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Brooks Wilson's Economics Blog: Scalia and Epstein on Economic Rights

Wednesday, May 27, 2009

Scalia and Epstein on Economic Rights

Yesterday, Sonia Sotomayor was nominated for the Supreme Court by President Obama.  Many have written on her qualifications. As a change of pace, I am posting on a debate in the January/February 1985 issue of Regulation Magazine between Antonin Scalia ("On the Merits of the Frying Pan") and Richard Epstein ("The Active Virtues") on the Supreme Court's lack of desire to constitutionally challenge legislative intrusions into the economy.

At the time the written debate took place, Scalia was a judge on the United States Court of Appeals for the District of Columbia Circuit.  In a nut shell, Scalia defends the Supreme Court's inaction in protecting constitution economic rights by postulating that these efforts would be interpreted as judicial activism, justifying past and future activism, and that the Supreme Court might further limit economic freedom rather than protect it.  I selected a few quotes to illustrate his arguments.  He begins by defining the debate.

Fundamental or rarefied, the point is that we, the judiciary, do a lot of protecting of economic rights and liberties. The problem that some see is that this protection in the federal courts runs only by and large against the executive branch and not against the Congress. We will ensure that the executive does not impose any constraints upon economic activity which Congress has not authorized; and that where constraints are authorized the executive follows statutorily prescribed procedures and that the executive (and, much more rarely, Congress in its prescriptions) follows constitutionally required procedures. But we will never (well, hardly ever) decree that the substance of the congressionally authorized constraint is unlawful. That is to say, we do not provide a constitutionalized protection except insofar as matters of process, as opposed to substantive economic rights, are concerned.
Scalia makes his case. my view the position the Supreme Court has arrived at is good-or at least that the suggestion that it change its position is even worse. skepticism arises from misgivings about, first, the effect of such expansion on the behavior of courts in other areas quite separate from economic liberty, and second, the ability of the courts to limit their constitutionalizing to those elements of economic liberty that are sensible...

The second basis for my skepticism is the absence of any reason to believe that the courts would limit their constitutionalizing of economic rights to those rights that are sensible.  In this regard some conservatives seem to make the same mistake they so persuasively argue the society makes whenever it unthinkingly calls in government regulation to remedy a "market failure." It is first necessary to make sure, they have persuaded us, that the cure is not worse than the disease-that the phenomenon of  "government failure," attributable to the fact that the government, like the market, happens to be  composed of self-interested human beings, will not leave the last state of the problem worse than the first. It strikes me as peculiar that these same rational free-market proponents will unthinkingly call in the courts as a deus ex machina to solve what they perceive as the problems of democratic inadequacy in the field of economic rights. Is there much reason to believe that the courts, if they undertook the task, would do a good job?
Epstein was the James Parker Hall professor of law at the University of Chicago.  Epstein argues that we must compare the imperfections of the legislative branch relative to the judicial. 
IN MY VIEW, Scalia has addressed only one side of a two-sided problem. He has pointed out the weaknesses of judicial action. But he has not paid sufficient attention to the errors and dangers in unchanneled legislative behavior. The only way to reach a balanced, informed judgment on the intrinsic desirability of judicial control of economic liberties is to consider the relative shortcomings of the two institutions---judicial and legislative-that compete for the crown of final authority. The constitutionality of legislation restricting economic liberties cannot be decided solely by appealing to an initial presumption in favor of judicial restraint. Instead the imperfections of the judicial system must be matched with the imperfections of the political branches of government...

THE THEORY OF CONSTITUTIONALISM, as I understand it, tries to find a way to minimize the sum of the abuses that stem from legislative greed on the one hand, and judicial incompetence on the other. There is, by and large, no third alternative to this sorry state of affairs. What I fear is wrong with Scalia's  statement of the argument is this: by focusing exclusively on the defects he finds in the judicial part of the process, he tends to ignore the powerful defects that pervade the legislative part of the process. Our constitution reflects a general distrust toward the political process of government-a high degree of risk aversion. That is why it wisely spreads the powers of government among different institutions through a system of checks and balances...

Judicial restraint is fine when it keeps courts from intervening in areas where they have no business intervening. But the world always has two kinds of errors: the error of commission (type I) and the error of omission (type II). In the context of our discussion, type I error refers to the probability of judicial intervention to protect economic rights when such intervention is not justified by constitutional provisions. And type II error refers to the probability of foregoing judicial intervention to protect economic liberties when such intervention is justified. This second type of error cannot be ignored.

What Scalia has, in effect, argued for is to minimize type I error. We run our system by being most afraid of intervention where it is not appropriate. My view is that we should minimize both types of error.
Scalia may be tactically correct, but I believe Epstein's arguments are more sound.

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