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Constitutional Law: The Return of Lochner Doctrine

This is what we need to fear from Citizens United.  The opinion has no actual legitimate basis in constitutional interpretation.  It is purely and simply a tragedy of extraordinary proportions.  The decision hearkens back to a dark period in our constitutional odyssey:  the Gilded Era, and its haunting, corporatist opinions — Lochner, the Civil Rights Cases, and the Slaughterhouse Cases.  Each one of these decisions, among others, served to undermine fundamental civil rights protections for the individual, and instead opted to empower corporations with [preeminent] constitutional status.

The Justices installed by FDR reversed this horrendous trend — now, it appears that we are witnessing the zombie-like reemergence of Lochner, as well as the Four/Five Horsemen of Reaction, in this case Scalia, Thomas, Alito, Roberts and … most unfortunately … Kennedy.  For an article on their predecessors in name, please see  http://en.wikipedia.org/wiki/Four_Horsemen_(Supreme_Court) (Justices van Devanter, Sutherland, Butler and McReynolds).

Once again, acknowledgment must be paid to ACS Blog:  http://www.acslaw.org/acsblog/node/18198

A year later, Citizens United still looks like the modern Lochner v. New York. This case may well come to symbolize the Court’s contribution to our modern Gilded Age and its destruction of the foundations of prosperity and democracy.

Lochner symbolizes the Old Court’s turning the Civil War Amendments on their heads. The Fourteenth Amendment promised African-Americans, and indeed all Americans, the rights of citizenship, equal protection and due process of law. The Court, instead, ruled that American citizens had fought the Civil War in order to forfeit our right to use democratic government to protect ourselves against the arbitrary power of “malefactors of great wealth.”

The Gilded Age’s concentration of power and wealth in the hands of a few, symbolized and furthered by Lochner‘s rejection of basic American values, led straight to the Great Depression. Neither democracy nor market capitalism can long survive if entrenched economic power is permitted to set the rules of competition so that it always wins. When ordinary Americans lacked the power to demand wages high enough to buy the products and services they produced, the resulting shortage of demand nearly destroyed the system.

Today, we are again in a crisis caused by a similarly radical upward shift of power and wealth. In sector after sector, economic incumbents have amassed enough power to be able to shift the rules in their own favor. We have raised CEO and banker pay, at the direct cost of ordinary employee wages, to the point where our major firms increasingly resemble the world’s kleptocracies. The wonder is not that so many have collapsed, Enron-style, into complete corruption or, dot.com and housing-style, into utter incompetence and misallocation, but that so many manage to last so long, emulating the Soviet and Third World autocracies in their fantastically wealthy elites and long slow slides into collective failure.

The route to riches is no longer productive innovation or new efficiencies, but instead manipulation of the legal system. In industry after industry, our major companies use their economic and political threat power and purchasable influences on public opinion to guarantee that educational finance, retirement, medical care, Internet, telephone and other utilities, prisons and even national defense will be organized in the fashion most profitable to economic incumbents without regard to social needs. Mobile capital demands, and receives, an unrestricted right to out-bargain always less mobile labor. Our banks get unprecedently wealthy by selling sophisticated instruments for evading legal regulation and shifting tail risks to the taxpayers, then use their wealth to spread the ideology of market fundamentalism while making even larger heads we win, tails you lose bets. Our medical care, already twice as expensive as in other civilized countries, threatens to suck up any funds left after our bloated financial sector’s skim. Entertainment and software companies replace innovation with ever expanding monopolies under the clever rubric of “intellectual property.” Pharmaceutical companies use their monopoly profits to fund (or distort) research into drugs chosen not for social utility but for rent extraction potential.

We learned in the Great Depression that if the middle class isn’t able to command enough pay to buy the products and services it creates, the economy will fall into a prolonged slump. Failed economies worldwide have taught us how easy it is for powerful economic elites to replace Schumpeter’s creative destruction with elite wealth and mass stagnation. Political theorists have known the danger of law for sale at least since the Israelites’ complaints about Samuel’s sons; every republican democrat used to know that no republic can long survive if the wealthy are rich enough to buy loyal followers.

Citizens United did not cause our problems, which predate it by at least a couple of decades. But it epitomizes the Supreme Court’s contribution, much as Lochner served as a symbol of an earlier age of heartless exploitation. Here, as in Lochner, the Supreme Court has reversed the plain meaning of our Constitution in service of the same Reverse Robin Hood ideology of taking from the middle class to enrich the rich. Nothing in the Due Process and Equal Protection clauses required that the law allow employers to demand that bakers work inhuman hours in indecent working conditions; nothing in the First Amendment requires that we put public opinion and our government itself up for sale to the highest bidder.

The First Amendment is meant to protect the power of the people to criticize and control their government and the right of individuals to dissent from the majority. It is an exemplar of the Eighteenth Century suspicion of consolidated power over individual citizens and fear of the power of corruption to destroy a democratic republic. The Court has turned it on its head by licensing our most powerful aggregations of collective wealth to purchase influence, power, and still more wealth.

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