My subject is federalism and rights. I will argue that jurisdictional competition is, by and large, an effective way for society to discover a good set of rights for people to flourish.
It is wholly appropriate to discuss federalism in relation to law and economics because federalism creates a market for governance. (1) Like other market processes, federalism offers a process of discovery--for individuals who can find states with the rights that allow them to flourish and for society that can allow it to evaluate best the effects of different rights by comparing the results in different jurisdictions.
I draw on work on which Professor Nelson Lund and I collaborated. (2) I will begin with an abstract discussion of the advantages of competitive federalism and then illustrate these advantages in a concrete case, suggesting that competitive federalism provides a better alternative than the judicial doctrine of substantive due process for creating freedoms connected to sexual autonomy. This area is a useful one in which to compare federalism and the Supreme Court as mechanisms for creating rights, not simply because writing about rights of sexual freedom keeps people's attention but because it is in the area of sexual autonomy that the Court has most usurped the process of competitive federalism.
I begin with two simple premises--one about the content of rights and another about their epistemology. First, good societies are concerned with protecting both liberty and other conditions for human flourishing. (3) In a good society, people should have freedom to act, but legal norms also should help sustain the conditions for the success of family life, friendship, and other social goods. In short, we should seek the set of rights that will maximize freedoms without permitting these rights to turn into license--the kind of activity that damages other social goods. (4)
My second premise is that it is hard to draw a line between liberty and license. This is because it is difficult to assess the consequences of freedoms and restrictions in the social realm-maybe even more difficult than it is to assess than the effects of economic regulation because of their scope and subtlety. (5) Like many law professors, I have predictions about the likely effects of many rights that are debated. But everyone, even a law professor, must admit occasionally that he is fallible in his social and moral intuitions. Because of such all too human fallibility, a desirable feature of constitutional design is a structure that helps us calculate together the consequences of our social policies by providing us evidence beyond just our intuitions.
The need for such a mechanism of individual and social discovery offers a powerful argument of a presumption against a monopolized process for creating rights whether the monopoly is held by Congress or the courts. I say presumption because I do not deny that some rights may best be protected at the federal level, and some should be protected against legislative abridgement. We have a constitutional process that can entrench specific rights at the federal level so long as they obtain supermajority support. (6) That consensus gives us greater confidence than we have in ordinary politics.
In contrast with monopoly power at the federal level, states take part in a process that is relatively competitive, better approximating the private market. (7) To be sure, federal constitutional law plays a crucial role in creating the framework for competitive federalism by protecting the free movement of people and information among the States. (8) These protections leave individuals "free to exit [their states] if the balance between liberty and license becomes radically off-kilter." (9) The paradox of a system of constitutional federalism is that two levels of government with defined roles can better protect freedom than one by permitting states to choose a bundle of rights while the federal government guarantees the rights of movement and information. …