This is an excerpt of a piece that will soon appear in Democracy magazine:
In the last few years, the Supreme Court and lower federal courts have shown a new hostility toward laws that regulate the economy and try to limit the effects of economic power. They have declared a series of laws unconstitutional, most famously limits on corporate campaign spending (the Supreme Court) and a key part of Congress’s 2010 health-care reform act (notably the 11th Circuit Court in Atlanta). The Supreme Court has also held that Vermont cannot restrict drug companies’ access to prescription records for the purpose of targeting their sales pitches and struck down other state laws that try to constrain the effect of wealth on elections. These decisions don’t just trim around the edges of regulation: They go to the heart of whether government can act to balance out private economic power in an era[to avoid word rep w/ next line] of growing economic inequality and insecurity. These decisions chime with some of the more troubling themes of the time. They fit well with the economics-minded idea that most of life is best seen as a marketplace and with the right-wing mistrust of government that has metastasized into Tea Party contempt and anger.
Liberals have denounced many of these decisions, but they have not yet spelled out the larger pattern. What’s missing from the criticism is a picture of what these cases add up to: an identity for the Roberts Court as the judicial voice of the idea that nearly everything works best on market logic, that economic models of behavior capture most of what matters, and political, civic, and moral distinctions mostly amount to obscurantism and special pleading.
The Supreme Court went down a similar road in the Gilded Age and afterward, defending laissez-faire economic principles against minimum wages, maximum hours, and other Progressive and New Deal regulation. The new cases have different doctrinal logic, and the economy has changed vastly, but the bottom lines are eerily alike: giving constitutional protection to unequal economic power in the name of personal liberty. The Supreme Court’s last go-round with economic libertarianism is often called the Lochner era, after a 1905 namesake case, Lochner v. New York, in which the Court invalidated a state law that set maximum daily and weekly hours for bakers. The Court ruled that the law violated constitutionally protected “liberty of contract,” the freedom of both employees and employers to make whatever agreements they saw fit. Minimum-wage laws were another prime target of Lochner reasoning because they limited the “freedom” to accept low pay. The Court also invalidated laws that favored organized labor by forbidding employers to require their workers not to join unions, struck down price regulations, and, more sympathetically, overturned barriers to entry in some trades and struck down a residential segregation law as a violation of the white seller’s right to transfer his property as he liked. Overall, between the 1880s and the 1930s, the Supreme Court struck down more than 200 pieces of state and federal legislation as violations of “economic liberty.”
If Chief Justice John Roberts’s Court develops the new cluster of anti-regulatory cases into a clear agenda, then the Roberts Court will be the twenty-first century’s answer to the courts of the Lochner era..The most extreme scenario would begin with invalidating the 2010 Affordable Care Act, but, win or lose, the mere fact that there is a viable constitutional argument against the law is a sign of how far the new economic libertarianism has gone. With or without that victory, such a jurisprudence would mean the end of regulation of campaign spending, virtually complete constitutional protection for advertising, and aggressive review of regulation in data markets or nearly any industry whose inputs or products are information. In other words, it would call into question whether government can regulate the basic engines of the new economy, just as Lochner jurisprudence did for the Industrial Age.
Nominally, the courts that have found some or all of the 2010 Affordable Care Act (ACA) unconstitutional are ruling on the limits of Congress’s authority to regulate the economy. Near the heart of these opinions, though, is the idea that the Constitution must protect, even indirectly, the autonomy of the consumer deciding how to spend her money. Although this is a very weak constitutional argument, it is revealing: It shows that the judiciary’s turn against a law that would have been uncontroversial not long ago is part of the new intellectual mood of laissez-faire for consumer capitalism.
The federal courts’ sharply divided judgments on the constitutionality of health-care reform,, and the dawning realization that the Supreme Court will likely take the constitutional challenge seriously, make this a strange moment, and one that might be momentous. The argument against the ACA that two federal district courts and one appeals court have accepted at the time of writing is that Congress lacks power to require individuals to buy insurance—the so-called “individual mandate” that is designed to put young and old, healthy and sick alike into the insurance pool. The Constitution assigns Congress a limited set of powers, and, in theory, it cannot act outside those. Therefore, Congress always faces two sets of constraints. It cannot do some things because those things are forbidden by rights-protecting language like the First Amendment, and others because, although they are not prohibited, they are not authorized by the Constitution’s list of Congress’s powers. The ACA’s opponents argue that the individual mandate violates the latter principle.
Congress’s go-to power for 70 years, since the Supreme Court embraced the New Deal, has been the power “to regulate commerce … among the several states,” generally just called the Commerce Clause. Although the bare language would seem to support a narrow reading of the power, the Court has interpreted it to authorize nearly any legislation that touches on economic activity, even very tenuously, such as the federal ban on home production of medical marijuana for personal use (in 2007’s Gonzales v. Raich). But on the ACA, three federal courts have pleased conservative activists by holding that Congress cannot require people to buy insurance. The general principle of these cases is that the Commerce power does not authorize Congress to require people to make purchases, or perhaps to take any affirmative act at all, in a field of economic life that they have not already voluntarily joined. Become a farmer, the argument goes, and you may be subject to all kinds of regulations, quotas, and so forth. The initial choice to enter the field means taking on its regulatory burdens. But a passive citizen, just by being, has done nothing to subject herself to the insurance mandate. Once she enters the field of health-care consumption, courts have conceded, she could be required to buy insurance; but as long as, like Winnie-the-Pooh, she just is, Congress cannot reach her.
