A Law for Governments; C. Carson

CLARENCE B. CARSON ;t£aw jor (Jovcrltmcltts ACCORDING to the lore of our time, business monopolies are highly dangerous - so dangerous in their threat to the commonweal that they must either be prevented or regulated and controlled. For many years, attention has been focused on the supposed untoward character of business activities and of how the innocent may fall victim to them. This emphasis has drawn men's eyes and attention away from both the source of harmful business monopoly and the noncommercial monopoly which poses the greatest threat of all to the peace and well-being of peoples. Tha t is the monopoly which government has - the mo nopoly of the use of force in a given jurisdiction. All other monopolies pale before this one in the potenti alities for destructiveness, and it Dr. Carson, a frequent contributor to THE FREEMAN, is Professor of History at Grove City College in Pennsylvania.

is this power alone which can give to business activities potentialities for continued and concerted dam age. Yet, government is not only a great potential danger but also a necessity. Unless somebody has a monopoly of the use' of force in a given jurisdiction, there is likely to be: more or less continuous war fare as groups contend for con trol. That there be a monopoly within a jurisdiction is necessary for peace, and government is also charged with keeping the, peace with preventing aggression from abroad, with putting down do mestic insurrection, with inhibit ing assault, deception, and with settling disputes which may arise. In short, government is not only potentially dangerous but also po tentially highly beneficial. In any case, it is necessary. The dangers of government are l11anifold: that it will be despotic, 32 THE FREEMAN January arbitrary, tyrannical, confiscatory, dictatorial, weak and ineffective, strong and overbearing, aggres sive, destructive of life and prop erty, playing favorites, and so on.

Nor is there an abuse of which those who govern are capable that has not many times been prac ticed. Rulers have from time im memorial perpetrated aggressive war, deceived their own and other peoples, raped and ravished, stolen and confiscated, put the-innocent to death, and allowed the guilty to run loose and wreak havoc. To say that governments have also dis pensed justice and maintained the peace is equally true, but it should not mislead as to the inherent dangers of such an instrument. The existence of government poses a grave and recurring dan ger. It poses a problem, too, which may be stated in various ways. How shall this force of govern ment be contained and restrained? How shall those who govern - for after all, the danger that govern ment poses arises from those who govern - be kept from acting arbi trarily and despotically? How shall those who make, administer, and interpret the laws themselves be brought under the law? This last is, in essence, the question as it should ever be posed. It should be clear that there is no easy answer to it, nor is it likely that the problem will be finally solved.

Government operates by the ex ercise of power. To do its job ef fectively, it must have a monopoly of the use of force in a jurisdic tion. Yet such a monopoly makes it most difficult to bring govern ment under the law. There must first be a law for governments. Then, devices must be found for inducing those who govern to abide by the law. Natural Law and Constitutions In modern (post Renaissance) Western civilization two inter twined devices have been em ployed to bring those-who govern under the law - to establish a law for governments. The first - and most fundamental - of these is the natural law theory. The second is the device of having a written constitution. These methods did not arise-in a vacuum. Instead, there were compelling circumstances for com ing up with some means of bring ing rulers under the law. The major political trend in many-Eur opean countries was toward ab solute monarchy in the sixteenth and seventeenth centuries. This meant, in theory, that all power issued from the monarch and might be claimed by him. Also, it tended to mean that there was nobody to hold the monarch in check, or make him subject to the law. The inevitable result was rule 1970 A LAW FOR GOVERNMENTS 33 at the whim of the monarch - ar bitrary and despotic government.

Not everywhere and at all times was it equally the case, but it was certainly the dominant trend. The natural law theory provided the foundation, in these circum stances, for bringing government under the rule of law, for delimit ing the powers of the monarch most particularly. Here was a law above, and beyond the power of monarchs to alter and to which they, like other men, were subject. Natural law theory was not, of course, new to the sixteenth and seventeenth centuries. It had been effectively formulated by the Roman Stoics, and following that formulation became a part of the heritage of Western civilization. It received new impetus not only from the need to find some means for circumscribing the powers of monarchs but also from Renais sance humanism and the scientific developments of the seventeenth century. Some of the early spokesmen for natural law theory on the conti nent of Europe were Hugo Grotius (1583-1645), Samuel Pufendorf (1632:-1694), and ~ Jean Bodin (1530-1596) ; in England, Richard Hooker (1554-1600), James Har rington (1611-1677), and Al gernon Sidney (1622-1683). From these, and others, it entered a gen eral stream of thought to be espoused by such continental Euro pean, English, and American thinkers as Burlamaqui, Vattel, Beccarai, Locke, Blackstone, Mon tesquieu, John Wise, Jonathan Mayhew, and Thomas Jefferson, until it was the dominant mode of thought in the eighteenth century.

