Our Property Principle

Richard Epstein

Last December, my book, The Classical Liberal Constitution was published. In it, I argue that a sound interpretation of the Constitution requires reading its key provisions in light of the comprehensive classical liberal theory that animated their introduction. Constitutional law does not evolve in a self-contained universe, but is embedded in the intellectual tradition of private property and limited government. It is therefore deeply problematic to begin constitutional interpretation with either some preconceived notion of judicial restraint or the equally misguided belief that the justices are handmaidens to some “living constitution.”

How Modern Constitutional Law Falls Short

The classical liberal vision is out of vogue with the prominent strands of modern constitutional thought. Much of this disfavor rests in the implicit assumption that no coherent form of “cosmic constitutional theory” can be drawn from the document with the classic liberal approach. Thus Professor Robert Nagel criticizes my book in National Review for failing to show that classical liberal theory indeed animated the document or is strong enough to decide key cases under it. In so doing, he cites with approval Judge J. Harvey Wilkinson, whose well known-book Cosmic Constitutional Theory, eschews grand theory in favor of the constitutional minimalism of Edmund Burke. Wilkinson in particular takes to task the living constitutionalists like the late Justice William Brennan who insisted that “it is arrogant to pretend that from our vantage we can gauge accurately the intent of the Framers on application of principle to specific, contemporary questions,” in light of the “sparse or ambiguous evidence of the original intention.”

Ironically, it is thinkers like Wilkinson who give living constitutionalists like Brennan the cover they need to work their will. And all too often, the result is not “judicial hegemony” that deprives people of their capacity for self-governance, but judicial deference that allows political majorities to run roughshod over political minorities in the name of the living constitution.

Of course, everyone should be against cosmic theories that start nowhere and go nowhere. But it is a much more corrosive hypothesis to assume that all theories have that result. The Constitution is a complex document that gives powers to the legislature and the executive, but also empowers the courts to protect individual rights from encroachments by those branches. The difficulty in all cases is to get that balance right. On this point, Wilkinson’s refusal to adopt an explicit constitutional theory is not a sign of strength; it is an open invitation to expand government, to trample individual rights, to weaken a system of limited government, and to spur American decline. The illustration discussed below shows just how far both Wilkinson and Nagel have departed from an adequate approach to constitutional decisionmaking.

Constitutional Ad Hockery on Private Property

Private property is the central institution of classical liberal theory. The Constitution contains the explicit guarantee of the Fifth Amendment, which provides: “nor shall private property be taken for public use, without just compensation.” It is easy to discern the theory behind this provision. It compromises between an absolutist libertarian vision of private property that holds that the state can never take it from its owner, even with full compensation, and the totalitarian vision that routinely allows the government to take private property for public use without paying any compensation at all. The just compensation requirement splits the difference, letting the government force the transfer of property, but only upon payment of just compensation. The state thus avoids the holdout problem, without creating the alternative risk of expropriation.

This elegant compromise can, however, be eviscerated if read in ignorance of the legal theory on which it rests. Just such an evisceration was perpetrated by Justice Brennan, whose inexcusable ad hockery trampled over private property rights on more than one occasion. Any developed system of private property facilitates enormous gains from trade among individuals by allowing the division of property into its constituent parts. Thus, outright ownership can be divided between a landlord and tenant or a mortgagor and mortgagee. It can also be divided between the holder of air rights (with an easement of support) and ground rights. That division was at stake in the most important takings case of the last half-century, Penn Central Transportation Co. v. City of New York (1978). Justice Brennan’s landmark decision was virulently anti-theoretical and has severely undermined the constitutional protection of private property.   

To see why, it is necessary to start with the 1960 decision of Armstrong v. United States,which also involved divided interests. This prosaic dispute asked whether a subcontractor who did work on a naval vessel in Maine waters was entitled to place a materialman’s lien on the property when his general contractor failed to pay for the services. The government dissolved the lien by taking the vessel out of Maine waters. The standard common law theories of unjust enrichment made it clear that the general owner should not be allowed to get the benefit of the subcontractor’s work for nothing. To protect him against double payment, it was possible for the general contractor to demand a lien waiver from the subcontractor before making payment to the general contractor. But failing that, the creation of the subcontractor’s lien should have been upheld.

