to destroy a system of pos

itive law that had incorporated many important social reforms; it destroysthe rationali of law. The structural changes within the economic systemled to important changes in the functions of "general principles. Havingformerly been stepchildren oflaw, they now become its darlings. Section of the law against unfair competition prohibits the use of unfair methods ofcompetition by merchants. This prohibition has denite and specic functions in a competitive economy. By prohibiting certain forms of advertising,the announcement of irregular clearance sales, etc., it secures equal op-

portunities for the competitors in a free market; this "general principle is,therefore, an important element in a competitive economy. This is, however, modied in the instant at which a competitive economy is replaced bya monopolistic economy. This general principle ceases at this moment to bean instrument for the preservation of equal opportunities in a free marketand becomes a means for establishing monopolistic control over the mar-ket. This functional change has an important bearing on the pricexing oftrademarked articles. If the state sanctions the pricexing among manufacturers of trademarked commodities, and, moreover, threatens wholeslers and retailers who do ot adhere to these price schedules with pun-ishment, then the private pricexing of the monopoly assumes a publiccharacter. Hence, the application of the "general principle becomes asovereign act of the state, which orders the consumers, who are dependenton the monopoly, to recognize and t put up with the price rules of the private monopolies.

The foregoing examples are intended t o illustrate the proposition that"general principles occupy a central role when competition gives way to

monopoly. "General principles support the powerposition of the monopolies. However, this thesis must be qualied in one direction. From to 3 "general principles in labor law served to effect a compromise be-tween enterprisers and workers. A precise analysis of all its decisions showsthat during this period the federal labor court used "general principles toeffect a compromise beteen the antagonistic interests of capital and labor.



132 FRAZ L. EMA

At that time the constitutional idea of parity among the various groups inGerman society still had the character of political realit. From 3 on-ward, when the political inluence of labor parties and labor unions waswaning, the idea of pari became nothing but pure ideology, and "generalprinciples again became a means for giving sanction to the interests ofcapital.

The conclusion is justied, therefore, that in a monopolistic economy"general principles operate in the interest of the monopolists. Te irrational norm is calculable enough for the monopolist since his position is sopowerful that he is able to manage without the formal rationalit of the law.He can manage not only without rational law; frequently the latter operateseven as an impediment to the full development or, if desirable for him, to a

restriction of production faciities. For rational law, as has been pointed out,has not only the function of rendering the process of economic exchangecalculable, but it serves at the same time to protect the weaker partner. Themonopolist can do without the assistance of law courts. His power is a suf-cient substitute for the judicial action of the state. Even when utilizing theform of the contract, his economic power enables him to impose upon con-sumers and workers all those rules that he deems indispensable and that theother parties are forced to accept if they want to continue to exist. The con

tracts of the monopolists burden the consumer with all imaginable risks,while the consumer himself has to full all the obligations required by thelaw. The monopolist can force him to comply without appealing to thecourts. Moreover, the monopolist tries to abolish the supplementary guaranties of private property in the means of productionnamely, freedom ofcontract and enterpriseand to have the formal rationalit of the law completely terminated. Freedom of contract comprehends the right of the out-sider to remain out of a cartel, the right of a cartel member to retire fromthe cartel under certain contractual conditions, and, nally, the right ofthe employee to form unions. Freedom of enterprise permits any capitalistto establish competitive enterprises and to compete with the monopolies.Hence in the eyes of the monopolist these supplementary guaranties losetheir value. They are consequently restricted or even completely abolished.The direct commands of the soveregn state, the administrative acts thatdirectly protect the interests of the monopolist and restrict or abolish theold guaranties, now assume the function of a new auxiliary intitution.The apparatus of the authoritarian state realizes the juridical demands of

the monopolists.

V I I

The signicance of "general principles becomes even clearer in the authoritarian state because all restraints are abolished which parliamentary



