Cake: on the having and eating of it

by Chris Bertram on August 3, 2012

Hi there liberal rule-of-law fetishists!

Now that I’ve got your attention, I’d like to mention something that’s been bothering me. This idea that we all order our affairs under a system of predictable rules sounds very nice, but I do wonder whether it’s compatible with some of the other things that you seem to be signed up for. Some of you, I know, are worried about this so-called 1 per cent, and even about the 1 per cent of the 1 per cent: the people who own lots of stuff. Not only do they own lots of stuff, but they own the kind of stuff that is useful if you want to own even more stuff. That’s how it goes. And, of course, they also have the means to bring about a favourable “regulatory environment”, so that they get to hold onto that stuff.

Now I suppose you want to do something about that? Yes? One option would be to let them hang onto all their existing assets – after all, they got them justly (or at least non-criminally) according to the rules of the system they themselves helped to formulate – but to introduce a new system of rules (call it a “basic structure” if you like) that works to the greatest benefit of the least advantaged. Assume you have the knowledge to design it with the distributive effects you want (big assumption that!). Let that system grind away for long enough – a few generations perhaps – and you’ll have shifted things a little bit in the right direction. (Assuming, that is, that the 1 per cent don’t use their residual wealth and influence to throw you off-track as soon as you hit the first bump.)

I think you can see where I’m going by now. If you really want a shift in the distribution of wealth and income, if you really really want it, then realistically you’re going to have to use state power to do a bit of ex post redistribution. You’re going to have to take stuff from some people and give it to others. Doesn’t necessarily have to be that total Marxian expropriation of the expropriators: a comprehensive programme of debt cancellation would fit the bill. Life is about making choices: and you’re going to have to choose. Is it outrageous to dispossess someone of the wealth they acquired under the rules of the game; or are you going to say that substantive fairness sometimes matters more?

Now I know there are some wrinkles there. What about predictability? What about incentives? Sure. (Of course the predictability of stable property rules is a bit overstated: all those people who got their houses repossessed when the economy went bad didn’t see that coming!) You might have to duck and weave. You might have to convince property owners that you’ll only go so far and no further. But don’t kid yourselves that you can do the redistribution you want and treat the rule of law as absolute. If robbing the rich appals you, become a libertarian instead.

(UPDATE: Well I’ve clearly managed to confuse a bunch of people with this post. Probably a consequence of trying to make a serious point in a knockabout style. I had in mind not any old garden-variety idea of the rule of law but something a bit more specific, namely that society ought to be run according to predictable rules that provide individuals with certainty that their efforts won’t be nullified by state action, a view associated with Hayek but endorsed by Rawlsians. So mea culpa for that.)

{ 220 comments }

1

Rob 08.03.12 at 8:58 am

What?

The rule of law just means that the law is unambiguous and equally applied. A law which institutes an 80% property tax does not violate the rule of law. It’s clear, unambiguous, applies equally to everyone and everyone is able to predict how the law applies to them.

The opposite of “rule of law” is not “high taxes” it’s “arbitrary use of authority”. Unpredictable expropriations are bad because they’re unpredictable, not because they’re expropriations (and there’s the consequentialist argument that once you legitimise arbitrary expropriations, you might find that the winners and losers aren’t quite the people you had in mind – pretty much any “slum clearance” program ever would serve as an example).

I’m puzzled that this has bothered you. It’s really not very complicated and you’re a smart enough guy. Is this just a bit of a brainfart post?

2

Ray 08.03.12 at 9:10 am

Hi there, liberal arbitrary-use-of-authority fans!
Exactly what is it about the last -10- -25- -50- 200 years of history is it that convinces you that those in authority give a shit about redistribution?
If robbing the rich appeals to you, become an anarchist instead.

3

Chris Bertram 08.03.12 at 9:11 am

_The rule of law just means that the law is unambiguous and equally applied._

Rob, I think you’ll find that very many people subscribe to a conception of the rule of law such that a government passing a law expropriating non-criminally acquired property without compensation would be a violation of the rule of law.

4

Chris Bertram 08.03.12 at 9:14 am

Ray “Exactly what is it … that convinces you that those in authority give a shit about redistribution?”

Nothing that I wrote carries such an implication.

5

Tim Worstall 08.03.12 at 9:20 am

“What about incentives? Sure.”

Indeed. And the 20th century seems to tell us that killing all the rich people and taking their stuff does not increase the living standards of the poor as much as letting the rich keep their accumulated wealth (other than death taxes there’s not been really any “wealth” as opposed to income taxation) and working on the incentives to produce more income/wealth in which the poor get a share.

And in the grubby detail of such incentives: the reason to let the wealthy keep their gelt whether from their own entrepreneurial efforts or those of previous generations is that it tells would be entrepreneurs that we might well let them keep any that they make. Making that entrepreneurialism and this increase in income/wealth more likely to happen.

6

Tim Worstall 08.03.12 at 9:24 am

“Rob, I think you’ll find that very many people subscribe to a conception of the rule of law such that a government passing a law expropriating non-criminally acquired property without compensation would be a violation of the rule of law.”

Well, yes, it would be in certain circumstances in the UK. Because the UK has signed international treaties saying that such a thing would be illegal.

In the US it’s unconstitutional. It would be a “taking”.

7

Chris Bertram 08.03.12 at 9:24 am

_killing all the rich people_

A bit quick off the blocks with the _argumentum ad Stalinum_ there Tim. Are you in training for some kind of competition?

8

Andrew F. 08.03.12 at 9:26 am

Rule-of-law != law-never-changes.

The legislators may change laws in a manner consistent with the law governing the creation of new laws.

The weakness, imho, of your last post is the extent to which you rely on legislative intent and purpose in enabling other, non-legislative parts of government to expand the law as they may see fit. Legislative intent is a murky concept at best. The intentions and purposes of hundreds of elected politicians in voting for a law rarely are coherent.

And for another branch of government, deciding which intention or purpose to ascribe to the laws pass by the legislator can become an exercise in law-making itself, if that branch is unbound by the actual words that were actually voted upon and passed by the legislature.

I don’t see how your democratically accountable, rule-expanding enforcers are an improvement over democratically accountable, rule-making legislators. The latter, at least, has the feature of separating the rule-making from the rule-applying functions.

9

tax 08.03.12 at 9:29 am

The rule of law doesn’t mean that you can’t change the law. If you can do it in one direction – taxes on the wealthy, in particular estate taxes, have been lowered in the US – and there’s no problem with the “rule of law,” then surely you can do it in the other direction. So, sorry, I don’t see any problem here.

10

bob mcmanus 08.03.12 at 9:30 am

I think the rich and the poor understand alike that the rules and rule of law do not really protect them. You don’t hire a floor of expensive tax lawyers as a gesture of confidence in the system, although you will claim otherwise.

11

Nick 08.03.12 at 9:32 am

I am not sure I know of an emprical case in which a set of general rules have been designed to decrease inequality in the long run. So it is hard to be sure exactly how easy or difficult it would be. But my hunch is it would be quite do-able. You would want longrun moderate NGDP growth / inflation so that the rich can’t just hold onto their money and maintain its value that way, combined with a moderate land tax tied to property values.

Whatever it is that rich people do, whether living, owning, leasing out, eating, entertaining, lobbying or working in nice offices, it tends to happen (at least in the UK) on expensive real estate.

Of course, it would be possible for rich people to avoid such a regime by switching their wealth into something like art, gold and diamonds and moving to smaller places outside of expensive cities. But that would impinge rather a lot on their lifestyle and also free up more real resources for the rest. So the rich would either becomes less wealthy or, at least, start acting less wealthy.

12

Ray 08.03.12 at 9:33 am

Chris, your argument is that it is essentially impossible to formulate a system of rules for rapid redistribution. Even a set of rules that will lead to some redistribution over the course of 5 generations will most likely be stopped by the residual power of the 1%.

But if we throw away the rules, redistribution is just an edict away!

So… how come it is impossible for liberals to put in place rules that will allow for more rapid redistribution, but we can expect unconstrained state power to be in the hands of liberals?

13

Chris Bertram 08.03.12 at 9:33 am

Since I nowhere in the post assert that the rule of law means that you can’t change the law, I can’t see where the comments #8 and #9 are coming from. In fact, I specifically mention changes (in the basic structure) that would be in accordance with the rule of law. What you can’t do, for those who accept a basically Hayekian picture of the rule of law, is pass laws (for redistributive and other purposes) that expropriate property justly acquired under the rules of the system.

14

Daragh McDowell 08.03.12 at 9:35 am

Rob, I think you’ll find that very many people subscribe to a conception of the rule of law such that a government passing a law expropriating non-criminally acquired property without compensation would be a violation of the rule of law.

Those people would be wrong. There’s nothing about a preference for the ‘rule-of-law’ that prevents the imposition of wealth taxes, luxury consumption taxes, or other means of redistributing wealth and/or property.

Indeed, the whole OP as you have written it only works if you ignore the taxation and redistribution functions of the modern law-based state. Which is clearly a bit mad – so what’s the point?

15

Chris Bertram 08.03.12 at 9:39 am

_Indeed, the whole OP as you have written it only works if you ignore the taxation and redistribution functions of the modern law-based state._

Nope. Because taxes that are known about in advance, thereby permitting citizens to order their choices in accordance with them (choosing to work at a given rate of income tax, consume luxuries subject to a consumption tax) are not violations of the RoL. _Ex ante_ is OK, _ex post_ is not.

16

bob mcmanus 08.03.12 at 9:44 am

The ruling ideas may come from the ruling class, but those ideas, be they economic, political, social, or moral are protected and revered by the courtier and aspirational class.
Of course liberalism and Bourgeois democracy serve Capital.

17

RR 08.03.12 at 9:54 am

How about starting with upholding workers’ right of assembly? The distribution problems started with union bashing and a run-away financial system that momentarily kept increasing consumption going on despite stagnant incomes.

Incomes have to grow or the whole economy stagnates. That’s not about politics, it’s a rule of nature.

18

Chris Bertram 08.03.12 at 9:54 am

Look folks. There’s a reason why Hayek, in _The Mirage of Social Justice_ exempted Rawls from his strictures against “social justice”, and that was because Rawls’s programme involved embedding redistribution into the design of a system of rules knowable _ex ante_ by persons., thereby conforming with Hayek’s conception of the rule of law.

19

Armando 08.03.12 at 10:04 am

First, I’m not sure I agree that redistribution requires what you are vaguely asserting it requires – if the political will exists, I don’t see why a redestributive program might not work under an extension of the present taxation system (I realise that is idealist, but the OP does come close to asserting that any actual redistribution must violate the rule of law, which I’d like to push against).

Second, suppose we grant that serious redistribution needs bigger tools. Now unless you either have this sprung as a surprise on the populace, or enact it worldwide, it simply isn’t going to work. So essentially the rule of law problem arises in the midst of a serious democratic problem or is simply wishful thinking.

But OK, lets grant that serious redistribution can’t be made through progressive taxation, is enacted worldwide and after serious and long democratic debate in each country (I would think that such a serious change would be a real problem for me if it were decided without such a debate – as a routine exercise of power on the part of a civil servant or politician, say). Then I can see how that comes into conflict with the rule of law, as one is essentially rewriting the rule book, and I agree that that is a serious business. But not one I have a problem with as long as it is done through the democratic process through election and fully debated – “This is what we propose the new model of our society should be”.

What I don’t want is for George Osborne to have the power to do what you are talking about in reverse (I realise that things are pretty bad now, but I’m sure they could work out a nice regressive redistribution) at a whim, which is a power the OP is very close to suggesting he should have (but only to be used the other way).

20

BC 08.03.12 at 10:07 am

I’m not entirely sure on this, but I believe at least parts of the Bush tax cuts were ex post, applying to the current year’s taxes when the bills were signed. I’m wondering if this is a rule of law violation–the system of rules wasn’t knowable ex ante; citizens couldn’t order their choices in accordance with it.

21

tadhgin 08.03.12 at 10:09 am

Every year in the UK the chancellor fills up a red briefcase with a series of ways plans to “expropiate” (property taxes, windfall taxes, whatever you’re having yourself). HMRC goes about implementing them.The next year he (so far) does the same thing again… This was a real someone is wrong on the internet post!

22

Armando 08.03.12 at 10:16 am

For me, the model of how this sort of thing might be done legitimately is Labour’s 1997 “Windfall Tax” http://en.wikipedia.org/wiki/Windfall_Tax_(United_Kingdom)
which I had no problems with at all.

23

Chris Bertram 08.03.12 at 10:21 am

Armando, that shows us, I think that British Labour governments have been less committed to Hayekian conceptions of the rule of law than orthodox Rawlsians are. Good for them.

People might want to google “windfall tax” and “rule of law” by the way.

24

Mark 08.03.12 at 10:26 am

Isn’t the point that an absolutist adherence to the ROL is simply morally unattractive, because relatively minor deviations from the ROL may be massively outweighed by the moral good secured by those deviations. As Raz said long ago “sacrificing too many social goals on the altar of the rule of law may make law barren and empty”. And if one is a 1%er living in a plutocracy and accumulating wealth according to highly unjust rules, one might expect that property tax might be introduced in the future.

If we look to some of the classic debates on this in legal philosophy, (Hart-Fuller 1958) we could talk about retrospective punishment of actions that were morally abhorrent but legal in the Nazi regime, which sharpens the point that sometimes people can play by the rules and not get much sympathy when their actions later have a different set of rules applied to them. The same can be said for men who found that common law judges had the power to alter the rule that allowed them to legally rape their wives.

25

Chris Bertram 08.03.12 at 10:29 am

Mark: yes.

26

Daragh McDowell 08.03.12 at 10:32 am

Nope. Because taxes that are known about in advance, thereby permitting citizens to order their choices in accordance with them (choosing to work at a given rate of income tax, consume luxuries subject to a consumption tax) are not violations of the RoL.

Well if your objection to the status quo is (as I think it is) that vast accumulations of wealth lead to the accumulation of vast amounts of power (a concern I share) then you have to concede that said wealth has to be used in some manner to exercise power. You then tax the use. You can create very large scale redistribution by heavily and thoroughly taxing certain kinds of use (capital gains for instance) or simply large concentrations of wealth through stamp duties, sur-taxes and so forth. You can prevent people by moving money out of the country with capital controls. And you can announce this all at 5PM on Friday, say its going into effect at 12.01AM on Saturday and people won’t be able to do a thing about it.

Your suggestion that the wealthy will ‘Go Galt’ in response to some of these measures does not merit comment.

27

Nick 08.03.12 at 10:42 am

So are there many examples when deviating from the rule of law has been “massively outweighed by the moral good secured by those deviations”?

I don’t think punishing SS officers quite counts as the Nazi regime did not have a rule of law in anything other than the purely positivist sense (which is not the “rule of law” concept we are discussing here). Nazis and their collaborators didn’t have a legitimate expectation that their actions would be considered lawful in the future.

Did the windfall tax do enough good really? Isn’t it at least worth exhausting the possible policies of redistribution which are compatible with the rule of law before infringing it?

I think we already have a lower than optimal weighting of the rule of law in our current legal systems. And obviously, current infringements of the rule of law tend to be benefit the powerful at the expense of the disadvantaged.

28

Mark 08.03.12 at 11:00 am

Yes, Nick, everything depends on whether the moral value created by infringement outweighs (even if not massively) the moral value of not infringing the ROL. All things considered, including how to deal with uncertainties of effects/incentives/etc. And this analysis is complex.

There were some more complicated/interesting examples in Nazi Germany, but I take your point that often the Nazi’s simply ruled outside of law, perhaps even from a legal positivist perspective, and so people could not even say that law justified their actions at the time.

Bill Scheuerman has written a lot about how the powerful get special ROL-infringing treatment in domestic and international law, and has argued that the left should take the ROL more seriously for this reason.

29

Neville Morley 08.03.12 at 11:08 am

“You don’t hire a floor of expensive tax lawyers as a gesture of confidence in the system.”

Huh? Well, only if you define ‘confidence’ as “they’ll let me keep as much of my income as I want and screw the rest of you”.

30

Random Lurker 08.03.12 at 11:08 am

Can I have a reverse ad Stalinum argument?
Suppose I very much like the idea of a state that not only actively redistribute, but also directly runs a big part of the economy, statalizing stuff instead than privatizing it.
However I don’t want this to become an evil dictatorship. The way to avoid the evil dictatorship stuff is to instate some “freedom from the state” rights, such as the right of free speech, the right to not be discriminared in employment for political reasons etc.
All those rights require as a prerequisite that bureaucrats and prosecutors are bound to a strict interpretation of the law, that is the opposite of your arargumentation gument.