In affirming this standard practice, Justice Hugo Black was well aware of the odd state of affairs that would arise if this lonely materialman had to bear a huge fraction of the cost of maintaining a naval vessel used for the defense of a nation. Black’s final sentence shaped the nature of the inquiry: “The Fifth Amendment's guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Note that this provision gains its strength precisely because it purports to rest on the powerful proposition that public goods should be paid for by the public at large, and not by the persons who under contract provide for those services. Professor Nagel, Judge Wilkinson, and Justice Brennan are all too skeptical of the classical liberalism’s ability to create general theories.

More concretely, Justice Brennan’s inability to see how classical principles apply to modern problems led him to overextend Armstrong’s reasoning and make calamitous miscalculations in Penn Central. To be sure, that case does involve a novel social problem embodied in a landmark preservation statute, about which none of the Framers had any views at all. But it hardly follows that it is impossible to apply general principles from a case about a materialman’s liens to one about air rights, which were, after all, also well-recognized property interests under New York law. Had Brennan done so, the correct outcome would have been clear: If the City of New York wants those air rights in order to provide a classic public good—views for its citizens up Park Avenue—then the public must pay for the privilege. There is not one constitutional theory for liens and another for air rights.

But Justice Brennan derailed that sensible result by turning Armstrong inside out. He wrongly insisted that “this Court, quite simply, has been unable to develop any ‘set formula’ for determining when ‘justice and fairness’ require that economic injuries caused by public action be compensated by the government, rather than remain disproportionately concentrated on a few persons.” In consequence, he deferred to the use of “essentially ad hoc factual inquiries” of the sort that Judge Wilkinson defends, only to twist the constitutional text beyond recognition by insisting that one key inquiry is whether the law interferes with “investment-backed expectations” of the property owner—a largely useless term that has no textual warrant whatsoever. Brennan then junked a thousand of years of Anglo-American property law, when he claimed that the proper unit of analysis is the “parcel as a whole,” and concluded that there is no compensation for the air rights taken because of the ground rights that were retained. Penn Central thus severed the constitutional law of property from the common law of property, and the scads of incoherent decisions under that rubric are testimony to the foolishness of the decision.

All of these errors rest on Brennan’s incorrect understanding of constitutional originalism. He assumed that originalism requires the judge to find some specific text of the Framers that addresses the precise legislative scheme in question. But the correct view only seeks to situate the new government scheme within the fundamental structure of property as it was articulated at the time. That scheme of course included the recognition and protection of partial interests in land.

Progressivism and Faction

To this day, we pay a heavy price for Justice Brennan’s anti-theoretical mindset. Brennan clearly chose the wrong benchmark for property rights because he supported the grand progressive tradition of letting governments manage communities as they see fit. But, like Justice Wilkinson after him, he missed the major perils of this worldview—dangers that James Madison grasped in addressing the dangers of faction in Federalist No. 10. The greatest of these dangers is that the majoritarian politics championed by both Brennan and Wilkinson allow strong majorities to confiscate the property of an isolated minority. It was for just that reason that the Framers advocated a republican form of government, in contrast to a democratic one, whose complex voting rules were intended to make it more difficult for majorities to always have their way.

Today, with weak property rights protection, the dangerous dynamic of majoritarian politics can engulf all government actions. In the absence of a strong just compensation requirement, nothing ensures that government takings, even when done for public use, will be worth more to the public at large than to its private owners. Protecting private property does not stand in opposition to the welfare of the community at large, but is thoroughly consistent with it. For example, forcing New York City to put the cost of landmark preservation “on budget” improves the political process by forcing a more candid deliberation of relative costs and benefits. It is the failure to incorporate this check on deliberation that has contributed so much to economic stagnation in New York City and the nation. The City thus labors under the massive misallocations caused by rent stabilization because it refuses to put on budget the losses incurred by landlords from tenants who can force the renewal of their leases at below market rates. It is just this unwillingness to respect financial liens that accounts for the deplorable conduct of the federal government in the continuing scandal over the expropriation of the private shareholders of Fannie and Freddie.

It is not the case that judicial quiescence can return Americans to “Their Inalienable Right to Self-Governance,” to use Wilkinson’s evocative term. What is needed is not the mischief of collective self-governance, but the inalienable right of individual self-governance. The failure to police the line between the private and public space has led to the degeneration of the political debate and the massive destruction of private wealth. It is truly tragic that scholars like Robert Nagel are so uninformed to write that “analytical methods of classical liberalism are . . . often not powerful enough to legitimate authoritative settlement of contested issues.” The truth is that they are not powerful, as they stand. It is just that modern democratic collectivists of all sorts will never master their constitutional theory unless they first learn from the bottom-up how the institutions of private law operate. Unfortunately, this is a lesson that the current crop of constitutional theorists, both conservative and progressive, studiously refuses to learn. 

