law-mosaic.jpgEconomy Polarizing Political Economy 

Rule of Law

By James H. Nolt

When I was in elementary school, I remember my (very conservative) teacher saying that the great thing about the United States was that our constitution guaranteed rule by law rather than by men. At the time, to my young mind, that seemed a fairly arbitrary distinction to me, since it was obviously both. Now I understand more completely what the rule of law entails.

As I explained in an earlier blog, liberalism, within international relations theory, has always favored the development of international law, rules, and norms. A rival international relations theory, realism, scoffs at international law as mostly window dressing concealing the real relations of power. Power, for international relations realists, is rooted in the military power of nations.

The international order constructed by the Western Allies after World War II was steeped in liberal ideals. A vast network of rule-bound institutions was created, including the United Nations, the World Bank, the International Monetary Fund, and the General Agreement on Tariffs and Trade (GATT), which evolved into the World Trade Organization. Subsequently, scores of other multilateral institutions and non-governmental institutions emerged. Liberals argue that these international institutions increase global prosperity and security.

I am not an international relations liberal because, unlike liberals, I recognize that there is no “one size fits all” solution for global problems. Nearly any institution, policy, or rule protects some interests and undermines others. My Machiavellian or corporatist worldview is why I label this series “Polarizing Political Economy.” Being a Machiavellian, by the way, is not a moral choice; it is a recognition of the realities of conflicting interests. This is a reality recognized by political theorists as diverse as Thucydides, Aristotle, Machiavelli, Montesquieu, David Hume, and James Madison, not to mention the Marxian tradition. Liberalism assumes there is only one policy and one world order than secures the general good—I doubt that.

On the other hand, I am not an international relations realist either, for several reasons. First of all, I do not believe military power is paramount in international relations. Since all wars are financed, private interests must be included in the analysis of international relations. Most wars have conflicting economic interests deeply implicated in their origins, goals, and termination. Second, I agree with liberals that laws and institutions do matter. They comprise the terrain of the battlefields on which private interests contend. Effective legal systems, such as the U.S. Constitution, can channel private conflict into legal channels rather than resolving all conflicts by force. The same can be true of international institutions.

International laws and institutions may help level the playing field between large and small countries just as domestic laws do the same between the rich and the poor, though never adequately. Where there is no law at all, for example in countries dominated by warlords, the weak and poor are clearly worse off. On the other hand, unlike liberals, I do not believe that international institutions are neutral public goods that benefit the world community as a whole. The possible benefits are not evenly distributed nor does everyone agree on what is good and beneficial. This is why the international arena can be contentious.

The Brexit vote in the U.K. and President Donald Trump’s repudiation of the Trans-Pacific Partnership (TPP) this week illustrate this point. The U.K. and the U.S. are the two countries that were most influential in the founding of the postwar liberal international order now being challenged by their own leaders. I have debated whether Trump is truly an economic nationalist, but his actions during his first few days concerning the TPP and border wall suggest that his campaign promises were not mere pandering. He really means to govern the way he campaigned. Likewise, in the U.K., there was some doubt after the Brexit vote whether the country would actually sever decades of deep ties to the European Union. The U.K. supreme court ruled this week that Parliament in London would have to approve the exit, which it probably will, but that the Scottish and other regional parliaments, which were more likely to resist Brexit, have no say. The founding countries of the postwar world order seem to be reversing direction.

This reversal will have profound effects on the international order. China’s President Xi Jinping has already announced that his country will be willing to step up as a champion of the global liberal order if the U.S. abdicates. This in itself is a stunning development. Who would have believed when President Jimmy Carter established diplomatic relations with a poor and inward-looking China in 1979 that in less than four decades it would not only become the world’s largest trading nation but also champion the liberal world order more vigorously than the U.S.?

Some think that because a bipartisan majority in Congress supports free trade, Trump will be constrained from overturning the liberal trading system. Actually, under the rules of that very system, the Trump administration has significant powers to obstruct trade, such as by using antidumping suits. Likewise, observers have noted that a majority of U.K. parliamentarians support continued membership in the European Union, yet it is expected that a majority will vote to support Brexit rather than defy the voters who endorsed Brexit. Executive powers in both countries are sufficient to greatly alter the rules of the game, shifting toward protectionism in the U.S. and reasserting national sovereignty in Britain. Both moves are against the globalization trend.

However, there is one other powerful bloc that has a say, but is largely ignored in the media. Transnational capital, what I like to refer to as business internationalists, have their vote too. They vote not with ballots, but with credit and investment decisions, and perhaps also lawsuits, propaganda, and political contributions. Hundreds of large and powerful global corporations operate in various countries and buy and sell in many more. Segmenting the world market is not in their interest. They are likely to fight these anti-globalization moves in ways most of us will not notice.

If Trump does what he promised and tries to satisfy his voter base, he will necessarily alienate a large and powerful bloc of business internationalists, dividing the elite as never before since 1945. This will provoke new tactics and new political alignments. Similar developments will occur in the U.K. and Europe. The inevitable consequence of this new politics is an erosion of the rule of law.

As I argued two weeks ago, the kind of bilateralism and individual company negotiations that Trump favors portends different rules applying in each instance and to each party, whether country, company, or individual. Rule by universal law dissolves into rule by negotiated deals. This is not democratic. It is not even republican, the way the U.S. founding fathers and European Enlightenment theorists understood republicanism as rule by law. It is instead rule by (mostly) venal and corruptible men who will use their particular powers to discriminate. Those discriminated against will be not merely minorities and immigrants, already getting widespread attention in the media, but powerful corporate interests who will fight back with every means at their disposal when they find that a deal favoring one set of business insiders discriminates against them. I will discuss more about the consequences of this next week.



James H. Nolt is a senior fellow at World Policy Institute and an adjunct associate professor at New York University.

[Painting courtesy of Library of Congress]

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