31

tax 08.03.12 at 11:15 am

Colour me really confused. If a government decides to institute an 89% tax on estates (where before the tax was 0%), then surely that is within the “rule of law,” and Chris accepts this is. Clearly this will be redistributive (in less than one generation). So I’m afraid I still don’t see what the problem is.

Chris B.: “Because taxes that are known about in advance, thereby permitting citizens to order their choices in accordance with them (choosing to work at a given rate of income tax, consume luxuries subject to a consumption tax) are not violations of the RoL. “

Neither are all taxes that are not known in advance. Suppose the U.S. instituted an unvoidable 89% estate tax in 2013. That would be a huge surprise. It’s not known in advance. But it’s not a violation of the RoL.

The closest I can get to understanding Chris B.’s position is that he wants to say that taxing past income with new laws is against the rule-of-law. That’s an of course, but that’s not the only, or even best, way to redistribute. After all one wants to redistribute present wealth, not past income. And one can tax present wealth by wealth taxes (e.g. an estate tax or an out-an-out wealth tax as in France), within the rule of law.

32

bob mcmanus 08.03.12 at 11:26 am

29: No the rich hire the lawyers (and politicians) in order to ignore, use and abuse the law in order to keep tour money. The “system” unless you want to include the extra-legal or some discursive rather than objective sense of law, neither protects or gets in the way of those with power and wealth. The law is something they use, never serve.

I read yesterday that the IRS simply doe not bother auditing billionaires. It costs far too much time and money for the marginal gains.

33

Chris Bertram 08.03.12 at 11:28 am

tax: I agree that a heavy estate tax would be compatible with the rule of law as understood above. Uncompensated expropriation of the property of existing living persons (or corporations for that matter) clearly isn’t, so I think that rules out wealth taxes.

So you are correct to think that there’s a way of conducting a fairly radical redistribution of wealth away from the 1% within one generation (assuming that there aren’t other ways for them to avoid such a tax) that’s formally consistent with the rule of law.

I doubt, however, that such a slow redistribution would be sustainable, since the 1% would organize to thwart it. There’s a passage in Oskar Lange somewhere about the perils of gradualism where he says that you need to act quickly to break the power of capital or they’ll gradually get their act together and push you back. So, if you like, consider the claim slightly modified: it isn’t socially and politically possible to effect a radical redistribution away from the 1% in a reasonable timescale in a manner compatible with the Hayekian conceptions of the rule of law that many Rawlsian appear to endorse: you’ve got to get their stuff off them quicker than that.

34

P O'Neill 08.03.12 at 11:36 am

There’s a country of interest to a few commenters here with its own extreme rule of law behaviour recently. That would be Ireland — deciding by itself in September 2008 (and not at the behest of the ECB as later mythology would have it) that senior unsecured bondholders whose money was already long since sunk into insolvent banks must get paid back no matter what.

Excellent on rule of law grounds. Disastrous for incentives, since the obvious unsustainability of it all scared off would-be new lenders, precisely the people who could have been attracted at the expense of the legacy creditors. And the distributional consequences were big banks and investment funds getting their money, paid for by public spending cuts.

35

bob mcmanus 08.03.12 at 11:37 am

The poor and the working class should, and often do, have the same attitude toward the law that the rich do. “Can’t assemble here,” “Can’t print this,” “no general or wildcat strikes.” The revolution comes when the proletariat gives up bourgeois attitudes of electing representatives to write laws in their favor, which can only happen on the margins and provide crumbs not power, and also gives up on bourgeois liberals who are in the way and useless, and whose entire identity is based on embedding the ruler’s ideas.

36

bob mcmanus 08.03.12 at 11:44 am

Steve Randy Waldman has belatedly discovered Michal Kalecki, and has a very interesting post on redistribution and the quite rational incentives for the rich to maximize their wealth and power at the expense of everyone else. He links to Peter Frase’s “Four Futures” post over at Jacobin.

I suppose that’s enough from me.

37

Daragh McDowell 08.03.12 at 11:46 am

@P O’Neil

But as many commentators in the Republic have already pointed out (Fintan O’Toole several times IIRC) the government could have changed the law in advance of, or as a contingent element of the guarantee.

38

tax 08.03.12 at 11:54 am

“Uncompensated expropriation of the property of existing living persons (or corporations for that matter) clearly isn’t, so I think that rules out wealth taxes.”

Property taxes are wealth taxes, i.e. they are assessed on the value of a house or other property, not on its income flow. That’s clearly permissible and within the rule of law, right? Raising property taxes, or making property taxes progressive, would help redistribution.

In any case, I don’t agree with the premise that wealth taxes are per se against the rule of law. That’s a pretty bizarre use of “rule of law” in my eyes. France has a wealth tax, and it went through all the appropriate legal hurdles. While a French-like wealth tax would be unconstitutional in the U.S., I think, a Constitutional Amendment would make it legal and thus surely it’s within the “rule of law.”

39

christian_h 08.03.12 at 12:04 pm

Agree with Chris, but like many similar posts on this blog it seems to me an excellent argument against reformism (or its close relative gradualism, as Chris writes in 33.), but then somehow it stops short of the necessary conclusion. Which is indeed, among other parts of a revolution, that we need to “eliminate rich people as a class”. Some killing of resisters among the rich may be included in this, sorry Tim.

40

tax 08.03.12 at 12:10 pm

“it isn’t socially and politically possible to effect a radical redistribution away from the 1% in a reasonable timescale in a manner compatible with the Hayekian conceptions of the rule of law that many Rawlsian appear to endorse”

I’m not sure why you add everything after “in a manner.” I don’t think it’s socially or politically possible [in the U.S.] to effect a radical redistribution away from the 1% full stop.

41

chris 08.03.12 at 12:19 pm

While a French-like wealth tax would be unconstitutional in the U.S., I think

Why? A tax is not a taking, that’s been established for centuries.

Anyway, if you implement moderate inflation (not Zimbabwe, but even something like 5% would be significant over a decade or two), you create a Red Queen race where the wealthy can’t stay wealthy by sitting on their wealth — they have to keep adding to it, which is income and therefore clearly taxable under any standard.

42

rea 08.03.12 at 12:22 pm

very many people subscribe to a conception of the rule of law such that a government passing a law expropriating non-criminally acquired property without compensation would be a violation of the rule of law

You’ve formulated a rule against uncompensated takings so broadly as to rule out taxation. Very few people think the government can’t legitimately tax. There may be extreme cases in which distinguishing taxes from takings requires close reasoning, but ordinarily, it’s fairly easy to tell the diference.

43

Nick 08.03.12 at 12:24 pm

If it is a question of feasibility rather than possibility, then you have to measure the feasibility of abrogating the rule of law without descending into a nasty authoritian society versus the relative feasibility of gradual reform. As people have been pointing out, it isn’t even a question of the reforms being that gradual (outside of the US). Property taxes would do the job and start working immediately.

44

tax 08.03.12 at 12:26 pm

“Why? A tax is not a taking, that’s been established for centuries.”

The U.S. needed an amendment for an income tax. Surely the Supreme Court would not let a wealth tax pass unless an amendment specifically allowed it.

45

Matt 08.03.12 at 12:28 pm

“If robbing the rich appals you, become a libertarian instead.”

Better summary: “If you care more about abstract principles than people, become a libertarian.”

Even better: “If you’ve decided that ‘liberty’ is something that should be rationed according to material wealth, become a libertarian.”

46

Chris Bertram 08.03.12 at 12:28 pm

rea: I don’t think I have done that, in fact, since your formulation suggests an entitlement to the quantum of pre-tax income that is later taxed. But if there is no such entitlement, then the government isn’t, in taxing, expropriating what was non-criminally acquired (or indeed expropriating at all). In any event, the key distinction I want to make is between rules that are in place _ex ante_ the activity (as all income, sales etc ) and seizure _ex post_.

47

rea 08.03.12 at 12:31 pm

Chris @ 41–the reason a wealth tax would be unconstitutional in the US (at the federal level anyway) is that the constitution says: “direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers” There’s a specific constitutional amendment that allows income taxes; otherwise they would violate this provision.

48

Daragh McDowell 08.03.12 at 12:33 pm

Shorter christian_h @49 – ‘unfortunately justice demands that some unspecified abstract people who aren’t me or people I know must be arbitrarily murdered. I will pretend to be upset about this’

49

christian_h 08.03.12 at 12:42 pm

Oh look it’s comment 48 distorting… comment 49 that hasn’t been posted yet. And it goes downhill from there…

50

Jro 08.03.12 at 12:42 pm

Existing rules of the game hold that tax rates can be changed periodically. There’s nothing that undermines the integrity of our institutions about changing tax rates.

51

JW Mason 08.03.12 at 12:42 pm

don’t kid yourselves that you can do the redistribution you want and treat the rule of law as absolute. If robbing the rich appals you, become a libertarian instead.

Now we’re getting somewhere!

52

christian_h 08.03.12 at 12:44 pm

(There’s really few things as impressive as the liberal’s ability to be self-righteous while their favourite liberal states are murdering, maiming, enslaving and generally f****g over people around the world.)

53

rea 08.03.12 at 12:51 pm

I don’t think I have done that, in fact, since your formulation suggests an entitlement to the quantum of pre-tax income that is later taxed. But if there is no such entitlement, then the government isn’t, in taxing, expropriating what was non-criminally acquired (or indeed expropriating at all). In any event, the key distinction I want to make is between rules that are in place ex ante the activity (as all income, sales etc ) and seizure ex post.

I’m not actually attempting to formulate a rule distinguishing taxation from expropriatation–I’d need to spend several hours with my nose in Supreme Court reports before venturing to attempt that. My recollection is that the US Supreme Court has, in fact dealt with the issue, although that’s hardly my area of specialty as a lawyer. But I’m fairly confident that a distinction between ex ante rules and ex post facto rules is not the whole story–taxes based on the current market value of real property are very common in the US, and neither the value nor the rates are fixed as of the date of the purchase of the property.

54

JW Mason 08.03.12 at 12:55 pm

I think those people arguing that an arbitrary level of redistribution can be achieved through RoL-compatible taxes might ask themselves if the rich people to be redistributed from would agree. The phrase “confiscatory taxation” exists, so somebody thinks it’s a thing.

55

Nick 08.03.12 at 1:04 pm

@51 Indeed. But perhaps the treatment of non-citizens around the world by even “liberal” states shows the sort of treatment we could fear if we lacked the rule of law within the states. You can get a tiny little taste of it when you go to an airport. Or by walking in front of a police officer in an “annoying way” or something.

56

Daragh McDowell 08.03.12 at 1:04 pm

@christian_h

Congrats – you’ve successfully identified a typographical error. My criticism of your glib declaration that “Some killing of resisters among the rich may be included in this” is obviously invalid as a result.

And while it’s always nice to be told what my opinions on various states are (FWIW – I’m actually not a fan of US or UK foreign policy in both its economic or military variants) I’m not sure I’m quite ready to accept accusations of self-righteousness from someone advocating the ‘elimination’ of social classes, given that for professional reasons, a large number of my friends are from former Soviet states – that is members of their family within living memory actually experienced the policies you seem to be endorsing. Beyond the initial brutality of having family members slaughtered for the crime of owning a pig or belonging to the professional classes, there was the general stigma of being related a vrag naroda limiting professional ambitions and doing all manner of psychological harm not only to the children, but grand children and even great grand children, of the men and women who were tortured and shot due to the whims of those who think like you.

As a result, I tend to find the expression of such sentiments deeply unsettling and I have about as much respect for the Internet International as I do for their neo-conservative Keyboard Kommando brethren. You both talk so airily about the sad necessity of murder in such a way that the rational reader can’t help but question your motives.

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Chris Bertram 08.03.12 at 1:05 pm

rea: that’s right of course and taxes on land etc do look hard to fit in. Since even some libertarians think land taxation is just (as a kind of rental on use of common space) it may be they are just different.

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Chris Bertram 08.03.12 at 1:07 pm

Daragh: get a grip.

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Daragh McDowell 08.03.12 at 1:11 pm

Chris – If you’re comfortable with comments like ” among other parts of a revolution, that we need to “eliminate rich people as a class”. Some killing of resisters among the rich may be included in this, sorry Tim.” On your blog, that’s fine. Its your playground.

I’m not. I know actual people who have actually suffered significantly from the result of such thinking. They’re good friends of mine. I think that casual endorsements of murder should be pushed back against. I also think its right to question the motives of people who make them.

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Katherine 08.03.12 at 1:15 pm

I think the rich and the poor understand alike that the rules and rule of law do not really protect them.

I daresay that people living in places without the rule of law, which I’m guessing is not you, might venture to disagree.

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Chris Bertram 08.03.12 at 1:15 pm

Daragh, if I were to write “you’re first up against the wall when the revolution comes!” I hope you’d take it as the joke it would be intended to be. Or is The Hitchhiker’s Guide now on the Codex McDowellis as impermissible humour?

62

RobW 08.03.12 at 1:19 pm

“all those people who got their houses repossessed when the economy went bad didn’t see that coming”

You have got to be kidding me here! How many of those people took out mortgages based on unrealistic expectations (on their own part!) that they could pay back a zero money down, interest only, variable rate mortgage. Give me a break with this machinery of capitalism oiled by the blood of the workers bit. If you want to give everything away to charity, go right ahead, but stay away from me and mine thank you very much.

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Daragh McDowell 08.03.12 at 1:20 pm

Chris – christian_h’s original post did not, in fact, appear to be humorous but rather a serious argument that you’re post does not go far enough. His follow ups to my criticism reinforced this interpretation. I’m fine with ‘first up against the wall’ humour (the URL of my first blog was something similar.) I’m less fine with people saying that people who say such things in apparent seriousness are ‘only joking.’

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Barry 08.03.12 at 1:40 pm

Chris Bertram on August 3, 2012

“Hi there liberal rule-of-law fetishists!”

Chris, pulling lame jokes to cover up for a dumb idea does not make you or your idea sound smarter.

65

Josh G. 08.03.12 at 1:41 pm

If you really want a shift in the distribution of wealth and income, if you really really want it, then realistically you’re going to have to use state power to do a bit of ex post redistribution. You’re going to have to take stuff from some people and give it to others.

Even if you believe that a wealth tax inherently violates the rule of law (which I consider an absurd proposition), we could just wait for them to die, and hit them with a massive estate tax. Inheritance is a form of income to the heirs, so taxing it is no more problematic from a rule-of-law perspective than taxing any other form of income.

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Tim Worstall 08.03.12 at 1:45 pm

This probably belongs on the earlier thread but on the subject of taxes and politics:

http://taxprof.typepad.com/taxprof_blog/2012/07/argentine-president-.html

If you want to publicly criticize Argentina’s government, make sure all your tax filings are in order.

That was the thinly veiled message President Cristina Fernández de Kirchner sent Wednesday near the end of a speech broadcast on all national television and radio stations. Reiterating her standard criticism that media “operations” are depressing Argentinians with gloom-and-doom stories, she derided an article published last Sunday. … In the story, the owner of a real-estate agency, one of its directors and an employee were quoted complaining that recent government measures essentially blocking the sale of foreign currency to citizens had paralyzed their business.

Kirchner then dropped this bit of information: the firm in question hasn’t filed taxes since 2007 and neither has the director quoted in the story, whom she named.

How did she know? She had called up the head of the tax agency to ask, and this, too, she openly revealed on Wednesday’s broadcast. … [B]y saying that she had called the taxman out of supposed concern for the real-estate agency, she unabashedly established cause and effect: you criticize me; I punish you.

Perhaps not quite the power we’d like to see politicians have?

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Barry 08.03.12 at 1:46 pm

Nick 08.03.12 at 9:32 am

” I am not sure I know of an emprical case in which a set of general rules have been designed to decrease inequality in the long run. So it is hard to be sure exactly how easy or difficult it would be. But my hunch is it would be quite do-able. You would want longrun moderate NGDP growth / inflation so that the rich can’t just hold onto their money and maintain its value that way, combined with a moderate land tax tied to property values.”

The New Deal would be a good example. Of course the right has spent several decades explaining that We Can’t Learn Anything From That, and that we should look at the freedom and growth under Pinochet, the libertarian paradise of Singapore, The Celtic Tiger Ireland, Iceland, the Baltic States, the Bush Boom and so on.

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LFC 08.03.12 at 1:47 pm

Mark @28
Scheuerman has written a lot about how the powerful get special ROL-infringing treatment in domestic and international law, and has argued that the left should take the ROL more seriously for this reason.

