Freedom Now I: From Dependency to Dignity

Blacks' self-help efforts could get a big boost from a reoriented civil rights movement, one that turned to demolishing the last of the Jim Crow laws.

Nineteen eighty-eight will mark 25 years since the historic March on Washington that symbolizes the rightness and the urgency of securing blacks' civil rights. Unfortunately, in the ensuing years the civil rights movement has lost its bearings.

Forsaking its traditional tenets—individual rights and equality under the law—the civil rights establishment has turned to racial quotas, contract set-asides, and other numbers-oriented strategies. But these efforts have been divisive and the results questionable. More importantly, they reveal that the present leadership has forgotten that the movement has always been about securing for individuals the freedom to control their own destinies.

Today, as the movement casts about for direction and momentum, it has a golden opportunity to put America back on its 200-year track of steady progress in honoring its commitment to civil rights. For serious problems remain, and they require more than the recently renewed attention to traditional black self-help efforts.

Perhaps most debilitating are laws at every level of government that arbitrarily limit the ability of individuals to become self-sufficient, productive members of society. These laws separate individuals from economic opportunities, some by making entry into basic trades and professions so onerous as to largely exclude those not already on the economic ladder, and others by reserving business opportunities for a privileged few.

These economic barriers are rooted in the Jim Crow era, when a wrongly decided Supreme Court case sanctioned the power of state and local governments to destroy individuals' economic liberty with impunity. But despite the insidious modern-day consequences of that decision, these obstacles to black progress escape attention in the current civil rights debate.

Other Jim Crow laws fell to the concerted efforts leading up to the civil rights acts of the 1960s. But in the '70s and '80s the definition of civil rights has been steadily transformed from the fundamental rights we all share equally as Americans, into special burdens for some and benefits for others.

The movement's shift in emphasis from maximizing individual liberty to dictating economic parity exacted an enormous price: a painstakingly developed popular consensus supporting America's doctrinal commitment to civil rights has been dangerously eroded; blacks who make progress are, perversely, forced to question the source of their gains; and many blacks are more isolated from basic opportunities—more deeply enmeshed in the stifling miasma of poverty and despair—than ever before.

For two centuries, from Thomas Paine to Frederick Douglass to Booker T. Washington to Martin Luther King, leading advocates of civil rights challenged governmental restraints on individual freedom and economic liberty. Today, those barriers are far more sophisticated than in the Jim Crow era, and laws are no longer drawn explicitly on racial lines. Yet the effects are largely the same: contemporary restrictions on opportunities to participate in the economy continue to work their greatest hardship on the most disadvantaged in our society—predominantly blacks and the poor.

The civil rights movement today faces a choice. It can continue to forsake the market, the route to upward mobility traditionally traveled by ethnic minorities in this country. Or, replenished by the natural rights principles that animated its great triumphs, it can work to demolish the last vestiges of Jim Crow.

For more than half a century, the civil rights movement persistently chipped away at the infamous Plessy v. Ferguson decision. The Louisiana law upheld in this 1896 Supreme Court ruling was typical of Southern laws decreeing social and economic segregation. This one required "separate but equal" railroad accommodations. In refusing to strike down such state-imposed discrimination, the Court was abdicating its seminal role in protecting civil rights, a situation that would continue until Plessy was finally reversed by Brown v. Board of Education in 1954.

But while Plessy was perhaps the most notorious judicial repudiation of civil rights, it was by no means the only one. For the Court did not merely sanction the states' arbitrary restriction of social opportunities, but of economic opportunities as well.

The death knell for economic liberty was sounded 24 years before Plessy in the Slaughter-House Cases in 1872. By this decision, the Court essentially excluded economic liberty from protection under the 14th Amendment. Yet an examination of the history of this amendment's adoption reveals that such protection was a substantial motivation for so changing the Constitution.

