Freedom of Religion and the Freedom of the Church

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It is widely accepted—in American law, in other countries’ laws, and in human-rights law generally—that “freedom of religion” is fundamental and that it should be protected, respected, and promoted. The Universal Declaration of Human Rights of 1948, for example, called on all political communities to “promote respect” for the right to religious freedom and to “secure [its] universal and effective recognition and observance.”

However, and to put it mildly, a commitment to religious freedom is easier to profess than to operationalize. Identifying the content, reach, and limits of religious freedom; working out its implications and applications; and constructing effective doctrines and other mechanisms for its legal and judicial enforcement continue to be difficult and contested projects.

I have, in some academic and other work, tried to show that the right to “freedom of religion” belongs not only to individuals but also to (at least some) institutions, associations, communities, and congregations.[1] Just as every person has the right to seek religious truth and to cling to it when it is found, religious communities have the right to hold and teach their own doctrines. Just as every person ought to be free from official coercion when it comes to religious practices or professions, religious institutions are entitled to govern themselves, and to exercise appropriate authority, free from official interference. Just as every person has the right to select the religious teachings he will embrace, churches have the right to select the ministers they will ordain.

“Religion,” Justice William Douglas observed in his opinion in Wisconsin v. Yoder (1972), is “an individual experience.” It certainly is, but it is not only that. After all, as Justice William Brennan reminded us, in Corporation of the Presiding Bishop v. Amos (1987):

For many individuals, religious activity derives meaning in large measure from participation in a larger religious community. Such a community represents an ongoing tradition of shared beliefs, an organic entity not reducible to a mere aggregation of individuals.

Such “organic entities” are subjects, not merely results or byproducts, of religious liberty. At the center of religious freedom, then, is the principle of “church autonomy” or what the American Jesuit and church-state scholar John Courtney Murray (and many others) called “the Freedom of the Church.”[2] According to Harold Berman, the great legal scholar and historian, the freedom of the church was a “‘Great Idea,’ whose entrance into history marked the beginning of a new civilizational era.”[3] In any event, this idea—or something like it—is an important aspect of any plausible account of religious freedom under and through constitutional law and government.

Michael McConnell observed a little while ago that although “‘freedom of the church’ was the first kind of religious freedom to appear in the western world, [it] got short shrift from the Court for decades.”[4] However, he continued, “it has again taken center stage.” It seems that it has.[5] Indeed, Chief Justice Roberts, in his opinion in the Hosanna-Tabor case (2012), gestured toward its place in Magna Carta on the way to concluding for a unanimous court that the Constitution “bar[s] the government from interfering with the decision of a religious group to fire one of its ministers.”[6]

But, what is this “great idea”? Berman and others have discussed at length and in depth what it meant during, around, and after the Investiture Crisis of the 11th century. What, though, does and should it mean today?

For starters, the “freedom of the church”—if it means anything—includes the freedom of religious associations, institutions, and communities to govern and order themselves and it constrains the authority of political, secular officials to interfere with that governance. The Supreme Court in Hosanna-Tabor appears to have said as much. Wrote Chief Justice Roberts for the Court:

By forbidding the “establishment of religion” and guaranteeing the “free exercise thereof,” the Religion Clauses ensured that the new Federal Government . . . would have no role in filling ecclesiastical offices. The Establishment Clause prevents the Government from appointing ministers, and the Free Exercise Clause pre­vents it from interfering with the freedom of religious groups to select their own.

Later, when affirming that an implication of these prohibitions is the so-called “ministerial exception,” Justice Roberts explained that:

[r]equiring a church to accept or retain an unwanted minister, or punishing a church for failing to do so, intrudes upon more than a mere employment deci­sion. Such action interferes with the internal governance of the church, depriving the church of control over the selection of those who will personify its beliefs.

There is more to the idea, though, than its core. I have proposed that we can usefully think about the “freedom of the church” not only as a “black letter” legal rule; and not so much as a single organizing principle like “equality,” “neutrality,” or “liberty of conscience”; but also as a way of describing the confluence of and relationship among a variety of constitutional, political, and moral arguments and themes. That is, the “freedom of the church” might—for us, today—function less as a rule, standard, or doctrine (though it will function this way sometimes, as in Hosanna-Tabor) and more like a background or animating value, even a mood.

It might, for example, serve in law and policy as a kind of placeholder, or as a point of entry, for the argument that political and personal liberties are best protected through competition and cooperation among plural authorities and jurisdictions and through structures and mechanisms that check, diffuse, and divide power.

Additionally, it echoes and perhaps reinforces the arguments of scholars like Paul Horwitz[7] and Fred Schauer regarding the importance of “First Amendment institutions” and the “infrastructural” role they play in clearing out and protecting the civil-society space within which the freedom of religion is exercised and in creating the conditions and opportunities for that exercise.[8] Freedom of religion, after all, is not only lived and experienced in and through institutions, it is also protected, nourished, and facilitated by them. An appropriate appreciation for “the freedom of the church” might inspire careful attention to what the Second Vatican Council called the “conditions for the fostering of religious life,” that is, the conditions within which “people may be truly enabled to exercise their religious rights and to fulfill their religious duties.”[9]

Furthermore, “the freedom of the church” affirms and reflects what Mark DeWolfe Howe called

[the] pluralistic thesis . . . that government must recognize that it is not the sole possessor of sovereignty, and that private groups within the community are entitled to lead their own free lives and exercise within the area of their competence an authority so effective as to justify labeling it a sovereign authority. To make this assertion is to suggest that private groups have liberties similar to those of individuals and that those liberties, as such, are to be secured by law from governmental infringement.[10]

It confirms, in Murray’s words, that “[w]ithin society, as distinct from the state, there is room for the independent exercise of an authority which is not that of the state.”[11] And, the “freedom of the church” provides a reason and justification for the fact that there are some questions—“religious” questions—that civil or secular courts do not and should not answer. It also provides justification for the doctrine that the First Amendment does not permit state actions that create or require “excessive entanglement” between governments on the one hand and religious institutions, practices, or teachings on the other.

This “great idea” could, in other words, be many ideas. Perhaps the Hosanna-Tabor case, by anchoring the idea’s paradigmatic application firmly in our Constitution and tradition, has provided something of a fixed point of reference for the various other complementing, supporting, and operationalizing themes.

Now, these themes have been closely examined and pointedly criticized, on a variety of grounds, in scholarly literature and elsewhere. Some insist, for example, that principles like “church autonomy” or the “freedom of the church” are suspect because they can be used to protect deeply objectionable or immoral activities and programs. They can, but this is true of many important ideas. Others have contended that rights and liberties properly belong to individuals only and not to groups, associations, or corporate entities. This criticism has some political appeal, but it does not square with our practice or jurisprudence. Still others remind us that using or protecting the idea of “the freedom of the church” in law requires difficult line-drawing and close-call distinctions. But this fact does not mean the idea should be rejected.

At least three other objections have been pressed by Micah Schwartzman and Richard Schragger in an important 2013 article called Against Religious Institutionalism. We might call these the Misplaced Nostalgia objection, the Religion Isn’t Special objection, and the Individual Conscience objection.

With respect to the first, they argue that the “historical account offered by some religious institutionalists is anachronistic, incomplete, and reactionary” and they detect in present-day defenses of the freedom of the church “a form of religious nostalgia, a certain melancholy for the passage of an age in which everyone—or at least all Christians—shared a thick set of religious beliefs and perhaps also a way of life based on common rituals and practices.” In fact, the idea does not—or, at least, it need not—involve nostalgia or reaction. Its defense should not be dismissed as a “melancholy” call for a return to a time of organic social unity, before the collapse of “the sacred canopy,” the disenchantment of the world, and the emergence of pluralism.

It is, of course, true that appeals to, or efforts to mine, “the freedom of the church” risk falling into anachronism. There is a need for translation, not transplantation, of this idea. Still, the “freedom of the church” proposal is fairly modest and for the most part consists in the suggestion that the tradition of protecting and respecting religious liberty under and through law in the United States is richer and more interesting than is sometimes thought (or described in some Supreme Court opinions).

Next, it is objected that religion isn’t “special” (and so religious institutions aren’t, either). First Amendment scholars and others have been wrestling for some time with doubts about the justifiability of treating “religious” claims for exemptions with more solicitude than non-religious, conscientious claims for exemptions.[12] The “freedom of the church” idea presumes and proposes that religion is special—or, more precisely, that religious institutions, communities, and authorities are and should be differentiated, at least for some purposes, both from political authorities and from non-state institutions and voluntary associations generally.

To embrace this idea as still-relevant is to claim that religious institutions have a distinctive place in our constitutional order—and not only a distinctively worrisome or harmful one. It is to suggest that churches are not “just like the Boy Scouts” and that, while they to a large extent function in civil society in the same way and deliver the same Tocquevillian benefits as any number of voluntary associations, they are, in the end, different.[13]

True, it is increasingly difficult, within the boundaries of argument set down by some versions of liberal political theory, to justify, on principled grounds, special treatment for religious liberty. Still, in our history and tradition, “religious” institutions and authorities have acted, and have been regarded, as special and distinct, whether or not “religion” has been understood as neatly separate from “culture,” “conscience,” or “morality.” We live under a written Constitution that “singles out” religion and we inhabit a tradition in which “church” and “state” have, in a special way, cooperated and contended.[14] If it is anachronistic to invoke the freedom of the church, it seems even more ahistorical to deny the distinctive (for better or worse) place and role of religious actors in that tradition, and today.

Finally (for now), proposals to bring “the freedom of the church” back to center stage have been criticized for neglecting, or even supplanting, the rights-bearing individuals who appropriately star in the post-Enlightenment show and for allowing the rights and liberties of churches and institutions over those of natural persons. Schragger and Schwartzman, for example, express the concern that “the freedom of the church” “put[s] church first,” and thereby “inverts the usual formulation whereby institutional autonomy is derived from individual rights of conscience.”

The “freedom of the church” proposal, however, does not subordinate individuals’ religious-liberty rights to those of institutions. Nor is it being claimed that the freedom of the religious conscience from government coercion “derives” from the autonomy, sovereignty, or independence of churches or other religious institutions. The historical and continuing significance of “the freedom of the church” is not that it somehow grounds or trumps individuals’ religious liberty or freedom of conscience, but that it checks and limits state and political power and thereby helps to protect the liberty and conscience of institutions and individuals alike.

To be sure, there is no getting around the fact that the “freedom of the church” idea, or cluster of ideas, is a challenge to many contemporary assumptions, premises, and commitments. It remains to be seen whether, or to what extent, it can be incorporated faithfully—that is, in a way that is faithful to the idea—into an account of religious liberty and church-state relations that is plausible, let alone attractive, to present-day citizens and scholars. It may be that it cannot. If not, we should be willing to question not only the idea itself but also the standards we use to identify attractive accounts.

The effort to retrieve, translate, and incorporate “the freedom of the church” confronts more than a few obstacles.

First, there is the centrality in contemporary political theory and morality of the individual. The appeal of an idea that seems to privilege institutions over individuals seems limited given that, more and more, we think in terms of personal spirituality rather than institutional affiliation, public worship, or tradition.

Next, there is the reality of religious difference and diversity. There is no one “church” any more than there is one “state.” As Schragger and Schwartzman insist:

The issue is how the freedom of the church can be made plural—how to move from the Middle Ages to the Reformation and eventually to our modern experience of religiously diverse, liberal democratic societies, without losing the claim of church sovereignty that drives the various forms of religious institutionalism.

A related, and quite substantial, obstacle is the rise of the modern, liberal, sovereign state and the tension between its claims and any pluralist account of authority. The state, even if it stops short of attacking non-state authorities as “worms within the entrails” of the body politic, and even if its powers are constitutionally conferred, enumerated, and limited, seems likely to regard non-state authority as only provisionally held and exercised and to insist that it be exercised in accord with the same norms that (appropriately) govern the state itself.

The fourth, and perhaps most formidable, obstacle to translation is the lack of interest in translating. As always, there are those who are comfortable with, or who have a stake in maintaining, the doctrinal and conceptual status quo. As Steven Smith has observed:

[A]ny . . . reorientation would require judges and scholars—and citizens generally—to unthink and unlearn much that has come to be taken for granted, and to recover interpretive possibilities that have largely been forgotten.[15]

All that said, the idea of, and the on-the-ground struggle for, “freedom of the church” mattered in the past and matters today. It is an old but still important idea. It is significantly, but not entirely, out of place in today’s constitutional-law and law-and-religion conversations. But, if it can be retrieved and translated, then it should be—not out of nostalgia or reaction, but so that the law will better identify and protect the things that matter.

 

[1] See generally, for example, Richard W. Garnett, “The Freedom of the Church”: (Towards) An Exposition, Translation, and Defense, 21 J. Contemp. Legal Issues 33 (2013); Richard W. Garnett, Religious Liberty, Church Autonomy, and the Structure of Freedom, in J. Witte & F. Alexander, eds., Christianity and Human Rights: An Introduction (2011); Richard W. Garnett, The Freedom of the Church, 4 J. Cath. Social Thought 59 (2007).

[2] See generally, John Courtney Murray, We Hold These Truths: Catholic Reflections on the American Experience 186-90 (2005 ed.).

[3] Harold Berman, Law and Revolution 87 (1983).

[4] Michael W. McConnell, Reflections on Hosanna-Tabor, 35 Harv. J.L. & Pub. Pol’y 821, 836 (2012).

[5] See for example Paul Horwitz, Freedom of the Church Without Romance, 21 J. Contemp. Legal Issues 59 (2013); Richard Schragger & Micah Schwartzman, Against Religious Institutionalism, 99 Va. L. Rev. 917 (2013); Steven D. Smith, Freedom of Religion or Freedom of the Church?, in A. Sarat, ed., Legal Responses to Religious Practices in the United States (2012).

[6] Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 132 S. Ct. 694, 702 (2012).

[7] Paul Horwitz, First Amendment Institutions (2012).

[8] Frederick Schauer, Principles, Institutions, and the First Amendment, 112 Harv. L. Rev. 84 (1998).

[9] Pope Paul VI, Dignitatis humanae, ¶ 6 (1965).

[10] Mark DeWolfe Howe, Foreword: Political Theory and the Nature of Liberty, 67 Harv. L. Rev 91 (1953).

[11] Murray, We Hold These Truths, at 70-71. See generally John Inazu, The Four Freedoms and the Future of Religious Liberty, 92 N. C. L. Rev. 787 (2014) (presenting a theory of “strong pluralism”).

[12] See for example Frederick Mark Gedicks, An Unfirm Foundation: The Regrettable Indefensibility of Religious Exemptions, 20 U. Ark. Little Rock L. J. 555 (1998).

[13] Richard W. Garnett, Religion and Group Rights: Are Churches (Just) Like the Boy Scouts?, 22 St. John’s J. Legal Comment. 515 (2007).

[14] Michael McConnell’s phrase from his article, “The Problem of Singling Out Religion,” 50 De Paul L. Rev. 1 (2000-01)

[15] Steven D. Smith, Freedom of Religion or Freedom of the Church?, in Legal Responses to Religious Practices in the United States 45 (Austin Sarat ed., 2012).

Responses

Freedom of the Church Not Freedom of Religion

I have long benefitted from Professor Garnett’s work in the area of law and religion. Given the sometimes contentious climate in and out of the academy, it is worth highlighting the tone of his writing as well as its substance. Both are admirable. One of Professor Garnett’s core scholarly pursuits has been to argue for a…

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Negotiating the Freedom of the Church

One of the challenges in commenting on Rick Garnett’s essay is that I think his deeply thoughtful and measured analysis is basically right on target. If we are going to take individuals’ freedom of religion seriously, we need take into account the importance of their religious communities. Exactly what that means is, unfortunately, hard to…

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With Non-Interference Comes Responsibility

Richard Garnett’s Liberty Forum essay argues eloquently for the importance of institutional religious freedom in our system of government and our broader society. As Garnett writes, some form of institutional religious liberty, or “freedom of the church,” is an “old but still important idea.” It’s an idea, moreover, that in one form or another has…

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The Rise of Adversarial Corporatism

corporatism

Timothy F. Geithner, former U.S. Secretary of the Treasury and savior of the free world,[1] has lamented the intractable paradox of financial crises: government must lend freely to actors who by all rights should bear the price of their own reckless conduct and be wiped out. The post-crisis years have been marked by a related but somewhat different paradox: On the one hand, the government has recapitalized financial institutions, subsidized them, and drawn them closer to its ample bosom. On the other, it has hit those same institutions with an avalanche of prosecutions. Settling these cases is very costly; one estimate puts the largest six banks’ litigation costs since 2009 at over $160 billion.

A strategy of re- and de-capitalizing firms at the very same time does not make much intuitive sense. And, conservative pundits seem torn. They have harshly criticized the government’s bullying banks into multi-billion-dollar settlements. Poor J.P. Morgan, poor Jamie Dimon. But they also inveigh against “crony capitalism,” which happens to be what Mr. Dimon practices for a living.

What gives?

I suggest that the conflicting policies and laments converge on a single phenomenon. Prosecutorial aggression and “crony capitalism” are two sides of the same coin. Let’s call it “adversarial corporatism.”

In a 2001 book, Berkeley professor Robert A. Kagan described America’s regulatory style as “adversarial legalism”[2]. The term was, deliberately, slightly oxymoronic. “Legalism” suggests a Weberian, hierarchical bureaucracy. But that is not “the American way of law” (the subtitle of Kagan’s book), for we combine an emphasis on lawfulness and a fear of agency “capture” with a highly decentralized, rights-based, litigation-driven mode of regulation. The mismatch, wrote Professor Kagan, comes from combining grand social ambitions that require a high degree of social control with fragmented governmental institutions and public distrust of government.

Kagan hoped that those rival forces might yet be domesticated with a bit of good will and restraint on all sides. What has actually happened is the opposite. Grand ambitions have become grander yet. The environmental laws of the 1970s—Kagan’s paradigm—look quaintly modest compared to contemporary efforts to govern the entire health-care market, the financial markets, and indeed the planet. Meanwhile, agency “capture” has become an even more fully symbiotic relation between government and private interests. At the same time, the Naderite public interest lawyers of the 20th century cannot hold a candle to today’s adversarial forces: government prosecutors of all stripes, and trial lawyers. What was once hard-fought civil litigation has become (criminal) prosecution, largely conducted outside the judicial process. Over a wide range of economic activity, adversarial legalism has evolved into an actual oxymoron: “adversarial corporatism.”

Regulatory Regimes

“Corporatism” is often associated with Benito Mussolini’s forms of industrial organization. But there is also a more benign, democratic form of corporatism, practiced by postwar Germany, Austria, and other (mostly Western European) countries. Corporatism in this sense seeks to lock representative and democratic interest groups—“peak associations”—into binding agreements over, for example, labor conditions or workplace standards. The agreements may be embodied in legislation, or they may be produced through routinized negotiations (as with labor “tariffs” or prevailing wages). In that fashion, democratic corporatism seeks to dampen social conflict and bring economic stability.

The United States came uncomfortably close to importing Mussolini’s corporatism; the New Deal’s National Industrial Recovery Act was explicitly modeled on it. The Supreme Court unanimously struck down the act in Schechter Poultry v. United States (1935). And yet, in the postwar era, we still ended up with something akin to democratic corporatism. Regulatory agencies such as the Federal Communications Commission, the Securities and Exchange Commission, and the Food and Drug Administration superintended sectoral industry cartels, shielding them against “ruinous competition” and against attack by state regulators or private parties. Transportation, agriculture, and utilities were regulated in the same fashion. The National Labor Relations Board maintained a rough balance between labor and capital. Banking and finance, too, were organized along corporatist lines.

New Deal corporatism pursued the same objectives as its European counterpart: social and economic stability. Here as in Europe, it rested on a rough social consensus—in our case, the New Deal consensus. The law that organized this universe was not the Constitution but the Administrative Procedure Act of 1946 (APA). The APA governed an array of (typically) bipartisan, “independent” agencies. For traditional rule-of-law protections, administered by independent courts, the APA substituted administrative process and deferential judicial review.

That system crashed and splintered in the 1960s, for well-rehearsed reasons: misgivings about the capture of regulatory agencies; the system’s inability to accommodate broad but diffuse demands for environmental and consumer protection; a lack of transparency and accountability. The system became more pluralistic. A much wider range of interests gained access to agencies, as the courts and the Congress pried the doors open for consumer advocates, environmental groups, and competing economic actors. The APA underwent a radical transformation, and the administrative process became much more contentious and judicialized. This, roughly, is the world described by Robert Kagan in 2001.

That world is no longer ours. We have acquired a new style of regulation—adversarial corporatism. Its most pristine embodiment is the Wall Street Reform and Consumer Protection Act of 2010, otherwise known as Dodd-Frank for its main congressional sponsors.

