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Taking Economic Liberty Seriously

Does the Constitution protect the right to earn a living?

Damon W. Root
August 26, 2010

On March 5, 1934, the U.S. Supreme Court declared New York shopkeeper Leo Nebbia to be a criminal because he sold two quarts of milk and a 5 cent loaf of bread for the combined low price of 18 cents. As Justice Owen Roberts explained in his 5-4 majority opinion in Nebbia v. New York, the state’s Milk Control Board had fixed the minimum price of milk at 9 cents a quart to eliminate the “evils” of price-cutting.

As for the constitutionality of this action, which raised the price of milk during the lean years of the Great Depression in an effort to boost the profits of New York dairy farmers, while doing absolutely nothing to improve the health or safety of the milk-drinking public, Roberts simply shrugged. “A state is free to adopt whatever economic policy may reasonably be deemed to promote public welfare, and to enforce that policy by legislation adapted to its purpose." Furthermore, “If the laws passed are seen to have a reasonable relation to a proper legislative purpose, and are neither arbitrary nor discriminatory, the requirements of due process are satisfied.” In other words, when it came to economic regulations, the courts needed only to rubber stamp whatever the lawmakers deemed “reasonable.”

Today, we call this highly deferential approach the “rational basis test,” and as Timothy Sandefur explains in his superb new book The Right to Earn A Living: Economic Freedom and the Law, the results have been disastrous for the judicial protection of economic rights. “Modern government is at liberty to violate a citizen’s right to earn a living almost at will,” Sandefur observes, pointing to a depressing array of occupational licensing schemes, state-sanctioned monopolies, price controls, regulatory takings, eminent domain abuse, and other government misdeeds that receive almost no meaningful scrutiny from the courts.

Expertly weaving legal history with contemporary events, Sandefur shows how this shameful state of affairs violates the text and history of the Constitution and contradicts some five centuries of Anglo-American precedent. The right to earn an honest living, he explains, dates back to the Magna Carta and was cited repeatedly by English judges and legal experts in the 16th and 17th centuries, directly influencing America’s founding generation. In 1615's The Case of the Tailors of Ipswich, for example, Lord Chief Justice of England Edward Coke declared, “at the common law, no man could be prohibited from working in any lawful trade.”

Nearly two centuries later, James Madison, one of the chief architects of both the U.S. Constitution and the Bill of Rights, echoed Coke’s words: “That is not a just government, nor is property secure under it, where arbitrary restrictions, exemptions, and monopolies deny to part of its citizens that free use of their faculties, and free choice of their occupations.” Similarly, Rep. John Bingham (R-Ohio), the author of the first section of the Constitution’s 14th Amendment, which applied the Bill of Rights and other unenumerated rights to the states, said that the 14th Amendment included “the liberty...to work in an honest calling and contribute by your toil in some sort to the support of your felllowmen, and to be secure in the enjoyment of the fruits of your toil.”

So what went wrong? According to Sandefur, the blame falls largely on the Progressives of the late 19th and early 20th centuries, who believed that government action should be the primary agent of all social change. To that end, the Progressives enacted a mountain of new legislation that touched on every aspect of human life, from workplace regulations and antitrust statutes to alcohol prohibition, racial segregation, and eugenics.

When conservative state and federal judges began striking down some of these laws, Progressives responded by calling for judicial restraint, which is the idea that judges should defer to lawmakers and let the majority have its way. By the 1930s, leading Progressives such as Supreme Court Justice Louis Brandeis had popularized a selective form of judicial restraint, one that told the courts to uphold economic regulations while aggressively protecting free speech and privacy. That set the template for today’s rational basis test and the second-class citizenship of economic rights.

It’s certainly not a happy story, but if you want to understand today’s illiberal legal landscape and how it got that way, this eloquent and carefully researched book is a perfect place to start.

Damon W. Root is an associate editor at Reason magazine. This column first appeared at Reason.com.


Damon W. Root is Senior Editor


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