The Constitution: Government and the rule of law

The Constitution: Government and the rule of law

I n t r o d u c t i o n : G ov e r n m e n t , l i b e r t y a n d

d e m o c r ac y

The Constitution is the third concept that is allocated a core position in neo-liberalism’s conceptual configuration. Neo-liberals, as the previous chapters have demonstrated, acknowledge the need for government, but are at the same acutely aware of the dangers that government embodies. The Constitution is a fundamental political concept for neo-liberals because it represents a means through which the powers of government and other state officials can be curtailed. Individual liberty, they contend, can only be safeguarded by constitutional constraints and by the sup - remacy of law – constitutional government is equated with limited gov- ernment. There is thus a significant ambivalence in neo-liberal ideology towards the state and politics. At the heart of neo-liberalism is a serious doctrine about politics and government. Neo-liberals recognise that, in order to have a functioning market order, it is vital to have a correspon- ding form of political order. Indeed, they must emphatically engage in pol- itics in order to free society from politics. In neo-liberalism, the principles and operating procedures of a specific form of constitutional order repre- sent the only acceptable means of both limiting the coercive power of gov- ernment and upholding the rules of the market.

At the heart of neo-liberalism’s conception of constitutionalism is its interpretation of the rule of law. In neo-liberal ideology, the powers of gov- ernment are constrained by the rule of law underpinning the constitution. The rule of law represents the fundamental fixed rules that stand over and above the political community. It prevents government from stultifying At the heart of neo-liberalism’s conception of constitutionalism is its interpretation of the rule of law. In neo-liberal ideology, the powers of gov- ernment are constrained by the rule of law underpinning the constitution. The rule of law represents the fundamental fixed rules that stand over and above the political community. It prevents government from stultifying

individual incentives in their pursuit of individual ends or desires and is therefore essential in neo-liberalism for the preservation of the market order. Neo-liberals starkly contrast their liberal ideal of the rule of law with collectivist economic planning, which ‘cannot tie itself down in advance

to the general and formal rules which prevent arbitrariness’. 1 The rule of law, neo-liberals argue, unlike the legislation of central government, guar- antees not only equality before the law but also individual liberty, by restricting the exercise of government powers to those determined by a permanent framework of formal laws.

An important tension in neo-liberal conceptions of the constitution is that which exists between democracy and liberty. Neo-liberals like F. A. Hayek argue that it is a misleading and unfounded belief that democratic rule can never be arbitrary rule. Democracy, they point out, does not always guarantee individual freedom. It is allegiance to the liberal consti- tution and its fixed rules of law, rather than majority rule, that can prevent the rise of arbitrary power and dictatorship. Hayek thus acknowledged that it may be necessary to limit the will of the majority rule (or rather the will of the administrators and agents of the majority) in order to uphold the rule of law and the values of democracy. It is only through a liberal con- stitution that democracy can be effectively preserved, as individual liberty is an essential precondition for democratic rule. 2

This chapter will outline neo-liberalism’s conception of the Constitution. It will briefly examine of constitutional traditions found in Britain, the United States and Germany, as well as the neo-liberal inter- pretation of these traditions. The chapter will argue that neo-liberals do not endorse all constitutional frameworks, but rather they support the liberal ideal of a rule-of-law state embedded in the German Rechtsstaat. One of the most influential neo-liberal advocates and elaborators of a liberal constitutional has been Hayek. The chapter will assess his contribution to the formation of an ideological constitutional model. It will look at his dis- trust of democracy, his discussion of the primacy of the rule of law, and the intractable relationship he sees as existing between law and legislation. It will outline the concepts adjacent to the constitution, such as private law, legal responsibility, abstract order, ‘rules of just conduct’ and evolution, in relation to Hayek’s liberal programme. The chapter will go on to set out a neo-liberal constitutional model. It will detail James Buchanan’s proposals for constitutional reform and Hayek’s agenda for the ‘constitution of a liberal state’ through a discussion neo-liberal peripheral concepts or policy ideas like the separation of powers, independent administrative courts, a This chapter will outline neo-liberalism’s conception of the Constitution. It will briefly examine of constitutional traditions found in Britain, the United States and Germany, as well as the neo-liberal inter- pretation of these traditions. The chapter will argue that neo-liberals do not endorse all constitutional frameworks, but rather they support the liberal ideal of a rule-of-law state embedded in the German Rechtsstaat. One of the most influential neo-liberal advocates and elaborators of a liberal constitutional has been Hayek. The chapter will assess his contribution to the formation of an ideological constitutional model. It will look at his dis- trust of democracy, his discussion of the primacy of the rule of law, and the intractable relationship he sees as existing between law and legislation. It will outline the concepts adjacent to the constitution, such as private law, legal responsibility, abstract order, ‘rules of just conduct’ and evolution, in relation to Hayek’s liberal programme. The chapter will go on to set out a neo-liberal constitutional model. It will detail James Buchanan’s proposals for constitutional reform and Hayek’s agenda for the ‘constitution of a liberal state’ through a discussion neo-liberal peripheral concepts or policy ideas like the separation of powers, independent administrative courts, a

chapter will contend that the Constitution is a fundamental concept for neo-liberalism, since one of its principal aims, as a movement in opposition to collectivist planning and arbitrary power, is the preservation of liberal constitutionalism and the rule of law.