Progressive Insurance

Why libertarianism matters more than ever in Obama's America

Does the election of Barack Obama represent the triumph of progressivism and the end of libertarianism? Many on the left seem to think so. Obama's victory, argued blogger Matthew Yglesias, represents a "resounding victory for progressive ideals." The "old assumptions of free-market fundamentalism," declared The New Yorker's George Packer, "have, like a charlatan's incantations, failed to work."

But what the current vogue for the term progressive fails to acknowledge is that the original progressives embraced the worst abuses of state power in the late nineteenth and early twentieth centuries. Libertarians, by contrast, stood as consistent defenders of individual liberty in all spheres of human life.

Consider the Jim Crow South. As historian David Southern has written, disfranchisement, segregation, race baiting, and lynching all "went hand-in-hand with the most advanced forms of southern progressivism." Plessy v. Ferguson (1896), the Supreme Court decision that enshrined the doctrine of "separate but equal" and serves as perhaps the most potent symbol of the Jim Crow regime, dealt with a Louisiana law forbidding railroads from selling first-class tickets to black customers. That's not the free market making life worse. It's the government.

Moreover, as economist Tim Leonard points out, progressives believed in a "powerful, centralized state, conceiving of government as the best means for promoting the social good," a belief that directly contributed to the widespread progressive support for eugenics, racial collectivism, and various coercive "reforms." Progressive darling Theodore Roosevelt, for instance, held notoriously racist and imperialist views, including the notion of "race suicide," which held that the white race faced the risk of being out bred by its "little brown brothers." He also believed that the 15th Amendment should never have been ratified since the black race, in his words, was "two hundred thousand years behind" the white.

In opposition to all that stood libertarians like Moorfield Storey, the great lawyer and activist who helped found both the National Association for the Advancement of Colored People (NAACP) and the Anti-Imperialist League. A proponent of the gold standard and laissez-faire economics, Storey argued and won the NAACP's first victory before the Supreme Court, a 1917 decision that relied on a defense of property rights to squash a residential segregation law.

The New Deal-era saw some heroic resistors as well. Among them was Supreme Court Justice George Sutherland, one of the "Four Horsemen of Reaction" (along with Justices James McReynolds, Pierce Butler, and Wiliam Van Devanter), so named for reliably voting against New Deal regulations. An advocate of property rights and liberty of contract, Sutherland was also an outspoken defender of women's rights who, as a U.S. Senator from Utah, introduced legislation that became the 19th Amendment.

In his majority opinion in Adkins v. Children's Hospital (1923), one of the precedents later overturned by the New Deal Court, Sutherland struck down Washington, D.C.'s minimum wage law for women, arguing that it violated their liberty of contract under the 14th Amendment. As historian Jim Powell observed, this law had thrown numerous women out of work, including elevator operator Willie Lyons, one of the figures in the case, who was promptly fired and replaced by a man willing to work at her old wage. In his majority opinion, Sutherland denounced the law for encouraging such perverse consequences. "Surely the good of society as a whole," Sutherland wrote, "cannot be better served than by the preservation against arbitrary restraint of the liberties of its constituent members."

Sutherland's most famous vote, however, arguably came without comment in Schechter Poultry Corp. v. United States, the 1935 decision that struck down the National Recovery Administration (NRA), which at that point was the centerpiece of the New Deal. Specifically, NRA price controls and other "codes of fair competition" had made it illegal for the Schechter brothers, who maintained a small Kosher slaughterhouse in New York, to set their own prices and let their customers pick out their own chickens. (Similarly, dry cleaner Jacob Maged would spend three months in jail in 1934 for charging 35 cents to press a suit, rather than the NRA-mandated 40 cents.)

"Extraordinary conditions may call for extraordinary remedies," Chief Justice Charles Evans Hughes held for the unanimous Court. "But the argument necessarily stops short of an attempt to justify action which lies outside the sphere of constitutional authority. Extraordinary conditions do not create or enlarge constitutional powers." The NRA was finished.

But Roosevelt, who denounced the ruling for its "horse and buggy definition of interstate commerce," would have the last laugh. Two years later (two months after FDR threatened to "pack" it with more sympathetic justices, in fact) the Court overruled Sutherland's Adkins decision to uphold another minimum wage law for women, arguing this time that the state had a duty to "preserve the strength and vigor of the race" by protecting current and future mothers—a line that hasn't exactly sat well with feminist legal scholars. As historian William E. Leuchtenburg put it, "the Court was now stating that local and national governments had a whole range of powers that this same tribunal had been saying for the past two years that these governments did not have."

From that point on, the Supreme Court proved ready and willing to defer to FDR's vision for the country. Which might sound great to today's progressives, until they recall that FDR ordered the wartime internment of Japanese Americans, an executive action that the pliant Supreme Court upheld in Korematsu v. United States (1944). Sutherland, who died in 1942, at least did what he could to oppose the Rooseveltian juggernaut.

Indeed, as Sutherland and Storey's careers demonstrate, libertarian ideas have long served as a crucial check against the illiberal impulses of progressive majorities. The Jacob Weisbergs of the world notwithstanding, libertarianism matters now more than ever.

Damon W. Root is an associate editor of reason.