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Quotation of the Day…

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… is from page 328 of Vito Tanzi’s 2018 book, Termites of the State: Why Complexity Leads to Inequality (original emphases): Rules, now issued by modern governments, and increasingly in coordination with other governments and with international organizations, have, to a large extent, replaced the broader principles, or the guidelines, that had existed in the past. These rules are created to deal with current actions and current perceptions of what is proper, legitimate, and necessary. The problem is that it is difficult for specific rules to anticipate future needs and to stipulate future actions that may be guided by new and unanticipated circumstances…. DBx: This point, a Hayekian one, is important. Common-law processes apply principles to particular situations – to particular

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… is from page 328 of Vito Tanzi’s 2018 book, Termites of the State: Why Complexity Leads to Inequality (original emphases):

Quotation of the Day…Rules, now issued by modern governments, and increasingly in coordination with other governments and with international organizations, have, to a large extent, replaced the broader principles, or the guidelines, that had existed in the past. These rules are created to deal with current actions and current perceptions of what is proper, legitimate, and necessary. The problem is that it is difficult for specific rules to anticipate future needs and to stipulate future actions that may be guided by new and unanticipated circumstances….

DBx: This point, a Hayekian one, is important.

Common-law processes apply principles to particular situations – to particular disputes – as these situations arise in reality, complete with all of their contexts and details. The resulting rulings and articulations of law are extracted from existing principles. And each ruling, of course, is available to be used as a guide in the future to resolve similar disputes. Yet common-law legal rulings – and the larger body of law of which they are a part – are never so precise in their details, or so rigid in their application, that the uniqueness of each situation is ignored in attempts to apply the law.

Common-law processes, based on principles and being no part of any effort to bring about particular outcomes, are forward-looking in a way that legislation cannot be. This truth holds both for legislation enacted by legislatures and for the administrative rules issued by agencies to which legislatures delegate their legislation-making powers.

See, for example, the work of F.A. Hayek, of Bruce Benson, of Bruno Leoni, and of James Coolidge Carter.

The advantage of common-law processes over legislative rule-making is recognized to be even greater once one realizes that what Tanzi above calls “current perceptions of what is proper, legitimate, and necessary” are nearly always distorted by interest-group pressures, by the rational ignorance (and rational irrationality) of voters and legislators and bureaucrats, and by the many other political imperfections identified by public-choice scholarship.

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Don Boudreaux
He is a professor of economics at George Mason University in Fairfax, Virginia. Previously, he was president of the Foundation for Economic Education.

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