Western liberal societies are described by a mix of two contrasting ethical presuppositions, that which commences from a perspective that views persons as natural equals and that which commences from a perspective that classifies persons hierarchically. Differences in this mix among separate polities may create difficulties as principles of justice are extended across national boundaries in response to continuing globalization.
In his treatise, The Constitution of Liberty (1960), F. A. Hayek emphasized the central role of the generality principle, as embodied in the rule of law, for the maintenance of a free society. This book extends Hayek's argument by applying the generality principle to politics. Several important policy implications emerge. There are no direct implications to suggest how much governments should do. The argument suggests strongly however, that, whatever is done politically, must be done generally rather than discriminatorily.
Monetary policy prior to, during, and following the 1990?1991 recession was the tightest and most restrictive in over 30 years. Some have suggested that this policy was explicitly designed by the monetary hawks on the Federal Reserve to wring out the residues of inflationary expectations; others, that the central bank could not offset the real, and powerful, negative shocks buffeting the American economy. But a better explanation is that the monetary authorities were passive because they failed to appreciate the treacherous (...) financial weather caused by new capital requirements and the massive bailout of insolvent institutions. (shrink)