Friday, April 27, 2012

Free Markets, the Rule of Law, and Classical Liberalism


Richard M. Ebeling • May 2004 • Vol. 54/Issue 4

The history of liberty and prosperity is inseparable from the practice of free enterprise and respect for the rule of law. Both are products of the spirit of classical liberalism. But a correct understanding of free enterprise, the rule of law, and liberalism (rightly understood) is greatly lacking in the world today.

Historically, liberalism is the political philosophy of individual liberty. It proclaims and insists that the individual is to be free to think, speak, and write as he wishes; to believe and worship as he wishes; and to peacefully live his life as he wishes. Another way of saying this is to quote from Lord Acton’s definition: “By liberty I mean the assurance that every man shall be protected in doing what he believes his duty against the influence of authority and custom, and opinion.”1 [1] For this reason, he declared that the securing of liberty “is the highest political end.”2 [2]

Lord Acton did not say, you will notice, that liberty is the highest end, but rather the highest political end. In the wider context of a man’s life, political and economic liberty are means to other ends. What ends? Those that give meaning and purpose to his sojourn on earth. Liberalism does not deny that there may be or is one ultimate Truth, or one moral “right,” or one correct conception of “the good” and “the beautiful.” What liberalism has argued is that even the wisest and best men are mere mortals. They lack God’s omniscience, omnipresence, and omnipotence. Mortal men look at and understand the world within the confines of their own imperfect knowledge, from the perspective of their own narrow corner of existence, and with extremely limited mental and physical powers compared to those possessed by the Almighty.

As a result, since no man may claim access to an understanding of man and his world equal to God’s, no man can claim a right to deny any other person the freedom to follow his conscience in finding answers to these profound and ultimate questions. They are so crucial to man’s very being as a spiritual and moral person that they must be removed from the arena of politics and political control. They must be left to the private and personal confines of each man and his conscience.

The reason for this should be evident. Political control is fundamentally the power of physical force. It is the right to demand obedience from the citizenry either to do or not do something under the threat of the use of coercion. Political power can be used to command people regarding how they may live, how they may think, and how they may act. It is one man bending the will of another to his wishes under the threat of physical harm.3 [3]

Some men have faced such threats or uses of force and not given up their faith or beliefs or ideas. But liberalism argues that no man should be confronted with torture or death because of where his conscience leads him. Furthermore, once political power is used to dictate what men may believe and how they may peacefully act, society is faced with an endless struggle as those with conflicting faiths, beliefs, and ideas battle for control of the reins of political authority. It becomes a life-and-death confrontation to determine whose conception of the good, the beautiful, the right, and the just shall be imposed on all. In such a battle over truth and virtue man’s world becomes an earthly hell of human and material destruction.

There thus arose the idea of tolerance, that each man should respect the right of every other man to be guided by the dictates of his conscience.4 [4]But even tolerance was soon seen to be authoritarian; it implied that the one tolerating the free thoughts and actions of another was doing so as if he were giving a privilege to someone else, a privilege that if given could at any time be taken away. Hence, it was insisted that freedom of conscience was a fundamental right possessed by all men, and not something permitted or allowed, say, by a majority for the benefit of a minority.5 [5]

But how was the political authority—the government—to be prevented from overstepping its boundaries and encroaching on such individual rights as freedom of conscience and other elements of personal liberty? How were men with political power to be restrained from abridging other men’s rights? All law is man-made, regardless of the source of the inspiration for the law. It is men who articulate and agree on the law, who codify it, and who establish and enforce the procedures and mechanisms for its respect and enforcement. Man, therefore, can never be separated from law and the legal process.

Public Accountability

A way to assure that society lives under a rule of law and not a rule of men is to insist that even those who implement and enforce the law be held accountable under certain clearly defined procedures in their dealings with the citizenry. Or as the English legal philosopher Albert Venn Dicey expressed it in the late nineteenth century: “With us every official, from the Prime Minister down to a constable or a collector of taxes, is under the same responsibility for every act done without legal justification as any other citizen.”6 [6]

An essential element of the rule of law is that it specifies what government may not do to the citizenry. For example, neither the government nor its various legal agents may hold an individual without bringing charges against him before a judge within a specified period of time. The writ of habeas corpus assures that no man is physically seized and held for an indefinite duration without charges being brought against him in a court of law. If it is not demonstrated to the court that a breach of the law has occurred and that there is sufficient evidence for holding the accused, he must be let go.7[7] Or as Dicey explained it, “Liberty is not secure unless the law, in addition to punishing every kind of interference with a man’s lawful freedom, provides adequate security that everyone who, without legal justification, is placed in confinement shall be able to get free.”8 [8]

A distinctive quality and merit of the rule of law is that it attempts to, if not completely eliminate, then reduce as much as possible all arbitrary power in the hands of those who administer the political regime and the legal order. Friedrich Hayek, for example, has emphasized that the rule of law refers to laws of an abstract and general nature equally applied to all men independently of any particular circumstance.9 [9]

Since this may seem rather nebulous, it can be better understood through the expression end-independent rules.10 [10] We can think of this, for example, in terms of the rules of road. These rules specify whether cars are to be driven on the right or left side of the road; that all cars must stop and wait while the traffic light is red, and may go when the light turns green; that posted speed limits must be followed; and that if a police car or an ambulance is coming down the road, all other drivers are to pull over and stop until it has passed.