In an instructive overview of Dodd-Frank, law professor David A. Skeel has argued that the statute is a throwback to New Deal-style corporatism. It establishes “(1) government partnership with the largest financial institutions and (2) ad hoc intervention by regulators rather than a more predictable, rules-based response to crises.” Adds Skeel: “The partnership works in both directions: special treatment for the Wall Street giants, new political policy levers for the government.”[3]

Evidence is not hard to come by. The ultimate government “partners,” Fannie Mae and Freddie Mac, played a key role in the 2008 meltdown that the reform law was supposed to address. Still, after a brief period in federal receivership, Fannie and Freddie emerged largely unscathed and are making money again (which the U.S. Treasury siphons off). Moreover, to these old-time Government Sponsored Entities (GSEs), Dodd-Frank has added a stable of new ones. They are called “Systemically Important Financial Institutions” or “SIFIs” for short. They, too, operate with a huge embedded subsidy. (By some estimates, their advantage vis-à-vis smaller institutions works out to close to 100 basis points.) A lot of money can be made by being systemically important. But you must stay close to the regulators and be nice to them. Former Morgan Stanley CEO John Mack famously articulated the new first law of finance: “Your Number One client is the government.” Goldman Sachs CEO Lloyd Blankfein has chimed in: “We’re not against regulation. We partner with regulators.”

Of course they do: they always have. There’s a serious argument that the relation between government and banks must be corporatist. On one side, the government needs to borrow money. On the other side, fractional reserve banking requires a lender of last resort—the government. Hence the mutual embrace.[4] The use of regulatory and lender-of-last-resort leverage is called “fiscal repression.” It is a pristinely corporatist mode of operation; but it is old hat. So what is new?

It is that the partnership is a pact among devils, or at any rate an arrangement that is calculated to make the parties look that way. The government is every bank’s number one client because it is the true source of profits. Those come in the form of embedded subsidies and of regulatory goodwill, which a bank may cultivate by, for example, serving as a holding pen for former and future government officials. (This is Citigroup’s business strategy.) But there is a second reason to cultivate the government: it, unlike most clients, can destroy you. It will threaten to do so on a regular basis, and it will shout from the rooftops that you (banker) ought to be in jail. Instead of charging or prosecuting individuals, however, the government prosecutes firms and exacts large sums of money. Billion-dollar settlements have become almost routine.

These shake-downs are a perplexing feature of what is, after all, supposed to be a “partnership.” Several features are worth noting:

First, while settlements are haggled out behind closed doors, the results are the stuff of press releases and newspaper headlines. The opposite is true of conventional corporatism, which operates on the principle that publicity is what happens when the system breaks down.

Second, the settlements and fines in these proceedings bear little, if any, relation to the supposed abuses. While there was a lot of bad behavior in the run-up to the financial crisis, the practices that did the real harm had much more to do with horridly misaligned incentives than with the sudden emergence of a criminal class. And no one seriously pretends that the prosecutions or the settlement amounts correspond to culpability, mens rea, or demonstrable harm to consumers. The settlements usually take place far away from any courtroom, and long before any trial. They are political bargains.

Third, and most strikingly, “settlements” settle virtually nothing. In New Deal corporatism, as noted, administrative agencies and congressional subcommittees shielded regulated industries from legal and political attack. Adversarial corporatism, in contrast, resembles a protection racket that exacts payment and then invites rival gangs to open fire on the local saloon. A settlement with one federal regulator will rarely stop investigation and prosecution by another federal regulator; or prosecutions by state attorneys general and treasurers; or consumer class actions or derivative shareholder actions; or actions by those allegedly hapless victims of mortgage shenanigans, Fannie and Freddie and the Federal Housing Administration. State and federal agencies compete for the spoils. None of them has the means or the motives to bring closure.

It seems highly unlikely that Dodd-Frank’s architects deliberately designed a grand profits-for-pariah-status bargain. Congress does not work that way, least of all under tumultuous conditions like those that obtained in 2008. Moreover, it is misleading to think of “the government” as a unitary actor. The U.S. Department of Justice could not get a U.S. attorney in New York or Sacramento to stand down even if it wanted to, and the federal government’s ability to block enforcement proceedings by officials in the 50 states is nil.

For all that, adversarial corporatism does have a functional logic. At the time of Dodd-Frank’s enactment, the political system could see no way to bury GSE’s, to break up SIFIs, or to wring the subsidies out of the system. Corporatism, however, requires a private quid for every government quo, especially in the wake of a financial crisis that was widely viewed as Wall Street’s fault. The quasi-criminalization of an entire area of the private sector was the only quid that the political system could exact, and so it did.

Banditry

Is government-by-prosecution really a new regulatory style, or just a temporary banking thing? As noted, the banking sector is and has always been a particularly likely candidate for corporatism. And perhaps the adversarial climate will give way to corporatist comity once the post-crisis mop-up is over and the bankers have been cured of their mistaken belief, acquired in “de-regulatory” times, that they are independent actors. However, that prospect seems unlikely.

Adversarial corporatism extends far beyond the financial sector; it has taken hold across a wide range of industries. The tobacco industry, for example, operates under a state-sanctioned cartel and an explicit profit-sharing agreement with state governments (called the 1998 “Master Settlement Agreement”), in exchange for de facto immunity from private lawsuits.[5] The pharmaceutical industry is another example. It operates under a regulatory regime with strong oligopoly tendencies. The firms pay for regulatory approval at the front end; at the back end, state and federal regulators, along with trial lawyers, capture a big portion of the rents by means of “law enforcement.” (Many of the largest settlements on record have been between pharmaceutical firms and federal agencies, especially the Departments of Justice and Health and Human Services.)

The Affordable Care Act works on a similar principle with respect to health insurers. The act turns health insurance into a product that cannot survive in an open market and then promises to keep that product viable by means of subsidies and compulsion. That, too, is a “partnership” between business and government. It, too, will become a permanent perp walk.

All these arrangements reflect the reality that every corporatist system must have some way of recapturing an acceptable portion of the government-produced rents. For de jure GSE’s, the arrangement is made explicit: Fannie and Freddie must kick back their profits to the Treasury. De facto GSE’s aren’t subject to that requirement. Thus the need for some other way to siphon off the profits. That is where law enforcement, so-called, comes in. Legal action is, it appears, more convenient than conventional methods such as taxes or rate regulation. Financial settlements and payments are in lieu of penalties in name only. They are better viewed as dividends, payable to the banks’ number one client. And like any investor-client, the government will insist that dividends be paid promptly and reliably.

Is this a stable institutional arrangement? There are reasons to think not. The key arguments for corporatism, as mentioned, are economic stability and social consensus. (New Deal agencies were supposed to protect and stabilize their industries, not destroy them.) A corporatism that is adversarial is incompatible with either goal. It aims, after all, to keep financial institutions and their investors in a state of permanent uncertainty, and to stir up resentments.

The difference between conventional corporatism and its adversarial cousin is reminiscent of Mancur Olson’s famous distinction between “stationary” and “roving” government bandits: Stationary bandits seek to enforce exclusive dominion and will exploit their base only to the point of maximizing long-term gains. Roving bandits have a much shorter time horizon. They come, loot, and leave the scraps to the next occupier. That, roughly, is our system: once multiple federal agencies are through with J.P. Morgan or Glaxo, state AGs and trial lawyers pick over the remains. Such a regime simply isn’t built for the long haul.

Even so, there are potent reasons to suspect that adversarial corporatism may be here to stay:

  • Regulatory agencies at all levels of government have become profit centers for cash-strapped legislatures, and returns on agencies’ law-enforcement investments have become an important margin of regulatory competition. Agencies will be loathe to surrender their legal powers; legislators will be reluctant to demand they do so.
  • Adversarial corporatism rests on broad political coalitions. The architects of the tobacco cartel were careful to cut trial lawyers and public health groups in on the bargain. State AG settlements routinely divert funds to a coterie of advocacy groups. Health insurers and providers “partner” with Medicaid and Medicare lobbyists. And in a truly breathtaking account (cited in note 4), Charles W. Calomiris and Stephen H. Haber have documented the unholy coalition of big banks and an entirely bank-financed non-profit “fair housing” sector. Like all such coalitions, that between Wall Street and urban interests is firmly entrenched in Congress. (In the 1970s, my friend Alex Pollock has noted, the Senate Committee on Banking and Currency became the Committee on Banking, Housing and Urban Affairs.) And the coalitions are well connected to both major political parties. President Clinton promoted the banking-fair housing coalition as did President Bush. President Obama does, and the same will be true of the next President.
  • As an economic matter, multi-billion dollar legal liabilities have become part of firms’ overall profit picture. At one level, this seems odd since government-imposed liabilities are almost random events. But then, stock markets find no great difficulty in pricing legal risks, and an entire cottage industry has grown up to arbitrage them.
  • As a matter of elite social mores, profits-for-prosecution has become accepted. At Baltusrol Country Club, moving your ball in the rough remains a grave offense. Running a quasi-criminal enterprise may be more like a condition of admission. (If the government isn’t after you, you’re probably not very rich or important.)
  • Adversarial corporatism is self-reinforcing in public opinion terms. The Wall Street Journal’s editorialists have summed up Dodd-Frank and its implementation with the headline, “Government Has Won.” Meanwhile soi disant progressives are just as convinced that the capitalists have won. Not one culprit in the 2008 meltdown has gone to jail, they cry, and the banks are raking in unprecedented profits. Both camps are in a way correct, and both can marshal mountains of evidence. Both choose to see only one side of a fiendish bargain that is not easily explained.

The Corporatist Conundrum

For any number of reasons—economic, political, social—adversarial corporatism is a very bad way to run a country. Can anything be done about it?

Law and courts?

Excessive hope on this front is probably misplaced. True, many government prosecutions of alleged corporate misconduct would not pass muster with a jury or judge. However, few if any targeted companies can afford to play hardball. Thus, the parties bargain in the shadow of the law, and over time, the deal-making becomes routinized. To paraphrase the divine Tina Turner, “What’s law got to do with it?”

External shocks?

That might not work, either. The 2008-2009 financial crisis should have been a wake-up call. Yet the forces that knowingly walked us into the disaster—banks, housing advocates, Fannie and Freddie and the FHA—walked away from it with more money, power, and privileges than before. Dodd-Frank did not retard adversarial corporatism; it enshrined it.

A call to reason, social responsibility, and the greater collective good?

That was Robert Kagan’s proposed cure for adversarial legalism and its ills. It went unheeded. Adversarial corporatism will likewise prove immune to appeals to the greater good, and for the same reason: for the professional players, it’s a positive-sum game. As has been said, they have a friendly dealer (the government) and a few hundred million suckers at the table, who can’t get up: taxpayers. For the pros, the rational strategy is to pretend that it’s a real fight and a competitive game; to raise the stakes; and to squabble over the proceeds among themselves, somewhere down the road.

Will the game end when all the suckers sit naked?

No. The house will print money and lend it, as it does whenever there is a crisis and, nowadays, even when there isn’t one. The game will end only when the card sharks start shooting each other—in other words, when the coalitions that sustain adversarial corporatism break.

I’ll entertain any reasonable proposal conducive to that end. But I’m not holding my breath.

[1] Timothy F. Geithner, Stress Test: Reflections on Financial Crises (Crown, 2014).

[2] Robert A. Kagan, Adversarial Legalism: The American Way of Law (Harvard University Press, 2001).

[3] David A. Skeel, The New Financial Deal: Understanding the Dodd Frank Act and Its (Unintended) Consequences (John Wiley and Sons, 2011).

[4] Charles W. Calomiris and Stephen H. Haber, Fragile by Design: The Political Origins of Banking Crises and Scarce Credit (Princeton University Press, 2013).

[5] If you must know the gory details, see Michael S. Greve, “Compacts, Cartels, and Congressional Consent,” 68 Missouri Law Review 285 (2003).

Responses

The New Cronyism of the Old Rent-Seeking State

Michael Greve’s essay vividly describes some deeply troubling trends in the relationship between the government and the economy. It provides a much needed perspective at a time when politics and policy-making are nothing if not adversarial, and more casual observers succumb to the temptation simply to choose sides without asking how we came to this…

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Does a Sophisticated Theory Miss the Facts?

Michael Greve introduces “adversarial corporatism,” a new conceptual lens through which to view the growing and contentious collaboration of industry and government. Adversarial corporatism takes the conventional story of crony capitalism and regulatory capture—a story appealing to critics on the left and the right alike—and adds a dose of a starker reality: the cooperation is…

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Adversarial Corporatism: Additional Thoughts

I am deeply grateful to Brian Mannix and to Peter Conti-Brown for their thoughtful, indeed profound comments on my “adversarial corporatism” post. I am equally grateful to Richard Reinsch and the Liberty Forum for hosting this exchange. To paraphrase the Boss, we learn more from three minutes on this blog than we ever learned in…

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Our Civil Rights Rest on Fundamental Arguments, Not Racial Ones

Martin Luther King, Jr.

Celebrations of the Civil Rights Act at 50 remind us just how anachronistic the common understanding of civil rights has become. They are treated as the product of a momentary movement in the latter portion of the 20th century or as a work of legislative artistry by President Lyndon Johnson. Today it seemingly suffices to name President Johnson and Dr. Martin Luther King, Jr. to say all that is necessary about civil rights. Ironically, the observations most associated with each of these men undermine their claims to be advocates of civil rights constitutionally understood. In Johnson’s case, the observation was that “equal opportunity is essential, but not enough, not enough.”[1] In King’s case, the observation was the dream that one day his children would be judged “not by the color of their skin but by the content of their character.”[2]

Johnson’s words were spoken in the context of a strident demand for “affirmative action” and an “equality of results” that militates rather against than in favor of a genuine understanding of civil rights. King’s, which on the surface were an appeal to the best and broadest standards, nevertheless embed an empirical description of the lives of American blacks that suggests civil rights must be conditioned on changes in their circumstances. In tying civil rights to the question of race, each of these perspectives fails to convey those rights as they should be understood.

Civil rights are best defined as the rights to common or equal participation in civil society.[3] Natural law governs the terms of participation in civil society, comprehensively extending from conception to full maturity. Natural law, as it pertains to human action, is a standard of right conduct “not of humans’ own making” for beings whose self-directed motions are not determined by material circumstances. That such a rule lies at the bottom of what are termed “civil rights” is revealed by reviewing the development of our understanding of civil rights.

Their best articulation from the time of the Founding comes from James Wilson. Further, illustrative Supreme Court opinions defending civil rights show how far the decisions of the justices were regulated so as to tie advances in civil rights to advances in understanding natural law. Finally, Dr. King, in his seminal statement, which was his “Letter from a Birmingham Jail,” clearly expresses the fundamental ground of equality identified by James Wilson (and the Declaration of Independence) as essential to civil rights; it also invokes the entire sweep of Western reflection on the meaning of justice in such a way as to show the pursuit of civil rights as nothing less than perfecting civil relations in light of natural law.

Someone may object that the Declaration of Independence establishes a defense of political rights and therefore not, as such, civil rights (often treated either as independent of, or as dependent upon or derivative from, political rights). Let us clarify, then: When the Declaration asserts that “to secure” the unalienable rights of life, liberty, and the pursuit of happiness—

governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any form of government becomes destructive of these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles, and organizing its power in such form, as to them shall seem most likely to effect their safety and happiness . . .

–it most of all distinguishes the natural rights antecedent to every government and the resultant “civil rights” that restrain governments to observing and protecting those natural rights.

Such a reading is readily deducible from the elegant formulation of James Wilson, a member of the Constitutional Convention of the United States in 1787 and also a justice on the first Supreme Court. Wilson argued that citizens, regardless of identity or culture, are entitled to “natural” and “acquired” rights, the latter consisting of two rights: the right to “the honest administration of the government in general,” and “in particular, to the impartial administration of justice.”[4] Wilson was not alone in this assertion. He elaborated and confirmed strong suggestions made at the Constitutional Convention and, most notably, contained in the Federalist Papers. In the latter, it is specifically argued that “justice is the end of government,” that “security for civil rights must be the same as that for religious rights,”[5] and that civil rights concern the protections of all parties to the whole, minority or otherwise.[6]

Wilson’s definition of civil rights goes to the heart of the concept. He is most helpful, however, in articulating the foundations of that concept, which he accomplished in his law lectures on the topics of “natural rights,” “the general principles of law,” and “the law of nature.”

The discussion of natural rights begins from the universally accepted concept of a transition from a “state of nature” into a “state of civil society,” mediated by individuals surrendering some natural rights in order to attain civil security. However, Wilson insists—contradicting Edmund Burke and William Blackstone—that what is surrendered is minimal indeed because civil rights are founded on “the stable foundation of nature,” and not “the precarious and fluctuating basis of human institution.”[7]

The Lectures on Law discussed the general principles of law as progressing naturally and consistently from the law of God to man-made law. In that process, Wilson reasoned, man could place confidence in the project of protecting civil rights without surrendering a claim to justice. God’s law for man (apart from that communicated only in Revelation) “is communicated to us by reason and conscience.” Such law known purely by “reason and the moral sense” “has been called natural.” Furthermore, “human law,” which has “deficiencies,” “must rest its authority, ultimately, upon the authority of that law, which is divine.” Among the kinds of human law Wilson defines “that [law] which a political society makes for itself” as “municipal law.”[8]

Wilson’s “municipal” law is the primary focus of civil rights because of a second important argument: namely, civil rights originate in concerns for domestic economy or household management (or in other words, marriage, parentage, and character formation), since it is precisely in that environment that citizens are brought to full maturity, fit for the common or equal enjoyment of and responsibility for the order of civil society.

Wilson reiterates: Since government itself results from the natural law, every government that fails to secure and enlarge the exercise of natural rights “is not a government of the legitimate kind.” Natural law in that sense points to the obligations of humans as they stand “unrelated” to others, “related” to particular others, and “related” to others in general. Insofar as humans stand unrelated (“state of nature”), there is no role for government; insofar as they stand in either particular or general relations, government plays the role of securing their rights and responsibilities in those relationships. In general (“in his unrelated state”), man has a natural right to property, his character, liberty, and safety. In his “peculiar relations,” depending on whether he is a spouse, parent, or progeny, he has “peculiar rights” and “peculiar duties.” In his “general relations,” man has the rights “to be free from injury, and to receive the fulfillment of the engagements, which are made to him” and the duties “to do no injury, and to fulfill the engagements, which he has made.”[9]

The paramount universal duty of government is the duty to “preserve human life.” Reviewing the history of the exercise of unnatural powers over the “newly born,” Wilson recognizes the “consistency, beautiful and undeviating,” with which the “common law” “protects human life, from its commencement to its close.” This common law is the same discovered by Sir Edward Coke in Euripides (“the common law of Athens”) and thus appropriated by Wilson as a standard imperfectly attained until the most recent times.[10]

In other words, the rights attaching to man in “his unrelated state” (merely by virtue of his humanity) subsequently obligate government and, indeed, provide initial legitimacy to government. Next Wilson took up in sequence: marriage (“the true origin of society”), parentage (“the relation of parent and child”), and “the duty of parents to maintain their children decently; . . . to protect them, . . . and to educate them.” He also ruled out slavery as “unauthorized by the common law. Indeed, it is repugnant to the principles of natural law that such a state should subsist in any social system.”[11]

What this account means is that the best understanding of civil rights in practice derives from close attention to how citizens in any given country, indeed persons altogether, are treated in the course of the conduct of their lives in their ordinary relations. As Wilson put it, “publick law and publick government were not made for themselves,” but for “society” . . . “particularly domestick society.”[12]

It is therefore notable that many of the landmark decisions concerning civil rights in the United States touch upon precisely the monuments of domestic economy cited by James Wilson.

The Supreme Court has upheld individual rights of marriage not merely as a positive result of the prescriptions of the Constitution or statutes but as something “long recognized” as one of “the vital personal rights essential to the orderly pursuit of happiness by free men.” Moreover, marriage is one of the “basic civil rights of man,” fundamental to our very existence and survival.”[13] Similarly, the freedom of contract and the right to maintain a home for a family were affirmed on the grounds that the “rights to acquire, enjoy, own and dispose of property . . . [were] . . . an essential pre-condition to the realization of other basic civil rights and liberties.”[14] Finally, the rights of parents to educate their children not only have been held not to derive from positive law but have been deemed strong enough to resist even the demands of positive law. To quote the Court,

The fundamental theory of liberty upon which all governments in this Union repose excludes any general power of the State to standardize its children by forcing them to accept instruction from public teachers only. The child is not the mere creature of the State; those who nurture him and direct his destiny have the right, coupled with the high duty, to recognize and prepare him for additional obligations.[15]

Arguments from “fundamental theory” are far more the reasons for those decisions than any compulsive operation of the laws. To that extent, they reflect the force of natural law thinking in lighting the path to civil rights.

