A very interesting 1905 lecture , by Albert Venn Dicey, the leading British legal theorist and reputed constitutional scholar of late XIXth and the beginning of XXth century, on how Benthamite utilitarianism paved the way for socialism and the destruction of the liberal order :
The patent opposition between the individualistic liberalism of 1830 and the democratic socialism of 1905 conceals the heavy debt owed by English collectivists to the utilitarian reformers. From Benthamism the socialists of to-day have inherited a legislative dogma, a legislative instrument, and a legislative tendency.The dogma is the celebrated principle of utility…….
Parliamentary sovereignty, in short, taught as a theory by Blackstone and treated as a reality by Bentham, was an instrument well adapted for the establishment of democratic despotism.
The legislative tendency was the constant extension and improvement of the mechanism of government.
The guides of English legislation during the era of individualism, by whatever party name they were known, accepted the fundamental ideas of Benthamism. The ultimate end, therefore, of these men was to promote legislation in accordance with the principle of utility; but their immediate and practical object was the extension of individual liberty as the proper means for ensuring the greatest happiness of the greatest number. Their policy, however, was at every turn thwarted by the opposition or inertness of classes biassed by some sinister interest. Hence sincere believers in laissez faire found that for the attainment of their ends the improvement and the strengthening of governmental machinery was an absolute necessity.
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And, oddly enough, the tendency of Benthamite teaching to extend the sphere of State intervention was increased by another characteristic which conciliated Whigs and moderate Liberals—that is, by the unlimited scorn entertained by every Benthamite for the social contract and for natural rights.
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The effect actually produced by a system of thought does not depend on the intention of its originators; ideas which have once obtained general acceptance work out their own logical result under the control mainly of events. Somewhere between 1868 and 1900 three changes took place which brought into prominence the authoritative side of Benthamite liberalism. Faith in laissez faire suffered an eclipse; hence the principle of utility became an argument in favour, not of individual freedom, but of the absolutism of the State.
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Thus English collectivists have inherited from their utilitarian predecessors a legislative doctrine, a legislative instrument, and a legislative tendency pre-eminently suited for the carrying out of socialistic experiments.
Dicey had a great influence on Hayek’s legal thinking, especially in its mature phase when he wrote the multivolume “Law, Legislation and Liberty”. Though it is probably correct to assume that it was Bruno Leoni’s defense of the decentralised, informal and unsystematic character of the evolution of the old English common law that lead Hayek to integrate law and law creation into his broader theory of catallactics or market order and thus arrive at an all-encompassing theory of spontaneous order unparalleled, to the best of my knowledge, by no other liberal thinker before him, it is Dicey however who formulated the rudiments of this perspective on law and provided much of the initial inspiration.