These rules of the road are general and uniform, in that they apply equally to all drivers and do not privilege or burden anyone. Furthermore, as long as every driver follows these rules, he is free to travel on the roads whenever he desires, for whatever purpose he may have in mind. Nor can any driver be pulled over by police patrolling the roads and highways for a traffic violation unless there is an infraction of these general and uniform rules of the road.

The general and abstract rules are “end-independent” because they do not imply or require any particular outcome or result from the actions and interactions of the citizenry, as long as they follow the rules. Thus, whether people follow the rules of the road to get to work, or to visit the family dentist, or simply to get out of the house for a while and just drive around is immaterial. The very nature of a free society under the rule of law is that the society, itself, has no purpose, or “manifest destiny” or “historical role” that it is called upon to play. A free society has no plans or purposes separate from the individual plans and purposes of its individual citizens.

Selfishness versus Great Causes
That a free society has no plan or purpose or higher calling independent of those of its citizens has bothered many who think that nations should have “callings” to “greatness.” They see in the individual plans and purposes of the citizenry a narrowness and selfishness not worthy of great causes and great men. One leading voice in the first half of the twentieth century who wanted nations to pursue great causes under great men was Werner Sombart, a German Marxist who later in the 1930s became an outspoken apologist for Hitler’s National Socialism.11 [11]

During World War I, Sombart published a small volume of what he called “patriotic reflections” titled Traders and Heroes.12 [12] He contrasted the trader or man of commerce, who, Sombart insisted, sees no farther than his own profits to be made through market transactions, with the spirit of the hero that brings forth the virtues of courage, obedience, and self-sacrifice. “The trader,” Sombart said, “speaks only of ‘rights,’ the hero only of his duties.”13[13]

Now, of course, the question that Sombart’s depiction of the characteristics of the “hero” leaves unanswered is: obedience to whom, and sacrifice for what? In Sombart’s view it was the state, through its political leaders, that dictated the goals for which the citizenry was to make those sacrifices and that demanded obedience to achieve the national tasks. The individuals of the society were to sacrifice their own goals, purposes, plans, and dreams. These were narrow, mundane, and petty. The great political leaders make the other members of society conform to a higher plan and purpose, one which they claim to discern through intuitive insights and understandings that ordinary men cannot comprehend or grasp. Hence, they are expected to obey the commands of those leaders in the service of an imposed hierarchy of ends to which they must sacrifice their individual plans and purposes.

In a society of Sombart’s heroes, the rules under which the citizenry now act are end-dependent. That is, the legal rules and regulations under which men are made to live direct them to act and interact in ways that are meant to assure particular outcomes. The citizenry’s actions are made to follow paths leading to the outcomes that the political leaders consider the desirable configuration for the society. How else can it be assured that the actions of all the people move in the direction that the nation’s call to greatness demands? It should be clear that this requires the abrogation of the individual’s own freedom of action, choice, and decision-making. He is made into the tool of another man’s ends. He serves ends that others have assigned to him, and not his own.14 [14]

It should also be clear this is why those who desire to assign higher purposes and callings for society tend to be suspicious of and often actively hostile toward free enterprise and the market economy. The essence of every type of collectivism, whether it be called socialism, communism, fascism, Nazism, or the interventionist-welfare state, is the desire and intention of imposing on society a politically engineered design to which all men are expected and, if required, forced to conform.

Adam Smith, in his first book, The Theory of Moral Sentiments, referred to the social engineer as “the man of system,” who looks at society as if it were a giant chessboard upon which he moves the human chess pieces until the overall pattern created is one to his own liking. What the man of system totally disregards is that each of these human pieces on the chessboard of society has his own will, wishes, desires, dreams, goals, values, and beliefs, which motivate his own movements independent of any attempt by that social engineer to direct and dictate his place and position in society.15 [15]

Property Provides Autonomy

Classical liberalism has always emphasized the inseparable connection between individual liberty and the right to private property. Partly it has been based on the idea of justice: that which a man produces honestly and peacefully through his own efforts, or which he acquires through voluntary acts of exchange with others, should be considered rightfully his. The case for private property has also been made on the basis of utilitarian efficiency: when men know that the rewards from their work belong to them, they have the motives and the incentives to apply their industry in productive and creative ways.16 [16]

But in addition, the classical liberal has defended the institution of private property because it provides the individual with a degree of autonomy from potentially abusive political power. Private property gives the individual an arena, or domain, in which he has the ability to shape and design his own life, free from the control of political force. As a private owner of some of the means of production—even if it be only his own labor—he can search out the employment for himself that he considers most attractive and profitable, given his own personal purposes and plans. A community of individuals, each of whom owns varieties of property that he is at liberty to apply and utilize in various ways, provides a network of potential relationships of production, trade, and association among men outside and independent of the orbit and control of government. Private property gives reality to the ideal of individual freedom.17 [17]