I’m interested in a cite here, if you have it. thanks.

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Patrick S. O'Donnell 08.03.12 at 1:49 pm

The problem in the U.S. of course is that libertarians and other free market fanatics, as well as non-libertarian Liberals, will invoke the “takings clause” of the Fifth Amendment, i.e., they’ll remain mired in rule-of-constitutional-law fetishism. Overcoming this would require a new amendment that trumps this specific clause, and given the virtually insuperable ideological and political obstacles to amending the Constitution, that is unlikely to occur, to put it blandly. Or, to put it otherwise, it’s as likely as a member of the Tea Party being discovered who is well-versed in the literature of the so-called analytical Marxists. The only other avenue of change is invocation of that democratic fiction, the sovereign constituent power of “the people” or popular sovereignty (it’s a fiction if only because, as Russell Hardin has explained, constitutions are typically not the products of ‘the people’ in anything but a metaphorical sense) by way of an extra-constitutional revolution (one that might still conceivably be, in some sense, law- or constitution-respecting). As Hobbes well understood, it’s a question of how “the people” (i.e., some group thereof) can, or might, turn itself (once again) into a moral and political authority (and of course Hobbes tried to make the subsequent political and legal authority ‘absolute’ so as to make rebellion or revolution unlikely; but the power of the sovereign is nonetheless conditioned on the performance of its principal reciprocal obligation: protection of its subjects, or that which justifies obedience, for Hobbes granted there are certain natural rights or a set of what today we call non-derogable norms). If we follow Carl Schmitt, we claim that this constituent power can reassert itself from within the constitutional order, but if we’re true Liberals, the question of constituent power cannot arise, within the Liberal account of the rule of law (at least in the U.S. case, I can’t speak for other constitutions). I would think, then, one question that follows is whether this constituent and extra- or non-constitutional power of the people is capable of existing as some form of moral community in the “state-of-nature” or must it succumb to a “war-of-all-against-all” prior to re-constituting itself into a new legal and political order.

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Freshly Squeezed Cynic 08.03.12 at 1:53 pm

the reason to let the wealthy keep their gelt whether from their own entrepreneurial efforts or those of previous generations is that it tells would be entrepreneurs that we might well let them keep any that they make.

I somehow suspect that the obvious negative socio-economic effects that come about due to large concentrations of inherited wealth would be more damaging to the entrepreneurial spirit than a mild “death tax”.

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bob mcmanus 08.03.12 at 1:53 pm

I daresay I find it not as easy to separate community cohesion, general moral sentiments, institutions, and social norms from the pieces of paper that are my supposed shield and lifeline. Greece and Spain are lawful countries, and the poor are not doing so well. Bandits of any class, well the tail classes, are not deterred by the legal code.

If you choose to say that the “law” includes the items in my first sentence, you have opened a very wide door for me.

As far as christian_h and daragh: I personally believe that a very large, if only temporary, melioration of inequality, can be achieved short of cataclysm. I don’t need everything they have, and I don’t need it right away.

However I think this is only achievable via a credible threat of social disorder, not as a last resort, but as the initial negotiating position. Social disorder must be internalized and become part of the ideology, which entails of course a radical opposition to liberals and liberalism.

In practice, I believe that only a limited demonstration of social disorder and lawlessness would be necessary in order to make the threat credible. The general strikes after WW II, Tahrir Square. How much is necessary is an empirical and local question.

The problem, christian_h, is that you will have to go through so many employees of the plutocrats before you start feeding the guillotines.

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OCS 08.03.12 at 1:57 pm

Maybe I’m missing something here. It might be against the rule of law to expropriate mansions, seize bank accounts, and authorize the howling mob to loot Park Avenue penthouses. But isn’t any redistribution going to happen through changes in the tax system?

I’m a middle class Canadian. I pay income taxes, property taxes on my house, and sales taxes. The rates can be and are changed by my democratically elected government all the time.

So I don’t see how it can be outside of the rule of law to institute, say, a 90 percent tax on all income above $1 million, or a property tax of 90 percent on all property over $2 million, or a graduated sales tax on big ticket items, or a big estate tax, etc. It’s just a matter of changing the rates. Even if we institute new taxes, so what? New taxes are nothing new.

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Patrick S. O'Donnell 08.03.12 at 2:35 pm

OCS makes a good point, and should remind us that we’re not dealing with just rule-of-law fetishists but those (libertarians) who believe in absolute moral property rights (wherein property is somehow a pre-political moral concept and thus there are ‘natural’ rights in property) such that each person “has an inviolable moral right to the accumulation of property that results from genuinely free exchanges.” On this view, no compulsory taxation is legitimate. A less extreme, “desert-based” form of libertarianism has a host of other unique problems (discussed in Murphy and Nagel’s The Myth of Ownership: Taxes and Justice, 2002). Most libertarians, of which there appear to be an increasing number inside and outside the Republican Party in the U.S., believe government’s exist only to protect certain basis individual rights and that government “interference” with economic liberty through taxation is only justified when use to support a “minimal State,” that is, national defense, a judiciary, and a police force: all of this primarily by way of preserving enforcement of property and contract rights! Perhaps the political climate will change in support of a return to truly progressive tax rates, but one must wonder if the powers-that-be will allow rates that amount to meeting some significant threshold for meaningful ex post redistribution.

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bianca steele 08.03.12 at 2:37 pm

Chris Bertram’s argument would seem to be compatible with an argument that high levels of inequality are better for most people (who’s going to pay for the art now that nobody’s building cathedrals anymore? why can’t we just have liberal-minded rich people who will do good things for the poor?), so redistribution should go in a somewhat different direction, in order to achieve the accordingly somewhat different results.

But of course everyone who’s been reading CT for a while knew this already.

And this being the Internet, there’s the ever-looming issue of IP law lurking behind any question involving property rights. Like land, there is a potential disconnect between use and ownership. Unlike land, historically, IP has been widely dispersed and decentralized, both in use and in ownership. Regarding the OP’s implications for current debates in IP reform, I am not sure which “redistribution” scheme the plurality of readers would actualyl have in mind.

There’s also the kulak thing, but nobody likes kulaks anyway.

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christian_h 08.03.12 at 2:39 pm

Daragh, a revolution is needed. In fact your beloved liberal capitalism is a result of a bunch of them, and I guarantee they didn’t go peacefully. Your political fellow travellers are murdering as we speak, and no this is not a bug of your preferred system – it’s a feature. But this self-righteous denial of history is, of course, par for the liberal course. Add a liberal (pun intended) sprinkling of moralizing nonsense and deliberate misrepresentation of other people’s arguments, and we have you. The difference between us is that I don’t desperately pretend that the politics I support are peaceful and pain-free for everyone. It’s called basic honesty.

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Daragh McDowell 08.03.12 at 2:42 pm

@bob mcmanus – Ahhh, now we’re getting somewhere. Funnily enough as a self-identified liberal, I’m quite happy with the threat or use of social disorder as a negotiating tool. I might call it ‘civil disobedience’ but that’s splitting hairs. I also think that it can be used in different ways – lets call them positive-intentional (‘we’ll protest Vodafone and find other means of disrupting its business if it continues to avoid tax’) and negative-consequentialist (‘if the government continues to pursue policies that drastically increase inequality, riots are the inevitable result.’) I would argue both are extremely different from a policy of ‘killing the rich and taking their stuff.’

I also don’t think this is incompatible with the ‘Rule of Law’ since most theorists in this area (to my knowledge) accept that broad-based social acceptance of the ‘rightness’ of certain laws is a necessary condition for both their implementation and legitimacy. Mass civil disobedience demonstrates, quite forcefully, that this consent has not been given.

However the same tradition of protest has often relied on two key factors – a) accepting legal sanction for these acts, if only to show that said sanctions are unjust b) operating in a manner that, while seeking to disrupt certain key economic or state functions, is not directly violent to other human beings.

I’d also quibble with Tahrir square as an example, given that it was more of an act of revolt against an unjust regime (incidentally, a regime whose architects implicitly rejected rule-of-law in the interests of social justice. How’d that work out?)

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Patrick S. O'Donnell 08.03.12 at 2:43 pm

I’ve just started to read it, but the question of IP and global justice is the topic of a new book by Madhavi Sunder: From Goods to a Good Life: Intellectual Property and Global Justice (Yale University Press, 2012). On first glance, at least, it looks promising.

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Daragh McDowell 08.03.12 at 2:55 pm

Chris Bertram – may I respectfully request you read christian_h’s latest missive and then reevaluate a) his humourous intent b) who it is exactly that needs to get a grip?

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bianca steele 08.03.12 at 2:57 pm

Patrick, thanks.

I’ll add, before I go offline for a little bit, that if we doubt the idea that IP ownership can be widely distributed, yet at the same time not universally distributed (i.e., there is private ownership of IP, a right not to be copied, no duty to share, etc.), corporate ownership is not the only–not even by any means the most obvious–alternative. Information could be owned by the government. Information could be owned by a corporatist-style organization like (a non-government version of) the Royal Society, or the IEEE, or the AAUP, or the IAEA. I’m sure there are other alternatives.

I’m absolutely speaking only for myself, but I actually have never met anyone on the “corporate” side of the IP debates who believed information is owned in a strict sense by corporations (except possibly someone who may have believed it was owned by a company other than the one they worked for, a more successful rival). Not one of them was a “socialist,” though.

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ask 08.03.12 at 3:03 pm

A conception of rule of law that accepts that Hayekian principle gives away most of the game. Property rights themselves depend on state coercion for enforceability. It’s not clear why taxes or a different set of property rights should be characterized as fundamentally different in kind–it’s all the state using its power to direct how/where surpluses are allocated.

And there’s certainly nothing about the way legal rules function that would prevent different allocations. It’s not a natural or neutral implication of “rule of law” that unearned incomes (i.e. rents that flow from land, capital equipment, other people’s labor based on how we define property rights) must be privatized rather than distributed according to democratic and constitutional legislation. Just because some people think rules that benefited them are unchangeable doesn’t mean those are the rules of the game forever or that all other rules are inherently illegal.

Whether any of these changes are likely to come about, in light of the way power is exercised in our legal system, is another question. And i tend to agree w bob mcmanus there.

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Chris Bertram 08.03.12 at 3:04 pm

Daragh: his humour may have been dark, but with the “sorry Tim” it was definitely there. His claim that your own politics includes its share of (hidden and unacknowledged) violence isn’t an unreasonable rhetorical move. I suggest you take it on the chin instead of acting all offended.

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Anderson 08.03.12 at 3:19 pm

Wait. I thought Chris Bertram was some sort of professor of political philosophy, not someone fundamentally confused about the meaning of “the rule of law.”

CT needs to improve its security measures to prevent hackers from posting under the names of its members. Obviously, there’s a great risk of embarrassment.

… Pretty freakin’ obviously, in the United States for example, the possibility of future tax increases, which may affect property already obtained, is part of the set of operating assumptions.

Perhaps this is Worldwide Pretend Hayek Was Right Day, and I’m just behind on the joke?

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Brett Dunbar 08.03.12 at 3:21 pm

The political system is at least somewhat interested in re-distribution. The overall effect of the tax system in the UK is that the bottom 65% or so of the income distribution are net beneficiaries, the total value of the benefits they receive exceed the total tax they pay.

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christian_h 08.03.12 at 3:21 pm

Ok so to be clear: I would much prefer it if we could achieve radical change without any violence. I just doubt it’s possible – the powerful usually don’t surrender without a fight – and won’t pretend otherwise. This does not mean I’m “calling for murder” any more than someone supporting Obama’s reelection despite the drone warfare etc. is “calling for murder” or someone who supported the 1989 revolutions in Eastern Europe was “calling for” radically lower life expectancies in Russia. And I was being ironic in my original comment – I thought my use of the Stalinist phrase “eliminate … as a class” gave it away…

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Daragh McDowell 08.03.12 at 3:24 pm

In other words, you’re not joking. And I’m not offended. I’m just kind of appalled.

86

christian_h 08.03.12 at 3:32 pm

Like everything in real life (as opposed to philosophy textbooks) the “rule of law” is contested ground. Its fetishization (I believe Chris used this term very precisely, in relation to what was argued in the previous post) is not a neutral act; rather, it is a way of hegemonizing current social practices and power relations.

Current law, for example, makes just about all practices of social disruption illegal in many places (certainly in the US), including civil disobedience, strikes and such. On the other hand, current law legitimizes the application of power by (excuse the jargon) the ruling classes. The claim that the power of the powerful could be broken within current law – by raising taxes or whatever – is thus exposed as a convenient fiction. Of course the liberal form of our politics does not as such make the achievement of a more just and equitable society “illegal” – but it does make it all but impossible without first transcending law. This is not exactly new – most of the social achievements that we have came about via the application of social disruptive power that was at the time illegal.

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bob mcmanus 08.03.12 at 3:33 pm

76: We’ll then disagree I’m afraid, less in actual practice then in theory?

I would argue both are extremely different from a policy of ‘killing the rich and taking their stuff.’

while seeking to disrupt certain key economic or state functions, is not directly violent to other human beings.

This is to me a question of material conditions and resources, tactics and strategy, not any kind of principle. Of course the strong preference is for non-violent means as long as they are plausible and effective. And I understand that a commitment to non-violence is considered by many to be itself a tool of counter-hegemony.

But I am kinda Schmittian, in that I believe that a community of action only forms at the exact point that “Whatever it takes” becomes their law. Our opposition is already there.

And I will not cluck my tongue at the OWS protestor shoving back a cop, except perhaps at her quixotic foolishness.

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christian_h 08.03.12 at 3:35 pm

Yes Daragh, being honest about the implications of one’s politics can be pretty appalling – history often is pretty appalling. It’s still preferable to lying to yourself.

89

Quickly 08.03.12 at 3:37 pm

If robbing the rich appals you, become a libertarian instead.

“appalls you” not “appals you”

90

Quickly 08.03.12 at 3:38 pm

On appals v. appalls: nevermind, I guess it’s a British thing.

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Sebastian H 08.03.12 at 3:47 pm

So let’s combine those two posts. Chris wants a dramatic increase in the power of government, and he thinks it (for *very* important moral reasons) it shouldn’t be hampered by the rule of law, and at least one dimension of that should involve large increases in the discretion of ‘enforcers’ including their ability to retroactively make legal things illegal.

The weird thing about this is that normally if I saw myself arguing against that view, I’d suspect I was blatantly straw manning and trying to argue in bad faith by tarring the other side with transparently silly ideas.

Chris, surely you understand that in the real world such powers would be used against the poor and against minorities far more often and with greater focus than they would be employed against the rich or powerful or well connected. You can’t really imagine that theses powers would only be employed by your side and only for good purposes. Can you? If you can’t imagine leftists with bad side motivations (racist or anti science or just nursing unjustifiable grudges) surely you can at least worry about rightists enforcers misusing these powers?!?

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rea 08.03.12 at 3:57 pm

Perhaps not quite the power we’d like to see politicians have?
Tim @ 66: there is a difference between a politician having the tax returns of her political opponents audited (bad) and noticing that her political opponents hadn’t bothered to file tax returns since 2007 (unexceptional).

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Tim Wilkinson 08.03.12 at 3:59 pm

Arguments against the ‘rule of law':

1. the US constitution is right-wing

2. during a revolution, it would (obviously) be interrupted

3. Some Austrian dilettante polemicist mentions the phrase in one of his screeds

Arguments for the rule of law:

1. It need not limit the ability to levy taxes

2. Do you feel lucky, punk?

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Sebastian H 08.03.12 at 4:07 pm

Rea, I sort of agree with you, but sort of don’t on the tax returns issue. The information discovered in Tim’s example was of the unexceptional kind. The impulse to call the tax authority about your political opponents when they gain prominence is bad.

It strikes me that one of Chris’s major mistakes in these two threads is to attack the rule of law and propose replacing it in certain instances with enforcers who are allegedly subject to democratic accountability without realizing that one of the real-world functions of the rule of law is to provide accountability as to the legislature (to make clear laws) and between the legislature and the enforcers (to enforce the laws that have democratic backing as opposed to their own personal animus or impulse).

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Anarcissie 08.03.12 at 4:11 pm

It seems to me that as long as there are any significant differences between persons in terms of power and wealth, the system that sets up and maintains those differences will also tend to concentrate and centralize them, on the general principle of ‘them that has, gets.’ What militates against this increasing concentration is not liberalism or democracy or faith in Jesus but system-disrupters like war, invasion, mass crime, sudden technological advances, natural disasters, plague, and so on. For example, the Black Death killed off so many people that the price of labor rose sharply, to the great individual and collective advantage of the peasant and working-class survivors. Another example is the European invasion of the Americas, which let millions of people more or less off the leash for awhile, at the expense of the original inhabitants of course. Once the general system settles down, those with a talent for acquiring and exercising power resume their practices, the concentration of power resumes (we’re seeing this now) and we must await the next catastrophe.