TH E CHAGE I THE F CTI O OF LAW 133

democracy, even when functioning badly, had erected against the unlimitedexecution of the requirements of monopolies. The function of "generalprinciples is even extended. Thanks to their ambiguit, they served, in theperiod of transition, to bring preNational Socialist positive law into harmony with the demands of the dominant group, and formally with the com-mands of the leader [Fhrer] , to the extent that it had been in contradiction with these. Despite certain differences of opinion, National Socialismpostulates that the judge is absolutely bound by the law. But the "generalprinciples enable decisions to be made in accordance with the dominantpolitical opinions even where positive law contradicts them. Fo, in applying"general principles the judge must not have to resort to his free discretion,since "the principles of National Socialism are the direct and exclusive au-

thorities in the application and use of the general principles' by the judge,the lawyer, and the jurist.4 Thus, the "general principle is a means forrealizing the political command of the leader against a contradictory positive law. Furthermore, National Socialist literature is entirely unanimous inholding that the law is nothing but the command of the leader for i t is onlydue to the will of the leader that "prerevolutionary law is valid. "ll thepolitical power of the German people is embodied in the leader. . . . lllaw emanates from him. The " leader of the ethnic group is characterized

by his attachment to the la of life of the ethnic communit which he ex-presses by laws, decrees, and so on. It is this direct "administration of lawwhich appears "as a singular monstrosit to all those whose mode of thinking is still under the inluence of the nineteenth century. To them law' canonly be what is provided for by statutes, and they call law only that whichParliament as a socalled popular representation,' according to orderlyproceedings, has decided on as law. Above all, it is inconceivable to themthat even the highest judicial authorit of the e thnic communit' is em

bodied in the leader. They established their bourgeoisRechtsstaat

theauspices of the separation of powers and regarded the independence ofthe judge' in the face of the state as one of the most essential guarantiesof their individualistic freedom. Yet history has denitely decided in favorof us Germans and against those disintegrating liberalistic principles. Todaywe know that the leader protects the lw and that he, in a case of emergency,will immediately act a executive capacit. The destiny of the whole community rests on his shoulders. 4 Numerous nongeneral laws having thecharacter of privileges have been decreed. The principle that laws may not

have retroactive force has been discarded. Even the fundamental principleof the Rechtsstaat the principle of equali before the law, has ceased to bea rule of the National Socialist theory of law which, claiming to derive itstheory from Hegel, seeks to base itself upon the "concrete personalit4and forgets that Hegel, although recognizing the purely negative natureof the principle of formal equality, was not in favor of discarding it. The



134 FRAZ . EUMA

ndependence of the judge has also been changed. Even f one dsregardsall extralegal nterferences wth the judcature, the repudaton of the general character of law reduces the status of the judge to that of a polceman.Iflaw and the leader's wll are dentcal and f the leader can have poltcalfoes klled wthout legal tral and ths acton s then celebrated as the hgh-est realzaton of law,4 then one can no longer speak of law n a speccsense . Law n ths case s nothng but a techncal nstrument f or the execu-ton of certan poltcal objectves t s nothng but the command of theruler. The legal theory of the authortaran state s accordngly decsonsm,and law s nothng but an araum domiatio, that s, a means servng thestablzaton of power.

Ths, however, s not the jurstc deology of the authortaran state. Ths

s rather represented by "nsttutonalsm or, as Carl Schmtt calls t, the"theory of concrete orders and communtes.5 Insttutonalsm s dstn-gushed from decsonsm well as from normatvst postvsm. We havealready characterzed the man tenets of legal postsm as ncludng theproposton that law can be found only n statutes, that the legal system sfree of logcal contradctons and s consequently a completely coherent sys-tem of general norms, and that the judge has only to apply this system ofnorms so that, n spte of the fact that the applcaton s effected by human

bengs, the norm prevals n all ts purty. The prncpal concepts of ths theory are (a) the legal person, whch comprses as well the physcal as the jurdcal person (b ) the subj ectve prvate rghts, whch express personal free-dom based upon objectve law (and the hghest form of whch s the rghtof prvate property) ; and (c) the contract, to whch all human relatonsmust be reduced, ncludng the state an the club, marrage and saes agreement, church and labor unon. Accordng to the postvst theory, the state,too, was a legal person. The bearer of soveregnty was not socal groups butthe Staatsperso tself whch acted through agences. The ndvdual pos-sessed subjectve publc rghts vsvs the state.

The legal person s the economc mask of the property relatonshp. A amask t covers the true face and obscures the fact that prvate propert s notonly a subje ctve rght but s at the same tme, the bass of "masterslave re-latonshps. The contract, beng the auxlary guarant of prvate propert,s a contract between free and equal legal persons. But ths freedom andequalty exsts only n the legal sphere. The legal equalt of the contractualpartners hdes ther economc nequalt. The labor contract n partcular s

a contract between the legally equal worker and entrepreneur. Its form doesnot reveal the fact that n actualt the entrepreneur s more powerful thanthe worker. The Staatsperso alone s supposed to be the bearer of soveregn, and the postvst theory of the state refuses, therefore, to speak of thesoveregnt of an agency or an organ. Ths theory obscures the domnatonof some men over other men.




