The Supreme Court of the United States decided Lochner v. New York on this day (April 17) in 1905, which held that the "right to free contract" is implicit in the due process clause of the Fourteenth Amendment to the United States Constitution.
From George C. Leef:
Lochner v. New York is an often-mentioned but misunderstood 1905 Supreme Court decision that lends its name to this excellent analysis of constitutional jurisprudence by Michael J. Phillips. Phillips, professor emeritus of business administration at Indiana University, has written probably the best book by a nonlawyer on any aspect of constitutional law, and the best survey of the Lochner line of cases by anyone. This book is a penetrating revisionist history of a key period in our legal history.
Briefly, in Lochner the Supreme Court struck down a New York statute that limited the number of hours bakers could work. The majority held that the freedom to contract for as much work as a man chose was within the “liberty” protected by the Fourteenth Amendment and that paternalistic health and safety rationales advanced by the government did not save the statute. The decision elicited a furious dissent from Justice Oliver Wendell Holmes, who argued that the Court was usurping state prerogatives. “The 14th Amendment does not enact Mr. Herbert Spencer’s Social Statics,” Holmes grumbled.
Lochner wasn’t the first time the Court had declared unconstitutional statutes that interfered with liberty and property, but that name has been applied to a line of cases in which the Court, employing an approach later dubbed “substantive due process,” defended individual rights against government encroachment. That philosophy came to an end during the New Deal, when the Court, with an augmented number of “liberals,” upheld coercive New Deal programs. Ever since, law students have heard that Lochnerism was a terrible mistake. Justices like Holmes and Louis Brandeis have been elevated to constitutional deities, while the defenders of individual rights have been pilloried.
Phillips correctly notes that there is a lot of myth in the standard account of the Lochner period. His study of the Court’s decisions leads him to conclude that there was nothing like the uniform obstruction of “progressive” legislation that most people believe occurred during that era. Interventionist legislation sometimes lost, but some times it was upheld. Thus the Court doesn’t deserve as much blame—or credit—as it is customarily given, depending on your point of view.
More important, Phillips’s analysis of the particular decisions leads him to conclude that “some of the cases in which [the Court] did strike down governmental action were more justified than is generally believed.” He demonstrates that the statutes in question were largely the sort of counterproductive special-interest legislation that we have come to expect from legislatures. In striking down such measures, the Court was not acting against the common good, but for it.
One of the most valuable parts of the book is the author’s demolition of the canard that in the “substantive due process” cases, the Court was simply acting as an agent for business interests. Phillips refutes that bit of anti-capitalist posturing by noting that in most, if not all, of the cases where legislation was struck down, the Court was certainly not siding with business. For example, in Louis K. Liggett Co. v. Baldridge (as in the Lochner case), the Court invalidated an obviously anticompetitive statute. Phillips writes, “Pennsylvania’s ostensible effort to protect the public health looked suspiciously like an effort by in-state pharmacists to block competition from chain stores.”
In the course of his analysis, Phillips produces a delightful byproduct—a reassessment of the supposed brilliance and consistency of the Court’s famed dissenters Holmes and Brandeis. Brandeis especially has been revered by leftists for his dissents in cases like New State Ice v. Liebmann. Read the chapter “What Motivated the Old Court?” and watch the lustrous Brandeis halo turn to junk before your eyes.
Also worthy of close attention is Phillips’s chapter “The Question of Unequal Bargaining Power.” The standard defense given by interventionists for minimum wage and other supposedly pro-labor statutes is that the government must intervene to “equalize bargaining power” where one party is said to have an “unfair” advantage. Phillips takes a fairly sharp sword to that idea. He points out that while an individual, whether a manual laborer or a Harvard Law School graduate, doesn’t have much “bargaining power” regarding employment offers, competition among prospective employers ensures that workers are paid according to their productivity. That the Lochner Court didn’t bite on the “unequal bargaining power” sucker bait, while the New Deal Court did, is a mark in favor of the former and against the latter.
Phillips concludes that the decisions of the Lochner era are best explained by a commitment, if imperfect, to the idea that freedom ought to be preserved unless there is a compelling reason to interfere with it. I’d love to see many law students confound their professors in constitutional law with the points raised by this book when they arrive at the “substantive due process” cases.
George C. Leef
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.
This article was originally published on FEE.org. Read the original article.
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