When Americans think about the rule of law—if they ever think about it at all—it’s usually about how it’s lacking in foreign lands, such as Latin America or Africa. Corruption and bribery, the usual symptoms of a breakdown in the rule of law, aren’t much of an issue for us. We tend to feel secure that, with minor exceptions, our country is governed by agreed upon laws and not by arbitrary decisions of individual government officials.
In general, this is true. We benefit from a legal and political tradition that has valued and strengthened the rule of law. Yet there is one area that should still concern us. As economist John H. Cochrane notes, the “burgeoning regulatory state poses a new threat to our political freedom.”
Cochrane has written and important, and lengthy, essay on the rule of law in the regulatory state. While I’d recommend reading it in its entirety, here are six key quotes from the article:
1. “The agencies demand political support for themselves first of all. They are like barons in monarchies, and the King’s problems are secondary. But they can now demand broader support for their political agendas. And the larger partisan political system is discovering how the newly enhanced power of the regulatory state is ideal for enforcing its own political support.”
2. “This rule of law always has been in danger. But today, the danger is not the tyranny of kings, which motivated the Magna Carta. It is not the tyranny of the majority, which motivated the bill of rights. The threat to freedom and rule of law today comes from the regulatory state. The power of the regulatory state has grown tremendously, and without many of the checks and balances of actual law. We can await ever greater expansion of its political misuse, or we recognize the danger ahead of time and build those checks and balances now.”
3. “We’re headed for an economic system in which many industries have a handful of large, cartelized businesses— think 6 big banks, 5 big health insurance companies, 4 big energy companies, and so on. Sure, they are protected from competition. But the price of protection is that the businesses support the regulator and administration politically, and does their bidding. If the government wants them to hire, or build factory in unprofitable place, they do it. The benefit of cooperation is a good living and a quiet life. The cost of stepping out of line is personal and business ruin, meted out frequently.”
4. “Regulators and politicians aren’t nitwits. The libertarian argument that regulation is so dumb — which it surely is — misses the point that it is enacted by really smart people. The fact that the regulatory state is an ideal tool for the entrenchment of political power was surely not missed by its architects.”
5. “‘Rule of law’ ultimately is a set of restrictions to keep the state from using its awesome power of coercion to force your political support. If you oppose Castro, you go to prison. If you opposed Herbert Hoover, could you still run a business? Sure. If you oppose President Obama, or the future President Hilary Clinton can you do so? If you oppose the polices of one of their regulatory agencies, now powers unto themselves, or speak out against the leaders of those agencies, can you do so? If you support candidates with unpopular positions, can you still get the regulatory approvals you need? It’s not so clear. That is our danger.”
6. “‘Rule of law’ is not just about the existence of written laws, and the superficial mechanics of trials, judges, lawyers, ad sentences. Rule of law lies deep in the details of how those institutions work. Do you have the right to counsel, the right to question witnesses, the right to discovery, the right to appeal, and so forth. Like laws, what matters about regulation, both in its economic efficiency and in its insulation from politics, is not its presence but its character and operation.”
Other posts in this series:
• Roger Scruton on Conservatism
• Milton Friedman on Freedom and Economics
“Magna Carta Memorial” by ttwff is licensed under CC BY 2.0
