Our Constitution created a pro-property rights, pro-contract rule of law — a system promoting entrepreneurial growth. On this 224th Anniversary of the creation of the Constitution, the business community should recognize its value and act to defend it.
The Founders sought a balance between the need for a strong government (Madison’s observation that because men aren’t angels, governments are necessary) and George Washington’s warning that government, like fire, is a dangerous servant and a powerful master. Our Founders sought to restrain the fire of government to its proper sphere. The Constitution created firewalls: separation of powers; clearly enumerated and limited powers to the national government; and set forth basic rights of the people. That document — supported both culturally and legally — restrained Leviathan for almost a century.
The highpoint of judicial respect for economic liberty came in the early 1900s. In the famous 1905 Lochner case, the Court struck down an anti-competitive state restriction about the number of hours bakery employees might work. Similarly, in Buchanan v. Warley (1917), the Court struck down a local racial residence restriction as a violation of property rights.
But the Progressive movement soon eroded these restraints. Progressives, the secular priests of America’s emerging intellectual class, believed that if America freed itself from the archaic restraints created by the Constitution, it could become Heaven on Earth.
That belief led Progressives to disdain all restrictions on Leviathan. They discredited the Constitutional understanding that many things simply shouldn’t be done by the federal government, no matter how popular. Their successes breached the Constitutional firewall, allowing government intervention to consume our liberties. The bright-line restraints of the Constitution were gradually replaced by a “majority is always right” concept (at least, regarding economic liberties).
Bright-line standards were replaced by now-common judicially capricious “balancing tests.” But keeping a government in check by balancing tests is extremely difficult. It requires judges with independent minds who view government with reasonable suspicion and a public who sees constitutional firewalls as legitimate. Judges, after all, “read the paper” and are loathe to ignore public sentiment.
The resulting Progressive-influenced Supreme Court largely abandoned any defense of the Constitutional firewalls. In the 1942 Wickard v. Filburn decision, for example, the Supreme Court weakened the restraints on Congress’s Commerce Power. The result: a Congress intervening in every nook and cranny of our private lives. The ObamaCare battle will hinge on whether this dangerously intrusive trend is stopped by the Supreme Court.
Today, we face a world in which the Constitutional firewall is in disarray, and the flames of federal power threaten to destroy our economy, our liberties, our democracy. Yet, the business community has not rallied to its defense in any strategic fashion even though, absent a well-defended system of economic rights — capitalism cannot long survive.
Businesses do, of course, seek to defend themselves against each new government attack, but they do so tactically and they do so alone. Their goal is to safeguard their own special situation — not to insist on the impersonal rule of law. Nor do they realize that attacks on the Constitution succeeded because they linked rent-seeking business’s economic gains with the moral support of the Progressive movement. In our market democracy, we need to establish an off-setting alliance — between the economic and intellectual market advocates.
CEI’s Law and Litigation program seeks to find those fire bricks of the Constitution still in place and to strengthen them, while making the moral arguments that can reestablish popular support for the Founders’ Constitution. We’ve worked to strengthen the Takings Clause by applying it to rent control, to ensure the First Amendment’s speech protection extends to commercial speech; to revive the Compact Clause as a restraint on the ability of states to conspire against their citizenry; and to ensure that federal bureaucracies are accountable to the President. We were successful in about one and one-half of these — pretty poor for a football team, but not bad for constitutional litigation. After all, it took the Progressives almost a century to dismantle the Constitutional firewalls.
Business should value this restoration effort. A joint business/pro-liberty intellectual fight to repair the Constitutional firewall — to ensure again that the fire of government is kept within its proper sphere — is critical. How else can economic liberty and our free market economy survive?
Americans are again supporting the Constitution. Business support could ensure we prevail. It is important, for while the Constitution — like all creations of mankind — is not perfect, it is vastly superior to what we have now.
See also my Business and Politics video podcast on the anniversary: