Introduction: Judge Andrew P. Napolitano joined the FOX News Channel (FNC) in January 1998 and serves as its senior judicial analyst. Judge Napolitano is the youngest life-tenured Superior Court judge in the history of the state of New Jersey. While on the bench from 1987 to 1995, Judge Napolitano presided over more than 150 jury trials and sat in all parts of the Superior Court – criminal, civil, equity and family. He has handled thousands of sentencings, motions, hearings and divorces. For 11 years, he served as an adjunct professor of constitutional law at Seton Hall Law School, where he provided instruction in constitutional law and jurisprudence. Judge Napolitano returned to private law practice in 1995 and began television broadcasting in the same year. Judge Napolitano's many books include It is Dangerous to be Right When the Government is Wrong: The Case for Personal Freedom (2011).

Daily Bell: Let's get started. What about the Rand Paul controversy? Where do you stand on his endorsement of Romney?

Judge Napolitano: Rand Paul is a friend of mine but yes, that endorsement certainly got him slaughtered on his Facebook page; they were running 50:1 against him. My whole view – and I've said this on air – Mitt Romney's views are closer to Barack Obama's than they are to Thomas Jefferson's and he presents just a slightly different version of big government. In fact, in the defense policy he might actually be worse than the President because he seems to be itching to start a war with Iran. In terms of domestic policy, he contemplates additional borrowing, maybe a little less than the President has borrowed. If the President is re-elected he might bring us to $20 trillion in debt by 2016; Romney might bring us to $18 trillion in debt by 2016. Either of those federal debts would be unsustainable.

Daily Bell: Give us a quick summation and your thoughts on the election this year.

Judge Napolitano: I have harshly criticized Paul Ryan for having voted to offer the president to raise the debt ceiling; I have also criticized him for his support of the Patriot Act and its extensions and the National Defense Authorization Act. He is a classic George Bush Republican who does not believe that the Constitution means what it says. I was heartened to hear him quote me the other day when he said 'our rights come from our humanity,' which is a gift from God, and they don't come from the government. But unfortunately, he lied by his vote to take our rights in the legislation that I have just articulated.

On the other hand, I don't think his designation by Governor Romney has succeeded in getting capital and getting the Governor's taxes off the front page, and has zeroed the media focus on what should be an essential aspect of this election. That is who would be a better steward of the economy. I say steward because they both want to be steward of the economy. To me, the steward of the economy should be the people who participate in it and not the government. It should be the free choices of entrepreneurs and consumers; they shouldn't need the hand of the government.

Having said that, I disagree with the fundamental premise of both of their campaigns. Now, the President believes that government is there for people who can't do what they should do for themselves. Governor Romney wants to make government more efficient. I don't want to make it more efficient; I want most of it to go away. I'm sure I would be a challenger of much of what a President Romney would do – and I know that I sometimes get in trouble when I use the Romney/Jefferson comparison but I don't think that's an opinion; I think it's a truism. His views are much closer to Obama than they are to Jefferson.

Daily Bell: Not much difference between the two of them would you say?

Judge Napolitano: Well, no, but that's the society we've created. We really don't have two political parties anymore. We have one big government party, with a democratic wing that likes war and taxes and individual welfare and staying in power, and a republican wing that likes war and deficits and corporate welfare and staying in power. There is very little difference between them. I mean, Ron Paul and Gary Johnson are so different from the mainstream Republicans and the mainstream Democrats; they really present the only alternative. It's basically a choice between Tweedle Dee and Tweedle Dum.

I understand the animosity towards the president, I understand the fear he instills in those who embrace traditional values, I understand the anybody-but-Obama. I understand the argument of those who say at least Mitt Romney is a step in the right direction. My own view is that those who are afraid of big government under President Obama will be equally as afraid of it under a President Romney.

Daily Bell: We saw he ran a rare press conference disputing the accusations that he is running an unfair and negative election campaign.

