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Some Causes and Consequences of the Bifurcated Treatment of Economic Rights and “Other” Rights Under the United States Constitution

Published online by Cambridge University Press:  13 January 2009


The existence of a meaningful distinction between economic rights and “other rights” has been a cornerstone of constitutional law for the past sixty years. During this period, the federal courts consistently have taken the position that Congress is free to abuse citizens’ economic liberties, but is not permitted to interfere with such other, noneconomic “rights” as freedom of expression, freedom of assembly, and freedom of religion.

Research Article
Copyright © Social Philosophy and Policy Foundation 1992

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1 Jensen, M. C. and Meckling, W. H., “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure,” Journal of Financial Economics, vol. 3 (1976), pp. 305–60CrossRefGoogle Scholar at 307, n. 6.

2 Tollison, R. D., “Public Choice and Legislation,” Virginia Law Review, vol. 74, no. 2 (March 1988), pp. 339–71CrossRefGoogle Scholar, at 343.

3 Macey, J. R., “Transactions Costs and the Normative Elements of the Public Choice Model: An Application to Constitutional Theory,” Virginia Law Review, vol. 74, no. 2 (March 1988), pp. 471518.CrossRefGoogle Scholar

4 The argument that the Framers intended to establish a constitutional system that implemented a system of checks and balances in order to make wealth transfers more difficult is not inconsistent with the more common argument that they established such a system in order to prevent tyranny. Checks and balances not only make direct tyranny by elected officials more difficult; they make indirect tyranny by interest groups more difficult as well. Ibid, at 493–95; Cass Sunstein, R., “Interest Groups in American Public Law,” Stanford Law Review, vol. 38, no. 1 (November 1985), pp. 2987.CrossRefGoogle Scholar As Sunstein has observed, “the problem of faction has been a central concern of constitutional law and theory since the time of the American Revolution. Madison made control of factions the centerpiece of his proposed Constitution.” Ibid, at 29.

5 Since its inception, there has been controversy among constitutional lawyers about whether judicial review was a part of the original constitutional design. The ultimate answer to the question of whether U.S. federal judges possess the power to declare acts of Congress unconstitutional was not provided in the Constitution itself, but in Chief Justice John Marshall's landmark opinion in Marbury v. Madison, 1 Cranch 137 (U.S. 1803), where Justice Marshall declared that this power was not expressly provided in the Constitution because it was not considered necessary to do so, and that such power is an essential element of American constitutional law because it is inherent in the very concept of an independent judiciary.

Despite the uncertain provenance of the power of the judiciary to review the constitutionality of legislative enactments, it is absolutely clear that the Framers envisioned an independent judiciary as a safeguard against encroachments on the people's liberty by the legislature. Alexander Hamilton, the principal advocate for the constitutional establishment of an independent judiciary in The Federalist Papers, based his defense of this branch on its ability to control legislative excess, not through judicial review alone, but through the “firmness of the judicial magistracy” in its role as interpreter of statutes:

But it is not with a view to infractions of the Constitution alone that the independence of judges may be an essential safeguard against the effects of occasional ill humors in the society…. The firmness of the judicial magistracy is of vast importance in mitigating the severity and confining the operation of such laws. It not only serves to moderate the immediate mischiefs of those which may have been passed but it operates as a check upon the legislative body in passing them; who, perceiving that obstacles to the success of an iniquitous intention are to be expected from the scruples of the courts, are in manner compelled, by the very motives of the injustice they mediate, to qualify their attempts.

Hamilton, Alexander, The Federalist Papers, no. 78, ed. Clinton, Rossiter (New York: Mentor, 1961), p. 470.CrossRefGoogle Scholar

6 Director, Aaron, “The Parity of the Economic Market Place,” ed. Manne, Henry G., Economics of Legal Relationships: Readings in the Theory of Property Rights (St. Paul: West Publishing Company, 1975), p. 105.Google Scholar

7 Meiklejohn, Alexander, Free Speech and Its Relation to Self-Government (New York: Harper, 1948), p. 2.Google Scholar

8 Moore, T. G., “An Economic Analysis of the Concept of Freedom,” Journal of Political Economy, vol. 77, no. 4, pt. 1 (1969), pp. 532–44.CrossRefGoogle Scholar

