Laissez-faire Constitutionalism Research Articles

The classical limits to police power and the economic foundations of the Slaughterhouse dissents

The essay examines the influence of classical economics on an important episode in American 19th-century jurisprudence on business regulation, the Slaughterhouse Cases of 1873. It is well known that the dissents penned by Supreme Court Justices Field and Bradley lay down the fundamental doctrines of the later Lochner era of so-called laissez faire constitutionalism. The essay argues that these dissents were inspired by Adam Smith’s system of natural liberty and, in particular, by his views about the regulation of negative externalities and the undesirability of government-granted monopolies. The Smithian influence emerges even more clearly when the briefs presented by counsel for the plaintiffs John A. Campbell are considered. Those briefs contained most of the issues raised by the dissenting Justices; hence, it is claimed that Lochner’s intellectual roots may be traced back to Campbell and, from him, to Smith.

The Classical Limits to Police Power: Adam Smith and the Economic Foundations of the Slaughterhouse Dissents

The paper examines the influence of classical economics on an important episode in the American 19th-century jurisprudence on business regulation, the Slaughterhouse Cases of 1873. Law historians know well that the dissents penned in that occasion by Supreme Court Justices Field and Bradley lay down the fundamental doctrines of the later Lochner era of laissez faire constitutionalism. The paper argues that these dissents were inspired by Adam Smith’s system of natural liberty and, in particular, by his views about the regulation of negative externalities and the undesirability of government-granted monopolies. The Smithian influence emerges even more clearly when the outstanding briefs presented by counsel for the plaintiffs John A. Campbell are also taken into account.

In Search of 'Laissez-Faire Constitutionalism'

This article is a response to Professor Jed Shugerman’s Economic Crisis and the Rise of Judicial Elections and Judicial Review, HARVARD LAW REVIEW (2010). Professor Shugerman argues that the widespread adoption of judicial elections in the 1850’s and the embrace by the first generation of elected judges of countermajoritaran rationales for judicial review helped to effect a transition from the active, industry-building state of the early nineteenth century to the laissez-faire constitutionalism of the Lochner era. This response argues that Professor Shugerman overstates the causal relationship between the elected judiciary’s robust constitutional defense of and the iconic, if unrepresentative, substantive due process of the late nineteenth and early twentieth centuries. If we are to draw a line of historical causation between the mid-century vested rights decisions and the so-called laissez-faire constitutionalism of the Lochner era, it must necessarily run through the watershed historical events of slave emancipation and the industrialization of labor, as well as the transformative constitutional changes set in motion by the Reconstruction amendmnets. To the exent that Lochner-era courts did constitutionalize economic liberty in a manner that warrants the label laissez-faire constitutionalism, they were inspired less by the Jacksonian vested rights jurisprudence that preceded the Civil War than by the constitutional and industrial revolutions that followed it.

The (Rail)Road to Lochner: Reproduction Cost and the Gilded Age Controversy on Rate Regulation

The controversy over railroad rates regulation represented a fundamental component of the jurisprudential trajectory that, culminating in Lochner v. New York, led to the era of so-called laissez faire constitutionalism. Constitutional protection of property required that regulation be such as to preserve the value of the regulated business. The paper builds on Siegel 1984 to argue that, by indicating in Smyth v. Ames (1898) reproduction cost as the correct technique to calculate the value of a railways, the Supreme Court retained its allegiance to the fundamental tenets of classical political economy even in a period of massive economic transformations, when classical economics was increasingly viewed as unable to capture the new reality of American industrial life.

Classical Competition and Freedom of Contract in American Laissez Faire Constitutionalism

It is impossible to tell the history of American antitrust law and economics during the so-called formative era (1890-1915) without a preliminary understanding of the economic rationale underlying that major phase of American constitutional law commonly called laissez faire constitutionalism, or Lochner era. The essay is a preliminary effort to locate such a rationale in the almost perfect overlap between classical political economy, especially the notion of competition as the supreme organizing principle of thriving societies, and classical liberalism, in particular the notion of liberty of contract. It is argued that the well-known Progressive interpretation of the Lochner era fails to recognize the true meaning and extent of this overlap. The protagonists of our story are economists Adam Smith, John Stuart Mill and Francis Wayland, and Supreme Court Justices James Wilson, Oliver Wendell Holmes and Rufus Peckham.

