Book Reviews

A REVIEWER'S NOTEBOOK JOHN CHAMBERLAIN Economic Liberties and the Constitution THE first assignment I had from For tune magazine in the mid -Nineteen Thirties was to do a story on the ((nineold men" of the Supreme Court. The question of human rights ver sus property rights was then on ev eryone's mind. If you were to sug gest that the right to own property was pre-eminently a human right, you were obviously influenced by ((reactionary" thinkers such as Irv ing Babbitt or Paul Elmer More. You were also, in Franklin D. Roo sevelt's phraseology, a ((horse and buggy" thinker. The judicial heroes of the day in the early Nineteen Thirties were the great ((dissenters," Holmes and Brandeis. Sometimes Harlan Stone went with them. The old stalwarts Van Devanter, McReynolds, Butler and Sutherland-were considered anachronisms. When I visited Pro fessor Felix Frankfurter at Harvard to talk about the court, he said sar castically of Sutherland that you couldn't get blood from a turnip.

376 Now, forty-five years later, Ber nard H. Siegan, who teaches law and economics at the University of San Diego School. of Law, comes along with a book, Economic Liber ties and the Constitution (University of Chicago Press, 5801 S. Ellis Ave., Chicago, Illinois 60637, 383/pp., $19.50), that reverses the dictum of much ((liberal" history. The old ((reactionaries" turn out to be the true liberals. McReynolds in partic ular emerges as something more than the crusty ((aginner" of the New Deal imagination. What Siegan has done is to deal with Supreme Court history in the light of what the Founding Fathers intended. They believed in Natural Rights philosophy; they read Coke and Blackstone, and were cognizant of the claims of ((natural law" theor ists that ~(positive," or enacted, law should go along with fundamentals that were ingrained in the universe and the nature of man. Economic libet1ies were protected ECONOMIC LIBERTIES AND THE CONSTITUTION 377 in the Constitution, with a guaran tee that property could not be seized without just compensation. And, in accordance with the Common Law and traditions going back to Magna Carta, the deprivation of ~~life, lib erty and property without due pro cess of law" made judicial review an absolute necessity in a check-and balance system. People believed in the ~~law of the land," and felt safe from·ex post facto rulings that would impair the obligation of contracts.

~~Due process" was always a nebu lous concept to the layman, and the phrase, ~~substantive due process," doesn't add much to clarification. But ~(due process" can be taken to mean that legal decisions should not de part from constitutional intention. Before the Civil War the Supreme Court held broadly to Chief Justice Marshall's defense of freedom of contract. ~(Due process" was af firmed in the Fourteenth Amend ment. The legal battles of the late Nineteenth and early Twentieth centuries involved conflicting inter pretations of ((public needs," and some of the justices whose reasoning is analyzed by Siegan must seem in consistent when questions of health in bakery shops, for instance, shade off into questions of mere unpleas antness. The swing in sentiment that re sulted in the ((liberal" distinction between ~~human rights" that are more or less absolute and ~(economic rights" that need not be upheld can be charted by reference to two cases.

In one, New State Ice Co. v. Lieb man, the old dispensation hung on; in the other, Nebbia v. New York, we see what Siegan calls the ((ap proaching end of economic due pro cess." New State Ice Co. v. Liebman in volved the liberty of businessmen to enter an established market. The Oklahoma legislature had declared that the manufacture and sale of ice was a (~public business," and hence subject to regulation. An agency was given wide discretion in issuing cer tificates to enter the ice business. When an independent ice man chal lenged the State of Oklahoma, the issue went ultimately to the Su preme Court. Sutherland, speaking for a majority of six, upheld the right of free market entry where there were no considerations of damage to the public health and safety. But Brandeis, in a famous dissent, ar guedthat the Oklahoma statute was not arbitrary. There could be, he said, a natural monopoly in the ice making business if competition were unchecked. There could be (~needless waste." Anyway, the State of Okla homa should be accorded the right to ((experiment."

The importance of the Brandeis dissent was that it foreshadowed na tional policy in establishing the Civil Aeronautics Board and other agen cies designed to control and license 378 THE FREEMAN June entries in a whole host of fields. In Nebbia v. New York the Brandeis ((minority" view became the major ity opinion. By a five-to-four deci sion the Supreme Court upheld the conviction of a small Rochester, New York, storekeeper for the ((crime"·of selling two bottles of milk and a loaf ofbread for eighteen cents. This was in defiance of the milk control law. Justice Roberts, speaking for the majority, ruled that it was not un reasonable for New York to enact legislation that deprived Nebbia of the liberty to sell at prices of his own choosing. McReynolds, speaking this time for a minority that included Van Devanter, Sutherland and But ler, questioned the wisdom of inter fering with the economic rights of little grocers-and also of «twelve million consumers to buy a neces sity otlife in an open market."

Siegan says that the prose in «McReynolds' dissent ... is scarcely in keeping with the image of old guard reactionaries and those who tread on the rights of the masses." Why, so Siegan asks, «have so many legal commentators missed the point of economic due process? Were Holmes and Brandeis really the he roes of that Court?" Since the New Deal the Court has followed a general pattern of accord ing udue process" protection to eco nomic issues only when they affect the First Amendment. Beyond that, the Court has tended to reject judicial review of government restraints on economic liberty. Siegan thinks the time has come for a reversal of current policy. Judicial review, he says, is firmly rooted in the Consti tution. The judiciary has uno au thority to eliminate constitutional protection for economic liberties." Congress and the State legislatures, being subject to pressures from small groups seeking ide~logical favors, can't be trusted with the «final au thority" in socioeconomic matters.

The Court should rehabilitate our Constitutional principles and bring an end to the substitution of politi cal competition for the economic competition that protected the con sumer before the world turned over on its axis in 1933. i THOUGHTS RULE THE WORLD by Leonard E. Read (The Foundation for Economic Education, Irvington-on-Hudson, N.Y. 10533), 1981 128 pages - $6.00 cloth Reviewedby Perry E. Gresham, President Emeritusand DistinguishedProfessor,Be thany College. LEONARD E. READ has produced his own two-footshelf of books. Thoughts Rule the World is number twenty seven. This handsomely bound ·new volume has all of the sparkle and charm of his earlier books with the 1981 OTHER BOOKS 379 added dimension of experience and wisdom which is reserved for what Norman Ream calls ((the chronolog ically gifted." Napoleon, dejected and in exile, his dream of world conquest faded, reflected on his experience and said - Uthe pen is mightier than the sword." Had he thought still more .deeply he might have arrived at the conclusion that the pen is nothing without thought, and that thought truly rules the world. The world of Leonard Read is made up of learn ing, thinking and writing about Lib erty. His thoughts are not intended for world conquest. He has spent his life in a relentless effort to know the truth and to share his discoveries with those who come to him with seeking minds.

Those who are out for a polemic to correct the left-leaning liberals will find no encouragement in this book. Read is no contentious debater. He bears no relationship to the young philosophers of Plato's Republic who were described as ((like puppy dogs who bite and tear one another, with out a true vision of truth." Read be lieves that one who loves liberty must study it, live it and let the example of his integrity and rectitude draw to him those who would learn. The Sage of Irvington has illumi nated one hundred eighteen pages with a most amazing range of pert i nent quotations. He begins with his old friend, Ralph Waldo Emerson, and concludes with Oliver Gold smith. In between is a startling ar ray of philosophers, economists, poets, emperors and presidents with a spate of scientists and saints for good measure. The intellectual com panions of Leonard Read are from all ages and all places.