9 Ibid., p. 533.

10 The point, of course, is Adam Smith's. This particular rendition is found in McKenzie, R., “Introduction,” ed. R., McKenzie, Constitutional Economics: Containing the Economic Powers of Government, p. 4 (Lexington: Lexington Books, 1984), pp. 118.Google Scholar

11 T. G. Moore, “Economic Analysis of Freedom,” p. 534.

12 See Director, “Parity of the Market Place,” p. 102 (summarizing Meiklejohn's argument).

13 Ibid., p. 105, n. 6.

14 Ibid.

15 Ibid.

16 Mill, John Stuart, Utilitarianism, Liberty and Representative Government (New York: E. P. Dutton & Co., 1951).Google Scholar

17 Knight, Frank H., Freedom and Reform: Essays in Economics and Social Philosophy (New York: Harper & Brothers, 1947)Google Scholar, ch. 14.

18 Lee, D. R., “Politics, Ideology, and the Power of Public Choice,” Virginia Law Review, vol. 74, no. 2 (March 1988), pp. 191–98CrossRefGoogle Scholar, at 195.

19 198 U.S. 45 (1905).

20 Ibid., p. 64.

21 McCloskey, R. G., The American Supreme Court (Chicago: University of Chicago Press, 1960), pp. 137–39.Google Scholar

22 Nowak, John E., Rotunda, Ronald D., and Young, J. Nelson, Constitutional Law (St. Paul: West Publishing Co., 1978), pp. 7778.Google Scholar

23 Epstein, Richard A., “Toward a Revitalization of the Contract Clause,” University of Chicago Law Review, vol. 51, no. 2 (Spring 1980), pp. 732–34.Google Scholar

24 Ibid.

25 Ibid.

26 Compare Muller v. Oregon, 208 U.S. 412 (1908) (upholding state legislation regulating the number of hours women could work) and Bunting v. Oregon, 243 U.S. 426 (1917) (limiting the work hours for men in certain industries) with Hammer v. Dagenhart, 247 U.S. 251 (1918) (invalidating a federal law that excluded from interstate commerce products made by firms employing children under a certain age) and Tyson & Bro. v. Banton, 273 U.S. 418 (1927) (invalidating theater ticket sales regulation).

27 Adair v. United States, 208 U.S. 161 (1908) (invalidating a federal law prohibiting antiunion “yellow dog” employment contracts as violations of substantive due process); Hammer v. Dagenhart.

28 See, e.g., Schechter Poultry Corp. v. United States, 295 U.S. 495 (1934) (invalidating the National Industrial Recovery Act); United States v. Butler, 297 U.S. 1 (1936) (invalidating the Agricultural Adjustment Act); Carter v. Carter Coal Co., 298 U.S. 238 (1936) (invalidating a federal law regulating price fixing and unfair trade practices, and setting minimum working conditions in the coal industry).

29 Nowak, Rotunda, and Young, Constitutional Law, p. 403.

30 300 U.S. 379 (1937).

31 United States v. Darby, 312 U.S. 100 (1941) (upholding the Fair Labor Standards Act); NLRB v. Jones & Laughlin Steel Co., 301 U.S. 1 (1937) (upholding the National Labor Relations Act); Wickard v. Filburn, 317 U.S. 111 (1942) (upholding a new Agricultural Adjustment Act).

32 198 U.S. 45, pp. 68–72 (Harlan, J., dissenting).

33 United States v. Carolene Products Co., 304 U.S. 144 (1938). In what has become the most famous footnote in constitutional law, in footnote four of the Carolene decision the Court declared:

There may be a narrower scope for operation of the presumption of constitutionality when legislation appears on its face to be within a specific prohibition of the constitution, such as those of the first ten amendments….

It is unnecessary to consider now whether legislation which restricts those political processes which can ordinarily be expected to bring about repeal of undesirable legislation is to be subjected to more exacting scrutiny under the general prohibitions of the Fourteenth Amendments than are most other types of legislation….

Nor need we inquire… whether prejudice against discrete and insular minorities may be a special condition which tends seriously to curtail the operation of those political processes ordinarily to be relied upon to protect minorities, and which may call for a correspondingly more searching judicial inquiry.

