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The classical limits to police power and the economic foundations of the Slaughterhouse dissents

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Abstract

The essay examines the influence of classical economics on an important episode in American 19th-century jurisprudence on business regulation, the Slaughterhouse Cases of 1873. It is well known that the dissents penned by Supreme Court Justices Field and Bradley lay down the fundamental doctrines of the later Lochner era of so-called laissez faire constitutionalism. The essay argues that these dissents were inspired by Adam Smith’s system of natural liberty and, in particular, by his views about the regulation of negative externalities and the undesirability of government-granted monopolies. The Smithian influence emerges even more clearly when the briefs presented by counsel for the plaintiffs John A. Campbell are considered. Those briefs contained most of the issues raised by the dissenting Justices; hence, it is claimed that Lochner’s intellectual roots may be traced back to Campbell and, from him, to Smith.

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Notes

  1. Balkin and Levinson (2001, 174).

  2. It may be worth recalling that, while the label “classical” properly identifies only those economists active in Europe and the US from the last quarter of the 18th century through the first seven decades of the 19th century—the chronological limits being conventionally set by Adam Smith and Karl Marx—classical ideas remained widespread until the early 20th century, especially in the US. The system of natural liberty is famously presented in the Wealth of Nations (Smith 1904 [1776]).

  3. Cf. Keynes (1936, 383).

  4. Exemplar of the still widespread belief that classical political economy was tantamount to mere laissez faire and that therefore this was its unique contribution to the Lochner era are Kens (1998, Ch. 6), and Shugerman (2010). A similar argument (see Leonard 2009) could be made against the conventional narrative on the influence of so-called Social Darwinism.

  5. See, among many, Pound (1909), Lerner (1933), Twiss (1942), Corwin (1948), McCloskey (1951). For further references, see the Appendix of Wiecek (1998).

  6. See e.g. Benedict (1985), Gillman (1993), Bernstein (2003), Mayer (2009).

  7. For book-length overviews of these developments, see Hovenkamp (1991), Gillman (1993), and Novak (1996).

  8. McCurdy (1975, 970–971).

  9. Ibid., 971.

  10. In Commonwealth v. Alger (7 Cush. 53, Mass., 1851), Massachusetts Chief Justice Lemuel Shaw so sanctioned public restriction of property rights: “every holder of property […] holds it under the implied liability that his use of it may be so regulated, that it shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, not injurious to the rights of the community” (Alger, 84). A classic definition of police power is in Freund (1904, iii): “the power of promoting the public welfare by restraining and regulating the use of liberty and property”. On the origins of this doctrine, see Siegel (1991), Novak (1996, Ch. 1).

  11. “There are acts which the federal or state legislature cannot do without exceeding their authority. […] A law that punished a citizen for an innocent action, or in other words for an act which when done was in violation of no existing law; a law that destroys or impairs the lawful private contracts of citizens; a law that makes a man a judge in his own cause, or a law that takes property from A. and gives it to B. It is against all reason and justice for a people to entrust a legislature with such powers, and therefore it cannot be presumed that it has done it” (Calder v. Bull, 3 U.S. 386, 1798, 388 [Chase, J.]).

  12. See Benedict (1985). By “class legislation” it is meant legislation passed by government “merely to promote the interests of certain classes at the expense of their competitors, to impose special burdens and benefits on particular groups without linking these burdens and benefits to the welfare of the community as a whole” (Gillman 1993, 61).

  13. See the opposing views of Wiecek (1998) and Tamanaha (2010).

  14. Siegel (1991, 24).

  15. The only major exception was the case law on rate (esp. railroad rate) regulation, where present value and reproduction cost were amply used by courts, though only at the turn of the century and borrowing from engineers and accountants, rather than economists. See Giocoli  (2017).

  16. Slaughterhouse Cases, 83 U.S. 36 (1873).

  17. For a thorough reconstruction of Slaughterhouse’s manifold facets, see Labbé and Lurie (2005). Also see Hovenkamp (1991, Ch. 10). On the important role played in American political and legal history by the issue of corruption, especially when associated to corporate privileges, see Wallis (2006).

  18. See next section below.

  19. On this doctrine, see Aleinikoff (1987).

  20. Though not the main one, this being the so-called rational basis review formulated during the heydays of the New Deal (Nebbia v. New York, 291 U.S. 502, 1934). The latter standard only requires a court to ask whether a government measure is rationally related to a legitimate government interest. For a critical account, see Barnett and Bernick (2018).

