STAFF NEWS & ANALYSIS
Why Rule of Law is the Most Important Product
By The Daily Bell Staff - November 22, 2017

Every once in a while a technology comes along that upsets an entire industry.

Digital cameras put Kodak out of business. The giant of the photography industry had the opportunity to adopt the technology early. But their profits depended on selling film more than selling cameras.


And this is not a new phenomenon.

When the printing press was invented in the 15th century, it revolutionized education for everyday people. The cost to create books plummeted. Knowledge became widely distributed. When monks were transcribing books by hand, the cost of a single volume could be astronomical.

But the printing press allowed books to be mass produced. Poor people could finally get their hands on an important tool which was previously only available to the rich. The benefits of an educated populace cascaded into further developments in science and technology. Europe boomed. It was the internet of the day.

But just like today, certain segments of the economy are threatened by new inventions. In the Ottoman Empire, hand scribing books was a big business. There was a large lobby to make sure the printing press didn’t put scribes out of work. They had the support of the government who used the intellectual class to control information and hold onto power. The printing press was declared unholy and banned. This move was likely the beginning of the end of the Ottoman Empire.

People need the freedom to make use of a new technology. Places like the Ottoman Empire which issued arbitrary decrees did not allow people to produce the type of wealth and advancements that freer countries did.

Countries which advanced more rapidly tended to have rule of law. Instead of arbitrary proclamations by governments, the law in the west derived from common law. Law was a way to solve disputes and avoid violence. It wasn’t perfect. There was still power imbalance. But overall, respect for objective law created an environment where new technology could be used to advance the quality of life.

And rule of law today is still what creates wealth in advanced nations.

A report estimated that 46% of all wealth in advanced countries comes from the rule of law. The amount of natural resources means far less. Look at oil-rich Venezuela which just defaulted. Compare that to a Singapore which is basically just a rock, but is the third wealthiest nation in the world.

So it really doesn’t matter how promising a technology is if a country can ban its implementation. China is repeating historical mistakes by banning Bitcoin. And the reasons are the same. Cryptocurrencies threaten the banks’ control over exchange. Banks and government collude in the same way that the scribes did with the Ottoman Empire.

Rule of law is why Europe advanced quicker than China. Europe was fragmented enough so that a country had to adopt new technology, or risk being outcompeted or conquered by their neighbors. But China was a large united country. A faction took control of the Chinese government and dismantled the shipyards because they were controlled by their rivals. 1,000 years before Columbus, China was able to sail halfway around the world, but by the time 1492 rolled around, they didn’t have a navy to speak of. So even though the technology had been there, without rule of law, it could not increase wealth or raise the standard of living.

Luckily, much of the world more closely follows European rule of law. There has been enough competition among government so that most technologies have some opportunity to advance.

But the thing is, law is still relatively arbitrary. Some countries are better than others, but rule of law comes and goes like the seasons. And in some places, how the courts will rule comes down to little more than the flip of a coin.

Despite all this, an enormous amount of wealth and advancements have been produced. Worldwide poverty is at historical lows.

But there really isn’t much competition when it comes to rule of law. There are only 195 “products” out there when it comes to government. More than half of them can be written off outright as dictatorships and banana republics.

Industries are routinely upset by new technologies. Rule of law is a product in need of innovation. The way to govern a society needs some experimentation to improve it.

If revolutionary changes happen in the structure of governance, other advancements could continue at exponential rates.

Despite the primary importance of governance, there is little true disruption in governance compared to other areas of the capital stock such as equipment or machinery, where “creative destruction” is common. Moments of true innovation in governance are so rare that they capture worldwide media attention such as the emergence of Dubai as a financial and research hub.

Dubai was once a sandy desert. Today it is a leading center of international finance, commerce, and research, and one of the wealthiest places on earth. Dubai has the fifth-fastest growing economy in the world thanks to its many “free zones” that place virtually no taxes or restrictions on foreign trade. Dubai studied and adopted “best practices” in global financial governance, embracing English common law and global trade. This has attracted private capital and entrepreneurs, lifting countless others out of crushing poverty.

The product is starting to emerge. There are proven ways to govern which make wealth creation easier. There are methods of governance that lift people out of poverty. Right now, we are still at the stage where the big powers are fighting the new technology. They are protecting their own power and attempting to stifle emerging modern methods of government.

Much like the Ottoman Empire banned the printing press, and China dismantled the shipyards, big governments are trying to insulate their industry from competition. That is why secession movements are put down with such vigor. It is why government monopolizes law and courts. It is why central banks are hostile towards Bitcoin and blockchain technology which puts power into individuals’ hands.

Cities like Dubai and Hong Kong, and countries like Singapore and Liechtenstein are emerging products. They are the prototype governments which are starting to offer hope for an upset when it comes to the industry of rule of law. And with 46% of wealth deriving from the rule of law, it is certainly an area worth innovating.

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  • RED

    VERY INTERESTING PERSPECTIVE!

  • nottoobrite

    Germany !! (saving ther world non solar panels
    Down the tube. Just opened today’s post, new electric tariff Euro 0.67 Kw/h ($US 0.85 )

  • KevanRowlee

    Sharing on my Facebook wall.

