In what may be the dumbest thing ever said about Lochner, Prof. Daniel Greenwood writes on the ACS Blog that
Lochner symbolizes the Old Court’s turning the Civil War Amendments on their heads. The Fourteenth Amendment promised African-Americans, and indeed all Americans, the rights of citizenship, equal protection and due process of law. The Court, instead, ruled that American citizens had fought the Civil War in order to forfeit our right to use democratic government to protect ourselves against the arbitrary power of “malefactors of great wealth.”
The Gilded Age’s concentration of power and wealth in the hands of a few, symbolized and furthered by Lochner’s rejection of basic American values, led straight to the Great Depression. Neither democracy nor market capitalism can long survive if entrenched economic power is permitted to set the rules of competition so that it always wins. When ordinary Americans lacked the power to demand wages high enough to buy the products and services they produced, the resulting shortage of demand nearly destroyed the system.
I think Greenwood is claiming that the Court’s decision in Lochner fostered rent-seeking by powerful private interests, who then used their influence over government officials to pervert the market process in a way that caused the economic collapse of the Great Depression. This theory is truly unorthodox, to be kind.
First, of course, the Supreme Court decisions usually lumped together with Lochner—the so-called “laissez-faire constitutionalism” cases—did not represent an inversion of the Civil War Amendments. It is of course true that the Nineteenth Century Court’s interpretations of those Amendments, in cases like Slaughterhouse, Cruikshank, and Plessy, were terribly wrong, and led to the perpetuation of awful injustices. But the “laissez-faire constitutionalism” cases are generally seen as standing for strong judicial protections for property rights and economic freedom—when what Slaughterhouse, Cruikshank, Plessy, and other decisions did was to withhold such protection.
For example, the Slaughterhouse Court refused to enforce the Fourteenth Amendment in a way that would have promoted free market competition, thereby encouraging rent-seeking and monopolization. That decision was wrong on originalism grounds and had terrible economic and political consequences, but for Greenwood to imply that it and the other cases are somehow in the same mould as Lochner is silly. Indeed, the so-called “Lochner era” came about only when the Court started to embrace the legal theories advanced by, among others, Stephen Field, who famously dissented in Slaughterhouse and similar post-Civil War cases deflating the Civil War Amendments. He didn’t dissent in Plessy, to his discredit—but Plessy upheld government interference in the economy, against a legal challenge that was financed by railroads who didn’t like the burden imposed on them by the government of Louisiana! The capitalists lost these cases, is my point—they didn’t win them. Moreover, the pro-market decisions like Adair and Lochner were deeply rooted in principles first advanced by the anti-slavery constitutionalists; they expressed the same classical liberal ideas that underlay the Fourteenth Amendment itself.
Second, whether the Lochner decision itself “rejected basic American values” or not depends on what one’s views of “basic American values.” If one thinks that basic American values include the freedom to make one’s own economic choices—to make decisions for oneself about where to work, under what conditions, for what hours, for how much money—then one sees Lochner as an affirmation of those values. If one thinks basic American values include the right to tell other people what to do with their lives, then one sees Lochner as a rejection of those values. But it’s worth keeping in mind that contemporarneous Progressives themselves generally saw Lochner as conserving traditional values of individual freedom of choice; that is, of affirming traditional American values. And that’s just what they didn’t like about it. They believed it was time to abandon the eighteenth century values of individual freedom and limited government that they rightly saw as the heart of the Constitution. Progressives from Alpheus Mason to Franklin Roosevelt were explicit about their rejection of these traditional constitutional principles.
Finally, Greenwood’s claim about causality is nothing short of stupid. The Great Depression was not caused by a “shortage of demand,” let alone from too-low wages; it was the result of many causes, but most clearly of manipulation of the economy by interventionist government, most particularly in the money supply. Wages, however, had been steadily rising between 1905, when the Lochner case was decided, and, say, 1925. Here’s the BLS’s report showing that wages basically tripled or quadrupled during that period—a period, by the way, which saw not only increased labor union activism, but the enactment of minimum wage laws in many states—not exactly laissez-faire. The Depression was certainly not caused by low wages, since wages were not low.
While Greenwood is to be credited for acknowledging, however confusedly, that the Depression resulted partly from government intervention in the economy at the behest of politically influential private interests—most notably in the case of the Smoot-Hawley Tariff—that, too, can hardly be blamed on Lochner or similar decisions, which decreased the ability of private interests to exploit government power for their own purposes. Lochner, if anything, reduced the capacity of private interests to obtain private-interest legislation, by limiting the power of government to interfere with private economic agreements. By contrast, the rejection of the principles of individual economic freedom embodied in Lochner, and the adoption of New Deal legislation like the NIRA, dramatically worsened the Depression by legally empowering private industries to set minimum prices and limit competition. Behind these laws were Progressive intellectuals in the FDR Administration who were among Lochner’s sharpest critics—people like Felix Frankfurter and Rexford Tugwell. That’s why decisions like Schechter Poultry and other cases invalidating New Deal programs were portrayed by Progressives as being tainted with the spirit of Lochner. They wanted to tear down precisely the barrier between powerful private interest groups and the government that they saw Lochner as having erected. Has Prof. Greenwood ever even read Roscoe Pound?
It’s really amazing to peer for a second into the Twilight Zone that is the ACS Blog—a land where facts and principles mean absolutely nothing, and the most absurd interpretations of history and law stand as though they are respectable intellectual positions. Suffice to say, Daniel Greenwood has no more respect for constitutional law than he does for Say’s Law.
Comments policy