In Defense of the Classical Liberal Constitution

Richard Epstein

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

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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.

The Journal of Law & Liberty Annual Symposium: "The Classical Liberal Constitution"

On behalf of The Classical Liberal Institute and the New York University Journal of Law & Liberty, we invite you to today's symposium at New York University School of Law. The topic of the conference will be Professor Richard Epstein’s new book The Classical Liberal Constitution: The Uncertain Quest for Limited Government.

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The conference will bring together legal scholars from around the country to analyze and debate Professor Epstein’s The Classical Liberal Constitution. Professor Epstein employs close textual reading, historical analysis, and political and economic theory to urge a return to the classical liberal theory of governance that animated the framers’ original text, and to the limited government this theory supports. Grounded in the thought of Locke, Hume, Madison, and other Enlightenment figures, the classical liberal tradition emphasized federalism, restricted government, separation of powers, property rights, and economic liberties. 

The conference begins at 9:30AM with Opening Remarks by Dean Trevor Morrison and an Introduction by Professor Mario Rizzo. 

Following the Introduction, there will be three panels, each focusing on a different aspect of the book:

1. Constitutional Structure, 10:00 AM: This panel will evaluate the structural aspects of the classical liberal constitution, including the roles of each branch of the federal government, separation of powers, and federalism. Professor Epstein defends the traditional view of separation of powers at the federal level, which cuts against the progressive effort to build administrative agencies into the basic system. He also defends on both structural and textual grounds the pre-1937 view of limited commerce and taxing powers against the progressive position that envisions a broad role for government in both these areas.

Moderator: Professor Troy McKenzie (NYU Law)

Panelists: Michael Greve (George Mason Law), Richard Pildes (NYU Law), Richard Wagner (George Mason University), and John Yoo (Berkeley Law)

2. Individual Rights, 1:15 PM: This panel will evaluate the classical liberal constitution’s theory of individual rights–including property, liberty, contract, speech, religion, and equal protection. On these issues, Professor Epstein argues that the interpretive principles set out above tend to argue for the protection of broad rights which in turn are subject to major public justifications that are often encapsulated in the traditional notion of the police power. That uniform position is then contrasted with the modern two-tier progressive structure that tends to follow this approach with preferred freedom and suspect classification but ignores it in connection with traditional property, contract, and, in some cases, procedural protection.

Moderator: Christopher Sprigman (NYU Law)

Panelists: Daryl Levinson (NYU Law), Deborah Malamud (NYU Law), Thomas Merrill (Columbia Law), and Ilya Somin (George Mason Law)

3. Constitutional Methodology, 3:15 PM: This panel will evaluate Professor Epstein’s theory of constitutional interpretation, which starts from a textualist position that it modifies in two ways. The first involves applying general principles to deal with non-textual issues of circumvention, justification, and remedy. Second, he discusses when the prescriptive
constitution (based on long practice) leads to a departure from the original text. That interpretive background is then applied to the major conceptual shifts from the classical liberal constitution that he defends and the modern progressive world view that he attacks.

Moderator: TBA

Panelists: Barry Friedman(NYU Law), Gary Lawson (Boston University Law), Michael Rappaport (San Diego University Law), Nicholas Rosenkranz (Georgetown Law), and Adam Samaha (NYU Law)

At 11:45 AM and 5:00 PM, Professor Richard Epstein will give  remarks responding to the day's panels.   

Please RSVP

We hope you will be able to join us today.

The Classical Liberal Constitution

Richard Epstein

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This coming week, Harvard University Press will publish my new book, The Classical Liberal Constitution: The Uncertain Quest for Limited Government. This 700-page volume took me over seven years to complete, and it offers a distinctive third approach to constitutional law that helps explain why the current Supreme Court’s conceptual framework is in a state of serious intellectual disrepair on many, but by no means all, issues.