This argument is strange, notwithstanding that federal judges have signed on to it. Strictly speaking, it addresses the limits of federal power. Nonetheless, its rhetorical force comes from appeals to the autonomy of the consumer and warnings that a runaway Congress might violate that autonomy. Courts overturning the individual mandate invariably invoke dark fantasies of a paternalistic government requiring citizens to buy American cars, health-club memberships, or vegetables. The odd thing about this parade of nanny-state mandates is that, because the Commerce Clause concerns the powers of Congress, not the rights of individuals, a ruling that invalidates the individual mandate under the Commerce Clause simply means that only state governments, not the federal government, can pass such a law. Famously, Massachusetts has already done just that.
There is really no such thing as a constitutionally protected personal liberty that a state can violate but the federal government cannot, or vice-versa. The Constitution protects individual rights against all government action, regardless of the source (with a handful of minor exceptions that are not relevant here). The Commerce Clause governs federal but not state power because it is not a rights-protecting clause. The odd thing about the anti-ACA cases is that they proceed as if they were vindicating a constitutional right of consumer liberty, but the Constitution has not been interpreted as securing economic rights since the Supreme Court rejected Lochner Opponents’ Commerce Clause arguments are displaced Lochner-ism.
That the constitutional case against the ACA is eccentric doesn’t mean that it is silly or sure to fail. In fact, the Lochner era had its own restrictive vision of the Commerce Clause, which the Supreme Court used to strike down federal laws regulating workplace conditions (such as bans on child labor). Like today’s anti-ACA courts warning against mandatory vegetable-buying, courts applying this older view of the Commerce Clause showed their real motives by remarking, for instance, that if Congress could regulate child labor, “all liberty of commerce will be at an end.” But where Lochner jurisprudence embraced a picture of economic liberty that centered on the autonomous producer (the worker bargaining with his employer), today’s emerging theory concentrates on the autonomous consumer. As with much of the new First Amendment doctrine, the basic protected act is the decision about how to spend one’s money.
There is, too, a trace of Tea Party paranoia in the anti-ACA opinions’ image of a Congress that barely passed the ACA, after decades of failed attempts, and cannot bring itself to raise taxes in a time of fiscal crisis, suddenly deciding that micro-managing its constituents’ grocery lists is a good idea. Laws requiring the purchase of broccoli might be bad, but they would also be unpopular, and that is all the protection we need against them. Looking in the Constitution for a guarantee against every silly or pernicious law a person can dream up distorts the document. The less one trusts the political process, though, the greater the tendency to look to the Constitution for protection by a higher law. The political right’s assault on government and caricature of Washington as a tyrannical power lend force to extravagant constitutional theories aimed at staving off a ravening Congress—an especially grim irony at a time when Tea Party representatives hold Congress hostage. This blend of doctrinal mutation and political unreality is where the intellectual climate of neo-Lochner-ism and the political climate of enraged populism come together.
Viewed broadly, this interpretation of Congress’s power has the same logic as the new First Amendment cases and the original Lochner doctrine. On the one hand, it celebrates individual freedom. On the other hand, by “protecting” individual freedom from government interference, it helps to guarantee that the inequality of the private marketplace will persist. Ironically, this often means that the individual freedom at stake—consumer choice, campaign spending, liberty of contract—is less worth having. Up close, the individual choice—buy, sell, hold—is unburdened by regulation; but pull back the camera, and you realize that the free choice is among a set of options that regulation helps to define—or does not, if the Constitution prevents it. In 1905, the unregulated choice to work more than ten hours a day in a bakery might have been free up close, but in a broader focus labor-market regulation was aimed at giving workers more attractive choices. Today, the uninsured face miserable, often impossible choices on the health-care market—just what the ACA is designed to change—which makes the courts’ invocation of consumer autonomy in striking down the ACA a particularly bitter irony. The freedom to spend money in a political campaign with Exxon on the other side may not feel so inspiring to those citizens who live elsewhere than on the pages of the Supreme Court’s opinions. Of course the choice to spend or not spend is a form of freedom, and regulation burdens that freedom; but until recently the American understanding has been that this is not a constitutional freedom, because legislatures’ power to regulate markets and compensate for economic inequality is too important to subject to probing judicial review. A constitutional right to spend what you do not have or decline to buy what you could not afford anyway recalls Anatole France’s mordant remark that the law, in its majesty, equally forbids rich and poor alike to sleep under bridges and steal bread for their dinner.