Florence Kelley and the Battle Against Laissez-Faire Constitutionalism

The usual story of the demise of laissez-faire constitutionalism in the 1930’s features heroes such as Louis Brandeis, Felix Frankfurter and the great male progressives of the day who rose up from academia, the bench, and the bar, to put an end to what historians label legal orthodoxy. In this essay, I seek to demonstrate that Florence Kelley was a crucially important progressive who was at the front lines of drafting and defending new legislation that courts were striking down as violating the Fourteenth Amendment and State constitutions. Looking at who was drafting and lobbying for path breaking progressive legislation and how such legislation was being defended accomplishes a number of things. It uncovers how male actors at times worked closely and collaborated with women reformers. Furthermore, thinking about women reformers as central actors demands that we examine our own categorical thinking. Placing progressive era women reformers in a non-porous women’s sphere, while imagining that elite male thinkers were sealed within an all-male world of academics, lawyers and jurists, distorts late nineteenth and early twentieth century culture and leads to what we might call intellectual segregation. This essay is thus a work of bricolage that brings together the scholarship on women’s leading roles in progressive era reform with mainstream narratives of history.

The Not-So-Strange Birth of the Modern American State: A Comment on James A. Henretta's “Charles Evans Hughes and the Strange Death of Liberal America”

James Henretta's “Charles Evans Hughes and the Strange Death of Liberal America” takes up one of the most interesting and important interpretive questions in the history of American political economy. What explains the dramatic transformation in liberal ideology and governance between 1877 and 1937 that carried the United States from laissez-faire constitutionalism to New Deal statism, from classical liberalism to democratic social-welfarism? That question has preoccupied legions of historians, political-economists, and legal scholars (as well as politicians and ideologues) at least since Hughes himself opened the October 1935 Term of the U.S. Supreme Court in a brand new building and amid a rising chorus of constitutional criticism. Henretta, wisely in my opinion, looks to law, particularly public law, for new insights into that great transformation. But, of course, the challenge in using legal history to answer such a question is the enormous increase in the actual policy output of courts, legislatures, and administrative agencies in this period. Trying to synthesize the complex changes in “law-in-action” in the fiercely contested forums of turn-of-the-century America sometimes seems the historical-sociological equivalent of attempting to empty the sea with a slotted spoon. Like any good social scientist, Henretta responds to the impossibility of surveying the whole by taking a sample. Through a case-study of the ideas, political reforms, and legal opinions of Charles Evans Hughes, particularly as governor of New York and associate and chief justice of the U.S. Supreme Court, Henretta offers us in microcosm the story of the revolution (or rather several revolutions) in modern American governance.

Isaac Sherman and the trials of gilded age liberalism

Isaac Sherman (1817-81) was a self-made New York merchant and financier. Originally a Barnburner Jacksonian Democrat, he became a Free Soiler and in 1856 a campaign manager for Republican John C. Fremont. An influential Unionist, Sherman subsequently became a self-taught expert on railroad finance, currency, and local and state taxation. This article draws upon the Sherman papers recently acquired by the Huntington Library to offer an interpretive biography of this hitherto obscure but important railroad financier and laissez-faire ideologue. Sherman's activities show the personal and intellectual connections between the Equal Rights and Free Labor ideologies of the pre-war years and the Laissez-Faire Constitutionalism of the post-war period. They also reveal the anxieties of the haute bourgeoisie of the Gilded Age, and the legal stratagems used by Sherman and others to return the United States to the gold standard and overturn the Federal income tax. Finally, Sherman's proposals for local and state tax reform, conterminous with and similar to those of Henry George, reveal the limits of classical liberalism in both its laissez-faire and utopian forms.

Moral Philosophy, the United States Supreme Court, and the Nation’s Character, 1860–1910

The charge that the United States Supreme Court exercised a conservative influence upon the nation’s constitutional life during the period from 1864 to 1938 is impossible to refute. The Supreme Court during the period from the end of the Civil War to the New Deal era has been portrayed as having largely abdicated its obligation to protect society’s common interests in favour of a laissez-faire constitutionalism reflecting the social and political views of new and powerful economic interests. The judicial conservatism of the late nineteenth and early twentieth centuries conflicted with the political ideals of Progressives and with the direction taken by American policy-makers since the acceptance of Franklin D. Roosevelt’s New Deal in the 1930s. Historians have labelled the Court’s laissez-faire conservative style as undesirable, if not consciously immoral.Nevertheless, the problem of understanding the ideas which lay at the foundation of judicial conservatism should be addressed. General legal historians have preferred to begin and end their inquiries into early influences on the judicial mind with a short overview of legal education and leave aside the possible influence of college studies. In recent years, historians have broadened their investigations of the intellectual underpinnings of late nineteenth-century legal thought in an attempt to provide the sort of synthetic account of legal thought suggested by Perry Miller’s Life of the Mind—a work which attempts to connect the thought of leading members of the bar to intellectual currents outside the legal sphere. The result has been a limited rehabilitation of the Supreme Court’s reputation during the Gilded Age.

