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Constitutional Protections of Economic Activity

A Symposium in Celebration of the Bicentennial of the Constitution

October 16 — 17, 1987

On October 16-17, 1987, the Federalist Society hosted a symposium in celebration of the bicentennial of the Constitution at the George Mason University School of Law. The symposium was titled "Constitutional Protections of Economic Activity: How They Promote Individual Freedom."

In November 1789, after the Constitution had been drafted and ratified, Benjamin Franklin wrote Jean Baptiste Le Roy to report that “[o]ur Constitution is in actual operation; everything appears to promise that it will last; but in this world nothing is certain but death and taxes.” It is perhaps too early to add the existence of our Constitutional democracy to Franklin’s list of certainties. But two hundred years after its drafting, we can say that the Constitution shows little sign of collapsing. It is therefore appropriate, in the year of its bicentennial, that we take time to reflect on the constitutional underpinnings of our enduring governmental structure. The purpose of this symposium is to focus particular attention on an important bulwark of our freedom: the protection of economic activity. The aim of this introduction is to provide background information on the subjects the panelists will discuss.

A principal concern of the Founding Fathers was economic prosperity, which they believed depended upon both political and economic liberty. Indeed, excessive taxation of commerce was one of the sparks which had ignited the Revolution. Accordingly, the Framers built several safeguards of economic freedom into the Constitution. The Commerce Clause enabled Congress to ensure a national market, free from patchwork state interference with the movement of goods. The individual states retained exclusive power over commerce within their borders, subject to the Contracts Clause, which prohibited the states from impairing contractual obligations. Property rights were further protected in the Bill of Rights, which prohibited unreasonable searches and seizures and takings without just compensation.

The Framers conceived a small federal government of limited powers. But as time progressed, the federal government grew in size and power. The Civil War Amendments to the Constitution engineered a shift of power from the states to the federal government. As the federal government’s influence grew, governmental involvement in the economy also increased.

At the beginning of the Twentieth Century, the prevailing opinion held that the Constitution permitted little governmental interference with the free market. The Supreme Court interpreted the Due Process Clause broadly, and the watch words of the day were “freedom of contract.” But with the Great Depression, the perception that the market was flawed and that governmental intervention was necessary for the continued functioning of the economy came into vogue, both with the public and with scholars. The New Deal, despite its initial setbacks at the hands of the Supreme Court, eventually institutionalized this view, and regulation extended into virtually every industry and touched almost every aspect of economic life—minimum wages and maximum hours, workplace safety, collective bargaining, product safety, and trade practices.

More recently, the pendulum has begun to swing the other way, toward less governmental involvement in the economy. “Deregulation” has removed some governmental oversight from trucking, railroads, air transportation, long-distance telecommunications, and financial services; it has been proposed for several other industries. Proponents of “privatization” advocate returning nationalized firms, such as Amtrak and Conrail, to private ownership and contracting with other private firms to provide services now provided by the government itself. The debate has touched not only whether it is sound economic policy, but also whether it is proper for the government to be involved in these activities in the first place.

Paralleling the federal government's growth in size and scope has been the steady increase in the amount of money necessary to finance its activities. For over one hundred years, excepting times of war, the government financed itself by duties levied on imports. The Constitution itself prohibited direct taxation, unless apportioned among the states according to their populations. The Sixteenth Amendment swept away the requirement of apportionment and gave the federal government a new source of revenue. Today, federal spending comprises nearly a quarter of gross national product and has surpassed the federal government's ability to raise revenue.

Out of this problem of chronic budget shortfalls have arisen numerous proposals for reform. Some advocate giving the President a line-item veto, so that he may reduce congressional appropriations as he sees fit, subject, of course, to an override. Others advocate reducing outlays across the board if Congress exceeds specified ceilings. Still others have proposed amending the Constitution to require the President and Congress to balance the budget. The debate over the soundness and constitutionality of these proposals intensifies as the national debt grows.

For individuals, economic liberties may also find protection under the basic rights enumerated by the Constitution. The Constitution and its protections of basic liberties have been expansively interpreted over the past few decades. The doctrine of incorporation has extended the Bill of Rights, originally conceived as a protection for basic rights against encroachment by the federal government, to apply to the states as well. The term “person” has come to mean, at least in some contexts, not just natural persons but corporations—fictitious persons—as well. At the same time, the federal and state governments have extended their reaches into economic activity, to regulate such activities as advertising, employment contracts, unions, and communication. At some point, these two trends collide; economic regulation must yield to the constitutional protections of rights such as freedom of speech. The exact boundary is unclear.

This introduction can only briefly cover some of the many issues that the speakers will explore, for the ramifications of economic freedoms in our Constitution are far-reaching indeed. Through the proceedings of this symposium, we hope to illuminate the workings of these constitutional principles that have operated for so long. As Alexander Hamilton wrote in the first sentence of the first Federalist Paper, “You are invited to deliberate on a new Constitution for the United States of America.” In a similar spirit of inquiry, we invite you to listen to the panelists and to deliberate upon the economic freedoms guaranteed by our Constitution.

