The Rule of Law, or “I gotta do what to use my property?”

The Rule of Law

The rule of law has fallen on hard times, principally because the concept itself is misunderstood. Consequently the application of the principle is misapplied. Classical liberalism teaches the rule of law is the principle of protecting the broadest interest of the individual from the arbitrary use of power.

The “rule of law” restricts authoritative powers, not enhance them. Today the principle is understood to mean quite the opposite; increase authority over the individual. It is applied through administrative rules and legislation that actually increase arbitrary power.

The rule of law, applied especially to private property, is the fountainhead of both economic development and civil liberties. Risk and reward belonged to the owner of property. The risk associated with a venture was the property owner’s and so was the reward, it could not be confiscated. The “right” moral convictions were not a prerequisite for property ownership.

Social Justiced

The perversion started with the belief that laws could correct injustice (both real and perceived). Broad rules securing equality before the law gave way to narrow, targeted rules and laws to promote a specific outcome. Once the rules and laws were codified, their proponents would argue, “It’s the law” as they took your property. The divine right of king’s has been replaced with the new rule of law, is essentially the divine of right of the few.

The rule of law has morphed into a collective consensus of the few (unelected boards, citizen groups authorized by unelected boards, elected officials) to determine good/bad, ugly/pretty, sustainable/unsustainably etc.

Real Life Example

Consider the plight of Old National Bank’s sign in downtown Lafayette Indiana.

“This sign is so bad, it’s just bad”.

“It totally destroys the skyline. It’s just too big.”

“I personally think it looks tacky as hell,” said Ken McCammon, president of Friends of Downtown, “Not a fan.” At least he is honest enough to omit it is his opinion leaving the discussion open to contrary opinions.

The irony is that Old National had to go through an administrative process that was designed decades ago to correct perceived injustices (too big signs). In other words, they followed “the (new definition) rule of law” and are still considered “too big” and “too ugly”. Which creates a new problem? Will more rules and laws be enacted to correct the perceived “too big”, “too ugly” problem that the current rules and laws were to correct? When will it end?

Will rules, regulations and laws become so onerous that all economic activity must be anointed by the king? By a proletarian dictatorship? Is there a difference between the two?

Nothing New

Classical liberals saw the problem almost one hundred years ago. Dictatorship does not breed planning, planning breeds dictatorship. As the rule of law continues to be perverted, more rules and laws are necessary to continue correcting perceived problems, that in some cases are caused by the perversion itself. The political authority must claim more power over individuals to enforce more and more rules.

Old National has found that to be the case: Follow the rules made decades ago to prevent “too big/ugly (fill in the adjective of your choice)” yet their sign is still “too big/ugly/etc”. The inevitable next step according to the “new rule of law”? More rules, regulations and laws to correct the perceived wrong such that the next person will have to pay for the sins of the previous person.

Something Old

This spiral of power is best observed by a small business owner in Lafayette when lamented “Small businesses are forced to jump through multiple hoops in order to uphold a standard of historic preservation. We are limited in scale and scope as to what we are allowed by the city. And this? A bit of a slap in the face.” Indeed he is right, property owners in historic districts face burdensome regulations that others do not.

Historic property districts distort economic activity. The skewer that stuck the small business owner, intrusion in the market, is the very thing they seem to be wanting for Old National. Instead of calling for a rollback of onerous rules, he seems to be advocating for more. “Let’s share the misery”.

The rule of law was instrumental in the development of a market economy that produces unprecedented material blessing. It also allows for very rich and diverse market of ideas. Changing the principle into something different changes the structure of society. It has been tried many times and it’s failure has always been catastrophic.

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