Insttutonalsm proclams tself as a progressve and "ebunkng theorybecause t attacks the concept of the person and replaces t by the conceptof the nsttuton whch does not hde dfferentatons as the lberal conceptof the legal person does. Thus the to concepts of the Staatsperso and ofsoveregnt are elmnated. 5 The state becomes an nsttuton lke a paral-lelogram of forces t becomes a communt that rests organcally uponcommunties of a lower order. The concept of soveregnt becomes super-luous because the power that s exercsed by ths state has ceased to be anexternal power. It s rather the power of the organzed communty tself.Ths power s supposed, moreover, to be subsumed under eternal naturallaw or under the "eternal law oflfe of the ethnc group.

Even more rgorous are the changes that the theory of property under

goes. For postvsm the plant s the techncal unt n whch the owner produces and the enterprse s the economc unt through whch he executeshs busness polcy. Insttutonalsm transforms the plant nto a "socal workand factoy communt n whch the worker s not only an nstrument ofthe entrepreneur but also "a lvng member of the workng communty ofentrepreneurs and workers. The law regardng organzaton of natonallabor ofJanuary 20 34 legalzed the foregong denton of the federallabor court, the consequence beng that the contractual relatonshp be

teen worker and employer s replaced by the oblgaton of fathfulnesswhch s derved from ths communt.

Nt the materialistic Rman ocaio condcio oparm [sale f service] but theGerman lega frm f a faithcntract [ ree-vra] determines the relatinbeteen emplyer and emplyee It is nt the reciprcal bligatins f exchange but cmmn rk, rk in the cmmunity and a cmmn task andaim, hich are decisive52

Ths formulaton, whch does not consder the labor contract as a contratbut as an organzatonal relatonshp or as a personal legal bond, was rstput forth by Gerke,5 who asserted that the labor contract s nothng but thecontnuance of the Germanc "fathcontract (Treue-vertrag) beeen lordand vassa. Hugo Snzhemer transposed ths theory nto the German laborlaw. The busness enterprse, then, becomes a socal organsm, and the corporaton s transformed f rom a unon of legal persons wth propert nto annsttuton. Propert, brely speakng, ceases to be the subjectve rght of a

legal person and becomes an " nsttuton, that s, a reed, objected, anddendvdualzed socal relatonshp. The contract s not only pushed asden practce, as we have seen, but t also ceases to play a role n legal deology.Rghts and dutes are no longer connected wth the wll of legally equalpersons but rather wth objectve facts. What s decsve, now, s the statusthat man possesses n socety.



136 FRAN Z . NEMAN N

The chi ef representative of institutionalism, Geoges Renard,54 summarized the institutionalist demands and opposed them to juridical positivism,which he calls Jacobinism. The core of institutionalism is the eliminationof the legal person from the legal system, the separation of the institutionfrom the legal person, and the absolutization of the institution. The con-cept of the legal person is supplanted by the "concrete legal status of themember of the ethnic communit55 since the retention of the old liberalconcepts would destroy the "ethnic communit.5 According to Renard,the institution is an organism or a legal structure that serves the commonweal. It is not a simple relationship it is "existential. It is a unit, "a wholein which the single individuals are integrated. "The institutional relation-hip is an internalization, a cosortium ivicem memb" Thus the enterprise

s dvorced from the entrepreneur, the corporation from chairman andboard. With the subjective public right, the person and sovereignt of thestate disappear.5

How is this development to be explained? The legal principles of positiism certainly had a veiling function. The concept of the legal persondoubtless is a social mask. But this mask only disguises ; it does not eliminateits bearer, which can still be sensed behind the mask. In the period of competiion it was not necessary that the proprietor should disappear since, as

an individual, he did not exercise much economic and social power for itwas not the single individual but the totalit of those individuals, that is, thesystem which exercised power over man. Under monopolistic capitalism,however, this power is concentrated in the hands of a few. If the mask wereremoved, the true situation would be revealed. In a monopolistic economythe power that is exercised by a few can e easil yperceived. Institutionalism,as the legal theory of monopolism, eliminates this mask from the theory oflaw, but it also eliminates its bearer, the proprietor himself. One does not

speak any more of proprietors but of plants and entrepreneurs. One disards the oncept of the "person of the state [Staatsperso] This concept,n the postvst theory of the state, disguised the fact that, in realit, a socialgroup exercised the power that was attributed to the "person of the state . However, if political power is a s strongly concentrated as is the case in theauthoritarian state, then it is desirale that the concepts of the "person ofthe state and of sovereignt be abolished and replaced by the concept ofthe community led by the leader. Henceforth the state is called a "forma-tion or "conguration Gestalt) and is called " the political conguration

of the German people.5 To the extent that commands, and not contrac-tual agreements, become decisive, the legal theory of positivism disintegrates and is supplanted by institutionalism:

f, during the last centuries, it was necessary fr the cn tinuatin f ecnmiclife that prmises were kept withut cntinuus interventin f pwer, in the



