Lochner, New York, Richard Epstein discussed on John Batchelor
Is the John Batchelor show. Professor, Richard Epstein senior fellow at the Hoover Institution writing into finding ideas is commenting on an address at the federal society, national student symposium. Topic on the surface of economic liberty. Now before you all run to corners of the room to look up economic liberty. This turns into be a melodramatic case of supreme court decision Lochner versus New York which was decided in nineteen zero five and is now the source of enmity by the present chief Justice of the United States. John roberts. Puzzling. You bet that's why we need Richard a very good evening to you. Now, I've read Lochner summary, and it has to do with a bakery in New York and a law passed by the New York legislature. This is nineteen o five meaning that was heavily influenced by Tammany, but in any event a law that forbade bakeries to employ workers more than ten hours a day and sixty hours a week. The supreme court came in one thousand nine hundred five and on Horst that law and very much in the in the guise of claiming that it was economically. Liberty that they were in at that. They were endorsing liberty. John Roberts reviles that decision. Locked in versus New York any group said, and I'm following your reporting with three others supreme court decisions over the last two hundred years, which I think we can uniformly agree. Are repulsive one is dread. Scott fifty eight hundred fifty six plus versus Ferguson that's separate but equally ninety six and the car Matsuo decision of nineteen forty four that permitted the concentration of Japanese American citizens during World War Two, but what doesn't belong. And why in your argument is Lochner versus New York. What about Lochner upsets the chief Justice? And what about Lochner is vital for us to understand economic liberty? Good evening to you. Well, let's go back to the beginning. Lock know didn't quite stated exactly it was only some kinds of baker's not all kinds of bakers and this was treated as evidence that it was a political deal at state in the state legislature to protect certain Baker. From competition by certain other kinds of baker's. So historically the way the decision goes is it starts with the case called Allegheny in about eighteen ninety six which the supreme court uniform. We hold that. When you talk about the rights of individuals have onto the due process clause, the phrase liberty for the word liberty has the meaning to cover liberty of contract with freedom of contract. Well, obviously, if you're going to cover freedom of contract, you cannot cover it. Absolutely. So as to say if you and I entered into a contract. A murderer third person is protected by the due process clause of the constitution. So the moment you commit yourself to this definition of liberty you necessarily have to read into this particular provision of the constitution, a police Powell limitation, and that limitation was predictably defined in more ways. It has to do with the safety health, the general welfare, and the malls of the population are the two heads that really matter here, I health and safety. And the argument was made that the restrictions in this particular case designed to protect the health of the bakers from the aggressions of their particular employers. And so what happened is you? Now have to ask the question is that what's really going on is this a health and safety regulation, or is it something else? And so in his opinion Justice, Rufus Peckham spent an enormous amount of time and asking whether or not this was within the police power or whether it's felt without it. And if it's falling without it. There are two possible ways that you could explain the case, it's a paternal regulation telling people, we know what's better for you than you know, what for yourself, and he said, that's not acceptable. Or it was an anticompetitive regulation, which says the rubber bakers out there who are not going to be affected by this statute. And so therefore when you put it on these bakers, oh what you're doing is. You're essentially tilting economic tables in one direction rather than another. And that actually turns out to be the correct explanation. The modes of production and locker was a small Baker. He had one group of workers. They came in the late afternoons baked the bread went to sleep got up in the morning and collected the bread and they won the job for about fourteen or fifteen hours they slept in the middle. And if you look at the statute, which has the maximum hours provisions, it also has an adequate ventilation sleeping quarters provisions just before which is health regulation that was not challenge. And so as he looks at this thing often, Peckham them says all you're trying to do is to drive these bakers out of business because the standard union baker's. I'm had a very different system of production. They had one crew come in the afternoon and another crew coming in the morning. Neither of these foods worked over ten hours. So there was a disparate impact. All this was very nicely explicatives by a man named David Burstein who wrote a book called reconstructing lock. And you turn it not from a situation where the government is essentially trying to protect people against helpless, aggressive employees. Your turn it as a state making an anticompetitive statement. Why do we know that this is true? The name of the cases locked against New York. It's a criminal prosecution. This is not a case where an angry work comes up and quit and says I want more money than I was given because I was oppressed. And it was exactly that particular feature which described how the case was worth. Now, I