If the anti-ACA argument succeeds at the Supreme Court, it will be a sharp departure from the Court’s practice in the twentieth century. It is nearly unimaginable that any Court between the New Deal and now would have invalidated a national program of economic regulation, aimed at securing basic social benefits to all, that violates no constitutionally recognized individual rights. What is less clear is whether such an opinion would be a sea change, the start of a libertarian-inflected approach to the Commerce Clause, or just an important (and highly political) aberration. On one level, it doesn’t matter much: It took decades and much of the Obama Administration’s political lifeblood to pass the ACA, and nothing comparable seems likely to happen soon. But like Bush v. Gore, the infamous case in which the Supreme Court effectively settled the 2000 presidential election, the stakes in HCR are big enough that a one-day-only theory would have enormous consequences for the countr. A one-off opinion setting aside the ACA would reflect the political and judicial mood of the time. The idea that consumer sovereignty is a constitutionally protected value, that purchasing decisions are sacrosanct, involves the leveling of personal and political life into market decisions. That this idea infuses the anti-ACA opinions and gives them their rhetorical and (to their supporters) moral force shows how central it has become to the libertarian strain of legal reasoning.
There is acute irony in the way the new anti-regulatory cases interact with the Republican agenda in Congress. No one doubts that health-care reform would be constitutional on a single-payer, Medicare-like model, with the government simply providing tax-funded insurance,. Such traditional liberal programs, though, have been driven off the field by decades of right-wing success. The ACA is an intellectual compromise with market thinking and a political compromise with the big insurance companies. That is why, instead of just providing insurance as a public benefit the way many developed countries do, it requires individuals to purchase it from the company of their choice, keeping markets and established corporate players in the game. And that, in turn, is why it is constitutionally vulnerable. The ACA’s opponents call the individual mandate an unprecedented exercise of government power, which it may be, but not because it is a triumph of American “socialism”: It is novel because Democrats used to be able to pass public benefits that were straightforwardly public, rather than channeled through markets regulated favorably to big companies.
The Supreme Court’s several-pronged attack on the regulation of spending, selling, and buying reinforces one of the most persistent and pernicious intellectual mistakes of the time, one that we share with the Lochner era: the idea that markets are natural phenomena, arising from their own organic principles and free human action, while politics and lawmaking are artificial interferences with this natural activity. In fact, as sophisticated economists, lawyers, and others have always understood, markets are the products of law, which defines and enforces the ownership and exchanges that set the market in motion. A laissez-faire market arises from one kind of law, a more social-democratic market from another. There are things to say for and against both kinds of markets, and any real-life economy has complex blends of both elements—for instance, minimum-wage laws, bans on racial discrimination and prostitution, speed and weight limits for long-haul truckers, and so forth are all straightforward limits on laissez-faire market freedom. It is obscurantist, though, to suggest that some version of the laissez-faire market is a natural baseline, and anything that departs from it needs special justification. That is the spirit of the new cases. It sets aside the intellectual and political gains of decades of struggle in the twentieth century: the New Deal recognition that the country must take responsibility for shaping its own economy, and the decision to remove the old American romance with economic libertarianism from constitutional judging. It is the revival of that bad romance that makes the memory of Lochner relevant now.
What is happening here is deeper than cynical partisanship. These cases are not Bush v. Gore, the shameful 2000 opinion in which the Supreme Court handed the presidency to George W. Bush. The original Lochner era, similarly, was not corporate toadying or crudely ideological applications of laissez-faire theory. The justices of that time were interpreting long struggles for constitutional freedom. Jacksonian attacks on monopolies and the privileged few, the abolition of slavery, and the Fourteenth Amendment’s new promise of equal citizenship for all Americans formed the backdrop to Lochner. In effect, the Court decided that constitutional doctrines that blocked some economic regulations were the best way to define a new version of American citizenship that made everyone equally free for the first time. The problem was not that they were insincere or inane, but that they were wrong Like the old Lochner-ism, today’s new anti-regulatory doctrines are rooted in ideas: that personal freedom has an economic dimension that the Constitution protects, and that government attempts to equalize or otherwise direct economic power are pernicious and constitutionally suspect. Like the old cases, the new ones end up protecting economic power as a form of freedom, which ties the hands of government and leaves lots of people less free.What will become of all this depends, at the crudest level, on the outcome of the next presidential election and the next few Supreme Court appointments. In a more complex way, it depends on the quality of our politics and public life. The Constitution is what Americans make of it. Constitutional law is unlikely to produce a better version of its core principles, freedom and equality, than Americans’ social movements and political leaders confidently voice and pursue. For a few decades in the twentieth century, regulating the economy to make personal freedom and security a reality was a goal shared between Democrats and Republicans, big business and labor. Earlier, however, it was a fraught idea, denounced as socialism or fascism, and it became consensual only after the crisis of the Depression and the decades-long efforts of the labor movement and progressive critics of laissez-faire. If Americans do not re-establish ideals of equality and personal liberty that take account of vast social and economic inequality and give government a strong role in addressing it, we will get the Constitution, and the country, we have earned.