Economic rights, in the libertarian legal tradition described across episodes of The Bob Zadek Show, are the unenumerated rights of individuals to own themselves, own the fruits of their labor, enter into contracts, and pursue a trade or business without government interference. Bob Zadek frames them as a branch of rights distinct from the civic rights—free speech, assembly, religion, freedom from unreasonable searches—that Americans can recite from memory. Though not explicitly enumerated in the Constitution, these rights were widely accepted and taken for granted at the founding, and most observers of American civic life believe they exist. Overruling Government Overreach: Damon Root on the Libertarian Legal Movement (2014)
Definition and scope
Damon Root describes the basic idea as coming from the free labor philosophy of the abolitionists and radical Republicans who ratified the Fourteenth Amendment in 1868: each individual owns himself and the fruits of his labor, and as long as he harms no one else, he may engage in a basic occupation—driving a taxi cab, for example—without burdensome licensing processes. Root acknowledges that government may regulate to protect public health, safety, or welfare, such as pollutants going into a river, but argues that bartering over wages is a special-interest question rather than a health or safety one, so the liberty of contract doctrine comes into play. Overruling Government Overreach: Damon Root on the Libertarian Legal Movement (2014)
Clint Bolick traces the rights to the time before the United States was a nation, brought from England, and identifies two essential rights: the right to free labor—contracting with another person to perform work at an agreed-upon salary without government intruding into the relationship—and freedom of enterprise, the right to establish a non-harmful business without extensive government interference. These are bedrock American rights that do not explicitly appear in the Constitution because they were so widely accepted that no one thought it necessary to enumerate them. Local Leviathan: Clint Bolick on Grassroots Tyranny (2018)
Glenn Roper, whose organization works to re-enshrine the value given to economic rights, says the term can sound hoity-toity but is really just the right to make a living, run a business, and pursue a profession of one’s choice. The Mini-Administrative State (2020)
The Lochner case and liberty of contract
Bob Zadek calls Lochner the focal point that anyone reading in this area encounters sooner or later. Root explains that Lochner v. New York was a 1905 Supreme Court decision arising from a New York law called the Bakeshop Act, passed in 1895, which regulated the baking industry in ways including ceiling height and drain pipes. One provision limited bakery employees to a 10-hour maximum day and 60-hour maximum week. The Court held that the maximum hour provision had nothing to do with health or safety—one can work 12 hours in a bakery and the bread is just as safe to eat—and struck it down as a violation of the right to liberty of contract: the employer had a right to say how many hours he needed people to work, and the employee had a right to contract for those hours. Overruling Government Overreach: Damon Root on the Libertarian Legal Movement (2014)
Progressives at the time and since pointed to Lochner as conservative or libertarian judicial activism, saying the Court read laissez-faire economic theory into the Constitution and overturned the will of the people of New York. Root says Lochner set the terms of the legal debate for the next 30 years and was cited in Supreme Court cases dealing with economic regulations. Overruling Government Overreach: Damon Root on the Libertarian Legal Movement (2014)
Zadek uses the minimum wage as a concrete illustration of the tension: minimum wage laws criminalize two consenting adults who want to enter into a contract for the sale of labor, where a worker says he would like to sell his labor for $6 an hour and the employer agrees. He argues there is no victim, the contract is mutually beneficial, and the transaction becomes criminal only through the application of minimum wage laws—a perfect example, in his view, of the subordination of economic rights. Overruling Government Overreach: Damon Root on the Libertarian Legal Movement (2014)
The New Deal constitutional revolution
Root says that during the progressive and New Deal periods, courts regularly struck down economic regulations because they violated economic rights, and that once upon a time courts protected those rights at the same level as freedom of speech and free association. That changed at the end of the New Deal. Legal scholars speak of the New Deal constitutional revolution in 1937 and 1938, and then in the early 1940s in a series of Supreme Court cases, the Court backtracked on its former protections of economic liberty and said it would defer to regulators, lawmakers, government officials, and bureaucrats. Root says the Court has acted as a rubber stamp in favor of the regulatory state since the end of the New Deal, and that in 1937 the Court overturned Lochner, leaving the doctrine dead ever since. Overruling Government Overreach: Damon Root on the Libertarian Legal Movement (2014)