After the Civil War, the South faced an acute labor shortage stemming from its enormous war casualties and the emancipation of the slaves. Many blacks remained with their former plantations as share croppers, while others took advantage of the skills they had learned as slaves to enter trades.

For a society largely predicated on a stable and servile labor supply, the spectacle of blacks competing with whites and gaining a measure of economic independence was difficult to bear. Many plantation owners banded together in cartel fashion to keep wages low and limit blacks' mobility.

But persuasion and peer pressure were inadequate to overcome market forces. Individual plantation owners could benefit by offering higher wages than the cartel had agreed to, and the intense competition for labor drove wages inexorably upward. Crop shares for tenant workers increased by 500 percent in the decade following emancipation.

Soon, former slave owners were turning to the state to accomplish what they could not do in a competitive market. "We must have a black code," urged George Fitzhugh, a leading Southern theorist—a "subordination of the inferior race that will compel them to labor whilst it protects their rights and provides for their wants." Fitzhugh's prescription, undergirded by twin notions of inferiority and paternalism, provided the original rationale for racial classifications that survive in different forms even today.

"Black codes," adopted throughout the South between 1865 and 1867, restricted mobility through vagrancy laws and limited entrepreneurial opportunities through oppressive licensing and apprenticeship requirements. These laws were outright "attempts to enforce a labor-market cartel among white employers that could not be enforced in any other way," observes economist Jennifer Roback in a study of the post–Civil War South. The codes allowed former slaveholders to preempt market forces and restore as closely as practicable the feudal order that prevailed before the Civil War.

Typical of the black codes was South Carolina's licensing statute, under which any "person of color" was required to obtain a permit to "practice the…business of an artisan, mechanic, or shop-keeper, or any other trade, employment, or business." The licenses cost $100—for ex-slaves, a staggering sum—and were valid only for one year. They required a showing of skill, fitness, good moral character, and an existing business or apprenticeship and could be revoked upon any complaint of abuse.

These regulations created an obstacle course littered with pitfalls and disincentives that utterly precluded business and trade opportunities for blacks. They were tied, once again, to the plantation.

It was against this backdrop that Congress passed the Civil Rights Act of 1866, which guaranteed equality under the law as well as the right to make and enforce contracts and to purchase and sell property. But President Andrew Johnson and others warned that the law was unconstitutional, since it purported to limit the conduct of state governments. So, recognizing that wholesale deprivations of civil rights were being perpetrated by state and local governments, Congress turned to changing the Constitution, passing the 14th Amendment that same year.

The amendment forbade states from making laws that "abridge the privileges or immunities of the citizens of the United States," "deprive any person of life, liberty, or property, without due process of law," or "deny to any person…the equal protection of the laws." Though primarily concerned with protecting newly emancipated blacks, the amendment was explicitly designed to provide universal protection for fundamental rights.

Six years later the Slaughter-House Cases reached the Supreme Court, providing the first opportunity to apply the new protections. The cases challenged a Louisiana statute creating a slaughterhouse monopoly for certain parishes (counties) and prohibiting competition in that trade. The plaintiffs, a group of butchers, argued that the statute violated the rights guaranteed by the 14th Amendment, among them the right to engage in a trade free from arbitrary and unequal state regulations.

By a 5-to-4 vote, the Court upheld the law as part of the state's "police power." Under this authority, declared the Court, "private interests must be made subservient to the general interests of the community." Although conceding the importance of the rights asserted, the majority ruled that they "belong to the citizens of the States as such, and…are left to the State governments for security and protection, and not by this article placed under the special care of the Federal government." Thus did the majority read out of the Constitution the "privileges or immunities" clause of the 14th Amendment.

The four justices who dissented condemned the decision for violating, on the "mere pretense of prescribing a police regulation," the "right of free labor, one of the most sacred and imprescriptible rights of man." The 14th Amendment, Justice Stephen J. Field noted, was intended to give "practical effect to the declaration of 1776 of inalienable rights, rights which are the gift of the Creator, which the law does not confer, but only recognizes."