This footnote contains the most complete statement of the now well-known distinction in constitutional law between the treatment of general economic or business regulatory legislation, which will be given great deference by the courts; and both governmental restrictions on groups that the court believes have been the subject of systematic exclusion from the political process, as well as legislation that restricts what the court takes to be fundamental constitutional values. These latter sorts of governmental regulations, unlike general regulatory legislation, will be the subject of stricter judicial scrutiny.

34 Tribe, Laurence H., American Constitutional Law (Mineola: The Foundation Press, 1988), p. 582.Google Scholar

35 372 U.S. 726 (1963).

36 Ibid., pp. 731–32.

37 336 U.S. 106 (1949).

38 Nowak, Rotunda, and Young, Constitutional Law, p. 408.

39 Stigler, George, “The Theory of Economic Regulation,” Bell Journal of Economics, vol. 2, no. 1 (1971), pp. 321.CrossRefGoogle Scholar

40 Macey, Jonathan R., “Promoting Public-Regarding Legislation Through Statutory Interpretation: An Interest Group Model,” Columbia Law Review, vol. 86, no. 2 (March 1986), pp. 223–68CrossRefGoogle Scholar, at 227–28.

41 Olson, Mancur, The Rise and Decline of Nations (New Haven: Yale University Press, 1982), pp. 75117.Google Scholar

42 Macey, Jonathan R., “Public Choice: The Theory of the Firm and the Theory of Market Exchange,” Cornell Law Review, vol. 74, no. 1 (November 1988), pp. 4361Google Scholar, at 52–53.

43 Ibid.

44 A possible shortcoming of the Lochner-era Court's approach to legislation was that it did not take a particularly consistent approach to constitutional issues, and perhaps acted with too much restraint.

45 Mashaw, Jerry, “Constitutional Deregulation: Notes Toward a Public, Public Law,” Tulane Law Review, vol. 54 (1980), pp. 849–75Google Scholar, at 868 (“the question [of] whether the legislative action has a public purpose is always one that the legislature purports to have decided affirmatively”).

46 Bickel, Alexander M., The Morality of Consent (New Haven: Yale University Press, 1975), p. 83.Google Scholar

47 McChesney, Fred S., “A Positive Regulatory Theory of the First Amendment,” Connecticut Law Review, vol. 20, no. 2 (Winter 1988), pp. 355–82Google Scholar, at 366.

48 Sunstein, Cass, “Interest Groups in American Public Law,” Stanford Law Review, vol. 38, no. 1 (November 1985), pp. 2987CrossRefGoogle Scholar, at 29.

49 Madison, James, The Federalist Papers, No. 10, ed. Clinton, Rossiter (New York: Mentor, 1961), p. 77.Google Scholar

50 Ackerman, Bruce, “The Storrs Lectures: Discovering the Constitution,” Yale Law Journal, vol. 93, no. 6 (1984), pp. 1013–73CrossRefGoogle Scholar, at 1013.

51 Landes, William and Posner, Richard, “The Independent Judiciary in an Interest-Group Perspective,” Journal of Law and Economics, vol. 18, no. 3 (December 1975), pp. 875901.CrossRefGoogle Scholar

52 Ibid., p. 878.

53 Tribe, American Constitutional Law, pp. 678–79.

54 Ibid.

55 Ibid.

56 Schenk v. United States, 249 U.S. 47, 51 (1919) (declaring that “the prohibition of laws abridging the freedom of speech is not confined to previous restraints”); Gitlow v. New York, 268 U.S. 652, 666 (1925) (“freedom of… the press [is] among the fundamental rights and ‘liberties’ protected by the due process clause of the Fourteenth Amendment”); Pierce v. Society of Sisters, 268 U.S. 510 (1925) (holding that a law requiring all children to attend public schools is inconsistent with the First Amendment protection of the free exercise of religion).

57 Anderson, Gary M., Shughart, William F. II, and Tollison, Robert D., “On the Incentives of Judges to Enforce Legislative Wealth Transfers,” Journal of Law and Economics, vol. 32, no. 1 (April, 1988), pp. 215–28.CrossRefGoogle Scholar

58 410 U.S. 113 (1973).

59 Director, “Parity of the Market Place,” p. 104.

60 Easterbrook, Frank H., “The Constitution of Business,” George Mason University Law Review, vol. 11, no. 2 (Winter 1988), pp. 5372Google Scholar, at 53–54.

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