The Subtle Change from Principles to Rules

This brief book is a compilation of three essays that were written during the summer of 2007 and first published in October 2010. They deal with a revelation that was given to us as we were attending a breakfast presentation on upcoming changes to the US accounting standards. Instead of fighting off the drowsiness which usually accompanies listening to accounting jargon, we found ourselves grappling with a deeply disturbing truth that increasingly defines life in America to this day. American society, which had built itself and created an unprecedented dynamism by operating on the basis of tacitly agreed upon principles, was now turning to the blunt instrument of rules as the basis for relationships. An understanding of this subtle shift in American thinking will greatly aid one in understanding the seemingly inexplicable changes that they see all around them. Clearly, rules have always been a part of life. They are nothing new. What was, and is new, is the power that is now being ascribed to rules. In America, it was often the case that a rule would be written and modified on the basis of an underlying principle. Rules for the sake of having them did not make much sense.Now, circa 2012, the power is continuing to shift to the rules themselves. While the hallmark of principles is that they are flexible enough to adapt to constantly changing circumstances, rules tend to serve as a kind of concrete for society which, as they harden, completely paralyzes anything that finds itself trapped amongst them. Societies based on rules are nothing new. In fact, they are sadly becoming the norm throughout the world. Perhaps the clearest high level distinction between a society that operates on the basis of principles and one that operates on a basis of rules is whether it finds its legal basis in English Common Law, which generally produces outcomes based on equity before the law and a reasonable standard; and Napoleonic Code with its strict adherence to written rules which often has little flexibility regarding the individual circumstance that is being examined. These essays deal with the shift, then, from America's predisposition to operate on the basis of English Common Law to that of the rigidity of Napoleonic Code, and the inevitable consequences of making this shift. The eternal question that we present here, "deer" reader, is whether or not one will stay in the meadow once as they see this shift occur.