BB&T Academic Programs
What Capitalism Is
The Nature of Government
Economics of Capitalism
Objective Law as the Rule of Law
The government in a capitalist system embodies the rule of law, not the rule of men. This means that the government must operate in accordance with objective laws.
Objective laws, as philosopher Harry Binswanger explains, "must be objective in both their derivation and their form." To be objective, a law must be based on the recognition and protection of individual rights. It must be strictly limited to the prohibition of the initiation of physical force in some defined form. Because individual rights are the only means for a society to recognize the objective requirements of man's survival as a moral being, they are the only proper basis for a system of laws to regulate that behavior in society.
That the form of the law must be objective means that it must be clear, knowable, and consistent in their language. Citizens must be informed of the laws, their justification, and the clear, objective punishments that accrue for violations prior to taking action. A government cannot rightfully engage in retroactive lawmaking (a principle enshrined in the Constitution's "ex post facto" clause).
The contrast to a non-objective law illustrates the difference between a rule of law and the rule of men. In a proper, objective system, a government would clearly define and prohibit murder. A non-objective law would be a law that prohibited "doing things that are mean" to other people. Whereas in the first example, the individual's right to life is protected against the initiation of physical force (gunshots, stabbings, poison, etc.), in the latter example, no man could know what would be enforced as "mean." Such a law would waver according to the judge or jury involved in the case.
Unfortunately, such non-objective laws have come to be commonplace in our system. The antitrust laws prohibit "unfair" competition, which has been interpreted by the courts to both prohibit and allow the same types of business practices depending on the situation. Some legislators want to pass laws that prohibit gasoline producers from selling at prices that are "unconscionably excessive." This is the essence of a non-objective law—it is not based upon an instance of the initiation of physical force since buyers and sellers of gasoline come to the market freely of their own choice; and it is not clear or knowable ahead of time, since "unconscionable" may mean different things to different juries and judges. In the end, the enforcement of such a law would exist at the whim of the man or men who held governmental power. No man would be safe from the arbitrary exercise of the government's power in such a situation—it would truly be the rule of men.