Bernard H. Siegan is Distinguished Professor of Law at the University of San Diego Law School and has advised several Eastern European nations on constitutional matters.
As the nations and republics emerging from Communism write new constitutions, ominous signs appear that these constitutions will reject the basis for the recent revolutions. Instead of confining it, the constitution writers appear to be establishing a huge economic role for government.
A major, if not the major, reason for the fall of Communism is economics. Compared to the capitalist states, the Communist countries were economic disasters, far behind in individual income and material comforts and conveniences. Thus, as was apparent to any traveler, life for the average citizen was considerably better in capitalist West Germany, Taiwan, and South Korea than in Communist East Germany, China, and North Korea.
Yet most Communist leaders were no less interested than capitalist leaders in providing a better life for their constituents. They imposed every conceivable law toward that end and were ever ready to adopt new regulations “in the public interest.” As a result, the Communist nations had an abundance of laws, but as it turned out, never of food, clothing and shelter. The problem was that Communism identified the public good with ever greater government authority.
By contrast, the market-oriented countries achieved much more good for the people by following an opposite principle, equating the public interest with individual freedom. Capitalist countries such as the United States rely on individual ingenuity and productivity to improve and advance human society. History confirms that free minds, hearts, and bodies account for the greatest societal achievements.
Unfortunately, lawmakers in the former Communist countries may be ignoring this great lesson. Consider, for example, the recommendations of the Ukrainian Parliament’s Constitutional Commission. In the June 1992 draft, it proposes constitutionally mandating a lavish program of entitlements and benefits including: Rest, leisure, paid vacations, “fair” and “satisfactory” wages, and other welfare benefits for workers, minimum living standards, equal pay for the same amount of work in accordance with its quality and quantity, free medical service, safe environment and foodstuffs, free education, and a reduced work period for mothers with young children, minors, people with limited ability to work, and those engaged in physically demanding labor or working in harmful environments.
The proposed constitution would thus impose serious regulatory and monetary restraints on the private sector as well as on the political process. These controls are not consistent with aspirations for freedom and abundance.
They rely on the erroneous idea that people are dependent on government benevolence for their well-being. To prosper and provide abundantly the material necessities of life, Ukraine must encourage private ownership and investment. A constitution that strongly protects economic liberties will attract both domestic and foreign investment. Studies show that the most prosperous nations are those that strongly protect private property and enterprise.
If the Ukraine economy is poor, how will it provide for the host of entitlements and conditions the constitutional draft seeks to bestow? If the entitlements are satisfied, how much will be left to pay for the armed services, police and fire protection, and installation and maintenance of streets, sewers, and water mains? A nation must limit the tax burden lest it destroy the economy.
To be sure, the proposed Ukraine Constitution does provide protection for ownership and investment, but in language hardly comforting to would-be owners or entrepreneurs. The right of property supposedly is secured, but it “must not contradict the interests of society as a whole or of individual citizens.” This exception is big enough to consume the protection.
The former Communist nations should look to the U.S. Constitution as their model. Its protections are negative in character. They are intended to prevent the enactment of laws that stifle opportunity and self-improvement. The U.S. Constitution does not impose affirmative economic obligations on the government. Liberty, in the U.S. constitutional sense, means being immune from government coercion.
The benefits flow to both the individual and the society, as James Madison, the principal architect of the United States Constitution, once stated: “I own myself to a very free system of commerce, and hold it as a truth that if industry and labor are left to their own course, they will generally be directed to those objects which are the most productive, and this in a more certain and direct manner than the wisdom of the most enlightened legislature could point out.”
A constitution that protects both liberties and entitlements is incoherent and very difficult to interpret. It seeks to accomplish two diametrically opposite goals: reducing and enlarging government. Moreover, guaranties of entitlements in a constitution that authorizes judicial enforcement of its provisions will jeopardize the judiciary’s protection of liberty. (The former Communist states are according their high courts the power to enforce their constitutions.)
To enforce the entitlements, the judiciary might well mandate imposition of additional taxation and spending, and neither the people nor the legislature would be able to control this power. Taxing the people and spending the receipts are peculiarly legislative powers, stemming from the idea that only the people, acting on their own or through their representatives, are entitled to decide how they will utilize their own resources. (In the United States, the principle of “no taxation without representation” is among the most sacred.)
Similarly, a court may implement constitutional provisions that require a clean environment, adequate medical service, or fair wages by imposing personal monetary requirements on owners and entrepreneurs, contrary to their contract and property rights. Thus, constitutional efforts to provide government benevolence would give the judiciary dictatorial control over important public and private decisions.
For some people in nations emerging from Communism, life is not comfortable these days. The fault lies not with capitalism but with the difficulty of converting a backward economy to a modern one. Most government-owned industries in these nations cannot compete successfully in world markets. They produce goods and utilize production methods that are antiquated. They lose much money and must either be closed or sold to private investors. Unfortunately, either alternative creates unemployment. But there is no other way for a nation to convert to a viable economy which in time will produce a high standard of living.