Liberty Corner’s Thomas Anger has some long and thoughtful comments on my recent posts regarding racial discrimination. But I fear that my point has been taken a bit more strongly than I intended. For instance:
if I’ve followed Sandefur’s reasoning correctly, it seems to be this:
1. A collective agreement amounts to state action.
2. The state cannot act to deny an explicit constitutional right or any other fundamental right, say, the right to engage in commerce.
3. Therefore, the widespread refusal of whites to refuse to engage in commerce with blacks is an unlawful state action.
The linchpin of Sandefur’s argument is his conflation of collective agreements and state action, a conflation that he traces to Frederick Douglass.
First, I’m not trying to make an “argument,” since I’ve tried to make clear that I don’t really know what I think on this issue. My only point is that I’m troubled by the too-easy distinction between state-action discrimination (bad) and everyone-in-society-agreeing-privately discrimination (perfectly okay). One reason I am troubled by that is because I think if everyone in society agrees to something, the distinction between that and state action becomes illusory, as illustrated well by the White Primary case I mentioned. So there’s no “argument” nor a linchpin—just a qualm, and Anger has done nothing to ease my concern.
Second, Douglass’ comments about state action come in his reaction to the Civil Rights Cases. In his lone dissent in that case, Justice Harlan pointed out that the 13th Amendment bans slavery, in addition to involuntary servitude. Thus slavery must be more than just involuntary servitude—indeed, slavery is not state action. Many slaveowners prior to the war pointed out that there just weren’t any laws that created slavery. It was closer to everyone-in-society-agreeing-privately discrimination than it was to state-action discrimination. Thus, Harlan reasoned, the social institution of slavery could be combated by the 13th Amendment—not just state-run discrimination. I’m quite fond of this argument.
Now, Anger goes on to say
1….[T]he state arises out a collective agreement of its citizens…
2. [T]he collective agreement…doesn’t give the state unlimited power…. In fact it specifically limits the state’s power of action. The citizens of the state may—and do—withhold certain powers from the state, for the private exercise of citizens.
3. Therefore, regardless of how many citizens agree on a particular subject, that agreement is not tantamount to state action if the subject lies outside the power granted the state….
(Number 2 gives us some trouble. First, it is true that the social compact doesn’t give the state unlimited power, but we ought to carefully distinguish between the moral and the constitutional limits on the state. The social compact is only limited by moral constraints—that is, the people may write any social compact they wish so long as it gives the state no power that exceeds their moral authority. Constitutional limits then come on top of those limits. It is in the realm of Constitutional limits that the people withhold powers from the state for the private exercise of citizens (or to vest those powers in a different sovereign). At the level of moral limits on the social compact, the people do not withhold powers for their own private exercise, because they have no right to exercise those powers which are withheld. In other words, the people in forming the social compact are limited only by moral constraints—they can’t steal, can’t murder, and can’t make a government that does these things. They don’t withhold these powers for their own private exercise. These are beside the point here, but I think it important enough to keep this distinction in mind that I thought I’d mention it.)
The operative part of this syllogism seems actually to be cabined in the last half of the sentence under number 3: if the subject lies outside the power granted the state. Perhaps. But as the White Primary case makes clear, sometimes that line is not so obvious. Or, my favorite conundrum, the situation of tenant farmers in Mississippi, whose white landlords would immediately evict them if they dared register to vote. Now, this attitude was unanimous among the white landlords. On what grounds would a strict laissez-faire attitude stop these landlords from doing this? Or is Anger willing to say that he has no problem with such a practice? Again, I’m not saying I have the answer to this problem or to any of the problems of the post-Civil War South. All I know is, I’m not convinced that laissez-faire was enough—even though at the same time I am certain that long-term redistributionary and paternalistic legislation was not the right answer.
