Recently, I had a delightful evening with some girlfriends. We spent literally hours discussing a wide range of topics. At one point, however, something came up and, before I had an opportunity to say another word, my two friends looked at one another. Their faces became somewhat pained, and they both remarked: "Oh no; we don't want to discuss anything political."
My friends are very liberal. And as you know, I am not (at least, not with anything other than some social issues).
What I found sad was not that we do not see eye to eye on political theory. What I found sad is that my friends find discussion of issues associated with politics and government and economics so upsetting that we cannot talk about it. My own belief is that somehow, they think that their beliefs are "for the good of people" and moral - and frankly, that what I think is best for the nation is ... not. Ergo, they do not want to be reminded of this particular failing of mine.
But, what I honestly believe overall is this. My friends are truly great people. They believe what they believe because they do think it will lead to the best society possible. Yet - so do I about my principles and theories. And what I find so difficult to understand is, why is it hard for them to see that this is true - that even though we disagree, we do not disagree about the ends; we disagree about the means. And then, if you accept that - why should it be so tough to talk about our differences and why we belief what we do - and reject what we do?
If they were willing to listen, this is a column I wish they would read. This demonstrates that those of us who believe in as much freedom as possible, in the rule of law and of consistency and some predictability, do so because we believe such a system will lead to the best possible lives of our people overall. And that not doing so is not a presciption for "helping the rich and ignoring the poor" but truly - for helping everyone.
Policymakers should be guided by Hayek, especially by his emphasis on the rule of law and the predictability of policy. As he wrote in The Road to Serfdom, “Nothing distinguishes more clearly conditions in a free country from those in a country under arbitrary government than the observance in the former of the great principles known as the Rule of Law. Stripped of all technicalities, this means that government in all its actions is bound by rules fixed and announced beforehand—rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances and to plan one’s individual affairs on the basis of this knowledge.”
Rules-based policies produce more stable economies and stronger economic growth. When people make decisions, they look to the future. Prices that convey information and provide incentives reflect the future. So good decisions as well as the prices that guide them depend on the predictability of future policy—and thus on clear policy rules.
But Hayek emphasized that rules for government policy do something more. The rule of law protects freedom, as the title of Hayek’s The Constitution of Liberty suggests. Hayek traced this idea through the ages—first to Aristotle, then to Cicero, about whom Hayek wrote: “No other author shows more clearly . . . that freedom is dependent upon certain attributes of the law, its generality and certainty, and the restrictions it places on the discretion of authority.” Hayek also cited John Locke, who wrote that the purpose of the law was “not to abolish or restrain, but to preserve and enlarge freedom. . . . Where there is no law, there is no freedom.” Finally, Hayek pointed to James Madison and other American statesmen who put these ideas into practice in a new nation. These thinkers distrusted government officials as protectors of freedom; the rule of law, they believed, was more reliable.
So rules have a dual purpose: encouraging economic growth and protecting freedom.