Dawn of the Conservative Era

Dawn of the Conservative Era Paul Kens Introduction When I was working on this project, a friend who is neither a lawyer nor a historian, asked what I was doing. I told her I was working on a lecture entitled “The Dawn of the Conservative Era” and that it was about the conservative Court at the turn ofthe century. Her response came as a surprise. She thought I was going to talk about today’s Court as it approached the turn of the twenty-first century. I suppose my friend was not far off in the way she interpreted my description. But I am going to talk about another dawn of another con­ servative era. It was a time between 1890 and 1937, often called the laissez-faire era. And it produced a body of legal doctrine often referred to as laissez-faire constitutionalism. The term laissez-faire, of course refers to the economic theory. It was an economic theory predicated on the free market and the idea that prosperity could best be achieved in a system where individuals were left free to pursue their own self-interest. It placed its faith in Adam Smith’s Wealth of Nations and the idea that the “invisible hand of the market” would ensure the economy would operate smoothly and efficiently. To proponents of laissez-faire theory this was more than a preferred policy. It was a matter of natural law and of natural rights. Of these natu­ ral rights, two stood out. First was the natural right of property. The other, called “the natural right of free exchange,” was the natural, self-evi­ dent, and inalienable right of all people to em­ ploy their own efforts for the gratification oftheir own wants, either directly or through exchange.1 Inspired by these beliefs, Adam Smith’s American successors, the laissez-faire econo­ mists, polished and advanced the principle that government should not interfere in economic matters.2 Edward Atkinson, an economist tied to the laissez-faire tradition, argued that: “Government’s efforts to solve economic prob­ lems, no matter how sincere, had the opposite effect. They upset the economic balance, de­ stroyed the incentive for labor, and sapped the spirit ofenterprise and productive energies ofthe nation.”3 Their ideas began to take hold of eco­ nomic thinking in the middle 1800s. They were reinforced by the growth ofthe philosophy of So­ cial Darwinism, and together they created a legacy that formed a theoretical basis for opposition to government regulation. Under laissez-faire theory, property and free 2 JOURNAL 1997, VOL. 1 exchange were natural rights. But were they pro­ tected by or incorporated into the Constitution? Certainly the Constitution includes protections for property. The Article I, section 10 guarantee that no state shall pass any law impairing the obligation of contract provides some protection both for prop­ erty and for free exchange. But that provision primarily protects the sanctity of existing con­ tracts, not an inalienable right to be free from gov­ ernment interference. The Constitution also guar­ antees, in the Fifth and FourteenthAmendments, that property shall not be taken without due process of law. Finally, the Fifth Amendment guarantees that property shall not be taken for public use without just compensation. All ofthese provisions give some protection to property. But they do not go so far as to prohibit regulation or make any sweeping limitation on government involvement in economic matters. Nevertheless, according to the traditional version ofconstitutional history,judges ofthe late nineteenth and early twentieth centuries did interpret the Con­ stitution in a way that provided sweeping limitations on government involvement in economic matters. This version ofhistory saw such Justices as Stephen J. Field, David J. Brewer, and Rufus W. Peckham laying the foundation for the conservative era. When faced with a tough question about the validity ofeco­ nomic regulation, it saw them turning to Adam Smith’s Wealth ofNations rather than the Constitu­ tion. In this version of history, the Four Horsemen, Justices George Sutherland, James C. McReynolds, Pierce Butler, and Willis Van Devanter, carried this work into the 1930s. Inspired by laissez-faire eco­ nomics, these men pursued a policy of emphasizing protection ofproperty. According to this traditional version...

Labor's Constitution of Freedom

According to the standard story, the basic structure of modern constitutional law emerged from a clash between two great constitutional visions: the laissez-faire constitutionalism of the so-called Lochner Era and the progressive vision concisely summarized in footnote four of United States v. Carolene Products. The standard story omits a third great constitutional vision: labor's constitution of freedom. In the early twentieth century, American workers advanced their own interpretations of the Constitution, often in opposition to those of the Supreme Court. Workers did not wait for judicial approval to put their constitutional vision into practice. Having declared laws unconstitutional, they endeavored to strike them down through noncompliance and direct action. The article begins by setting forth a theoretical model of constitutional insurgency, focusing on the roles played by popular rights consciousness, direct popular power, and professional legal representation in achieving constitutional change. It then presents a detailed case study of constitutional insurgency. In January of 1920, the Kansas state legislature enacted the Kansas Industrial Court Act, the most ambitious piece of American labor legislation prior to the Wagner Act. Although the Industrial Court ruled in favor of workers more often than not, the American Federation of Labor declared the law unconstitutional under the Thirteenth Amendment, and ten thousand Kansas coal miners staged a four-month winter strike “against the political powers of the state of Kansas, monopoly, [and] the industrial court law.” The article tells the story and examines the dynamics of this insurgency from the level of the miners’ local unions on up to the United States Supreme Court.