A Law Antecedent to Man Basically, the modern natural law theory held that there is a law antecedent to man, society, and government, that this law is from God, that it is a law which must be observed if each of these is to reach its true form and ful fillment. It is discovered by at tending to the nature of things, and when one attends rightly to the nature of things, he is using right reason. When man's nature and the nature of the universe are viewed in this fashion, it is found that man has certain natural rights: namely, the right to life, to the use of one's faculties, and to the fruits of one's labors. So ciety is natural to man - man is a social being - for within society he can make those exchanges which satisfy and complete him. In like manner, government is necessary for man, for it enables him to live in peace, to have fruit ful relations with others, and keep what is his.

The great thrust of modern natural law thought was to limit 34 THE FREEMAN January government to its proper sphere. One historian of natural law says, "Now the primary practical object pursued by the theorists of Nat ural Law was the delimitation of an area within which objective Right should be withdrawn from the caprice of the legislator, and subjective Right should escape the attacks of the State's author ity.... It was thus with a new and unprecedented force that the theory of Natural Law was able to enter the domain of public law.... "1 That the natural law set bounds to the actions of government was the import of what many of the theorists had to say. Hugo Grotius declared that "it is beyond con troversy among all good men that if the persons in authority com mand anything contrary to Nat ural Law or the divine precepts, it is not to be done .... First, those rulers who are subject to the peo ple ... , if they transgress against the laws of the State, may not only be resisted, but put to death .... "2 Burlamaqui maintained that "if the abuse of the legislative power proceeds to excess, and to the sub version of the fundamental princilOtto Gierke, Natural Law and the Theory of Society, Ernest Barker, trans.

(Boston: Beacon Press, 1957), p. 39. 2 Wilson O. Clough, ed., Intellectual Origins of American National Thought (New York: Corinth Books, 1961), pp. 174-75. pIes of the laws of nature, and of the duties which it enjoins, it is certain that under such circum stances, the subjects are by the laws of God not only authorized, but even obliged to refuse obedi ence to all laws of this kind."3 John Locke pa.rticularized "the bounds which the trust that is put in them by the society, and the law of God and nature have set to the legislative power of every commonwealth, in all forms of government."4 Natural law theory would not, of itself, bring governments un der the law. Natural law has pre sumably been in existence since the beginning of time. Nor have great thinkers from time to time been wanting in their understand ing of its precepts. But as a the ory, the natural law does not and has not prevented arbitrary and despotic government. The second step in bringing under the law those who govern was to specify the laws for those who rule in a particular state - to have a con stitution.

The British Moclel The British pointed the way to constitutional government. Indeed, the British had a long history of attempting to subject their gov ernment to the law. Most of this 3 Ibid., p. 194. 4 Ibid., p. 159.

1970 A LAW FOR GOVERNMENTS 35 effort was devoted to making the king rule by and observe the law. The question was usually phrased in this way: Is the king above the law? Sir John Fortescue, the lead ing legal mind· of fifteenth century England, maintained that the king was not above the law. But For tescue was not taking a novel position in English history, though he may have taken it more point edly than had his predecessors. It had been made dramatically clear at least two centuries before that the king should not be considered above the law. The main thrust of the Magna Carta which King John signed in 1215 was his acknowl edgment that he must observe the established legal procedures in his acts. The matter came to a head once more in the seventeenth century, and more famous documents were added to the English constitution. The Stuart kings claimed absolute powers, and their subjects took action to restrain them. Charles I subscribed to the Petition of Right which spelled out new limitations on his power. The Bill of Rights, proclaimed in the latter part of the seventeenth century, settled the matter definitively. The king was brought decisively under the law.

