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					Session 17

Wednesday, 20 October 2010

The Laissez Faire Regime, Part 1

Intro to “judicial regimes”

         Each political generation that triumphs in the policy branches leaves (or
          births) a judicial regime


          Federalist  John Marshall

          Jeffersonians/Jacksonians  Taney

         Americans created a system where they run to the Courts to tell them
          answers to certain questions (parliament doesn’t tell you answers, lawyers in
          courts do)
         Over time, what will develop are competing legal products (or philosophies)
          about how to engage in this behavior
         legal approach X, Legal approach Y, ex. Scalia vs. Breyer
         Originalists v. “living consitutionalists”

2 potential problems:

         Lag effect: justices from the old political generation stay on through the
          ascendancy of the new generation
         Is judging special? One of the reasons the lawyers and judges had the power
          to say what the law is, is because it was their orthodoxy (craft) made their
          decision making distinct.

Conceptualizing Taney’s Approach

Federal Government: everything given by the constitution

States: everything not given to feds in the constitution, the natural right to police for
health and safety, regulate commerce when “big brother” is not

Exclusivity Dies

       After Tan, no longer is there the idea that if the federal government had a
given power, X, that the states could not also have that power simultaneously, so
long as it did not conflict with a federal desire…(ex. Taxation, bankruptcy, race
discrimination) = “Dormant” Commerce Power
Laissez Faire Era

Political Background

      Change in American culture from agrarian to industrial economy
      Horse and buggy days are gone
      Industrial capitalism is here

Large-scale production

      From 1863-1899, index of manufacturing production rose by more than 700
      Andrew Carnegie (steel)
      John D. Rockefeller (oil)
      Robber Barons
-New Economic Goliaths

      Exist in an agrarian legal order:
        Mergers
        Trusts
        Monopolies
        Oligopolies

Massive Mergers:

       Under the McKinley administration, there were massive mergers going on, so
that companies were growing into large trusts and monopolies. Two thirds of the
largest 75 industrial companies in the US had not existed just a few years earlier.
(Teddy Roosevelt is in office, 1901)

Woodrow Wilson:

       …”Jefferson’s view of limited government belonged to an age which was
without railways and telegraph lines.” He came to realize that government must
change and adapt with the times of this new industrial era, if it was to perform its

Capitalism get sick?

      New phenomenon: roller coaster ride
      Left unabated and unchecked, new industrial capitalism seemed to have fits
       of boom and bust
      Depression in 1870s and 1890s

Should there be rules for capitalism?

      Abuses occur
      Worker injuries, child labor, unsafe products
      The Upton Sinclair book

   Famous book written by Upton Sinclair, called “The Jungle, “ which chronicled
   how the manufacturers of beef, specifically sausages, had worked on conveyor
   belts and be chopped up and put into the sausage. The manufacturers of the
   sausage did not care.

Labor movement:

      Unions form
      Strikes in the late 1800s (Eugene Debs)
           o Violence, death
           o People demanding labor reform

Transformation in the organization of political ideology

      Something fascinates results
      How political ideology is organized, changes

The forces of capital  labor: farmers, steelworkers, and miners

Laissez Faire: government shouldn’t touch economy

      No states rights
      Progressivism “contemporary liberalism”

E.C. Knight

      Sherman anti-trust act passed in 1890
      Concerned about large conglomerations and trusts
      American Sugar Refining company:
          o Purchased 4 sugar refineries in PA
          o Controlled over 98% of sugar-refining business in the U.S.
          o E.C. Knight was one of the refineries


        It outlawed “every contract, combination…or conspiracy, in restraint of
trade” or interstate commerce, and it declared every attempt to monopolize any
part of trade or commerce to be illegal.


      Sherman Anti-Trust Act is constitutional, but
      Manufacturing is different from selling

“Dinner Logic”  (later “abortion logic”)

      You can’t touch the cookie while it’s in the oven
      Before it comes out of the oven, it is not dinner (works the same for

Basic legal rules:

1. Manufacturing is local

2. Cannot regulate commerce “indirectly” (before it leaves)

Commerce Clause

      If it’s local it can’t be regulated, and manufacturing is local
      Regime politics and constitutionalism
      Gives more power to the people/manufacturers

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