  • The rule of law is unequivocally the most important. The problem is most people don’t have a clue as to what it the rule of law is.

    There’s only one rule of law for nations because there’s only one lawgiver:

    “…Isaiah 33:22 and James 4:12 declare that Yahweh is the exclusive legislator. There are no others, period! Anyone who claims the title of legislator (particularly when his “laws”—whether commandments, statutes, or judgments—are inconsonant with Yahweh’s) is a usurper and is perpetuating the sin begun by Adam and Eve. The same is true for any one of us who would modify Yahweh’s triune law….

    “Any legislation antithetical to Yahweh’s turns evil to good and good to evil (Isaiah 5:20). When man rejects Yahweh’s standard of morality, it is inevitable he will make legal what Yahweh has made unlawful (e.g., infanticide and sodomy) and make illegal what Yahweh has made lawful (e.g., monotheistic Christianity outside the four walls of church buildings).

    “Yahweh is the only lawgiver because as Creator He’s the only one with the authority to determine what is good and evil. His morals as codified in His commandments, statutes, and judgments determine what is right and left. Anything left of His right(eousness) is left, liberal, and ungodly….”

    For more, see blog article “Right, Left, and Center: Who Gets to Decide?” at http://www.constitutionmythbusters.org/right-left-and-center-who-gets-to-decide/.

    Then find out how much you really know about the Constitution as compared to the Bible. Take our 10-question Constitution Survey at http://www.bibleversusconstitution.org/ConstitutionSurvey.html and receive a complimentary copy of a book that examines the Constitution by the Bible.

  • Samarami

    Article written from the perspective that “countries”, “the-law”, etc., are living, breathing entities. They’re not. They’re superstitions.
    But few there be that come to see that clear truth. Sam

    • Perhaps more like illusions created deliberately for the public to buy into, hey ?

      Congress is a serious bad joke as well as any real concept of rule of law today, her inn USA,

      Ponder this, Mueller is supposedly investigating Trump for Russia collusion and we now all know for a fact that the real Russia collusion was all by the democrats on a grand scale and the phony Muller sham still continues as if it has any credibility or legal basis at all ? We also now know that Comey, and Mueller himself were part of the Uranium One sham and everything we are seeing is driven by the democrats to try and cover up their own serious crimes !

      Again where is Sessions and why are Rosenstein, McCabe and Mueller running DOJ and FBI ? The reason is obvious, they are all part of the deep state apparatus and DEM cabal in place ! Comey, Hillary, Podesta, Lynch, Holder, Obama and many others should all be prosecuted ASAP ! It is a very long list indeed and until this happens there will be no rule of law in USA.

  • Don Duncan

    What is the rule of law dependent on? Political philosophy. What is politics based on? Ethics. What is ethics based on? Epistemology. What is epistemology based on? Metaphysics. Ayn Rand started with a metaphysical axiom, derived an epistemology from which she derived an ethics. Her ethics gave her capitalism, an economic theory which is a sub-category of politics. Capitalism is dependent on freedom. Since no freedom exists on principle but only as a practical exception to the tyranny imposed everywhere, capitalism does not exist, only mixed economies. This causes a constant power struggle which impedes innovation, social and economic.

    Without a sound ethical basis for the rule of law, product improvement is slow and subject to major backward trends. See the US Empire.

    • All we are actually seeing is greed and apathy. Greed by the corporatocracy that has been created here in USA and is part of the deep state apparatus and control freaks we call government. And apathy by the people who do nothing at all except complain. And there is a lot they can do but are simply too lazy or too stupid ? Take your pick. Here is a simple starting point below. Realize the middle class actually has all the power via purchasing power and the power of the purse. They have simply been afraid or too dumb to use it. Hopefully that will change going forward, as it is well past due for sure, We shall see ?

      http://www.downtoearththinking.com/citizens-take-back-america-.html

    • False. I’m a Rand scholar, a contemporary of hers, know the canon better than you do. She had zero understanding or concern for the philosophy of law. The preamble to The Freeman’s Constitution puts the issue squarely: “The philosophy of law is a separate branch of science, independent of ethics. Moral inquiry pertains specifically to the interests, powers, and dilemmas of an individual, epitomized by the question: “What shall I do?” Legal philosophy addresses impersonal administration of public justice, litigation among parties in dispute, the combined might of a community, and custodial guardianship of certain individuals who are unable or legally prohibited to conduct their own affairs.”

      https://www.amazon.com/Constitution-Government-Galts-Gulch/dp/1499550456

    • Ephraiyim

      Wiithout” a sound ethical basis for the rule of law, product improvement is slow and subject to major backward trends.”

      It already exists and was Natural Law which was derived from the Hebrew God YEHOVAH.
      The founding father’s had this in mind when they formed the original documents. Argue if you will but the god of the Hebrews is the basis for liberty and ethics as well as the rule of law.
      This includes judgment by righteousness but of equal importance mercy.

