Every society comes equipped
with customs, norms, rules, and laws. The amicable and productive social
relations of man would not be possible without them. They are formal and
informal, written and unwritten, public and private, common and
judge-discovered. There are rules of day-to-day conduct, business rules,
rules against crimes, rules of the road, rules of sea, rules to settle
accidents and disputes, and rules for marriage and divorce. We need these
rules and laws in order to realize both a peaceful social order and freedom.
Upon ourselves and our modern
societies, we and the state additionally impose regulations covering every
conceivable area of life. In the U.S., there are federal, state, county, and
local statutes. Modern man legislates and regulates the content of the
automobile, drugs that mean prison and drugs that do not, monies paid to
retirees, what money is, and wars to be fought. He imposes the mandates,
commands, and legalities that we loosely call our laws. They cover every area
of life: birth, schooling, doctoring and hospitals, work, saving, investing,
consuming, business, finance, welfare, transportation, communication, energy,
farming, factory, trade, illness, and death. Should all of these matters be
codified and controlled by the state? Should all of them be regulated and
enforced? Should we eliminate all our freedom and create a totalitarian society?
Of the laws we do require, should the state simply make them up? Where should
law come from?
Tacitus has written: "The
more corrupt the Republic, the more the laws." In 1936, the U.S. Federal
Register contained 2,620 pages of statutes. By 2004, the number was 78,851, a
growth rate of 5 percent a year during a period when population grew by 1.22
percent a year and real Gross Domestic Product (GDP) per capita grew by 2.47
percent a year. While population went up by a factor of 2.3 and real GDP rose
by a factor of 5.4, pages of federal statutes rose by a factor of 30. By any
measure, the making of federal statutes has qualified as a super-growth
industry. Does this bespeak exponential growth in corruption?
Should we applaud this growth or
bemoan it? Has it contributed to well-being or has it restrained and
diminished it? Which laws have been good laws, which bad? The existence and
rapid growth of such a vast array of regulations highlights fundamental
questions that have been addressed at least from the days of Moses, Plato,
and Huangdi. What is law? Where do rules and laws come from? How does someone
legitimately come under the jurisdiction of a law? What shall be a
society’s rules? What shall be its laws? What areas of life shall they
cover, and what areas shall they not cover? By what standards do we judge
what rules and laws shall be applicable to our society and what shall not? How
do we know when our rules and laws are good and when they are bad? How do we
fashion these rules and laws? How should we fashion rules and laws?
For any people, these are
critical social and political questions because the answers arrived at have
wide effects on everyone in a society over long periods of time. Choosing
laws is like choosing a gas to breathe. If we choose good laws, they are like
oxygen. We live and thrive. If we adopt bad laws, they are like methane. We
suffocate and die. Rules and laws are ingredients in society’s recipes
(or techniques) of production. They are factors that enter into and affect
production. After we adopt them, the productive returns come in over a long
period of time. The contribution of a law to our values and wealth can be
positive or negative.
Good laws are social goods, and
as such both add to social capital and further the accumulation of capital in
general, both private and social. Bad laws are social bads. They are a
diminishment to social capital and they further the decline of capital in
general. Just as a person makes an investment in a capital good, so a society
invests in social capital. Just as an individual investment works out well or
badly, so do a society’s investments in its social capital. Social
capital comprises goods that facilitate the well-being and progress of an
entire people. So when a society makes errors of investment in its rules and
laws, the consequences are serious because they affect everyone in the
society. Russia’s investment in Communist rules and laws in 1917 killed
millions of Russians and impoverished the entire country for decades. America’s investment in its rules is killing America and Western civilization on this
continent. Civilization is not a given and unchanging fact of life. Civilizations
rise and fall, and not for random reasons. Wrong rules and laws destroy
society’s wealth and civilization just as surely as a bad investment
destroys an investor’s wealth.
Wrong laws comprise capital of
the wrong kind. They reflect societal choices that are damaging and
counterproductive; yet it is easier to make a bad law than remove it. For one
thing, supporting interest groups harden and resist change. Removing a bad
law causes visible damage to some interests, including the administering
government and its bureaucracies, while the prospective benefits are not yet
visible. For another thing, obtaining assent for a change in law involves
costs of creating a new coalition, and these hold back a change. It is
difficult to obtain agreement on the effects of an existing law, much less a
new one. The effects of a new rule are not uniform across everyone in
society. Because there are gainers and losers, there is a cost to creating a
supportive coalition or arranging side-payments to the losers.
Once they are passed, laws, good
and bad, become part of the system. Society adjusts to them. They become
unthinking ways, habits, and traditions. The costs of overcoming existing
traditions impose yet another heavy burden on change.
In short, the costs of scrapping
bad laws are high. We are mostly stuck with them.
In view of the difficulties in
removing bad laws and their long-term decivilizing effects, we should be far
more reluctant to institute new laws than we are. We should be far more
risk-averse in making laws. In fact, we should establish a fundamental code
that we know is right and stick with it. This is not being done. Instead, we
arrogate to ourselves and our states the power to fashion laws in a
relatively unconstrained manner. This feature is commonly seen in modern
constitutional forms of political government, be they democracy, republican,
socialist, fascist, or communist, all of which purport to be lawful.
The power to fashion new laws
has a built-in bias toward creating bad laws. It is virtually a law of
mankind that new man-made law tends to be bad law. This is because man-made
laws serve the interests of those who promote their passage.
John Adams in 1763 thought that
republican government should be "bound by fixed laws, which the people
have a voice in making, and a right to defend." He was correct about
"fixed laws." However, it is a blatant contradiction also to insist
that "the people" make laws. Any system of government in which men
routinely consult themselves (and thus their own parochial interests) in
fashioning laws to be backed up by a monopoly of force, whether via a process
of direct democracy, representative government, council, king, presidium, or
dictatorship, is a system that is not averse to new laws. It is a system
biased toward making new laws. This means it will make more bad laws that are
inherently difficult to change. This means a system geared toward increasing
damage done to society and increasing decivilization.
We fool ourselves by thinking we
can legislate laws and benefits as we please. We accomplish only the opposite
by multiplying bad laws that we find ourselves unable to remove.
The great battle of our time is
not the clash of civilizations. It is the battle among ourselves to relocate
and reinstitute the sources of our own civilization in new and proper ways so
that we may maintain that civilization. We will only win that battle when we
greatly reduce our power, and thus the power of our political governments, to
We need to restrain ourselves
and our governments. We need to stick with an immutable code of law that we
know is right, that fosters civilization, and that is beyond man’s
tampering and manipulation. Such a code can easily be found in the Holy
Michael S. Rozeff
Michael S. Rozeff is a retired Professor of Finance living in East
Amherst, New York. He publishes regularly his ideas and analysis on www.LewRockwell.com .
Copyright © 2009 by LewRockwell.com. Permission to reprint in
whole or in part is gladly granted, provided full credit is given.