Conventional wisdom divides constitutional judges and scholars into two warring camps: conservative and progressive. The classical liberal offers a third point of view, by explaining how our Constitution secures a system of strong property rights and limited government. It does so by rejecting the deep antitheoretical strand that often guides both conservative and progressive thought, and leads both groups—for somewhat different reasons—to support a highly deferential, if misnamed, “rational basis” test to assess the constitutionality of congressional and legislative action.

The Lochner Syndrome

Conservative thinkers often start their constitutional analysis with neither text nor structure, but with their own view of the proper role of the Supreme Court in a democratic society. In their view, the essential choices about the social and economic structure properly belong to the political branches of government at both the federal and state level.

The view holds that the judiciary should override statutes and executive actions only in exceptional cases. They think no judge should translate his policy objections to particular laws into constitutional terms. Thus, in The Tempting of America, Robert Bork called the Supreme Court’s 1905 decision in Lochner v. New York—which by a five-to-four vote declared New York’s controversial maximum-hours law unconstitutional—an “abomination” that “lives in the law as the symbol, indeed the quintessence of judicial usurpation of power.”

Unlike conservatives, progressives defend these laws. But their judicial attitude is driven by the same skepticism about judicial intervention in economic matters. That is the message of Justice Oliver Wendell Holmes’ famousLochner dissent: “a constitution is not intended to embody a particular economic theory, whether of paternalism and the organic relation of the citizen to the State or of laissez faire.

So it is that two giants at the opposite ends of the political spectrum make the identical mistake: Neither thinks that it is possible to map onto the U.S. Constitution a substantive theory of government. Holmes makes that mistake when he talks about “a constitution” when the proper frame of reference should be the United States Constitution. Bork decries Lochner as “judicial usurpation” because he denies that there can be an independent textual or structural basis for striking down any economic regulation, no matter how misguided it may be.

What is perverse about both positions is that a constitution (indeed any constitution) is adopted precisely to establish some permanent framework in which laws can be made and validated. An ancient constitution could follow Justinian’s maxim “quod principi placuit legis vigorem habet,” which states, “that which is pleasing unto the prince has the force of law.” However, the U.S. Constitution explicitly rejects this approach by adopting all sorts of measures intended to diffuse the power of public officials: in part through federalism, in part through the division of government power into the Congress, the President and the Courts. These structural protections are augmented by a broad catalogue of individual rights, which checks both federal and the state power. Judicial usurpation is, to be sure, one sin. But to read these broad protections narrowly is the inverse mistake of judicial abnegation.

As applied to Lochner’s maximum hour law, the legislature should be required to justify exactly why, in a free society, it has the right to make a judgment about how many hours individuals should work and under what conditions. That point may not be absolute, but by the same token, ordinary liberty does carry with it the presumptive right to choose employment of one’s choice, with narrow exceptions for military service and jury duty.

Otherwise, surely under our Constitution, no state could order its citizens to accept certain jobs against their will. The same principle against governmental interference with individual liberty also is at work when government seeks to stop people from working in a job of their own choosing. If A uses force to prevent B from working for C, he commits the tort of interference with advantageous relations, and can be enjoined from that behavior. Put government in the role of A, and it is in exactly the same position.

The Police Power Exception

Of course, government prohibits people from engaging in criminal activity and taking advantage of the helpless. Indeed, both of those long-standing social norms have become embedded in the police power, under which federal and state governments may regulate individual activity to protect, as the phrase goes, “the safety, health, morals and general welfare” of the public at large. Inclusive as this list may seem, it does not negate key constitutional guarantees. In particular, the police power rationale does not let government pass overtly paternalist legislation on the one hand or overtly anticompetitive legislation (as in Lochner) on the other.

It is here that the underlying substantive vision matters. Under the classical liberal constitution, maintaining a free and open market for both capital and labor is an essential government function, which resonates in the explicit guarantees with respect to contract, private property, and the freedom of speech and the press. These apparently disparate guarantees are all linked together by the common sentiment that the state must show a serious justification before it can limit their exercise. The class of justifications is not open-ended, and it never includes the anticompetitive and protectionist legislation that is routinely sustained based on a supposed need to correct abuses of the market that are unrelated to duress, fraud, and monopoly.

More specifically, the proper scope of the police power is tied to the two reasons that lead people to join a political compact in the first place. The first reason is to control the use of force and fraud. The second is to allow state taxation and coercion to facilitate gainful interactions among individuals who are unable by themselves to create the much needed public goods—including defending against foreign threats, maintaining domestic order at home, and providing the common infrastructure of roads and other public facilities—because of insuperable transaction costs. The simple but powerful notion that justifies these coercive actions is that all individuals receive just compensation from the state for their tax dollars in the form of a higher level of personal security and economic prosperity.