      • Don Duncan

        You claim a sound ethics is based on “the god of the Hebrews” and the Founding Fathers reflected this in the original documents. I agree the religious ethics was the basis, I disagree it was sound. If it was, we wouldn’t have had tyranny from the beginning, e.g., the Whiskey Tax Act. And we probably wouldn’t have it now.

        You may claim that Yehovah’s ethics was not followed and if it were we would have “rule of law”. If it wasn’t followed, how do you know? You have no proof, no example of where the religious ethic led to a rule of law that worked. All history proves the opposite. Futhermore, you cite mercy as equal to righteousness. I disagree. I don’t want mercy personally or for others. I want justice. The two are opposites. Righteousness is obedience, and mercy is forgiving disobedience. Where is the justice in that? Where is the common sense? If I can break the law and be forgiven what is my incentive to keep the law? We see this in practice when a lawbreaker confesses, gets forgiven, sins again, confesses, get forgiven, on and on thru his whole life. Sin without lasting guilt is sin without guilt. That “ethics” is a perscription for immoral conduct. I reject it as irrational.

        An ethics that is based on our humanity is sound, and forgiving unnatural acts is anti-life, unethical. To claim that whatever a human does is “natural” is wrong. Commonly found actions and natural actions are not the same. I claim that it is natural for humans to think, to reason, to work out a social system that benefits all. Have we done that? Or the opposite? Is our history not a horrific record of war, of man’s inhumanity? How is fraud or initiation of force, i.e., authoritarianism, reasonalble? But authoritarianism is the belief system that has prevailed under all religions since recorded history, for many millennia.

        It is time to use our brains instead of our fists. It is time to do the smart thing, the human thing, the life-enhancing thing and enbrace our minds, our rationality, to value reason as primary to our survival. That would make us moral for the first time in history.

  • Here is a perfect example of rule of law or at least some needed rule of law from an unexpected source to be sure !
    https://www.washingtonpost.com/investigations/how-drugs-intended-for-patients-ended-up-in-the-hands-of-illegal-users-no-one-was-doing-their-job/2016/10/22/10e79396-30a7-11e6-8ff7-7b6c1998b7a0_story.html?utm_term=.c2770f62f1f7

    and these as well

    https://www.washingtonpost.com/people/lenny-bernstein/?utm_term=.c8332e8e1cc0

    It is getting far more clear daily that our own government and all of its agencies are in fact corrupted to the core and more specifically at the top of all the agencies and little more than a giant criminal enterprise. Everything in these articles occurred under the BHO regime so their DOJ, DEA and FBI were nearly completely complicit because they all had to know about all of it. Just as they all have been in Hillary’s emails and the Uranium One scam and now the Mueller sham !~

    So now the question is what will Trump do with Session’s and the rest of these fools and criminals ? It is abundantly clear Sessions is NOT up to the task at hand because everything in those articles has been known for years now. This is the perfect example of the deep state apparatus at work with the corporatocracy here in USA. We shall see if Sessions actually has a clue or if he is just a tired old dog afraid of the big dogs on the porch ? All the while the real criminals walk freely ! This what the War on Trump is all about in spades. Unfortunately very few people actually grasp the full meal deal.

    http://www.downtoearththinking.com/the-war-for-our-minds-.html

    http://www.downtoearththinking.com/the-war-against-donald-trump-.html

  • Brilliant, every word of it.

  • NobodysaysBOO

    MUCH WORSE than just the crooks making PHONY laws for money, they let the crime gangs WRITE the LAWS!!!
    they appoint and PAY BIG MONEY to committees of insiders to write them then they vote for them at night in secret.

  • Government should not have the power to make law, but only to enforce it.

    • Q46

      The English Parliament’s primary role was to supervise and limit the power of the Executive… the King… and to protect the citizenry against the State by scrutinising any legislation proposed by the King to ensure it was not contrary to Common Law Rights.

      Parliament’s role as legislative body was intended to be minor, only to introduce legislation which might be needed to strengthen Common Law, clarify it or extend it and all legislation should obey the Common Law in letter and spirit.

      The same supposedly was true of US Congress, but on both sides of the Atlantic, things have changed. Parliament/Congress now in fact act to protect the State and those who run it from the citizens, trashing the Common Law and eroding Rights under it.

      And ‘rule of law’ has become a phrase meaning Government has permission to coerce the citizenry as it likes.

      • A parliament that does not legislate but only supervises. Novel idea. 😉

  • Q46

    ‘Countries which advanced more rapidly tended to have rule of law. Instead of arbitrary proclamations by governments…’

    Correct.

    ‘… the law in the west derived from common law.’

    Incorrect.

    The Common Law and rule of law developed in England and was established in what are now ‘The English Speaking Nations’ by the English colonists who went there, and forms the basis of some other Countries where it was established via the British Empire.

    A large part of the West, Continental Europe, for example, does not have the Common Law, it has law derived from Roman Code Law and Napoleonic Code and it does not observe the rule of law, although it claims so to do. Just look at the behaviour of the EU.

    Under Common Law, an individual is free to do anything unless the law says they cannot, under Code Law an individual is free to do only what the law says they can.

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