The dissenters conceded the state could properly regulate slaughterhouses for legitimate public-safety concerns. But as Justice Joseph P. Bradley emphasized, "there are certain fundamental rights which this right of regulation cannot infringe." He declared: "For the preservation, exercise, and enjoyment of these rights the individual citizen, as a necessity, must be left free to adopt such calling, profession, or trade as may seem to him most conducive to that end. Without this right he cannot be a freeman. This right to choose one's calling is an essential part of that liberty which it is the object of government to protect; and a calling, once chosen, is a man's property and right. Liberty and property are not protected where these rights are arbitrarily assailed."

Another dissenter, Justice Noah Swayne, voiced the hope that the consequences of the decision "may prove less serious and far-reaching" than feared. But the fears were quickly realized. Slaughter-House unleashed the white supremacists to again extinguish economic opportunities for blacks.

The resulting laws, known as "Jim Crow," made the black codes before them seem mild by comparison. In the economic realm, they took four principal forms. "Contract enforcement" laws severely limited the ability of laborers to change employers. Vagrancy laws made it unlawful to be unemployed, even temporarily. "Emigrant agent" laws restricted the activities of labor recruiters. And "debt peonage" laws allowed blacks who were imprisoned for their debts to be turned over to employers who assumed their obligations.

These laws regulated every aspect of economic interaction, making it nearly impossible for blacks to attain self-sufficiency and rendering the myth of black inferiority a self-fulfilling prophecy. In addition to economic restraints, the laws were soon extended to limit social interaction and educational opportunities as well. Kentucky's Day Law, for instance, forbade racial mixing in private schools, which were viewed as instruments for integration.

Thus, as political economist Robert Higgs observes, "The fountainhead of effective discrimination" lay not in private efforts but "in the governments of the Southern states, counties, and cities." Blacks were effectively disenfranchised, and a "racial monopoly of politics allowed the hostile whites to treat the blacks as they pleased."

Over time, competitive market forces were largely snuffed out by these governments. Between 1892 and 1907, for instance, blacks initiated boycotts against segregated transit systems in two dozen cities across the South and launched their own competing companies, only to have them shut down as violations of licensing laws.

The unambiguous legacy of the Supreme Court's abandonment of economic liberty in Slaughter-House is that Southern blacks were again consigned to a separate, subordinate caste with little hope of economic emancipation. This sordid legacy persists today in its most fundamental aspects, remaining largely untouched by the civil rights gains of the 1960s.

For a time, the Supreme Court moved to afford some protection for economic liberty. In Yick Wo v. Hopkins in 1886, the Court bowed to the 14th Amendment in ruling on a San Francisco ordinance that required, among other things, permission from the board of supervisors to operate laundries. Though neutral on its face, the ordinance was clearly aimed at Chinese entrepreneurs. Despite holding certificates of safety under previous standards, 150 Chinese were arrested and 200 denied permission to operate.

The law, the Court found, gave the government "naked and arbitrary power" that rendered the laundry owners "tenants at will, under the supervisors, of their means of living." The Court struck down the law, declaring it "intolerable in any country where freedom prevails, as being the essence of slavery itself."

The Court's recognition of economic liberty as a vital component of civil rights reached its zenith in 1905 in Lochner v. New York, which invalidated a state law setting maximum hours for bakery workers. The law, declared Justice Rufus W. Peckham, was based on a paternalistic notion that workers are "wards of the state," unable to "assert their rights and care for themselves without the protecting arm of the state interfering with their independence of judgment and action." Rejecting such paternalism, Peckham argued that "the right to purchase or sell labor is part of the liberty" guaranteed by the 14th Amendment.

