K. Sabeel
Rahman
From the Occupy movement to the Fight for 15 to Black Lives
Matter, the politics of the current moment have cast into relief deep
structural inequalities in American politics, economy, and society. At the same time, the Supreme Court’s recent
track record on labor rights, voting rights, campaign finance, and class
actions evoke for some commentators the specter of “neo-Lochnerism.” The Roberts Court, to these critics, is furthering
a business-friendly
view of constitutionalism that, while it avoids the formalisms of Lochner, nevertheless evinces a similar disregard
for the kinds of underlying power disparities that might make these policies
necessary. What might an alternative,
more egalitarian and democratically-inclusive constitutionalism for today look
like? In their forthcoming book The Anti-Oligarchy Constitution, Joseph
Fishkin and Will Forbath attempt to develop one such alternative, arguing for a
constitutional tradition emphasizing economic opportunity that draws on the New
Deal and on Constitutional legacies back to the Founding.
But I think it is important to understand this larger
project that Fishkin, Forbath, and a growing cohort of legal scholars and
reformers are engaging in is about more than constitutional text,
interpretation, or doctrine. It is,
rather, a more fundamental project about the literal constitution of our economic and political structures, and about
the moral values that we want to animate these structures. In this, the growing scholarship on law and
inequality is best understood as a more modern manifestation of a familiar
legacy: that of legal realism and Progressive Era political economy.
***
In the late nineteenth and early twentieth centuries, the
upheavals of industrialization generated an extraordinarily rich ferment in
intellectual thought and reform politics.
We are familiar with the legal realist attack on laissez-faire constitutionalism
and the conservative Lochner court
through its methodological critique of formalism, and a social scientific
interpretation of judicial behavior as fundamentally subjective and political. But this conventional reading of legal
realism undersells its intellectual contributions and relevance for today. A
number of more radical legal realists, alongside other thinkers in economics,
philosophy, and reform politics, developed a surprisingly compelling and
prescient account of economic power and democracy.
For these thinkers, the problem of the modern economy was
first and foremost understood not as
a matter of income inequality per se, but rather as a deeper problem of
unaccountable and concentrated power. Louis Brandeis, for example, captured this
concern with large corporations, monopolies, and trusts, arguing that large corporations
enjoyed immense profits while paying below subsistence wages, creating a
disparity in political power that was akin to slavery where workers were
“absolutely subject” to the will of the corporation.[1] Even if corporations acted in the interests
of consumers and laborers, this would be at best a “benevolent absolutism,”
still leaving in place the root problem that “within the State [there is] a
state so powerful that the ordinary social and industrial forces existing are
insufficient to cope with it.”[2]
In addition to the concentrated power of discrete actors
like corporations, trusts, and wealthy elites, the realists and their fellow
critics of industrial capitalism also saw this same problem of unequal power in
the very fabric of the market system itself.
Robert Hale argued that unequal income distributions were a result not
of natural forces, but of disparities in power: “the relative power of coercion
which the different members of the community can exert against one another.”[3] Economists
like John Commons and Richard Ely, as well as philosophers like John Dewey shared
this power analysis of market transactions.
This diagnosis of unequal economic power recasts the problem
of modern capitalism as one not of income inequality, but rather one of domination—the accumulation of
arbitrary, unchecked power over others.
Domination, for these Progressive Era critics, manifested in both the
concentrated form of corporate power, and the diffuse form of the market system
itself. The realist critique of the
public/private distinction was therefore not just a critique of formalism. Rather, it was an argument for opening up
these “private” forms of economic power to the same demands for democratic
justification, legitimacy, and accountability normally expected of exercises of
“public” power.
***
In their response to this problem of domination, the reform
politics of the Progressive Era represented a large-scale, structural, attempt
to redress this problem of domination in two respects: first, by restructuring
the market system to curb private power; and second, by restructuring the
political system to expand popular sovereignty.
Taken together, these reforms sought to both reduce the threat of
domination and expand the capacities of the democratic citizenry to better hold
economic actors accountable.
In the economic realm, the Progressive Era established
radical changes to the very structure of the emerging industrial economy. From the battles to create a meaningful
antitrust law, to the establishment of the Federal Reserve as a way to reassert
some degree of public control over finance, to the widespread adoption of
public utilities as a mode of social control over the production and
distribution of necessities like ice, milk, transportation, and communications,
Progressive Era reformers sought to change the allocation of economic power and
the dynamics of market forces. While we
are accustomed to viewing the Progressive Era as the rise of ideals of
regulatory expertise in areas like consumer protection and worker safety, it is
this effort to structurally shift economic power that were most central.
