Law and Freedom and the Emergent Demos

Somewhere successful governmentis the balanced combination of the rule of law and democratic choices.  This essay discusses this at length and isworth the read.

Present volatility in the Arabworld has begun the process of cutting the autocracies free, just as happened ageneration ago in both the communist world and the Latin World in particular.

If we have learned anything, itis that the process is naturally jerky.  Fewmodern democracies are yet in place, but they are all clearly evolving towardjust that.  Yet most began with theirpeople hitting the bricks and that possibility informs all leaders today inthose post revolution countries. Everyone senses a real limit to their authority.  Even the Chinese sense it.

There are still autocracies outthere and they are all now rethinking their options.  Most will continue to coast only becausetheir people will let them.

There Is No Viable "Third Way"
James A. Dorn

August 2001 • Volume: 51 • Issue: 8 •
James Dorn is vice presidentfor academic affairs at the Cato Institute.

The collapse of communism in 1989 in Eastern and Central Europe, andthe fall of the Soviet Union two years later, have increased the number ofdemocracies in the world to a total of 120. Of those, however, only 85 areclassified as “free” by Freedom House—a stark reminder that creating a freesociety requires limiting government. That in turn requires limiting majorityrule and protecting property rights.

Emerging democracies can learn from James Madison’s constitutionalvision: The danger is that without limited constitutional government, electoraldemocracies (with universal suffrage) will undermine what F. A. Hayek calledthe “constitution of liberty.”

Individual rights will then lose ground to special interests, and civilsociety will be weakened as all aspects of life become politicized. Instead ofbecoming less visible, the state will become more powerful.

For Madison,“The essence of government is power; and power, lodged as it must be in humanhands, will ever be liable to abuse.” The fundamental question that concernedMadison, and the other framers of the U.S. Constitution, was how toprevent the abuse of governmental power while protecting individual rights tolife, liberty, and property.

Madison’s goal was to create a basis and structureof government that would protect persons and property and stand the test oftime. His goal was justice under the law of liberty.

Madison regarded it as self-evident “that personsand property are the two great subjects on which Governments are to act; andthat the rights of persons, and the rights of property, are the objects, forthe protection of which Government was instituted.”

In Madison’s view, justice, liberty, andproperty are inseparable: “That alone is a just government,” wrote Madison, “whichimpartially secures to every man, whatever is his own.” Like Hayek, Madison viewed justice as“rules of just conduct,” not as some officially sanctioned distribution ofincome that satisfies some subjective criterion of “social justice.”

Madison accepted Adam Smith’s distinction between perfect and imperfectrights, where “perfect rights” are associated with consent and commutativejustice, while “imperfect rights” are associated with force and distributivejustice. Imperfect rights, such as the “right to welfare,” are rights only in a“metaphorical sense”: they cannot be exercised without violating someone’sproperty rights.

True justice requires the protection of property rights, not thepromotion of the welfare state. No one has the right to be compassionate withother people’s money.

Madison adhered to the classical-liberal view ofdemocracy, which is consistent with limited government and the rule of law,rather than to the modern liberal view in which democratic government isvirtually unlimited. In 1837, a year after Madison’s death, John O’Sullivan,the political editor of The Democratic Review, wrote: “The fundamentalprinciple of the philosophy of democracy” is “to furnish a system of theadministration of justice [in the Madisonian sense], and then leave all thebusiness and interests of society to themselves, to free competition andassociation, in a word, to the voluntary principle”—that is, to the “principleof freedom.”

That view of democracy clashes with the welfare state and itsopen-ended vision of democratic government. Today, in both emerging and maturedemocracies, the rule of law and freedom have been sacrificed to majoritarianpolitics—a danger Madisonwarned against.

Just Government and Spontaneous Order

Madison supported limited government not only because he thought it wasjust but because he recognized, as did Adam Smith, that limiting government tothe defense of persons and property prevents corruption and lays the basis forthe emergence of a spontaneous market order and wealth creation.

Madison favored free trade and opposed governmentintervention. He called himself a “friend to a very free system of commerce”and regarded as self-evident the notion “that commercial shackles are generallyunjust, oppressive, and impolitic.” He recognized that “all are benefitted byexchange, and the less this exchange is cramped by Government, the greater arethe proportions of benefit to each.”

