Beginning at the end of the nineteenth century and continuing through the late twentieth century came loud and repeated warnings from theorists about the decline of the rule of law. It is an odd paradox that the unparalleled current popularity of the rule of law coincides with widespread agreement among theorists that it has degenerated in the West. Theorists on both ends of the political spectrum, right and left, have concurred on this diagnosis, though the former have lamented this decline while the latter have celebrated it. Given that the rule of law is widely prescribed as the elixir for many political and economic ails, it is essential to understand the nature of and reasons for this decline. The arguments of the political right will be taken up in this chapter.

Liberalism versus socialism

The observed decline of the rule of law is directly linked to the grand ideological contest between liberalism and socialism of the past 150 years. Mid-nineteenth-century England was the highpoint of classical liberalism. A free market in the production, distribution, and exchange of goods and services substantially prevailed, with relatively limited government interference. According to historian Eric Hobsbawm, the engine of economic progress during this period was the development of the railroad. It generated increases in steel production (to build rails and cars) and coal mining (to fuel the engines); it encouraged innovations in machine-building and engineering; it prompted the creation of new financial devices for capital accumulation (to finance projects).