In the present case, it could be that the power-wielders are too incompetent to keep their system going. so there is a kind of uncomfortable hope there. But expect them to construct a more free and egalitarian system under any circumstances in which they remain in control? Why? How?

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Chris Bertram 08.03.12 at 4:14 pm

Ah Sebastian, you express my thoughts so much better than I ever could myself …..

Now where was I?

Look, there’s a parallel in some of the issues surrounding just war theory, namely, can you achieve your proclaimed objectives whilst keeping within the procedural limits you’ve set for yourself. You could answer: Chris is wrong, the just and egalitarian republic is (in practice) is fully attainable whilst staying within the procedural limits set by Hayekian conceptions of the rule of law. You could say: too bad, we have to respect those procedural constraints and give up on massive redistribution.

Now since lots of people in the United States think of themselves as being on the “left” whilst being no further to the left than, say, Kenneth Clarke (Matthew Yglesias would be an example), I don’t find it surprising that _they_ tend to think the objective they endorse is attainable consistent with the procedural limitations. But that’s because they’ve defined the objective down. For those whose egalitarian ambitions are greater, there’s more of a problem. Sebastian says that government that violates the Hayekian ideal will inevitably harm the poor more than the rich. Nice rhetorical move that, but I’m not buying, because I think that respecting this procedural constraint ensures that the poor are always with us: we need to get the stuff off the rich.

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Jim Harrison 08.03.12 at 4:26 pm

The rule of law inevitably breaks down where there is too great a disparity in power and wealth between contending parties, which is why contracts with labor unions, pension commitments to government workers, and treaties with Indian tribes are so fragile and our courts currently dispense administration rather than justice to underclass people. Since money is the most salient dimension of power in the modern world, wealth redistribution is not the antithesis of the rule of law; it’s the precondition of the rule of law.

98

Ben A/baa 08.03.12 at 4:28 pm

Chris, I think this is one where you should just admit that your original post made no sense. (unless it’s just trolling, in which case fess up)

1. Inheritance tax increases are compatible with the ROL in a democratic republic like the US
2. Income tax increases are compatible with the ROL in a democratic republic like the US
3. Income tax increases are compatible with the ROL in a democratic republic like the US
4. Heck, even the institution of a direct wealth tax is compatible with the ROL in the US. Maybe you’d need to pass an amendment, but fine.

Your gripe is actually that your preferred policies have no chance of being democratically enacted. That’s not a problem with the rule of law.

99

Chris Bertram 08.03.12 at 4:42 pm

Ben A. Well of course I’m sorry if it made no sense to you. Your point seems to be that we could pass a law enacting redistribution. Sure we could. But a law expropriating the rich of most of their existing holdings and redistributing to others would not conform to the Hayekian ideal of the rule of law. To quote from _The Road to Serfdom_ (ch 6)

bq. Under the rule of law the government is prevented from stultifying individual efforts by ad hoc action. 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…

That certainty would not characterize the position of the 1% under a government legislating to expropriate a large percentage of their holdings.

100

Watson Ladd 08.03.12 at 4:47 pm

Chris, if we returned to the marginal tax rates of the mid 1950’s wouldn’t that have a redistributive effect without requiring the abolition. Congress is also explicitly permitted to change the bankruptcy laws in the Constitution. So long as we live in a democracy the fortunes of the 1% are the result of democratic agreement: if the working class was to organize for a progressive income tax, we would have a progressive income tax.

rea: Actually, Congress could change the formula for capital gains, charging on prerealization as well. The difficulty of this approach is obvious: illiquid assets are hard to value.

101

Eric Titus 08.03.12 at 4:54 pm

I’d argue that rule of law becomes more important as the size of government increases. Regulators need some space to interpret the law, but when regulation is both pervasive and has the authority to extend itself further where it sees fit, you really do end up with the potential for negative consequences. On the civil liberties front, things like wiretapping, information collection, and stop and frisk are examples of agencies/police forces deciding to liberally interpret their authority.

102

Ben A/baa 08.03.12 at 5:06 pm

Chris,

Let’s stipulate that this sentence fully captures Hayek’s notion of the ROL. Let’s further stipulate that significantly increasing taxes violates Hayek’s conception of the ROL. Seems like a weird position for Hayek to take, but again, let’s stipulate it.

Even so, what does this have to do with left-liberals you were tweaking above? Almost *no* left-liberal I know (I’m not one) thinks tax increases violate the ROL. Your statement:

This idea that we all order our affairs under a system of predictable rules sounds very nice, but I do wonder whether it’s compatible with some of the other things that you seem to be signed up for.

is only relevant if you think left-liberals take on board the view of the ROL you ascribe to Hayek. Which they manifestly don’t. So again, I think this doesn’t make sense .

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Tim Wilkinson 08.03.12 at 5:07 pm

@99 Regardless of what sense one might try to make out of Hayek’s elucubrations on jurisprudence, this reference to ‘Hayekian conceptions of the rule of law’ looks like one leg of a triviality two-step to me.

Why one would want to endorse Hayek’s repurposing (AFAIK he never manages an actual redefinition, nor would want to, not explicitly, anyway) of the concept is beyond me.

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Chris Bertram 08.03.12 at 5:10 pm

Au contraire: as I said above _Rawlsians_ (the left-liberals I have in mind) think that you get the distributive outcomes you want by programming them into the operation of rule-constituted institutions (the basic structure) that conform to the Hayekian ideal of the ROL. That’s why, as I mentioned a zillion comments back, Hayek exempted Rawls from his critique of “social justice” in _The Mirage of Social Justice_. Sorry if this too niche for you.

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C.P. Norris 08.03.12 at 5:12 pm

Don’t we have a precedent for a decrease in economic equality (in the US and other places) between the Gilded Age and the post-WWII decades? Was it necessary to give the government power to arbitrarily “zap” (and Tasers hadn’t been invented!) bad guys?

I know we had a lot of extralegal lynchings during that period, but that’s not really what we’re talking about here.

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Phil 08.03.12 at 5:13 pm

I was going to contribute to the debate on this post, but by the time I got to it the comment count was up to 101, and thread longa, vita brevis.

On the OP I’m basically with Pashukanis – the rule of law is inscribed with the foundational assumptions of bourgeois society, and the law under communism would either look very different indeed or (in a more utopian view) not exist at all. I don’t think it follows from this that, starting from where we are now, the protections of the rule of law should be dismantled, even where the short-term effect of doing so would be to the benefit of the working class. The “Man For All Seasons” argument is very much to the point – in the absence of a mass movement pushing for regulation of the rich, “more regulation” is likely to mean “more regulation of the poor” first and foremost. (There are those who argue that a rise in regulation of the poor is actually to be welcomed, as it will be accompanied by a fall in the punitive policing of the poor. To which I say, “show your working” – it sounds a bit like the argument that workers who put up with sexual harassment get higher wages.)

The law needs pushing – and ultimately, in the lonely hour of the last instance, pushing till it breaks. But we’re nowhere near there yet – and not likely to get there any time soon; at the moment I don’t see much sign of anyone pushing it from below.

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+Roger Burgess 08.03.12 at 5:21 pm

Chris Bertram, you’re making a mistake in thinking that wealth was non-criminally acquired.

Changing the rules of the game such that you can capture more wealth than you could otherwise is a criminal act. A theft has been perpetrated, wealth was acquired that one was not entitled to. Pure and simple.

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OCS 08.03.12 at 5:24 pm

Chris @99
But your original post was directed at liberal rule-of-law fetishists. And now you’re trying to saddle us with a Hayekian conception of the rule of law which I doubt any of us accept. I sure don’t.

From the OP: But don’t kid yourselves that you can do the redistribution you want and treat the rule of law as absolute

In fact, a lot of us are saying straight out that the redistribution we want is perfectly compatible with the rule of law as we understand it. As Watson says @100, just returning to Eisenhower-era tax rates in the US would go a long way to accomplishing what we want.

Are you pulling our legs?

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Chris Bertram 08.03.12 at 5:25 pm

+Roger (then I’m out)

I agree that’s a tempting move to make, but I don’t see how it is consistent with other views about the basic legitimacy of existing liberal democratic states (and hence property ownership etc under them) that Rawlsians (at least) usually endorse.

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novakant 08.03.12 at 5:28 pm

being honest about the implications of one’s politics can be pretty appalling

But what are your politics? Being pissed off by the status quo and screaming “revolution” isn’t politics. Neither is wishing for a pony once you get your way.

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Chris Bertram 08.03.12 at 5:30 pm

OK then one more:

OCS: yes, the Hayekian conception (via the Rawlsian ideas of embedding outcomes in rules) was in my mind all along. So the post has indeed confused people who had a more garden-variety idea in mind – _mea culpa_ . When I realised that, I tried to clarify (as early as #13 above) but maybe I should have edited the OP rather than addressing in comments.

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+Roger Burgess 08.03.12 at 5:35 pm

Chris, I got it from your Hayek quote:

Under the rule of law the government is prevented from stultifying individual efforts by ad hoc action. 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…

Individuals are not free to pursue [their] personal ends and desires certain that the powers of government will not be used deliberately to frustrate [their] efforts because thems as gots there first are doing exactly that.

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Tim Wilkinson 08.03.12 at 5:37 pm

CB – Oh, Rawlsians. As far as I’m concerned, Rawls was basically reverse-engineering contemporary US society. But you seem to be suggesting he went further and took a Nozickian quasi-constitutional position on property rights. Did he really not add some comments about legislation, tax rates, etc.?

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Patrick S. O'Donnell 08.03.12 at 5:41 pm

I think the discussion at this juncture might benefit from consideration of whether or not “liberal socialism” (John Roemer), assuming its coherence and plausibility, has the redistributive properties or effects Chris, and others, believe necessary. Rawls, who endorsed a conception of liberal socialism (and referenced Roemer’s book on same), described it as an “illuminating and worthwhile view” characterized by four elements:

(a) A constitutional democratic political regime, with the fair value of the political liberties.
(b) A system of free competitive markets, ensured by law as necessary.
(c) A scheme of worker-owned business, or, in part, also public-owned through stock shares, and managed by elected or firm-chosen managers.
(d) A property system establishing a widespread and a more or less even distribution of the means of production and natural resources.

As Rawls wrote, “Of course, all of this requires much more complicated elaboration.” From Rawls’ Lectures on the History of Political Philosophy. Samuel Freeman, ed. (Belknap Press of Harvard University Press, 2007).

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OCS 08.03.12 at 5:45 pm

Chris @111

Fair enough. That accounts for my feeling that something was going over my head. I would never have commented on a post if I knew it was really about the Hayekian conception of the Rawlsian social contract.

Sorry about that.

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bob mcmanus 08.03.12 at 5:46 pm

we would have a progressive income tax.

I have repeatedly asked the usual suspects (Thoma, DeLong, Krugman) exactly how the redistribution is supposed to work, but have yet to get an answer.

1) Tax the rich.

2) But all mainstream economists are adamantly opposed to wage inflation over productivity, and are horrified at the thought of a regime of expected wage inflation over productivity.

3) So divert new revenues into infrastructure and social services (education, health care, retirement)? Well, this should increase productivity and profits and we will get an expanding pie, but again without allowing wages to outpace prices, my guess will get renewed inequality.

4) The Great Compression had several factors besides high tax rates, and wage increases outpacing prices and asset/equity gains was another important part of the story.

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LFC 08.03.12 at 5:47 pm

Bianca Steele:
Chris Bertram’s argument would seem to be compatible with an argument that high levels of inequality are better for most people (who’s going to pay for the art now that nobody’s building cathedrals anymore? why can’t we just have liberal-minded rich people who will do good things for the poor?), so redistribution should go in a somewhat different direction, in order to achieve the accordingly somewhat different results.

This makes no sense. Nothing in the OP (whether or not one agrees with it) is compatible with an argument that high levels of inequality are better for most people. What is “a somewhat different direction” with “somewhat different results”?

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LFC 08.03.12 at 5:52 pm

Rawls was basically reverse-engineering contemporary US society

No. Totally wrong.

119

Jacques Distler 08.03.12 at 5:58 pm

I am pretty confused.

Do property taxes (a tax on a certain kind of wealth, namely real estate) constitute a violation of the RoL?

Does raising property tax rates constitute an ex post taking?

I realize that there’s an interesting question about what sorts of measures would be required for an effective redistribution of wealth. But I am quite unclear about what sort of line is purportedly being crossed by (certain) such measures.

120

Wonks Anonymous 08.03.12 at 6:08 pm

I don’t think I’ve ever actually come across a booster of Rawls’ “property-owning democracy”, despite the popularity of Rawls as a political philosopher. The welfare state is accepted by most, and folks further left aren’t fixated on Rawls (much less Hayek).

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Ben A/baa 08.03.12 at 6:19 pm

Sorry if this is too niche for you

A nice sentiment, but not really. The problem is that your interpretation of what Hayek thought about the rule of law, and how he applied it to Rawls, is isn’t actually the last word on what Rawlsian liberals need to accept on the limits of action through the political system. To put this point flippantly would be to say “Rawlsians think you can’t significantly raise tax rates? Really?”

Less flippantly, the point is that while of course Rawlsians want to build justice into the ‘basic structure,’ the basic structure can include a political system that can respond to events or change laws. It’s not like Rawlsians have to decide the tax rate in the original position. Or whether there will be a draft for the armed forces. Or any number of things that, if imposed at a certain point in time, will meaningfully alter the rules of the game as people understand them. If, per hypothesis, a 90% tax rate or 10 years of mandatory service in the armed forces is required for some legitimate, democratically approved objective, a Rawlsian can support that.

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Chris Bertram 08.03.12 at 6:32 pm

_To put this point flippantly would be to say “Rawlsians think you can’t significantly raise tax rates? Really?_

(Since I’m obviously aware that Rawlsians can raise tax rates, I think its plain that I haven’t managed to make myself understood by you. )

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OCS 08.03.12 at 6:32 pm

Ahh, screw it. I am too going to comment on a post knowing full well that the argument hinges on a Hayekian conception of the Rawlsian social contract.

Chris, I think your argument implies that the US and others have set up a system that promises people they can go ahead and get as rich as they want and no one is allowed to get in their way, no matter what. Now someone wants to change the rules mid-game, and that’s just not fair, speaking Rawlsianishly.

In fact, I think the message about the rules of the game has never been that straightforward. At the very least, progressive taxation and estate taxes should have been a signal that you weren’t always going to be allowed to keep all of your wealth.

And remember that the extreme concentration at the top only occurred gradually over the last, what, 30 or 40 years? I’d say it’s that massive concentration that is changing the social contract, and that the institution of a more egalitarian society would lead to a restoration of the rules we all thought we were living under.

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+Roger Burgess 08.03.12 at 6:49 pm

OCS,

I think Chris isn’t paying as much attention to the recursive nature of a phrase like “Rule of Law” as perhaps we’d like him to.

When people change the rules of the game to make sure that they never or rarely lose, then they’re forcing people who oppose them into an equivocation on the phrase “Rule of Law”. Prior to any such changes, presumably the law was fair and just. After the changes made by the powerful, the rule of law is no longer either fair or just, yet it remains ‘Law’, just of a different kind and quality than what existed before.

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bob mcmanus 08.03.12 at 7:00 pm

5) Of course if worker’s healthcare and education are provided by the state, and wages don’t take a beating, that frees up income for Ipods and cruises, IOW, wage/price spiral

There may be three solutions:

A) A Japanese-style “production economy” in which the surplus is re-invested into productivity (solar and electric trains!) at the expense of wages and profits. Although Japanese GDP doubled in the 60s, the wage share steeply declined;then spiked in the 70s, and has been declining with the rest of us ever since. And that policy still resulted in a horrific asset bubble and crash.

B) Increasing the wage share at the direct expense of prices, profits, assets/equities, and investment, thereby sanitizing redistribution. Find me a New Keynesian who will go along with that.

C) Steve Keen’s Jubilee! Reboot. Void all private and public debt leaving many or most other assets (land, diamonds, Renoirs), status markers, and personal/social capital (Harvard degree) in place. Longish story, but that would radically, though temporarily, equalize wealth with fairly minimal destruction and discomfort.

But C) is Revolution.