suppose the next thing is why Justice, but Justice Roberts, someone happy about what would lock MS stands for is an age in which it turns out that economic regulation of market behavior is now subject to serious constitutional scrutiny. And if you're gonna do that with locked the entire new deal. Progressive agenda is all. And therein lie. Therein lies the critical nature of this case, Richard because one more time in a presidential contest. Where to see the major candidates clash over the presumption of the new deal new best. We can see the new green deal echoes of that period in the nineteen thirties. Where if I follow your general argument, these last years economic liberty was abridged. Yes. And so what happens is if you look at the National Labor Relations act that was clearly unconstitutional under lock how do we know? Because in a case called a day or decided in nineteen oh eight and in another case called Coppedge in Kansas decided in nineteen fifteen what happens is the supreme court strikes down. I federal and then state law both of which say in effect that it's criminal to insist that workers agreed not to be a member of the union in order to get a job. And the so called yellow dog contract, then becomes the? The industry standard. And what that means is you can tell an employee you wanna work for us. You can't have dual loyalties. You cannot be a member of the union. You can't promise to be a member of the union if you want to quit and then join a union, that's fine. Why are they so insistent upon this, absolutely solid reasons? The typical situation you had in the minds and minds are very heavy source of contention because there's no way if you don't like the business climate in the state of West Virginia, you could take all your coal out of the state and moved down to Tennessee. And what happens is that coal sits in the grant. And what you do you start to get it up. And then you want to get it out. And if all the workers on the particular job can pull off without a moment's notice and call a strike, you had a huge expenditure. The coal is left. Idle inside the mind, and you go back unless you cut a very strong deal. And so the whole point of the dog contract was to make sure that that hold up would not happen. You trying to five hundred workers individually for breach of that. The contract. But if you can enjoy the union, but pulling them off for breach of contract each whole the union responsible in damages for the loss you stop this stuff in its tracks. So nineteen Eighty-three when we conference celebrating the fiftieth anniversary of the new deal. I defended the yellow dog contract in no uncertain terms before hey somewhat surprised audience at Yale Law School and was greeted with shrieking opposition most notably by men named Julius who could not believe that anybody who was sane. And so, but could ever think that he dot contract made sense? And he said I was hopelessly obsolete in my thinking, and I told him economics. Amusing is quite up to date. What happens is all the economics that was used in the nineteen thirties to justify union was essentially all based upon a kinda odd notion of inequality of bargaining power where it was said that the big employees had a necessary advantage over the small employees are the general rule is if you've got competition and you're on. Paying somebody in the wages. There's going to be a mind that's gonna open up next door some unrelated business. It's gonna hire those workers the way, and if you actually look at the wage path in the first third of the twentieth century with all this injustice was set to be taking place. It turns out to say you uniform upward trend consistent with the increases in the level of worker productivity. And in fact, one of the things I like to say about Lachmann and particularly era is between eighteen seventy and nineteen forty roughly speaking, the lock near and supreme court jurisprudence, that's the area of greatest human progress in the history of the world in any particular country anyway, and so the idea that somehow or other when you actually look at lock it has adverse social effects. That's crazy. The point about this is unions are real job killers under these circumstances. They don't make any more sense. They do today than they did. Then the big difference today. It's much harder to organize workers because it turns out their jobs, much, more variegated. So they're not as willing to join. A collective bargaining ago. She, but there's never been a time where union organization has actually made sense. If you're trying to concern yourself with us a social welfare function rather than the benefits of the individual workers who joined the union who take the hide out workers who cannot get jobs out of employers and shareholder profits and out of their customers. And so I've always said if you're a radical individualism, but doesn't care about anybody else, you support union if you're interested in overall, social welfare, you support the employers because they are in favor of a competitive system, and that is much more, socially optimal. If the employee wanted to collude against the workers, that's an antitrust violation. And you want to have no part of that. However, the supreme court chief Justice continues to identify Lochner as one of the four was decisions based upon his presumption that we're allowing our own feelings our own preferences in in place of the law. That's a puzzling term it has to do with the cultural assumptions of the moments that when we come back. We'll put the chief Justice test on this Richard Epstein of the Hoover Institution writing a defining ideas about Lochner and economic liberty. I'm John Batchelor. This is.