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7:00 p.m. - 8:00 p.m.
Keynote Address by Richard Epstein [Archive Collection]

A Symposium in Celebration of the Bicentennial of the Constitution

Topics: Constitution • Founding Era & History • Law & Economics • Supreme Court
George Mason University School of Law
3401 N. Fairfax Drive
Arlington, VA 22201

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On October 16, 1987, The Federalist Society hosted a symposium in celebration of the bicentennial of the Constitution at the George Mason University School of Law. The symposium was titled "Constitutional Protections of Economic Activity: How They Promote Individual Freedom" and opened with a keynote address by Professor Richard Epstein with introductions by Professor Henry G. Manne, Dean of George Mason University School of Law.

Featuring:

  • Prof. Richard Epstein, University of Chicago Law School
  • Introduction: Prof. Henry G. Manne, Dean of George Mason University School of Law

* * * * * 

As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker.

Speakers

8:00 p.m. - 9:30 p.m.
Panel I: Methods of Interpreting the Economic Rights Provisions of the Constitution [Archive Collection]

A Symposium in Celebration of the Bicentennial of the Constitution

Topics: Constitution • Founding Era & History • Law & Economics
George Mason University School of Law
3401 N. Fairfax Drive
Arlington, VA 22201

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Event Video

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Description

On October 16-17, 1987, the Federalist Society hosted a symposium in celebration of the bicentennial of the Constitution at the George Mason University School of Law. The symposium was titled "Constitutional Protections of Economic Activity: How They Promote Individual Freedom." The first panel discussed "Methods of Interpreting the Economic Rights Provisions of the Constitution."

Featuring:

  • Prof. Gary Lawson, Yale Law School
  • Mr. Roger Pilon, Department of Justice
  • Prof. Mario J. Rizzo, New York University
  • Prof. Mark G. Kelman, Stanford Law School
  • Moderator: Dean Henry G. Manne, George Mason University School of Law

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As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speakers.

Speakers

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9:30 a.m. - 11:15 a.m.
Panel II: The Takings Clause, the Contracts Clause, and Other Economic Rights Provisions of the Constitution

A Symposium in Celebration of the Bicentennial of the Constitution

George Mason University School of Law
3401 N. Fairfax Drive
Arlington, VA 22201

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11:30 a.m. - 1:15 p.m.
Panel III: First Amendment Protections and Economic Activity

A Symposium in Celebration of the Bicentennial of the Constitution

George Mason University School of Law
3401 N. Fairfax Drive
Arlington, VA 22201

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2:15 p.m. - 4:00 p.m.
Panel IV: Federal Spending and the Deficit: Is a Constitutional Remedy Necessary? [Archive Collection]

A Symposium in Celebration of the Bicentennial of the Constitution

Topics: Constitution • Law & Economics • Separation of Powers • Federalism & Separation of Powers
George Mason University School of Law
3401 N. Fairfax Drive
Arlington, VA 22201

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Event Video

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On October 16-17, 1987, the Federalist Society hosted a symposium in celebration of the bicentennial of the Constitution at the George Mason University School of Law. The symposium was titled "Constitutional Protections of Economic Activity: How They Promote Individual Freedom." The fourth panel covered "Federal Spending and the Deficit: Is a Constitutional Remedy Necessary?"

Featuring:

  • Prof. Kate Stith-Cabranes, Yale Law School
  • Prof. William Craig Stubblebine, Claremont McKenna College
  • Prof. Lawrence Summers, Harvard University
  • Moderator: Judge Douglas H. Ginsburg, U.S. Court of Appeals, D.C. Circuit

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As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speakers.

Speakers

4:15 p.m. - 6:00 p.m.
Panel V: The Public and Private Realms: The Privatization Movement and Other Developments [Archive Collection]

A Symposium in Celebration of the Bicentennial of the Constitution

Topics: Constitution • Law & Economics
George Mason University School of Law
3401 N. Fairfax Drive
Arlington, VA 22201

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Event Video

Listen & Download

Description

On October 16-17, 1987, the Federalist Society hosted a symposium in celebration of the bicentennial of the Constitution at the George Mason University School of Law. The symposium was titled "Constitutional Protections of Economic Activity: How They Promote Individual Freedom." The final panel of the symposium discussed "The Public and Private Realms: The Privatization Movement and Other Developments."

Featuring:

  • Prof. Kenneth S. Abraham, University of Virginia Law School
  • Prof. Robert C. Ellickson, Stanford Law School
  • Prof. George L. Priest, Yale Law School
  • Moderator: Prof. Leonard P. Liggio, Institute for Humane Studies at George Mason University

*******

As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speakers.

Speakers

6:30 p.m. - 7:00 p.m.
Reception

A Symposium in Celebration of the Bicentennial of the Constitution

Hyatt Arlington Hotel
1325 Wilson Boulevard
Arlington, VA 22209

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7:00 p.m. - 10:00 p.m.
Banquet

A Symposium in Celebration of the Bicentennial of the Constitution

Hyatt Arlington Hotel
1325 Wilson Boulevard
Arlington, VA 22209

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