126

Watson Ladd 08.03.12 at 7:03 pm

Roger, fair and just does not imply a unique configuration of laws. Is it juster to have a law proclaiming that one can turn right on red, or the opposite? What about a law permitting the operation of a chemical plant in a particular region, or a law banning such operation? Now suppose I lobby to operate a chemical plant, and the law is changed through democratic processes. Is my wealth somehow illegitimate, merely because there used to be a law prohibiting it? Must every condom manufacture look over their shoulder for the aftermath of the Comstock laws?

127

Barry 08.03.12 at 7:06 pm

I see things like ‘Hayekian conception of the Rawlsian social contract.’, and wonder WTF?

Why do we care what Hayek thought? On one or two issues, he thought well; we know that on others he was basically a libertarian-who-heart-dictators, and could be outstandingly stupid (road to serfdom, anybody?).

128

Ben A/baa 08.03.12 at 7:14 pm

Chris,

Sorry to misunderstand you, and thanks for the clarification. But I think there are a couple of problems that remain even under my new (clarified) understanding of your point.

1. First, I think it’s obviously correct that a Rawlsian will believe some actions with desirable consequences can’t pursue because the means are illiberal. That’s just the definition of liberalism. So, can a Rawlsian liberal in a well-ordered state aid substantive fairness by stealing rich people’s money, Robin Hood style. No, he cannot.

2. But I think to force Rawlsian liberals into the kind of dilemma you were posing requires two semi-equivocations:
a) Defining ROL as “society ought to be run according to predictable rules that provide individuals with *certainty* that their efforts won’t be nullified by state action” seems fair enough. But any liberal (and I would think Hayek as well, although I’m very ill-read on Hayek) is going to have to admit that the certainty provided can’t be absolute. The law can change to adjust to new situations and may burden some minority more than the public generally. Whether these changes are permissible will likely be a sum of i) whether the objective is itself a liberally permissible one, ii) how it is instituted, iii) how grave a violation of liberty/justice/fairness it imposes on the minority.
b) As others have noted, there’s an ideal vs. non-ideal tension running through here. The problem with the 1%, in your OP, is not that they are rich, but that they are using wealth to actively corrupt the rule of law. That’s a prototypical non-ideal situation. It almost feels like you’re asking under what conditions the “Hayekian Rawlsian” cam support a right to revolution.

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bob mcmanus 08.03.12 at 7:38 pm

Here’s the Cornell 2010 Paper that I used to check my memory of the Japanese economic history.

Basically, it attempts to prove that a declining wage share increases productivity and employment. Theoretically, this should make commodities less expensive and increase real wages and standard of living.

But what it does not do is increase the wage share of national income and the resulting political power. Now as a this-week Neo-Kaleckian, I do believe the wage share can greatly increase without a decline in employment or productivity. But we do have a problem, at the least in the discourse, and in the transition to a greater wage share.

Sorry.

130

Bemused 08.03.12 at 7:41 pm

@ + Roger “Chris Bertram, you’re making a mistake in thinking that wealth was non-criminally acquired.”

I tend to agree with Roger that a great deal of the wealth held by the 1% was acquired, if not criminally, then at least unlawfully (aggressive tax planning that wouldn’t stand up to audit, wealth accumulated from violations of securities laws, environmental laws, consumer protection laws, anti-trust laws, worker protection laws). I’m a corporate lawyer and I see first hand how a LOT of decisions get made in the full knowledge that it’s in violating a rule or reg, but the risk of detection and prosecution is low to negligible. So I kind of wonder about the “basic legitimacy of existing liberal democratic states (and hence property ownership etc under them)”

Which tends to argue for the point that, at least to some extent, we will need to relax our devotion to RofL, and stop fetishizing it. I can assure you that those what have wealth are not nearly so scrupulous.+

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LizardBreath 08.03.12 at 7:42 pm

Ben A is making sense here.

Another way of putting it is that I think the original post begs the question of exactly what violates the rule of law. If you accept that “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” is the definition of the rule of law, and is to be interpreted such that any change in the law that will have the effect of redistributing wealth counts as deliberately frustrating the efforts of an individual to accumulate wealth, then it’s tautological that you can’t redistribute wealth without abandoning the rule of law.

The problem I see with the post is that I don’t think there are many people who aren’t serious libertarians who would accept that definition — there are some kinds of redistribution that would seem lawless to the average liberal (at least, there are some kinds of redistribution that would seem lawless to me), but the line isn’t anywhere near where you’re drawing it. That doesn’t mean there’s anything intrinsically wrong with your definition of the rule of law, but if the goal of the post was to point out an inconsistency between a value liberals accept (the rule of law) and an endpoint they desire (redistribution), I think it fails because liberals don’t accept the value of the rule of law in the way you’re defining it, and you need your definition to get to an inconsistency.

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Tim Worstall 08.03.12 at 7:47 pm

“Nice rhetorical move that, but I’m not buying, because I think that respecting this procedural constraint ensures that the poor are always with us: we need to get the stuff off the rich.”

Nice zero sum fallacy there.

My argument is much more compact that this Hayek/Rawls thing that I don’t understand (cue, so, what’s new with Worstall not understanding?).

“Within the known rules of the game”

That’s the point I consider important. I don’t mind (so much) what the rules of the game are. I just insist that they be known. To be absurd, if you get out of the left side of the bed then the tax rate on your income is 10%. On the right then it’s 50%.

If that’s something that is detailed by the law only after you’ve got out of bed then we’re not operating to my concept of the rule of law. If it’s something that you know and are told before you go to bed at night it may well be a ludicrous tax law but it doesn’t violate my (obviously idiosyncratic) definition of the rule of law.

Which brings us back to Bertram’s original, the enforcers should have more power to zap the bad ‘uns even if they haven’t actually broken the law.

Err, no.

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Watson Ladd 08.03.12 at 8:03 pm

Bemused, if they got the wealth illegally, prove it and seize it as the result of property resulting from crime. Too hard? Go cry in a corner about how the stupid laws won’t let you punish the bad people, along with all the other cops.

134

Ben A/baa 08.03.12 at 8:06 pm

Lizardbreath!

Nice to run into you again. All well I trust?

135

Chris Bertram 08.03.12 at 9:01 pm

Lizardbreath:

I don’t think that any change in the law that has a redistributive effect violates the ROL as I intended it. In fact the OP is pretty explicit in that points since I assume (2nd para) that changes in the rules might gradually shift things in the right direction. The kind of intervention where I think Rawls would see the ROL as being violated is where someone has accumulated property according to the law in a legitimate (though not fully just) state and where the state then takes this property off them (ex post) for redistribution to others. Changes in, say, income or consumption taxes, don’t have this character since they’re set prospectively (what you’ve earned in the past is off limits).

But I see that I’ve not done a great job of expressing myself clearly in this post. My more general worry about whether we can get a (much more) egalitarian society than we have whilst staying within procedural limits we claim to accept, is something I’ll try to revisit in another post.

136

Chris Bertram 08.03.12 at 9:14 pm

(Actually Alex: you’re banned from my threads permanently. I don’t mind vigorous disagreement but sneering questioning of my good faith I can do without.)

137

Phil 08.03.12 at 9:15 pm

that the idea that a just society can be run entirely according to publicly available rules that are made explicit to everyone in advance is a dangerous utopian fantasy

Blimey Charlie. Justice is incompatible with the rule of law? Not only is justice incompatible with the rule of law, believing that they might be compatible is a utopian fantasy – and dangerous to boot? I think you might want to rethink this.

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Chris Bertram 08.03.12 at 9:18 pm

Did you not notice the word “entirely” Phil?

139

Chris Bertram 08.03.12 at 9:26 pm

(The point being that a conception of social justice can’t have an exclusively procedural implementaton: you need other stuff – such as ethos and judgement guided by broader principles too. I can’t imagine you actually disagree Phil.)

140

Bemused 08.03.12 at 9:35 pm

Chris, for that next post, I suggest you run some numbers:

Assume you don’t confiscate and redistribute capital, but redistribute just the income generated by that capital through a steeply progressive income tax system (including dividends, rental income and capital gains, maybe unrealized capital gains too), using the revenue to fund policies that have redistributive effects, such as universal health care, better education at all levels, enhanced pension benefits, etc. Those steps would stay within your confines of ROL and accepted procedural limits, right? You may be able to get to a higher level of equality faster than you may have thought; i.e. in a decade or two as opposed to several generations. Although not being an economist, I’m just speculating. (Whether or not the result is egalitarian enough is another question.)

But this won’t address the question of whether any such course of action would be politically doable.

141

leederick 08.03.12 at 9:36 pm

“I think Rawls would see the ROL as being violated is where someone has accumulated property according to the law in a legitimate (though not fully just) state and where the state then takes this property off them (ex post) for redistribution to others. Changes in, say, income or consumption taxes, don’t have this character since they’re set prospectively (what you’ve earned in the past is off limits).”

I’m not really sure of the value of the ex post/ex ante distinction here. Capital and income are linked. The usual view is that capital is just the present value of future income – so the value of a boat, say, is determined by the discounted cash flows you could get from leasing it out.

That implies an ex-post wealth tax of the value of boats will yield X; but a future income tax on proceeds of boat rental will also yield X (in the future, of course, this can financed to get the cash now), and will cause the capital value of boat now to drop because the value of future cash flows will be lower due to the announced ex ante tax. Having the same effect on anyone who owns a boat.

142

Salient 08.03.12 at 9:42 pm

Hi there liberal rule-of-law fetishists!

Let me Onion that for you.

143

Alex 08.03.12 at 9:43 pm

(Last comment was before I saw Chris say I’d been banned)

(Actually Alex: you’re banned from my threads permanently. I don’t mind vigorous disagreement but sneering questioning of my good faith I can do without.)

Do you think you could reconsider since I’m not sure that I have (at least, I didn’t mean to) questioned your good faith – I was merely adding to a point already made by Tim Wilkinson, and pointing out your original argument (as other commenters have done) from the previous post?

I apologise if what I’ve said has been too aggressive, but if that be the case my only reason (not an excuse) would be that the nature of the idea under discussion (getting rid of the rule of law) means that conversation is highly strung (FWIW, a previous commenter described the idea as “nuts”).

Your comment thread is your own of course, but I am rather taken aback to be banned from it after just that one comment. I understand that stopping further participation in this thread may be a good idea, however do you think you can allow me to comment in future threads? Please?

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LizardBreath 08.03.12 at 9:49 pm

The kind of intervention where I think Rawls would see the ROL as being violated is where someone has accumulated property according to the law in a legitimate (though not fully just) state and where the state then takes this property off them (ex post) for redistribution to others.

The move you make that I can’t quite follow in the original post is “If you really want a shift in the distribution of wealth and income, if you really really want it, then realistically you’re going to have to use state power to do a bit of ex post redistribution. ” I think that’s a claim that that the sort of gradual shift that wouldn’t violate the RoL (as you define it) might have some redistributive effect, but realistically wouldn’t actually work to meaningfully serve the goal of redistribution, and that claim doesn’t seem to me to be obviously well supported.

Say, consumption taxes: would the institution of a draconianly progressive consumption tax strike you as a violation of the RoL as you define it? Financial transaction taxes? Changes in real property tax rates? Policies leading to inflation sufficient to decrease the value of currently held wealth, combined with progressive income tax rates on the income derived from that wealth? There seem to me to be plenty of policies that would work (whether or not we could successfully enact them) to meaningfully reduce inequality of wealth, that wouldn’t appear to me to violate the RoL — to the extent that your post rests on the claim that anything that would work, would also violate the RoL, I think that’s where the problem lies.

145

Chris Bertram 08.03.12 at 9:50 pm

OK fine Alex. But don’t try the sarcastic “Nice try!” again. (And give a proper email address to conform with our comments policy.)

146

LizardBreath 08.03.12 at 9:51 pm

Baa! Haven’t noticed you around in forever. You should come by Unfogged and argue about stuff sometime, and I’ll try ineffectually to keep my temper. It’s no fun when everyone’s agreeable.

147

Daragh McDowell 08.03.12 at 9:54 pm

I’d like to say I find the difference in reaction to christian_h’s comments and Alex’s both remarkable, and a bit telling.

148

Chris Bertram 08.03.12 at 9:57 pm

Thanks LizardBreath.

Yes if you could implement and enforce those policies then you might get sufficient redistribution without violating the ROL. But there are a number of reasons why you might not be able to. Overtly political resistance, obviously. But insofar as you leave control of productive resources in the hands of the 1% but attempt to redistribute from them using such taxes at the same time, then they probably have the means to make life economically uncomfortable for everyone too.

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Jeff R. 08.03.12 at 10:07 pm

Why is it that political resistance to every proposed alternative seems to matter intensely but political resistance to the ROL-breaking radical redistribution that they’re alternatives to doesn’t seem to in this argument?

(In what world is a 1%/.01% capable of maintaining a favorable regulatory environment not capable of stopping a Jubilee or whatnot?)

150

LizardBreath 08.03.12 at 10:07 pm

After 148, I apparently completely misunderstood the original post. If I’ve got it now, it could be roughly summarized as: Given that the holders of wealth control the levers of ‘legitimate’ government power, it’s probably prohibitively difficult in practice to institute policies that would have the effect of significantly redistributing wealth without abandoning the RoL.

At which point I’d agree that such policies are terribly difficult to institute, but that they have been successfully put in place in other times and places, and I hope, possibly in vain, that we can do the same thing again in the future.

151

Phil 08.03.12 at 10:23 pm

The point being that a conception of social justice can’t have an exclusively procedural implementaton: you need other stuff – such as ethos and judgement guided by broader principles too.

If by “publicly available rules that are made explicit to everyone in advance” you mean “publicly available rules that are made explicit to everyone in advance, once and for all, with no scope for development over time or argument in individual cases, and nothing else”, then I agree – and if Rawls’s conception of the RoL is that narrow, so much the worse for Rawls. When I see “publicly available rules that are made explicit to everyone in advance” I think of Fuller’s (and latterly Waldron’s) position on the inner morality of law – but that’s an idea of law which includes a lot of what you’re classing as “other stuff”.

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Bemused 08.03.12 at 10:37 pm

leederrick – I think you’re right.

Chris is saying that he will not take away your boat and give it to a poor person.

But if you lease the boat, and generate income, it is OK to tax the income, and presumably within a progressive system.

There are a lot of problems with this in practice.

Normally, for a capital property, you’re allowed capital cost allowance (CCA), which means you don’t have to pay income tax on the depreciation of the asset. In theory anyway, you should be able to replace your boat at the end of its useful life. So in Chris’ conception, in order for the state not to be confiscating capital which was legitimately acquired, the CCA provisions would have be be pretty generous. Then of course there are no shortage of ways to generate other deductions from the gross rental revenues to ensure that very little income is actually taxable. Not to mention the problem that you can enjoy the boat without paying any rental fees to yourself, whereas arguably, that imputed rent should be taxable revenue. It turns out to be really, really difficult and complex in practice to maintain the difference between capital and income, because it is sort of artificial. (Although many extremely capable individuals are paid highly to do just this.)

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Chris Bertram 08.03.12 at 10:55 pm

Leederick, bemused

Well that’s certainly interesting, but I’m suspicious of the notion that because we can treat two phenomena as the same from some perspective, then they are the same from the perspective we’re interesed in.

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Watson Ladd 08.03.12 at 11:33 pm

Chris, I’m confused by your capital strike argument. If the argument is that productive resources do less work when taxed, but wouldn’t if confiscated, then the state should be able to buy out the capitalist compulsatorially, but with compensation. After all, the state can make more with the property then the capitalist can. But in practice people maximize profit, no matter how much they give to the tax man as a result. This seems like the Laffer curve in reverse.

155

Charlie 08.04.12 at 12:56 am

From the OP:

One option would be to let them hang onto all their existing assets – after all, they got them justly …

I’m not sure that “let them hang onto” gets things quite right; in fact I think it concedes far too much at the outset to the ex post facto crowd. Laws aren’t only confiscatory and threatening: laws help bring about property in the first place, and most importantly, they help in sustaining its value, ensuring that owners get as much enjoyment from property as they hoped for. Creditor-debtor relations are sustained by laws. Company ownership is made rewarding in part by employer-employee relations, also sustained by laws. In short, laws are a boon. But perhaps not for everyone. We may come to feel that some social relations sustained by law are exploitative, and act to end them. Someone then gets relief. There’s a loser, of course, who may complain on ex post facto grounds. They wanted the law to stay as it was, because they had plans. However if that’s really a principle to be respected, the person whose exploitation is relieved should also complain on the same grounds. They too, had plans. I even think there has to be some sort of criterion here for the justification (or not) of legislation after the fact; something along the lines of: if even the winners would complain, because their plans were upset, then the change in legislation isn’t justified. Otherwise, legislate away!

