Law vs Legislation

July 9, 2015

In our society, and every society, there are rules. Ideally, all the rules are applied equally, and nobody feels put out by having to abide by them.

Some rules evolved naturally, as a consequence of some activity which people engaged in. That’s why in the US, and in many countries, we drive on the right. We decided, when we still were using horses and buggies, that keeping to the right – even when walking on the sidewalk – facilitated movement.

In many countries, the rule is to keep to the left, as in the UK and in Japan, and that’s OK. In those societies, the rule is understood universally, treats everyone alike, and lets all know what to expect. Right or left is a choice which developed naturally, although it eventually was codified into Law.

Similarly, in our culture, we form queues when we’re waiting for service, such as at a bank, a bakery, or other location. No Law is needed, and the specific rule can be modified to try out new ways – such as when banks instituted the single line serving all teller windows.

Most people obey these rules because of peer pressure. Some people still cut in nearing a busy highway exit, but that is the exception rather than the rule.

In some cultures, our rule just doesn’t exist, because the people didn’t think it was needed in the first place. So, if you go to a pastry shop in France and wait to be served, you’ll wait until everybody else has been served – in France, they don’t use queues.

Not all Laws are obeyed near universally. On the highway, if you drive just at the speed limit – regardless of which lane you’re in – the chances are that some idiot will honk his horn or flash his lights at you, and if you look in the mirror, you see scowls (or worse).

Nobel Economist F.A. Hayek made a distinction between Laws, which evolved from our natural choices (queues in the US), and rules which are observed more in the breach than in practice. He called these Legislation.

Legislation tends to be more restrictive and unevenly targeted than Laws. Legislation imposes the will of a few on the rest of us. Favoritism is widespread, although many times this favoritism is not immediately apparent.

Several years ago, the venerable incandescent light bulb was outlawed in the US. Though they are being phased out, starting with the higher wattage bulbs, the effect is quite noticeable on the lower strength bulbs still available today. Replacement incandescent bulbs which still are available cost much more today than simple “inflation” would cause.

Where the favoritism comes in is that the makers of the cheap outlawed bulbs have been driven out, leaving the field open to makers of the mercury-filled CFL bulbs and the LEDs. Since Americans would not have abandoned the incandescents so abruptly, if at all, the Legislation goes against what people really want. In this case, for example, favoritism makes light bulb choices more expensive for poor people (who don’t have a lot of spare cash) while benefiting CFL and LED makers (who may have been pushing the Legislation).

It seems to me that with each passing Presidential Administration, the amount of Legislation – as opposed simply to Laws – has grown continuously and at a quicker rate. This trend may be much more apparent under President Obama, but it’s been going on for at least 3 generations. All this Legislation, benefiting some Americans to the detriment of others, has the net effect of making our society poorer as a whole.

ObamaCare is making us poorer. Bailouts for AIG, for Fannie Freddie, and for the big money center banks is making us poorer. The Zero Interest Rate Policy, making it near impossible for a senior who has accumulated a Million Dollars to live off the earnings, is making us poorer. The subsidies and regulations spawned from the Global Warming Alarmism nonsense, penalizing oil, gas, and coal, in favor of windmills and solar array farms, is making us poorer.

One difficulty in reversing our plunge into a third world Economy, with only two classes – rich and poor – is that people have greater urgency to concentrate only on their own economic state. They need to put food on the table, clothes on their backs, and a roof over their heads, and it is more difficult than it used to be. Most don’t have time for politics.

To reverse our country’s infatuation with Socialism, we need to find a way to make Americans aware that it is this Socialism which is making their lives more difficult – making them poorer. We need candidates for office pledged to fight it. And, we need more people, including news people, to understand what questions to ask. 

Robert (Bob)  Shapiro is self-taught in Austrian Economics and has consulted briefly for the governments of Mexico, Greece, Portugal and Spain. He has traded Gold & Silver and their stocks since 1970. Bob Shapiro’s blog is

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