If anything were to reveal the necessity to found civil rights on altogether “fundamental” and “unqualified” arguments, it would surely be the defense of civil rights penned by King in Birmingham City Jail. In his famous letter, he stated that “I am in Birmingham because injustice is here,” which means that he took a transcendent standard and not a transient promise as the basis of the claims he defended. He argued for the “interrelatedness of all communities and states,” which in turn led him to the famous formulation, “Injustice anywhere is a threat to justice everywhere.” In short, King believed, in Birmingham, that the defense of civil rights for black people in particular required the articulation of the rights of people anywhere and everywhere.

It was on the foundation of St. Augustine’s natural law theory,[16] then, that King discovered the grounds of civil disobedience: “A just law is a man-made code that squares with the moral law or the law of God. An unjust law is a code that is out of Harmony with the moral law.”

To defend civil rights for black people meant to prove that “segregation is not only politically, economically and sociologically unsound, it is morally wrong and sinful.” The moral error begins with the denial of a common or equal position in the civil society, and it ends with refusing to some “the honest administration of the government and the impartial administration of justice.” Thus, the examples King used covered the same two categories established by Justice Wilson.

First, King cited the “code that a numerical or power majority group compels a minority group to obey but does not make binding on itself.” This, he held, is “difference made legal,” where the term difference is synonymous with injustice. The rule of justice, he said, is “sameness made legal.” To attain that standard of governmental performance, however, requires common and equal participation in the civil society and in the government predicated upon that society. Thus, people should not be subject to laws which they “had no part in enacting or devising.”

The second category, the impartial administration of justice, provided the most dramatic defense of the theory King defended, for in mounting the argument against the “racial injustice [that] engulfs this community,” King had to bring his case home to the level of domestic economy that revealed precisely how far civil rights had been impaired. The reductio ad absurdum of lunch counter sit-ins to defend the right to enjoy public custom was not meant to show how trivial civil rights claims were, but rather to show how far injustice had penetrated. The civil rights problem of the 1960s was that American blacks could not conduct themselves under the guidance of natural law because of the obstruction of their opportunities to do so. That meant no families, properly speaking; no education, properly speaking; no self-government, literally speaking. Where there is no domestic economy there is no political community.

If it is warrantable to insist that all human beings should live in accord with the law of nature, then it is an absolute requirement that all be secured the civil opportunity to do so. For that reason, civil rights can be meaningfully defined only as the common or equal participation in civil society. That raises the issue of whether the turn taken from the Civil Rights Act of 1964 did not lead us away from, rather than toward, civil rights.

“The Dilemma of Negro Americans”

Martin Luther King was incontestably the foremost public figure in the United States at the time he broached the most important question confronting the nation. This question formed the subtitle of his final book, Where Do We Go from Here: Chaos or Community? (1967) He promised to deliver what the nation most needed at that moment. The question was rhetorical in form, conveying clearly King’s judgment that community was the appropriate answer. If we seem rather to have inherited chaos than community, we must seek the reason for that in some relation to the answer given by King, and the nation’s reaction to it.

King looked for moral strength in a mystical and mythical “capacity for hardships” in American blacks. “It is on this strength that society must now begin to build,” he wrote. Thus in Where Do We Go from Here he jettisoned dependence upon freedom and self-government as sufficient to justify wholesale inclusion in American society. (“This is no time for romantic illusions and empty philosophical debates about freedom. This is a time for action.”) The reason for this result is that the difficulties American blacks faced in 1967 were cultural and inherited, and only liberation from the weight of that inherited tradition could supply the measure of opportunity required to change the life chances of American blacks.

The discovery of a cultural basis for black disadvantages provided for King the “most optimistic” part of the story for, he reasoned, culture could be turned from the work of destruction to the work of reconstruction:

Any review of the Negro family’s experience is that the causes for its present crisis are culturally and socially induced. What man has torn down, he can rebuild. At the root of the difficulty in Negro life today is pervasive and persistent economic want. To grow from within, the Negro family—and especially the Negro man—needs only fair opportunity for jobs, education, housing and access to culture. To be strengthened from the outside requires protection from the grim exploitation that has haunted the Negro for three hundred years.[17]

This “optimistic” conclusion comes eight pages into an analysis that opened with the observation that the “dilemma of white America is the source and cause of the dilemma of Negro America.” King’s two Americas, setting the tone for the 1968 Kerner Commission report, relate to one another only as “oppressor” and “oppressed” are related to one another. The reality he found in America was no community.

“Being a Negro in America means being scarred by a history of slavery and family disorganization,” King wrote, weaving the reality of 300 years into an accumulated burden of 1967 and presenting an account of the abstract “Negro family” as if it were an autobiography. In these early pages, the reader cannot escape the obvious implication that, respecting “Negroes,” the “content of their character” is a product of suffering, impotence, and impoverishment. In recounting the tales of woe and the magical survival of American blacks, King barely so much as adverts to any intrinsic human capacities or strengths, either in explanation of past achievements or in projecting future achievements. Culture, it seems, is a force independent of humanity.

Since for King the strophe of cultures in America is color, one might anticipate that the antistrophe would be character, as in the expression that people are to be judged “not by the color of their skin, but by the content of their character.” That would mean that the cultural change one seeks is not so much color-blindness (which would be merely a consequence of paying primary attention to character), but rather that sensitivity to character which would merge two cultures into one. To change the culture, one must teach the society how to make judgments of character. According to King, however, American blacks could not take on that task themselves, for they lived under the spell of “color shock”:

It constitutes a major emotional crisis. It is accompanied by a sort of fatiguing, wearisome hopelessness. If one is rejected because he is uneducated, he can at least be consoled by the fact that it may be possible for him to get an education. If one is rejected because he is low on the economic ladder, he can at least dream of the day that he will rise from his dungeon of economic deprivation. If one is rejected because he speaks with an accent, he can at least, if he desires, work to bring his speech in line with the dominant group. If, however, one is rejected because of his color, he must face the anguishing fact that he is being rejected because of something in himself that cannot be changed.[18]

Famously, each of King’s hypotheticals had served in the earlier part of the 20th century as the catechism black families carefully rehearsed in their children (including, I dare say, the family of the elder King who instructed King, Jr.). The conclusion, however, that the aspects of character which one might change have been subordinated to the overriding power and importance of “color shock” served to relegate the earlier catechism to a second-order necessity. We have a paradox here: For King, as well as for President Johnson and others, the evidence of “color shock” became poor education, poverty, and social disadvantage. Thus, the “wearisome hopelessness” was justified by the impossibility of attempting any form of cultural improvement prior to reversing the effects of oppressive victimization.

While King wrote little of questions of character in American blacks, save to exculpate acts such as crimes with reference to the “environment” and “victimization,” he did not entirely neglect the matter. When enumerating five recommended responses to “the Negro’s dilemma,”[19] he began with his nearest reference to character, “a rugged sense of somebodyness.” To overcome a “feeling of being less than human, the Negro must assert for all to hear and see a majestic sense of his worth.” Naturally, mere self-assertion is not a substitute for solid accomplishment. The other recommended responses to “the Negro’s dilemma” were “group unity,” a “constructive use of the [limited] freedom we already possess,” union “around powerful action programs,” and “enlarging the whole society, and giving it a new sense of values.”

These prescriptions for “social change” merged in a single consideration that was enunciated in the book’s final chapter, “The World House.” He there evoked for his reader the emergence of a coherent political movement transcending the United States and animating a global movement toward social democracy. That ultimate political movement was the analogue to the indigenous political movement on which he relied in the United States to nurture his five-point program. (“More and more, the civil rights movement will have to engage in the task of organizing people into permanent groups to protect their own interests.”)

The movement, as he described it, consisted of blacks (as a group, though needing to be mindful of not being taken for granted), northern liberal Democrats, members of labor unions, and an ever-widening circle of oppressed peoples. This general account gave full credit to King’s candid assessment that “there is a need for a radical restructuring of the architecture of American society,” in which the emphasis is placed on the word “architecture,” meaning design, and conjuring up fundamental principles rather than incidental or corollary circumstances.

Martin Luther King answered his rhetorical question—chaos or community?—by dreaming of founding a new community. The unjust treatment he accorded George Washington, depreciating Washington’s moral anguish about slavery and constructively denying the important fact that Washington liberated his slaves in his will, may be accounted for by the immensity of King’s ambition to rival Washington as a founder. King, however, failed where Washington succeeded.

[1] President Johnson’s commencement address at Howard University, Washington, D.C., June 4, 1965.

[2] Martin Luther King, Jr., “I Have a Dream” speech, Washington, D.C., August 28, 1963.

[3] Here and in what follows the argument is an abridgment of that presented in W. B. Allen, “American Civil Rights Movements,” an essay published on the Natural Law, Natural Rights, and American Constitutionalism site. Source URL:http://www.nlnrac.org/american/american-civil-rights-movements

[4] James Wilson, Collected Works of James Wilson, ed. Kermit L. Hall and Mark David Hall (Indianapolis: Liberty Fund, Inc. 2007), Vol. II., Part 3, “Lectures on Law,” Chapter VII, “Of Crimes Against the Rights of Individuals Acquired Under Civil Government,” p. 1160.

[5] Alexander Hamilton, James Madison, John Jay, The Federalist Papers, ed. Jacob E. Cooke (Wesleyan University Press, 1961), Essay #51, p. 351.

[6] For the details of these arguments, see The Federalist Papers, #8, p. 45; #10, p. 57-62; #28, p. 178; #43, p. 298; #84, p. 578.

[7] Wilson, Vol. II, Chapter XII, “Of the Natural Rights of Individuals,” p. 1056.

[8] Ibid., Vol. I, Chapter II, “Of the General Principles of Law,” p. 498.

[9] Ibid., Vol. II, Chapter XII, “Of the Natural Rights of Individual,” p. 1062.

[10] Ibid., p. 1068.

[11] Ibid., 1066-1078.

[12] Ibid., p. 1081.

[13] Loving v. Virginia. 388 U.S. 1; 87 S. Ct. 1817; 18 L. Ed. 2d 1010; 1967 U.S. LEXIS 1082. June 12, 1967, at 190.

[14] Shelley v Kraemer. 334 U.S. 1; 68 S. Ct. 836; 92 L. Ed. 1161; 1948 U.S. LEXIS 2764; 3 A.L.R.2d 441. May 3, 1948, at 841.

[15] Pierce v. Society of Sisters. 268 U.S. 510; 45 S. Ct. 571; 69 L. Ed. 1070; 1925 U.S. LEXIS 589; 39 A.L.R. 468. June 1, 1925, at 535

[16] Martin Luther King, Jr., “Letter from a Birmingham Jail,” April 16, 1963, www.stanford.edu/group/King/popular_requests/frequentdocs/birmingham.pdf

[17] Martin Luther King, Jr., Where Do We Go from Here: Chaos or Community? (Beacon Press, 2010), p. 116.

[18] Ibid., p. 117.

[19] “The Negro is called upon to be as resourceful as those who have not known such oppression and exploitation. This is the Negro’s dilemma. He who starts behind in a race must forever remain behind or run faster than the man in front. What a dilemma! It is a call to do the impossible. It is enough to cause the Negro to give up in despair.” King, Where Do We Go from Here: Chaos or Community?, p. 128.

Responses

Civil Rights, the Civil Rights Act, and Martin Luther King, Jr.

The Civil Rights Act of 1964 is surely the most renowned piece of legislation enacted in 20th century America. It stands (with the Voting Rights Act passed the following year) as the culminating achievement of the Civil Rights movement, itself now enshrined in conventional opinion as the latest and greatest of America’s great awakenings. By…

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Restoring the Color-Blind Foundation of the 1964 Civil Rights Act

The Civil Rights Act of 1964 banned much government and private-sector discrimination, mostly on the basis of race and ethnicity (“color” was specified in addition to “race,” and “national origin” was the term used instead of the now-more-common “ethnicity”), but often on the basis of religion, too, and sometimes on the basis of sex as…

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Race, Rights-Talk, and Equity

W. B Allen’s essay impresses upon us how different our understanding of civil rights is from that of the Founders and the authors of the Fourteenth Amendment. Back then “civil rights”referred to our most fundamental rights, those closely tied to and only slightly more expansive than our natural rights. Today most of us think of…

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The Great Society, a Half-Century On

Great Society

President Lyndon Johnson’s “Great Society” speech is about to turn 50 years old. The speech, which the President gave as the commencement address at the University of Michigan on May 22, 1964, is a milestone in American history and instantly lodged that phrase in our political vocabulary.

The most grandiose political slogan in a roster that includes the New Deal and the New Frontier, the Great Society was more than a set of policy objectives. Rather, Johnson described it as the commitment to undertake an eternal quest, one that would elevate American civilization by expanding the federal government’s responsibilities and capabilities. The Great Society, he said, is “not a safe harbor, a resting place, a final objective, a finished work. It is a challenge constantly renewed.”

Rather than vindicate an ambitious conception of what government could and should do, however, the Great Society’s leading political accomplishment was to raise doubts about activist government’s competence and legitimacy, doubts which have beset liberalism ever since.

As a governing concept, the Great Society encompassed so many gauzy aspirations that it was never easy to say what it was about or be sure what it was not about. “The Great Society rests on abundance and liberty for all” and “demands an end to poverty and racial injustice,” Johnson said in Ann Arbor. “But that is just the beginning.” With the help—if that’s the right word—of speechwriter Richard Goodwin, Johnson laid out goals for Americans to pursue with the guidance of experts retained by the federal government.

The Great Society, the President said, is a place:

“where every child can find knowledge to enrich his mind and to enlarge his talents”; “where leisure is a welcome chance to build and reflect, not a feared cause of boredom and restlessness”; “where the city of man serves not only the needs of the body and the demands of commerce but the desire for beauty and the hunger for community”; “where man can renew contact with nature”; “which honors creation for its own sake and for what it adds to the understanding of the race”; “where men are more concerned with the quality of their goals than the quantity of their goods”; and, “most of all,” it is “a destiny where the meaning of our lives matches the marvelous products of our labor.”

In Johnson’s Great Society, the concern and intercession of social scientists, helping professionals, and government officials would be elicited by every kind of unhappiness— except, that is, for unhappiness about the attentions of social scientists, helping professionals, and government officials.

The limitless agenda Johnson outlined rested on ideas already well established in liberal circles. Arthur M. Schlesinger, Jr., for example, in one of his essays of the 1950s, declared:

Today we dwell in the economy of abundance—and our spiritual malaise seems greater than ever before. As a nation, the richer we grow, the more tense, insecure, and unhappy we seem to become.

The postwar economic boom, and the expectation that it would endure and expand forever, heralded the transition from the New Deal’s “quantitative liberalism” to a “qualitative liberalism” that would, wrote Schlesinger, be “dedicated to bettering the quality of people’s lives and opportunities.” It would “oppose the drift into the homogenized society” and “fight spiritual unemployment” in much the same way that quantitative liberalism “once fought economic unemployment.” Liberals must wage this fight by addressing “the quality of popular culture and the character of lives to be lived in our abundant society.” Schlesinger, moreover, saw the “greatest threat to American liberty” coming “less from the people who do not want others to be free than from the people who do not want to be free themselves.”

Neither he nor President Johnson endorsed the Rousseauian solution of forcing people to be free. Instead, both envisioned a therapeutic enterprise that would help (and help, and help) them to be free, given that the “greatest need in America” was “the revival of individual spontaneity.” (The Schlesinger quotations are from The Reporter, May 17, 1956, and Saturday Review, June 8, 1957.)

This qualitative liberalism promoted by the Great Society rested on four fallacies, two of them theoretical. First, the “problems” the Great Society was meant to address—such as “loneliness and boredom and indifference,” to quote Johnson’s speech—are better understood as dissatisfactions inherent in the human condition than remediable social dislocations. Second, the idea that these “problems” legitimately fall to government to try to solve, is dubious and dangerous—especially for a government deriving its just powers from the consent of the governed, as opposed to a theocracy claiming legitimacy on the basis of revealed truths.

The third error, which manifested itself empirically after 1964, has to do with practical capacity. The Great Society presupposed that republican government possesses not only the moral authority but the ability to comprehend, and then solve, a problem like spiritual unemployment. Even two politically sympathetic scholars wrote in The Liberal Hour: Washington and the Politics of Change in the 1960s (2008) that “the central and ultimately fatal germ of 1960s liberalism” was the conviction that “every problem has a solution and that the government in Washington is most likely to provide that solution.”

Fourth, it turns out that Schlesinger, Johnson, and the other promoters of qualitative liberalism badly misread the historical circumstances of mid-20th century America. The Great Society was presented as the construction of a splendid structure upon the foundation laid by the “brilliant success,” as Schlesinger styled it, of quantitative liberalism in providing prosperity and security. Liberals “should be able to count that fight won and move on to the more subtle and complicated problem of fighting for individual dignity, identity, and fulfillment in a mass society,” he wrote. Qualitative liberalism treats the triumphs of quantitative liberalism “as the basis for a new age of social progress, and seeks to move beyond them toward new goals of national development.” The foundation proved to be far from secure, however.

We should resist the temptation to ascribe LBJ’s spectacular political downfall to the Great Society’s fatuities. (In November 1964, he won 61.1 percent of the popular vote, which remains the largest percentage received by any presidential candidate since James Monroe in 1820. By 1968, he was too unpopular to seek his party’s nomination, or even attend its national convention.) We may, that is, safely assume that very few Americans voted for Johnson because they actually expected his administration would satisfy their desire for beauty and hunger for community, then abandoned him soon thereafter because the meaning of their lives did not match the marvelous products of their labor.

The real problem was not that government under Johnson failed at tasks no government had previously completed or even attempted. It was, instead, the failure at undertakings long understood to be incumbent upon any government, such as—to cite the Constitution’s preamble—justice, domestic tranquility, the common defense, and the general welfare. The most egregious failure was Johnson’s policy in Vietnam, which produced neither peace, nor disengagement, nor victory, just an endless, increasingly bloody stalemate in a war the President would not or could not convincingly justify. LBJ acted, according to Michael Barone, “as if he were trying to sneak the nation into a war,” to “wage a war without really saying so to the American people.” Johnson’s attempt to find an Aristotelian mean between going and not going to war was not only geostrategically but politically disastrous.

The Great Society speech made just one brief mention of foreign affairs, calling on the Michigan graduates to “join in the battle to make it possible for all nations to live in enduring peace—as neighbors and not as mortal enemies.” The achievement of global harmony sounded like it was still far off. In contrast, Johnson characterized endless prosperity as if it were at hand. Indeed, he argued that the only real economic problem was not securing abundance, but the prospect that it would prove disappointing or even harmful. That is, having largely succeeding in creating “an order of plenty for all of our people” over the 50 years prior to 1964, Americans faced a “challenge” in “the next half-century”: whether “we have the wisdom to use that wealth to enrich and elevate our national life, and to advance the quality of our American civilization.” Failing to meet that challenge would turn us into “a society where old values and new visions are buried under unbridled growth.” Unless we “prove that our material progress is only the foundation on which we will build a richer life of mind and spirit,” Johnson warned, America will be “condemned to a soulless wealth.”

And consider that the President spoke even more expansively about the economy in private than he did in public. “Hell, we’re the richest country in the world, the most powerful,” he told Goodwin in one conversation. “We can do it all, if we’re not too greedy.” He took the same tone in another: “Hell, we’ve barely begun to solve our problems. And we can do it all. We’ve got the wherewithal.”

Even before Johnson left office, the public had good reason to doubt that the wherewithal to “do it all” was really all there. The increasing inflation brought on by Johnson’s unwillingness to choose between guns for Vietnam and butter for the Great Society was the first ominous sign. Next came the Arab oil boycott of 1973. That really marked the end of the Johnsonian Affluent Society—the idea that smart Keynesians had solved the age-old problem of want by using newly discovered tools of macroeconomic management.

In the four subsequent decades, America has known periods of economic vigor, such as the mid-1980s and late-1990s, but has never regained anything like the postwar boom’s blithe assurance that happy days were here again, forever. Just think how relieved millions of Americans in our own time would be—those who have witnessed or experienced downsizings and foreclosures, who have seen or been adults in their thirties and forties moving back home with their parents—at the prospect of unbridled growth and soulless wealth.

Our current President’s misbegotten foray into extemporaneous sociology was an attempt to explain why so many embittered working-class Americans “cling to guns, or religion, or antipathy to people who aren’t like them, or anti-immigrant sentiment, or anti-trade sentiment.” Warming to his subject, he said:

Here’s how it is: in a lot of these communities in big industrial states like Ohio and Pennsylvania, people have been beaten down so long, and they feel so betrayed by government, and when they hear a pitch that is premised on not being cynical about government, then a part of them just doesn’t buy it. . . . But the truth is that our challenge is to get people persuaded that we can make progress when there’s not evidence of that in their daily lives. You go into some of these small towns in Pennsylvania, and like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing’s replaced them. And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not.