In 1792 Madison wrote, “Liberty and order will never be perfectlysafe, until a trespass on the constitutional provisions for either, shall befelt with the same keenness that resents an invasion of the dearest rights;until every citizen shall be an Argus to espy.”

Argus, of course, refers to a giant with 100 eyes who acts as aguardian—in Madison’scase, a guardian of our liberties. In a free society, citizens must be vigilantand be able “to espy”—that is, to see at a distance—and use reason to discernthe long-run implications of alternative policies.

Unless people learn to judge policy from a constitutional or long-runviewpoint, and not just consider it in the postconstitutional setting ofmajority rule, they will lose their freedom. By taking a long-run view andexercising “right reason,” individuals are more likely to agree toconstitutional limits that insulate economic life from politics and prevent“rent”-seeking behavior that redistributes, rather than creates, wealth. Thatis a point James M. Buchanan, founder of the Public Choice school of economics,has so eloquently stated.

Lessons for Emerging Democracies

There are several important lessons that emerging democracies can learnfrom Madison’sconstitutional vision:

For true democracy to prevail, government must be limited and must bejust; the security of persons and property must take precedence over electoralpolitics.

To prevent rent-seeking and corruption, economic freedom must prevail;people must accept a rule of law that treats people equally under the law andsafeguards private property rights and freedom of contract.

A spontaneous market-liberal order will arise to coordinate economicactivity and create wealth, provided the government minimizes its role in theeconomy and lets people be free to choose.

A free society cannot coexist with a redistributive state—there is no “Third Way”; peoplemust be ever vigilant to ensure that majorities are prevented from violatingthe rights of minorities in the name of distributive justice.

How quickly those lessons are learned in countries making thetransition to democracy will depend crucially on the size and scope ofgovernment in the old regime and the duration of the old regime. For countriesthat had all-powerful governments and central planning for long periods oftime, the transition to a liberal democratic state with the rule of law andfree markets cannot be expected to occur as quickly as in countries withsmaller governments, some experience with markets, and a memory of freedom.

The Freedom House rankings for democratization and economicliberalization for ex-communist countries, as of June 1999, show that nearlyall of the post-Soviet states, or Newly Independent States, lag significantlybehind Eastern and Central European countries that had previous experience witha liberal political and economic order.

Similar results hold for the Freedom House’s rankings for adherence tothe rule of law and for the extent of corruption. Ex-communist countries thatexperienced the rule of law prior to World War II and respected propertyrights—such as Hungary, Poland, and Slovenia—havemade faster progress on moving toward the rule of law and reducing corruptionduring the transition to democratic capitalism than countries such as Russia and Ukraine.

That Russiais making such slow progress should not be surprising; it takes time to changeone’s thinking after so many years under totalitarian rule. As AlexanderTsypko, a professor of philosophy at Moscow State University, wrote in the CatoJournal in 1991, just prior to the collapse of the Soviet Union: “It ishard—very hard—to admit that your life and your work are being senselesslywasted and that you are living in an unnatural, false society, headed with yourcountry for the dead end of history.”

The future of limited government in emerging democracies will depend onadherence to the rule of law and justice in the Madisonian sense. Citizens andleaders need to think about the proper scope of government and recognize thedangers of universal suffrage when there is no effective limit to the scope ofgovernment. Madison’sfundamental question is still relevant today, namely: How can we protectindividual rights against majoritarian interests that violate private propertyrights?

In conclusion, emerging democracies need to consider the long-runimplications of alternative rules, not just look at short-term policy optionsfor redistributing income and wealth. They need to foster an ethos of law andliberty. Moreover, they need to recognize that change will take time and thatthere is no viable “Third Way.”Ultimately, political freedom requires economic freedom, and vice versa. Toprotect both requires limited government.

Perhaps the biggest challenge for the future of limited government isto move Chinatoward the rule of law and freedom. China’s leaders should heed the advice ofJixuan Hu, who recently wrote:

··By setting up a minimum group of constraints and letting humancreativity work freely, we can create a better society without having to designit in detail. That is not a new idea, it is the idea of law, the idea of aconstitution. Real constitutional government is a possible alternative to thedream of a perfectly designed society. . . . The idea is to apply the principleof self-organization.

History has proven that Madisonwas right and Marx was wrong. The future of freedom and democracy rests withthe Madisonian vision of limited government. Let us salute the “great little Madison.” One person canmake a big difference!

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