It was never made so clear, by documents, however, that the other branches of government were under the law. The great model of a constitution which set forth a thoroughgoing law for government is the United States Constitution, supplemented by the constitutions of the states. Here, for the first time effectively, a law for all branches of government was com mitted to paper. That the United States Constitution is a law for the government it authorizes must not be generally understood. Yet that is what it is. Everyone of the original passages deals with the powers of government, with the authority of those who govern, or with how they shall be chosen, for how long they shall serve, what their qualifications shall be, and how the Constitution shall be ratified and amended. The Consti tution is not a law for the citi zenry, except in respect to how they shall be governed and what political procedures shall be fol lowed. It is a fundamental law for government.

Limitations upon Government This character of the Constitu tion may be clearly shown by quoting a few passages from it. Article: I, section 1, reads: "All legislative Powers herein granted shall be vested in a Congress of the United States, which shall con sist of a Senate and House of Representatives." The remainder of that portion deals with qualifi36 THE FREEMAN January cations of legislators, the conduct of their business, and the' extent of the legislative authority. Arti cle II, section 1, reads: "The ex ecutive Power shall be vested in a President of the United States of America. He shall hold his Of fice during the Term of four Years, and, together with the Vice President, chosen for the same Term, be elected, as follows .... " There follows a description of the mode of election, the qualifica tions for the office, how the Presi dent may be replaced, and a list ing of his powers and duties. Arti cle III, section 1, begins: "The judicial Power of the United States, shall be vested in one su preme Court, and in such inferior Courts as the Congress may from time to time ordain a.nd establish."

This, too, is followed by an ac count of the authority and juris diction of the Federal courts. Article IV as well as parts of Article I deal with prescriptions for and limitations on state gov ernments. For exa.mple, Article IV, section 1, says: "Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which' such Acts, Rec ords and Proceedings shall be proved, and the Effect thereof." Article I, section 10, contains such points as these: "No State shall enter into any Treaty ... ; coin Money; emit Bills of Credit . . . ; pass any ... Law impairing the Obligation of Contracts .... " Arti cle V sets forth precedures for alnendment. Article VI proclaims all earlier debts of the United States valid, declares that all laws and treaties made under the authorization of the Constitution the supreme law of the land, and prescribes the oath binding upon all officers of the United States and of the sev eral states. Article VII simply prescribes the method and how many states shall be necessary for ratification of the Constitution.

It is the fact that the Constitu tion is a law for governments that makes it so important that its pro visions be rigorously observed. It is important, of course, that pri vate individuals abide by the law. It is even more' important that those who govern abide by the law, for when they act lawlessly they do so with the full force of government. Separation 01 Powers Drawing up a law for govern ments was one thing; getting it observed was something else. The answer to monopolistic abuses in private industry is competition. If a company does not serve well, or its products are exorbitantly 1970 A LAW FOR GOVERNMENTS 37 priced, in a free market others may enter the field and subject that company to· the discipline of the marketplace. There is not so ready a solution to the problem posed by a government's monopoly of the use' of force. Direct compe tition among governments is a thing to be avoided rather than sought, for direct competition in the use of force is warfare.

Yet, it is possible to use the competition principle in a modi fied form without inviting per petual warfare. One way that this has been done is by the separation of powers within the government so that those who govern may check and restrain one another. The famous formulation of this doctrine was made by Montesquieu in The Spirit of the Laws. He reasoned in this fashion: When the legislative and executive powers are united in the same person, or in the same body of magistrates, there can be no liberty; because ap prehensions may arise lest the same monarch or senate should enact tyr annical laws, to execute them in a tyrannical manner. Again, there is no liberty if the power of judging be not separated from the legislative and executive powers. Were it joined with the legis lative, the life and liberty of the sub ject would be exposed to arbitrary control; for the judge would then be the legislator. Were it joined to the executive power, the judge might behave with all the violence of an op pressor. 5 Looking at it in another way, the separation of powers principle may be seen as a means of inhibit ing tyrannical power by bringing those who govern under the law.

Whereas, if the powers are joined in a single body, there would be nobody to see that it observed the law. American Federalism The British government was thought by Montesquieu to em body the separation-of-powers principle in the eighteenth cen tury. So it did, for the monarch was reduced mainly to the execu tion of the laws, Parliament en acted the laws, and there was a more or less independent judici ary. Americans accepted Montes quieu's formulation as an article of belief and separated the powers of government both in the United States Constitution and in those of the states. Americans went further than this in retaining as much of the competitive principle as practica ble in order to keep government under the law. They set upa fed eral system of government, one in which the powers of government were dispersed among the general and the state governments. Each of these governments was to have 5 Ibid., p. 186.