  21. See Winch (1992).

  22. In the Theory of Moral Sentiments Smith (1790 [1759]) had employed the famous device of the impartial spectator—“the judge within”—as a metaphor for the individual’s social conscience, tempering her tendency toward selfish, antisocial behavior. Appealing to a notional, impartial judge was Smith’s peculiar way of settling moral questions—one of the basic tasks of the impartial spectator being precisely the assessment of justice and injustice of individual actions. See Young (1986), Herzog (2014). The relationship between Smith’s critique of mercantilism and his jurisprudence is explored by Young (2001).

  23. Winch (1992, 100).

  24. On Smith’s hostility against joint-stock companies, see Fleckner (2016). Wallis (2006, 49) notes the similarity between Smith’s complaints about the mercantile system and American 19th-century controversies about corporate privileges and the associated corruption of state legislators. I am grateful to a referee for having pointed out this further possible connection between Smith’s analysis and a theme—corporate corruption—which would also feature in Slaughterhouse.

  25. Smith (1904 [1776], IV.5.78).

  26. Ibid., IV.8.30. On the Madison—Smith connection, see Fleischacker (2002).

  27. A few words are of order here on why the Smithian, non-utilitarian version of classical political economy was the most popular one in 19th-century America. Starting from the 1830s, a group of so-called “clerical economists” played a decisive role in its diffusion, as they found in Smith’s combination of moral philosophy and economic analysis the solution to the thorny issue of how to make the principles of political economy consistent with Christian morality, and therefore proper teaching stuff for evangelical colleges (for the details, see Davenport 2008). The leading figure was Reverend Francis Wayland (1796–1865), who fancied himself a kind of “American Smith”. Just as Smith had done, Wayland too conceived of his own main works, the 1835 Elements of Moral Science and the 1837 Elements of Political Economy (both wholly Smithian texts), as related parts of a single system of social philosophy. The Elements of Political Economy would become the best-selling economics textbook of the time, making Wayland the discipline’s foremost teacher for two generations of pre-Civil War American students. On Wayland, see Dorfman (1966 [1949], vol. II, 758–767), Conkin (1980, 116–123), Frey (2002).

  28. Cf. Alexander (1998).

  29. As noted above, utilitarianism remained until the late 19th century marginalized in American economics and philosophy due to its alleged lack of proper moral foundations. See Palmer (1941), Hovenkamp (1996).

  30. Hovenkamp (1989). On the classical notion of competition, see Giocoli  (2014, Ch. 2).

  31. See De Roover (1951), Hovenkamp (1989).

  32. Stigler (1982, 1).

  33. Cf. Smith (1904 [1776], I.10.1).

  34. Viner (1960, 65).

  35. “All property in this commonwealth […] is derived directly or indirectly from the government, and held subject to those general regulations, which are necessary to the common good and general welfare” (Alger, 85).

  36. See Horwitz (1992).

  37. Cooley (1868, 572). Even more explicitly, a few pages later: “The maxim, Sic utere tuum ut alienum non laedas, is that which lies at the foundation of the power” (ibid., 577).

  38. “The obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty” (Smith 1904 [1776], II.2.94).

  39. Every man has freedom to do all that he wills, provided he infringes not the equal freedom of any other man” (Spencer 1851, 103, original emphasis).

  40. More precisely, Smith would argue that the tendency of the impartial spectator would be to sympathize with the natural liberty of individuals to pursue their own interests and abstain from, say, erecting firewalls; yet, this sympathetic attitude would prove detrimental to social good; hence, the utility check must step in to prevent this undesirable outcome. See Young (2005). Generally speaking, the whole area of Smith’s “civil police”, which included economic regulation in the modern sense, was reserved to utilitarian judgment: public utility was for him the ultimate judgment for violations of police. But this does not mean that Smith’s approach was naively utilitarian. As remarked by historians of economics Amos Witztum and Jeffrey Young, when summoned to give advice to statesmen, the spectator must be ready to employ a sort of “rationalistic safety net”, in which utility provides the final check to ensure that moral sentiments do not lead into actions that are ultimately harmful to society. Indeed, one of the functions Smith ascribed to government is to make sure that pursuing morality (i.e., justice as embodied by the system of natural liberty) does not eventually harm society. The spectator’s task is to draw the line, isolating the categories of behavior that, like failing to erect firewalls, may give rise to undesirable outcomes. See Witztum and Young (2013, 578).

  41. See Haakonssen (1981).

  42. Smith (1904 [1776], IV.9.51).

  43. Haakonssen (1981, 129).

  44. Another reason for rejecting the “list approach” was the knowledge barrier that inevitably hindered legislators’ plans for the “perfect state”. Smith observed that in order to justify government interference with human activities (first of all, economic ones) it is necessary to credit government with better information about individual interest than the individual herself. This he could not concede. See e.g. his critique of the “men of system” in Smith (1790 [1759], VI.2.41).