The networks of voluntary, peaceful, and private association form the elements of what has been called “civil society.” They are the “intermediary institutions” that stand between the power of the state and the single, isolated individual; they supply support and give assistance to the individual in the economic, social, cultural, and spiritual needs of life. But they also offer protection and strength to the lone individual who otherwise would face the power of government on his own. It is not surprising, therefore, that historically the more the power and intrusive reach of the government extends into the affairs of the citizenry, the more the state attempts in various ways to undermine and replace these voluntary associative institutions of civil society with its own bureaucratic structures. The weakening or elimination of the intermediary institutions of civil society leaves the individual increasingly dependent on the political caprice and largess of those who manage the agencies of government. He becomes a pawn in the hands of those men of system whom Adam Smith warned us against.18 [18]

Where the rule of law is practiced and respected, the creative energies of man are set free. Each man is at liberty to utilize his own knowledge for his own purposes, but the very nature of the free-market economy is that he must apply that knowledge and his abilities in ways that serve the ends of others in society as well. Since no man can attain all his goals, beyond some of the more primitive ones, through his own labor and the particular resources that may be in his ownership and control, he enters into exchange relationships with others in society. Men begin to specialize in producing things for which they have a comparative advantage over their neighbors to extend their trading opportunities with others in the growing community of men. The interdependency that a division of labor creates makes each member of society increasingly conscious that he must serve his fellow men in order to  accomplish his own ends.19 [19]

The individuals on that great chessboard of society move themselves about, forming connections, relationships, and associations with those around them as they discover opportunities for mutual improvement. Patterns do take form; configurations of human interconnection do take shape. But these patterns are not planned or designed; they emerge from the relationships that men choose to establish among themselves, with no conscious intention of generating much of the institutional order and structure that result from their market and social interactions.

As Hayek pointed out, drawing on the insights of some of the political economists of the eighteenth century, the social order that develops is to a great extent “the results of human action, but not of human design.”20 [20] And, as Hayek emphasized, it is all to the better that this is the case. Why? Because the emergent social patterns, order, and institutional arrangements incorporate the knowledge, ability, and creativity of the multitudes of human participants. No single mind or group of minds—no matter how wise and well-intentioned—could ever know, understand, and appreciate all the fragmented knowledge, insight, and ability that exist as divided knowledge and creative potential in the minds of all the members of humanity as a whole. If all that man knows, that he can do or might imagine, is to be taken advantage of and brought into play for the general good of all mankind, then every individual must be left free to use what he knows, and do what he wants to do, according to his own design.21 [20]

What irks the social engineer when he looks around at the free society is that it appears to be a world without a “plan,” a jumble of social chaos. What the classical liberal sees is a world of multitudes of plans, each one being the plan given by an individual to his own life. There is order, pattern, and structure to this world, but an order, pattern, and structure generated out of the interconnections that individuals have formed among themselves through their voluntary market and social relationships.

The rule of law provides the societal rules of the road within which those individuals may freely move about as they see fit. The rules for the free society are fairly simple and straightforward: thou shall not kill; thou shall not steal; thou shall not bear false witness—no fraud or deception in relationships with others. Beyond these types of simple rules, each individual is free to follow his own conscience and interests in all other matters.

A Lawless World

The world in which we live today is to a growing extent a lawless world, if by lawless we mean circumstances in which the rule of law is increasingly not respected or even understood. The law, in practice, is more and more end-dependent in its purpose and application. Some in society do not like the pattern of relative income shares that results from the interactions between employers and employees, so they use the power of the state to redistribute income and wealth according to their conception of material justice and fairness.

Others do not approve that some in society like—indeed enjoy—smoking, especially while they are having a drink and after a meal, so they restrict or increasingly ban private establishments from setting their own rules on the basis of what they consider the preferences and desires of their customers by totally prohibiting smoking in what they declare to be “public” places. Still others believe that the citizenry cannot be trusted to make sufficiently wise choices concerning their own retirement planning or their medical-insurance coverage, so they enact laws and regulations that impose rules that will guarantee the creation of the social engineer’s preferred patterns for such social behavior on the part of those whose choices and decisions he considers less enlightened than his own.

To assure, as the phrase goes, that there will be “no child left behind,” the social engineers are imposing more national regulations on standards for education in schools around the country, to create more of a single pattern of learning and its measured success to which all educational institutions and children will be required to conform. One of the contributions for which Hayek was awarded the Nobel Prize in economics was his insightful reminder that competition can and should be seen as a discovery process, through which each of us discovers our potential and ability in the rivalry of the marketplace. Indeed, Hayek said, it is in the competitive process that men are stimulated to see how far they can push themselves and their abilities, what new ideas and important innovations they can come up with, and what their most productive and valuable role and place may be in the social system of the division of labor for the mutual benefit of all.22 [21] How can this play out in the crucial arena of devising new and better ways of educating the young, when the men of system, the social engineers, in Washington, D.C., increasingly nationalize the content and form of learning in all the schools across the nation?

The latest trend in this direction is the growing fear that the new global economy threatens the livelihood and material standards of living of the American people. A chorus of special-interest groups and intellectual elites are warning that investment opportunities and many relatively well-paying jobs are being lost to other countries around the world. They conjure up nightmare visions in which America buys everything from the rest of the world, where labor is cheaper and production costs are much lower, and that America is left with nothing to manufacture at home. International trade and investment will leave the United States an economic wasteland of poverty and dependency on cheap products made in China and outsourced labor services supplied by India.