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ezra abrams 08.04.12 at 1:20 am

Your basic premise, that the 0.1% got its stuff fairly, is wrong
It is a fundamental rule western civilization that a criminal may not keep his or her ill gotten gains.
The gains of the 0.1% were done by , in many cases, crimminal activity (see Mortgage underwriting, WaMu).
In other cases, it was, at the very least, so morally and ethically wrong that no reasonable person could have believed that the actions were ok; see Bain Capital, taking of pension funds.

Here in the Sate of MA, we are having a debate of seniority for teachers in public schools.
The reason we hare having the debate is a “pseudograssroots” organization funded by un accountable rich guys – gates and koch and walton.
They have given an organization so much money that its threat to work on this is enough to move the debate here in Mass.
regardless of where you stand on this issue, the idea that faceless, un elected, un acccountable to anyone billioniairs are essentially running out country, as a practical matter, ought to scare you.

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ezra abrams 08.04.12 at 1:25 am

Sometimes, I wonder about you academics.
We have working parents whoose children are crying each night from hunger and un filled cavities, and you are worried about taking money from B Gates and M Rommney cause it might violate some abstract unformulated contrary to the idea that we are a sovereign nation ?
the more I read people like you, the more I understand the Terror of Robespierre and Lenin; its not enough that the rich dominate us, they buy the academics to.

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Sebastian H 08.04.12 at 1:35 am

“But there are a number of reasons why you might not be able to. Overtly political resistance, obviously.”

Why do you get to use this as a curt dismissal, while your proposal doesn’t seem to have to deal with it?

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chris 08.04.12 at 2:41 am

If the law can say that anyone with a $100,000 house must pay the government $100 per year in exchange for the enforcement of real estate laws, prosecution of burglars, etc. — and clearly it can, since it does — I don’t see why the law can’t make that $1000, or even $10,000 (although raising it that high might have serious bad effects, it isn’t inconsistent with principles of the rule of law as long as the tax increase itself is passed by a legitimate legislature, etc.)

And then there’s no reason society can’t expand the class of assets taxed — corporations, for example, could neither exist nor do business without the constant protection of the state, so why doesn’t the state tax all owners of stock 1% of its present value, per year? Just because of the inconvenient arguments about assessment of closely-held corporations? That may be part of it, but I think the political power of the stockholder class is a much bigger part. Real estate, after all, is assessed regularly whether it changes hands or not, and this neither requires a small army of assessors nor crumbles the foundations of the economy.

Cars and I think in some states boats already have ad valorem taxes payable year after year, regardless of how or whether you’re using the asset, which in some abstract sense is justified by the public works that facilitate the use of those assets, or police protection from theft/recovering them if they are stolen, or both, but in any case, nobody claims that it violates either the Direct Tax Clause or some more general idea of the rule of law; regardless of how legally the car or boat was acquired, it clearly isn’t against the law to tax it.

The rule of law is no serious obstacle to a redistributive system of taxation. The role of money in elections, on the other hand…

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Mark 08.04.12 at 5:23 am

So many comments on such a basic point: major changes to tax laws on property seem to violate the ROL requirement of non-retrospectivity, because they take property that has legally been acquired according to the prior order of rules. This is similar to taxing income earned in the past at a higher rate. Or punishing action that was legal when it was done, or increasing the penal tariff on a crime retrospectively. There is clearly some aspect of autonomy and dignity that is frustrated when one’s actions in the past are made to have different effects in law than they had at the time they were done.

But where the rules are unjust, our expectations that our actions won’t be legally judged a different way in the future are not so legitimate. And in any case, we will have to ask what moral harm is done by ROL violations and what good is achieved.

Of course many other things we might want to do in the name of other moral values also may be contrary to other rule of law values as well.

The Scheuerman article I am thinking of in particular is ‘The Rule of Law and the Welfare State: Toward a New Synthesis’ (1994) 2 Politics and Society 195 (no free version, unfortunately).

If you can’t access that, you will be pleased to know that Jeremy Waldron – one of the major theorists of both the ROL and property – has posted a version of his recent Hamlyn Lectures on ‘The Rule of Law and the Measure of Property’ on SSRN. I think the third and parts of the second lecture are right on the point in this post and thread.

(hopefully the link works!?)

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Mark 08.04.12 at 5:23 am

Ok, no, here is the link – I can’t do html tags obviously

http://ssrn.com/abstract=1866357

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js. 08.04.12 at 5:54 am

I’m a bit curious about the dialectic here. Because as far as I can tell, almost all liberal RoL are defending one or both of the following points:

1. You can too get redistributive/egalitarian outcomes while staying within Rawlsian RoL strictures.

2. Getting rid of RoL is actually going to hurt the poor/disadvantaged/minorities/etc. more than it’s going to hurt the dominant classes.

But neither of these seems like a Rawlsian defense. The first is either a feasibility argument or perhaps a claim that the argument is (roughly) semantic — depending on where you put the stress. The second is a straight-up consequentialist defense. But again, a proper Rawlsian defense it seems to me would have to be a bit more “in-principle”. There’d have to be something just straight-up wrong about ex-post extractions. But as far as I can see this is not on offer–from liberals.

(And just to be clear, my own views on this are somewhere between CB and christian_h.)

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Chris Bertram 08.04.12 at 6:29 am

Mark: many thanks for that link. I shall read with interest.

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temp 08.04.12 at 7:54 am

But most of the actual existing liberals objecting to Bertram’s first post did not object to it on the grounds that it violated some prohibition on ex-post extraction. One or two (libertarian?) commenters did make that point but the main argument against seemed to be that it gives too much power to regulators to interpret the laws. So this post just seems like a strange response.

The argument to make, I think, is that 1) democratically-elected legislators are not actually any more resistant to corruption than the regulators they appoint 2) direct legislation isn’t flexible enough, fast enough, or smart enough to effectively expropriate from the wealthy. So if society has decided it wants a more balanced wealth distribution, it’s legitimate for it to appoint regulators to move things in this direction and give them the necessary powers to do so.

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Watson Ladd 08.04.12 at 1:07 pm

I’m going to challenge that second point. If you had an 80% tax on all income, how would that get evaded? The IRS already issues rules interpreting the tax law in the US: the danger of rulemaking is that the executive branch will be tempted to use its rulemaking authority in ways contrary to the rule of law. So if the IRS was to go ahead and issue an interpretation of the law not consistent with the law, we would have a problem in that the executive would now have lawmaking authority.

This could be acceptable if the executive was constrained by laws. But if, as seems to be the idea, we just give them the power to say “you should pay more.” that’s not really legal, anymore then the King of France saying “you should be imprisoned” was the rule of law.

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bianca steele 08.04.12 at 3:21 pm

LFC:
Okay, I can see why you’d say that. I’m not going to go word-by-word through the post and nitpick, because it would be rude and miss the point besides. I really do think the post overall is so abstract that it isn’t going to bother someone who really is authoritarian or who’s mostly encountered authoritarian-like arguments in the past.

The second paragraph, obviously, is entirely abstract. There aren’t even any nouns that name specific people to the exclusion of other specific groups of people. Someone is going to have to give more and other people are going to receive more. An argument that the peasants should be taxed more to pay for building Versailles would have the same form.

The third paragraph, like the others, has a lot of rhetoric in it, and I’m not sure how much attention you would want to pay to that, so I’ll leave it out. The core of the argument is If you . . . want a shift in the distribution of wealth . . . you’re going to have to use state power to . . . take stuff from some people and give it to others.

You and I know that CB means the pattern of distribution, not the specific distribution at any given moment—but he didn’t say that, and it works very well either way. It could just as easily describe something like a game of king of the hill where the kid who won last tries to change the rules so that anyone else who tries to continue to play is now breaking the rules, and yells at them the whole time that they’re being mean in trying to make him move. “Debt cancellation” is also abstract in the sense that it doesn’t say which debts, whose debts, who will cancel them, or by what means (could it possibly be stretched to mean “canceling” them by working them off?).

Part of the problem, for me, here, is that I’m not sure exactly what CB means for “rule of law.” If it means predictability, it’s definitely more predictable to choose one king of the hill and let him be king forever. And then there’s “what’s best for the least advantaged.” If you haven’t heard the argument that undemocratic systems can be better for the poorest than democratic systems can be, all I can say is that I have, and maybe educators through the 1970s and 1980s started doing a more thorough job in making sure the kids in their care didn’t turn out to be hippies.

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bianca steele 08.04.12 at 4:02 pm

Incidentally, js. seems to read Rawls as a liberal in the European sense. I’d acquired the impression somehow that he was a liberal in the North American sense, strengthened by the way Rawls is frequently defined by contrast with Nozick, but it’s quite likely that I’m wrong.

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LFC 08.04.12 at 5:32 pm

Bianca @167:
A ‘liberal’ in the European sense roughly equals (to my understanding) a small-government, business-oriented conservative in the US sense (with allowances, of course, for the somewhat different political spectrums in US vs. most of Europe). So Rawls is not a ‘liberal’ in the European sense (and I doubt that js. was reading him as such).

Rawls worked in what political philosophers usually call the liberal tradition, but whether Rawls is a ‘liberal’ in the sense in which that word is used in contemporary US politics, or whether he is something somewhat to the left of that, has been the subject of debate, as you might infer from a comment or two on this thread. The lack of precise definitions (what exactly is a ‘liberal’ in contemporary US politics? what is a ‘left-liberal’? a ‘social democrat’? etc.) is a problem here. At any rate, I might suggest that you scroll up to Patrick O’Donnell’s comment @114. Also you might want to take a look at this.

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js. 08.04.12 at 5:34 pm

Incidentally, js. seems to read Rawls as a liberal in the European sense.

This wasn’t at all my intention, though I should maybe have been more clear. Rawls is a liberal in the North-American sense who is also deeply committed to certain procedural conception of justice — or more accurately, his conception of justice has a strong procedural component. I am sometimes tempted to believe otherwise, but I think CB is pretty much right that Rawls’ commitment to the procedural aspects would also commit him to oppose the sort of discretionary, ex post extractions CB is recommending. But–and here’s what seems to me to be the key thing–Rawls would committed to opposing these because they’re somehow basically unfair, not because they would have unfortunate consequences, nor because other measures toward the same end would be feasible, etc. So a proper Rawlsian defense would have to show or make plausible why this would be unfair, and that as far as I can see is not forthcoming (except perhaps from people whose views are more in line with Nozick than with Rawls).

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LFC 08.04.12 at 5:52 pm

js. @169:
Well, if such ex-post extractions seem, intuitively, basically unfair to X, and X then puts that intuition into ‘reflective equilibrium’ with philosophical doctrines A, B, and C, and comes out still thinking intuitively that it’s unfair, there’s your ‘Rawlsian defense’, I guess. (Which doesn’t necessarily mean Rawls himself would come out that way.) But obviously CB is relying on very specific things Rawls says about RoL, which I am not immediately familiar with b/c it’s been a long time since I read Rawls. CB also relies, as he has said repeatedly, on Hayek’s exempting Rawls from Hayek’s strictures vs. various theories of justice. (I haven’t read Hayek.)

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LFC 08.04.12 at 5:58 pm

correction — should read: “comes out still thinking that it’s unfair” (strike “intuitively”)

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Watson Ladd 08.04.12 at 7:47 pm

js, maybe I’m just so stepped in that Anglo-American conception of law by watching “Law and Order” so much, but are there conceptions of justice that aren’t rooted in procedure? We object to kangaroo courts because they are inherently illegitimate, not because they wrongfully convict people. The Secret Service protected the man who shot Regen from the crowd because justice, not vengeance, must be served. How is this not placing procedure high above any other consideration? Caught red-handed in front of a crowd of witnesses, the gun still smoking, we read him his rights instead of shooting him right then and there. So what then makes taxation higher then justice, when every murderer may avail himself of the law.

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Tim Wilkinson 08.05.12 at 5:56 pm

re Mark’s Waldron link: – especially interesting are his observations about the World Bank etc. producing a ‘Rule of Law’ index based on a Hayek-style conception which is all about making the world comfortable for capitalists – and which is hostile to the idea of legislation except so far as it is needed to institute the One True Law of the market. This (fairly arbitrarily Google-selected) account of US nation-building and the attempt at constitutional emtrenchment of neoliberalism is relevant: http://www.focusweb.org/node/724

———–

I’d add that the principle of non-retroactivity is a principle of criminal justice – that you cannot be held to have committed a crime unless there was at the time a law in force which made your action criminal. It is unclear what ‘retroactivity’ is supposed to be embodied in wealth taxes – after all, a tax law doesn’t say ‘you never legally owned what you apparently did. It says ‘you owe X amount (now) on the basis of Y features of your situation to date’.

So the effect of tax laws is to determine a certain liability – a debt. It isn’t to remove any property – still less is it to impose a punishment.

Obj1: many punishments are debts (fines) of the same kind, so this is an illusory difference. Ans1: Yebbut actually the fine is often not the harsh bit: many fines are relatively small, the kind of amount you might get stiffed for by a landlord or a cascade of bank charges, and payment spread (interest free) according to ability to pay. Criminal conviction and punishment have many other elements like crim record, name in paper and various specific disqualifications as well as (mostly) the fabled connotation of moral obloquy, and these are the essentially penal aspects.

Obj2: not paying taxes gets you prison. Ans2: not really – if you can’t afford the tax bill I’m pretty sure you go bankrupt rather than getting banged up. And in the UK anyway, if you don’t pay there may be attachment of earnings or some sort of seizure of goods but prison only on defiance of a court order I believe, which presumably means being able but unwilling to pay. Fraud is a different matter, and no-one has proposed that a GAAR or any other provision would turn disallowed tax avoidance into fraud, and certainly not retroactively (since dishonest intent is required for fraud, this would be particularly odd).

Obj3: Still you might be unable to pay. You’ve spent it in reliance on the then current tax law; now you’re hit with a bill and ruined. Ans3: yes, fine. In the strange case where the state presents a bill taxing past wealth no longer possessed, that would be a bit of a wrong ‘un. But the answer is the same as that given to Tommy Cooper when, raising a clenched elbow to chin height, he complained “Doctor, it hurts when I do this”: Don’t do it then. Suddenly taxing people a huge portion of the value of their assets can prefectly well be done without being retroactive about it in this way.

If you’re taking a monetary sum that the person can in fact afford, there is no violation of retroactivity (also, btw, the retroactivity principle is not really central to the rule of law, since it’s not essential to raising law above all personal authority). And since we are anyway talking about the state taking back the currency it’s issued and at whose pleasure its holders are in possession of (un-devalued) legal tender at all.

(Relatedly also don’t think the ‘immoral but technically legal’ conception of tax avoidance is the right one. The issue of wrongdoing needn’t come into it, just the matter of liability to tax. And btw this ‘a few rotten apples’ approach is the whole basis of the GAAR and the rest of the Cons’ empty PR about tax. Also btw if we’re talking about tax and the rule of law, cosy and secretive deals between corporations and their taxman dinner guests is the first thing that springs to mind.)

However, I don’t deny that divesting the 1% of their wealth would be extremely difficult in practice, and even a very determined and disciplined government acting quickly with great tactical skill might not manage it while remaining within the constitution. But that’s not because it’s impossible to pass laws that would if enforced squeeze the rich ’til the pips squeak. It’s because the ruling class would use all means to protect their assets and we would be looking at something like a civil war/state of emergency kind of situation (cf. ‘A Very British Coup’), at which point the question of the rule of law becomes moot.

Even if the problem is just that in order to prevent massive tax avoidance/capital flight the new government would have to use surprise, we’re talking (1) about a one-off revolutionary change, and (2) I still don’t really see that retroactivity need be contrary to the rule of law, properly so-called.

On point (2), I’d say the rule of law is to be contrasted with (a) lack of rule and (b) rule by persons. A is not really relevant here, but b is. And retroactive legislation need not involve rule by persons. The executive need not have excessive discretion either in the substance of the powers awarded to it or procedurally through lack of judicial oversight. Likewise, the judiciary need not be given excessively open-ended issues to determine, nor engage in lawmaking of its own. The legislature too can produce retroactive legislation while still (a) remaining within its electoral manifesto commitments, (b) engaging in proper parliamentary processes of debate and scrutiny, (c) voting as a legislative body, rather than being subject to the command of an individual or improperly constituted association (cabal). I wouold agree that under circs where surprise is needed, a legislature might not be able to fulfil all these, and to that extent would have to act outside the rule of law. This would not be a case of retroactivity though: I’d subsume it under the ‘interruption of the RoL by revolutionary change’ rubruic.

