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Notes: Abstract The notion of an evolutionary process was not “imported” from biology into social theory. The idea of spontaneous processes producing an unintended outcome was commonplace in the social sciences long before Darwin (Scottish Enlightenment). At whatever level an evolutionary perspective may be applied, it always presumes the operation of three mechanisms: (a) a mutation mechanism, i.e., a process by which constantly variation and novelty are introduced—in Popper's terms: new tentative solutions—(b) a selection mechanism, i.e a process of systematic selection among the variants—in Popper's terms: a process of error-elimination—(c) a replication mechanism, i. e., a process by which variants or tentative solutions are preserved, reproduced or propagated. Although both economists and biologists resort to equilibrium explanations—because a full and detailed specification of all causal forces cannot be given—the analogy between natural selection in biology and evolutionary processes in human societies is not that close. The selection mechanism that is operating in cultural evolution works directly on the behaviour pattern itself, i.e., on the rules that govern behaviour, without necessarily wiping out unfit carriers. Moreover, cultural evolution—which is a matter of trial and error learning and imitation—is very fast when compared with genetic evolution. Hayek works out the implications that follow from an evolutionary epistemology for the issue of socio-economic-political organization. His main subject is the social dimension of the knowledge problem or the problem of social learning. This problem has two distinct aspects. Hayek's theory of the spontaneous order of the market—which is best known for its emphasis on the capacity of markets to utilize dispersed knowledge—delivers the insight that if we want to generate in society any particular order of a certain degree of complexity, we should look for general rules of conduct which, if followed by individuals, would tend to induce that order to form spontaneously. Hayek presents an instrumental justification of a particular type of rules. Rules of just conduct exhibit certain structural characteristics—they are negative, purpose-independent, abstract, universal and permanent—but Hayek's account offers only a very general schema which has to be filled in in detail. As they are defined by Hayek, the general rules of conduct which allow for the formation of spontaneous orders, are not necessarily self-enforcing in the technical game-theoretic sense, contrarily to a widely held view. It is Hayek's emphasis on the theme of the interrelation between the system of rules and its systematic outcome at the level of the order of actions that qualifies him as a Law-and-Economics theorist. Hayek's theory of cultural evolution suggests that the abstract rules which contribute to the formation of a spontaneous order are themselves an unintended product of evolutionary processes. His theory of cultural evolution becomes disputable where it seems to argue that because of our “incurable ignorance” we ought necessarily to rely largely on unquestioned traditional rules instead of attempting to choose rationally or construct the system of rules that we want to follow. The question of how the different kinds of rules differ in their nature (rules of conduct vs organizational rules) must be distinguished from the question of how they originate (whether they “spontaneously evolve” or are “deliberately designed”). The two dimensions are conceptually distinct. The extension of the market analogy to the constitutional level, i.e., to the rules and institutions within which market coordination takes place, is not corroborated by the game-theoretic analysis of invisible-hand processes. This analysis does not warrant the conclusion that invisible-hand processes will always operate to generate efficient results. The game-theoretic analysis involves several simplifications however. The arguments that are based on it cannot be considered conclusive. The most developed parts of the theory of cultural evolution are the theory of nomos, as exemplified by the evolution of the common law, and the theory of the role of the judge. In the theory of the common law and the role of the judge the emphasis is on the coordination of individual activities through a process of systematic mutual adjustment of expectations. The function of the judge is to assure a maximal coincidence of—legitimate—expectations, i.e., to create a situation in which the chance to form correct expectations is as great as possible. The theory suggests that the role of the judge in making law is analogous with the role of an entrepreneur launching a new product: the entrepreneur is consciously trying to make a profit, thus unintentionally contributing to the overall allocation of resources. The judges, by upholding those rules which make it more likely that expectations will match and not conflict, are consciously trying to give greater internal coherence to the law. Each is unintentionally playing a part in the formation of a spontaneous order—in one case, the body of the common law, i.e., a system of rules of conduct conducive to the efficient operation of the order of actions which rests on it, in the other, the overall allocation of resources. The analogy is not flawless: while it seems plausible to assume that the entrepreneur, when unintentionally assisting in the overall allocation of resources, is trying to make a profit, i.e., is guided by the profit motive, it is not clear why we should assume that judges are guided by the search for greater coherence. With respect to the role of the entrepreneur, “private vices” may be supposed to coincide with “public benefits”, since only those entrepreneurs who de facto achieve positive profits in one way or another and can therefore be assumed to serve the interests of consumers better, will thrive and prosper, whereas entrepreneurs who do not succeed in doing so are eliminated sooner or later. But insofar as judges are public officials, the analogy seems to be particularly weak. Judges hardly constitute a homogeneous group and their interests and motivation may be highly varied. Insofar as judges adjudicate particular cases by means of custom and precedent, stare decisis can be said to account for the transmission or replication mechanism in the evolution of the law. It is explicitly recognized that grown law requires correction by legislation. It seems that legislation can be required both to generate novelty—i.e., as a mutation mechanism—and to eliminate errors in past developments—i.e., as a selection mechanism. Evolutionary analysis as such does not provide us with a satisfactory normative framework for comparative institutional analysis. Hayek's “limits of reason” argument implies that, at least to some extent, we will have to rely on the explorative potential of open-ended, competitive, evolutionary processes and on the kind of experience that accumulates in trial and error learning processes. But it should not imply that we adopt an attitude of uncritical acquiescence in evolutionary drift. One direction in which such a framework for comparative institutional analysis has been explored recently, is provided by the research programme of Constitutional Political Economy. The basic framework is derived from the contractarian analysis of multi-level individual choice. An alternative direction in which the evolutionary perspective may be provided with a normative benchmark consists of complementing it with a realist ethical theory. Popper has found in evolutionary theory a forceful argument for objectivism and realism. An elaboration of this theme would go beyond the scope of the domain of Law-and-Economics.