Progressive Judges in a Progressive Age: Regulatory Legislation in the Minnesota Supreme Court, 1880–1925

The years between 1890 and 1937 traditionally have been viewed as a period of extreme judicial activism with respect to economic regulation, a time during which courts, both state and federal, interfered on a grand scale with legislative reform agendas. Fueled by the constitutional theories of Thomas Cooley and Christopher Tiedeman, the story goes, the courts became bastions of laissez-faire constitutionalism, relying on doctrines of substantive due process and liberty of contract to invalidate legislative efforts to redress social and economic inequality.

The guardian of every other right: a constitutional history of property rights

Editor's Preface Preface Introduction 1. The Origins of Rights: The Colonial Period 2. The Revolutionary Era, 1765-1787 3. Property Must Be Secured: Establishing a New Constitutional Order 4. The Development of Rights in the Antebellum Era, 1791-1861 5. The Gilded Age and the Challenge of Industrialization 6. Progressive Reform and Judicial Conservatism, 1900-1932 7. The New Deal and the Demise of Laissez-Faire Constitutionalism 8. Rights and the Regulatory State 9. Epilogue Notes Bibliographical Essay Index of Cases Index

Doctrinal Synergies and Liberal Dilemmas: The Case of the Yellow-Dog Contract

The three decades spanning the years 1908 to 1937 saw a remarkable transformation of the Supreme Court's jurisprudence concerning the rights of workers to organize. In 1908, the Court held that a federal law prohibiting employers from discharging an employee because of his membership in a union violated the of secured to the employer by the Fifth Amendment. In 1915, the Court similarly declared a state statute prohibiting the use of contracts unconstitutional. In 1937, by contrast, the Court upheld provisions of the Wagner Act prohibiting both discharges for union membership and the use of yellow-dog contracts. Thus, the doctrine of liberty of contract no longer operated as a bar to legislation protecting the rights of workers to organize for purposes of collective bargaining. The tale of the yellow-dog is naturally of interest because of its centrality to the development of American law and the decline of substantive due process. Beyond this, however, the story can be seen as a critical chapter in the development of American liberal legalism. The yellow-dog provoked something of a crisis in liberal discourse, because it brought into conflict two time-honored liberal values: of and freedom of association. Recent scholarship has shown how liberty of contract was forged from such diverse liberal resources as Adam Smith's liberal political economy, Jacksonian liberalism, and the Northern free labor ideology that animated the abolitionist movement. Freedom of association enjoyed no less venerable liberal pedigree. Its protection against government infringement enshrined in the First Amendment, the freedom to affiliate with the lawful organizations of one's choice had been a widely embraced feature of American culture since well before the Civil War. Indeed, the passion of the American people for voluntary associations had attracted the fascination of Alexis de Tocqueville during his journey to the United States in the 1830s. The yellow-dog exposed a tension between these two values of American liberalism. Opponents of the yellow-dog contended that the employer was using his constitutionally protected of as a means to inhibit his employee's freedom to associate with his fellow workingmen. In characteristically liberal terms, the answer to this charge would turn on whether the employee was seen as having surrendered his freedom of association voluntarily, or as a product of coercion. The answer to this question would in turn depend upon assumptions about the structure of the market, and these assumptions would change over time. Beneath this discourse, I believe, lay concerns about whether unions were properly analogized to the other sorts of voluntary associations celebrated by American liberalism. As those concerns became increasingly allayed over time, labor's advocates could more successfully appropriate the liberal rhetoric of associational freedom. Yet the story of the demise of the yellow dog cannot be adequately understood by looking at cultural context alone. In order to understand the voting patterns of the various Justices and the views they expressed in their opinions, one must pay close attention to the development of doctrine. A study of the doctrine pertaining to the yellow-dog reveals to us the difficulties with the notion that substantive due process and constitutional federalism were merely convenient weapons in the arsenal of a reactionary Court devoted to the maintenance of financial and industrial elites. Instead, we may see the weblike, interconnected structure of laissez-faire constitutionalism. The doctrinal manifestations of Commerce Clause and due process jurisprudence were not simply free-floating rules that could be changed or abandoned without consequences extending beyond the particular doctrine involved. These areas of doctrine were developmentally intra- and interdependent. Modifications of one substantive due process doctrine entailed changes in another; developments in due process and Commerce Clause doctrine produced mutual, synergistic ramifications. In short, doctrinal commitments made by Justices in one area of doctrine entailed corresponding commitments in other doctrinal domains. In order to follow the trail of the yellow dog contract, we must trace these ripple effects across structurally related areas of doctrine.

