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Business and the Rule of Law
Published on Wednesday, December 21, 2005 by
Business and the Rule of Law
by Robert B. Reich
American business should be deeply concerned about the claims by the President to authority for whatever action is necessary to secure the nation, even if that means stretching or ignoring the law.

From its infancy, modern capitalism depended on liberty and predictability, and business leaders fought for the rule of law. The idea that a head of state must be bound by law emerged from the struggles of the 17th and 18th centuries with monarchs who claimed to have divine right to do as they pleased. A rising class of European merchants insisted that rulers do only what they were authorized by law to do.

These business leaders understood that economic liberties could not be separated from civil liberties. If a king or emperor could arrest or detain or search or torture anyone for whatever reason, there was nothing to stop him from taking private property, interfering in private contracts, commandeering private resources.

Now we have a President who asserts the power to spy on Americans without the approval of a court, even though a law enacted more than a quarter century ago prohibits this practice. He claims authority to secretly monitor the actions of private groups advocating environmental protection or peace. He and his administration assert the prerogative to call any American an "enemy combatant" and keep him in jail without counsel for as long as they wish.

This is the same Administration that flouts international law by detaining foreigners indefinitely, by holding some in secret prisons, and by using torture as an instrument to gain information. Itís the same Administration that pays off journalists here and abroad to write favorable stories about it, also in defiance of law.

The President says all this is justified because he is the nationís Commander-in-Chief, responsible for guarding the nationís security in a time of war. But if the end of keeping Americans secure justifies all means -- including a disregard of law -- then no one is secure.

If civil liberties can be sacrificed at the whim of the president -- without deliberation by Congress, and absent the normal procedures involved in making law -- economic liberties are equally at risk. How far are we from the specter of no-bid government contracts to politically well-connected suppliers who agree with the Presidentís assertions about the war? Of selective prosecution of antitrust laws or health and safety regulations, depending on support for the Presidentís war agenda? Of pressure on the media to provide favorable coverage of the war, in return for regulatory favors?

When a president or a king is unaccountable to law, itís impossible to predict where or how he will act in pursuit of his aims.

The perils for American business reach beyond our shores. When America is viewed less as a beacon of law and democracy than as a lawless bully, the nation cannot claim world economic leadership. The so-called Washington Consensus of the 1990s, embracing free trade, free capital flows, and responsible fiscal policies, is unraveling. The Doha Round of trade talks has practically ground to a halt. Weíre getting nowhere on international agreements over taxes and securities.

Economic freedom and civil liberty -- the two are inseparable. And both are threatened by unaccountable power that refuses to be confined by the rule of law. As they did centuries ago when confronting monarchs who claimed unbridled power to rule as they wished, business leaders must come to the defense of liberty.

Robert Reich is Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written ten books, including The Work of Nations, which has been translated into 22 languages; the best-sellers The Future of Success and Locked in the Cabinet, and his most recent book, Reason. His articles have appeared in the New Yorker, Atlantic Monthly, New York Times, Washington Post, and Wall Street Journal. Mr. Reich is co-founding editor of The American Prospect magazine. His above commentary airs tonite on NPR's "Marketplace."


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