Unless the final 32 months of Barack Obama’s presidency witness the most spectacular economic growth since the Industrial Revolution, his will be the next in the succession of administrations that failed to deliver on promises that industrial jobs and communities would regenerate rather than continue to decline.

Obama’s remarks, it will be noted, came at a 2008 campaign fundraising event, not a policy seminar. The candidate’s analysis did not concern the governing challenge of devising policies to actually extend economic security and opportunity to disaffected voters. Rather, he was addressing the electoral challenge of persuading them to suspend a justified sense of betrayal and cynicism, and entertain the possibility that activist government can help them.

That political concern preoccupied many other Democrats. In a post-mortem on John Kerry’s defeat in 2004, Noam Scheiber of The New Republic wrote, “Democrats have run up against the limits of what they—or anyone else—can do to create and protect good jobs, the top economic priority of working-class voters,” who “seem more and more aware” of this fact. And because these voters think neither political party will deliver good jobs, they incline to the more culturally accommodating party, which does not disdain their views on guns, religion, or immigration.

Unlike Kerry, however, Obama won the presidency. And unlike Johnson, he stood for and won reelection. His victories, less than landslides but by no means cliffhangers, argue that Democrats can win elections and expand activist government despite not solving the policy problem of improving working-class prospects. The residual political force of the New Deal’s quantitative liberalism had allowed Michael Dukakis to carry the state of West Virginia in the 1988 presidential election, by a margin of 52 to 47 percent, even though he won only nine other states. By 2012, Obama lost West Virginia by 62 to 36 percent (and all 55 of its counties, unprecedented in the state’s history), yet won the national election comfortably.

The Great Society offered a liberalism for flush times, but the recollection of its goals, proclaimed though never achieved, has frustrated the formulation of a liberalism for harder times. Left-populism, seeking to occupy a political space somewhere between Franklin Roosevelt and Huey Long, thinks reviving the quantitative liberalism of aggressive regulation and redistribution is the answer. Whether a new New Deal would bring back a new Affluent Society is highly doubtful, however, as is the ability of such an agenda to sway the electorate. The victories of Mayor Bill de Blasio in New York City and Senator Elizabeth Warren in Massachusetts have seen Blue jurisdictions get bluer, rather than Red or Purple ones turn Blue. (In 2012, Obama got 78 percent of the vote in the five boroughs, and 61 percent of the vote in Massachusetts, against an opponent who had been elected its Governor 10 years earlier.)

The 1964 presidential election saw the widest gap in history between the two major party nominees on the question of how much the federal government could do and should attempt. The decisive victory by the champion of activist government, however, had unintended consequences for both parties, and for the nation. The liberal consensus swept past LBJ after the 1964 election at warp speed: The case for a new kind of government activism had rested on the belief that because America was in such good shape, its big problems solved or about to be, government had the right and duty to address questions about the quality of life and civilization. Four short years later, as Johnson left office, a new moralism came to define the liberal outlook, holding that America was in such terrible shape, as a moral and practical matter, that now government activism was urgently necessary to rescue a nation on the verge of collapse.

By 1968, Arthur Schlesinger could give a speech that called Americans “the most frightening people on this planet . . . because the atrocities we commit trouble so little our official self-righteousness, our invincible conviction of our moral infallibility.” Governmentally directed social transformations were no longer enhancements that would make a Good Society Great, but emergency measures needed to redeem the nation, averting a demise both imminent and deserved. The republic’s foundations had been discovered to be so fragile that millennial transformations were our only hope for avoiding anarchy.

The transformations that liberals said were indispensable turned out to be optional, however, even as the routine responsibilities they said could not possibly be discharged turned out to be within government’s capabilities. Upon examining the race riots that broke out in the summers of 1965, ’66, and ’67, for example, the National Advisory Commission on Civil Disorders (known as the Kerner Commission) reported that without “a commitment to national action—compassionate, massive and sustained,” requiring “unprecedented levels of funding and performance” for programs that “produce quick and visible progress” in black inner-city neighborhoods, the riots would continue and intensify. The nation enacted none of the Kerner Commission’s agenda—even President Johnson, who had appointed the commission, ignored its report—but the riots somehow ended.

Liberals applied the Kerner Commission argument more generally to America’s urban intifada, “the big-city crime wave of the sixties and seventies” that was, according to the New Yorker’s Adam Gopnik, the “crucial trauma in recent American life.” There really was a “liberal consensus” on public safety: one that amounted to abandoning, in the words of a legal scholar cited by Gopnik, “all serious effort at crime control.” That abandonment consisted of the liberal insistence that the only feasible, just solution for the problem of crime was to remove its “root causes” by—what else?—enacting the maximal liberal social welfare agenda.

In ignoring this advice, America turned to the punitive measures liberals insisted would be futile and indecent: more police, more prisons, longer sentences, fewer paroles. The nation’s murder rate was 4.6 per 100,000 in 1962. It was at least twice that high in 10 of the 21 years beginning in 1973, during which it was never less that 7.9 murders per 100,000, a rate 72 percent higher than in 1962. After the 20-year decline that began in the early 1990s, however, during which crime’s alleged root causes remained rooted, the rate stood at 4.7 per 100,000 in 2011, the lowest level since 1964.

The list of ills that 1970s liberals said an un-transformed, unredeemed America would have to learn to live with included not only riots and crime, but high inflation. The economic journalist Robert Samuelson has argued that stable prices “are like safe streets, clean drinking water and dependable electricity. Their importance is noticed only when they go missing.” When they went missing in the 1970s, it was “a deeply disturbing and disillusioning experience that eroded Americans’ confidence in their future and their leaders.”

On the eve of Ronald Reagan’s inauguration in 1981, after a year in which the Consumer Price Index had increased by 13.5 percent, one of the most prominent liberal economists, Lester C. Thurow, took to the pages of the New York Times to warn the President-elect: “You can declare war on inflation. But you cannot win a war against inflation. And if you insist on trying, you will simply grind up both the economy and your administration in a futile effort.” Indeed, “you can only cure inflation if you are willing to restart the Great Depression.”

America’s foremost exponent of Keynesianism, Paul Samuelson, who won the Nobel Prize in Economics the second year of its existence, was certain in 1979 that another Depression would be the least of it. “Today’s inflation is chronic,” he warned, with roots “deep in the very nature of the welfare state.” Attempts to end it through disinflationary monetary policy would require

abolishing the humane society [and would] reimpose inequality and suffering not tolerated under democracy. A fascist political state would be required to impose such a regime and preserve it. Short of a military junta that imprisons trade union activists and terrorizes intellectuals, this solution to inflation is unrealistic—and, to most of us, undesirable.

Reagan ignored all such advice. Instead, he supported the credit squeeze pursued by Federal Reserve chairman Paul Volcker. Within two years, inflation was broken. The Consumer Price Index, which had increased by 117 percent in the 10 years before Reagan took office, increased by 128 percent in the 25 years after. It has never had an annual increase exceeding 5.4 percent since 1982, having never had one less than 5.8 percent from 1973 through 1982. Somehow, this economic achievement necessitated neither a Depression nor a police state.

Liberals paid a heavy political price for choosing their policy goals recklessly, and discharging their governmental responsibilities fecklessly. Following his departure from the Johnson administration, which he had served as Assistant Secretary of Labor, Daniel Patrick Moynihan wrote: “The stability of a democracy depends very much on the people making a careful distinction between what government can do and what it cannot do.” Thus, “to seek that which cannot be provided, especially to do so with the passionate but misinformed conviction that it can be, is to create the conditions of frustration and ruin.”

America and liberalism both suffered because liberals misread and misused the mandate won in the 1964 election by the champion of activist government. Against all expectations, conservatives who had followed that year’s champion of limited government to a historic defeat wound up with opportunities to govern, and set the terms of the national debate, beyond anything they had known since the New Deal.

It turns out, though, that the law of unintended consequences neither rests nor plays favorites. Conservatives made good use of the opportunities liberals’ failures provided, restoring public safety, a sound currency, and—in concluding the Cold War successfully—national security. Their reward, it seems, has been to open new possibilities for activist government. As journalist Matt Bai has written, when citizens “take for granted the basic competence of government” it “makes all the difference when you ask them to expand it.”

Responses

The Politics of Dependency

William Voegeli’s essay reminds us of the absurdity of so much American political discourse of the past 60 years. The call for greater state-mandated redistribution and entitlements in order to “oppose the drift into the homogenized society” and “fight spiritual unemployment,” to combat “loneliness and boredom” and “build a richer life of mind and spirit”…

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Wind in the Willows

With the 50th anniversary of President Johnson’s “Great Society” speech fast approaching, we are seeing a flood of historical remembrance and analysis, and there will be more in the weeks and months ahead. The television historians and talking heads will be swooning over how much was accomplished by an 89th Congress that was, in the…

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The Great Exception

The 50th anniversary of President Lyndon Johnson’s “Great Society” speech offers us an opportunity to reflect not just on the speech itself but also on the half century of consequences that have followed in the wake of the grand project it announced. As William Voegeli notes, the commencement address Johnson delivered to the University of Michigan’s…

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Understanding Clarence Thomas: The Jurisprudence of Constitutional Restoration

U.S. Supreme Court Justice Clarence Thomas

When, on July 1, 1991, President George H. W. Bush nominated Clarence Thomas to serve as Associate Justice of the United States Supreme Court, predicting that he would be “a great Justice,” calling him “the best person for this position,” and denying that Thomas’s race had entered into his nomination, many Americans were skeptical. They doubted Bush’s claims, as they doubted his nominee. Among those doubting Thomas were individuals from the civil rights community, convinced that he would abandon the life-long campaign for racial justice undertaken by Thurgood Marshall, the first black justice, whose seat he was to fill. Other doubters included feminists, convinced that Thomas would vote in favor of overturning Roe v. Wade, and members of the political left, certain that he was a partisan conservative of mediocre abilities whose originalist approach to constitutional interpretation was simply a cloak for his policy preferences. Those doubting Thomas even came from the political Right, especially those worried that his unequivocal commitment to the principles of the Declaration of Independence would make him a judicial activist.

During his confirmation hearing, those doubting Thomas were quick to believe Anita Hill’s unsubstantiated claims that he had sexually harassed her. As a result of their doubts, Thomas was confirmed by a razor-thin margin of fifty-two to forty-eight votes.

Even after his confirmation, his critics continued to doubt him; they doubted his intelligence and independence, dismissing him as Justice Scalia’s “sock puppet,” mindlessly agreeing with and repeating Scalia’s arguments, and labeling him, in racially-charged language, Scalia’s “lawn jockey” and “shoe-shine boy.” They went so far as to doubt his very humanity, with the New York Times branding him “the Court’s Cruelest Justice” during his first year on the bench. Left-wing law professors doubted his legitimacy, attempting to rescind invitations to speak that their law schools had extended to him and, if failing at that, boycotting his visits. One went so far as to argue that any five-to-four Supreme Court decision in which Thomas was in the majority should be regarded as nonbinding.

Thomas is now approaching a quarter of a century of service on the High Bench, during which time he has written over 475 majority, concurring, and dissenting opinions. In Understanding Clarence Thomas: The Jurisprudence of Constitutional Restoration, I undertake a detailed analysis of these opinions as well as of his speeches and law review articles, and provide, thereby, overwhelming evidence that there never was any reason to doubt Clarence Thomas or what President Bush said about him. In them, Thomas has articulated a clear and consistent jurisprudence of constitutional restoration that seeks to restore the original general meaning of the Constitution.

During his nearly quarter of a century on the Supreme Court, Justice Clarence Thomas has pursued an original general meaning approach to constitutional interpretation; he has been unswayed by the claims of precedent – by the gradual build-up of interpretations that, over time, can distort the original meaning of the constitutional provision in question and lead to muddled decisions and contradictory conclusions. As with too many layers of paint on a delicately crafted piece of furniture, precedent based on precedent – focusing on what the Court said the Constitution means in past cases as opposed to focusing on what the Constitution actually means – hides the constitutional nuance and detail he wants to restore. Thomas is unquestionably the justice who is most willing to reject this build-up, this excrescence, and to call on his colleagues to join him in scraping away past precedent and getting back to bare wood – to the original general meaning of the Constitution.

The two Supreme Court justices who unabashedly identify themselves as originalists are Antonin Scalia and Clarence Thomas. While their approaches have much in common, Scalia has a narrower view of originalism than Thomas – Thomas fundamentally accepts Scalia’s original public meaning approach to constitutional and statutory texts, but then adds to it his original general meaning approach.

Professor Gregory E. Maggs has usefully identified three approaches to originalism. The first is original intent. This approach seeks to identify what the delegates to the Constitutional Convention in Philadelphia collectively intended to accomplish when they drafted the Constitution in the summer of 1787. Those who pursue an original intent approach do so because they believe that “interpreting a document means to attempt to discern the intent of the author.” Therefore, they focus on the records of the Constitutional Convention and on what the delegates said about the Constitution as it was being drafted. Madison’s Notes figure most prominently for them, but other delegates also took notes and many of the delegates wrote letters and essays during and after the Convention that provide for them insight into the framers’ intentions.

The second approach to originalism is original understanding. It focuses on identifying the collective understanding of what the various provisions of the Constitution meant to the delegates of the state ratifying conventions of 1787 and 1788 that brought the Constitution into existence. Those who pursue an original understanding approach point out that the Constitutional Convention met in secret under a rule that declared that “nothing spoken in the House be printed, or otherwise published, or communicated without leave,” and, as a consequence, the public did not become aware of its records and what was said there until decades after ratification of the Constitution. Therefore, they argue, the best way to discern the original understanding of the Constitution is to look at what the delegates said at the ratifying conventions and at what arguments were made by the various Federalist and Anti-Federalist writers attempting to influence the election of those delegates.

The third approach to originalism is original public meaning, most closely associated with Justice Scalia. It seeks to ascertain the meaning of the particular constitutional text in question at the time of its adoption. It does so by consulting dictionaries of the era and other founding-era documents “to discern the then-customary meaning of the word and phrases in the Constitution.”

Thomas has incorporated all three of these approaches into his own distinctive original general meaning approach. In a 1996 lecture entitled “Judging” delivered at the University of Kansas School of Law, Thomas declared that “I have said in my opinions that when interpreting the Constitution, judges should seek the original understanding of the provision’s text, if that text’s meaning is not readily apparent.” And, he went on to elaborate that for him “original understanding” means what both “the delegates of the Philadelphia and of the state ratifying conventions understood it to mean.”

So, in deciding cases, Thomas turns to founding-era documents not only to identify the original intention of the framers, the original understanding of the ratifiers, or the original public meaning of the Constitution’s words and phrases but then to find agreement among these “multiple sources of evidence” and thereby to ascertain the “general meaning shown in common by all relevant sources.” He does so because, while original intent, original understanding, and original public meaning typically lead to the same result, they do not always do so. (Consider, for example the question of state sovereign immunity where the text of Article III, § 2 suggests the states could be sued in federal court without their consent, where Hamilton in Federalist No. 81 and John Marshall in the Virginia State Ratifying Convention said they could not, where the Supreme Court in Chisholm v. Georgia (1793) said they could, and where finally the Congress and the state legislatures through their adoption and ratification of the Eleventh Amendment said they could not.)

The differences between Scalia’s original public meaning approach and Thomas’s original general meaning approach need briefly to be elaborated.

Since his elevation to the Supreme Court, Scalia has assiduously and consistently argued that the Court is to interpret the text alone and nothing else. As a consequence, he rejects reliance on legislative history or legislative intent and invariably refuses to join any opinion (or part of an opinion) that employs it.

Thomas, pursuing an original general meaning approach, incorporates Scalia’s narrower original public meaning approach, and so he also asks what the text meant to the society that adopted it, but he then widens his originalist focus to consider evidence of the original intent of the framers and the original understanding of the ratifiers and to ask why the text (either constitutional or statutory) was adopted. Concerning the Constitution and the Bill of Rights, Thomas reinforces Scalia’s textualism by asking, when necessary to make his case most persuasively, what were the ends the framers (and members of the First Congress) sought to achieve, what were the evils they sought to avert, and what were the means they employed to achieve those ends and avert those evils when they proposed and ratified those texts. And, to answer these questions, he readily turns to Farrand’s Records, The Federalist, Elliot’s Debates, The Founders’ Constitution, The Complete Anti-Federalist, The Documentary History of the Ratification of the Constitution, and the Annals of Congress and incorporates what he finds in these and other founding-era sources into his opinions.

But, there is, however, an even bigger difference between Scalia’s and Thomas’s originalism: the Declaration of Independence. In A Matter of Interpretation, Scalia derisively dismissed what he called Professor Laurence Tribe’s “aspirational” theory of constitutional interpretation by declaring: “If you want aspirations, you can read the Declaration of Independence, with its pronouncements that ‘all men are created equal’ with ‘unalienable Rights’ that include ‘Life, Liberty, and the Pursuit of Happiness.’” But, he continued, “[t]here is no such philosophizing in our Constitution, which, unlike the Declaration of Independence . . ., is a practical and pragmatic charter of government.”

By contrast, Justice Clarence Thomas takes seriously the Declaration of Independence and its claim that all men are created equal. In his Senate confirmation hearings, he explained why:

My interest started with the notion, with the simple question: How do we end slavery? By what theory do you end slavery? After you end slavery, by what theory do you protect the right of someone who was a former slave or someone like my grandfather, for example, to enjoy the fruits of his or her labor?

Thomas believes that the Declaration’s principles are foundational to the Constitution – they “preced[e] and underl[ie] the Constitution” – and he grounds his opinions explicitly in them. In a 1987 article in the Howard Law Journal, Thomas declared that “the ‘original intention’ of the Constitution [was] to be the fulfillment of the ideals of the Declaration of Independence, as Lincoln, Frederick Douglass, and the Founders understood it.”

For Thomas, the higher law principles of the Declaration not only offer insight into how to interpret the Constitution but also provide the “best defense of limited government, of the separation of powers, and of the judicial restraint that flows from the commitment to limited government.” They also offer “our best defense of judicial review – a judiciary active in defending the Constitution, but judicious in its restraint and moderation. Rather than being a justification of the worst type of judicial activism, higher law is the only alternative to the willfulness of both run-amok majorities and run-amok judges.”

For Thomas, it is “the fundamental principle of equality, one of the higher law principles [manifest in the Declaration and] informing the Constitution,” that requires a “color-blind” Constitution. In Adarand Constructors v. Pena (1995), in which the Court held that that the strict scrutiny standard applies to all government classifications based on race, Thomas declared in his concurring:

As far as the Constitution is concerned, it is irrelevant whether a government’s racial classifications are drawn by those who wish to oppress a race or by those who have a sincere desire to help those thought to be disadvantaged.

He pronounced “the paternalism that appears to lie at the heart of this [racial preference] program” to be “at war with the principle of inherent equality that underlies and infuses our Constitution. See Declaration of Independence.”

Thomas employs his original general meaning approach as a means of constraining judicial discretion and encouraging judicial restraint. In his University of Kansas lecture on “Judging,” he declared that “judges should adopt principles of interpretation and methodology that reduce judicial discretion.” He explained why this is so important:

Reducing judicial discretion is one of the keys to fostering impartiality among the judiciary. The greater the amount of judicial discretion, the greater the freedom to write one’s personal preferences into the law. Narrow judicial discretion, and you reduce the temptation for judges to ignore their duty to be impartial.

Thomas continued by observing that “in order to maintain our impartiality, judges must also adopt methodologies and principles that encourage judicial restraint.” That methodology for Thomas is original general meaning. He declared that his original general meaning approach “works in several ways to reduce judicial discretion and to maintain judicial impartiality.”

He mentioned three in particular: To begin with, “it deprives modern judges of the opportunity to write their own preferences into the Constitution by tethering their analysis to the understanding of those who drafted and ratified the text.” Additionally, “it places the authority for creating legal rules in the hands of the people and their representatives rather than in the hands of the nonelected, unaccountable federal judiciary.” Finally, Thomas noted, his original general meaning approach “recognizes the basic principle of a written Constitution. We as a nation adopted a written Constitution precisely because it has a fixed meaning that does not change.” He contrasted the American Constitution with “the British approach of an unwritten, evolving constitution. Aside from an amendment adopted pursuant to the procedures set forth in Article V, the Constitution’s meaning cannot be updated, or changed, or altered by the Supreme Court, the Congress, or the President.”