The Shaping of Nineteenth-Century Law: John Appleton and Responsible Individualism.

Foreword Preface A Self-Made Man Bangor Lawyer Reformer and Judge Evidence and Justice Defendant Takes the Stand Freedom and Responsibility in the Marketplace Personal Responsibility in the Law of Torts The Rights of Man and the Rights of Slavery are at Eternal War Government by Consent Laissez-Faire Constitutionalism and the Limits of Government Retirement and Legacy Bibliography Index

The Source of a Myth: Police Powers of the States and Laissez Faire Constitutionalism, 1900-1937

The Source of a Myth: Police Powers of the States and Laissez Faire Constitutionalism, 1900-1937

Thomas M. Cooley, Laissez Faire Constitutionalism, and the Formative Period of First Amendment Law

Thomas M. Cooley, Laissez Faire Constitutionalism, and the Formative Period of First Amendment Law

Corporations and Society: Power and Responsibility

Introduction: Corporate America I. Doctrinal Origins Santa Clara Revisited: The Devlopment of Corporate Theory by Morton J. Horwitz The Sherman Antitrust Act and the Corporate Reconstruction of American Capitalism, 1890-1914 by Martin J. Sklar The One Best System? A Political Analysis of Neoclassical Institutionalist Perspectives in the Modern Corporation by Michael Barzelay and Rogers M. Smith II. Legal Language as Social Control and Economic Planning The Idea of the Corporation as a Person: On the Normative Significance of Judicial Language by Warren J. Samuels The Jurisprudence of Corporate Personhood: The Misuse of a Legal Concept by John J. Flynn The Paradox of Paternalism and Laissez-Faire Constitutionalism: The U.S. Supreme Court, 1898-1921 by Aviam Soifer III. Further Policy and Performance Consequences The Corporation and Antitrust Law Policy: Double Standards by David Dale Martin Bigness and Social Efficiency: A Case Study of the U.S. Auto Industry by Walter Adams and James W. Brock IV. The Corporation as Private Government: Democratizing Policy Implications Corporations and Our Two Constitutions by Arthur S. Miller Toward More Competitive Diversity in a Market Concentrated Economy by Samuel M. Loesher Moral and Criminal Responsibility and Corporate Persons by Martin Benjamin and Daniel A. Bronstein Profit Sharing and ESOP's: Improved Incentives and Equity Selected Bibliography Index

The Paradox of Paternalism and Laissez-Faire Constitutionalism: United States Supreme Court, 1888–1921

In 1898, the year Americans first sailed forth to fight in other countries to protect purported victims of imperialism, A. V. Dicey steamed into Harvard University to deliver his lectures on Law and Public Opinion in England. Like William Blackstone, Vinerian Professor before him, Dicey deployed a number of memorable epigrams to capture what seemed basic truths of his day. Dicey's assertion that ‘protection invariably involves disability’ appeared to state the obvious to Americans at the turn of the century.In this essay I will consider how the United States Supreme Court embraced Dicey's epigram and translated it into decisions during the tenures of Chief Justices Fuller and White about the capacity of the individual in the United States to contract and care for himself.

Laissez-Faire and Liberty: A Re-Evaluation of the Meaning and Origins Of Laissez-Faire Constitutionalism

Until recently, historians of American constitutionalism agreed that, except for the infamous Dred Scott decision, the most unfortunate decisions of the Supreme Court were those that incorporated the notion of laissez-faire into the Constitution in the late nineteenth century. These decisions permitted the Court to frustrate efforts to secure a more just economic order in the United States until the 1930s. The intellectual foundations of laissez-faire constitutionalism have been so alien to most legal scholars since the 1930s (and equally unintelligible to many even earlier) that they have found it difficult to believe these decisions were the result of efforts to enforce ‘neutral’ principles of constitutional law, to utilize the terms of Herbert Wechsler's famous analysis. They could not conceive of the Court's rhetoric about liberty and due process as anything but cant, a subterfuge designed to camouflage other purposes.