Economic Liberties and the Constitution, by Bernard H. Siegan, Chicago: University of Chicago Press, 1981, 383 pp., $19.50.
American judicial thought took a giant step forward in 1972 when the US Supreme Court declared that
the dichotomy between personal liberties and property rights is a false one. Property does not have rights. People have rights. The right to enjoy property without unlawful deprivation, no less than the right to speak or the right to travel, is in truth a "personal" right.…a fundamental interdependence exists between the personal right to liberty and the personal right in property.
Unfortunately, as Bernard H. Siegan exhaustively details in Economic Liberties and the Constitution, American jurisprudence has yet to match its rhetoric. The abrupt abandonment in the early 1940s of review of economic and social legislation continues, leaving fundamental economic rights at the mercy of selfish and perverse government intervention.
Siegan argues—often eloquently, always persuasively—that such judicial abstinence should be reversed. He points out that there is no need for a constitutional amendment to open the way for "economic acts between consenting adults" (to borrow the phrase coined by philosopher Robert Nozick). The Court now protects liberties that it deems fundamental; so, what is needed is "a better allocation of judicial concern" to protect the rights to use and dispose of property, enter into a business or profession, and contract for goods and services.
This reallocation of concern would increase what Siegan describes as "negative" judicial power, where the courts veto "legislative encroachments on liberty." And it would eliminate "affirmative" judicial power, where the courts become "another producer of laws and expander of government."
Siegan amasses a wealth of historical evidence, philosophical principles, and pragmatic arguments to demonstrate that the purpose of the judiciary was, and remains, "the preservation of liberty." The judicial branch is to provide redress for all those adversely affected by legislative and executive actions:
Justices are not intended to be government agents, furthering the interests of the executive and legislative branches in their disputes with citizens.…A judicial system more concerned to protect the power of government than the freedom of the individual has lost its mission under the Constitution.
Siegan examines the historical context of the Constitution, concluding that America's experience with taxation, regulation, and confiscation during the colonial and Revolutionary War periods property and commerce is essential in a state dedicated to maximizing freedom." The Constitutional Convention debates demonstrate that the Constitution was intended to so maximize freedom and explicitly to protect individuals' economic as well as other activities from interference. And courts then regularly protected economic liberty, principally relying on natural rights and the due process clause of the Constitution.
This being the case, Siegan points out that the courts had "no authority to eliminate constitutional protection for economic liberties." Their role is not to make a political decision to jettison disfavored liberties.
Indeed, the speed with which the courts eviscerated constitutional protection for economic liberties was unprecedented and resulted, not from consistent and principled jurisprudence, but from constant and unprincipled policymaking. The US Supreme Court still protects "rights"; it has merely changed the "rights" that it protects.
But suppose the Court had sought a principled reason to abandon economic liberties? None exists, argues Siegan. To the oft-stated contention that the Constitution is outdated, he replies:
The Constitution speaks to the general political condition of the human species—a condition that has changed little if at all since the eighteenth century. The Framers' major concerns about the distribution, excesses, and abuses of political power are as pressing today as they were two hundred years ago. Their desire to secure individual liberties remains as compelling a concern as ever.
Moreover, as the Supreme Court itself argued in 1972, the distinction between economic and civil/political rights is false. Only access to underlying economic resources can guarantee political rights. As Siegan points out, "A free society cannot exist unless government is prohibited from confiscating private property. If government can seize something owned by a private citizen, it can exert enormous power over people."
Empirical evidence supports this contention. The New York-based organization Freedom House annually surveys the status of political freedom and civil liberties throughout the world and consistently finds that many of the capitalist and capitalist/socialist countries—but none of the socialist countries—are free or partially free.
Indeed, by whimsically protecting some economic rights on noneconomic grounds, the Court has implicitly acknowledged the importance of economic rights. For example, to the extent that advertising is protected, it is as "free speech." Distributing contraceptives is protected as "privacy." Yet these are economic rights, which happen to be part and parcel of the human rights that are more widely recognized today.
Turning from principles to practice, Siegan convincingly demonstrates that "because much welfare and regulatory legislation has proved economically harmful, judicial review of such legislation serves the pragmatic interests of society." He briefly reviews more than 50 studies, surveying the wreckage left by government regulation in areas such as transportation, energy, banking, and broadcasting. The results are uniformly disastrous, with benefits reaped by special economic interests, and costs borne by everyone else—particularly the poor and disadvantaged. For example:
• Transportation. Airline regulation kept ticket prices high, prevented new, small carriers from entering the market, and kept established, often inefficient carriers in business. Taxicab regulation has established protected local monopolies, keeping rates high, outlawing lower-cost alternatives such as jitneys,and, through the high cost of taxi licenses, denying lower-income people a chance to break into the business. Federal regulation of railroads, interstate moving companies, and trucking firms has been blatantly anticompetitive, greatly increasing prices for all consumer goods transported around the country and shoring up the profits of a small number of well-established firms.
• Banking. Regulation has erected barriers to entering into the banking business, reducing competition and artificially increasing industry profits.
• Broadcasting. Federal regulation has restrained competition, fostered monopoly profits, deprived viewers of a variety of alternative programs that might otherwise have been offered, and in many respects infringed on First Amendment rights (showing, once again, how intimately twined are economic and civil rights).
• Housing. Building codes and zoning restrictions have greatly increased housing costs and reduced the supply of housing without appreciably increasing the quality of housing or substantially changing land-use patterns from those found in the absence of zoning (for example, in Houston).
Rather than enter in with its own brand of intervention, concludes Siegan, the courts should be trying to lift the burden of government regulation. "The courts' traditional role in protecting individual rights remains the most promising judicial means of reducing the burdens of economic inequality."
Finally, Siegan persuasively argues that there is no reason that legislatures should be the final arbiters of socioeconomic policy any more than they should be of free speech policy. In a society governed by shifting and at times intolerant majorities, discrete economic, racial, national, and political minorities "can be the victims of perverse, arbitrary, and capricious" discrimination.
In fact, he suggests that legislatures do not reflect the will of their constituents, because special-interest groups effectively apply concentrated pressure to gain special favors. Nor are many legislatures competent enough to draft legislation that is careful to respect individual rights. As the credibility and legitimacy of the legislature thus falls, "the need for the judiciary to safeguard liberties of those affected by legislation increases."
Siegan has written a vitally important book that is sure to ignite an impassioned legal and philosophical debate. In the 200 years since the formation of our republic, political power has replaced economic power in the marketplace. Influence has become more important than ability; access, more important than service; and votes, more important than rights.
Whatever the noble purposes of those who wield it, this political power is used to pauperize economic minorities, just as it has been used to muffle political dissent and stifle social diversity. Thus, the reason—the necessity—for protecting economic liberty is no less than that guaranteeing political and civil liberty. As Siegan so eloquently concludes an eloquent book, "The rewards of liberty are vast and unpredictable."
Doug Bandow is a lawyer and free-lance writer. He is currently at the White House.
This article originally appeared in print under the headline "Taking Liberties With the Constitution".