THE CHANGE IN THE FNCTION OF LAW 1 3 7

meatime this necessit has becme less imprtant due t te prgressive accumulatin f capital The ruling class as ceased t cnsist f numerus persns wh cnclude cntracts, nw it is cmpsed f large pwerful grupscntrlled by a few persns which cmpete with ne anther in the wrld

market. They have transfrmed vast areas in Eurpe int gigantic labr campscharacterized by a rigid discipline The mre cmpetitin in the wrld market turns int a sheer struggle fr pwer, the mre rigidly rganized will theselabr camps becme bth internally and externally. The ecnmic basis f thesignicance f prmises becmes less imprtant frm day t day, because, tan increasing extent, ecnmic life is chaacterized nt by the cntract butby cmmand and bedience9

Entirelydisparate political theories have made use of institutionalism, in-

cluding reformist theory, especially that of the trade unions, as well as thetheory ofthe authoritarian state. This fact is indicative ofthe confusion thatat present is characteristic of legal thought. It is indeed true that the theoryof institutionalism seems to be more correct empirically than the theory of

juridical positivism. That the plant, the enterprise, the corporation, and themonopoly are declared to be social institutions expresses the fact that propert is no longer the private affair of the individual but has become a socialinstitution in a specic sense. Institutions are, of course, more tangible thannorms. Hence in Germany, France, and England this theory was adopted by

progressive laborunionism or collectivism. But actually this realism is onlyapparent because the institution is divorced from the context of power relationships without which it is unintelligible. Institutionalism tears istitu-tions from their social context. Just because the concept of the institutionhas such a vague character, which can be expressed in such highsoundingsentences, just because it was divorced from social realit, institutionalismin Germany became the theory of social reform on the part of the tradeunions. Particularly the theories of labor law of the various trade unions

were based upon institutionalistic concepts. In England, especially underthe inluence of Gierke's theory of the association Geossescha) conservatism as well as Fabianism employed the institutionalist concepts in orderto reform the relationship between state and societ. In France institutionalism is substantially neoThomistic and has been extraordinarily strength-ened by the papal encyclical Quaragesimo a"

The legal theory of National Socialist Germany avoids the word "institutionalism and, "in order to distinguish itself from neoThomism, pre-

fers to call itself "the juristictheory of order or " the theory of communit.It is supposed to be "congurational or structural thinking. National Socialism experiences this "conguration of things in the activities of themonopolies. The close kinship beeen institutionalism and monopolisticcapitalism was implicitly admitted by Carl Schmitt when e characterizedGottlOttlilienfeld's " theory of structures as the truly appropriate German



138 FRNZ L NEUMNN

economic theoy. Gottl-Ottlilienfeld, a leading German economist, eliminates the economic911y actve individual entiely fom his economi theoyand eplaces him by social stuctues which ae eithe "elementay o "instumental stuctues.

Hence,juidical positivism is eliminated fom the legal theoy of the authoitaian state; yet it is not eplaced only by institutionalism. The decisionist elements ae peseved and ae enomously stengthened: st, bythe elimination of the ational concept of law, and second, by the exclusiveule of the political concept of law. The eason is that the institutionalist theory is never able to answe the question of which institutions, in a given situation, ae "elementay and which ae meely "instumental stuctuesneithe is it able to state which acts of intevention and which tpe of egu

lation of institutions ae "appopiate to the situation. No is it able to dee of itself what the "concete status of the goup-membe is to be. Thiseson must be made by the appaatus of the authoitaian state whichutilizes the command of the leade as a technical means.

