Saturday, September 20, 2008

What Rule of Law?

Bear Stearns? Sure! Fannie Mac? You got it. Freddie Mac? Yep. Lehman Brothers? Sorry pal. AIG? Oh fine.

The Rule of Law thus implies limits to the scope of legislation: it restricts it to the kind of general rules known as formal law and excludes legislation either directly aimed at particular people or at enabling anybody to use the coercive power of the state for the purpose of such discrimination. It means, not that everything is regulated by law, but, on the contrary, that the coercive power of the state can be used only in cases defined in advance by the law and in such a way that it can be foreseen how it will be used.

--F. A. Hayek, in The Road to Serfdom.

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