Without realizing it, liberals and conservatives are working from opposite ends of the political spectrum, under opposing rationales, to reach the same end: expanded government power. As a result of the political push and pull between those advocating judicial activism and those favoring judicial restraint, two fundamental American rights-the right to earn an honest living and the right to own private property-have been stripped of vital constitutional protection, leaving entrepreneurs and small property owners especially vulnerable to backroom deals and majoritarian whims.
The Framers envisioned a system in which individuals enjoyed rights equally, and the rights they enjoyed were treated with equal respect under the Constitution. But in 1938 the U.S. Supreme Court’s ruling in United States v. Carolene Products Co. (upholding a Congressional ban on interstate shipment of milk that contained added fat or oil) created an artificial dichotomy under the Constitution. Some rights, notably free speech, were elevated to a preferred tier and now rightly receive vigorous constitutional protection. Rights demoted to the second tier, specifically economic liberty and property rights, wrongly receive far less protection. Indeed, the protection for economic liberty is so feeble that bureaucrats and judges may simply invent justifications for challenged laws, even if those justifications are purely hypothetical and even if it is quite clear they had nothing to do with the legislature’s decision to pass the law. While property rights have received a somewhat greater degree of protection from the Supreme Court during the past 20 years, they remain under siege from government through eminent domain, zoning, and environmental regulations.
When the legislative or executive branch exceeds its legitimate enumerated powers, the courts have the authority, indeed the duty, to declare that exercise of power unconstitutional.
Liberals, however, tend to reject the notion that the courts have any role in seriously protecting economic liberty or property rights. This is remarkable in light of the fact that many liberals strongly advocate court protection for various rights-such as welfare or abortion-whose constitutional pedigree is far more questionable than rights to private property and economic liberties. Indeed, during recent decades, liberal judges, often urged on by public interest groups, have issued many opinions expanding the realm of economic and property regulation, thereby strengthening the welfare state. Having achieved this judicially sanctioned welfare state, liberals are strong supporters of letting the democratic process operate unimpeded by court oversight.
Conservatives, who can be supportive of property rights and economic liberty on policy grounds, are nevertheless reluctant to have courts rein in legislatures. Reacting to the perceived excesses of the Warren Court, Roe v. Wade, and the ability of liberal public interest groups to advance their agendas through the courts, conservatives came to view the judiciary with suspicion at times bordering on outright animosity. Increasingly, their touchstone is judicial restraint requiring deference to legislatures. This deference, coupled with an allegiance to stare decisis, means that conservatives are rarely willing to overrule precedent, leaving entrenched the very foundations of the welfare state they rail against.
Both liberals and conservatives take comfort in their belief that legislatures will respond to the will of the public and make informed policy decisions that can be changed as public sentiment dictates. Though appealing in principle, this trust in the democratic process ignores the realities of governmental institutions. Through gerrymandering and other means, elected representatives are increasingly insulated from constituents. Meanwhile, many policies are set and enforced by unelected, unaccountable agencies and commissions. What’s more, politically powerful special interests often capture the regulatory process to keep out newcomers, or to take what doesn’t belong to them. In the absence of democratic limitations, protection of economic and property rights is increasingly dependent on the self-restraint of government institutions-a commodity that is chronically in short supply.
In such a climate, the Court’s role in reviewing the constitutionality of laws becomes especially important. Without judicially recognized constitutional constraints, perverse incentives lead inexorably to expansion of government power and the yielding of individual rights. That dynamic is nowhere more evident than in property rights and economic liberty, where the current constitutional debate is whether there should be any limits on governmental power. In effect, where does the outer boundary of government authority lie?
A classic example is Kelo v. New London, argued in February, in which the Supreme Court will decide whether the constitutional requirement that takings be for a “public use” places any judicially enforceable limit on the power of eminent domain. The Court must decide whether the government can take property from one owner in order to give it to another private party solely because that new owner may be able to pay higher taxes.
In upholding the taking of 15 properties owned by seven families to make way for private office space and other unspecified projects (begging the question how can a taking be declared for a public use when no specific use has been declared), the Connecticut Supreme Court deferred to the New London City Council. But it also deferred to the unelected, private New London Development Corporation, which has been given the government’s power of eminent domain. Recognizing the speculative nature of the project and the breathtaking expansion of this government power, dissenting Connecticut Supreme Court justices wrote, “The majority assumes that if the enabling statute is constitutional, if the plan of development is drawn in good faith, and if the plan merely states that there are economic benefits to be realized, that is enough. Thus, the test is premised on the concept that ‘if you build it, [they] will come,’ and fails to protect adequately the rights of private property owners.” Under this standard, no home, no small business would be safe from tax-hungry governments and land-hungry developers. As the Institute for Justice noted in its Supreme Court brief, “Only the utterly incompetent could fail to devise a hypothetical chain of events whereby any use of eminent domain could lead to economic growth.”
The state of economic liberty jurisprudence is even more dire, demonstrated by a recent U.S. Court of Appeals for the Tenth Circuit decision upholding Oklahoma’s retail casket cartel. Oklahoma law requires anyone selling a casket to become a government-licensed funeral director-no small task considering, in addition to years of study, it requires an applicant to embalm 25 bodies; all this despite the fact that casket retailers never handle dead bodies nor perform funerals-they merely sell what amounts to a box. The Tenth Circuit explained, apparently without irony, that “dishing out special economic benefits to certain in-state industries remains the favored pastime of state and local governments,” and upheld the law on the grounds that “that intrastate economic protectionism . . . is a legitimate state interest.” In effect, we now have a federal appeals court giving a green light to the rankest form of cronyism and favoritism. Despite the starkness of the ruling, in March the Supreme Court declined to review the case.
As long as the Court shows such extraordinary deference to legislatures and maintains a two-tier approach to constitutional rights, the ratchet operates in one direction-to increase government power.
When government growth is proceeding virtually unchecked, setting reasonable outer boundaries might be a good place to start. The problem, however, is that for economic liberty and property rights, the boundaries are set at such an outer extreme that, for all practical purposes, courts cede virtually unchecked authority to government. Bureaucrats become adroit at maximizing their power just short of the boundary. The result is a flourishing regulatory regime that too often leaves abused property owners and entrepreneurs without recourse.
If economic liberty and property rights are to be restored to their rightful place in the constitutional constellation, the courts must go beyond merely setting these outer limits; they must truly revive constitutional protections. Judicial activism and abdication have read these rights out of the Constitution; it is essential that consistent and principled judicial engagement rehabilitate them. Respect for stare decisis must not mean refusal to reexamine wrongly decided cases; it must mean a respect for order that makes transitions as smooth as possible, while at the same time fulfilling the courts’ responsibility to recognize constitutional constraints on government authority.
With constitutional constraints in place, deference to legislatures makes sense. Liberals and conservatives can compete to establish policies through the deliberations of elected representatives. Wishes of the majority can prevail while the rights of the minority are respected. And entrepreneurs and small property owners, secure in their rights, can once again focus their energies on productive activities instead of trying to fend off arbitrary laws and regulations.
William H. Mellor is president and general counsel of the Institute for Justice in Washington, D.C. E-mail: www.ij.org.