What we are hearing is the 21st century’s version of the early nineteenth-century Luddites, who at that time raised the alarm that the Industrial Revolution would soon result in unemployment for the vast majority as the emerging machine age made human labor redundant. The industrial machine age did indeed result in the replacement of a wide variety of human labor. But this freed tens of millions of hands to then do new and different work with the assistance of more and better tools, so that the quality, variety, and quantities of goods and services available to all were expanded beyond anything that could be imagined at the time. Our modern standard of living began with the Industrial Revolution and the machine age that it introduced.


After thousands of years of appalling poverty, more and more parts of the world are beginning to join and catch up to the West in terms of standards and quality of living. We should be hailing this as one of man’s greatest hours in his long existence on this earth. This great transformation will, of course, bring changes, even dramatic changes, in the structure and patterns of the global system of division of labor, as billions of people on other continents find new and more productive and profitable niches in the world’s network of trade, commerce, and industry.23 [22]

America’s Role in the World

Inevitably, this will change, as well, America’s role and place in the global community of nations. Some industries and service sectors will diminish or be entirely replaced by producers and suppliers in other parts of the world. But trade is a two-way street. Imports are paid for with exports. In fact, the only reason a nation exports anything is to use those foreign sales as the means of paying for goods and services that can be purchased from abroad less expensively than if they were to be made at home.

Other industries and service sectors will emerge or expand in America, instead, as the citizens of the United States discover in the arena of international commerce and competition their better and more efficient niches to serve their neighbors at home and their fellow human beings around the world. When the next generation looks back at our present time, say, 25 years from now, they will be able to see the market processes by which these new patterns and trading relationships emerged and took shape. And they will see the improvements and gains that resulted from these processes in a way that we cannot yet imagine, any more than those who feared the machine age in the early decades of the nineteenth century could imagine the wondrous improvements in the human condition that were visible when one looked back at the beginning of the twentieth century.

We can never possess tomorrow’s knowledge today. We can never know what innovations, creative ideas, and useful improvements will be generated in the minds of free men in the years to come. That is why we must leave men and their minds free. The man of system, the social engineer, who sees only the apparent problems from these global changes, wants to plan America’s place in the new, emerging global economy. But to do so, he must confine and straitjacket all of us to what his mind sees as the possible, profitable, and desirable from his own narrow perspective with the knowledge he possesses in the present.

Soviet-style central planning may seem to have been cast into the dustbin of history (to use a Marxian phrase), but in fact the underlying idea is alive and well around the world, including the United States. Ideological elites and voting majorities not only do not recognize the individual rights of others to live their lives in ways of their own choosing, but they increasingly do not even show tolerance for any range of difference of opinion and action. They are determined to plan our lives and our futures—and indeed even our thoughts in this increasingly anti-liberal age.24 [23]

Leonard Read, the founder and first president of FEE, once penned a book with the title Anything That’s Peaceful.25 In it he said that if we are to regain the liberty that we have lost, and the fully and consistently applied rule of law that once was the guardian of our liberty and freedom of enterprise, we must reawaken in our fellow citizens an understanding of what liberty, the rule of law, and individual self-responsibility mean. But this cannot come about unless each of us is willing to participate in a process of self-education in which we become knowledgeable about liberty and its opposite. And we must be willing and courageous enough to consistently defend freedom, self-responsibility, and all of their implications.

Each of us, Leonard Read said, must become candles of liberty in the darkness of collectivist ideas. The brighter we each shine through our understanding and ability to articulate the meaning of freedom, the more we will be beacons that can attract others. Quoting an old English saying, Read reminded us that it is the light that brings forth the eye and the ability to see.

None of us who care about liberty can avoid in good conscience our responsibility in this matter. I will close with the words of the Austrian economist Ludwig von Mises, who was one of the greatest and brightest lights for liberty in the twentieth century: “Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way for himself if society is sweeping towards destruction. . . . What is needed to stop the trend towards socialism and despotism is common sense and moral courage.”26 [24]

Richard Ebeling [25] is president of FEE. His latest book is Austrian Economics and the Political Economy of Freedom (Elgar). This paper was delivered at Hillsdale College on February 8, 2004.