Judge Napolitano: Well, this is a very negative campaign. The President cannot run on his record. His record on the economy is reprehensible and he is, of all occupants of the White House, the most dangerous to human freedom since Abraham Lincoln. He doesn't want to touch either of those subjects so his only approach is to attempt to destroy Governor Romney.

Daily Bell: What's your take on Ron Paul? Give us a summation of his career.

Judge Napolitano: I think he probably continues to go around the country, keeping the dialogue going of small government and maximum individual liberty. I think he probably passes the mantel to his son, Senator Paul. Senator Paul and Governor Johnson probably battle it out and if they can't come to some kind of agreement as to who will personify human freedom and who, in public life, will be the champion of it. I think that's probably a good thing because I think the movement will continue to grow.

With Congressman Paul free from congressional duties he might actually stir up the pot even more then he's done already. My next book, which comes out after election day, is an assault on the progressive era, dedicated to Ron Paul in large measure because no person in these times has done more to remind people about the loss of liberty than he. He has been an inspiration to millions and among those millions is me.

Daily Bell: Are you a backer of Rand's generally?

Judge Napolitano: Look, I understand why he endorsed Governor Romney. Of course, I would never do it but I understand why he did it because he has to live in the Republican Party and has to have peace with the Republican establishment in the United States Senate. I am sure it was done with the consent of his father. I understand it did not go over well with rank and file and I know that because it didn't go over well with me. Once this election is over, whether Governor Romney wins or the President is re-elected, I think Rand Paul will be his usual self and that usual self is one of the very few members of the Congress who believes that the Constitution means what is says.

Daily Bell: You were negative about the freedom trend in the US last time we spoke. Are you more hopeful now?

Judge Napolitano: No, not at all. No. The government keeps getting larger and more in our faces. There is less outrage than there used to be. The Air Force predicts that in ten years there'll be 30,000 drones in the sky at any given moment and that some of them will be the size of golf balls and some will be the size of mosquitoes, and nobody is complaining about that. People seem willing to give up their privacy in exchange for safety. People forget they need protection from the government.

People are confusing freedom and safety. Freedom does not promote safety; freedom promotes unfettered choices, free from government interference. It accepts the fact that there will be some dangerous things in society but it assumes that risk from danger without is a more desirable state of affairs than an authoritarian government than within. I think these are bad days for freedom and unless a Ron Paul, Rand Paul or Gary Johnson is in the White House they will continue to get bad. I just couldn't imagine a President Romney dismantling the security state, not enforcing the Patriot Act, disregarding the National Defense Authorization Act, stopping all the drones. I just couldn't imagine that happening. Until that happens, we're at the tender mercies of whatever faceless bureaucrats are running the government.

Daily Bell: How did the US Constitution get perverted?

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Judge Napolitano: Well, I think that the problems with the Constitution began in the Lincoln administration, when he drilled people for doing what the founding fathers did, which was seceding from an overbearing central government. In the so-called Reconstruction years, which really were the years of military occupation in the South – Reconstruction is just a euphemism for that – the military directed daily life in the South for 10 years. That really whetted the federal government's appetite for more power. Now we see a recession in that power for the next 30 years and then it comes back in the Progressive Era, and the progressives are so all-encompassing that they sit even on the courts. And the courts let Teddy Roosevelt and Woodrow Wilson get away with things like, 'we are not going to let the Constitution stand in our way' for what the people need. That's utterly inconsistent with their oath to office.

Of course, the real serious troubles with the Constitution are with the FDR years. FDR has eight members on the Supreme Court and they are doing bizarre things like saying that wheat to the farmer, which grows in his backyard, which is ground into flour and made into baked goods all of which are consumed by his family, somehow constitutes interstate commerce, and people accept that with a straight face. That's, of course, the infamous, Wickard v. Filburn case in 1942. From and after that case, all bets are off and the Congress now knows that its authority to regulate even minute behavior will be held up by the court, even behavior so infinitesimal that it's not measureable by standard economic mechanisms. Because Wickard v. Filburn basically says if small infinitesimal activity ended up with other small infinitesimal activity, that's how the entire country could affect interstate commerce and the government could regulate even the small, infinitesimal parts of it. This would send Jefferson and Madison to the madhouse if they learned that the Supreme Court did this and the Congress acted upon it but as we know, that's what happened.

