This chapter explores the impact of devolution upon particular aspects of the UK’s constitutional arrangements. First, devolution required a major departure for the courts from their historic reluctance to review legislation. Devolution obliges the courts to become involved in politically contentious debates and, where necessary, to strike down legislation enacted by the devolved legislatures if it exceeds their competences under the devolution arrangements. As the devolved administrations push for increased autonomy, this may even require the courts to rule upon the legitimacy of legislation seeking independence. The chapter thereafter considers the place of England within the Union following devolution to the other constituent parts of the UK. England remains the only non-devolved territory within the UK and, as such, continues to be governed from Westminster. This gives rise to a number of representational, legislative and administrative difficulties. This chapter outlines the consequences of England lacking any meaningful devolved structures of government, and the proposed responses to the difficulties associated with this most obvious of devolution’s asymmetries.

In this chapter, there are two new things to include in our analysis. First, we analyze random, unforecastable changes in monetary policy. In Chapter 5, we studied how permanent, anticipated changes to the fiat money stock growth rate would affect the return and welfare. Now we can talk about monetary surprises and their effects.

So far, we have shown that money is memory, it reduces transaction costs compared with barter, and it frees up resources compared with a commodity money economy. In Chapter 3, we focused on the demand for money. All good things. The next step is to consider how changes in money supply affect economic decisions.

In Chapter 8, we started with new stores of value that were perfect substitutes for fiat money. In these economies, we learned that if the return on other assets is greater than that of fiat money, fiat money will not be valued. Yet, when you look around, you see that fiat money is valued in many real economies even though other assets, like capital, have a greater return than fiat money.

In earlier chapters, we used the overlapping generations model as a model of money. People needed money, whether fiat, commodity, or inside money, to acquire a market good. We did not interpret this good literally as consumption in old age, because money balances are a trivial source of savings for retirement. We used the overlapping generations structure as a simple way to model exchange without taking the age of the model’s people very seriously.

This chapter introduces those rights and freedoms that are considered core to the democratic process. Those freedoms (often labelled ‘civil liberties’) ensure that individuals are able to circulate and obtain information freely, are able to participate in the election of representatives (and governments) and are able to peacefully – and collectively – make public demonstrations of political viewpoints without incurring criminal sanctions. In turn this chapter will therefore consider freedom of expression, freedom of assembly, the liberty and security of the person, and the right to vote.

We begin by examining the key purpose of a constitution: the definition and allocation of governmental power. Following this – using examples – the chapter proceeds to illustrate the various functions that such devices are meant to perform and the differing forms that constitutions can take. It then goes on to introduce the UK constitution, noting its key characteristics and comparing them with those of constitutions elsewhere.