  45. Haakonssen (1981, 131).

  46. Cf. Smith (1790 [1759], II.ii.5).

  47. See Mill (1909 [1848], V.11.4), Medema (2009, Ch. 2).

  48. As he put it, regulations “may not only be established by the State, but must also be subject to change from time to time, with reference to the general well-being of the community, as circumstances change, or as experience demonstrates the necessity” (Cooley 1868, 574).

  49. Ibid., 596–597.

  50. Wynehamer v. People of New York, 13 N.Y. 278 (1856). On this case, about a 1855 New York statute prohibiting the sale of liquor, see Novak (1996, Ch. 5).

  51. See Horwitz (1992).

  52. Cooley (1868, 577).

  53. The relevant part of the Amendment recites: “No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law”.

  54. Slaughterhouses used to be located in New Orleans’s most populous areas, alongside tenements, hospitals, and schools. As the city had no public sewer system, butchers emptied the waste of butchered animals into the streets and the Mississippi River, which supplied the city’s water. Unsurprisingly, yellow fever epidemics were frequent. The statute also imposed significant restrictions on the Crescent City Company, subjecting it to sanitary inspections and to fines if it did not provide adequate facilities to meet the demand. A case can thus be made that the Louisiana statute was a well-motivated (in legal terms) and efficient (in economic terms) use of state police power to regulate the slaughtering industry and control a major public health problem. For this interpretation, see Hovenkamp (1991, Ch. 10), Parmet (1996), Labbé and Lurie (2005).

  55. Jordan (1980, 80).

  56. Ibid., 86. As mentioned in the Introduction, the true motivations behind Campbell’s involvement in the case and the theses he presented to the Court are irrelevant here. Was he just trying to win the verdict for his clients or was he after political goals? Suffices to say that Campbell’s arguments have also been explained as part of a reactionary legal strategy he masterminded to obstruct the Reconstruction projects carried forward by the Republican government of Louisiana. See Ross (2003a).

  57. The case was discussed twice in front of the Supreme Court. Hence, Campbell prepared two versions of his brief, making for a total of more than 90 pages (excluding the Appendices). Generally speaking, the quality of Campbell’s briefs was legendary. Some of his arguments before the Supreme Court were widely recognized by the bench and the bar of the time as the greatest ever heard. See Connor (1920).

  58. After graduating at Franklin College (the current University of Georgia) at fifteen (!), Campbell had started reading law in 1828 and had been admitted to the Georgia bar one year later. He had to re-start his legal profession from scratch in Louisiana after losing his property and spending jail time because of his involvement with the Confederacy. Franklin College’s 1820s syllabi suggest that Campbell received no formal training in economics there. See Reed (1949, Ch. III).

  59. A narrow interpretation of the Privilege or Immunities Clause of the Fourteenth Amendment will be the touchstone of Justice Miller’s opinion for the majority (see below, Sect. 7)—and of much legal debate about Slaughterhouse ever since. Miller’s views have been accused of unduly constraining the rights of national citizenship granted by postwar Amendments. See e.g. Hyman (2000). For the thesis that an anti-discriminatory reading of that Clause should not necessarily entail support for economic freedom, see Curtis (1996).

  60. Campbell (1975 [1873], Brief 1, 540).

  61. Ibid., 540–541.

  62. Ibid., Brief 2, 660, original emphasis.

  63. Ibid.

  64. Ibid., Brief 1, 551–552.

  65. Ibid., Brief 2, 676.

  66. Ibid., 677.

  67. Ibid. Here the instrumentality of Campbell’s argument in favor of his clients may perhaps be best appreciated. He emphasized that the statute made no express reference to specific sanitary problems, nor to “the location of the landings for stock” or “the waters of the river Mississippi” (ibid., Brief 1, 566–567), but this claim deliberately neglected years of public debate and legislative proposals about the unhealthy effect of New Orleans slaughterhouses. See Labbé and Lurie (2005, Chs. 2–3), Hovenkamp (1991, 117–121).

  68. Campbell (1975 [1873], Brief 2, 681).

  69. As well as with Cooley’s treatise: see e.g. Cooley (1868, 165 and 357).

  70. Campbell (1975 [1873], Brief 1, 575).

  71. Ibid., Brief 2, 669.

  72. Cooley (1868, 394).

  73. Campbell (1975 [1873], Brief 1, 562).

  74. Constant (1837, 129), quoted by Campbell (1975 [1873], Brief 2, 685).

  75. A substantive interpretation of the Due Process Clause is famously at the core of the Lochner decision—and of the ensuing century-long debate about it. For a recent re-assessment of the issue, see Bernstein (2017).

