Rule of Law regulates conflict in society
Two competing dynamics were at play, and that led to the emergence of the rule of law in history.
One the one hand, political power was based on military might, and those who controlled military power could take what they wanted and needed to sustain their power. On the other hand, prosperity required peace and security. Without peace, there would be no trade, and without personal security there would not be much investment.
The key problem for those wielding power was how to create trust among the population so that people would trade and invest more and thus grow the economy. The answer was the law: by formulating laws and by promising to use power only according to law rulers attempted to both regulate conflicts in society, and to give people security that power would not be used arbitrarily and unexpectedly.
This process of constraining power through binding rules and through sanctions against misuse of power has always been fragile. It depends on the rationality of those wielding power, that in the long run they are better off if they limit their confiscatory powers and allow economic growth to happen.
In modern open societies power is no longer concentrated in one individual but is shared widely among different actors and exercised according to complex procedures that are insulated from discretionary political power.
This move from discretionary power to rule-based procedures, from rule of powerful despots to rule of law, has led to unprecedented prosperity in countries that have achieved it. But it has taken a long time and often remains only partially done because the key step is hard – how to persuade or pressure powerful groups, especially those who can exercise violence, to constrain their power and submit to rules, the rule of law, in a permanent and credible fashion.