What kind of government? Rule of Law, or Rule by Discretion? It’s an easy question.

Natural Law Capitalism (markets in everything, limited by externality) must emerge under rule of law since no other option is available. The only externality is black markets (crime) to profit by imposition of costs by externalities. All other forms of circumventing rule of law by rule of discretion will simply breed special interests, monopolies, rents, and corruption – as well as black markets

One of the great intellectual scams of the 19th and 20th centuries is to sell the replacement of rule of law, with arbitrary rule – by selling capitalism (unlimited free trade capitalism that tolerates externalities), versus socialism (discretionary rule socialism that manufactures externalities in volume).

There is no alternative to a mixed economy. The alternative is between rule of law mixed economy (dividends to shareholder-citizens), and arbitrary rule mixed economy (dividends to the political class and their enablers).

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