If the geneal law is the fundamental fom of law and if law is not onlyvoluntas but also ratio, then one must state that the law of the authoitaianstate has no legal chaacte. Law as a phenomenon distinct fom the political command of the soveeign is possible only if it manifests itself as geneal

law. In a society that cannot dispense with powe as a pinciple, completegenealit of law is impossible. The limited, fomal, and negative genealiof law unde libealism not only makes possible capitalistic calculabilit butalso guaantees a minimum of libet, since fomal libet has two aspectsand makes available at least legal chances to the weak. Fo this eason theedevelops a conlict between the law and the libeties based theeon, on theone side, and the equiements of a monopolistic economy, on the othe side.Unde monopolistic capitalism, pivate popet in the means of poduc

tion as the chaacteistic institution of the entie bougeois poch is peseed but geneal law and contact disappea and ae eplaced by individua measues on the pat of the soveeign.

NTES

1. This article is an abbreviated translation of "Der Funktionswandel des Gesetzes im Recht der brgerlichen Gesellschaft, Zeh f Szhg 1937,

pp. 542-596. The translation and editing have been done by Klaus Knorr and Ed ward A. Shils. The article no longer fully represents the views that I hold, as will become apparent by comparison with the subsequent article "The Concept of Political Freedom.

Editor's Note: Neumann added this comment in 1953.2. John Locke, Sed Tee f C Geme (Oxford, 1948), chap. 12, sec.

147·



THE CHANGE IN THE FNCTION OF LAW 139

3 hmas Hbbes, Leviathan. In he Enlish Works of homa Hobbes ofMal-b ed William Mlesrth (dn, 1 83 1 8) chap 1 , p 1

Hbbes, Leviathan p 0 Benedictus de Spinza, actatspolitics (Hilversumi, 18) , chap , par

6 Spinza, ractats politics chap , sec J Russeau, he Social Ctact and Discorses trans G D H Cle (Ne

Yrk, 1 1 3 ) , 3 ff8 G W F Hegel, Philosophy of Riht trans T M Knx (Ofrd, 1 ), sec 1 1 Hegel, Philosophy ofRiht sec , suppl10 Hegel, Philosophy ofRiht sec 71 1 1 mmanuel Kant, Philosophy o Law trans W Hastie (Edinburgh, 188 ) ,

· 1 1 William Blackstne, Commentaries of the Laws of Enland (Ne Yrk, 1 8 1 ),

vl 1, p 1 3 Rex v Cree; ex parte Sekgme ( ), K B 761 Benjamin Cnstant, Le Moniter nivsel 1 , 18, p. 71 Mntesquieu, Lsprit de lois (Paris, 1 868) , pp xi, 616. Cazals, in Archives parlementaires (Paris, 1 861 1 ), ser 1 , vl 1 1 , p 817 Jeremy Bentham, Works vl 3: Genal View of a Complete Code of Laws ed

Jhn Bring (Edinburgh, 1 83) , pp 0 1 18 Maximilien Rbespierre, in Archives parlementaires (Paris, 1 861 1 ), ser 1 ,

vl 0, p 1 6

1 "One individual must never prefer himself s much even t any ther individual as t hurt r injure that ther in rder t benet himself thugh the benetf the ne shuld be much greater than the hurt r injury f the ther AdamSmith, heo of Mal Sentimen (Bstn, 1 8 1 7) , vl 1 , pt 3, chap 3, p 6Further " n the race fr ealth and hnrs an d preferment, each may run as hard he can and strain every nerve and muscle in rder t utstrip all his cmpetitrs,but if he shuld j stle r thr dn any f them, the indulgence f the spectatris entirely at an end (vl 1 , pt , sec , chap )

0 La libert consiste a ne dpendre qe des lois"

1 F J Stahl, Rechts- nd Staahre 3d ed (nd ), vl , pp 1 3716 Rudlph Gneist, DerRechstaat d ed ( 187 ) , p 333 3 Rbert vn Mhl, Geschichte der Litatre d Staatswissschaften (Erlangen,

1 8 ), vl 1, pp 6 seq Ott Baehr, Der Rechstaat eine pblicistische Skizze (Cassel, 186), pp 1 Karl Welcker, "Staatsverfassung, n Das Staa-xikon ed Karl vn Rtteck

and Karl Welcker (Hammerich, 183183), vl 16 A V Dicey, Intdction to the Stdy of the Law of the Constittion (Lndn,

1 1 )

7 On the German thery, the best discussin is in Raymnd Carr de Malberg,Contribtion a la toe ale de ltat (Pas, 1 0 ), vl 1 8 See W Hedemann, Die Flcht in die Geralklaseln (Tubingen, 133) Quted in E Frsth, "Zur Rechtsndungslehre im 1 Jahrhundert, Zeit

schri fur die Gesamte Staatswissenschaft 6 ( 1 3) 63 30. Bernhard Windscheid, Recht n dRechwissenschaft ( 1 8) , p 3 31. Karl Bergbhm, Jsprdz nd Rechphilosophie (Leipzig, 1 8) , p 1 3 1