Examples of how Thomas’s faithful adherence to his original general meaning approach helps him maintain his impartiality and keeps him from writings his own preferences into the Constitution are numerous. They include his dissent in Gonzales v. Raich (2005) in which he voted to uphold California’s “medical marijuana” law; his opinions in such negative commerce clause cases as Hillside Dairy v. Lyons (2003) and United Haulers Association v. Oneida-Herkimer Solid Waste Management Authority (2007) in which he upheld economic protectionist measures by states rather than to eliminate undue burdens on the free market; his anti-business federal preemption opinions in Pharmaceutical Research and Manufacturers of America v. Walsh (2003) and Wyeth v. Levine (2009); his opinion in Federal Communications Commission v. Fox (2009) arguing that full First Amendment protection should be extended to indecent broadcast speech; and his concurrence in the partial-birth abortion case of Gonzales v. Carhart (2007) in which he questioned whether Congress had the power to enact a federal law on this subject.

Examples also come from his opinions on behalf of a wide range of criminal defendants concerning a variety of Bill of Rights guarantees in cases such as Georgia v. McCollum (1992), defending peremptory challenges; Wilson v. Arkansas (1995), proclaiming the “knock and announce” rule to be a constitutional requirement; United States v. Hubbell (2000), holding that the term witness in the Fifth Amendment’s “Self-Incrimination Clause” refers not only to one who is called to testify but also to one who is called to furnish evidence; and Alleyne v. United States (2013), building on his concurrence in Apprendi v. New Jersey (2000) and holding the Sixth Amendment right to trial by jury requires a jury to find beyond a reasonable doubt every element that increases the penalty for a crime not only beyond a prescribed statutory mandatory maximum but also beyond a prescribed statutory mandatory minimum.

As Thomas pursues his original general meaning approach, he rejects past decisions that depart from that meaning. He invites his colleagues to join him by engaging in the hard jurisprudential work of scraping away the excrescence of misguided precedent and restoring the contours of the Constitution as it was generally understood by those who framed and ratified it.

For example, in his concurring opinion in the Ten Commandments case of Van Orden v. Perry (2005), Thomas condemned the “incoherence of the Court decisions” that had rendered “the Establishment Clause impenetrable and incapable of consistent application.” He called for a “return to the views of the Framers,” and argued for the adoption of physical coercion “as the touchstone for our Establishment Clause inquiry.”

Regarding free speech and press, it led him to reject precedents that treated commercial speech as having less value than noncommercial speech; to spearhead the attack on campaign financial regulations through his rejection of Buckley v. Valeo (1976), his insistence that both campaign contributions and expenditures “involve core First Amendment expression,” and his argument that the First Amendment fully protects anonymous speech and, therefore, prohibits financial disclosure requirements; to argue consistently that broadcast, cable, and internet companies should enjoy the same First Amendment protections as the print media; and to deny that minors have free speech rights in public schools or that the video-game industry has a right to have access to minors to sell or rent to them its violent video-games without their parents’ consent.

Thomas’s dissent in Kelo v. City of New London (2004) is worthy of mention in this respect as well. In this Takings Clause case (which reads, in the Fifth Amendment: “nor shall private property be taken for public use without just compensation”), Thomas observed that “[s]omething has gone seriously awry with this Court’s interpretation of the Constitution. Though citizens are safe from the government in their homes, the homes themselves are not.” He regretted that the Court majority relied not on the constitutional text but “almost exclusively on this Court’s prior cases to derive today’s far-reaching, and dangerous, result.” The principles the Court should have employed to dispose of this case, he argued, “are not be found in precedent but rather in the Public Use Clause itself.” And, he concluded, “[w]hen faced with a clash of constitutional principle and a line of unreasoned cases wholly divorced from the text, history, and structure of our founding document, we should not hesitate to resolve the tension in favor of the Constitution’s original meaning.”

Many illustrative examples of Thomas’s original general understanding approach to the text of the Constitution itself come from his Commerce Clause opinions. From his first major pronouncement in his concurrence in United States v. Lopez (1995) to most recently in his dissent in NFIB v. Sebelius (2012), he has repeatedly rejected the Court’s interpretation that Congress has power to regulate any activity that has a “substantial effect” on interstate commerce, because it not only renders “superfluous” Congress’s other powers enumerated in Article I, § 8 but also gives “Congress a ‘police power’ over all aspects of American life.”

After a long and bruising confirmation battle, Thomas arrived at the Court as damaged goods. And, given the liberal predilections of the legal professoriate, law review articles about him during his first decade of service were unrelentingly hostile and derogatory. But, during his second decade on the Court and beyond, things have changed dramatically; the impact that his concurring and dissenting opinions have had on his colleagues – and the law – became apparent to the legal community, and thoughtful articles taking seriously his opinions and commending his original general meaning jurisprudence are now much more prevalent than those castigating him. They praise him as the “Next ‘Great Dissenter,’” “The Lone Principled Federalist,” and the emerging “Commercial-Speech Protector.”

Prominent law professors across the ideological spectrum are increasingly acknowledging his intellectual contributions and leadership. Steven G. Calabresi, a conservative professor at Northwestern University School of Law and a co-founder of the Federalist Society, has described Thomas’s opinions as “very scholarly, with lots of historical sources” and views him as “the most principled, even among the conservatives. He has staked out some bold positions, and then the Court has set out and moved in his direction.”

Akhil Amar, a liberal professor at Yale Law School, favorably compares Thomas’s career with that of Justice Hugo Black: “Both were Southerners who came to the Court young and with very little judicial experience. Early in their careers, they were often in dissent, sometimes by themselves, but they were content to go their own way. But once Earl Warren became Chief Justice the Court started to come to Black. It’s the same with Thomas and the Roberts Court. Thomas’s views are now being followed by a majority of the Court in case after case.”

Not everyone is happy with this outcome, but an increasing number of his critics are honest enough to admit Thomas’s impact. One example is Tom Goldstein, who is the publisher and co-founder of SCOTUS blog. He recently wrote: “I disagree profoundly with Justice Thomas’s views on many questions, but if you believe that Supreme Court decision-making should be a contest of ideas rather than power, so that the measure of a justice’s greatness is his contribution to new and thoughtful perspectives that enlarge the debate, then Justice Thomas is now our greatest justice.”

Thomas was a young man when he was appointed to the Court – he was 43. He arrived utterly fatigued from the months of personal invective and attacks on his character, but he quickly got his second wind, filing powerful and principled dissents within months of his confirmation. He established his pace early on, and through the years he has steadily and confidently lengthened his stride.

Responses

Sowing the Seeds of an Originalist Future

Not too long ago, I found myself discussing the U.S. Supreme Court with an acquaintance who does not particularly follow politics. During the conversation, I mentioned the name of Justice Clarence Thomas, which provoked the question, “He’s the one who doesn’t do anything, right?” I suppose there are worse ways that Justice Thomas could be remembered,…

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The Jurisprudence of Constitutional Restoration Is Originalism, but Not All Conceptions of Originalism

Dr. Ralph Rossum’s most recent book, Understanding Clarence Thomas: The Jurisprudence of Constitutional Restoration, performs the valuable service of cataloguing and synthesizing the jurisprudential work of one of America’s great living jurists. Rossum’s book joins other sympathetic—though not hagiographic—accounts of Justice Thomas’ work, most importantly Professor Scott Douglas Gerber’s First Principles: The Jurisprudence of Clarence…

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“Just, Wise, and Constitutional”: Justice Thomas’s Legacy in Law and Politics

Ralph Rossum has followed his indispensible volume on Justice Scalia with an equally indispensible analysis of Justice Clarence Thomas’s life and work. The two seem destined to be paired forever. Because they share so much in common, each is the other’s best foil. Professor Rossum draws such contrasts expertly, as have Randy Barnett and Lee Strang,…

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Thomas’s Full Throated Originalism: Ralph Rossum Responds

I am grateful for the thoughtful commentaries and kind words that Keith Whittington, Lee J. Strang, and Adam White have provided on my essay on Clarence Thomas’s jurisprudence of constitutional restoration. Since all three commentaries address the low value that Thomas, as an originalist, places on stare decisis, I will begin there. Antonin Scalia, the Court’s…

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In Defense of the Classical Liberal Constitution

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What follows is a short account of the central argument of a long book, of some 700 pages, that seeks to cover the basic outlines of constitutional law in three major areas: interpretation, structure, and individual rights. The theme that unifies these three separate topics is how they all relate to the quest for limited government. That task requires an interpretive method and an institutional design that is strong enough to allow for government rule, but not so powerful that it suffocates the very individuals whose liberty and security it is intended to protect.

Conservative, Progressive, and Classical Liberal

In dealing with this central theme, my most distressing observation is that the two modern schools of constitutional interpretation do not address the essential challenge of political theory in this fashion. I therefore spend much of the initial section of the book dissecting the two theories of constitutional interpretation—conservative and progressive—that dominate modern discourse of constitutional law, which in oversimplified fashion are these.

First, the conservative view of judicial restraint stresses unduly the need for the judges to take a back seat on major questions of domestic policy and foreign affairs, leaving it to the Congress and the President to divide the key powers of government between them. As a matter of political outlook, most of the conservatives tend to favor, for example, a broad role for private markets and to acknowledge the desirable features of separation of powers on the one hand and of federalism on the other. But by the same token, they do not think that it is the province of the justices to make the central institutional calls on these vital matters, which they think are properly left to the political branches of the government. In so doing, they make the familiar modern mistake of accepting popular democracy as the ideal of government, rejecting implicitly the more structured form of classical republicanism whose complex checks and balances were introduced to counteract the evils of popular democracy that operated by majority will.

That same logic of judicial restraint leads conservative justices to tolerate in large measure extensive forms of regulation of property and contract at both the state and national level, yielding vast scope to the government in the overall control of the economy, even with respect to policies that these justices either reject or doubt on substantive grounds. Again the principle of judicial restraint shapes their institutional role.

To the progressive or liberal justices, the basic challenge takes somewhat different form. By and large they think that separation of powers is a recipe for paralysis in a complex economy that cries out for an activist state. They also believe that the traditional common law rules that governed the law of property, contract and tort have played themselves out in modern times. In their place, they follow the early progressive vision calling for a strong central government to face the challenges of modern times. That program in turn has two separate parts. The first relies on extensive public participation in the deliberative process to set the broad national course on general economic and social affairs. The second looks to group of neutral and learned experts to translate this political consensus into a set of workable rules that can be systematically applied by modern administrative agencies that often operate with substantial independence from judicial, and often, political oversight.

On many particular areas, conservative and progressive thinkers disagree with each other. But the central truth of the modern political economy is that both for different reasons think that the economic and social choices in the United States should be left to democratic and administrative processes. The classical liberal position thus takes issue with both of these points of view, and insists that the great genius of the American Constitution lies in its appeal to a very different political tradition, that counts Locke, Montesquieu, Hume, and Madison as the serious intellectual forbearers of the Constitution.

The Originalist Enterprise—Reconceived

On this general view, the central challenge is to forge sensible institutions that divide and fragment power so that it cannot become the source of political domination or oppression. In dealing with this issue, the entire interpretative structure of the Constitution is critical because if the Framers could not provide clear directives as to the structure of government and the protection of individual rights, the great constitutional crusade for limited government will be stopped in its tracks. To the linguistic skeptic, the endless confusion implicit in key constitutional commands leads to judicial deference to the political branches that then engage in nonstop political horse-swapping devoid of constitutional principle and judicial oversight.

The best elements of constitutional originalism are keenly aware of the dangers associated with the view that any word can have whatever meaning that the justices, the legislators or the president decide to give it. They know that without some check on this exercise, the effort to find a principled basis for limited government will necessarily fail. There is much to be said in favor of this view, so that it become in my view utterly untenable to claim, for example, that the term “commerce” is broad enough to encompass agriculture, mining and manufacture, when in ordinary English the term is used in opposition to these three kinds of activities that our Constitution designedly left to the control of the States. In similar fashion, it is not possible to read the term “private property” as though it encompasses only the right or exclusive possession to land, animals or chattels, when the term has always been used in both common and Roman law —the Framers were far from ignorant to the classical tradition—to cover the rights of use, within the boundaries of nuisance law, and the right of disposition whether by sale, lease, mortgage or gift.

The constant effort to expand the meaning of commerce and restrict the meaning of private property are key components of the Progressive agenda, by combining an expansion of federal power with a contraction of the domain of protected private rights in the second. A faithful originalism is on solid ground when it resists the constant effort to redesign terms so as to turn a classical liberal constitution into a modern progressive one, without going through the process of formal amendment. More generally, there is no necessary connection between the conservative insistence on judicial restraint and classical liberal theory. A Constitution drafted by defenders of limited government should not by interpretation be converted into an open-ended charter of government power.

If the originalists are on sound ground on this issue, they are on far weaker ground if they think that the close examination of the written text, standing alone, is sufficient to unlock the meaning of general constitutional provisions. It is at this point, that the defenders of judicial restraint show insufficient respect to the well-developed interpretive tradition that treats any constitutional text as creating the initial presumption whose gaps are filled in by a conceptual analysis that links the basic textual provisions to the larger constitutional purposes of limited government. These ends are, of course, the control of force and fraud, the common defense, and the provision of public goods, such as roads and other infrastructure, whose creation was contemplated under the Constitution.

It is therefore necessary to recognize that virtually every constitutional text leaves unstated three critical questions for its implementation; anticircumvention rules, justifications, and remedial choices.

First, constitutional limitations are intended to prevent abuse by the political bodies. It is therefore necessary to read the text broadly enough to prevent government from enacting artful measures to circumvent the constitutional limitations on its powers. If the states cannot impose taxes on imports, they cannot be allowed to impose special taxes on importers that could achieve the same end. If the government is not allowed to regulate speech, it cannot be allowed to subject it to heavy taxation. If the government cannot take property, it cannot burn it to the ground, and leave the rubble in the possession of its former owners.

By the same token, it is critical to recognize that in the constitution (as in the ordinary law of contract and tort) the basic rules take the form of presumptions not absolute, allowing the government to justify its actions in particular cases. People should prima facie keep their promises, but not when induced by force or fraud. Individuals should not use force against others, except in cases of self-defense. One of the great vices of modern constitutional law is that the justices and the commentators often see constitutional law as a self-contained body of rules and principles divorced from the rules of private law that explain how ordinary people interact with one another.

This explicit linkage between public and private law brings two critical propositions into view. The first is that the same principles of interpretation have to be brought to bear on the great constitutional guarantees, which now become presumptions not absolutes. Historically, this was done by the articulation of systematic rules that governed the police power, which becomes the main axis along which constitutional doctrine develops on all matters of structural constraint and individual rights, even though those two words are not found anywhere in the Constitution.

The second point is that it should be possible to give principled content to the scope and function of the police power. The standard classical liberal formulation of this doctrine spoke of the need to protect the “safety, health, morals, and general welfare” of the population. Broad as these terms were meant to be, they never gave the state the general power to pass “labor laws,” which were rejected for their excessive paternalism or for their eagerness to treat competitive harm as though it were the type of wrong that the government was in a position to prevent.

The question here is how to choose and defend one consistent interpretation. All too often, the recognition that the constitutional text has some play in the joints is often taken as creating “a living constitution,” which lets the Supreme Court fashion exceptions to the original constitutional norms in ways that reflect our modern sensibilities, so that comprehensive regulation of the economy or the use of real property may properly protect against competitive harms on the one hand, or the loss of views on the other.

Unfortunately, the living constitution approach misunderstands how constitutional justifications should be fashioned. The standard exceptions in the private law are in essential outline the same today as they were in ancient Rome and the early common law. Such notions of assumption of risk and self–which lie at the root of the police power are not new conceptions introduced on an ad hoc basis. What could turn out to be novel, of course, are the types of actions that constitute the threat or use of force.

Yet matters belong in context. The ability of the government to control cyberfraud and cybertrespass should be unquestioned. In contrast, the ability of government to suppress truthful speech or to license forced entry onto the land of others (which is allowed to labor organizations under modern law) cannot be read into any principled reading of the police power. Similarly the constant effort to tell people whom they must deal with under either the National Labor Relations Act or the Civil Rights Law represent a major expansion from the earlier police power jurisprudence, which concentrated in licensing and preventing actions, like the use of fireworks that could cause public nuisances.

Third, there is nothing in the Constitution that states the remedies that should be applied in the event of a constitutional violation by the government. It is therefore necessary to decide whether specific performance should be required, whether the state should be enjoined from certain activity, or whether some measure of damages or compensation should be paid. There are no distinctive constitutional principles that govern these questions. So that the implementation of a coherent remedial structure depends on carrying over to the public context the rules that are used to organize remedies in private disputes. Once again the great difficulty of constitutional interpretation is that the text necessarily poses many critical questions to which it does not necessarily supply explicit answers.

Changing Times

It should not be supposed that a Constitution that hews to these principles is unable to respond to serious modern challenges. The classical liberal judges of the “old court” that operated roughly speaking between the end of the Civil War and the great constitutional transformation of 1936-1937 was able to deal with the major issues that a narrow libertarian theory cannot. The imposition of taxes, the provision of public infrastructure, the use of the condemnation power, and the regulation of monopoly are all standard exercises of government power that are inconsistent with strong libertarian theory, but which are explicitly incorporated into the Constitution—which is why this book is called “The Classical Liberal Constitution” and not The Libertarian Constitution.

What is characteristic of most of the judicial decisions of this period was their willingness to face up to the greatest challenge of their time. The general issue of rate regulation preoccupied the Supreme Court during this period, and the justices (often unanimously) worked long and hard to prevent the accumulation of monopoly power on the one hand, without committing the equally great sin of confiscating private wealth under the guise of regulation. It was the New Deal Court, with its great attachment to state-sponsored monopolies that abandoned the old system so that regulation now became the device to prop up monopoly and not to limit it. Similarly in the area of antitrust, the classical liberal judges were relentless in their pursuit of cartel and other monopoly arrangements, but were careful not to convert the antitrust laws into tools for creating and protecting monopoly power, a task that the progressive justices all too eagerly embraced. Similarly, the classical liberal justices understood the need for taxation, but were equally aware that it was essential to put limits on the structure and objects of taxation lest it become a device whereby governments could create huge transfer programs among states and among individuals that has unleashed a veritable deluge of special interest legislation today. And it was the classical liberal justices who sought for the most part to curb the use of state regulatory power as it applied to economic and land use regulation.

In making this defense of the classical liberal constitution, it is important to recognize the imperfections of a doctrine that tolerated slavery at the outset of the nation and fostered various forms of institutionalized segregation after the Civil War. Needless to say these political compromises are totally at war with classical liberal theory. Similarly, many justices before modern times used the “morals: head of the police power to expand government control over personal conduct, particularly on matters of marriage and sex of which the most egregious example is not the contemporary opposition to gay marriage, but instead remains the systematic suppression of polygamy in the territories, which led to the forfeiture of extensive Mormon holdings to the state.

It is critical, moreover, to note that the basic principles of limited government apply not only to issues of separation of powers, and federalism, but also to such matters as religious freedom and charitable associations that do not have narrow economic ends as their sole objective. Finally, it is critical to note too that there are many areas today where both conservative and progressive justices exhibit a high degree of agreement in ways that fully respect classical liberal principles.

On the structural side, the aggressive use of the “dormant commerce” clause has served to protect national markets against state balkanization even without explicit textual warrant. In my view these deviations from original intention should be respected insofar as they satisfy two conditions. First, they are by long usage embedded into the national culture, and second, they are consistent with classical liberal principles. It is this dual interplay that makes so much of constitutional interpretation difficult.

Similarly on the individual liberty side, the great success of the First Amendment is that in most ways (except for the Progressive dalliance with campaign finance regulation), the text is interpreted just as the classical liberal would have it. Speech is read broadly to avoid the risk of government circumvention. The police power justifications deal with the control of force (threats of assault or violence), fraud and defamation, and the application of the antitrust laws to prevent illegal combinations in restraint of trade. But simple public dislike of an offensive position is never justification for state power. Finally, the use of remedies is carefully guarded to avoid, for example, injunctive relief in most defamation and invasion of privacy cases, but not for the protection of business trade secrets from public disclosures.

Yet by the same token, the great failures of modern time cannot be avoided. The willingness of the Court to let ObamaCare pass constitutional muster represents a three-fold failure. There is no willingness to attack the statute for its massive interference with freedom of contract, for its massive overreaching under the commerce power, and for its disregard of the essential limits on the federal power of taxation. That statute is emblematic of all that is wrong with both the conservative and progressive traditions of constitutional law. Only an explicit embrace adoption of the Classical Liberal Constitution at all levels of government can stop the slide of the United States into long-term stagnation and political discord.

