D EATH G RIP
The Hoover Institution gratefully acknowledges
P AUL H. AND E LISABETH E. B AUER
for their significant support of this publication.
D EATH G RIP
Loosening the Laws Stranglehold
over Economic Liberty
C LINT B OLICK
HOOVER INSTITUTION PRESS
STANFORD UNIVERSITY | STANFORD, CALIFORNIA
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www.hoover.org
Hoover Institution Press Publication No. 606
Hoover Institution at Leland Stanford Junior University,
Stanford, California 94305-6010
Copyright 2011 by the Board of Trustees of the
Leland Stanford Junior University
All rights reserved. No part of this publication may be reproduced,
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without written permission of the publisher and copyright holders.
First printing 2011
Manufactured in the United States of America
Cataloging-in-Publication Data is available from the Library of Congress.
ISBN-13: 978-0-8179-1314-4 (cloth. : alk. paper)
ISBN-13: 978-0-8179-1316-8 (e-book)
For Milton Friedman and Bernie Siegan,
two titans in the quest for economic liberty,
with gratitude for their friendship and enduring inspiration.
INTRODUCTION AND
ACKNOWLEDGMENTS
HERES A CIVICS STUMPER for you: can you name the three protections provided by the Fourteenth Amendment?
Most Americans likely could not identify any of them without additional prompting. But even among people who are possessed of substantial civic knowledge, Id wager the vast majority could name only two: due process of law and equal protection under the law. Theyre pretty famous. Even those who dont know they are part of the Fourteenth Amendment are likely to recognize the terms and know that they are important constitutional rights Americans possess.
Its the Fourteenth Amendments remaining protection that would completely stump most Americans, even if it were listed among multiple-choice options: its the guarantee that states may not abridge the privileges or immunities of citizens of the United States. If you asked the typical person on the streetindeed, even the typical lawyerwhere the provision comes from or what it means, most wouldnt have a clue.
How could two of the three provisions of the Fourteenth Amendment be so well-known while the other is so obscure? Especially when they appear within the same sentence? Deepening the mystery, the privileges or immunities clause is listed first among the trilogy of Fourteenth Amendment protections, suggesting that those who wrote it intended that the provision meant something important. Moreover, among the three protections, it is the only one that on its face protects substantive rightsthat is, privileges or immunities that states may not abridge. By contrast, the other provisions on their face do not impose substantive limits on government power, but rather instruct that states may not infringe upon life, liberty, or property without due process and that they are bound to provide all individuals with equal protection of the laws.
The reason why Americans are familiar with due process and equal protection is that scores of court decisions have struck down laws as violations of those guaranteesincluding some of the most- famous cases of all time, such as Brown v. Board of Education and Roe v. Wade . Law students spend months studying those two provisions, and they are a core focus of the Constitutional Law portion of the bar examination.
By contrast, cases involving the privileges or immunities clause are exceedingly rare and are almost never in the news. As a result, most law students spend a minute or two, if that, studying about the privileges or immunities clause. In fact, they are taught to forget it exists. Indeed, when I was studying for the California bar examination, the instructor told the students that there was only one thing they needed to know about the privileges or immunities clause: that it is never the correct answer to a bar exam question.
How did such a seminal constitutional provision plummet to such jurisprudential depths? Most legal questions have complex answersor at least lawyers who charge by the hour want you to think that they dobut the answer to this one is easy. Only a few years after the Fourteenth Amendment was enacted following the close of the Civil War, the U.S. Supreme Court drained the privileges or immunities clause of nearly all its meaning in one of the worst decisions in the history of American law, the aptly named Slaughter-House Cases .[1]
In that 1873 decision, the Supreme Court by a 54 votehighly unusual in those daysupheld a bribery-procured Louisiana slaughterhouse monopoly that had been challenged by a group of butchers whose businesses were jeopardized. In that decision, the court discovered a new way to amend the Constitution: by judicial fiat. The majority ruled that the privileges or immunities clause added almost nothing to the handful of rights protected against abuse by the states in the original Constitution. By that decision, one of the most important and beneficial products of the Civil Wara revolutionary constitutional provision intended to protect civil rights against oppression by state governmentswas nullified. So while myriad cases since the Fourteenth Amendment was adopted have invoked the equal protection and due process clauses, until recently not a single U.S. Supreme Court decision invoked the privileges or immunities clause to strike down a law.
The Slaughter-House Cases produced many unfortunate consequenc es, several of which will be discussed in the pages that follow. But foremost among them was the evisceration of one of the most sacred and central rights of Americans: economic liberty, the right to pursue a business or occupation free from arbitrary or excessive government regulation. Now, nearly a century and a half later, this right that many Americans deem fundamental enjoys virtually no legal protection whatsoever. If the government tries to take away someones welfare check, a Legal Services Corporation lawyer (your taxpayer dollars at work) can tie the government up in knots. But if the government decides to regulate your business out of existenceeven for the benefit of a competitoryou have virtually no constitutional recourse.
This state of affairs is particularly devastating for people at the bottom rungs of the economic ladder. The most pernicious regulatory barriers to opportunity are those that restrict entry into businesses and occupations that require little formal education or capital. Those regulations hinder meaningful participation in the mainstream economy, as well as upward economic mobility, to millions of economically disadvantaged Americans. At the same time, they limit market entry and inhibit competition at every level of the economy, as sophisticated business or labor interests manipulate government power to protect and enhance their economic positions to the detriment of others.
The privileges or immunities clause was intended to provide legal recourse to individuals affected by such laws. But the clause was killed in its infancy. That is a perversion of American law. The time has come to correct itto restore economic liberty to its rightful place among the most fundamental civil rights.