But the seeds of the demise of economic liberty were planted by Justice Oliver Wendell Holmes in a reactionary dissent in the Lochner case. Holmes assailed the majority's belief in "the liberty of the citizen to do as he likes so long as he does not interfere with the liberty of others to do the same." The Constitution, he charged, does not "embody a particular economic theory." Instead, Holmes urged a meaningless "reasonableness" standard, under which virtually any government barrier to economic opportunity, no matter how "injudicious" or even "tyrannical," would be sustained.

Holmes's dissent attained majority status in the courts during the New Deal era, leaving victims of state-imposed and state-sanctioned obstacles to individual self-sufficiency virtually no recourse to the courts. The judicial abdication is now so complete that in 1976 the Supreme Court upheld a New Orleans ordinance limiting to two the number of hot dog pushcarts in the French Quarter, thus depriving the plaintiff of her livelihood in that quintessential entry-level enterprise.

The passage of the Civil Rights Act of 1964 provided a mechanism to challenge employment discrimination. But the law was not even applied to governmental action until 1972, and it still contains no explicit provision prohibiting state-imposed barriers to practicing a trade, opening a small business, and other such traditional avenues to economic progress in our society.

Meanwhile, in the years since the Civil Rights Act, the civil rights establishment has jettisoned the effort to knock down state-imposed barriers so that individuals can control their own destinies. Instead it has focused on enlisting the power of government to achieve specified levels of employment, integration of schools, contracting with minority-owned businesses, and so on. And a stagnating underclass with ever diminishing prospects for upward mobility remains largely untouched even as its existence is widely lamented.

Entry-level, small-entrepreneurial opportunities, traditionally a hallmark of our system, have fueled the efforts of generation after generation of newcomers to attain self-sufficiency. But today, many of the likely avenues for economic advancement are artificially blocked for those who could most benefit.

At the state and local levels, these barriers take two principal forms: occupational licensing laws, an enduring relic of the Jim Crow era; and government maintained business monopolies, the progeny of Slaughter-House.

Early licensing laws, with "grandfather" clauses exempting existing white practitioners, were pushed by white supremacists and craft unions to limit competition from blacks. The modern licensing laws that grew out of these are more sophisticated, but they have the same effect. As economist Walter Williams explains in The State Against Blacks, these laws "discriminate against certain people irrespective of their race." But because the victims of this discrimination are specifically "outsiders, latecomers and [the] resourceless," the laws are "particularly devastating to blacks."

Occupational licensing laws come into play in a substantial portion of the economy. California alone licenses 178 different occupations. Today, at least 10 percent of the labor force works in licensed occupations. And this figure underrepresents the effects for those at the bottom of the economic ladder, where licensing requirements extend to such entry-level jobs as cosmetology, janitorial services, taxidermy, landscaping, and junkyard operations.

Most licensing requirements have only the most attenuated connection to asserted public-welfare objectives. Loudoun County, Virginia, even requires licenses for poets! Many rules, such as those governing lawyers, go well beyond legitimate concerns, while others are altogether unnecessary. In either case, such laws are plainly designed to limit new entrants. Many are administered by the regulated profession itself, with the coercive apparatus of the state at its disposal.

Williams relates the example of beautician and cosmetology licensing in Missouri. In addition to extensive formal training or apprenticeships, prospective practitioners must pass an examination consisting of both a practical (hands-on) and written component. The written portion tests such esoteric concerns as the chemical composition of bones.

In a recent examination, he reports, blacks passed the practical component at the same rate as whites but failed the written part disproportionately. In other words, a large number of black would-be beauticians are prevented from engaging in their chosen field, for which they are demonstrably qualified, solely by operation of an onerous and arbitrary state law. This scenario is surely repeated in dozens of entry-level professions.

Likewise, state-granted monopolies restrict start-up opportunities in businesses running the gamut from furniture moving to cable television. But none is more brazen than taxicab franchising.

Washington, D.C., is one of the few cities with virtually open entry to the taxicab market (though several members of Congress are trying to change that). Entrepreneurs may initiate service by satisfying safety and insurance requirements and paying a modest fee. Consequently, the taxicab industry provides broad and easily accessible business opportunities. Seventy percent of Washington's cabs are owned by blacks.