Notes
1.      Lord Acton, “The History of Freedom in Antiquity” [1877], reprinted in Selected Writings of Lord Action: Essays in the History of Liberty (Indianapolis: Liberty Classics, 1985), p. 7.
2.      Ibid. p. 22.
3.      Ludwig von Mises, Liberalism: The Classical Tradition (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1996 [1927]), pp. 4, 52–55; Ludwig von Mises, Human Action: A Treatise on Economics (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1996), pp. 145–57; Ludwig von Mises, Theory and History: An Interpretation of Social and Economic Evolution (Auburn, Ala.: Ludwig von Mises Institute, 1985 [1957]), pp. 49–50.
4.      J. B. Bury, A History of Freedom of Thought (New York: Oxford University Press, 1913). Oliver Brett, A Defense of Liberty (New York: G. P. Putnam’s Sons, 1921), pp. 151–70; Everett Dean Martin, Liberty (New York: W. W. Norton, 1930), pp. 193–238; see, also, John Morley, On Compromise(Edinburgh: Keele University Press, 1997 [1877]).
5.      Guido de Ruggiero, The History of European Liberalism (Gloucester, Mass.: Peter Smith, 1981 [1927]), pp. 18–19.
6.      Albert Venn Dicey, The Law of the Constitution (Indianapolis: Liberty Classics, 1982 [1885; revised ed., 1914]), p. 114.
7.      Lord Hewart, The New Despotism (London: Ernest Benn, Ltd., 1929), pp. 28–29; Francis W. Hirst, Liberty and Tyranny (London: Duckworth, 1935), pp. 67–74; Richard M. Ebeling, “Civil Liberty and the State: The Writ of Habeas Corpus,” Freedom Daily (April 2002), pp. 9–15.
8.      Dicey, p. 132.
9.      F. A. Hayek, The Constitution of Liberty (Chicago: University of Chicago Press, 1962), pp. 148–61.
10.  Geoffrey Brennan and James M. Buchanan, The Reason of Rules: Constitutional Political Economy (Cambridge: Cambridge University Press, 1985), pp. 1–18.
11.  Werner Sombart, A New Social Philosophy (Princeton, N.J.: Princeton University Press, 1937).
12.  Werner Sombart, Handler und Helden: Patriotische Besinnungen (Munich: 1915).
13.  Fritz K. Ringer, The Decline of the German Mandarins: The German Academic Community, 1890–1933 (Cambridge, Mass.: Harvard University Press, 1969), pp. 183–84; Jerry Z. Muller, The Mind and the Market: Capitalism and Modern European Thought (New York: Alfred A. Knopf, 2002), pp. 256–57.
14.  However, on the meaning of “leadership” in a free society, see Leonard E. Read, Elements of Libertarian Leadership (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1962); and The Coming Aristocracy (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1969).
15.  Adam Smith, The Theory of Moral Sentiments (New Rochelle, N.Y.: Arlington House, 1969 [1759]), pp. 242–43.
16.  Jean-Baptiste Say, A Treatise on Political Economy, or the Production, Distribution, and Consumption of Wealth (New York: Augustus M. Kelley, 1971 [1821]), pp. 127–32; William Huskisson, Essays on Political Economy (Canberra: Australian National University, 1976 [1830]), pp. 45–64; Frédéric Bastiat, Economic Harmonies (Princeton, N.J.: D. Van Nostrand, 1964 [1850]), pp. 199–235; John R. McCulloch, The Principles of Political Economy, with Some Inquiries Respecting their Application (New York: Augustus M. Kelley, 1965 [1864]), pp. 25–36.
17.  For recent statements of this idea, see, James M. Buchanan, Property as a Guarantor of Liberty (Brookfield, Vt..: Edward Elgar, 1993); Tom Bethell,The Noblest Triumph: Property and Prosperity through the Ages (New York: St. Martin’s Press, 1998); and Richard Pipes, Property and Freedom (New York: Alfred A. Knopf, 1999).
18.  Edward Shils, “The Virtue of Civil Society,” Government and Opposition, Winter 1991, pp. 3–20, and Robert Nisbet, Twilight of Authority (New York: Oxford University Press, 1975); also, Richard M. Ebeling, Austrian Economics and the Political Economy of Freedom (Northhampton, Mass.: Edward Elgar, 2003), Chapter 6: “Classical Liberalism and Collectivism in the 20th Century,” pp. 159–78, especially, pp. 168–72.
19.  Adam Smith, The Wealth of Nations (New York: The Modern Library, 1937 [1776]), Book I, Chapters 1–3, pp. 3–21; Mises, Human Action, pp. 143–76.
20.  Friedrich A. Hayek, “The Results of Human Action, but not of Human Design” [1967] in Studies in Philosophy, Politics and Economics (Chicago: University of Chicago Press, 1967), pp. 96–105; reprinted in Richard M. Ebeling, ed., Austrian Economics: A Reader (Hillsdale, Mich.: Hillsdale College Press, 1991), pp. 134–49.
21.  Hayek, The Constitution of Liberty, pp. 22–38.
22.  Friedrich A. Hayek, “Competition as a Discovery Procedure” [1969] in New Studies in Philosophy, Politics, Economics and the History of Ideas(Chicago: University of Chicago Press, 1978), pp. 179–90; and Thomas Sowell, Knowledge and Decisions (New York: Basic Books, 1980).
23.  Richard M. Ebeling, “Globalization and Free Trade,” The Freeman, April 2004, pp. 2–3; on this general theme of the benefits from freedom of trade and its continuing importance today, see Richard M. Ebeling, Austrian Economics and the Political Economy of Freedom, Chapter 10, “The Global Economy and Classical Liberalism: Past, Present and Future,” pp. 247–81; and on related aspects of the same issue, Richard M. Ebeling and Jacob G. Hornberger, eds., The Case for Free Trade and Open Immigration (Fairfax, Va.: Future of Freedom Foundation, 1995).
24.  David Henderson, Anti-Liberalism, 2000 (London: Institute of Economic Affairs, 2001), and David E. Bernstein, You Can’t Say That! The Growing Threat to Civil Liberties from Antidiscrimination Laws (Washington, D.C.: Cato Institute, 2003).
25.  Leonard E. Read, Anything That’s Peaceful (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1964).
26.  >Ludwig von Mises, Socialism: An Economic and Sociological Analysis (Indianapolis: Liberty Classics, 1981 [1951]), pp. 468–69, 540.

