A Planned Society and the Rule of Law

To say that in a planned society the Rule of Law cannot hold is, therefore, not to say that the actions of the government will not be legal or that such a society will necessarily be lawless. It means only that the use of the government’s coercive powers will no longer be limited and determined by pre-established rules. The law can, and to make a central direction of economic activity possible must, legalize what to all intents and purposes remains arbitrary action. If the law says that 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.F.A. Hayek, The Road to Serfdom.

Health Choices Commissioner, “pay czars”, the Kelo decision, bail outs! To this layperson all of it seem so, well, arbitrary. It’s as if we in the U.S. are moving toward a system where just about anything can be justified because some government official says that it should be so. It’s all for the greater good, right? What are pesky little things like individuals and predictable rules in the face of all that wonderful greater goodness?

Management Advice From George Eliot

Fancy what a game of chess would be if all the chessman had passions and intellects, more or less small and cunning; if you were not only uncertain about your adversary’s men, but a little uncertain also about your own . . . You would be especially likely to be beaten if you depended arrogantly on your mathematical imagination, and regarded your passionate pieces with contempt. Yet this imaginary chess is easy compared with a game man has to play against his fellow-men with other fellow-men for instruments.

–George Eliot, in Felix Holt, the Radical (1866)

Lots of political leaders and their academic advisors, and also more than a few business executives, fail to understand this point about the kind of “chess” that they are playing.

See also investing advice from George Eliot.

Anniversary Comparison

Amazon search on “revolution 1848“: 17,292 results

Amazon search on “revolution 1989“: 7,972 results

The “Wacky Sitcom Mixup” School of Foreign Policy

The very first episode of the “I Love Lucy” show established a template for all of the sitcoms to follow. The episode, titled, “Lucy Thinks Ricky Is Trying to Murder Her” has the archetypal sitcom plot:

Lucy is absorbed in her mystery/suspense novel…Later on, Lucy over hears a conversation Ricky is having with his agent and misunderstands the phone call, as she is only able to hear Ricky’s end of the line. She then comes to the mistaken conclusion that Ricky is going to kill her, based on the novel’s plot and Ethel’s card reading. [emp added]

Much wackiness ensues. The device is as old as comedy itself. See Shakespeare and the Greek comedies. Character A misunderstands something Character B did or said and then takes action based on that misunderstanding, with comedic consequences. Most importantly, the resolution of the plot occurs when the misunderstanding is cleared up by explicit and honest communication. Everyone hugs and all is forgiven.

Bryon York asks:

A lot of observers are having trouble figuring out the philosophical underpinnings of Barack Obama’s foreign policy. How does the president see America’s place in the world? How will he use American power? How much does he care about such things?

I think Obama et al believe that all of life’s problems are ultimately just the result of miscommunications and misunderstandings like those that drive a sitcom plot. Obama views himself in the role of the wise character in the sitcom who puzzles out the misunderstanding and brings all of the characters together for hugs at the end.

Let’s call this the “Wacky Sitcom Mixup” school of foreign policy.

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The Separation of Scientific Powers

Rep. Edward Markey (D-Mass.) has flagged an Office of Management and Budget (OMB) decision urging the Environmental Protection Agency (EPA) to use test data from companies and other existing data in judging whether chemicals found in pesticides and plastics could disrupt the human endocrine system, which releases hormones.[source]

I suspect that the OMB is actually suggesting that the EPA use all scientific data regardless of source. US regulatory agencies have long suffered from “not invented here” syndrome in that they rather routinely reject valid scientific data that originates from any source outside themselves. For example, they often refuse to use data generated by European regulatory agencies even though the standards of those agencies are just as good as ours.

However, I think he has a point (echoing Adam Smith) that data is suspect when it comes from companies that have an economic incentive to downplay the dangers of their products. However, Markey and others like him do not see that the EPA and other regulatory agencies have the same kind of built-in conflicts of interest as companies do.

Since the EPA’s budget and scope of powers depend on the degree of environmental hazard believed to exist, the EPA has a built-in institutional bias towards exaggerating dangers that is every bit as strong as the bias of profit-driven companies to underplay dangers. Worse, as a political creation, the EPA is subject to ideological pressure from politicians, lobbyists and activists across the political spectrum.

We should divide the EPA, and every other regulatory agency, into two departments that are entirely separated all the way up to and including the level of cabinet secretary. One department would be responsible for regulation while the other will be responsible for doing the science upon which the regulation depends. We might even go so far as to create a Department of Science which would perform scientific research for all regulatory agencies. Only then could we be assured that the science upon which we base our regulations would not be contaminated by institutional biases one way or the other.

As the scope and power of government have grown, we have neglected the concept of the division of powers, even though the Founders and history judge this concept absolutely vital to maintaining freedom. Today, each regulatory agency is its own little fiefdom and many are far larger than the entire Federal government was even 80 years ago. Yet we’ve never applied the Founders’ wisdom about the separation of powers to these vast and powerful organizations.

We need to start doing so.