Responses

The Skeptical Constitution

I’m terribly sorry. I seem to have come in late. I missed the part where the classical liberal gets to write the constitution. I know that a good many classical liberals, including my friend Richard, have offered their thoughts on the subject, but that’s not how I understand constitutions to be made. Sir Lewis Namier thought…

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Constitutional Compromise and Classical Liberalism

Across the conservative legal movement, there is a reassessment of the principles that have guided legal conservatives since the end of the Warren Court. Ideas that were once orthodoxy are now open to question. At the level of doctrine, the movement’s longstanding defense of Chevron has been replaced with the deep unease evinced by the…

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Due Deference to the Political Branches

Recently, I heard an observation about liberals and conservatives that rang true to me: Modern liberals tend to view themselves as freethinkers no matter how rigidly they adhere to liberal orthodoxy. Modern conservatives often display the opposite vice, imagining they speak for the average citizen even when election returns contradict that belief. One consequence is that…

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Richard Epstein Responds: Personal Liberty, Private Property and Limited Government Are Still the Keys to National Prosperity and Success

I should like to thank my three commentators for their observations on my lead essay. Those remarks by Gail Heriot (my former student, I am proud to say) and Joel Alicea are decidedly in the friendly camp, and thus need little response. The comment by my friend Frank Buckley shows a good deal of Canadian…

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The Institutions of American Liberty

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I write of an American tradition of liberty rather than of Liberty as such. I write not of the liberty we would find behind a veil of ignorance nor of the undiluted, principled, liberty some moralists consume straight up. I focus instead on a heritage of liberty, forged out of the particular and peculiar experiences of American history, protected and internalized by a panoply of institutions, and that has produced an American temperament infused with affection and admiration for its unique inheritance. American liberty inspires gratitude and a spirit of improvement that is constructive rather than revolutionary. Unlike Liberty as such, American liberty is not fully consistent, but is the beautifully imperfect expression of ideals wrangled from the messy experiences of a polyglot people.

Perfect Liberty (principled and abstract), much as Equality or Justice, inspires moral fervor. The attractions to simple, universal, and abstract principles are many—they allow the believer to indulge in regular displays of righteous outrage; they equip one with self-evident truths that justify social transformation; they give one’s life a sense of purpose or direction when real life doesn’t. Easy to digest, ready to implement, these abstract principles bear none of the weight of real human experience nor the burden of compromise. They are the moral intoxicants of alienated individuals and they are the primary danger to a regime of ordered liberty.

We ought to be concerned with those who are morally intoxicated. Still, extremism in the defense of American liberty is no vice. Ideological purity in the pursuit of perfect Liberty is, well, not American. Indeed, American liberty depends not on ideological purity but on the health of a fluid yet persistent body of institutions that habituate citizens in the practice of ordered liberty and that imprint on the American temperament a desire for self-rule.

And so, Americans have a heritage of liberty that is inextricably connected to their habit and taste for self-rule. My argument is that this heritage depends on institutions that foster the habits that sustain this heritage as well as the affections that bolster it. The enemy of American liberty is not bald tyranny but Liberty as ideology, which drifts toward tyranny. Devotion to any abstract conception of liberty without a corresponding love for the necessary institutions that give liberty a certain imperfect shape undermines, often unconsciously, the very means of liberty. While this is true whether the ideologue is on the right or left, today the greatest danger to American liberty comes from those on the left who work to weaken (often by way of government intervention) some key supporting institutions while engaged in an ideological take-over of other institutions. To love American liberty well requires that one love and defend the institutions that conserve an inherited liberty and provide the means of steady improvement in the American tradition of liberty.

The most important American institutions were created or altered in response to needs. British institutions and culture, particularly those carried by dissenting Protestants, heavily influenced American settlement in the 17th and 18th centuries. However foundational were these settling influences, British culture and institutions adapted to the institutional weaknesses of the new land. In the context of an emerging species of de facto (not ideological) equality and individualism, Americans crafted new institutions and altered existing ones to suit their reality as self-governing people. Nearly three centuries of town-creation nurtured an enviable faculty for political association as well as a taste for ad hoc institution building. Americans have a long history of bringing order to a new place by working with others in the construction of necessary institutions. Long experience with solving problems in flexible ways imbued Americans with pride of participation and creation (they loved their towns and their civic organizations and their self-imposed laws because they felt like the authors of their own story) and disposed them to take care of themselves and their own by means of this same capacity to create ordered liberty.

Pride of place, in Europe, usually resulted from centuries of attachment to a specific bit of land, families, buildings, and institutions. Not in America—or not as much in America. Here the first deep attachment to place sprang from the creative act of self-rule—by creating a town, by transforming land, by working with neighbors and former strangers to turn space into place in a very short period of time, American place-making transformed aliens into friends, turned competing interests into common causes, and fostered continuous acts of compromise.

Those same conditions necessitated all manner of institution building that bubbled up from the needs and desires of people living together. Putting aside the complex subject of the ordering influence of local or even regional markets through much of American history before the 20th century, we see more conscious efforts to build schools and colleges, to establish newspapers, journals, publishing houses, to start or revive churches, to organize private institutions of reform (e.g., temperance, anti-slavery, prison reform)—in short, a fervor of institution building by people who loved their liberty and sought ordered institutions to both support and express their liberty.

I have stressed the importance of ownership in the creative act. This needs some clarification. The American experience of building institutions, by and large, did not issue from a desire to work out ideological ideas in practice. Theirs was an accelerated and often self-conscious effort to build institutional frameworks that served their existing conditions. Many utopian experiments dotted the American landscape throughout much of its history, but these were small and localized and almost always very short-lived. The more common experience was the practical, self-interested, and limited efforts to secure the order necessary for individuals and families to work, worship, play, and live in an ordered place that reflected their values and supported their liberty to take care of themselves. One cannot stress enough that American liberty emerged from these “places” of engagement and creative ferment—American liberty began with experiences on a very human scale.

At least until the 20th century, the governments these Americans produced were heavy on politics and light on administration. They were civic institutions that helped internalize the relationship between order and liberty, that forced the reality of circumstances into all calculations of political purpose, and that left expansive space for non-political institutions to serve different roles and to govern themselves on terms appropriate to their members. This combination of being vested in a local and almost palpable government along with a disposition to solve as many problems and serve as many needs as possible by way of voluntary associations and self-governing institutions, fostered the most basic form of American liberty. With this liberty of self-rule each individual understands himself to be capable of taking care of his most immediate needs and then taught him to look around to those near him and like him (equality of condition) to work together, out of collective self-interest, to solve larger problems. Not only does this habit and taste for self-rule serve as the locus of American liberty but it also nourishes affections for the layers of institutions that intersect their lives.

The quickest way to destroy this liberty is to produce an administrative state that severs people from their most immediate form of political involvement and that robs them of their need to create with neighbors and allies the institutions that serve their needs. The administrative state not only alters people’s relationship with institutions and each other, it alters their affections, alienating them from the associations that helped turn groups of people in communities.

An ideological devotion to Liberty—or at least one version of Liberty as is manifested in the reigning Progressive ideology—aims at the administrative state which oversees a nation peopled by individuals who are unincorporated in most institutions and who lack affection or allegiance to anything but the administrative government (the current administration reminded us recently that the federal government is the one thing we all have in common). Issuing from a certain definition of Equality, Progressive Liberty aims at liberation rather than self-rule—often by liberating individuals from self-rule to self-expression.

Self-rule begins with the need to regulate one’s desires and to respond to reality as given rather than as one might design it. It begins with limits—not only those imposed by conditions but also those recognized as appropriate to self-impose in order to produce a healthy life—a life oriented to human needs more than human desires. Self-rule presupposes a general understanding that human life aims toward some good and that choosing to order one’s life relative to that good is necessary to a liberty that is not license, to a freedom that is not dissipation.

Liberty defined as self-expression issues from the primordial human urge to create, to be unrestrained, even by one’s own nature. The most basic limitations on self are expressed by the accidents of birth—gender, family, culture, nation, social standing, and the judgmental beliefs of others. Freedom from those accidents gives one the latitude to make one’s life what one wills, and if one’s will changes, so also can the self. Choice is, then, the most sacred expression of the self and therefore a regime of individual choice is the proper aim of the administrative state.

That administrative state, insofar as it is guided by this ideal, seeks to release individuals from the limitations, coercions, or simple influences of institutions that are not constituted for the ongoing revolution of liberation. Since most institutions are conservative by design—they carry forward valued ideas and structures—the administrative state must either take away their independence and thereby their competing source of authority or it must turn the institution into a means of liberation.

Recent history of America’s administrative state suggests that this is the strategy. Not only have local and state governments lost much ground over the last century with regard to their liberty to govern by their own lights (what Alexis de Tocqueville called “township freedom”) but over the last fifty years most efforts to organize people politically at local levels has aimed at advocacy—appeals for redress from a government. The most powerful political institutions that had once encouraged the exercise of self-rule are now too distant and too focused on administrative efforts to serve this role in the same way.

It would be helpful to a have a more or less comprehensive survey of American institutions, their history, their recent changes, and their relationship with the primary claim I make about American liberty emerging out of the habit and taste of self-rule. Such a task is impossible here, so some brief observations about a few such institutions might spark more empirically grounded work in the future.

The goal here is to remind the friends of American liberty of the importance of defending institutions, however imperfect they may be with regard to an abstract idea of Liberty, as the necessary condition of passing down America’s greatest accomplishment.

For obvious reasons, advocates of “Liberty as liberation” have sought to capture rather than weaken educational institutions. In the case of higher education the take-over has been dramatic. Long a haven for subversive ideologies, the biggest development in recent decades has been the transformation—dreamed of by so many radicals in the 1960s—of universities into agents of transformation with an amazing disregard for any obligation of passing down or of garbing students with the vestments of a civilized order, millennia in the making. Universities, which serve as a necessary rite of passage for those who wish power in our society, are designed to equip students to see inequality as injustice, to feel the moral obligation to change or “transform” the received society, and to believe that the objective is the liberation of individuals to be creative authors of their own lives. Liberty as liberation, then, is the goal.

K-12 public schools, to a large degree, have become government schools. Rather than serving the needs and expressing the values of a community—a public—government schools reflect the interests and ideology of those who see schools as the best means of promoting generational change. When public schools are funded by local taxes, when curricula reflect the deliberate choices of the local public, when teachers understand themselves to serve the interest of their community and the values of their student’s parents, then schools are genuinely public. Public schools offer one of the most important institutions to cultivate a sense of community, the habits of self-rule, the art of compromise, and a taste for local freedom. As public schools become functionaries of the administrative state their purposes reflect the ideas and interest of that state rather than the community. More importantly the people of the community are robbed of the opportunity, inherent in the idea of public and local schools, to engage in the practice of civic engagement that binds citizens together in common purposes.

Public schools serve to knit people together while government schools isolate individuals. Because government schools curricula reflect the liberationist ideology that dominates American universities, teachers and administrators think of students as individuals who need the help of this government institution to escape the narrowness of their families and the boundedness of their community and culture. In this way government schools actively undermine American liberty and subvert other institutions that buttress that heritage of liberty.

The American family was something of a new creation—or a dramatic modification of inherited institutional structures. Democratized and highly mobile, the American family had little power to bind several generations to the interests of a duty-encumbering and hierarchical institution of the sort Europeans called family. Until the twentieth century, however, American families served a number of functions that have now been replaced by other institutions. These families once educated their own young and often trained them in a trade. They served as a primary support (often essential) to establishing a young person in a job and of preparing young people to have the means to marry. Most families served as economic institutions, productive units in local and regional markets. In all of these areas, the last hundred years or so have witnessed a dramatic alteration in the function and thereby the nature of the American family.

By the middle of the twentieth century one would be reluctant to affirm in public that families, not individuals, form the basic unit of society—so far had the process of individual liberation altered the arrangements, obligations, and liberties of the American family. Still, by culture and law, marriages and families were understood to be nearly inviolable in certain respects. The divorce revolution of the 1970s was to the family what the French Revolution was to the ancien regime. By loosing all adult individuals from any binding obligation, marriages necessarily become very powerful expressions of individual choice and thereby consistent with the liberationist ideal of liberty that encourages a life as designed and redesigned by the changing will of individuals-in-process. The current trend with regard to gay marriage or other familial choices simply proceed as a logical outgrowth of the divorce revolution. The real transformation took place with divorce laws that altered, subtly and over time, popular conceptions of the nature and purpose of both marriage and family. Once the integrity of the family as an institution had been usurped by the moral demands of liberty understood as liberation the supporters of what people often label “traditional marriage” were left without a popularly acceptable appeal to the integrity of the institution over the desires of individuals.

American institutions remain numerous, diverse, and robust. Debates have raged in recent decades over the changing character of voluntary associations, of religious institutions, and a great number of what we might call non-governmental groups, and what these changes mean with regard to healthy individuals, communities and nation. We need more attention still on these institutions with an eye specifically to how these changes in associational life influence either liberationist individualism or American liberty of self-rule. In particular, we ought to think more about the challenges many of these institutions face in having the liberty to govern themselves without coercion—or the threat of coercion—by various arms of the federal government. Still other institutions, like the military and the judiciary, are vulnerable to pressures to change according to reigning ideas of government elites who understand their political purpose in terms of transformation. In this case, long-term institutional changes of great significance can issue from relatively short-term political changes.

Advocates of American liberty ought to be focused much more on the institutions of liberty than in the abstract or philosophical defense of a competing definition of liberty. American liberty survives and flourishes only when it is rooted in the history and in the given reality of American citizens—to present one abstraction as an alternative to another abstraction is to risk losing the advantages that accrue to functioning institutions that build affections, allegiances, and habits of genuine American liberty. The future of American liberty—if it is to have a future—will be found in carrying forward a heritage that adapts to changing circumstances. The future of American liberty depends on institutions that have the latitude, means, and energy to incorporate citizens into a matrix of overlapping and very particular allegiances that call upon them to see in the ordering activity of self-governance the necessary condition for a cherished liberty.

Responses

The Revolution in Ideas and Practice That Elevated American Liberty

Ted McAllister and the Liberty Law Forum at Liberty Fund are to be thanked for resurrecting a vitally important but seemingly forgotten, or, at least, neglected topic. The subject of McAllister’s essay is the American tradition of liberty, which he contrasts with perfect or abstract liberty. He asks two important questions: What is distinctive about…

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The Distinctive Spheres of American Liberty and the State

“The Institutions of American Liberty” is a nicely written and, for the most part, compelling encomium to the tradition of American liberty and the institutions upon which it rests. The author of this piece, as so many following Tocqueville have observed, rightly notes that American history displays “a fervor of institution building by people who…

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Piety, Benevolence, Self-Government, and Free Institutions

The Rev. Timothy Dwight (President of Yale, 1795-1817, leading Congregational and Federalist thinker, enemy of Thomas Jefferson), wrote about the three great good works: piety, benevolence, and self-government. Self-government meant the well ordering of one’s life so he could live as a free and responsible human being. If a person was well self-governed, he would…

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The Extinction of American Liberty? Ted McAllister responds:

Lamentably, I find myself in general agreement with the thoughtful commentaries on my essay by the three respondents, C. Bradley Thompson, Steven Grosby, and William Dennis. This is not to say that underneath this broad consensus there aren’t serious and enjoyable differences of philosophy that warrant sustained engagement. Taken as a whole, the body of…

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The Constitution’s Structural Limitations On Power Should Be the Focus of the Bill of Rights

Bill of Rights

Ever since the Warren era of expansive individual rights jurisprudence, leading to the Court’s substantive due process jurisprudence culminating in Roe v. Wade, jurists, as well as the public at large, have grappled with the issue of judicial activism in the individual rights area. At the same time, by the time of the Warren Court, constitutional law had evolved to the point of denying the courts any meaningful role in enforcing the limited government principles incorporated in the Constitution. This essay, recognizing the continuing controversy over the Court’s individual rights jurisprudence, attempts to reconcile these two different strains in constitutional development in a proposed limited government model of the Bill of Rights.

The vitriolic reaction to the fairly recent injection of limited government principles into the nation’s political dialogue demonstrates how marginalized the notion of limited government has become since the 1930s. Furthermore, the widespread conviction that the Supreme Court would never strike down the Affordable Care Act on limited government principles likewise shows how unaccustomed the legal and political systems have become to judicial enforcement of those principles.[1] However, not only are limited government principles among the most important aspects of the U.S. Constitution, but they are key to understanding the provisions in the Bill of Rights regarding individual liberty. Indeed, the decline of limited government principles during the New Deal era, combined with the rise of an individual autonomy jurisprudence during the Warren Court era, has distorted the originally-intended meaning of the Bill of Rights.

Under the leadership of Chief Justice Warren, the Court adopted an individual rights jurisprudence that interpreted the Bill of Rights as existing for the purpose of achieving a certain vision of individual autonomy. This view gained a footing during the New Deal period, when the Court retreated from enforcing the limited government structural provisions of the Constitution, such as federalism and separation of powers, while at the same time heightening its scrutiny of substantive individual rights, such as those contained in the Bill of Rights.[2] But this shift in the Court’s orientation cast the Bill of Rights as concerned exclusively with individual autonomy, rather than with providing structural limitations on government power, thereby separating the Bill from the structural orientation of the Constitution as a whole. This modern view sees individual rights in isolation, as if the Constitution was primarily focused on protecting individual autonomy, not on creating a frame of government.

Under a limited government model, the Bill of Rights can be understood within the context of a larger goal—namely, ensuring the maintenance of limited government within the constitutional scheme. As the primary advocates for the Bill of Rights, the Anti-Federalists sought to achieve not particular substantive protections of a finite list of specific individual rights, but rather an assurance that the new federal government would indeed be a government of limited powers.[3] The Anti-Federalists feared that the original Constitution had not adequately prevented the new government from overstepping its allotted powers. To further secure a limited government, the Bill of Rights specified certain areas in which the government expressly had no power to act. Whereas the rest of the constitutional scheme set out structural provisions for the overall maintenance of limited government, the Bill of Rights articulated specific substantive areas in which the principle of limited government was to prevail. Nonetheless, the impetus for the Bill of Rights arose from the same limited government concerns that were incorporated in the original Constitution, and in this way the Bill of Rights is consistent with the original Constitution.

As James Madison put it, a Bill of Rights was added “for greater caution” to ensure a limited government.[4] When he introduced his proposal for a Bill of Rights in the First Congress in June of 1789, Madison explained that the purpose of this Bill was “to limit and qualify the powers of government.”[5] It would provide a second limitation on the power of government. The first limitation arose from the enumerated powers doctrine, prohibited the federal government from exercising any power not explicitly granted to it by the Constitution. But the Bill of Rights placed limits on even those enumerated powers, forbidding the federal government from using its delegated powers to encroach on areas outlined by the Bill of Rights.[6] By carving out particular areas that might possibly be regulated by the government under the Necessary and Proper Clause, the Bill of Rights sets out more specific standards enabling the people to better judge whether government had exceeded its power. [7]

What is often ignored about the Bill of Rights is that it was drafted and ratified with a view toward integrating it into the overall scheme of the original Constitution, which was structural. And the most important structural aspects of the Constitution were those aimed at ensuring limited government. As a whole, the Constitution is primarily one of “powers, structures and procedures, not of values.”[8]

According to Akhil Amar, the Bill of Rights is each “part of a single coherent constitution; and are reflective of a deep design; aimed at limiting government power.”[9] But if consistent with the constitutional scheme and its emphasis on structure, then the Bill of Rights should not be viewed in terms of individual autonomy, but in terms of employing the language of rights to limit government power. As Gary Lawson argues, the meaning of the Bill of Rights lies primarily in the structure and history of the original Constitution, rather than in the specific wording of each of the amendments.[10]

In The Federalist, Hamilton makes a clear distinction between a free government and a republican government.[11] Whereas free government focuses on securing specified individual rights, republican government tries to achieve a more general political freedom as a means to securing individual freedom.[12] In choosing the latter, the framers saw the structure of government as the best protection of individual rights. For this reason, the Constitution’s primary focus is not on providing a finite list of individual rights, but on creating structural features that protect against systemic government abuses and overreaching.[13]

But the Bill of Rights is more than just a way to generally limit the power of the federal government; the rights protected by the Bill of Rights were those that were most effective in empowering people to control and limit their government. Not only did the Bill of Rights create limitations on government, but it specifically identified areas of freedom which, when exercised, could further help to limit government. To the framers, the only real way to prevent government from violating the liberty of its citizens was to give those citizens the capacity to control government.[14] For instance, the Anti-Federalists often contended that freedom of speech and press were invaluable bulwarks against tyranny, and that exercise of those rights was necessary to control and limit government.[15] Freedoms of speech and press were seen as the essence of free government, through which people could be free to limit government by political means.[16]

Unquestionably, the framers of the Bill of Rights were very much concerned about individual freedom and natural rights. Indeed, this concern had inspired the Declaration of Independence. There is no historical dispute as to the desire of the framers for a constitutional system that protected liberty, and there is no dispute that the Bill of Rights served the goal of protecting liberty. However, the Bill of Rights tried to secure that goal through a means other than strictly a judicial protection of certain specific rights that in turn defined a particular notion of individual autonomy. Instead, limited government became the means by which liberty would be protected.