Jonathan Rowe points to the writings of Richard Epstein on the subject. I’ve not read Forbidden Grounds, but he touches on the subject in Skepticism And Freedom (2003), where he criticizes
profound gaps in [Robert] Nozick’s theory of entitlement that stem from his failure to explicitly acknowledge and incorporate the functional roots of the system…. Nozick dabbles with the question of what might happen if, say, one individual buys up all the drinking water in the world. But he never takes the next step to address coherently the refusal at common law to enforce contracts in restraint of trade. These cartel arrangements are embodied in transfers that satisfy Nozick’s rule of justice, but their adverse effects on social welfare, by restricting output and raising price, lead [sic] to the strong condemnation that they received at common law, which refused to treat them like ordinary contracts of sale….
Id. at 130-31. Epstein proposes that the right solution is simply to refuse to enforce such contracts (not to allow private rights of action as under the Sherman Act). I like this proposal because it is non-invasive, and because what happens then is just that the barriers against defection are dropped, and the natural tendency toward defection (which is the weak spot in any cartel) is then allowed to run its natural course.
What I don’t like about Epstein’s argument—well, two things. First, I don’t like that it’s not deductive. Epstein criticizes natural law theorists for emphasizing deduction too strongly, and therefore for overlooking “the ultimately consequentialist nature of the overall system.” Id. at 131. I don’t like consequentialism, because it’s usually an excuse for exchanging principles for popularity. Deducing one’s way from principles of human nature gives a grounding for any policy—that’s the great thing about natural rights theory. But drawing one’s policy conclusions from the opposite pole—from “consequentialism”—means looking to “social welfare” as one’s standard of value, rather than individual welfare. And “social welfare” is practically impossible to measure, as Epstein acknowledges, so that one’s consequentialism could easily be a license for any silly thing. Second, Epstein doesn’t give clear examples of where entirely private monopolies or contracts in restraint of trade would be effective. Interestingly, Rowe writes
I think it would be wrong…to suggest that even during the worst periods of Southern racism that whites as a group would act so single mindedly as to make private discrimination in most aspects of life the equivalent to an exercise of monopoly power.
This raises my eyebrows because to me, it’s the clearest example of just what we’re talking about. But at the same time, Rowe has a good point that racist policies were economically inefficient; private discrimination in the south was not purely private, as the David Bernstein article I mentioned demonstrates. The separate-but-equal law in Plessy was challenged by railroad companies that didn’t like having to pay the extra expense of complying with Louisiana’s law; the segregation on the buses in Birmingham was done by city ordinance. At first, that is. After the Supreme Court struck down that ordinance, the bus company wrote its own segregation policy. And even where the segregation “cartel” was strongly followed, blacks were able to set up their own economy, including black medical and legal trade associations. So the cartel was weak as cartels always are. But contract law itself is often strong enough to maintain such cartels—which is why Epstein advocates the refusal to enforce such contracts, and which is why Shelley v. Kramer, 334 U.S. 1 (1948), is such a brilliant answer, despite its flaws. But I think it’s also true that white racism can be so severe that people were willing to bear the inefficiency of paying more to keep blacks down. (I hate it when I agree with Stuart Buck!) Now, perhaps there are those who would defend this situation—after all, as Hayek says, one of the virtues of a free society is that people can choose what neighborhoods (and corresponding mores) make them more comfortable. Anger has defended whites who abandoned Detroit; and certainly we would say that if people wish to live in, say an explicitly religious community, away from sinners, that they should have that right. If so, why should whites not be free to pay more for segregated facilities? I hate this idea—but racists have rights, too.
In any case, I’m not trying to offer a systematic (or even coherent!) theoretical* defense of government intervention to correct racist outcomes. I just think that even in the absence of an explicit agreement, I think, private action can be tantamount to state action. That’s why the Civil Rights Acts strike down “patterns and practices” as well as explicit policies.
*-I would definitely offer a systematic constitutional defense of such intervention. I think Harlan’s 13th Amendment argument regarding slavery and badges of servitude is absolutely right and that attacks on Jim Crow should have been made under that Amendment, or perhaps the privileges or immunities clause of the 14th amendment, and not under the commerce clause.