Bolick describes a parallel early erasure: the Black Codes enacted by southern states after the Civil War aimed at suppressing black labor by suppressing freedom of contract to negotiate wages, imposing occupational licensing laws and other restrictions, and restricting private property rights. These laws were outlawed by the Civil Rights Act of 1866 and then incorporated into the Fourteenth Amendment through the Privileges or Immunities Clause. That clause, Bolick says, was erased from the Constitution within a short time in a case called the Slaughter-House Cases in Louisiana, and since then courts have given virtually no protection to freedom of enterprise and economic liberty. Local Leviathan: Clint Bolick on Grassroots Tyranny (2018)
Judicial deference and the rational basis test
Gail Heriot, asked whether Justice Scalia’s preference for judicial deference to the legislative branch was a strength or weakness, says deference is appropriate in some contexts but that her greatest disagreement with Scalia concerned deference to administrative agencies. She thinks the Supreme Court, including Scalia, went too far in deferring to agencies, which are not nearly as politically accountable as the legislature and the President. Her reading of the Administrative Procedure Act is that it required courts to give less deference than Scalia was inclined to do, though she understands that in the 1970s many courts were going over the top in changing appropriate regulations. She cites a recent case in which the Supreme Court essentially said it would defer to an administrative agency in the interpretation of its own jurisdiction, which she calls wrong: we cannot defer to a government agency in deciding how much power it has. Gail Heriot on the Significance of Justice Scalia’s Passing (2016)
Zadek adds that Scalia was no friend to libertarians on economic rights, calling it his greatest weakness as a jurist, and that Scalia denigrated economic liberty in a way that would upset constitutional scholars such as Randy Barnett. Heriot responds that his position was that he could not find those rights in the text of the Constitution. Gail Heriot on the Significance of Justice Scalia’s Passing (2016)
Roper explains the doctrinal mechanism of subordination: when economic rights or economic liberties are challenged, courts apply the Rational Basis test, meaning that if a rational reason can be identified for a restriction, it will be upheld. Unless one can show the legislature or governor acted irrationally in a way that makes no sense, the restriction stands. Roper says courts have gone further, imagining other reasons the government might have had for a restriction and upholding it if any rational reason can be imagined. He calls this a far departure from the understanding at the founding and throughout much of American history about the importance of allowing people to live their economic lives, just as they live their religious and social lives and speak freely. The Mini-Administrative State (2020)
The hierarchy of rights
Zadek argues that the country has been drilled into accepting that economic rights were every bit as important to the founders, with provisions in the Constitution and founding documents protecting freedom of contract, yet economic liberty as opposed to political liberty has become a second-class set of rights. He observes that government interference with freedom of the press, speech, assembly, or religion would provoke angry protests that could not be survived, but there is not the same rising up when government interferes with economic rights—making it relatively easy for the executive branch to deny people the right to earn an honest living. The Mini-Administrative State (2020)
Bolick says the courts have relegated economic liberty to a status below second-class—if there is a third or fourth-class status, that would be more accurate—even though those rights were intended to be robustly protected against government abuse. He notes that these laws are particularly harmful to people with little education and little capital, often preventing them from creating enterprises or working in occupations where they could earn an honest living. Local Leviathan: Clint Bolick on Grassroots Tyranny (2018)
Across episodes
The same question—why economic rights occupy a subordinate tier—is argued across the episodes, with the treatment shifting in emphasis rather than in conclusion. Damon Root in 2014 supplies the historical arc from the abolitionist origins of the Fourteenth Amendment through Lochner and the New Deal constitutional revolution of 1937. Clint Bolick in 2018 adds the Black Codes and the Slaughter-House Cases as an earlier erasure of the Privileges or Immunities Clause, and describes the harm to people of little education and capital. Glenn Roper in 2020 supplies the doctrinal name for the modern mechanism, the Rational Basis test, and the practice of imagining rational reasons to uphold restrictions. Gail Heriot in 2016 and Randall Holcombe in 2019 touch the topic from adjacent angles—Heriot on deference to administrative agencies and Scalia’s textualism, Holcombe on the Constitution’s silence about the economy. The excerpts show development in the specificity of the mechanism described, not in the underlying diagnosis.
What the sources do not cover
The excerpts do not state the outcome of the Slaughter-House Cases beyond the erasure of the Privileges or Immunities Clause, nor do they name the specific Supreme Court cases of the early 1940s that completed the New Deal constitutional revolution. The excerpts do not describe the content of the Civil Rights Act of 1866 beyond its outlawing of the Black Codes, and they do not state which amendment or provision the Lochner Court relied on beyond liberty of contract. Randall Holcombe’s discussion of the shift in economic rights ends before he answers Bob Zadek’s question about how government came to run the economy.