Irrespective of the moral rights and wrongs of the former Royal Bank of Scotland chief Sir Fred Goodwin’s pension entitlement, the widely reported comment by the Deputy Leader of the Labour Party, Harriet Harman MP, that Sir Fred’s pension entitlement “might be enforceable in a court of law… but it is not enforceable in the court of public opinion and that is where the government steps in”, shows a blatant disregard for the principle of the rule of law that must be at the heart of a free society. The idea that public opinion (as measured and defined by whom?) should somehow trump the law opens the door to any number of infractions upon individual liberty.
If property rights – which include, of course, pension entitlements – were to be determined by “the court of public opinion” the results would be economically catastrophic. Resources would be diverted to those deemed morally worthy, or able to capture the political process, rather than to enterprises that would put them to their most productive use. Distortion of the market process by attempting to deliberately assign income and wealth always results in impoverishment – thus always proving counter-productive. Sadly, there is no shortage of examples of societies that have met such a fate. The Soviet Union and its Eastern European satellites are one example from recent history. Zimbabwe offers a contemporary case.