Mr. Duffy holds a law degree and is pursuing a master’s degree in economics at the London School of Economics. He is the second prize winner of the 1995-1996 Olive W. Garvey Fellowship. A copy of the full text of his prize-winning essay is available upon request from The Independent Institute (see page 3).
Editor’s Note: In his essay, Mr. Duffy makes a critical inspection of the types of social ordering indicated by “free markets” and “government controls” in terms of law.
The experience of the United States in the twentieth century shows, I think, the truth of Friedrich Hayek’s contention that the rule of law cannot survive the vagaries of politics once it begins to lose force as a cultural value in people’s minds. The mental transformation wrought by socialist ideals has made many people willing to alter the prevailing mixture of freedoms and controls toward totalitarianism (though, of course, they did not see it that way) in the search for “social justice” and security. These may have been noble aims, but in the meantime it is not coincidental that the one area of law which has come into existence almost ex nihilo over the last century is the administrative law. The exigencies of the Great Depression made the rule of law vulnerable to politics, and the rule of law eroded accordingly, in favor of a jurisprudence which purports to justify the administrative state and which furnishes it with powers more extensive and more intrusive than any it held before.
In the 1930s, the Supreme Court of the United States began to allow Congress to delegate extensive legislative authority to agencies located in the executive and legislative branches of government, or “outside” any branch, by virtue of the political independence of the agency heads. In two great cases of 1935, Panama Refining Co. v. Ryan, and Schechter Poultry Corp. v. United States, the Supreme Court had struck down New Deal legislation on the grounds that Congress had delegated its powers unconstitutionally, but that doctrine fell into disuse with the Court’s general acceptance of a New Deal world-view after President Roosevelt’s court-packing plan gave them a fright in 1937.
Since then, it has been the norm for Congress to create a federal agency and allow it to legislate its own agenda within statutory guidelines that may be quite vague. The rules and regulations promulgated by these agencies have proliferated to such an extent that no mere citizen can be apprised of them all; specialized law practices are built around the rulings and procedures of a single agency; and compliance with the mass of technical legal requirements by a citizen who cannot employ full-time professional counsel is largely a matter of luck. At the same time, the exercise of police powers by government agents seems to have reached a new pitch of effectiveness, to the detriment of the traditional liberties of citizens: powers of summary enforcement by means of seizure or monetary penalty are legion, and the prospect of judicial review of an administrative action can only be reassuring to someone who has not read administrative case law and seen for himself how deferential the courts have become to the judgments of government agencies.
We now live in a society where the administrative state exists in great tension with the rule of law, and both are enervated and demoralized. The first task facing classical liberals today is to rehabilitate the rule of law and thereby to subjugate the administration of government firmly to it; for it is only with reference to some political ideal that measures of policy will appear to be movements toward the free market or away from it, and the only political ideal which we know to be compatible with the civilization we inhabit is the rule of law.
If we do not reshape our law and government into a regime which creates and harmonizes market order and justice, we will slide into the slough of failed nations where so many have gone before us by tyranny, by foreign conquest, by civil war, or by mere creeping decay. Other peoples have known something of what freedom was, but it passed away from them—from the Athenians, from the Romans, from the Italian republics, from England. Let us not think that we will avoid that fate merely by congratulating ourselves on the accomplishments of our past, for which we were not responsible, and which have always been tainted by some evil, like slavery or institutionalized misogyny, of gross inequality under the law. But if we do what the wise have always striven to do, if we revive the ideal which animates the law and bequeath to succeeding generations that true liberty which only true law can provide, then we can say to those generations what Shelley said in 1820 in his “Ode to Naples”:
Thou which wert once, and then didst cease to be,
Now art, and henceforth ever shall be, free,
If Hope, and Truth, and Justice can avail.