“a condition of liberty in which all are allowed to use their knowledge for their purposes, restrained only by rules of just conduct of universal application, is likely to produce for them the best conditions for achieving their aims”, and “such a system is likely to be achieved and maintained only if all authority, including that of the majority of the people, is limited in the exercise of coercive power by general principles to which the community has committed itself” (p. 55)
These statements serve to explain Hayek’s overall thesis in “Law, Legislation, and Liberty.” Individual liberty has been allowed to flourish as a product of public sentiment, not because of government institutions. And like individual knowledge, which may be limited in its own right, individual freedoms greatly benefit the larger community when allowed to exist unmolested. This means that government and its institutions should stay detached from defining or redefining such fundamental principles. Freedom can be achieved and realized by individuals naturally, through a collection of traditions, customs, and cultural values. Yet when the state attempts to involve itself in defining a fundamental principle like freedom, the principle is most often undermined.
Government institutions fail quite often to comprehend and respect these fundamental principles because of the tendency for institutions to overestimate their power of reason. This reliance on rationality can obscure the abstract forces within a community and because of the inability to even perceive such forces, government institutions prove ineffective when it comes to the preservation of fundamental principles.
On the other hand, societies which have been most successful at preserving fundamental principles like freedom have not permitted institutions to infringe upon the ability for individuals exercise according to their own purposes. In such a condition, mankind holds onto his traditions, customs, and culture, which only strengthen the existence of those important fundamental principles.