Why does the rule of law matter today?

0:05People understand the difference between rule by law and rule of law. Lots of totalitarian societies have constitutions, and they're used by the authoritarian regime to establish rule by law. I can arrest you because it's your and my Constitution. What we have is rule of law, and people know the difference between the two.

0:28What's scary is we're going through a process now outside the United States, in places around the world, Hungary, Poland, Turkey, Israel, India, where the traditional power and hold of the constitution is really being bent by strong leaders. We need to get through this period and make sure that the rule of law wins. [inaudible] to Hong Kong, it just blew my mind, this little strip of island and these tall buildings reaching to the heavens, and I said, you know what that is? That's Chinese creative energy bounded by British rule of law.

1:08That's what you get when you put the two together. What happened as Mainland China has moved in more to Hong Kong? That rule of law weakens. You'll leak energy. Suddenly the capital starts to move to Singapore, to Malaysia, to different places, so the interface between the rule of law and your society and your economy is hugely important because the rule of law is like a hard court in basketball. I'm a little guy, 5'7". Little guys, not me but like me, could actually dunk a basketball off a hard court. The absence of the rule of law is like the sand in the desert.

1:48You can't jump a millimeter. America is the country it is for a lot of reasons, but most of all because we've attracted immigrants from all over the world who are both high-energy and aspiring, and because we attracted people who are high-IQ risk-takers, and it's the two together.

2:08Why do they come here? It's a big world. They come here because they know there's this Constitution, and if they behave properly, sky's the limit, just like those buildings in Hong Kong. I was once in Abu Dhabi in the UAE. I was checking into a hotel, and I had an Egyptian who was my porter, who walked into the room. I said, "How do you like living here in the UAE?" He said, "I like it a lot." I said, "Why?" He said, "They have good canon here." Canon is the Arabic word for laws. I just always remember that.

2:44He said they have good laws here. It's not a full democracy by any stretch of the imagination. It doesn't even claim to be, but if people feel there's decency around them, that they'll get a fair shake whether it's in the Middle East or India or the United States, that's always going to attract high-aspiring people because they know their achievements will not be ceased by the government. They know if they bring that energy, that high-IQ risk, they start a online school, and it's wildly successful, the government is not going to look at it and say, "Nice little school you got there. We could really turn that into a big profit-making thing. I think we'll take it."

3:28The next immigrant is not going to come here and start a school.