Attention Economy


Wednesday, February 1, 2017

Rule of Law

Economic historian Jared Rubin’s interesting blog post is a must a read:
Rubin observes:
“In my view, the rule of law exists when it precisely that – the law rules, and it rules for all. What this means in practice is that laws are not arbitrary, they are applied equally to all, and those imposing rules do so within the confines of the law. It is the last of these aspects that I wish to focus on here. Why do rulers in societies governed by the rule of law actually rule within the confines of the law? When their desires are contrary to the law, what is to prevent them from ruling as they wish?
These questions well pre-date politics in the era of Trump. Their answers are something I have long been interested in as an economic historian because I believe that they hold, in part, the keys to understanding where modern wealth comes from. Freedom from arbitrary rule for a broad swath of the population means that those people will have incentive to invest, trade, and more generally grow their wealth without the grabbing hand of the state taking anything more than its pre-specified cut (which may be a lot, but as long as everyone knows that going in they will be able to adjust their actions accordingly). The absence of the rule of law encourages the opposite; why should anyone except the ruler’s cronies try to enrich themselves if it is just going to make them a target of confiscation when the ruler is in a bind?”

Related:
Autocracy in America