Wednesday, April 25, 2012

Avoid Chaos and Anarchy in Eritrea


Mogos Tekeste

The Awate Team wrote Eritrea's Wasted Decade. I posted my misgivings on the way the article related the history of the Eritrean-Ethiopian border legal ruling.
The Awate Team in its reply to my comments challenged me that I use the term the rule of law non-stop and without fully explaining what it means.  It is true that I am infatuated with the subject of the Rule of Law. I strongly believe that more than anything else this is the most crucial ingredient missing in Eritrea. This missing element is the main stumbling block from creating a stable, prosperous and liberal democratic society.
I wrote about this very subject on December 2009. I believe this article is relevant to the current debate.
It appears to me that the Awate Team is confused between three terms and how they relate to a particular political system – (1) The Law of the Land, (2) The Rule By Law, and (3) The Rule Of Law. (These are defined in the body of the text below.)
As aside, slavery, disenfranchisement of women, and the apartheid system were the laws of the land (the fist two in the USA and the last one in South Africa.) This enforcement of oppression of the worst kind using laws is generally categorized as the rule by law. These bad laws are antagonistic to the rule of law. The reason apartheid is abolished is that it violated the rule of law. Through the amendment process the USA abolished slavery and granted women equality. The reason again is to make the USA constitution conform to the rule of law.  
The Awate Team also accuses me that I never use the word justice. As far as the word is concerned, I have no defense, I am guilty as charged. I also confess on my own that I rarely use the words – democracy and multiparty elections too. This is a deliberate plan on my part, since these three terms expressed as a stand alone are not coherent and if not handled properly give rise to divisiveness in a society.
Democracy and justice, whatever they mean since they are some of the most abused terms, along with elections bring about chaos, anarchy and despotism in a nation if the necessary prerequisite -- the rule of law -- is not fulfilled. Just examine very closely on what is going on in Iraq, Afghanistan, Syria and Egypt. The ethnic and religious groups are at each others throats', as all typical tribal societies that have not yet transitioned to a liberal democratic society behave. If things in the Eritrean opposition do not improve drastically it is within the realm of possibility that the above mentioned nations in a weird way display what is awaiting for us in future Eritrea. (For more insights see: (1) Francis Fukuyama, the Origins of Political Order; Chapter 17; The origins of the rule of law; and (2) Why Nations Fail, by Daron Acemoglu and James Robinson.)
If one takes justice, we have the justice of the socialists and collectivists. Under a term called “social justice,” collectivists of all stripes expropriate private property; abolish middlemen and traders that are essential to a good functioning market economy, and they monopolize all economic activities. Collectivists disallow private ownership of private land, and decree that land belongs to the state; they go against the principle that "private property is the foundation of liberty." In nations such as Eritrea, where the capital market is undeveloped, the primary wealth of the people is land. And yet land is taken away from the people by the state. This draconian measure leaves the people very poor and worse makes the people a slave of the state. The excuse of the state is in order to have “an equitable distribution of wealth.” This does not conform to the rule of law. The “social justice” term and ideology is a favorite one of the PFDJ.
Under a term called Islamic justice, the Taliban and other look alike in Afghanistan, Saudi Arabia, and Pakistan chop off the hands of thieves, stone to death female ( not male) adulteress, decree fatwas on the head of individuals who speak their minds and voice their opinions. All these actions are antithetical to the rule of law. In short,  these are "cruel and unusual" punishment.
And what is the name of the party in power in Eritrea? You guessed it – People’s Front for Justice and Democracy -- again the abused terms justice and democracy
Unlike the terms justice and democracy, the definition of the rule of law is somewhat precise, and this is unless one wants to play dumb on purpose. Here is a definition from the United Nations.
  “The Secretary-General defines the rule of law as: a principle of governance in which all persons, institutions and entities, public and private, including the State itself, are accountable to laws that are publicly promulgated, equally enforced and independently adjudicated, and which are consistent with international human rights norms and standards. It requires, as well, measures to ensure adherence to the principles of supremacy of law, equality before the law, accountability to the law, fairness in the application of the law, separation of powers, participation in decision-making, legal certainty, avoidance of arbitrariness and procedural and legal transparency.’’

The rule of law as defined above already incorporates whatever good one wants to associate with “justice.”  When I advocate for a rule of law, in a way I am advocating for something good that one associates with justice. At a conceptual level, this is my defense as far as justice is concerned.
The article pasted below was published at Asmarino on December 2009. It is my full response to the Awate Team. Thanks.
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The Rule of Law in Eritrea
Mogos Tekeste
December 2009

There seems to be a lot of confusion on the status of the rule of law in Eritrea.

This confusion contributes towards the opposition being at odds with each other, extends a life support system to the oppressive political order of the People’s Front for Democracy and Justice (PFDJ) and finally, it baffles the international democratic forces and discourages it from lending an effective and valuable targeted support to the Eritrean people.

