The Supreme Court's Defence of Economic Freedom

    Throughout history, the Supreme Court has made numerous decisions and constitutional rulings which have changed the shape of the United States’ national and state economies. These decisions have covered things such as the contracts clause, regulation of private industry, minimum wage, work hours, and government takings. These decisions, and their effects have had a profound influence on the economic rights of Americans. Our Constitution provides several key components which have helped the court in legal battles involving the protection of economic rights for citizens. This is true for matters in which Americans act as both members of a firm marketing goods & services, or an individual selling their labor. Some of the court’s rulings have increased regulations on Americans, and some have greatly limited the State’s power, but ultimately, the Court’s doctrine in this area has proved to be an effective and indispensable factor in preserving American economic freedom.

    Every American has a right to natural resources, especially when they come in the form of a public good, like the water in a river, or just the use of the river itself. These types of things are public goods and are therefore nonexcludable. Many then believe that the public’s use of these goods should be protected by the State. In the 1870s’ the Mississippi River had become immensely polluted by slaughterhouses that were discarding pieces of dead animals into the river. There was a cholera outbreak in Louisiana and people were unable to utilize the river’s water without becoming sick. The Supreme Court ruled in the Slaughter-House Cases of 1873, that the Louisiana govt. was right to prohibit slaughterhouses upstream and centralize the industry downriver. Thus, the court worked to defend the freedom of the state’s citizens to enjoy this public good, while of course following the harm principle. In a 1908 case, Adair v. United States, the Supreme Court struck down Congress’ “Erdman Act.” This law prohibited “yellow-dog contracts” in railroads engaged in interstate commerce. What these did was prohibit railroad officials from denying employment to workers based on their membership in labor unions. The court’s decision here was to strike down the act. With this decision, the Supreme Court protected the freedom of contract for employees and employers. In the US, citizens have a right to sell their labor and provide jobs to who they please. The court protected this right and employers were once again permitted to exit a business relationship with individuals.

    Another significant decision in which the Supreme court advanced economic freedom for Americans was Lucas v. South Carolina Coastal Council in 1992. An individual in South Carolina had purchased two expensive lots of land with the intent to construct homes on them. The state government shortly after, passed a law which prohibited this very action on the land in question. The man’s land was in effect, completely devalued. He could no longer do what he set out to do here and the lots were worthless to him, and his investment was destroyed. Legal action ensued against South Carolina and the case made it to the Supreme Court. They once again preserved economic liberty for Americans. They ruled that this was a violation of the “takings clause” of the 5^th Amendment. This has it that people’s property cannot be taken without just compensation. In this case, any justice could argue that a devaluation of an individual’s land does not mean the government has “taken” it. The decision though was that the state’s new law, having crashed the value of Lucas’ land, meant that they had performed a taking. Just compensation was inevitably provided to reimburse Lucas for the investment they had ruined. This is yet another example of how our country’s Supreme Court has, in most cases, actively defended economic freedom for Americans; hopefully they continue the practice.