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Thursday, July 1, 2010

Federalism Means Carte Blanche for States?

The Constitution Limits States' Power, Too

Federalism is an important concept in the political structure of the United States—or at least it is supposed to be. Under the Constitution the national (or as it is now almost invariably called, federal) government was given certain responsibilities. Beyond those limited functions the federal government was not to go. The Tenth Amendment makes the plan for a division of governmental authority clear: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

Under that plan, the state governments are less restricted than is the federal, but they still must abide by constitutional limits on their power. No state may, for example, enter into a treaty with a foreign government, make anything but gold or silver coin legal tender, or pass any law impairing the obligation of contracts. Those (and other) restrictions on the states were written into Article I, Section 10. The ratification of the Fourteenth Amendment in 1868 further circumscribed the authority of the states with this language: “No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

Since the 1930s, the idea of federalism has been kicked around like an old can. Congress has passed statutes that undoubtedly trespass far into terrain denied to it under the Tenth Amendment, and through executive orders, presidents have exercised power that they were never meant to have. Those developments were, however, cheered by “liberals,” who scoffed at the idea of limitations on the powers of Congress and the presidency to do good. When arguments rooted in federalism were raised against such unconstitutional legislation as the National Labor Relations Act or Medicare, “liberals” hastily brushed them aside, saying that progress demanded that Congress and the president have sweeping authority.

Now that the old “liberal” coalition no longer holds sway in Washington, we find that its adherents are having second thoughts about the merits of federalism. Writing in the December 7, 2003, issue of the New York Times, Adam Cohen attempts to argue that federalism and progressivism are really allies. He does so by placing on a marble pedestal a dissenting opinion by one of the Supreme Court justices most revered by “liberals,” Louis Brandeis. Cohen’s article, “Brandeis’s Views on States’ Rights, and Ice-Making, Have New Relevance,” centers on the 1932 case New State Ice Co. v. Liebmann.

The facts of the case: Oklahoma’s legislature had enacted a law that prohibited any person from entering the ice-making business unless he had a certificate from a state commission. Existing ice-making businesses were “grandfathered” in, thus creating a cozy cartel for them. Liebmann had purchased land in Oklahoma City and invested a large amount of money in a new ice business, but when he began selling ice without the required certificate, one of the existing firms sued to stop him.

What the court record does not say, but which anyone familiar with state legislatures would understand, is that this statute was promoted by ice-making firms eager to stifle competition. Since medieval times, producer guilds have sought legal favors from governments that would prevent or restrict competition. The rhetoric for such favors, at least in democratic governments, is always couched in “public interest” terms, but such window-dressing should fool no one.

It didn’t fool the Court’s majority, which saw the Oklahoma law as unjustifiably infringing on Liebmann’s liberty. In Justice George Sutherland’s opinion, the statute merely secured though legislation an objective that the producers could not obtain voluntarily—cartelization. The statute was unconstitutional, Sutherland wrote, because “[t]here are certain essentials of liberty with which the state is not entitled to dispense in the interest of experiments. . . . The opportunity to apply one’s labor and skill in an ordinary occupation . . . is no less entitled to protection [than freedom of the press].”

The Brandeis Dissent

Brandeis, however, dissented. He argued that the Depression had brought about an emergency, calling for experimentation by government. Perhaps, he argued, Oklahoma’s scheme would eliminate “unnecessary duplication of facilities,” thereby improving economic conditions somehow. The freedom of people to enter into a lawful business was of no significance to Brandeis, and his willingness to accept Oklahoma’s rationale for the suppression of economic liberty stands in stark contrast to his famous skepticism over governmental claims of the need to regulate speech or invade citizen privacy in other cases.

Cohen extols Brandeis’s view that (in Cohen’s words) “government has an affirmative duty to seek out new approaches to the problems of society.” He presents Brandeis’s New State Ice dissent as a pathway to a rebirth of federalism, allowing states to experiment with “solutions to social problems,” such as e-mail spam. (Congress has written into its anti-spam legislation language designed to pre-empt the states from passing their own laws.)

I’m glad to hear “liberals” talking about federalism, but to jurists with the philosophy of Brandeis and writers like Cohen, federalism doesn’t mean undoing decades of unconstitutional “progressive” legislation that to a great extent shackles Americans to the authoritarian notions of Washington politicians and bureaucrats. It is merely another avenue for statists to impose their will on the populace. Just as Brandeis naïvely believed that Oklahoma’s cartelization of the icemaking business might improve the state’s depressed economy, so do contemporary “liberals” believe that state politicians will manage to solve problems that now plague us, such as unwanted communications or corporate mismanagement. The legislation they favor almost never entails the repeal of existing laws that get in the way of the ability of free people to find solutions to problems. Instead, they dream up new laws that further encroach on the freedom that the Constitution is supposed to protect.

Professing to be concerned about federalism without taking seriously the Constitution’s limits on governmental power—both federal and state—is disingenuous. Yes, the federal government has usurped power it was not intended to have, but it does not follow that state governments should be given carte blanche to engage in legislative experiments that deprive people like Liebmann of the essential of liberty.

If someone advocated a state law that experimented with, say, a mandatory state religion, there would, quite appropriately, be gasps of horror. Yet when “liberals” propose laws that compel employers to provide workers with paid leave or comprehensive medical insurance, there are no protests from their camp. Like Brandeis in 1932, they regard economic freedom and property rights as worthy of no constitutional protection.

Justice Brandeis’s dissent in New State Ice was not visionary. It was absurd, and had his “federalist” view prevailed, there would have been less freedom in Oklahoma and higher prices for ice. If you’re serious about constitutional doctrines like federalism, you also have to take seriously the idea that people and their property are not mere pawns in a great political chess game.

  • George Leef is the former book review editor of The Freeman. He is director of research at the John W. Pope Center for Higher Education Policy.