Governmental redistributionist and interventionist policies have been accumulating for two centuries. The seizure of income, the stifling of entrepreneurship and increased regulation of commerce have proceeded almost unremittingly. Ironically, this has taken place during a period in which mankind has enjoyed an unprecedented upsurge in prosperity.
Of course correlating the growth of incomes with the growth of state interventionism tells us nothing about causes. Indeed, we can see that each new entrant into the wealthy nation club—Japan, the New Exporting Countries of the 1980s, China, India—has achieved this by forsaking big government. The failures in Latin America, Africa and the Middle East, by contrast, have all sought to marry intrusive and redistributionist government with growth.
The USA has been the richest source of research in examining the seemingly inexorable growth of government. Timothy Sandefur’s The Conscience of the Constitution is one book among several recent ones addressing this issue.
Sandefur recognises that the US Constitution’s determination that government should focus on protecting life, liberty and property did not arrive out of the blue. John Locke had enunciated the principles of limited power by the executive and they were enshrined in Magna Carta with restraints against property taking and where “due process” precluded arbitrary arrest by the sovereign. (And commercial law had long been in place throughout Europe from the Middle Ages, ensuring fair treatment of visiting merchants, the alternative being a termination of trade.)
But the US Constitution, with its divided powers between the federal and state governments and with all having three elements of executive, judiciary and legislature, took dispersion of powers far more rigorously than had been previously seen. This arrangement was designed to sandbag liberty and individual property rights against incursions by the government.
Sandefur traces the gradual perversion of this with the executive, legislature and courts all making decisions that impose upon the individual’s rights, to override his or her working, leisure and lifestyle preferences. He looks at the Supreme Court, which in 1873 (the Slaughterhouse Case) sought to unpick the rights awarded to blacks resulting from the Civil War, and in extending the notion of “eminent domain” as a rare and unusual justification for compulsory acquisition to one that (in the Kelo Case) supported compulsory property transfers to uses the government deemed were more valuable. In Australia we see one outcome in the recent tragedy of bitterness as a government environment officer was killed by a landowner for serving a notice that required the landowner to restore his land to some form of natural state as determined by the New South Wales government.
Others have cast the executive and legislative arms as the villain. (It was Mark Twain who said, “No man’s life, liberty, or property are safe while the legislature is in session.”) Sandefur shares these views, framing them as responses to populist pressures. He says:
When Supreme Court Justice Stephen Breyer was asked in a 2006 interview what he thought was the most important part of the United States Constitution, his answer was simple: “Democracy”. This surely struck many as unremarkable, even as clichéd. But it is curious when we recollect that the word democracy is nowhere to be found in either the Constitution or the Declaration of Independence. On the contrary, the Founders had different priorities. In the very first sentence of the Constitution, they pronounced unambiguously that liberty is a “blessing”. They did not say the same about democracy.
Over the past century, the Progressives have legitimised the majority as a means of seizing wealth. John Dewey, writing in 1935, speaks for many of these. Dewey acknowledged that the Founders believed individuals should be protected from government intrusion, but that view, he claimed, was now obsolete. Dewey said that in today’s world, lawmakers must create “favorable institutions, legal, political and economic”, so as to shape the souls of citizens. He argued that government must redistribute wealth and redesign society so as to mould the mind and character of each person. Oliver Wendell Holmes took this even further, dubbing liberty as a perversion when it obstructs the majority “right” to implement policies. Sandefur also notes that Robert Bork had argued that “in a democracy the majority has a boundless power to outlaw whatever conduct it finds objectionable”.
Others have sought to extend such intrusions beyond property rights to matters governing personal relationships. Sandefur notes that when the Supreme Court ruled as unconstitutional a law that criminalised consensual homosexuality, Congressman Ron Paul maintained that “The State of Texas has the right to decide for itself how to regulate social matters like sex, using its own local standards.”
The tension, as Sandefur points out, between the rights of the ruler to operate efficiently as a delegate of the ruled, and the rights of the ruled to avoid arbitrary and tyrannical oversight, is as old as the state itself. As Sandefur states, Aristotle divided governments between those that rule for the ruler’s benefit and those that rule for the sake of the ruled.
Aristotle put in the former category tyrannies, oligarchies and democracies, the inclusion of democracies reflecting fears of mob rule. And here we have the nightmare of so many constitutional thinkers, including the American fathers, that once we legitimise rule by the majority, we have opened the floodgates to the plunder of the better-off by the worse-off. In the end, moral considerations aside, this strangles the productiveness of the state, as we see in examples ranging from the communist systems to Argentina and emerging in all democracies. “I voted for Obama because Obama gave me an iPad” was a famous refrain from the most recent US election. The loser, Mitt Romney, lamented that he found it difficult to win against the “48 per cent” who were the recipients of funding that the state had taken from the affluent.
Having legitimised the majority, how do we prevent it from utterly undermining the incentives of those who would create wealth?
Sandefur sees the need for a strict reading of the limitations within the Constitution, particularly on the ability of government to take property rather than, as at present, doing so “whenever it feels like it”. But the majoritarian genie having emerged from the bottle, it is difficult to see how it can be returned.
However, the dispersion of power in the USA does have some advantages in allowing the avoidance of some of the gross mistakes made in jurisdictions where power is more concentrated. Nowhere is this more evident than in the energy sector. Though the US administration shares similar goals of carbon reduction with the EU, and an equal hostility to shale gas, the President has been unable to tax fossil fuels and prevent shale gas exploitation in the way that the EU has. As a result, energy costs are considerably lower in the USA, to the benefit of American consumers and industry, the latter including automobiles, where BMW and Mercedes have both relocated much of their production to the USA.
But this is only mitigating, and perhaps temporarily, the spreading cancer of populism.