Daily Bell: Comment on the Supreme Court's decision regarding Obamacare, please.

Judge Napolitano: Well, I think it's one of the most tortured, twisted, unexpected, unaccepted, created opinions in modern times. Think of it this way: The court is an arbiter between the sides that are arguing before it. Either one side is right and the other side is wrong or one is partially right and the other side is partially right but the court really is without authority to come up with its own theory of a piece of litigation. So if both sides say this is not a tax, it is inconceivable that the courts on its own could say it's a tax. Rulings must come from the arguments made before it; otherwise there is no ability to rely on what the court will do if you are really just rolling the dice when you go in there.

Now, I know that sometimes bizarre compromises are necessary, to keep the five-person majority from becoming a four-person minority but this compromise – let's call this thing a tax even when its proponent denied that it was a tax – is unprecedented in our history. The Supreme Court has never declared something to be a tax that the congress did not say was a tax. Think about it, the opinions to use for the following proposition: The government can do whatever it wants, as long as the penalty for your not complying with the government's wishes is the imposition of tax, even if the behavior regulated by the government doesn't come from the Constitution. That is simply unacceptable. It is simply blatantly unconstitutional. That is simply offering the Congress on a dish unlimited federal power that even the Congress and the president didn't ask for.

Daily Bell: You are a libertarian. Are you an anarcho-capitalist?

Judge Napolitano: Well, it depends how you define those terms. I am a Randian, as in Ayn Rand, on economics. I am a Rothbardian, as in Murray Rothbard, on most philosophical principles, specifically the morality of government in our lives. Some of the younger producers who worked with me on the late, lamented, now-missed "Freedom Watch" used to say that I was an anarcho-capitalist. I don't know what the term means, but I am always the most libertarian person in the room. (Laughing)

Daily Bell: Rothbard was. How can one believe in representative democracy as an anarchist?

Judge Napolitano: Representative democracy presumes that those who receive power from the voters will respect the natural law and will respect the Constitution. We rarely have seen in our era that both the natural law and the Constitution are respected. Majority rules obviously means the rights of the minority so only a government tempered by the natural law, and in America tempered by the Constitution, has a moral one. That's why I said earlier almost all federal law is unconstitutional because it's either not grounded in a power granted to the Congress in the Constitution, or even if grounded there, violates the natural law. Beyond that we'd have to get into specifics. Under the natural law, the government only has two purposes, and those are to preserve, protect and defend our rights from fraud and force and nothing else.

Daily Bell: Is representative democracy a positive choice? Or does it always lead to despotism eventually?

Judge Napolitano: It usually leads to despotism because it usually draws to it people who suffer from labido dominandi, a Latin phrase that St. Augustine used, which is the 'lust to dominate' and the government doesn't usually draw people who think the way Ron Paul or Gary Johnson or I do. When I was in the government, in the judicial branch – we are really exceptions. The vast majority of people who are drawn there are busybodies, nanny-staters, bed-wetters and do-gooders who think that somehow they have the power to tell us how to live our lives differently than how we choose to live them.

So yes, representative democracy will lead to despotism without a judiciary seriously committed to constitutional principles and natural law principles. We do not have a judiciary today. Occasionally we hear it from Justice Thomas; sometimes we hear it from Justice Scalia; occasionally we hear it from Justice Kennedy. There is a smattering of lower court federal judges, but only these arguments are appointed by Democratic presidents. But for the most part, the Judiciary presumes to be constitutional whatever the legislative branch has done, and thus finds ways to uphold legislation.