14 FRAZ . EMA

3 DDolchstosspozess in Munch (Munich, 1 ) , p 33 H J aski, "Th e Pluralistic State, in hi s Fondations ofSovereigty and Oter

Essays (ndn, 1 3 1 ) , p. 3 seq3 O Kirchheimer, Weimar nd wasDann? (Berlin, 130) [Published as "Wei

mar-and What Then? in Poltics, Law and Social Chane: Selected Essays ofOtto Kirchheime; ed. Frederic S Burin and Kurt Shell (Ne Yrk: Clumbia University Press,16)

3 This is based upn an analysis f the flling: Hedemann, Die Flchtin die Galklaseln H Heller, in Veofentlichnen der Veinign d DetschenStaarechhre n. (18); H say, Rechnorm nd Entscheidn (Berlin, 1);C Schmitt, j«snslehre (Mnchen, 18); H. Triepel, Goldbilanzverordnnnd Vonsaktien (1); F Dessauer, Recht Richtertm nd Ministerialbokratie(Munich, 18); O Kirchheimer, zen derEnteignn (Berlin, 130)

36 J J Russeau, Emile (ndn, 111), bk. ·37 J J Russeau, The Political Writins ofJean Jacqes Rossea, ed. C. E aughan

(Cambridge, 1 1 ) , vl. , p 337 38 Russeau, Political Wriins ofJean Jacqes Rossea, vl , p 3 3 Ofcial cllectin, vl 1 0 , p 1 6 1 0 Vl. 10, p. 1 6 1 ; vl 1 1 1 , p . 30; vl . 1 03, p. 00; vl 1 07, p 370; vl . 10,

p. 3 1 0 vl 1 1 1 , p. 3 Kirchheimer, Grzen d Enteign (Berlin, 1 3 ) v 1 1 1 ,

3Editr's Nte: These seem t refer t the published prceedings f the German

Supreme Curt 1 Jristiche Wochschri (1): 0 Jristiche Wochenschr (1): 3 Eugen Ehrlich, �ie Rechndn ndfreie Rechtwissscha (eipzig, 103),

and Grndgn der SozioloieReches (Munich, 113) Hermann Kantricz, Der Kampt m die Rechwisenscha (Heidelberg,

106) Max Weber, Wirtschaft nd Gesel5cha (Tubingen, 1 ) , vl. , p. 1 1 6 Carl Schmitt, Funf Leitze fur die Rechtspaxis (Berlin, 133)

7 Hans Frank, in Zeich der Akademie des detschenRech (Jahrgang, 136):0

8 Karl arenz, Rechspson nd sbektives Recht (Berlin, 1 3 ), p Carl Schmitt, "Der Fhrer schtzt das Recht, in Detsche Jrist-itn

(13): 0 Carl Schm tt, U die dreiArten des Rechtswissenschalichen Denks (Hamburg,

13)·1 Reinhard Hhn, Die Wandln im staarechtlich Denken (Hamburg, 13);

en Duguit, Drot constittionnel (Pari, 107)

R Dietz, Gesetz zr Ordnn der nationaln Arbeit, th ed (Munich, 1 36 ) 3 Ott vn Gierke, " Die Wurzeln des Dienstvertrages, in Festschr fur HeinrichBrnner (B erlin, 1 1 ), pp 37

Gerges Renard, Lnstitti, fondet d'ne rnovation de l'ordre social (Paris,1 3 1 )

arenz, Rechperson nd sbecktives Recht, p ·



T H E CHAGE I TH E FCTIO OF AW 1 4 1

6 . E R Huber, " Die Rechtsstellung der Vlksgenssen, Zeichrifur die esamteStaawissensch 96 ( 1 9 3 ) 448.

7 Reinhard Hhn, Staat nd Rechemeinsch Thmas Maunz, "Das Ende

des subectiven ffentlichen Rechts, Zeichri fur die esamte Staatswissenscha 9

( 1934) 66 and 96 ( 93 ) 7 . 8 . E. R Huber, "Die deutsche Staatswissenschaft, Zeitscht fur die esamte

Staawissscha 9 ( 1 934) 28 9 . Max Hrkheimer, "Bemerkungen zur philsphischen Anthrplgie, Zeit

schfr Soziaorschn4 ( 1 93 ) 14·

neumann - the change in the function of law in modern society

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