Frohen – National Markets vs. The Rule of Law: Substantive Due Process, its Origins and Impact
Markets vs. The Rule of Law: Substantive Due Process, its Origins and Impact
Bruce P. Frohnen
39th Annual Meeting, New Orleans, April 26, 2003
One hears a great deal, of late,
concerning the effects of unwise regulation on the rule of law.
Such regulations bring about undue bureaucratic and judicial discretion,
leaving people without the means to know just what it is that the law requires,
let alone how they might meet its requirements.
But I want to address a somewhat different problem, namely the effects on
the rule of law of court attempts to construct free markets on their own.
The explosion of economic activity
in America during the nineteenth century is well known.
By the end of the century the United States had gone from a localist,
agrarian economy to a national industrial economy.
Yet, despite what some may say about the wonders of “spontaneous
order,” this development was aided considerably by what can only be termed
legal and judicial innovation.
Riparian rights, definitions of
takings and even burdens of proof in tort actions all were modified by the
courts in order to encourage development.[i]
But I want to focus on changes that took place later in the century,
culminating in the substantive due process cases of the late nineteenth and
early twentieth centuries.
In these cases the Court “helped
along” free market capitalism by supporting liberty of contract, and
supporting it as an absolute, national right.
Not content with fighting out the policy issue of how free the economy
should be at the state level, the national Supreme Court fought for free markets
everywhere. Now, few people at a
Philadelphia Society Meeting ñ certainly not I ñ would want to be known for
saying bad things about private property and liberty of contract.
But the Court fought for this good
thing in an illegitimate, highly damaging manner.
The Court made up the law to suit its own ends.
It stuffed into our Constitution, or at least into its own
interpretations of the constitutions, something that simply wasn’t there ñ
an absolute protection for liberty of contract.
I will argue that the results of
this judicial activism in the name of economic liberty were devastating, and
continue to this day. My thesis:
the road to government by judiciary ñ the loss of the rule of law ñ was
paved by the late nineteenth century laissez faire Court.
That Court instituted the doctrine of “economic substantive
due process.” And economic
substantive due process made the post World War II Supreme Court and its
arrogant assumption of almost unlimited power, possible.
Moreover, the doctrine shares with
its illegitimate progeny ñ “social” substantive due process as evidenced
in Roe v. Wade[ii]
and substantive equal protection ñ a common, illegitimate source and
function. These doctrines share a
specific, mistaken, reading of the fourteenth amendment to the United States
constitution, and an equally mistaken view of judges’ proper role in
interpreting the Constitution and laws of the people.
First, briefly, let me review the
substantive due process doctrine. That
doctrine has its flowering, if you will, in the 1897 case of Allgeyer vs.
In it the Court began in earnest to create rights based in liberty of
contract. In Allgeyer the
Court decided that Louisiana could not require that all insurance on Louisiana
property be issued by insurers registered in that state.
The Court could (and did) find that Louisiana doesn’t have the
right, the jurisdiction, to regulate contracts made outside the state with
foreign corporations. But it also
found a violation of the due process clause of the Fourteenth Amendment to
You may recall the language of the
Fourteenth Amendment’s due process clause: “no state shall deprive any
person” of “life, liberty, or property, without due process of law.”
And what is due process of law? There’s
Or at least it is now.
The historical record on this is
crystal clear. From Magna Charta
through the debates over the Fourteenth Amendment itself “due process” meant
the same thing: procedures accepted as the common law of a jurisdiction, applied
to anyone forced to answer a charge from the state.
More simply: customary procedural rights for criminal defendants.
Whence comes, then, Substantive
Due Process? Out of the minds ñ
and wills ñ of judges. The
argument is that certain rights, like liberty of contract, are so fundamental
that they must be covered by due process ñ that every human being is owed a
fair trial before being deprived of them.
If liberty of contract is critical in allowing individuals to chart their
own courses in life then why not include it in the “liberty” guaranteed by
the Fourteenth Amendment? Because
it isn’t there.
normal”>Perhaps liberty of
contract should have been made a part of the tradition of due process rights.