Von Mises said that government is essentially the negation of liberty. I believe he is correct. From that it follows that whatever the government does should be presumed unconstitutional and violative of the natural law. Rather than the challenger having the burden of saying why the legislation or the government behavior is wrong, the government should have the burden of saying why the legislation or the government behavior is consistent with the Constitution and consistent with the natural law. Simply switching that presumption would radically change the ability and the inclination of the courts to invalidate much of what government does in deference to our individual choices.

Daily Bell: Is modern law made to include natural law and economics? If not, why not?

Judge Napolitano: It doesn't matter. Natural law is part of our humanity and modern law is subject to that. The creature is subject to the creator. The creators of law are human beings and we all are subject to the laws of physics, the laws of economics, the laws of nature. 'Some men say the Earth is round and some men say the Earth is flat but if it is round, let the kings command flatten it, and if it is flat by an act of parliament, make it round.' Of course, the answer to both questions is no because all governments are subject to the laws of nature as are human beings. So the government ignores the natural law but it is ultimately subject to the natural law just like we are all subject to the movement of the Earth around the Sun and to a flat Earth or a round Earth, whatever the case may be.

Daily Bell: We've argued for common law here – not British common law but real common law, pre-Babylon, common law as it existed within tribal contexts for tens of thousands of years. Can you comment on that?

Judge Napolitano: That's a very complicated observation on your part. The common law that we inherited was the common law in Great Britain in the 17th and 18th centuries, which is essentially judge-written law based upon notions of fairness and tradition in history. For the most part it embodied the natural law and for the most part it has been irradiated by positive law, by the statutes that have been enacted by Congress, for instance, and by state legislatures. You remember that TV commercial, "It's not nice to fool Mother Nature?" Whenever the government violates the natural law, there are unintended consequences to it. I believe that we were created by an omnipotent, Supreme Being. Some people call him Allah; some people call him as do I, the Father. Now, I believe he made us in his image and likeness and he doesn't have a body but we do; he's not going to die and we are. But the one thing absolutely in common between the creator and the creature is freedom. When the government takes away human freedom, it takes away that one aspect of our humanity that is closest to the creator. There are inimitably adverse consequences to such interference.

Daily Bell: Follow-up: Why does the state need to be in charge of law? Why can't people pursue justice privately?

Judge Napolitano: Because as a token of all this, government doesn't share power. It would take a government of Ron Paul's, Rand Paul's and your humble correspondent here to shrink the government radically and to repose into the hands of individuals the ability to address injustice on their own. It truly goes back to the Middle Ages when people transferred to the government the right to punish.

Think about it. If my house is broken into and they steal my favorite book, what business is that of the government? Well, the government has decided that they have the right to prosecute and punish but in a different world, I would have insured and have insurers' authority to pursue the thief, and it wouldn't cost my neighbors any money to bring about justice. But we live in a world where the right to punish exists only in the hands of the government because it was perceived as fairer and more convenient at the time it was transferred. It's not fairer or more convenient today; it's politically subjective today. The greatest lawbreaker is the government itself so how could we possibly rely on the government to give us justice?

Daily Bell: What is justice?

Judge Napolitano: Depending on each individual, justice is different in different cases. Justice is certainly not the government taking property from us against our will. I mean justice is a series of voluntary transactions which, when interfered with, are made whole again on the basis of fairness and principles of morality. I can give you thousands of examples of injustice; most prosecutions are unjust because they tax the general populace for what is essentially a private dispute.

Daily Bell: Wouldn't private justice with its duels and vendettas be far preferable to public justice that in the US has incarcerated up to six million or more people, many of them unfairly, for long prisons sentences that doom families to separation and poverty?

Judge Napolitano: I don't want to get into duels and vendettas but if you are at home one night and you hear a knock on the door, and you answer the door and a guy standing there points a gun at you, and says give me your money, I want to give it away in your name, and you think the guy's crazy and you call the police, and you find out he is the police, come to collect your taxes … if you don't pay them they come with a gun. What do they do with the money? They give it away.

