Hayek warns on subversion of the Rule of Law

This is an important article to read and understand.  The warnings on Trump’s behavior to date are clear.  See A warning to Trump from Friedrich Hayek:

“One of Hayek’s most important arguments in his great classic, “The Road to Serfdom,” involves the Rule of Law, which he defined to mean “that government in all its actions is bound by rules fixed and announced beforehand.” Because of the Rule of Law, “the government is prevented from stultifying individual efforts by ad hoc action.”

In “The Road to Serfdom” and (at greater length) in “The Constitution of Liberty,” Hayek distinguished between formal rules, which are indispensable, and mere “commands,” which create a world of trouble, because they are a recipe for arbitrariness. When formal rules are in place, “the coercive power of the state can be used only for cases defined in advance by law and in such a way that it can be foreseen how it will be used.

…In sharp contrast, President-elect Trump prides himself on his skills as a dealmaker, and he wants to use those skills to “make good deals” for the American people. There is a real risk that in practice, presidential deals, deliberately done on an ad-hoc basis, will turn out to be Hayekian commands.

In a world of presidential deals, companies are going to have horrible incentives — to curry presidential favor in countless ways, to act strategically, and to make promises and threats of their own, so as to avoid unfavorable treatment from government and to obtain optimal concessions from it. That’s nothing to celebrate. On the contrary, it is a road to serfdom.

One of Hayek’s enduring achievements was to clarify the importance of government neutrality and forbearance, not through anything like laissez-faire, but by avoiding commands in favor of clear, general, stable, predictable rules on which the private sector can rely. A Dealmaker-in-Chief might turn out, in practice, to be a Commander-in-Chief in precisely the sense that Hayek deplored.”

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