But it never was. And it isn’t in the Fourteenth Amendment.
That Amendment, you may recall, was intended to protect freed slaves from
the “Black Codes” instituted in the South to keep them in virtual, if not de
Liberty in the Fourteenth Amendment, as in the Anglo-American tradition
more generally, refers to being “at liberty” ñ free from imprisonment.[vi]
So “due process” in this context is meant to protect people from
being imprisoned except by procedures accepted by the common law of their
In book-length form, Raoul
Berger’s Government by Judiciary makes this undeniably clear.
A standard response to this fact
is the claim that liberty of contract was included in a different section of the
Fourteenth Amendment, that guaranteeing the Privileges or Immunities of citizens
to all persons born or naturalized in the United States.
It just so happens, the argument goes, that the Supreme Court got the
Privileges of Immunities clause wrong soon after the Fourteenth Amendment was
ratified, defining them too narrowly in the Slaughterhouse Cases.[vii]
Well, the problem with that argument is two-fold.
First, to repeat an old adage, two wrongs don’t make a right.
Using one improper reading of the Constitution to “make up” for
another constitutes a double wound to the framers’ intent.
The second problem, and Berger
made this clear as well, is that the Privileges or Immunities Clause of the
Fourteenth Amendment was not intended to guarantee broad, economic rights; it
was intended only to provide auxiliary rights that would protect life, liberty
The provision protected important rights ñ including the right to be
tried by a jury of one’s peers, to give testimony, to have the same rules
apply to your contracts as to other people’s and so on.
But these rights do not proclaim or constitute unfettered freedom of
contract, or even that right, limited by state police powers.
Thus, by inserting, through its
own will, liberty of contract into the Fourteenth Amendment, the Court departed
from and undermined the Constitution. Well
intentioned or not, it made up the law.
And once you depart from the intention of those who put the
law into effect, you have inserted your will in place of the people’s, and the
law’s. The rule of law gives way
to the rule of men. And the
consequences have been devastating, including to economic liberty.
First, substantive due process made the New Deal, and thus
the administrative welfare state, possible.
The Court’s policy positions ñ finding maximum hours legislation
unconstitutional for bakers, but okay as a health measure for miners and
smelters, embedded utilitarian policy making into constitutional adjudication.
normal”>The question substantive
due process analysis asks is whether a regulation limiting a supposedly
fundamental right is a permissible exercise of state police power.
That requires analysis of the measure’s effects on health, safety or
morals. And that establishes the
notion that courts are about deciding whether policies are useful.
Which means that “useful” policies ñ like, say, ones designed to
end the depression ñ must be constitutional.
If the end is good, the means must
be Constitutional. This bad
reasoning legitimated the New Deal and many other bad decisions by the Courts as
well as the legislative and executive branches.
Now, someone might reply that it
actually was the demise of principled substantive due process that
allowed for the New Deal. But the
Court’s logic, by turning constitutional adjudication into a series of policy
judgments undermined its ability to fight the New Deal on these grounds.
Moreover, it undermined the real, constitutional grounds on which the
Court should have opposed the New Deal:
New Deal legislation entailed excessive delegation of powers to unelected
and it violated federal principles by overreaching the proper bounds of national
legislation, interfering with state prerogatives.
Unfortunately, the Court simply
gave up on the non-delegation doctrine.
Worse, however, the Court’s own
decisions, striking down in-state laws regarding child welfare and other
working conditions, destroyed the federalism argument.
In pursuit of national markets, the Court destroyed the logic and in the
end the reality of local self-government, leaving the way open for
nationalization and, frankly, socialization of the economy.
The Court asserted, wrongly, that the Fourteenth Amendment gave it the
right to decide on the reasonability of state laws.
In this way the Court undermined the constitutional presumption of state
sovereignty ñ the very purpose of the tenth amendment in limiting all federal
branches to the exercise of enumerated powers.
All this would be bad enough, but
I want to make one further point.