This is basically the system we have today and it is the system that we accept because we have come to the perverse belief in government, which can't deliver the mail, which can't run the school system, can't manage roads without potholes in them but somehow it can keep us safe and keep us prosperous. It can't. It is the perverse reliance upon government's delivered goods and services that has proven for hundreds of years, or at least 120 years, that it cannot deliver. The continued refusal to examine the proper role of government in our society that has brought us to where we are today and to the point where we can see change in people's thinking, for the government to be shrunk.

Daily Bell: What is the rationale for modern jurisprudence as applied by the modern state?

Judge Napolitano: The rationale is the assumption by a majority of persons that the state can more efficiently, and more justly, administer justice than individuals can. This, of course, has resulted in vast discretion being reposed into the hands of the state agents, police and prosecutors, whose charge is to prosecute. It has actually been argued that the decision to prosecute is among the most powerful in the government because it is essentially unreviewable. Of course, the decision to prosecute also denotes the decision not to prosecute; this, of course, enables prosecutors to violate the rule of law; that is to let some people off the hook while choosing to prosecute others for the same crime, thus making decisions on a political basis rather than on the basis of justice. The prosecutor essentially becomes the avenging angel for the victim and all the weight, all of the might and all of the state then comes down on the prosecutor's target for the charge for which the prosecutor has indicted the target. Almost always they charge greater than what the evidence will have seen so that when the negotiation process begins to settle the issue amicably, by what is commonly called a plea bargain, the prosecutors starts from a position of strength and the defendant starts from a position of weakness.

Daily Bell: Our idea of common law is the patchwork of law and courts that sprang up in Europe and especially in Britain and Ireland. These courts had different standards for justice and different ways of arriving at a verdict. We see nothing inconsistent about this, as we believe that most justice is "rough" (one way or another) and that cases are unique. In fact, the idea of competitive, marketplace justice is, of course, most controversial. (Any kind of marketplace competition is a bit controversial these days.) What about the positives of rough justice? Must justice always be fair and homogenous? Is it in practice?

Judge Napolitano: It is not always fair but it strives to be fair. The government almost always wins because it can carefully pick its targets. I mean, there are federal prosecutors in the country that have conviction rates in the upper 90 percent area simply because they know what targets to pick and what charges to file. But the roughness about the justice, about what you ask, has had an interesting transition. In the earliest days of common law, now 500 or 600 hundred years ago in England and Ireland, a jury was chosen because the jury knew the defendant and the victim. This was basically your friends and neighbors judging you. The theory of the common law was that the collective wisdom of 12 people who know the defendant and know or knew the victim are likely to result is rough, proximate but genuine justice.

Today, of course, we want the opposite. We want a jury of strangers that does not know the defendant and does not know or did not know the victim, and has no interest in the outcome and has no preconceived notion. So we really have switched 180 degrees on where the jurors come from and what type of preconceived notions we expect them to have. Now, do these cases usually result in justice? In my experience as a trial judge, and I tried about 150 jury trials in the eight years that I was on the bench, I think the result was almost always just or close to just. Sometimes the defendant could or should have been convicted of a crime one degree lower or sometimes one degree higher and in civil cases, sometimes the plaintiff got a little bit more than he or she deserved or not quite what he or she deserved but for the most part the collective wisdom, is usually correct.

That's why the decision to prosecute is so important and presumptions in the law are so important. The law presumes that what the government does is correct and even though the government has to prove its case beyond a reasonable doubt and to a moral certainty, it has all these presumptions going in its favor. They are sort of "hidden" in the law and they affect the language used by the judge in the courtroom, the procedures engaged in by the government, the advantages that the government has that it goes first and goes last, and it has virtually an unlimited budget in criminal cases. These are all things that a libertarian should know about and should want to examine, lest he or she come in the government's crosshairs for a reason other than his or her criminal activity.

