Noah Feldman's thoughtful essay in the New York Times Magazine, Imagining a Liberal Court: Equality, Liberty (June 21, 2010), is the appropriate response to the Gingrich nonsense in the April 21 Op-Ed. (See yesterday's post on Gingrich.) Feldman notes that liberal thought led to two great trends in Supreme Court decisions--the extension of the equal protection of the Fourteenth Amendment to encompass a notion of equality before the law for all and the expansion of concepts of liberty to include an entitlement to individual autonomy in private matters. But having developed these deeper concepts of equality and liberty, the liberal intelligentsia has essentially stepped back and let the private market/free enterprises sloganeers (starting especially with Reagan and Thatcher in the 1980s) take over. "No new progressive constitutional vision...has emerged" even though one is clearly needed to deal with the new threats to the institutions of democracy stemming from the rise of powerful, quasi-sovereign multinational corporations and their managers, owners, and hangers-on.
The answer is that new and pressing constitutional issues and problems loom on the horizon — and they cannot be easily solved or resolved using the now-familiar frameworks of liberty and equality. These problems cluster around the current economic situation, which has revealed the extraordinary power of capital markets and business corporations in shaping the structure and actions of our government. The great economic and political challenges of our present decade — salvaging and fixing financial institutions, delivering health care, protecting the environment — have major constitutional dimensions. They require us to determine the limits of government power and the extent to which the state can impinge on collective and individual freedoms. Progressive constitutional thinkers, so skilled in arguing about social and civil rights, are out of practice in addressing such structural economic questions.
More alarming is the fact that, over the past couple of decades, evident gains from deregulation have made many lawyers — progressive and conservative alike — too complacent about deferring to the markets on which our economy depends. That markets work well in so many contexts has strengthened the traditional conservative argument about the constitutional duty to respect private economic transactions — even in the minds of many liberals. Civil libertarian commitments, meanwhile, have become increasingly absolutist, leading some liberals to favor extending basic rights to corporations, not just to individuals. The American Civil Liberties Union, for example, has long urged the Supreme Court to treat corporations just like individuals when it comes to political speech.
To address these challenges, progressive constitutional thought must discover (or rediscover) a core set of beliefs about the right relationship between government, the individual and the powerful corporate entities that operate under the umbrella of the market. Reregulation, embraced by the Obama administration to address a range of serious economic and environmental dangers, demands its own set of constitutional explorations and explanations. A truly progressive constitutional project needs to go beyond simply upholding regulations challenged in court. It demands that the Supreme Court and other bodies acknowledge the government’s responsibility to protect our democracy from the harmful side effects of all-powerful markets.
Feldman traces the development of liberal theory in the aftermath of the infamous Lochner case, in which a judicial philosophy equating property rights with liberty rejected regulation of work hours in the name of protecting "liberty" of contract (and disregarding the fact of contracts of adhesion that result in employers having most of the contracting liberty and employees having mainly the liberty to work or quit). By the time FDR was able to appoint a significant portion of the court, the court began to move the law away from the view that any interference in the economic marketplace was unconstitutional towards an understanding that government is a necessary mediator between individuals and powerful business forces.
We have arrived, in a sense, back in a position very similar to that of the 1930s. Powerful corporate interests, especially the "shadow banks" and the banks and insurance firms, have acquired and exercised enromous influence over the laws of the marketplace, changing our economy from one based on productive manufacturing to one based on moving money back and forth in endless interrelated transactions--what I and others have termed the "financialization" of the economy. The Great Recession left ordinary Americans holding the bag, while the banksters continue to reap outsize rewards from the casino economy they created. Similarly, other large corporations pursue their own ends to the detriment of society. BP's spill in the Gulf is just one of the most obvious examples of corporate endangerment of the public good--taking public resources and creating public disaster. Enron and its manipulation of California's energy market is another. The leveraged buyouts and equity funds' taking companies private in order to fire workers and resale them--generally making money without increasing productivity--is another.
Yet just when we need a clear understanding that permits us to castigate this kind of corporate greed without at the same time condemning all of American capitalism, we flail and fail. Too many old style liberals think Citizens United was a good Supreme Court decision--like my colleage Bob Sedler, they are still reliving the fights for individual liberties from the seventies and unable to comprehend the nature of the current fight against the global financial juggernaut. But this is a failure to understand the concept that drove their own successful struggle (and thus better to see how it must evolve to contest the big issues of this age of globalization). As Feldman notes in describing the effort of liberals under the New Deal:
Liberals argued that the capitalist system could not survive its internal or external threats unless it was tempered and constrained by government regulation. The point of that regulation was not to subvert the market but to save it. One job of the Constitution, on this view, was to allow the government to protect its citizens and itself from the market’s tendency to dominate everything that came into its path.
While the liberal left has stagnated or remained groping for a philosophy that pushes forward beyond the seventies liberals, the right has succeeded in grabbing the imagery and using it for its own benefit. The right consistently shapes arguments for protecting the corporate establishment as arguments for protecting the individuals who may own the corporation. But such a view of the way corporations work, the power they possess, and their ability to use government to further the objectives of their managers and owners against the will of the people is dangerously shallow and limited.
[C]onservatives have once again mastered the art of depicting corporate interests in terms of individual liberties. What is needed, therefore, is an argument about why regulating markets is, from a constitutional perspective, desirable to enhance the constitutional values of self-government and individual liberty.
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A truly progressive jurisprudence would go further in its legal reasoning, acknowledging that the for-profit corporation, man’s most-advanced technology for making and concentrating wealth, creates unique risks for the structure of democratic government. It is true that corporate political speech is still speech, as Justice Kennedy and the A.C.L.U. alike have insisted. But that speech serves different ends than individual speech. Organized to use all lawful means to generate profit, corporations have the means and opportunity to try to capture the operation of government to serve this objective. Campaign-spending lets them do it directly. That is why Congress must be able to limit the effects of corporate speech during elections. It is a matter of defending democracy against the risk that business interests will come to dominate government decision-making — an interest that derives from the constitutional commitment to republican government.
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[T]he aim to stymie structural change [will] be framed in terms of individual freedom. It will be up to progressives to explain why this view is mistaken — and why limiting corporate rights is justified. [emphasis added]
This is the ultimate goal of this blog--to look at taxation, democratic institutions, and place of business in the economy through the lens of democratic egalitarianism, and to make the argument for controlling the size, power and influence of the biggest corporations and businesses so that we can create a sustainable democracy with a sustainable economy that operates for the benefit of the vast majority of the people and not merely for the good of the elite few who sit at the pinnacle of power.
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