Some use “the rule of law” clumsily and without having a deep understanding behind the meaning of that terminology. The current intensive debate about the current land ownership and use is a case in point; some want to solve the problems using group rights based on a very nebulous power sharing arrangement. An arrangement that is not in synch with the rule of law. If one scrutinizes their stands on other important issues such as -- working languages, the Eritrean-Ethiopian border demarcation -- one also finds their proposals have no basis on law.

Others naively claim that there is the rule of law in Eritrea. To sustain their claim, they maintain that Eritrea is ruled by the charter that was adopted by the PFDJ in its congress of 1994. They assert that this is a temporary and transient mechanism. (Heaven only knows how a system that has lasted for about fifteen years can be characterized as an ephemeral and a momentary one.) According to them, the charter is the law of the land. There is no contest on that point. However, from this, they erroneously equate this law of the land with the rule of law.

History of Legal Liberty:

From the legal perspective the history of liberty has progressed through three distinctive and qualitative stages. This progression may not be a one way linear progression in all societies. (At times there are regressions too. That had been the history of the East Europeans during the heydays of socialism.) Still, the general trend over a long period of time is progressive.

· “For much of human history, rulers and law were synonymous -- law was simply the will of the ruler.

· A first step away from such tyranny was the notion of rule by law, including the notion that even a ruler is under the law and should rule by virtue of legal means.

· Democracies went further by establishing the rule of law. Although no society or government system is problem-free, rule of law protects fundamental political, social, and economic rights and reminds us that tyranny and lawlessness are not the only alternatives.” See The Rule of Law

The First Stage, Where the Law of the Land is Arbitrary Edicts and Decrees:

In this stage, there are no rules to speak of. The leader essentially rules through arbitrary edicts and rules. There are no known and predictable rules that bind the leader. The leader and the state are synonymous. In such a system liberty is trashed. The words of the leader are the laws of the land. The living conditions of the people are no better than that of slaves or serfs. For the most part, Eritrea under the PFDJ is currently in such a very primitive stage of liberty.

The Second Stage, Where the Law of the Land is the Rule By Law:

In the second stage, the state is governed and bound by strict laws. The leader has to follow the rules. And mostly these rules are written. That is there are constitutions. These rules become the law of the land. Such a state is characterized as having a system that is governed by the rule by law.

In a system that is governed by the rule by law, though there are constitutions and rules, in real practice there is the absence of some civil liberties. Hence, even barbaric violation of human rights take the cover of legalities and court approvals. The second stage, though much more advanced than the first stage -- where the leader, or Capo, or King is the law --, the state sometimes has little respect for what are generally referred to as negative liberties. The most significant are: respect of freedom of religion, of association, of expression and of movement; respect of property rights; guarantee of the due process of law, such as “the existence of due process of law, for example, the legal concept of innocent until proven guilty; the concept of writ habeas corpus – ‘the right to be brought before a court to determine whether one has been lawfully detained.’” and; the enforcement of contracts and etc. These are rights that are reserved for individuals, and the state is legally prohibited from interfering with.

One can mention Ethiopia and China as two typical examples that have states that are governed by the rule by law. Both nations have constitutions and their leaders can substantiate to all they do to some articles and rules in their constitutions, despite the fact that some of their rules may violate various civil liberties. In short, they have legal covers to what they do. Still, a state that is governed by the rule by law is much better than a state that is not governed by any laws. At least, there are functioning courts. This second stage may enable a nation to move forward to a stage where civil liberties are respected – a period where the rule of law is supreme.

On the other hand, Eritrea is not even in the second stage, for now we might as well forget the rule of law. Worse, the leaders of the PFDJ are not even bound by the charters and rule of their very own organization, hence no known and predictable law of any kind. The leaders of the PFDJ cannot legally substantiate to some of their actions. See the Coup d’état in Eritrea

The Third Stage, Where the Law of the Land is the Rule Of Law:

In the third stage civil liberties are respected and a state that respects civil liberties follows the rule of law. Two typical examples of states that follow the rule of law are the USA and South Africa; in these nations the law of the land is the rule of law.

These civil liberties are also enshrined in the Universal Declaration of Human Rights. These rights are also embedded in the ratified Eritrean constitution; something that the opposition rarely highlights and does all it can to bury it under the rug. I judge the merit of the ratified constitution by its superb stand on civil liberties. If Eritrea were to implement its constitution and strictly abide by its letter and content, for the most part one may rightly conclude that the law of the land in Eritrea is in tune with the rule of law. As a rule of thump, a nation that does not respect the universal declaration of human rights violates the rule of law. This is where Eritrea is now.

Like all theoretical explanations of stages, no phase is pure. Take the USA, for example, for the most part the constitution of the USA was in harmony with the rule of law. Still, there were some major blunders. The very constitution that protected liberties for the majority denied the same rights to the black minority and espoused slavery. This is a violation of the rule of law. It took almost hundred years and the presidency of Lincoln to restore the rule of law regarding the status of African-Americans. “More than 600,000 men died [in a bitter civil war] before the sin of slavery was purged.” Lincoln had to resort back to the declaration of independence where it claimed all men are created equal and not the constitution to have a legal footing in his fight to eradicate slavery. The very constitution of the USA also disenfranchised women for many years until the constitution was to be amended. They used the amendment process to refine their constitution and to be in concord with the rule of law.

