(Published also on Mises Canada, here with some additions)
Dear Mr. Damon (I like you: can I call you Matt? You’ll never read this anyway, so I’ll call you by your first name).
So, dear Matt,
the cause of liberty needs people with your spirit. However, I’m sorry, but your recent defense of liberty and independence is so much inconsistent that it weakens that spirit.
Yes, the world is upside-down. But not because, as you say, «the wrong people are in power and the wrong people are out of power», but because the idea of law has been subverted.
The law intended as non-arbitrary limit to all coercive power (that is as non-aggression principle) has been replaced with the law intended as instrument of arbitrary coercive power.
In other words, the world is upside-down not because the power is held by the wrong people, as you say, but because the prevailing idea of law makes political power (i.e. coercive power), whoever holds it, unlimited. And the nature of an unlimited power is to expand.
When you say that the problem is that «the wealth is distributed in this country and in the world in such a way as not simply to require small reform but to require a drastic reallocation of wealth» you embrace the same idea of law that makes political power unlimited. This is the ‘law’ intended as command (hence obedience as a problem) rather than as principle valid for all (and especially for the state) in the same way: meaning that if Joe’s stealing money from Claire is a crime, also taxation is. And it is precisely that abstract idea of law (legal positivism) that produced Nazism, communism and the contemporary democratic totalitarianism.
The problem is not that wealth is allocated in the wrong way. The problem is that wealth is allocated. That there is the power to legally allocate wealth. The very possibility of coercive resource allocation implies the unlimited power to coerce people.
There’s also an economic aspect of all this. This however is too complex to be discussed in such a short letter or actually in any letter. So I will not touch this aspect. However, let me say that there are precise economic reasons why the idea of law that allows coercive allocation of resources (or the governments to impose their own money or the central banks to manipulate interest rates, which are the prices of time) produces misery, especially for those at the bottom. And conversely, there are precise economic reasons why the non-aggression principle, which does not allow any coercive allocation of resources, in time produces prosperity, especially for those at the bottom. These precise economic reasons are denied by academia but are proven by logic and illustrated by the Austrian School of economics (which is the only school of thought that deals with economic science).
What we live today is called “free market” by those who don’t know what the free market is. A free market cannot exist when a privileged authority has the legal monopoly of money. More than that, a free market cannot exist when the law is the decision of authority rather than the non-arbitrary limit to its decisions.
You say that «the rule of law has maximized and regularized the injustice that existed before the rule of law». You’re wrong. You see things upside-down. It is not the rule of law that did this. It is the rule of men that did it. Positive law (i.e. the law intended as instrument of arbitrary coercive power) is not law. It is a command that depends on authority’s will. But a command is not the law. The law is the opposite of a command. It is the principle that exists independently of anyone’s will or decision. The rule of law is the rule of that principle. Those who control the state hate the rule of law as much as they love the rule of positive “law” (i.e. their own rule).
We live in a world where it is the law that derives from authority. Liberty, independence and sustainable prosperity, however, are compatible only with a situation in which it is authority (if any) that derives from the law, «not in the sense that the law appoints authority, but in the sense that authority commands obedience because (and so long as) it enforces a law presumed to exist independently of it» (F. A. Hayek).
It is the authority that should orbit the law, not the other way round. The system is in fact upside-down. But it is not a problem of wrong people in power, nor of wrong allocation of wealth. It is a problem of wrong idea of law.