The framing generation did not know how to go about the goal of using specific constitutional provisions to protect natural rights or specific understandings of individual autonomy. They did not have a sufficiently clear idea of the parameters and scope of those individual rights. To the framers, natural or individual rights were vague and highly abstract.[17] As Philip Hamburger writes, theories of natural rights were not only so ambiguous and imprecise as to prevent broad consensus, but in fact were the subject of “substantial differences” among eighteenth-century Americans.[18] Moreover, the framers were reluctant to give the judiciary the kind of unbounded power it would need to define and enforce individual rights, so they crafted a Bill that focused not on the substance of each right but on limiting the power of government in certain areas. For instance, Madison drafted the First Amendment in the hard language of denials of government power, not in more general statements aimed at defining the nature and value of particular individual rights.[19] This language was in stark contrast to the softer kind of language in state constitutions, which focused on the moral value of liberty and individual rights and which were phrased more as obligations than as prohibitions.[20]

Furthermore, if the Bill of Rights was meant to protect fundamental or natural rights, it is curious as to why those protections were not granted vis-à-vis the states. When the Framers did seek to protect a right or freedom on its own accord, rather than as a means of limiting power, they did so in a manner that would protect that right or freedom from all governments, including state governments. The Contract Clause, for instance, specifically applies to both the federal and state governments.

Not only was the Bill of Rights not applied to the states, but the constitutional generation tolerated significant state regulation of those rights, thus further undermining the notion that the Bill served primarily to protect individual autonomy. For instance, late eighteenth century Americans accepted highly restrictive state laws on speech and press.[21]

The Ninth and Tenth Amendments in particular reflect the focus of the entire Bill of Rights as being limitations on the power of the federal government. The Tenth Amendment incorporated the rule of enumerated power, with all nondelegated power reserved to the states, whereas the Ninth Amendment limited the interpretation of the federal powers that were enumerated. As James Madison explained, the Tenth Amendment prohibited the federal government from exercising any source of power not specified within the Constitution itself, and the Ninth Amendment prohibited any interpretations of enumerated federal powers that would unduly expand federal power.[22] According to Kurt Lash, the Ninth and Tenth Amendments reflected such a universal desire for limited government that they faced very little opposition.[23]

The rise of the individual autonomy model of the Bill of Rights occurred in the wake of the New Deal demise of limited government principles. During the New Deal period, the notion of protecting liberty through the maintenance of limited and divided government gave way to the desire to ensure economic security through a powerful and activist central government. The framers’ view of political freedom requiring a limited government was largely abandoned by the New Deal reformers, who called upon an activist federal government to combat the problems of the Great Depression. Although the framers had sought political freedom by setting up structural features to prevent the concentration of government power, the New Dealers believed they could preserve liberty strictly through the judiciary’s enforcement of specified individual freedoms.[24]

However, this abandonment of limited government provisions undercut a fundamental protection of liberty. To compensate for this loss of constitutional protection, the Court made a compromise: although it would retreat from reviewing structural issues, it would intensify its review of substantive individual rights issues. Larry Kramer calls this the New Deal “settlement.”[25]

The Warren Court era solidified the transformation in constitutional approaches to the preservation of liberty—from relying on the limited government provisions of the Constitution to focusing almost exclusively on the judicial enforcement of substantive individual rights.[26] In doing so, the Warren and Burger Courts effected a constitutional revolution in many areas of substantive individual rights. But this transformation essentially viewed the protection of individual rights as the primary purpose of constitutional law. It misinterpreted the nature of the Bill of Rights and how the Constitution went about protecting liberty. It looked on the Bill of Rights as an almost unlimited grant of power to the judiciary to enforce its view of individual autonomy, while at the same time attempting to reconcile individual liberty with a virtually unlimited federal government.

In seeking to protect liberty exclusively through judicial enforcement of specific individual substantive rights, the Court ceased protecting the kind of governmental structures designed to guard individual liberty. But when that happens, only the judiciary is left to act as the guardian of liberty—and it does so by exercising great power to define and enforce an array of specific individual substantive rights.


[1]See Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566 (2012), where five Justices affirmed the limited government principles of the Constitution, specifically that Congress’ commerce power is limited, even though the Court upheld the Affordable Care Act based on Congress’ taxing power, and where the Court enforced federalism principles in striking down Congress’ attempted expansion of Medicaid.

[2]See U.S. v. Caroline Products, 304 U.S. 144, 152 n.4 (1938). For a discussion of the Court’s New Deal jurisprudence, see Patrick M. Garry, An Entrenched Legacy: How the New Deal Constitutional Revolution Continues to Shape the Role of the Supreme Court102-08 (2008).

[3]See Patrick M. Garry, Liberty Through Limits: The Bill of Rights as Limited Government Provisions, 62 SMU L. Rev. 1745 (2009).

[4] James Madison, Speech in Congress Proposing Constitutional Amendments (June 8, 1789), in 12 The Papers of James Madison 196, 202 (Charles F. Hobson and Robert A. Rutland eds., 1979).

[5] James Madison, Speech to House of Representatives (June 8, 1789), in Creating the Bill of Rights: The Documentary Record from the First Federal Congress 81 (Helen Veit et al. eds., 1991).

[6]See Michael Dorf, Incidental Burdens on Fundamental Rights, 109 Harv. L. Rev. 1175, 1189 (1996) (arguing that by “juxtaposing affirmative powers with negative limits, the Constitution’s architecture assumed that, even when the government pursues a permissible goal, the government might sometimes violate individual rights—and thus, the negative limits prohibit otherwise valid exercises of power”).

[7] Michael McConnell, Natural Rights and the Ninth Amendment, 5 N.Y.U. J.L. & Liberty 1,18 (2010); Jack Rakove, Original Meanings, 336 (1997).

[8] Robert Delahunty, 1 Univ. of St. Thomas Journal of Public Law and Policy, 1, 68 (2007). In The Federalist No. 38, James Madison argued that the Bill of Rights “ought to be declaratory, not of the personal rights of individuals, but of the rights reserved to the states in their political capacity.” The Federalist No. 38, at 235 (James Madison) (Clinton Rossiter, ed., 1961). Likewise, in The Federalist No. 84, Alexander Hamilton argued that “one object of the Bill of Rights is to declare and specify the political privileges of the citizens in the structure and administration of the government.” Id. at 515 (Alexander Hamilton).

[9] Akhil Reed Amar, Intratextualism, 112 Harv. L. Rev. 747, 814 (1999).

[10] Gary Lawson, A Truism with Attitude: The Tenth Amendment in Constitutional Context, 83 Notre Dame L. Rev. 469, 471 (2008) (arguing that the Bill of Rights was effectively redundant because federal laws abridging rights contained in the Bill of Rights had not been delegated to the federal government).

[11]See, e.g., The Federalist Nos. 9, 51 (A. Hamilton) (Jacob E. Cooke ed., 1961) (referencing the distinction between free governments and republican governments).

[12] Bradford P. Wilson, Separation of Powers and Judicial Review in Separation of Powers and Good Government 68 (Bradford P. Wilson & Peter W. Schramm eds,, 1994).

[13] Gary Lawson, Prolegomenon to Any Future Administrative Law Course: Separation of Powers and the Transcendental Deduction, 49 St. Louis U. L.J. 885 (2005).

[14] Thomas McAffee, Restoring the Lost World of Classical Legal Thought, 75 U. of Cin. L. Rev. 1499, 1572 (2007).

[15]See Letters of Centinel No. 2, in 2 The Complete Anti-Federalist 143-144 (Herbert J. Storing ed. 1981); Speech of Patrick Henry in Virginia Ratifying Convention in 3 The Debates in the Several State Conventions on the Adoption of the Federal Constitution 449 (Jonathan Elliott ed., 2d Ed. 1836).

[16]See James Madison, Report on the Virginia Resolutions (January 1800, reprinted in 5 The Founders’ Constitution 145 (Philip B. Kurland and Ralph Lerner eds., 1987).

[17] John Phillip Reid, Constitutional History of the American Revolution 10-11 (1986).

[18] Philip Hamburger, Natural Rights, Natural Law and American Constitutions, 102 Yale L.J. 907, 926, 955 (1993).

[19] Thomas McAffee, Inalienable Rights, Legal Enforceability, and American Constitutions, 36 Wake Forest L. Rev. 747, 777 (2001). Indeed, despite all the First Amendment case law, for instance, there is still much disagreement over the scope and application of individual autonomy boundaries within the Free Speech Clause, fulfilling the Framers’ fears that speech freedoms could not be adequately defined or expressed within one clause of the Constitution.

[20]Id.

[21] Hamburger, Natural Rights, 102 Yale L. J. at 911.

[22] James Madison, Speech in Congress Opposing the National Bank (February 2, 1791), in James Madison, Writings 480, 481 (Jack Rakove ed., 1999).

[23] Kurt Lash, James Madison’s Celebrated Report of 1800, 74 Geo. Wash. L. Rev. 165, 171 (1006).

[24] M.J.C. Vila, Constitutionalism and the Separation of Powers 14 (1969).

[25] Larry D. Kramer, The People Themselves: Popular Constitutionalism and Judicial Review 219-20 (2004). Because of this “settlement,” federalism became a dead doctrine until the Rehnquist Court. David Walker, The Rebirth of Federalism, 96 (1995).

[26] Daryl Levinson, Empire-Building Government in Constitutional Law, 118 Harv. L. Rev. 915, 971 (2005).

Responses

Natural Rights and the Limited Government Model of the Constitution: A Response to Patrick Garry

There is much to commend Professor Garry’s essay. He is eminently correct in saying that the Constitution contemplated a limited government. Whether it adhered to a “limited government model” is a different issue. What is more than curious, however, is Professor Garry’s statement that the “the overall scheme of the original Constitution” is primarily concerned with…

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Limited Government and Individual Autonomy

Patrick Garry’s essay “The Constitution’s Structural Limits on Power Should Be the Focus of the Bill of Rights” contains many valuable insights. In particular, it re-affirms the proposition – lost for many years but perhaps gaining some new currency – that the so-called “structural” provisions of the Constitution are, and were intended to be, not…

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The Constitution Created an Expansive, not a Strictly Limited Federal Government

The revolution of 1787-1791 overthrew a constitution that strictly limited the federal government in favor of one with general welfare and necessary and proper clauses that allowed the federal government to absorb state powers over time. It also tossed out the dogma of separation of powers in favor of a more sophisticated balance of powers.…

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Patrick Garry’s Reply to Responders

I am honored to be a part of this debate on the Bill of Rights with such accomplished and knowledgeable scholars. The three responding essays by Dr. Bowling, Professor Erler and Professor Ramsey provide keen insights on constitutional law and history. Indeed, the historical discussions in the three essays are more detailed than is my…

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The Future of Shareholder Wealth Maximization

V

Right on its 20-year schedule,[1] the old debate over the proper purpose of the corporation has recently been revivified in books, articles, and blog posts in as dire a tone as ever. The spectacular corporate failures on the part of firms like Enron, Lehman Brothers, and the quasi-governmental Fannie Mae, accompanied by equally spectacular government bailouts of failed firms, have fueled the recent uproar. A sense that someone has somehow wronged the rest of us characterizes the zeitgeist of the post-bailout era.

It is textbook law that a corporation’s board of directors must act in good faith to maximize for its shareholders the value of the firm under its charge. This essay considers the future of this bedrock principle of corporate law—shareholder wealth maximization—from practical and aspirational viewpoints. It first addresses the assertion that corporate law in fact does not require directors to maximize the wealth of their shareholder principals, and concludes that this claim is indefensible when viewed in proper context. It then asks to what extent shareholder wealth maximization ought to be the norm, and offers a libertarian, shareholder-driven take on corporate purpose.

Shareholder Wealth Maximization is the Norm

Shareholder wealth maximization deniers argue that directors do not, and never had to, maximize the wealth of a corporation’s shareholders. Their first argument is based on the observation that directors are regularly exculpated from liability despite having lost money for their firms. But this misses the point. Shareholder wealth maximization, as courts adjudicate it via the business judgment rule, is a standard of conduct, not a legal rule requiring a particular financial result. That is, directors incur no liability for an injury to the corporation resulting from an action that they pursued in good faith and with appropriate care. Managers must attempt to maximize shareholder value, but are not required to succeed.

The business judgment rule is thus the standard against which adherence to the shareholder wealth maximization norm is reviewed. It protects many actions that, in hindsight, did not increase, much less maximize, shareholder wealth. This includes manager decisions that appear to have favored the interests of nonshareholder stakeholders at shareholder expense. Courts do not second guess business decisions that plausibly could have furthered long-term shareholder wealth.

This perhaps odd combination of a strict wealth maximization principle and a low standard of review is a result of an implicit contract between shareholders and managers: Shareholders would not invest in a company if managers could whimsically deploy their investment to serve other interests. At the same time, managers would not work for a firm if their acceptance of employment meant that they had to guarantee optimal financial returns.

The second argument is grounded in language in some judicial opinions that, when viewed in isolation, can be read to suggest that shareholder wealth maximization is optional. For example, the Delaware[2] case of Air Prods. & Chems. v. Airgas,[3] says that a firm has no “per se duty to maximize shareholder value in the short term.” But for several pages thereafter, it reinforces the rule that a firm cannot neglect its long-term responsibilities to its shareholders. An honest reading of the case, especially in the context of the common law in which it is couched, establishes that the long-run interest to be considered ultimately comes back to that of the shareholder. Two older but famous cases, A.P. Smith Manufacturing v. Barlow[4] and Shlensky v. Wrigley,[5] are likewise cited for the proposition that maximizing shareholder wealth is discretionary. The former, in refraining from interfering with a corporate charitable donation, said that ‘‘[t]he general intent and end of all civil incorporations is for better government’’ and that “modern conditions require that corporations acknowledge and discharge social as well as private responsibilities as members of the communities within which they operate.”[6] In the latter case, the court did not intervene when the Chicago Cubs’ owner refused to install lights in Wrigley Field because “baseball is a daytime sport and . . . the installation of lights and night baseball games [would] have a deteriorating effect upon the surrounding neighborhood.”[7] Yet both decisions ultimately recognized that such seemingly nonshareholder-serving actions were actually investments in long-term business reputation and health, wholly consistent with maximizing shareholder wealth.[8]

As suggested, in the short run, the business judgment rule[9] only demands loose adherence to shareholder wealth maximization. Where there is no inevitable sale of the company, or transfer of control that would subject shareholders to the risks and consequences borne by holders of minority shares, managers may forego short-run gains in exchange for long-term ones.[10] It is only at the “Revlon moment” when managers must maximize the price that shareholders obtain in the short term. The Revlon moment occurs either when a company is certain to be sold,[11] or when a transaction causes control to shift from a diffuse set of shareholders to a concentrated block.[12] Short-term shareholder wealth maximization is required in these situations because they are the last opportunities for shareholders to maximize their return in their investment or for minority shareholders to be paid for their control premiums, respectively. At this Revlon moment, a board of directors may only collaterally—essentially accidentally because the board’s single-minded goal must be maximizing the price obtained for shareholders’ stock—protect nonshareholder interests if those interests create equivalent or greater value for shareholders.[13]

A third objection is that the current rule is invalid because the 1919 case of Dodge v. Ford[14]has been improperly interpreted to create it. This is a non sequitur. The current legal rule, reaffirmed multiple times just this year,[15] lacks no clarity in requiring managers to maximize shareholder wealth in today’s for-profit corporations.

A fourth objection is that a majority of states (but not Delaware) have enacted so-called “constituency statutes” that purportedly allow corporate boards to consider the interests of nonshareholder constituencies in their decision-making. If interpreted liberally, they may be understood to allow (but not require) boards to serve nonshareholder interests without tying their decisions to shareholder wealth. On another view, these statutes acknowledge and codify Delaware’s permissive approach to allowing boards to consider nonstakeholder interests in the short-term provided that there is a long-term connection to shareholder value. The most narrow view suggests that these statutes merely codify the common-law business judgment rule. Absent any meaningful judicial interpretation of these statutes despite decades since most were enacted, it would be reckless not to assume that legislatures would have been more explicit had they intended to be so revolutionary as to overturn such a longstanding precept of common law. The most reasonable understanding at this point is that these statutes officially import Delaware’s approach into their states.

A final contention—and one which this essay agrees would promote economic freedom—is that under Delaware law, a corporation may be organized for “any lawful business or purposes”[16] that need not include the promotion of shareholder wealth. (There are similar provisions in other states.) But Delaware courts, which interpret Delaware law, generally disagree unless the corporation is of a special type, like the very recently allowed “public benefit corporation” discussed below. If a corporate charter actually says that a corporation is to be run for a purpose other than maximizing shareholder value, a court may allow it (though this is not at all certain), but the run-of-the-mill business corporation is not set up this way, and the courts impute their aim to be maximizing shareholder value.

Corporate law is, for now at least, still very firmly in the shareholder wealth maximization camp.

A Libertarian Take on Corporate Purpose

Despite its solid footing in corporate law, it is difficult to say that long-term shareholder wealth maximization is taking place in today’s corporations in any strong form. Despite expanded shareholder ability to participate in corporate management (e.g., through more permissive proxy-access rules and the consolidation of holdings into blocks that are large enough to overcome shareholders’ rational apathy toward corporate elections) the board of directors controls the firm: boards act, shareholders react (at most) to board decisions.

Shareholder wealth maximization is based on agency theory, which holds that the incentives of managers are at odds with those of their shareholder principals. As a result, managers will run firms in a way that will maximize their own wealth rather than that of the shareholders whose investment enabled the enterprise. Because shareholders risked their wealth to finance the firm, they are entitled to a “residual” claim on whatever is left over after the firm’s contractual obligations have been fulfilled. A problem with allowing managers to serve multiple stakeholders is that, with any given decision, they will pick the stakeholder whose interests are most aligned with their own. This misalignment of incentives causes the firm to be run inefficiently—in a way that creates less overall value—with the resulting loss of value termed “agency costs.” To minimize agency costs managers should be required to exert their best efforts to maximize shareholder wealth. With this corporate goal in mind, the theory goes, nonshareholder stakeholders—managers, employees, customers, creditors, communities, and others—can contract ex ante for their fair share of the value created by the corporation.

Unfortunately, any method for enforcing the shareholder-value norm, with its attendant metrics, can be gamed by crafty managers who may very well be more familiar with their firms, and thus better positioned to extract wealth from them, than their shareholder principals. For example, a modern problem with attempting to induce shareholder-wealth-maximizing behavior among managers is an oversupply of short-term, and a dearth of long-term, incentive compensation based on share prices. A given year’s or quarter’s results are relatively easy for willing managers, “80 percent of [whom] report [that] they would sacrifice future economic value to manage short-term earnings to meet investor expectations,”[17] to manipulate. But like most chicaneries, they tend to be harmful in the long run, and in the extreme cases can result in catastrophic collapses, a la Enron.

It is harder to support the assertion that running firms to maximize long-term share price is per se improper. Indeed, long-term thinking about improving and perfecting the firm’s products and services that translates into sustainably increased future cash flows on the whole benefits all stakeholders. It is axiomatic that, say, a car company that exerts its energy on building ever-better cars will provide both its shareholders and its other stakeholders with greater value in the long term: Customers will be happier with better cars, and will buy them in the future and tell their friends to do the same. Robust sales will translate into employees with more secure and better paying jobs, more secure creditors, and communities with better employment opportunities and a greater tax base. And the longer-run residual benefit to shareholders is obvious: A company with greater and more stable cash flows will pay greater and more reliable dividends. Assuming that markets function more-or-less properly, some of that cash flow will be capitalized into current share prices.[18] Put another way, a firm’s doing well does in fact do good for the rest of us. But it is easy to see how managers compensated on short-term results would have incentive to put the firm’s cash into a bank account or far riskier investments if that would yield greater short-term returns than research and development.

All this said, and even assuming that such an enlightened form of shareholder wealth maximization were implementable and enforceable, some shareholders may desire to sacrifice financial returns to achieve other objectives. For example, some retail outlets like Hobby Lobby and Chick-fil-A do not open on Sundays both to make a religious statement and to give their employees a chance to go to church. If founding shareholders are unanimous in their wishes, and future shareholders have proper notice (say, in the firm’s certificate of incorporation) about the uses to which the firm in which they are about to invest will put their investment, a departure from the shareholder wealth maximization norm should be unproblematic.[19]

Many states have also taken a direct step toward expanded shareholder freedom by passing benefit corporation statutes. In Delaware, a “public benefit corporation” is a for-profit firm that nonetheless intends to produce enumerated public benefit(s) and that “shall be managed in a manner that balances the stockholders’ pecuniary interests, the best interests of those materially affected by the corporation’s conduct, and the public benefit or public benefits identified in its certificate of incorporation.”[20] Shareholders who form or invest in such a company may go beyond the wealth-maximization norm to both serve specific public benefits and consider the interests of other stakeholders. Still, it is unclear whether these new corporations may be managed so as to achieve private nonpecuniary benefits, or to consider only the enumerated and shareholder-wealth interests (as opposed to the interests of all “materially affected” parties). Relatedly, it is worth remembering that not-for-profit corporations, which may have members instead of stockholders, are prohibited from making a profit.

