Dear Friends,
It seems to me, the only way a prosperous and stable society can become destabilized is if there is a double standard in law. A society that holds everyone equally under the law and protected by it cannot help but be stable. Now some will argue that’s an oversimplification! That argument might sound logical but it’s spurious. I am talking about first causes. To become stable (prosperous, industrious, and healthy), it must have a legal system that at the very least has the appearance of one standard for everyone. Whenever this has not been the case, chaos, revolution, and crime have skyrocketed. Moreover, I maintain that it’s not a disparity of wealth that causes crime, it’s the appearance that some are above the law that causes it… apparent inequality in wealth masks the inequality of justice.
Barbaric societies have only the wealth they can steal from functional societies. The Vikings gathered wealth from Europe. They didn’t produce anything for it… but misery. The Mongols gathered huge amounts of gold and riches from their conquered lands, built a city, then that capital was abandoned the moment their empire fell. Civilizations that have an encoded double standard are innately limited in how much prosperity they can produce. In other words, justice leads prosperity. Rome before Marius and Sulla produced prosperity by the bucket-load. After Caesar it gathered prosperity from its conquered lands and fed the ever increasing poor, bread and circuses. Even the vaunted Athens was enriched as much by the slaves who worked in the silver mines as by trade.
Adam Smith, in his two famous books, argued for an invisible hand that’s guided by self interest. A nation can only build wealth when it has a legal system that allows for it. That means some cannot be overtly above the law. Why take the risk, get a loan, build a factory and if it succeeds a powerful person will simply take it. People don’t play in lose-lose games. As in ancient Rome, they would rather lose a foot. What incentive is there for a clever slave to create a machine for his or her master’s profit, incentives count. The legal system is nothing but incentives. When some are above the law and others are below its protections, the law is a means to plunder. Taxes fall on the politically disfavored while the favored get the windfall from those taxes… and printed money.
If, on the other hand, law is used to protect the weak and hold the strong to it, prosperity is inevitable. Inventions, property, and person protected lead to innovations, plenty of aggregate supply, and newly rich people. These are the signs of a prosperous society. The problem is, law is in the hands of human beings. People will exploit power for wealth and more power. That’s the underlying theme of the Holy Bible. Even David was guilty of exploiting power for personal ends. So law is almost always used as a tool. That’s why every nation on Earth today is in debt to the tune of 100% of GDP. Law is used to enable a group to extract, or plunder the prosperity of every nation. Monetizing the debt is the go to for the elite. It allows them to plunder the wealth of the nation while hiding the fact.
A nation, society, or civilization, whose elite have decided to exploit law to plunder the nation’s wealth must have a legal double standard. Some are above the law while others are below its protections. This becomes obvious when looking at punishments. If certain demographics, classes, or groups are not held to the standard of society, you can bet that society is being plundered by law. Confucius said, people follow their leaders. So when the leaders of a society are criminals, people become criminals. Water flows downhill. A double standard in law will lead to plundering the wealth of the nation instead of growing it. Wealth extraction under color of law forces people to become extraction avoiders, crime escalates, and society breaks down. This is because law drives prosperity… and poverty.
Sincerely,
John Pepin
