A Conversation On The Degradation of Economic Freedom

On this episode of the AIER Authors Corner Ethan Yang interviews Timothy Sandefur, who is the Vice President for Litigation at the Goldwater Institute, a public interest law firm specializing in advancing civil and economic freedoms. Sandefur is also an adjunct scholar at the Cato Institute and received his JD from Chapman University School of Law. He has authored a number of books on constitutional freedoms including the one discussed on this episode, The Right to Earn a Living, which explores the history as well as the degradation of economic freedom and private property in the United States. In particular, it highlights the once staunch and deep commitment the legal system as well as the political system had to the notion of economic rights, alongside its fall from grace during the Progressive Era. A written summary can be found here.

Last year, the intrusive business closures that were forced upon the population should have shown every citizen in this country that their economic rights mean almost nothing today. The government, if it could find a compelling reason, could ruin your day at a whim and take away one of the most important aspects of a person’s dignity, their right to earn a living. This is in stark contrast to our civil rights, such as free speech and due process, which are far more protected and respected. This is of course ignoring the fact that these rights also apply to economic matters, whether that be advertising or private property. Regardless, it is an established fact that economic rights, whether that be relating to freedom of assembly in the business sense, to not being subjected to intrusive regulations without due process, are all second class privileges. It wasn’t always like this. 

Sandefur explains that prior to the Progressive Era beginning in the late 19th century, American respect for economic freedom was actually quite strong. He explains that judges and politicians would speak about economic rights as if they were philosophically important, not just practically important. Rather than defending private property and free exchange from a purely economic perspective, such as citing authors like Adam Smith, American leaders actually felt these rights were morally important. This actually dates back to English common law, which saw the denial of the right to earn a living, i.e. economic restrictions, as an assault on individual dignity and just as important as your ability to speak freely. 

This all changed when the American Progressive movement kicked off, which was certainly friendly to civil rights but viewed economic rights with disdain. Supreme Court justices like Louis Brandeis summarized the philosophical outlook for the era. That is, a deep skepticism of private enterprise and a high degree of confidence in the power of the state to regulate society. From here, presidents like Woodrow Wilson and Franklin Roosevelt unleashed an expansion of the state into the economic space never before seen, creating precedent for what we have today. In particular this is where we get Nebbia v New York, a Supreme Court case that dropped the standard for state intervention down to a rational basis, which could basically mean everything. Nebbia itself pertained to price controls on milk, which at the time were rightly seen as controversial because it was thought that the government had no business telling a private entity how it ought to conduct a completely voluntary exchange. The Court, which had essentially been shifted far to the Progessive spectrum, ruled this to be constitutional, establishing much of the precedent for the world we live in today. 

Today we live in an age where we ask not if the government can regulate something, but why shouldn’t something be regulated? The Federal Register has an unending list of edicts and guidances touching on virtually every aspect of private life. Laws such as occupational licensing, which explicitly bar individuals from working without preapproval from the state, violate the very conscience of the right to work and have only increased in scope. It all goes without saying that these regulations oftentimes do not benefit consumers or the little guy, but typically serve the interest of established actors. Businesses large and small are subject to the mercy of regulators with little constitutional protection. The great tragedy of it all is that it wasn’t always like this and it doesn’t have to be this way.

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