Contrast the system in New York City, where a potential cab owner must first obtain a "medallion." The number of medallions is tightly controlled by the city, and as a result these permits to do business now go for $100,000. Blacks drive cabs in New York, but they rarely own them. Indeed, wherever new entry into a business is proscribed or restricted, entrepreneurial opportunities are diminished, particularly for minorities and the poor. So while 2,000 blacks own cabs in Washington, only 14 blacks own cabs in heavily regulated Philadelphia.

And, of course, entry restrictions affect not just would-be entrepreneurs but consumers, as well. By limiting the number of suppliers, they lead to higher prices and reduced service, especially in poor neighborhoods.

Most of these laws are based on faulty economic or public-welfare premises. They work their greatest hardship upon the most disadvantaged in our society, depriving them of the fundamental liberty and the basic opportunity that is the birthright—the civil right—of every American.

Two hundred years after adoption of our Constitution and a quarter century after civil rights activists marched on Washington to remind Americans of the individual rights enshrined in that document, someone ought to be standing up for these fundamental liberties. Recent calls for "self-help" from black leaders such as Benjamin Hooks of the NAACP and John Jacob of the National Urban League are a long-overdue and welcome move. But they are not enough. The civil rights establishment, along with conservatives who have long deplored its failure to look to the rich self-help tradition among blacks, must recognize that very real barriers to self-sufficiency remain.

The increased welfare spending, quotas, and set-asides that have dominated civil rights policy for the past 25 years have not changed the course of dependency and despair. Even stalwart defenders of this agenda are coming reluctantly to recognize this. So it is an opportune moment to refashion the terms of the civil rights debate—from collectivism to individualism, from coercion to opportunity, from dependency to dignity.

Legislation—filling the void left by the Civil Rights Act of 1964—is one way to start on an alternative agenda. An Economic Liberty Civil Rights Act, guaranteeing the right of every individual to pursue work and business opportunities free from arbitrary governmental constraints, could provide a focal point for a forward-looking civil rights program.

A reinvigorated quest for civil rights must also, as in the past, utilize the branch of government designed by the framers as the first line of defense for individual rights—the judiciary. And just as the classical civil rights movement had as its objective repudiation of the pernicious Plessy doctrine, so must the contemporary movement resolve to dismantle Slaughter-House.

The restoration of judicial protection for economic liberty will not be a simple task. Not a single member of the Supreme Court seems prepared to exhume Lochner, with its insistence on the freedom to labor as one chooses. In any case, for all its desirable conclusions, Lochner was probably defective in its constitutional analysis. (Most constitutional scholars maintain that the "due process clause" of the 14th Amendment, on which the decision relied, protects only procedural rights, whereas the amendment's "privileges or immunities" clause was designed to protect substantive rights.)

Thus, those who recognize the vital nexus between economic liberty and civil rights should proceed cautiously but creatively, in the tradition of the great civil rights triumphs of the 1950s—chipping away at barriers incrementally until the courts are once again receptive to the principles of natural rights. A new civil rights litigation program can combine principled constitutional arguments, based on the Ninth Amendment, privileges or immunities, equal protection, and so forth, with more pragmatic legal hooks, such as antitrust laws and the Civil Rights Act's proscription of employment discrimination.

Slowly but surely, such efforts could erode the Slaughter-House doctrine, until economic liberty is finally restored to its rightful place among our most precious civil rights. Nothing less than this will secure for minority individuals, as equals among equals, the right to control their own destinies and earn their share of the American dream.

Clint Bolick is an attorney with the Civil Rights Division of the Department of Justice. This article is derived from his forthcoming book, Changing Course: Civil Rights at the Crossroads (copyright © 1988 by Transaction Books). The views expressed are solely those of the author and are not intended to reflect the views of the Justice Department.