Daily Bell: The old common law courts were subject to private compensation, sometimes the compensation of a third party, as in Ireland. We believe that private payments might guarantee a better outcome than the current statist paradigm. What the West subscribes to today is a system in which the same entity (the state and its appurtenances) makes the law, enforces the law, renders the verdict and prescribes the sentence. To us this process is fraught with conflicts of interest. The person (the judge) who is rendering the verdict is on the same payroll as the prosecutor. What's your take?

Judge Napolitano: Well, it requires a tremendous amount of courage and restraint and even fearlessness to resist the state when you are on the same payroll. One of the duties of the Constitution is the maintenance of dual systems of justice, state and federal. This frequently is a reason for challenging a state law in a federal court, rather than in a state court where the judge is popularly elected or subject to reconfirmation by the same officials whose law he or she is now being asked to invalidate.

In some states, like my own, New Jersey, after a period of time your tenure on the bench becomes life tenure and then, of course, you are utterly liberated to do the right thing. But in the probationary period, before you receive life tenure, there is in the back of your mind the awareness that you need to have your next appointment approved by the same people – or by the same mentality, let me say – who are enhancing the constitutional side of the law that you believe is unjust. Or you need to go before voters, who would never understand the niceties of constitutional jurisprudence and the fact that the rule of law protects the individual against the state – even if everybody else in society wants the individual to go, the individual still has certain rights.

So to tie a bow on your question, there is obviously an inclination on the part of state judges whose peril and tenure on the bench depends upon approval by the apparatus of the state to want to please the state. It is a rare state judge who has the courage to say to the state, "No. You are wrong because the constitution doesn't permit it." It is far easier to do in the federal system, and it's easier to do in the states that grant life tenure but only three states, New Jersey among them, do that.

Daily Bell: In free-market common law, the aggrieved party and putative offender might both pay a judge to render a verdict. The judge, who does this for a living, would have every incentive to present a fair verdict because such verdicts would add luster to his or her reputation and generate additional business. Additionally, common law has the added advantage that not everyone would make use of the system because some would seek to settle grievances on their own. This would result in a very polite society (and has in the past) as no one would want to offend anyone else. Once upon a time, "manners" were far more elaborate and prevalent for a reason. Can you comment, please?

Judge Napolitano: I would strongly prefer a system like that because it removes the heavy hand of the state from the resolution of disputes in which the state really has no legitimate interest. The state has no interest in providing a forum. This, of course, would require that laws be changed so as to provide insurance coverage for various events or calamities for which the state does have insurance companies to offer coverage or policies today.

Think about it. If you steal my chicken or I steal your cow, this is a dispute between us; what does the government care about it? The answer should be it doesn't care at all but because the state loves power and the state does not like to share power, it likes to resolve all disputes the way it wants to resolve them. This drives up the cost and diminishes justice because it forces the disputants to follow the state's rule and the state's command and the state's way, and this does not inure to politeness, civility or even the idea that a dispute could possibly be resolved amicably and justly, without the state being involved.

The state is not an instrument of justice; it's an instrument of power. It holds itself out as an instrument of justice, and many of my former colleagues on the bench still believe it is an instrument of justice and jurors believe it's an instrument of justice and trial courts believe they are instruments of justice, but basically they are wrong; they are instruments of power – the state's power, the way the state wants it exercised.

Daily Bell: There is also an issue of honor and morality. In communal societies, where power has devolved to local levels, religion can often play an important role in how society is organized and how law is administered. Such societies are often shame-based, or have been in the past, and the prospect of shaming may act as a behavior modifier (as it does today but only vestigially). The combination of religiously oriented communal societies with local laws and customs, a common law heritage and the practice of dueling and so-called "vigilante justice" certainly poses an alternative to the current system of Western justice. Is this a realistic appraisal of past justice regimes or merely pie-in-the-sky?