This history is also lost among the Eritrean opposition; a group that is not saintly itself and yet has the audacity to demand an impossible perfection from others -- a perfect constitution is a pipedream. The ratified Eritrean constitution has an amendment provision too; another item that the opposition remains to be silent about, since it is easier to reject an entity than improve and develop it which requires a difficult, contemplative and arduous work. (For more insights on the rule of law, please see the books noted below. **)

The Need for a Single Coherent Message:

Some in the opposition emphasize on elections and not the rule of law as highlighted above. Recently, others claim that the problem in Eritrea, irrespective of the current coercive political order, is the dichotomy between the highlanders and the lowlanders, which they believe has disadvantaged the lowlanders. Or to put it differently and bluntly they claim that the highlanders are reaping benefits under the rule of the PFDJ. Nothing is far from the truth. Then they advocate for the Eritrean people to organize along sectarian and religious lines in order to fight for group rights. They categorize the highlanders (read Christians) in one group and the lowlanders (read Muslims) in another group. This so called dichotomy of the highlanders versus the lowlanders is blown up beyond proportions; in this the perpetuators of such half truths are no different than the PFDJ. Needles to say, the PFDJ is as repressive to the highlanders as it is to the lowlanders.

The solution to the problems of Eritrea is the establishment of the rule of law. We have to advocate for constitutional liberalism and the rule of law. Constitutional liberalism is defined as follows:

· “Constitutional liberalism … is not about the procedures for selecting government, but rather government's goals. It refers to the tradition, deep in Western history, that seeks to protect an individual's autonomy and dignity against coercion, whatever the source -- state, church, or society. The term marries two closely connected ideas. It is liberal because it draws on the philosophical strain, beginning with the Greeks, that emphasizes individual liberty. It is constitutional because it rests on the tradition, beginning with the Romans, of the rule of law. Constitutional liberalism developed in Western Europe and the United States as a defense of the individual's right to life and property, and freedom of religion and speech. To secure these rights, it emphasized checks on the power of each branch of government, equality under the law, impartial courts and tribunals, and separation of church and state. Its canonical figures include the poet John Milton, the jurist William Blackstone, statesmen such as Thomas Jefferson and James Madison, and philosophers such as Thomas Hobbes, John Locke, Adam Smith, Baron de Montesquieu, John Stuart Mill, and Isaiah Berlin. In almost all of its variants, constitutional liberalism argues that human beings have certain natural (or "inalienable") rights and that governments must accept a basic law, limiting its own powers, that secures them. Thus in 1215 at Runnymede, England's barons forced the king to abide by the settled and customary law of the land. In the American colonies these laws were made explicit, and in 1638 the town of Hartford adopted the first written constitution in modern history. In the 1970s, Western nations codified standards of behavior for regimes across the globe. The Magna Carta, the Fundamental Orders of Connecticut, the American Constitution, and the Helsinki Final Act are all expressions of constitutional liberalism.” See The Rise of Illiberal Democracy

I often stress that the only document that can effectively unify the Eritrean people is the ratified constitution. This is assuming that it be amended to exclude the state from being the sole owner of all Eritrean land, and to include the official languages of Eritrea. Regarding the other items of the rule of law, the ratified constitution is as good as many constitutions in the world including that of the USA.

The sad part is that we have an opposition that is unable to see something good, if not prefect, albeit not of its own creation in the ratified constitution. It is oblivious to the fact that it is much easier to rally the people inside Eritrea behind the ratified constitution. It is unaware to the fact that the international democratic force can be an effective advocate for the implementation of the constitution. All our grievances be it freedom of the press, religion, association and movement; respect of property rights and due process of law can be handled by a simple message that all Eritreans to the last person can propagate – implement the constitution.

It appears that the outright rejection of the constitution has become a shackle on the neck of the opposition. The rejection of the ratified constitution by many has completely left the opposition paralyzed. It simply does not have a coherent message. Hence the constant and petty squabbling and the non stop reorganizing and splitting. The PFDJ is equipped with a mindset that is engrossed in envy and hatred of educated Eritreans. The opposition should do its best to avoid an affliction of such grave malady. We should celebrate success and great works of Eritreans; and the constitution authored by Dr. Bereket and his colleagues is a work of great acclaim.

Dictatorial regimes eventually crumble down. History teaches us that the fate of the PFDJ will not be any different; if nothing else, the force of its deadweight inertia will be its undoing. When that time comes, the only weapon that the Eritrean people possess to create a secure, united, stable and viable liberal democratic state is the speedy implementation of the ratified constitution. This will be accomplished by the people inside Eritrea. The Diaspora opposition has a choice to speed up or delay this process.

Mogos Tekeste

Notes:
*My earlier posts are compiled in my BlogSpot. The site also provides links to articles that succinctly elucidate the concept of the rule of law and constitutional liberalism. The address is as follows:
** Important books on the rule of law in a descending chronological importance:
1. The Constitution of Liberty, by F. A. Hayek
2. The Open Society and its Enemies, by Karl Popper
3. The Future of Freedom, by Fareed Zakaria