This is in a parliamentary system but I don’t see that the US model need diverge in any important way.

Little is to be gained by piling onto the notion of the ‘rule of law’ extraneous principles such as prospectivity or (as Bingham has done recently) human rights, nor, a fortiori, spurious commutative principles of distributive justice a la Hayek or one of these Rawlsians. And much is to be lost, since to do so is to hand over to the Hayeks a substantial rhetorical advantage: using broad-brush appeals to the RoL is easier than having to go into detail and justify the specifics of one’s position.

If Hayek wanted to appeal to prospectivity as militating against a one-off redistribution, there would even be a retroactivity-based paradox to be had: if the redistribution were understood to be a one-off then it would not cause lack of certainty or stability in the future, so would presumably do so only in the past, unbeknownst to those afflicted by it – that is, the damaging effects on expectations and ability to plan would have to take effect retroactively. And retroactive law may be unjust, but retroactive causation is actually impossible (for practical purposes, at least). The Hayekian will have to accept that the thing that is changed now about those past plans (involving vast riches) is that they have gone from being (at best) fulfilled to being frustrated. And we know that already and have already cheerfully accepted it as a consequence of the proposed redistribution.

(Also, a reverse Godwin: Nuremburg laws were retroactive, but it was understood that this was approapriate, and it was not generally regarded as an abrogation of the rule of law. But anyway I’ve suggested there is no need for anything properly regarded as retroactive in the nulla poena sine lege sense.)

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Glen Tomkins 08.05.12 at 7:26 pm

Damn. Next thing you’ll come out in favor of freeing the slaves, despite the legitimate property rights of the owners.

This, of course, is exactly the dilemma that kept the Whigs from remaining a viable opposition to the ante-bellum Democrats. What we may see in the next few years is the crack-up of the modern Democratic Party over its inability to either oppose effectively or support as effectively as the modern Republican Party, the property rights of the folks who have expropriated the rest of us. We will see effective opposition to our latter-day Slavocrats only if and when we get a party willing to do things analogous to the nullification of the Fugitive Slave Act by several Republican controlled state governments in the late 1850s.

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js. 08.05.12 at 9:29 pm

LFC @170:

I sort of see what you’re saying, but let me try to make my point a bit more explicitly. (I’m sure you already know much of what’s to follow, but I often have a habit of being too elliptical, so I want to try and spell this out.)

I myself am not familiar with Hayek’s treatment of Rawls, so I’m going to set that aside (don’t think this affects my point). On the other hand, I don’t think I’m wrong in thinking that Rawls’ concern with RoL in the way that’s relevant to CB’s redistributive proposals is based on his particular conception of and commitment to certain strong procedural constraints–this is why predictability is an important concern for him, I think.

Ok, so stepping back a bit getting the lay of the land, so to speak: On the one hand, you have strictly procedural conceptions of distributive justice, whether extreme Nozickian versions or slightly less insane ones, where the function or role of the state is supposed to be set up a framework of rules, perhaps leveling the playing field somewhat, perhaps not, and then letting individual agents do what they will. In any case, it is not a legitimate function of the state to try and achieve or institute particular distributional outcomes/patterns/etc. Given this kind of view, it’ll all-important that the state respect the initial set of rules it has set up. Essentially, the state has no other function.

On the other hand, you have a family of views whereby certain distributional outcomes are manifestly unjust. In the presence of such distributions, it’s perfectly legitimate for, in not incumbent on, the state to intervene so as to counteract the existing unjust arrangements. Given the overriding goal of a more just distributional outcome, the particular methods the state employs can or must be suited to this. And if best or most effective way to correct the distribution is discretionary ex-post extractions, then this is what the state must do. That this might violate some aspect(s) of the initial framework set up by the state is not at all an objection. Then as now, the goal is to avoid or counteract manifestly unjust distributions.

Now Rawls’ view doesn’t fall into either of the above categories–he kind of wants it both ways. Or maybe, he wants a bit of both kinds of views. So, on the one hand, it’s perfectly legitimate for the state to try to achieve/institute particular kinds of distributional outcomes. In fact, it’s incumbent on the (just) state to do this. On the other hand, the methods available to the state to achieve the desired outcomes must be severely limited. Hence, the intense focus on basic structures, the emphasis on procedural constraints within and outside these structures, etc.

Now, finally, bringing us back to the present thread: As I see it, when the Rawlsian is confronted with the question: Why not ex-post extractions, after all?, something strange happens. The Rawlsian of course doesn’t have recourse to the libertarian-style answer that the state has no business instituting particular distributional outcomes—she’s conceded (in fact, demanded!) that this is a key part of the state’s business. What I see happening instead is Rawlsians forwarding (what are from a Rawlsian perpective) basically ad hoc defenses. This suggests to me that there’s not really a good defense to be had here. (Restating the formal requirement of reflective equilibrium isn’t enough, obviously.) And if there really isn’t a good Rawlsian defense to be had here, this would in turn suggest that there’s a deep internal tension in Rawls’ conception, and that trying to resolve this tension will push one pretty strongly either to the right or the left.

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LFC 08.06.12 at 12:40 pm

js. @175
You may be right; there may be a ‘deep internal tension’. But seems to me it would depend, at least partly, on whether the restrictions on “the methods available to the state to achieve the desired outcomes” are viewed as ‘principled’ or ‘ad hoc’. Presumably a Rawlsian would say that those restrictions derive from principled considerations; moreover, R. did make some effort to deal with possible tensions between different principles by giving certain principles priority over others (though I’m not sure how much that helps here). Some of this turns on how one views ‘retroactive’ application of rules (per, e.g., the comments @160 and 173).

Also, a side point: R’s focus on the ‘basic structure’ is, I think, not a ‘procedural constraint’ on methods available to the state. It simply means R. is concerned with “the political constitution and the principal economic and social arrangements” (TOJ, p.7) rather than with, e.g., individuals’ private, voluntary decisions about how to use and dispose of their income and wealth. Now, there are arguments to be made that such decisions are too important to be ignored by a theory of justice (cf. Cohen, If You’re an Egalitarian…), but in itself the focus on the basic structure is not, ISTM, a limit on the powers of the state or the methods available to the state. Those limits come from other aspects of R’s theory.

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LFC 08.06.12 at 12:48 pm

p.s. maybe I should have said “not a direct limit on the powers of the state”

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Watson Ladd 08.06.12 at 1:57 pm

Here’s a strong argument against ex-post taxation. Two similarly situated individuals are treated differently because of their histories. A wealth tax doesn’t do this. The argument against seizure of property without compensation is obvious if you’ve payed any attention to how property seizure actually works.

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Pat 08.06.12 at 3:24 pm

Hangon, folks—I’ve just got to go check on this machine I invented that measures the introduction of false dichotomies and oh look it exploded.

Really, this is stupid stuff. Rule of law fetishists are not Nozickians. And they don’t have any objection to confiscatory taxes. They just insist that such confiscation take place in a legally ordered system bounded by discoverable rules; to the extent they are democrats, they also prefer those rules to be chosen by the people directly or by their elected representatives; to the extent they are liberals, they prefer on a small inviolable area of privacy/individual rights; and to the extent they are egalitarians, they prefer the tendency of confiscation be flattening rather than steepening.

Which is to say there’s nothing inconsistent with being a rule of law fetishist and also a social democrat; indeed, that’s probably the biggest population of rule of law fetishists in the world today. The people Bertram appears to be thinking of, I suspect, would turn out not to care for the rule of law one whit once the shoe changes feet.

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Scott Martens 08.06.12 at 3:39 pm

So Chris, I know I’m coming to this late, but aren’t you basically saying that the cake is a lie?

(Everyone who gets that joke – you play too many video games!)

Tax dodges are legal. So is taxation. But you can’t pass laws deciding that Mitt Romney personally owes so-and-so much in additional taxes this year because he’s been abusive employing tax dodges, no matter how just they are. To do is precisely the kind of role as moral judge that the state isn’t supposed to have, even in democracies.

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piglet 08.06.12 at 4:12 pm

That post is what happens when you allow your opponents to define the terms of the debate. It’s unbelievably stupid. We really didn’t need liberal pundits (or whatever it is CB wishes to be recognized as) running around telling everybody that redistributive taxation is unconstitutional and therefore, progressives need be prepared to weaken the Rule Of Law. Rightwingers will have a field day.

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Chris Bertram 08.06.12 at 4:29 pm

Scott: I think your comment fits better with the my previous post (the badminton one) where the claim is that the state should have a general anti-avoidance rule (as is currently proposed for the UK and exists in Australia) and that if Romney employs a ruse that is quite plainly a ruse, we should collect the taxes he ought to have paid anyway (so not additional taxes but determining the taxes he owed all along). This post intended to argue for something different, namely that to achieve the necessary egalitarian redistribution we shouldn’t just implement procedures that will (prospectively) have a redistributive effect but will need to, Robin Hood style, take from the rich and give to the poor.

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Chris Bertram 08.06.12 at 4:32 pm

piglet: _blah blah unconstitional, blah blah right-wingers will have a field day_

I’m not American, I don’t care about your constitution, and I’m flattered that you think my thoughts (incredibly stupid or not) are so consequential.

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Watson Ladd 08.06.12 at 4:52 pm

Chris, how is that different from the current state of US tax law? What makes a Double Dutch with an Irish Sandwich a ruse, but leasing instead of buying not a ruse? As for caring about our Constitution, if you had it English courts wouldn’t have super injunctions and the police could not imprison suspects indefinitely without charge.

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Chris Bertram 08.06.12 at 4:56 pm

Watson, the last time I looked, there was a whole bunch of people the US government was imprisoning without charge.

On the US Constitution, this is rather good:

http://jacobinmag.com/spring-2011/burn-the-constitution/

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piglet 08.06.12 at 4:57 pm

If experience is any guide, stupidity is consequential. Anyway, you are as always evading the point, which I will repeat because I’m not going to let you misrepresent my critique:

“That post is what happens when you allow your opponents to define the terms of the debate.

When you allow wingnuts and extremists to define “Rule of Law” then you may end up having to oppose it. When you allow extremists and wingnuts to define “liberty” or “rights” then you end up having to argue against liberty or rights. Which is exactly the position they would like to see us in. If you can’t see why that is not only stupid but damaging to the progressive cause then I’ll stop right here. But don’t you dare misrepresent my argument.

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Chris Bertram 08.06.12 at 5:05 pm

piglet: the conception of the rule of law that I invoked was not especially wingnutty or extreme, so you point is basically misconceived. As I said above, Hayek’s ideal of the ROL, namely that “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…” is shared by plenty of liberals far to his left.

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Chris Bertram 08.06.12 at 5:07 pm

…. so for example, Rawls’s idea of a “well-ordered society” has the properties that Hayek identifies with the ROL in that quote.

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Watson Ladd 08.06.12 at 5:42 pm

Chris, last I checked they were captured on a battlefield by the military, not by the police. There are substantive rights protected in the US Constitution that are genuinely emancipatory: freedom of speech and religion, no bills of attainder, search and seizure by warrant, and the government cannot take your stuff without paying. Historically those rights and procedural protections have been violated with very bad results, and most often those on the receiving end have been the poor and minorities, especially minorities not favored by the political process.

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Sebastian H 08.06.12 at 5:49 pm

Piglet, so far as I can tell Chris is the one with the weird definition of “Rule of Law”. The number of people who think you can’t change tax laws because of the rule of law seems vanishingly small.

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Sebastian H 08.06.12 at 5:53 pm

Also, I’m not completely sure how connected the two posts are supposed to be (the first line makes them sound connected but who knows). But to the extent they are connected, I would reiterate Watson’s point: the rule of law/not giving huge discretionary powers to enforcers concept(s?) have certainly been violated all over the world all sorts of times. But we generally think of the violations as having turned out badly–especially for the poor and minorities–and therefore not worth modeling as a general principle (i.e. first post) and maybe not in tax law either, though there might be some reasons why it might be a little bit different if you restrict the discussion solely to tax law (second post).

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Chris Bertram 08.06.12 at 5:54 pm

Oh dear Sebastian, are you really so incapable of paying attention. Where do I claim that tax laws can’t be changed?

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Chris Bertram 08.06.12 at 5:57 pm

See, e.g my comment at #15 above.

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Salient 08.06.12 at 6:05 pm

Hayek’s ideal of the ROL, namely that “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…” is shared by plenty of liberals far to his left.

Provided that’s true, it’s depressing news. I don’t think it’s possible to write anti-monopoly trust busting legislation under that kind of ROL. Even if the trust-busting legislation says “we come break up your company once you have 80% or more market share according to this objective measurement standard” it’s still in violation. When you don’t have a monopoly yet you don’t know if you’ll ever cross that line, so you don’t know for certain that “the powers of government will not be used deliberately to frustrate” you. Same thing applies to e.g. pollution control. Are you sure that many of the folks you’re identifying as “ROL fetishists” from the first post, would accept this definition of ROL as their own?

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LFC 08.06.12 at 6:33 pm

Should distinguish betw. the ‘original’ US Const., on one hand, and the Bill of Rts and subsequent amendments, on the other. Seth Ackerman’s “Burn the Constitution” piece, linked by CB, is about the framework set up by the ‘original’ Constitution, the key parts of which are still in place, of course. But it is possible to bemoan the undemocratic aspects of the US Const. — electoral college, every state getting 2 Senators etc etc — while at the same time acknowledging the progressive thrust of the Bill of Rts. It’s all in a sense a moot point anyway, b/c while ideally it might be best to scrap the US Const. and start over, that’s not going to happen.

p.s. The (unwritten) British (or English, as it was) constitution also has undemocratic aspects. Not that I think it v. useful to get into a US-UK ‘whose constitution is worse?’ match.

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Chris Bertram 08.06.12 at 6:49 pm

Salient: some good points there on anti-monopoly. I don’t know whether to take them as (a) supporting evidence for my thesis that we shouldn’t stay within narrow ROL bounds or (b) plausible evidence that my attribution of narrow ROL commitments is too general. Will think on it.

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Bruce Wilder 08.06.12 at 7:32 pm

Rule of Law as, “a system of predictable rules” is a fairly authoritarian view (aka wingnutty), and, in isolation, conceptually untenable, precisely because rules are only a framework for governance, which is a continuous series of ex post judgments. If the world were predictable enough for the application of the rules to be all that predictable, then we would not need governments to govern, i.e. make ex post judgments, or to revise or devise new rules.

What you seem to have in mind, though, is not the rule of law, per se, but a Pareto principle, which secures to the Rich a presumptive moral claim to their past gains, even as the process of governance makes ex post judgments applying the old rules, and new rules are made.

Hayek may have embraced a Pareto principle, but Rawls certainly did not. Rawls has a scheme in which agents of value have plans, and those plans may conflict. The plans of the rich have no particular presumptive claim on state protection. The difficulty in Rawls is the difficulty of self-interested parties making rules, which, as a result of their being able to predict results from their application, may be predictably unfair. Making such rules from behind a veil of ignorance of interest dodges the problem of making rules from knowledge gained in experience, but it doesn’t make Rawls agree with Hayek.

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Watson Ladd 08.06.12 at 8:41 pm

Guys, I think we are all reading Hayek ridiculously, or using what Hayek thought to paint rule of law as a bad thing. Rule of Law doesn’t mean that the law won’t be used against you, it means the law will not be used as an instrument against you. Let’s imagine that smoking indoors was legal, and now it is not. You as a smoker had no way of knowing that this was going to happen, and it does make life more difficult. But I don’t see that the rule of law was violated. Likewise in the anti-trust analogy certain acts are prohibited by monopolies. If before the Clayton anti-trust act you owned a monopoly, that doesn’t give you the right to complain when the law comes into place. But if this is narrowly tailored against you and there aren’t neutral justifications for it, then we’ve got a problem.

Bruce, the issue with that argument is we judge people ex post with rules set out ex ante. Making new rules is different from judging people’s past actions with the new ones: it’s the latter which I take Chris to be defending, and which I’m attacking.

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bianca steele 08.06.12 at 9:06 pm

Certainly no one has suggested that regulation works solely by influencing the thought processes of actors before the fact, or that prosecutions after the fact rather than experience-informed changes to “regulation” are always irrelevant, unless I missed something.