Judge Napolitano: I think it's a realistic appraisal of past regimes. I don't know that it could happen here in the US tomorrow or in the lifetime of anybody reading this but it really was based on the first principles. One of the first principles of the common law and the natural law was the principle of subsidiarity. Why? Subsidiarity teaches that the least amount of government to resolve an issue is best so all governmental concerns should be resolved by the smallest amount of power, in the smallest unit of government, exercising the least power and the fewest resources possible. So it is far better for a dispute to be resolved by your neighbors than by Washington, DC.

Now, we don't practice subsidiarity in the United States even though it is a first principle. Jefferson and Madison understood it. The Constitution was written subject to it and is a part of the natural law. The Catholic Church and most of Christianity teaches it and it is rarely practiced today. It is almost Jefferson's "That government is best that governs least," so that would be the American version of subsidiarity. But when it was practiced, the concepts and experiences articulated in your question were real and did happen and induced compliance with accepted standards behavior without the heavy hand of the state being involved.

Daily Bell: Some other potential criticisms of modern law… Is modern Western jurisprudence actually admiralty law?

Judge Napolitano: Admiralty law is a branch of common law that governed the behavior of sailors aboard ship so it was a separate version of the common law because in the year in which it became accepted in British courts, sailors had been aboard ships for many, many months. So events that occurred there, disputes between sailors and disputes between the command structure, needed to be resolved while they were on ship rather than waiting until they could return to port.

Or if it was a grievance matter then the law would permit the restraint of the person charged aboard ship until return to port. They were different. It was high seas and there was not country. In the early days there wasn't even a statutory law so basically at trials judges did what they thought was fair and jurors did what they thought was fair, and from that grew a body of law called admiralty law. Today, admiralty law is essentially federal law written by the Congress governing the behavior of military and the civilians aboard ship outside the territorial areas outside the United States.

Daily Bell: Do US lawyers serve a British system or are they independent?

Judge Napolitano: The British system is loser pays. We do not have loser pays system in the United States. We have the beginnings of loser pays, by what is known as Rule 11 in the federal system. Rule 11 in the federal system permits the winner to have his or her legal fees paid by the loser when the loser argument is utterly frivolous. Now, that's a long way from loser pays but it is also a giant step in that direction.

The amount of civil litigation in Great Britain per capita is far, far less than what we have here in the US because of loser pays. You sue, you win, you go home happily. You sue, you lose, you not only have your own legal bills but you also have the legal bills of the entity that you sued. We don't have that here and there are certain exceptions to it, probably not appropriate to go through now, but we don't have it here.

The argument against it is we would not have had the expansion of human liberty here if loser pays were the law because lawyers would be afraid to challenge the government. It's like saying Brown v. Board of Education, which is essentially a challenge, a challenges that reached these decisions by pertinence. So the argument is if we had loser pays the lawyers would be afraid to bring that challenge for fear that they would have lost. The flip side of that is we live in a society that is terribly expensive in large measure because of explosion of litigation, which would not exist if we had losers pays. I do not think that loser pays is coming but I do see some small steps in the direction of it.

Daily Bell: Is the US a secret corporation?

Judge Napolitano: No. I try to understand that argument and I reject that argument. I don't reject the people who make the argument because they are simply challenging the ability of the federal government to write any laws whatsoever other than those specifically articulated in the Constitution. That's a view that I share, about the ability of the federal government and its limitations. But the argument that the United States is a secret corporation is one I've never understood and do not embrace.

Daily Bell: Did America ever go bankrupt? Is the country in legal receivership?

Judge Napolitano: Well, the country has defaulted many times – when it seized gold, when it seized silver, when it didn't pay its debt – so yes, you could argue that the United States is bankrupt. Our governance is in debt by 16 trillion dollars and Obama has borrowed about 1 trillion a year in his four years in office. If he gets re-elected and does the same thing, in 2016 we'll have a debt of 20 trillion dollars. That would generate about a trillion dollars a year in interest payments. That's about 40 percent of the revenue collected by the federal government from its various sources and it cannot sustain itself when 40 cents on every dollar goes to debt service. It also cannot sustain itself if it printed cash in order to pay those debts because then inflation would be crazy. We are in serious danger of defaulting, and the only solution to this, in my view, is a return to the gold standard, competing dollars and this requires an enormous change in mindset of people in Washington.