In the political realm, Progressive reformers experimented
with various measures to reassert popular sovereignty against the perceived
threats of economic power, as well as political corruption and
dysfunction. Thus, reformers succeeded
in institutionalizing ballot, recall, initiative, and referenda procedures in
many state constitutions. In a similar vein, many activists and reformers in
this period sought to mobilize citizens through political association as a way
to create a more equitable balance of political power. Others established for the first time Home
Rule powers for local government bodies as a way to expand participation and
bypass the corruption of state legislatures and party machines. The era was
dense with robust, active, and mass membership associations that offered both
civic cultivation for their members, as well as a source of countervailing
political power to represent the interests of their members in electoral
politics. These same aspirations drove the development of new expert-led regulatory
agencies and commissions at state, local, and national levels, offering reformers
the hope of an effective new tool for managing the increasingly complex modern
economy, asserting the public good against powerful private actors such as trusts
or corporations, and sidestepping the problems of political corruption and
capture within legislatures.
***
The realists and Progressive thinkers of the era were by no
means uniform in their views, and this brief account above cannot do justice to
the diversities and complexities of political economic thought in this
period. But by situating the legal
realists, the early law and economics scholars, and Progressive Era
philosophers all in context of the
politics of industrial capitalism, we can see some important implications for
contemporary legal scholarship grappling with this new Gilded Age of economic
and political inequality.
First, there is a substantive, moral vision of political economy to be excavated from the
turn-of-the-century Progressive thinkers and reformers, revolving around the
problem of economic domination, and the solution of democratic agency. This is more than simple anti-formalism or
social scientific realism. Rather, both
of these elements serve a larger moral account of economic and democratic
freedom.
Second, this moral account is paired with an implicit theory
of change that is decidedly not court-centric.
The thinkers and reformers of this period were by and large hostile to
the judiciary as conservative, formalist, and neither politically accountable
nor expert enough to be the lead institution in shaping American political
economy. But there is a way in which the
reform vision of Progressive Era thinkers can still be understood as
constitutional—not the Constitution of text, doctrine, and courts, but rather
the literal “constitution” of economic and political structures. The reformers of this period were
fundamentally structural in their
approach. They sought to reshape the
foundational structures and dynamics of both economic and political order. Landmark statutes like the Sherman Act and
the Federal Reserve Act can be thought of as a form of popular and legislative
constitutionalism in that they fundamentally altered American political
economy, were central matters of political contestation and validation, and
were seen at the time as having a foundational, near-constitutional status as
more than ordinary public policies. At
the same time, the method of social change is distinctive, seeking to radically
restructure American political economy through a combination of social
movements, normative shift, and super-statutes that, though not tied to
Constitutional doctrine, have a kind of quasi-constitutional import. The New Deal later codified similarly
structural, quasi-constitutional changes in political economy through its
financial reform statutes, the Social Security Act, and the National Labor
Relations Act, and the Fair Labor Standards Act, among others. These statutes continued both the substantive
normative thrust of Progressive Era thought, as well as its theory of social
change.
This is the tradition in which Fishkin and Forbath’s
intervention can be placed. Their
account of constitutional political economy is better understood as
constitutional in these two senses: as engaging the fundamental moral questions of what freedom,
opportunity, and democracy mean in today’s society; and as securing this moral
vision through laws that alter the basic structure
of our economy and politics. Such moral
and structural change can be accomplished through a particular approach to law
and social change, prioritizing the synergies between normative argument,
social movements, and legislative and regulatory changes to the basic
structure.
Nor are Fishkin and Forbath alone in this. In the aftermath of the financial crisis and
in the face of the Roberts Court, we are at the beginning of what might well
become a new wave of legal realism, as scholars from business law, labor law,
political law, public law, and elsewhere are increasingly turning their
attention to both the moral challenges of inequality, and to questions of
fundamental structural and system design.
While some of these scholars’ arguments do involve battles in the
Supreme Court, many of them take place on the terrain of regulation,
legislation, state and local level policy, and social movement advocacy. If we are lucky, these scholars can have the
kind of lasting impact as their forbears a century ago.
K. Sabeel Rahman is an Assistant Professor of Law at Brooklyn Law School and a Fellow at the New America Foundation. You can reach him by e-mail at sabeel.rahman@brooklaw.edu
[1]
Louis Brandeis, “Big Business and Industrial Liberty,” in Osmond Fraenkel, ed.,
The Curse of Bigness: Miscellaneous
Papers of Louis Brandeis (New York: Viking Press, 1935), 38-39, at 39.
[2]
Brandies, “On Industrial Relations,” in Curse
of Bigness, 73.
[3]
Robert Hale, “Coercion and Distribution in a Supposedly Non-Coercive State”
(1923), in William W. Fisher III, Morton Horwitz, Thomas Reed, eds., American Legal Realism (New York: Oxford
University Press 1993), 101-8, at 108.