  76. See e.g. Campbell (1975 [1873], Brief 2, 656 and 674). The earlier decision was Dred Scott v. Sandford, 60 U.S. 393 (1857), which infamously upheld slavery on various grounds, including the protection of slaveholders’ property rights.

  77. Slaughterhouse, Report of Plaintiff’s Brief, at 56, emphasis added.

  78. Campbell (1975 [1873], Brief 2, 682).

  79. Ibid., Brief 2, 682–683; emphasis added.

  80. Twiss (1942, 52–53).

  81. Ibid., 57.

  82. Slaughterhouse, 78. For an alternative reading of Miller’s Slaughterhouse opinion (interpreted as defending progressive economic regulation), see Ross (2003b, Ch. 8).

  83. Walker v. Sauvinet, 92 U.S. 90 (1875), 93.

  84. The opinion’s practical effects were soon circumvented by the expanded reading of the Due Process Clause typical of Lochner era courts. So, the only significant result of Miller’s downplaying of the Privilege or Immunities Clause was to shift legal focus from one clause to the other. See however Curtis (1996), who makes the case that the shift had indeed momentous consequences.

  85. Field and Bradley were joined in their dissents by Chief Justice Salmon Portland Chase and Associate Justice Noah Haynes Swayne. All four concurred in Field’s opinion; Swayne, who penned a third dissent, also concurred with Bradley.

  86. The Locofocos were a radical offshoot of Jacksonianism that arose in the mid-1830s in response to the alleged betrayal by mainstream Democrats of the principles of equal rights and opposition to monopoly. Their overarching goal was to make American society conform to the Smithian ideal of natural liberty. See Dorfman (1966 [1949], vol. II, Bk.3).

  87. Slaughterhouse, 97.

  88. Ibid., 109–110.

  89. For a critique of the prevailing view that Field was a committed Locofoco, who later in his career also endorsed the “free labor” creed, see Cachán (2002). Cachán emphasizes the laissez faire elements in Field’s jurisprudence.

  90. Gillman (1993, 67).

  91. Slaughterhouse, 110.

  92. Ibid., 105.

  93. Ibid.

  94. Ibid., 101.

  95. This may explain why ex-Confederate Campbell did not stress it. On the “free labor” ideology, the classic reference is Foner (1970).

  96. “The property which every man has in his own labour, as it is the original foundation of all other property, so it is the most sacred and inviolable” (Smith 1904 [1776], I.10.67). Field’s acquaintance with Smith was possibly due to his study of Francis Wayland’s Elements of Moral Science while at Williams College. Wayland was, as we know, the most prominent epigone of Smith in the US.

  97. Slaughterhouse, 110.

  98. In re Jacobs, 98 N.Y. 98 (1885).

  99. For an instance of this interpretation, see Kens (1998).

  100. See Campbell (1975 [1873]), Supplement to Brief 1, 583. Note that Campbell quoted the passage in full, thereby exalting its direct reference to the notion of negative limit (“The patrimony of a poor man lies in the strength and dexterity of his hands; and to hinder him from employing this strength and dexterity in what manner he thinks proper without injury to his neighbour, is a plain violation of this most sacred property”).

  101. Bradley was a learned man and a bibliophile; as a lawyer, he specialized in business and patent law, so it is very likely that he also possessed some knowledge of economics.

  102. Slaughterhouse, 114.

  103. Ibid., 116, emphasis added.

  104. Ibid., 119–120.

  105. Ibid., 120.

  106. Ibid., 122.

  107. Recall that even Campbell’s briefs contained no such transparent statement, although the official summary of his oral argument did.

  108. See Cooley (1868, 356).

  109. See Ely (2006).

  110. Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746 (1884).

  111. Ibid., 765.

  112. Smith (1904 [1776], I.10.1 and I.10.67).

  113. As a prominent Progressive scholar put it: “from being the mere protest of an outvoted dissentient, Bradley's conception of ‘liberty’ […] became the doctrine of an affirming opinion, and as such easily susceptible of being represented as the doctrine of the Court itself” (Corwin 1948, 136, original emphasis).

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Acknowledgements

I am grateful to Simon Cook, Maria Pia Paganelli and two anonymous referees for their useful comments. The usual disclaimer applies.

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Giocoli, N. The classical limits to police power and the economic foundations of the Slaughterhouse dissents. Const Polit Econ 30, 407–437 (2019). https://doi.org/10.1007/s10602-019-09281-7

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