Image via WikipediaGovernments at all levels routinely violate the principles of the rule of law. The concept of the rule of law is supposed to protect citizens’ equality before the law, but this equality is not too often held in high regard by government, and especially not by the federal government as we have it today.
The clearest examples of violations of the principles of the rule of law come in the form of various kinds of crony capitalism. The government interferes with individuals’ rights, and the free market, by granting some special privilege to some favored group at the expense of other citizens. This is done through various kinds of corporate welfare, including bailouts, monopolies, tax incentives, subsides, etc.
Today we have liberals calling for the abolition of special tax breaks for oil companies, which, in fact have minimal percentage effect on oil companies’ profits. I agree that they are not needed. However, the same liberals in government want to subsidize alternative energy development at taxpayer expense. Alternative energy sources should be developed in the free market, and if they can be made profitable, entrepreneurs and investors will reap the appropriate rewards for their own efforts, not from the confiscation of money from taxpayers.
Similarly, mandates and subsidies for ethanol are also unjust, as are agricultural subsidies and government control of industry in general. Also, the principles of the rule of law are violated when government enforces advantages for unions beyond what the free market would permit.
These things have been happening for generations. In my home city of Fort Worth, the city currently has a huge debt of unfunded pension obligations, and is having to cut various services to try to balance the budget. Yet not long ago, the city invested substantially in the construction of a new downtown hotel, and various private commercial projects. It seems inappropriate that the city can’t maintain public swimming pools and recreation centers that have operated for decades, but they seem to have the means to invest in “private” business, even to the point of being on the hook should these businesses not succeed.
But perhaps the big prize for present-day destruction of the rule of law should go to the Obama Administration and Congress for such things as Obamacare exemptions that were granted in exchange for support during the legislative process, and now that the law has been passed, waivers from the law, notably to entities in Rep. Nancy Pelosi’s congressional district. It helps to be politically connected.
The rule of law is a casualty of attacks on the free market through government interference. Some so-called “capitalist” executives have no problem with trying to persuade government to side with them against their competitors or even their customers. Whatever material gain they can get through government (as opposed to competition) is quite acceptable. This is the true robber baron mentality. Government participation happens through, if not direct bribery, then some kind of political help or support, or else a reward for past political support. What else could explain the bizarre lawsuit against Boeing over their plans to build airplanes in South Carolina, for example? Could it be a matter of rewarding unions and thus appealing to part of the liberal base?
In a free market, the market, not government, picks winners and losers. There are no bailouts, and entrepreneurs are willing to take a risk because they believe that have a product or service that can compete in the market on its merits, not on some central-planning bureaucrat’s idea of what needs to be offered. If the entrepreneur fails, this provides a lesson to others to avoid the same mistakes. This is fairly simple. It certainly is not rocket science.
The rule of law suffers and eventually dies when government tries too often and too forcefully to step outside its proper functions and take control of things it shouldn’t. Barack Obama didn’t invent this. But he is one of the worst offenders. When the rule of law is replaced by the arbitrary decrees of the ruling elite, it is difficult to restore, and it places citizens in danger of great financial loss, abusive punishment for political purposes, and tyrannical rule. When the government lacks accountability to the law, the result is a lawless government. In some respects, we’re already there.
Any Differences? - (Don Boudreaux) TweetWhat are the economically relevant differences between the hypothetical proposal summarized in the indented passage below and the tari...
1 hour ago