Daily Bell: Is America currently under a state of emergency and legally led only by the president?

Judge Napolitano: I think we are a police state. I think we are a national security state. I think the government pays lip service to the Constitution and basically does whatever it wants to do. When the Congress let the President decide that he can kill people on his own and he can start wars on his own – he once threatened to borrow money on his own – when the Congress permits that to happen, this is close to being a dictator. For the most part, Congress is a potted plant while the president, whether it's George W. Bush or Barack Obama, is allowed to do virtually whatever he can get away with. Frequently, the courts are reluctant to restrain him. It's a deplorable state of affairs in which we are on the precipice of a cliff. The true TV commercial should not be granny going over the cliff; it's all of us going over the cliff with the federal government pushing the wheel chair behind us.

Daily Bell: Why did we move from private law to "public" socialized law?

Judge Napolitano: Oh, my goodness, because people were bought off by the federal government. Why did FDR and LBJ create their massive establishments in order to create entitlements and in order to create dependence on the Democratic Party? People accepted the giveaways in return for the loss of freedom. Jefferson and Hamilton rarely agreed on anything but one thing they did agree on is when the public treasury becomes a public trough and the public learns this, it will send to the government people who will bring home the larger piece of the pie. That has happened, beginning in the Progressive Era and heightened in the FDR years, and heightened yet again when Republicans fell in line. They previously resisted the entitlement state; now they fall in line with it. That has produced a country in which half of the population receives a salary or material goods from the government, paid for by the other half. That also cannot survive in the context of freedom for very long.

Daily Bell: Why should the Supreme Court be the last word on justice? Why should people live under interpretations of the law made by strangers with their own agendas?

Judge Napolitano: Sometimes the Supreme Court justices do the right thing, and somebody has to have the final say. In my own view, the Constitution contemplates that states can reject oppressive federal laws and that state governments, either state legislature or the highest court in the state, has the power to invalidate a federal law in the state. We haven't had that for 220 years but that was clearly contemplated by the founders. That would remove the monopoly on the final word from the Supreme Court. There's an old phrase that the Supreme Court is infallible because it's final; it's not final because it's infallible. So removing its finality or sharing its finality with other courts would remove its aura of infallibility.

Daily Bell: Do you respect all of the Supreme Court justices?

Judge Napolitano: Do you mean the human beings on the Court or their decisions? I know some of them very well. I disagree with some of them. I think some of them are agenda driven. Rarely do you see a return to first principles. Stated differently, I would be in the dissent in most of the major decisions in our era because, in my view, it would be inappropriate for the Court to be ruling on this, or the behavior of the government that the Court is violative of the natural law or the constitutional law. A broad sweeping statement and to be fair I would have to examine each case and this is generally where I come down on this because, to me, the individual is greater than the state and the natural law is superior to all other law. Very few Supreme Court justices in the modern era have accepted either of those first principles.

Daily Bell: Do you believe that all of them abide by the laws of the land?

Judge Napolitano: I don't want to start a hypothetical dispute but I would say that few of them remain true to first principles.

Daily Bell: Are any of them ideologues?

Judge Napolitano: Yes.

Daily Bell: Do you have any final thoughts? Anything you want to say to readers that we didn't ask about?

Judge Napolitano: I thoroughly enjoy these interviews. I love your audience. I love your product but we live in very bad and gloomy and dangerous times for freedom. Freedom is more threatened today, in my view, than at any time since Lincoln was in the White House. We are on the precipice of losing freedom. Freedom lies in our hearts but it must do more than lie there. We must exercise freedom and make it difficult for the government to take it away from us.

Daily Bell: Thanks for your time once again.

Judge Napolitano: Thank you.