38 THE FREEMAN January a jurisdiction over the citizenry under it. This made it so that a grasp for power by those in one government would tend to en danger the powers of those in the other. They might be expected in their own interest to resist ex pansions of power and hence re strain each other. Checks and Balances An even more subtle form of competition is inherent in the re publican form of government es tablished in the United States. Those who govern derive their tenure from the consent of the people, either directly or indi rectly. That government be under the law is a condition of the lib erty of the people. That is, an increase in the powers of govern ment will be at the expense of the people, or some portion of them. Hence, the electorate may be jeal ous of their own prerogatives and resist the extension of government power. At the least, they may turn out of power those politicians who have displeased them when they come up for election.

Under the influence of Britain and the United States other peo ples turned with a will to the task of establishing a law for their governments in the nine teenth century. Constitutions were drawn up,elective legislatures set up or buttressed, powers balanced and checked, and arbitrariness re strained. Limited governments provided for more liberty than most peoples had ever known. In many ways, this movement toward constitutional government reached its peak - and its virtual culmina tion - in the wake of World War I ~hen the old autocratic govern n1ents were overturned, the ter ritories of empires carved up into nation-states, and constitutions adopted which were supposed to provide extensive liberties for the inhabitants. Twentieth Century Reformers Revert Toward Tyranny But a counter tendency had al ready set in, one which would eventuate in new tyrannies, arbi trary governments, dictatorships, and oppression. The first peoples to fall under the new despotism were the Russians, with the estab lishment of the Soviet Union in the early 1920's. They were fol lowed by the Italians, Germans, and many others in various de gree. Behind much of this thrust was not only the age-old desire of those who govern to be unlimited in their exercise of power but also a rationale for the concentration and exercise of power. That ra tionale can be called, generically, socialism, though it is known also as communism, fascism, collectiv ism, syndicalism, and "liberal1970 A LAW FOR GOVERNMENTS 39 ism." The animating idea behind it is the determination to use gov ernment power to make over man and society according to an ideo logical vision of what they should be. The effort to accomplish this is made by massive applications of government power. This power is applied in order to attempt to manage and control the economy, redistribute the wealth of the land, provide favors for the in digent, empower certain groups, disable certain others, and bring the whole under the sway of gov ernment. In some lands, this has been done directly, brutally, and dictatorially. In others, such as the United States, the effort has been made much more subtly, with a minimum of the show of force, and in the framework of other forms of government. In all cases, however, the effort has been made by unloosing those who govern and restricting and restraining the general populace.

That tyrannies have made their appearance in some places in our century is well known. That some peoples have fallen under the yoke of oppression is rather generally recognized. All too often, however, this has been attributed to certain evil men - as, for example, Adolf Hitler and Joseph Stalin - and not to the more basic development. When this latter character is rec ognized, it should be clear that the task is to bring governments un der the law. It is, or should be, the pressing issue of our times. There has been much talk in recent years in the United States of the need to restore law and order. Un doubtedly, there is such a need. It is important that citizens obey the law that order may prevail. But if it is only the inhabitants who obey the law, their obedience will quite often simply aid the establishment of tyranny. Those who govern must also obey the law, the law for governments. All governments are subject to law - the natural law. Beyond that, they may have their particular constitutions which establish the laws for those who govern. Rigorous adherence to these is necessary for govern ment to be limited so that the citizenry may be free. fJ IDEAS ON LIBERTY Limited Government THE POWERS not delegated to the United States by the Constitu tion, nor prohibited by it to the states, are reserved to the states respectively or to the people.

United States Constitution, Tenth Amendment The inherent weakness of PRICE COLLUSION D. T. ARMENTANO THE FOLLOWING article is a brief explanation of some of the eco nomic factors that appear to make price-fixing agreements between firms difficult to sustain, even in the absence of direct legal prohibi tion. The widely-held presumption among economists for some time has been that price conspiracies would be common in the American business system without antitrust legislation. The intent of the fol lowing discussion is to challenge such a presumption and suggest, instead, that there are diverse economic factors which would tend at all times to limit the success, and hence the significance, of price-fixing agreements in a free market. It is to be assumed that the firms under discussion here want to fix prices at more than competitive rates; what is being challenged is their collective abil ity to effectuate such a situation.