Friday, August 27, 2010

Taking Economic Liberty Seriously

Does the Constitution protect the right to earn a living?

On March 5, 1934, the U.S. Supreme Court declared New York shopkeeper Leo Nebbia to be a criminal because he sold two quarts of milk and a 5 cent loaf of bread for the combined low price of 18 cents. As Justice Owen Roberts explained in his 5-4 majority opinion in Nebbia v. New York, the state’s Milk Control Board had fixed the minimum price of milk at 9 cents a quart to eliminate the “evils” of price-cutting.

As for the constitutionality of this action, which raised the price of milk during the lean years of the Great Depression in an effort to boost the profits of New York dairy farmers, while doing absolutely nothing to improve the health or safety of the milk-drinking public, Roberts simply shrugged. “A state is free to adopt whatever economic policy may reasonably be deemed to promote public welfare, and to enforce that policy by legislation adapted to its purpose." Furthermore, “If the laws passed are seen to have a reasonable relation to a proper legislative purpose, and are neither arbitrary nor discriminatory, the requirements of due process are satisfied.” In other words, when it came to economic regulations, the courts needed only to rubber stamp whatever the lawmakers deemed “reasonable.”

Read more Reason

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