Posted on 03/04/2007 7:17:12 AM PST by Jacquerie
Planning & The Rule of Law
This means that a government in all its actions is bound by rules fixed and announced beforehand – rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances and plan one’s individual affairs on the basis of this knowledge.
Within the known rules of the game the individual is free to pursue his personal ends and desires, certain that the powers of government will not be used deliberately to frustrate his efforts. The government confines itself to fixing rules determining the conditions under which the available resources may be used, leaving to the individuals the decision for what ends they are to be used.
Economic planning of the collectivist kind necessarily involves the very opposite. The planning authority cannot confine itself to providing opportunities for unknown people to make whatever use of them they like. It cannot tie itself down in advance to general and formal rules which prevent arbitrariness.
When the government has to decide how many pigs are to be raised or how many busses are to be run, which coal mines are to operate, or at what prices shoes are to be sold, decisions cannot be deduced from formal principles or settled for long periods in advance.
They depend inevitably on the circumstances of the moment, and, in making such decisions, it will always be necessary to balance one against the other the interests of various persons and groups.
In the end somebody’s views will have to decide whose interests are more important; and these views must become part of the law of the land, a new distinction of rank which the coercive apparatus of government imposes upon the people.
The difference between the two kinds of rules is the same as the between providing (road) signposts and commanding people which road to take.
The state should confine itself to establishing rules applying to general types of situations and should allow the individuals freedom in everything which depends on the circumstances of time and place, because only the individuals concerned in each instance can fully know these circumstances and adapt their actions to them.
If, on the other hand, the state were to direct the individual’s actions so as to achieve particular ends, its action would have to be decided on the basis of the full circumstances of the moment and would therefore be unpredictable. Hence the familiar fact that the more the state “plans,” the more difficult planning becomes for the individual.
General rules, genuine laws as distinguished from specific orders, must be therefore be intended to operate in circumstances which cannot be foreseen in detail, and, therefore, their effect on particular ends or particular people cannot be known beforehand.
The kinds of question which the economic planner would have to decide need not and should not be guided by his individual prejudices but could rely on the general conviction of what is fair and reasonable.
Those most immediately interested in a particular issue are not necessarily the best judges of the interests of society as a whole. When capital and labor in an industry agree on some policy of restriction and thus exploit the consumers, there is usually no difficulty about the division of spoils. The loss which is divided between thousand or millions is usually either simply disregarded or quite inadequately considered.
In fact, as planning become more and more extensive, it becomes regularly necessary to qualify legal provisions increasingly by reference to what is “fair” or “reasonable” . . . more and more to the discretion of the judge or authority in question.
It (planning) must lay down by a legal rule how well off particular people shall be and what different people are to be allowed to have and do. It means in effect a return to the rule of status.
It is the absence of legal privileges of particular people designated by authority, which safeguards that equality before the law which is the opposite of arbitrary government.
It is very significant and characteristic that socialists have always protested against “merely” formal justice . . . and have always demanded a “socialization of the law, “ (and) attacked the independence of judges.
The Rule of Law was consciously evolved only during the liberal age and is one of its greatest achievements, not only as a safeguard but as the legal embodiment of freedom.
If the law says that such and such a board or authority may do what it pleases, anything that board or authority does is legal - but its actions are certainly not subject to the Rule of Law. By giving the government unlimited powers, the most arbitrary rule can be made legal; and in this way a democracy may set up the most complete despotism imaginable.
If, however, the law is to enable authorities to direct economic life, it must give them powers to make and enforce decision in circumstances which cannot be foreseen and on principles which cannot be stated in generic form The consequence is that, as planning extends, the delegation of legislative powers to diverse boards and authorities becomes increasingly common.
The Rule of Law thus implies limits to the scope of legislation: it restricts it to the kind of general rules known as formal law and excludes legislation either directly aimed at particular people or at enabling anybody to use the coercive power of the state for the purpose of discrimination.
Ping for later read.
Austrian Economics BTTT
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