The corporate form is essential to the prosperity of modern economies. One of its many benefits is that, when properly employed, it allows investors to voluntarily tie up capital with each other in a way that facilitates a long-term view. Even if one shareholder decides to escape a corporation by selling, it must find another to take its place; it is unable to cripple the enterprise by withdrawing its investment on a whim. The shareholder wealth maximization norm provides a basic assurance that money locked into a firm is not entirely lost. The norm is here to stay and will continue to be the default rule. Properly incentivized, it is socially beneficial and should even be encouraged.

Yet corporate law is a field of complex questions requiring complex and creative, rather than one-size-fits-all, solutions. Shareholders who risk their resources on a firm ought to be given the freedom to decide both how to control their directors and to what end they should be working. Some owners may indeed want to be wealthy, and thus want their directors to think only of their long-run financial gain. Others may want to become rich, but believe that the best path to wealth is indirect, via service to other interests. Still others may have little interest in making money and genuinely want to run a corporation for some other mission. The law should not impose either end upon an owner who desires another. As long as shareholders know what they’re getting into, they should indeed be allowed to pursue “any lawful . . . purpose” with their firms.


[1] Stephen M. Bainbridge, In Defense of the Shareholder Wealth Maximization Norm: A Reply to Professor Green, 50 Wash. & Lee L. Rev. 1423, 1435 n.42 (1994).

[2] Delaware is the de facto leader in corporate law which other jurisdictions regularly imitate. The focus herein is thus primarily, but not exclusively, on its laws and jurisprudence.

[3] 16 A.3d 48, 98 (Del. Ch. 2011).

[4] 98 A.2d 581 (N.J. 1953).

[5] 237 N.E.2d 776 (Ill. App. 1968).

[6]Barlow, 98 A.2d at 583, 586.

[7]Shlensky, 237 N.E.2d at 778 (internal quotation marks omitted).

[8]Id. at 180-81; Barlow, 98 A.2d at 585.

[9] Corporate boards enjoy less deference in the takeover context than the business judgment affords in nearly every other context. The analysis for present purposes is functionally the same in that managers wrong decisions are not questioned, but only their self-interested ones. Airgas, Time, QVC Network, Unocal, and Revlon, discussed infra, are takeover cases.

[10] Air Prods. & Chems. v. Airgas, 16 A.3d 48 (Del. Ch. 2011); Paramount Communications v. Time, 571 A.2d 1140 (Del. 1989); see also Paramount Communications v. QVC Network, 637 A.2d 34 (Del. 1993); Unocal v. Mesa Petroleum, 493 A.2d 946 (1985).

[11] Revlon v. MacAndrews & Forbes Holdings, 506 A.2d 173, 184 (Del. 1986).

[12]QVC Network, 637 A.2d 34.

[13]Revlon, 506 A.2d 182, 185.

[14] 170 N.W. 668 (Mich. 1919).

[15]E.g.:In re Trados Inc. Shareholder Litigation, 73 A.3d 17, 37 (Del. Ch. 2013)(“In terms of the standard of conduct, the duty of loyalty therefore mandates that directors maximize the value of the corporation over the long-term for the benefit of the providers of equity capital, as warranted for an entity with perpetual life in which the residual claimants have locked in their investment.”); In re Trados Incorporated Shareholder Litigation, 2013 WL 4511262, at *1 Del Ch. (Aug. 16, 2013) (“Directors of a Delaware corporation owe fiduciary duties to the corporation and its stockholders which require that they strive prudently and in good faith to maximize the value of the corporation for the benefit of its residual claimants.”); In re Novell, Inc. Shareholder Litigation, 2013 WL 322560, at *7 Del Ch. (May 1, 2013) (“There is no single path that a board must follow in order to maximize stockholder value, but directors must follow a path of reasonableness which leads toward that end.”).

[16] 8 Del.C. §§ 101(b), 102(a)(3).

[17] Keith L. Johnson & Frank Jan De Graaf, Modernizing pension fund legal standards for the twenty-first century (quoting Chairman Alan Greenspan), in The Embedded Firm: Corporate Governance, Labor, and Finance Capitalism 459, 464 (Cynthia A. Williams & Peer Zumbansen eds. 2011).

[18] Some economists believe that today’s stock price is always an accurate measure of today’s best estimate of future value creation because it reflects the present value of all future cash flows. Inasmuch as this reflects an investor’s view, it is correct. However, a given instance of, say, earnings manipulation is almost by definition unknown to investors.

[19] Corporate law already allows this in the area of shareholder agreements that would otherwise impermissibly restrict the board’s management authority. E.g., 805 Ill. Comp. Stat. §§ 5/7.70-71; N.Y. Bus. Corp. Law § 620(b); Chapin v. Benwood Foundation, 402 A.2d 1205 (Del. Ch. 1979); Clark v. Dodge, 199 N.E. 641, 642 (1936).

[20] 8 Del.C. § 362(a).

Responses

For Shareholder Wealth Maximization, Against Corporate Purpose

In “The Future of Shareholder Wealth Maximization,” George Mocsary undertakes two important tasks. The first is to establish that, notwithstanding claims to the contrary advanced by some corporate law scholars,[1] the shareholder wealth maximization norm is and remains a bedrock principle of corporate law. The second is to establish that, on broadly libertarian grounds, the…

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Why the Corporation Is Not Merely a Nexus of Contracts: A Response to Alexei Marcoux

Professor Marcoux’s thoughtful reply to my essay serves as an important reminder that a corporation may accurately be described as a nexus of contracts. Notwithstanding its significant descriptive power, it is a framework that tends to be criticized along with agency theory and the Shareholder Wealth Maximization norm with which it is closely associated.[1] Marcoux…

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The Future of Shareholder Wealth Maximization: A Response to George Mocsary

In “The Future of Shareholder Wealth Maximization,” Prof. George Mocsary examines two questions: Does corporate law require a corporation’s board of directors to act to maximize shareholder wealth in order to fulfill its fiduciary duties; and if yes (as Prof. Mocsary interprets the cases), should it continue to do so? In this Response, I argue…

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Shareholder Wealth Maximization: A Response to Cynthia Williams

Prof. Cynthia Williams raises some of the standard arguments against the shareholder wealth maximization norm. Most of her arguments are addressed in my original essay,[1] and restating what is written there would not add to the conversation. On other points, which can be boiled down to problems with short-termism in its myriad manifestations, we obviously…

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Originalism and The Good Constitution: A Discussion

Originalism 2

Originalism—the view that the Constitution should be interpreted according to its original meaning—has been an important principle of constitutional interpretation since the early republic. Today this theory has prominent adherents on the Supreme Court in Justice Clarence Thomas and, at least in “faint-hearted” form, Justice Antonin Scalia. Heller v. District of Columbia recently featured both majority and dissenting opinions that were wholly originalist in style. Legal academics across the political spectrum espouse some version of originalism.

Nevertheless, originalism continues to be plagued by challenges, the most salient being how it is to be justified. But originalism is also confronted by many other fundamental questions. What is the precise nature of an originalist method of interpretation? Isn’t it wrong for the living to be governed by the dead hand of the past?

A more general sense of disquiet underlies these specific questions. Law in general, and constitutional law in particular, should be measured by its contribution to our current welfare. Originalism seems to be focused on the distant past rather than the present and, on its face, does not concern itself with desirable results. Thus, it seems vulnerable to the central claim of living constitutionalism—that constitutional interpretation should be guided by a modern vision of a good society.

In Originalism and the Good Constitution, we present a new normative defense of constitutional originalism that connects this interpretive method directly to the concept of a good constitution. We argue that originalism advances the welfare of the present-day citizens of the United States because it generates constitutional interpretations that are likely to have better consequences today than those of nonoriginalist theories. The benefits of ordinary legislation for society and the proper theory of its interpretation are routinely connected to the virtues of lawmaking by a democratic legislature. We likewise connect the benefits of a desirable constitution and the proper theory of constitutional interpretation to the virtues of the constitution-making process.

The Desirability of a Constitution Enacted Under Supermajority Rules

Although our argument for originalism has its complexities, its essence can be captured in three simple premises that lead to a conclusion favoring originalism. First, desirable constitutional provisions (or as we also call them, entrenched laws) should take priority over ordinary legislation because such entrenchments establish a structure of government that preserves democratic decision making, individual rights, and other beneficial goals. Second, appropriate supermajority rules are a sound method of producing desirable entrenchments and no superior method is available. Third, the Constitution and its amendments have been passed in the main under appropriate supermajority rules, and thus the norms entrenched in the Constitution tend to be desirable. From these premises, it follows that the desirability of the Constitution requires that judges interpret the document based on its original meaning because the drafters and ratifiers used that meaning in deciding whether to adopt the Constitution.

In short, it is the supermajoritarian genesis of the Constitution that explains both why the document is desirable and why that desirability requires that it be given its original meaning. While there is one significant way in which those supermajority rules were not appropriate–the exclusion of African Americans and women from voting for and serving as constitutional drafters and ratifiers—this defect has rightly been removed.

Note the structure of this defense of originalism. It defends the quality of constitutional provisions largely by reference to the likely consequences flowing from the process that created them. It avoids the Scylla of completely formal defenses of originalism and the Charybdis of completely contestable assertions of what constitutes goodness. It is also consistent with perhaps the most common defense of originalism: that it generally ties judges to rules. These rules consist of the interpretative rules of originalism itself as well as the substantive rules in the Constitution. But to the virtue of rule following, it adds the even more important virtue of following beneficial rules.

Our central argument for originalism is that it preserves the benefits of a desirable Constitution. Thus, like some other originalists, we premise our defense of the Constitution on its desirability. But unlike other defenses, we do not define desirability based simply on our own political philosophy. Instead, crucial to our defense of originalism are our arguments that a desirable constitution should reflect the views of a diverse society, that the best way to create a good constitution is through relatively stringent supermajority rules, and that the supermajoritarian procedures for enacting the US Constitution are largely the appropriate ones.

A key issue for our defense is the proposition that supermajority rules are the most desirable way of creating good constitutional provisions and, in particular, that they are better than majority rule. While majority rule is thought to generally produce ordinary legislation that is desirable, permitting a majority to entrench norms would be problematic. Entrenchments need to be bipartisan and to reflect consensus to create allegiance and stability, but majority rule does not generate such consensus and bipartisanship. Entrenchments, which are designed to endure, also need to reflect the long view and to protect minority rights. But majority rule neither promotes the deliberation needed for the long view, nor is conducive to protecting minority rights.

By contrast, the passage of entrenchments under appropriately stringent supermajority rule would compensate for majority rule’s defects in the entrenchment context and produce good entrenchments. Supermajority rules, for instance, directly address the need for consensus by permitting only norms with the support of a substantial consensus to be entrenched. Supermajority rules also dampen partisanship by making it less likely that entrenchments could be passed with the support of only one party. Wide support for a constitution helps to create legitimacy and allegiance for the nation’s fundamental law.

Supermajority rule also encourages a nation to make good long-term decisions about entrenchment by creating a veil of ignorance and improving deliberation. A strict supermajority rule (for both enactment and repeal of entrenchments) improves the quality of entrenchments by helping to create a limited veil of ignorance. Because provisions so entrenched under supermajority rules cannot be easily repealed in the future, citizens and legislators cannot be certain how the provisions will affect them and their children. Hence they are more likely to consult the interests of all future citizens—the public interest—to determine whether to support a provision. For example, because people will not know whether their party is more likely to control the legislature or the executive, they will allocate powers between them based on their view of the public interest. Citizens are also more likely to support minority rights because they cannot be certain whether they or their families will be in the majority or minority in the future.

After discussing the desirable process for constitution making, the book then shows that the enactment of the US Constitution largely tracked that process. The Constitution and its amendments were mostly products of the kind of stringent supermajority rules that generate beneficial entrenchments. Constitutional amendments must be approved by two-thirds of each house of Congress and ratified by three-quarters of state legislatures. The original Constitution was also a product of a double, if not triple, supermajoritarian process. Article VII expressly required nine of the thirteen states to ratify the Constitution before it took effect. Equally important, but less obvious, is that a supermajority of states also had to support the calling of the Philadelphia Convention and that the Constitution was endorsed by a very substantial proportion of the Convention’s delegates. It is these supermajority requirements that produced some of the most celebrated aspects of the American Constitution, such as the Bill of Rights and constitutional federalism. Both of these features might have been omitted had the new constitution merely had to secure a majority rather than a supermajority.

Originalist Interpretation

A last step to our argument is that beneficial judicial review requires a form of originalism. It was the meaning that the enactors believed the Constitution had—the original meaning—that defined the consensus that made the Constitution desirable. It was not the meaning favored by Richard Posner or Ronald Dworkin. Following a meaning that was not endorsed by the enactors would sever the Constitution from the process largely responsible for its beneficence.

Our description of the desirability of a constitution enacted by a supermajority not only helps to justify originalism, but also offers a critique of other interpretive theories, such as living constitutionalism, that give the Supreme Court substantial authority to generate constitutional norms. A comparison of constitutional lawmaking with case-by-case Supreme Court norm creation reveals what is wrong with such Supreme Court-centered theories. First, only a very small number of justices generate norms through their decisions, but desirable constitutional lawmaking requires the broader participation of many. Second, the Supreme Court is drawn from a very narrow class of society: elite lawyers who then work in Washington. In contrast, supermajoritarian constitutional lawmaking enables participation by diverse citizens with a wide variety of attachments and interests. Constitutional lawmaking should be supermajoritarian, while the Supreme Court rules by majority vote. Perhaps worst of all, Supreme Court updating of the Constitution preempts the amendment process and redirects political energy from the rich deliberative process of constitution making that the supermajoritarian amendment procedure affords.

Our justification for originalism also dictates its methodology. The constitutional enactors voted to ratify the document based on their understanding of the text and how they believed it would be interpreted by subsequent generations. Thus, modern courts should interpret the Constitution using the same interpretive methods that the enactors would have used—a process we call original methods originalism. The normative reason for interpreting the Constitution using the methods the enactors would have employed is that the meanings these methods generate were used to evaluate the constitutional provisions and thus were crucial to obtaining the consensus that made the Constitution good.

This argument for the original methods approach is of major importance to originalism because it shows that the original interpretive rules are integral to originalism. Discarding these rules severs the connection between the document that existing judges implement and the document passed by a consensus of past enactors. To embrace originalism without embracing the enactors’ interpretive rules is like trying to decode a message using a different code than the authors of the message employed.

Original methods originalism also bears on a contemporary debate among originalists—the question of whether construction is a legitimate part of originalism. Adherence to the theory of construction is a central part of what is sometimes called the new originalism, but which we believe is better termed constructionist originalism. Constructionist originalists believe that original meaning controls the interpretation of provisions that are not ambiguous or vague, but that constitutional construction provides judges and other political actors with discretion to resolve ambiguity and vagueness based on values not derived from the Constitution. Under our view, construction based on extraconstitutional values would be legitimate only if the original interpretive rules endorsed construction. But we find no substantial support for constitutional construction, as opposed to constitutional interpretation, at the time of the Framing or even at the time of subsequent amendments. Rather, the evidence suggests that ambiguity and vagueness were resolved by the enactors and their generation by considering evidence of history, structure, purpose, and intent.

Dissolving the Dead Hand Through the Equality of Generations

Our supermajoritarian theory also provides an answer to the complaint that, under originalism, the dead hand of the past rules the present. We argue that each generation largely has equal formal authority to entrench its political principles into the Constitution. The original Constitution came into being through stringent supermajority rules, and each generation can amend the Constitution through similar, although not exactly the same, rules. Thus, the Constitution is not ruled by a dead hand but instead by a generationally fair procedure that allows a consensus of any generation to enact provisions. The formal equality of the generations means that the constitutional amendment process is essential to a desirable constitution and to a normatively attractive originalism.

But one of the main contributions of the book is to show that there also can be no effective amendment process without originalism. Without originalism, constitutional change can occur through other means. As a result groups will transform the Constitution without amending it—by, for instance having justices appointed who will revise the Constitution to reflect their own values. Such alternatives ultimately eviscerate the amendment process. For example, the New Deal produced no constitutional amendments despite its enormous popularity because the Supreme Court revised the Constitution and made such amendments unnecessary.

Proper constitutional interpretation and a vigorous constitutional politics thus march under a single banner: no originalism without the amendment process and no vigorous amendment process without originalism. We the People of each generation can effectively contribute to our fundamental law, only if We the Elite Lawyers do not usurp that process by continually changing the Constitution in the supposed name of the People.

The Exclusion of Blacks and Women

Our theory also responds to the complaint that the exclusion of African Americans and women from much of the constitution-making process undermines the case for originalism. While we ultimately reject this critique, we believe it is the most serious of all criticisms of originalism. Thus, it is all the more surprising that no previous defense of originalism has seriously grappled with it.

In fact, it is our explanation of the characteristics of a good constitution that underscores the potential power of this critique. The exclusion of African Americans and women goes to the heart of how supermajority rules produce a good constitution. The constitutional enactment process depends for its desirability on representation of the entire population. Supermajority rules have the virtue of creating consensus solutions, but if a class of voters are excluded from the process, their absence casts doubt on the existence of a consensus. The supermajoritarian process is supposed to help protect minorities, but it has difficulty doing so if those minorities cannot participate.

We develop a theory of supermajoritarian failure to address this issue. The mere existence of a flaw in the supermajoritarian process does not necessarily mean that originalism is not the best interpretive rule, any more than the mere existence of a market failure means that government regulation is superior to the market outcome. Interpretive theory has too long been under the grip of a nirvana fallacy.

One must instead examine the costs and benefits of following originalism with the other alternatives in light of the failure. There are three conceivable responses to supermajoritarian failure. First, one can dispense with the existing constitution and attempt to establish a new one. Second, one can simply apply the original meaning of the imperfect constitution, even though it has defects. Third, one can purport to apply the imperfect constitution, but then selectively depart from that constitution in an effort to correct it, such as when judges depart from the original meaning through interpretation.

We compare these three alternatives. Dispensing with our existing constitution is a drastic alternative that is not justified for the United States because any defects inthe US Constitution due to the previous exclusion of blacks and women are less costly than the burden of dispensing with the document and attempting to create one of greater desirability. Very few scholars or politicians have ever argued for such a solution. Correcting these failures through judicial interpretation is also generally problematic because such judicial correction requires substantial discretionary decisions that have the potential to unravel a constitution. Justifying such correction would require very significant defects.

Happily, subsequent generations have, through the amendment process, corrected the most obvious and worst consequences of the exclusion of African Americans and women. The original supermajoritarian failure has been followed by supermajoritarian corrections in the form of the Thirteenth, Fourteenth, Fifteenth, and Nineteenth Amendments. In light of these corrections, we argue that further judicial correction has more costs than benefits. Originalism remains the best theory of constitutional interpretation for our supermajoritarian constitution.

The test of a compelling theory of originalism is whether it meets the salient objections that have accumulated to this venerable theory over many years of disputation. We believe our theory meets these objections better than others through its focus on the good consequences of following a good constitution produced by a good constitution-making procedure.

Responses

Originalism: A Necessary Tool But Not a Constitutional Panacea

In their short contribution to this issue, “Originalism and the Good Constitution” John McGinnis and Michael Rappaport link together two conceptions that I think should be kept forever separate. As their provocative title suggests, they claim that the path to a good Constitution, capital C, lies through originalism. The central point in their argument is…

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Supermajoritarian Originalism

John O. McGinnis and Michael B. Rappaport’s essay, “Originalism and the Good Constitution,” is a précis of their book with the same title, published on October 7 of this year by Harvard University Press.[1] What follows is a commentary on this essay, not the book. McGinnis and Rappaport defend what they call “original methods originalism,” because…

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Original Methods Originalism Best Defends the Classical Liberal Constitution: A Response to Epstein

We are grateful to Richard Epstein for taking the time to reply, but are disappointed that he attributes to us positions we do not hold, indeed ones that are the reverse of our positions. We will first clear up some mistaken attributions and then consider in a spirit of engagement what might be a real…

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The Good Constitution and The Sixteenth and Seventeeth Amendments: A Reply to Rossum

We are very grateful to Ralph Rossum for his generous response. In particular, he is very kind to note that our “arguments are interesting, powerful, intelligent, and . . . original.” We also appreciate his emphasis on the power of the syllogistic nature of our argument for originalism. Rossum’s principal concerns center on the adequacy of…

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