The Rule of Law During Times of Economic Crisis

63 Pages Posted: 27 Aug 2015

See all articles by Todd J. Zywicki

Todd J. Zywicki

George Mason University - Antonin Scalia Law School, Faculty; PERC - Property and Environment Research Center

Date Written: August 26, 2015

Abstract

It is trite to observe that every economic crisis is unique and calls forth unique government responses. Still, it is possible to generalize from prior crises to anticipate government responses to future crises. Understanding patterns in governmental responses to crises is especially pressing in that the United States faces a looming and entirely predictable fiscal crisis caused by the seemingly irreversible nature of spending on entitlement programs and exploding government debt. Yet government responses to prior crises are not uniform — the economic crisis associate with the Articles of Confederation and the crisis of the Civil War produced strengthened constitutional structures. The crises of the Great Depression and recent financial crisis, by contrast, resulted permanent disfigurement of the Constitution that has produced a massive growth in rent-seeking and crony capitalist structures. This article explores these different constitutional responses to economic and national security crises and attempts to identify which factors may be crucial in determining whether the inevitable fiscal crisis results in strengthened or weakened constitutional government and the rule of law.

Keywords: crony capitalism, Dodd-Frank, economic recovery, fiscal crisis, legal constraints, moral hazard, popular ideology, rent-seeking, rule of law, social elites, U.S. Constitution

JEL Classification: H53, H63, H87

Suggested Citation

Zywicki, Todd J., The Rule of Law During Times of Economic Crisis (August 26, 2015). George Mason Legal Studies Research Paper No. LS 15-09; George Mason Law & Economics Research Paper No. 15-27. Available at SSRN: https://ssrn.com/abstract=2651893 or http://dx.doi.org/10.2139/ssrn.2651893

Todd J. Zywicki (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States
703-993-8091 (Phone)
703-993-8088 (Fax)

PERC - Property and Environment Research Center

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United States

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