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piglet 08.06.12 at 9:28 pm

Chris 187: when you start invoking Hayek as authority on what leftists should mean when they say “Rule of Law”, something is … weird. And when you make claims like “Hayek’s conception of X is shared by plenty of liberals far to his left”, you better provide some good evidence for that claim; with due consideration of the word “plenty”.

And similar to BW 197: “Rule of Law as, “a system of predictable rules” is a fairly authoritarian view (aka wingnutty)”. Can you provide some kind of support for that claim, an argument, a citation, anything? You go on to say that revising rules and making new ones is inconsistent with the concept of “Rule of Law”, huh? How come you are the first to notice such a huge conceptual inconsistency? This is all deeply depressing, not even because I think you are wrong (it’s more like “not even wrong”) but because this whole thread is built on some absurd strawman argument. I’m far from claiming to be an expert but surely you must be aware that these concepts have been debated for centuries by philosophers, legal scholars, political scientists and what not. To think that you can ride in and in a few incoherent lines of blogging expose that whole idea as absurd and untenable and whatnot? It reminds me of those poor souls who sincerely believe that they can disprove the whole science of evolution or global warming in a few sentences, needing not even high school level of science education.

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Watson Ladd 08.06.12 at 9:58 pm

bianca: what else is it supposed to do to work? If laws against murder didn’t deter murder, why would we have them? (Okay, okay, Kant) If all the EPA did was fine and fine, and the water and air didn’t improve, wouldn’t that be a sign that something needs to change?

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Chris Bertram 08.06.12 at 10:04 pm

piglet: I think it is implicit in Rawls’s concept of a well-ordered society where distributive outcomes are not implemented directly but via rules known in advance (and selected partly in virtue of their probable distributive consequences). Like I said above, Rawls’s espousal of such a view was the reason why Hayek exempted him from his criticism of “social justice” in _The Mirage of Social Justice_ . Since plenty of people are Rawlsians, that’s sufficient warrant for my “plenty” claim.

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Watson Ladd 08.06.12 at 10:05 pm

Chris, what is inconsistent with a heavy wealth tax and the rule of law? I agree expropriation is out, but a heavy wealth+inheritance tax doesn’t seem to violate the rule of law at all. So why do we need expropriation to expropriate?

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Chris Bertram 08.06.12 at 10:08 pm

Incidentally piglet, when are you going to start conforming to the CT comments policy by providing a valid email address?

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Chris Bertram 08.06.12 at 10:17 pm

And piglet, if you want a quote from Rawls, here’s one:

bq. The basic structure is a public system of rules defining a scheme of activities that leads men to act together so as to produce a greater sum of benefits and assigns to each certain recognized claims to a share in the proceeds. What a person does depends upon what the public rules say he will be entitled to, and what a person is entitled to depends on what he does. The distribution which results is arrived at by honoring the claims determined by what persons undertake to do in the light of these legitimate expectations. ( _A Theory of Justice_ 2nd ed. p. 74 )

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bianca steele 08.06.12 at 10:36 pm

Watson:
When I say “certainly no one has said P,” I mean it’s kind of pointless to even discuss P because it would only be a strawman. Here, where P is “regulation acts before the fact,” you and Bruce Wilder seemed to allude to it, though if you did it was admittedly too vague to count.

But to clarify, yes, a rule against murder is supposed to prevent murder. But it’s supposed to prevent murder by specifying a penalty to be applied after the fact. It would be dumb to refuse to prosecute a murder on the grounds that the law was defective in not preventing the murder, and that the purpose of the law is not to work ex post facto. It would be just as dumb to expect a law against murder to change the citizens instantly so that there would be zero murders. And when we say “rule of law,” we’re talking about how the government works. We don’t mean the people have internalized a system of laws.

The same for regulation. When something happens you didn’t expect, it’s entirely possible that there was already a rule against it; it’s not NECESSARILY the case that the problem was you’d failed to regulate against those consequences. You also wouldn’t say, “somehow or other the guys on the front lines seem to be running around without any self-control at all! clearly there’s no point in going after them, much less their supervisors. after all we were responsible for making sure they did the right thing.” Or “well, but it’s bad form to complain after you’ve lost.”

(On second thought, “no one” may not include China Mieville, who in Kraken has people programming the denizens of the spirit world with something like JavaScript.)

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Watson Ladd 08.06.12 at 11:48 pm

Chris, this is a fundamental misunderstanding of Rawls. Reflective equilibrium is an ongoing process, as Kant points out in “What is Enlightenment?”. It is possible that one has neglected moral duties through ignorance, and that society has had incorrect laws. Those laws can be changed regardless of any reliance interests. (Think freeing the slaves: Rawls is very much for that) It also isn’t clear why changing the wealth distribution over some time cannot be achieved by means other then wholesale appropriation. After all, the one percent did not achieve the 1990’s level of wealth disparity by a sudden theft, nor did it take that long for the 1930’s to be replaced by the more egalitarian 1950’s.

Bianca, if a murderer committed a murder when the murder statute didn’t apply, they wouldn’t be murders. That’s what the problem with ex post facto is. Chris is not proposing we punish people who break the law, or aggressively seek taxes from those who can pay them. Rather he’s proposing we change the law, then go back and find people who broke it before the law existed. The point is exactly to prevent people from engaging in tax planning. Imagine if that happens to abortion.

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bianca steele 08.07.12 at 12:07 am

Watson: Rather he’s proposing we change the law, then go back and find people who broke it before the law existed.

That was in the other thread, and I don’t see that that’s what CB is saying. He’s suggesting we change the line between acceptable and unacceptable discretion when something falls between the rules. And I’m not sure he’s actually proposing that. I don’t know enough about how the law is interpreted now to know whether it’s a change.

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LFC 08.07.12 at 3:08 am

fwiw
From Rawls, A Theory of Justice, 1st edition, p.238, from section “The Rule of Law” (sec. 38) (emphasis added):

The precept that there is no offense without a law (Nullum crimen sine lege, and the requirements it implies, also follow from the idea of a legal system. This precept demands that laws be known and expressly promulgated, that their meaning be clearly defined, that statutes be general both in statement and intent and not be used as a way of harming particular individuals who may be expressly named (bills of attainder), that at least the more severe offenses be strictly construed, and that penal laws should not be retroactive to the disadvantage of those to whom they apply. [NB: Penal laws should not be retroactive; doesn't say all laws should not be retroactive; not sure how significant this is.] These requirements are implicit in the notion of regulating behavior by public rules. For if, say, statutes are not clear in what they enjoin and forbid, the citizen does not know how he is to behave. Moreover, while there may be occasional bills of attainder and retroactive enactments, these cannot be pervasive or characteristic features of the system, else it must have another purpose. A tyrant might change laws without notice, and punish (if that is the right word) his subjects accordingly, because he takes pleasure in seeing how long it takes them to figure out what the new rules are from observing the penalties he inflicts. But these rules would not be a legal system, since they would not serve to organize social behavior by providing a basis for legitimate expectations.

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Sebastian H 08.07.12 at 4:59 am

“Oh dear Sebastian, are you really so incapable of paying attention.”

If a huge portion of your readers come to a (wrong?) conclusion, and it hits across two different posts, and it spans the ideological spectrum from Sebastian to Phil to Lizardbreath to rea, maybe you aren’t being very clear.

But your ability to drip with condescension is coming through like crystal. So your ability to communicate emotional content isn’t lacking.

Important areas you’ve left unaddressed:
1) you’re quick to brush aside rule of law changes due to political difficulties, but your own (imho harder to enact) proposals don’t seem to draw that criticism in your mind. Why is that?

2) Your focus appears to be on discretionary enforcement mechanisms but you don’t respond to the historical problem that in vast areas of legal enforcement, across huge numbers of varying cultural climates, that is a great way for the poor, the poorly connected, and the minority to get screwed over. How is arbitrary enforcement going to be mitigated under your proposed structure? (See for example the problem of overcharging to induce plea bargaining or almost the entire history of dealing with racial minorities).

3) And I hesitate to mention it because I worry that you’ll ignore the other two, but is Hayek really anyone’s go to guy on Rule of Law? What is mentioning him getting you in the discussion other than gratuitous libertarian swiping? Yes, he talks about it (and it seems like you are misinterpreting him in the quotes), but who cares? Does the average person who uses ‘rule of law’ mean what you claim Hayek means? If not, why in the world would you muddy the water by introducing it? You should either use the term as most people you’ll be interacting with it use it, or you should capture Hayek’s [alleged] meaning in some other term if you think you absolutely have to discuss it. So far as I can tell, just about no living person uses the rule of law in the way you claim Hayek used it, and I’m not particularly sure that Hayek used it the way you think he did. So why bring him in at all?

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Chris Bertram 08.07.12 at 6:04 am

Watson:

bq. Chris, this is a fundamental misunderstanding of Rawls. Reflective equilibrium is an ongoing process, as Kant points out in “What is Enlightenment?”.

Oh boy! I’m coming to the conclusion that there is a Watsonbot that composes your comments.

Sebastian H: no I drip with condescension towards know-nothings like you and Watson (assuming Watson is a person and not a bot). Your contributions here are on a par with you contributions to Henry’s recent thread where you confused your Polanyis. You add nothing, but you consistently get the wrong idea and then bull-headedly press on wrecking the conversation.

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Mark 08.07.12 at 6:52 am

Tim Wilkinson @ 173. I would read prospectivity as core rule of law principle that applies beyond the criminal law. As would most legal philosophers.

If you don’t mind having things you have already done being subjected to different rules now, that’s fine. But I like to be able to plan my life on the basis that what I do according to the rules will not have a different consequence attached to it, by new rules, in the future. We should at least recognise the moral trade-off involved in retrospective rule-making.

And Pat @ 179 – way to miss the point!

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Chris Bertram 08.07.12 at 7:01 am

Sebastian we (and you) are done here.

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Bruce Wilder 08.07.12 at 7:07 am

Watson Ladd: “Making new rules is different from judging people’s past actions . . . “

I’m not so sure that it is different, or can be different. In a world in which we are learning as we go along, ex ante and ex post are just hopscotch along the path. Every judgment we make is a dual judgment. We are judging whether the ball has bounced out of bounds, and, also, at the same time, whether the bounds are correctly set and marked.

“Rule of law”, for a philsophical liberal, implies institutions of law regulating the terms of social cooperation, and productive of a public (or general) good. It is perfectly sensible to balance the arbitration of conflicts over private interests with consideration of a general, public good or interest, and that calls for exercise of such dual judgment in governance.

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Mark 08.07.12 at 7:13 am

Also, those who doubt the importance of prospectivity in the idea of the rule of law might want to look at what legal philosophers say about this, eg

http://ssrn.com/abstract=1106243
http://ssrn.com/abstract=424613
http://ssrn.com/abstract=1690025

The classic works of Raz and Fuller are not freely available; neither is recent good work like the relevant chapter in Matthew Kramer ‘Objectivity and the Rule of Law’

Re tax anti-avoidance rules and the rule of law, see also
http://ssrn.com/abstract=1523043

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Tim Wilkinson 08.07.12 at 9:31 am

Mark – All my classic works of jurisprudence are currently hidden in a large stack of unmarked boxes, so I’ll stick with materials linked here.

I acknowledge the possibility of a tradeoff (‘cheerfully accepted’). Just because something is generally desirable, or a feature of good law, or necessary for justice doesn’t mean it is part of the Rule of Law, though. While I agree that plenty of (post-Dicey) theorists would include non-retroactivity (and such things as generality) as elements of the rule of law, I would be inclined not to, for the reasons given. That laws be prospective may be a requirement of justice, but the laws, rather than persons, can perfectly well be in charge and yet still have some retroactivity. I would even suggest the same might be said for non-general laws – those aimed at named individuals, for example. These may be odious but need not be incompatible with rule being by law rather than persons.

I think the reason why these two (undeniably important) aspects of good law are easily dumped into the expanding file marked ‘RoL’ is that one would naturally tend to associate both retroactivity and victimisation with partial or (to use a nebulous term) ‘arbitrary’ rule, as of for example, a dictator. And in fact I suspect one might tend to see retroactivity as typically a vehicle for such victimisation: retroactivity is likely to be a reaction to something, and that something is going to be a concrete state of affairs involving particular people, and so teyhre is likely to be at least the suspicion of victmnisation. (Of course if one is Hayek one might go over the top and weaken one’s position by first taking the kind of view that in other circumstances might be called ‘paranoid': supposing that ‘interference’ in the market amounts to ‘deliberate frustration’ of plans, and then, directing one’s objections only at such victimisation.)

This is a somewhat idiosyncratic position, perhaps, but not one I rely on anyway. I think limiting the requirement of prospectivity to crime is more common (a very quick scan of couple of those papers, suggests that they are very much directed at the criminal law), and I’m arguing in particular that it is not something that applies to rules of entitlement, as a matter of the RoL, at least. Rules of entitlement are not primarily, and certainly need not be, intended to guide action in the way that criminal prohibitions are. Here I go further than, say Waldron supra, who only goes as as far as commenting that what I don’t think we should concede is that the rhythm and timetabling of a society’s legislative flexibility should be adjusted additionally to pander to the profit horizons of individual investors who crave a certainty in the property market that they cannot secure in other investment environments.

I would say first that ensuring the functioning of markets is not an aim which it falls to the RoL to achieve. This may depend on what sort of ‘functioning’ we are talking about, but if we were using Laffer logic and trying to maximise revenue for example, the issue would be whether messing about in the market would upset incentives blah blah. But this is far too substantive an aim for the Rule of Law to be responsible for. And I can’t see any other kind of failure of the market grounding a charge of abrogating the Rule of Law.

There’s an ambiguity in the common term ‘legitimate expectations’, which tends to muddy waters here. If upsetting ‘the rules’ of property were to ground a complaint of fundamental injustice, it would need to involve not just frustration of sensible expectations, but frustration of valid claims to have those expectations honoured (the Waldron quote makes a mild version of this point – without foreclosing the option of going further). And then we are arguing about distributive justice rather than the rule of law.

I would also add as yet another aside that markets can take a lot more messing around with than one might suppose if one were to listen to right-wingers like Rawls, Hayek and the fabled ‘markets’ whose opinions and sentiment are conveyed with such clarity to journalists. I’m reminded of the observation that sovereign default seems to be ‘forgiven’ rather quickly by the markets.

In any case, should this argument go against me, I can sidestep it by pointing out, as above, that in any case confiscating property, by whatever means, does not involve retroaction; and even more clearly neither does imposing a debt. Tax laws are unpredictable, like lots of other things. that doesn’t mean that when they hit some ‘protected’ expectation must have been violated, nor that any past entitlements have been altered, nor some new prohibition imposed on past conduct.

I think the opposite view may have been encouraged to some extent by the intial focus on anti-avoidance rules, which seem to have been thought of as analogous to some post hoc loophole-closure device. But in fact anti-avoidance provisions (certainly those currently under consideration in the UK) are much more a matter of a better approach to drafting aimed at (prospectively) eliminating a whole range of ‘loopholes’ by attending to the reality of the situation rather than formal accounting procedures. I think there may also be a tendency to think of tax laws as penal (the libertarians’ men with guns) and thus to suppose that a tribunal’s finding that a certain avoidance strategy is ineffective is, or is ‘tantamount to’ (whatever that means), a finding of fraud or other crime.

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Tim Wilkinson 08.07.12 at 9:33 am

pa 3: ‘the reason..is’ -> ‘one reason…may be’

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Chris Bertram 08.07.12 at 10:33 am

I’ve had another go at some of the ideas here in a new post:

http://crookedtimber.org/2012/08/07/the-problem-of-rawlsian-transition/

People who know what they’re talking about are welcome to continue the conversation there.

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Jeffrey Davis 08.07.12 at 3:30 pm

The timing aspect is curious. Bribery is illegal now. And I don’t know of many people who believe that all legislators everywhere have been pristine. There is taint in the ways huge masses of money get accumulated. Taking it ex ante via an accumulated wealth tax might ruffle feathers, but there’s nothing outside the rule of law (or our sense of justice) that would find it a more grievous wrong than bribing legislators to game the system is.

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Andrew Cady 08.08.12 at 10:26 pm

I’m sorry, I couldn’t read through all these comments. I did search and find “slave” mentioned, but not this:

I’d just like to point out how closely the disagreement here resembles that old conflict about the abolition of slavery — whether to compensate the slave owners. The British Empire compensated the expropriated slave owners — putting the government in severe debt. (If I recall correctly, its deepest level of debt ever.) In clear violation of its own constitution, the USA did not compensate expropriated slave owners (except in Washington, DC).

To my mind, it only seems odd that no one thought to compensate the slaves.

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