Worst of all, in my view,
substantive due process legitimized judicial activism at the same time that it
de-legitimized natural law jurisprudence.
By looking beyond the text of the law to its own moral notions, the Court
established a tradition of judge-made law, turning adjudication into policy
making. Here’s the irony:
today’s courts claim more legitimacy for their policymaking because they make
dishonest references to the text where the old court tended to just say
“liberty” and “that’s fundamental, so it’s protected.”
The old court bowed to natural law
reasoning, assuming the taking of “life, liberty and property” was a
philosophical term to which it had the right of providing content.
But judges always have made bad moral philosophers.
That’s why our tradition never expected them to be moral philosophers.
What the Anglo-American tradition expected from judges was historical
understanding. That is, an ability
to read precedents and texts in light of their historical context; to, for
example, define the fourteenth Amendment’s common law terms in common law
terms. We have lost that, and the
rule of law it protected.
We also have lost our inherited
knowledge that the natural law is not a brooding omnipresence.
It is right here in front of us, in our institutions, beliefs and
practices. It was incorporated into
the United States Constitution and, in particular, into the common law so
central to the Anglo-American tradition. It
is not something to be made up by the judge, any more than it is something to be
dismissed as illusory or in the eye of the beholder.
It is central to our tradition, and judges have a duty to apply it, when,
where and to the extent that their role in our system of ordered liberty under
law requires it.
They are not required, nor are they allowed, to simply impose
their will, even in the face of injustice, on the people.
Rather, judges are to interpret statutes and common law standards in
accordance with historical usage ñ with the intention of framers whom we trust
were informed by the natural law, or whose laws we will change through
legislation or amendment.
Justice Kennedy’s statement in Planned
Parenthood vs. Casey[x]
that “at the heart of liberty is the right to define one’s own concept of
existence, of meaning, of the universe, and of the mystery of human life”
would be laughably ignorant if its results weren’t so tragic. But that
pro-abortion decision is rooted in the notion that morals are all subjective.
And that notion began infecting Supreme Court decisions when the
laissez-faire Court decided it could find the natural law on its own, looking to
Herbert Spencer rather than the intention of the framers.
I am saying nothing new, merely
joining with scholars like Philip Hamburger our own George Carey and the late,
much missed Russell Kirk, in arguing that natural law is to be applied
appropriately, that it was used in writing the constitution, but that it does
not give judges license to attempt something for which they clearly are not
qualified, acting as moral philosophers. Rather,
natural law requires that they again take up their traditional, proper role as
scholars of history, of the common law meaning of common law terms.
As a people, we do not need judges
creating rights to protect us. We
need to recognize, with the founders, that judges must be bound down by the
Constitution. And we need to
understand that not even the Constitution can save us from bad laws, and even
tyranny. Tyranny will not bow
before paper barriers, let alone judicial hot air.
Rights like liberty of contract can only be protected through active
participation in local politics. To
the extent we look to national judges to protect us, we will find ourselves at
the mercy of the people who run the central government ñ people committed to
power, and to centralizing power at the expense of local self-government.
Rights are important, but they are
rooted in tradition and the life of the people, or they are nothing ñ or,
worse than nothing, camouflage disguising those who wish to wield illegitimate
power over us.
[i] See especially Morton
Horwitz, The Transformation of American Law, 1780-1860 (Cambridge:
Harvard University Press, 1977).
[ii] 410 US 113 (1973).
[iii] 165 US 578.
[iv] See for example George W.
Carey, In Defense of the Constitution (Indianapolis: Liberty Fund,
1995) ch. 6.
[v] See for example Raoul
Berger, Government by Judiciary: The Transformation of the Fourteenth
Amendment (Cambridge: Harvard University Press, 1977) 25.
[vi] See Carey, In Defense
of the Constitution, ch. 6.
[vii] 83 US 36 (1873).
[viii] Berger, Government by
Judiciary, ch. 2.
[ix] See Schechter Poultry
Corp. vs. United States 295 US 495 (1935).
[x] 505 US 833 (1992).