Question

How the rule of law protects businesses from government? include an example in your explanation.

Answer 1

The rule of law is important to business. The rule of law establishes rules that people and businesses must follow to avoid being penalized. The rule of law not only allows people to understand what is expected of them in their personal capacities but also sets forth rules for businesses so that they, too, know what is expected of them in their dealings and transactions. In addition, it restrains government and others from infringing on property rights.

The rule of law provides guidance and direction in every area of business. Additionally, in the United States, the rule of law provides a sophisticated system of federalism, where state and federal laws coexist. The rule of law also governs contracts between people and between merchants. Additionally, because we have a rule of law system, employers know the rules of the game regarding their relationship to employees, and employees know the rules with respect to their obligations to employers.

The rule of law also provides protection for property. Imagine if we did not have protection for non-tangible property, such as intellectual property like trade secrets, trademarks, or copyrights. It would be very difficult to protect this type of property if we did not know the rules of the game. People would not have the incentive to create or share new intellectual property if they had no reasonable expectation of being able to protect it or of being rewarded for their creations. The rule of law also protects people from businesses. The rule of law also protects businesses from government. Since everyone is subject to the rule of law, this means that government itself may not overextend its reach when regulating or investigating businesses. Government must play by the rules, too. Without a rule of law system, people would have to exact satisfaction for the wrongs committed against them on their own. They would have to physically protect their own property. This would lead to a breakdown in social structure, and it would result in vigilante justice and physical strength playing primary roles in dispute resolution.