Making This Work

The willful suppression of private competition does not come within a country mile of serving these objectives. Instead, misguided legislation often spends public dollars to make all private citizens worse off than they would otherwise be, which is not the case when the sensible enforcement of the antitrust laws controls cartels and other anticompetitive activities.

It is just this basic pattern that explains the greatest successes of our constitutional order. When the justices escape their habitual skepticism about the power of legal theory, they can work wonders by making those key judgments needed to implement the classical liberal constitution. When the justices care about outcomes, they become classical liberals in spite of themselves. Here are two examples.

The First Amendment states that that Congress “shall make no law abridging the freedom of speech.” But it is possible to bring this abstraction down to earth in a way that is consistent with the general constitutional plan. The first point to note is that freedom of speech has to be read broadly to cover, as it does, all forms of expression. No devotee of judicial restraint could think that the First Amendment protects the words spoken in a play but not the gestures of the actors. Yet at the same time, no notion of textual literalism could defend the proposition that the protection of freedom of speech allows individuals to foment riots, to cheat their customers, or to organize cartels.

Now the classical liberal account of wrongful conduct shapes the police power exceptions to the basic constitutional guarantee. Yet by the same token, the Court has increasingly recognized that it is an indefensible stretch to think that this conception of the police power sustains the campaign finance laws, like McCain/Feingold, which limit corporate speech and thus thwart the active political competition they should advance.

Progressives may like this legislation, and some (but by no means all) conservatives may tolerate it. But under a classical liberal constitution, the only proper way to limit political contributions is to enforce the constitutional limitations on government power. Once the scope of government is so limited, individuals and groups no longer have any incentive to lobby governments for benefits that they can no longer dole out free of constitutional restraint.

The identical classical liberal argument applies with equal force to structural issues. As a textual matter, the Constitution gives Congress the power “to regulate commerce among the several states.” It does not in so many words restrict the power of the state to act when Congress does not. But from the early nineteenth century on, courts have developed a Dormant Commerce Clause jurisprudence that has worked wonders in preserving an internal common market for goods and services within the United States.

But why did it succeed? Because the justices, both conservative and liberal, tasked with constitutional enforcement, have always been keenly aware of the dangers that state barriers pose to domestic trade and national prosperity. Far from deferring to anyone, they have taken the task of constitutional design seriously and have adopted the classical liberal presumption of distrust to trade barriers, which are now subject to narrow police power justifications.

Any state, under the watchful eye of the Court, may keep out various kinds of animals and materials that pose a serious danger to the health and safety of the citizens. But they reverse field on Lochner because they now rigorously enforce the line between health and safety regulation on the one hand and anticompetitive legislation on the other. They don’t take refuge in the weak rational basis test to let state governments do as they please, but root out anticompetitive laws (like many maximum hour laws) masquerading as safety regulations.

Getting the Court Back Into the Game

The bottom line here is that the same mindset that works for individual rights works for understanding of the structural constitution. In both areas the result of energetic government, or what Clark Neily calls “judicial engagement,” pays handsome and enduring public dividends. The principles embodied in the classical liberal constitution are not those that work only in this or that era. They are principles for the ages, which is why they deserve to be embedded in constitutional jurisprudence. Yet all too often, these basic principles are rejected for ephemeral concerns that undermine our constitutional well-being.

It is not possible in this short essay to go through the many permutations on this common theme that are developed at length in my book Classical Liberal Constitution. But it is imperative to remember that eternal vigilance is indeed the price of liberty. When our Supreme Court drops its guard and defers to the federal government on matters of taxation and regulation, we end up with a huge government that saps the energy of a nation and gives us the tragedy that is Obamacare.

The Court’s progressives uphold these laws because they believe in their efficacy, even though labor unions and agricultural cartels always work against the long-term aggregate interests of the community. For their part, conservatives often practice a narrow and misguided originalism that ignores the foundational economic principles that lend coherence to the Constitution as a whole. The classical liberal approach does neither. It rejects both the judicial restraint of the conservatives and the economic naiveté of the progressives, and in so doing supplies the only blueprint for judicial action that can help lift this nation from its current malaise. We pay a high price for straying from first principles.