Academic journal article Texas Law Review

Reply: Lochnering

Academic journal article Texas Law Review

Reply: Lochnering

Article excerpt

Between 1905 and 1937, the legal culture experienced a genuine revolution. In 1905, the Supreme Court invalidated a maximum hour law for bakers,1 concluding that the State of New York could not transform bakers into "wards of the state."2 In 1923, the Court struck down a minimum wage law for women and children.3 The Court explained: "To the extent that the sum fixed exceeds the fair value of the services rendered, it amounts to a compulsory exaction from the employer for the support of a partially indigent person, for whose condition there rests upon him no peculiar responsibility, and therefore, in effect, arbitrarily shifts to his shoulders a burden which, if it belongs to anybody, belongs to society as a whole."4 In the Court's view, the police power was sharply limited, and whatever it included, it did not include the power to require minimum wages or maximum hours.5 Ideas of this sort played an important role in cases striking down not only minimum wage and maximum hour laws, but a number of other measures attempting to protect workers.6

At the same time, a countermovement was occurring within the legal culture.7 Between 1915 and 1935, many commentators urged that property rights were a product of law, and that government regulation, in the form of maximum hour or minimum wage laws, could not be seen as interference with a voluntary or law-free private domain. In 1923, the Supreme Court emphasized the importance of respecting "fair value."8 But in 1918, Justice Holmes had produced a responsive and relevant near-haiku: "Property, a creation of law, does not arise from value, although exchangeable-a matter of fact."9 In this highly compressed sentence, Holmes insisted that property is not produced by value but instead by law-and that this is simply "a matter of fact." By 1935, the attack on laissez-faire, and the insistence on the omnipresence of government regulation, was well-known, to the point where an unsigned student note, dealing with the law of contract, ridiculed the idea that a refusal "to supervise the ethics of the market place" could be justified by "doctrines of laissez-faire."10 The student author thought the justification implausible for one reason: "[T]he freedom from regulation postulated by laissez-faire adherents is demonstrably non-existent and virtually inconceivable. Bargaining power exists only because of government protection of the property rights bargained, and is properly subject to government control."11

Columbia law professor Robert Hale set forth the most powerful defense of this view, and his eyes were trained directly on Lochner and related decisions.12 Hale wrote against the background of the political struggle over government efforts to set minimum wages and to regulate prices, a struggle that he believed was being waged on false premises. His special target was the view that governmental restrictions on market prices should be seen as illegitimate regulatory interference in the private sphere. This, said Hale, was an exceedingly confused way to describe the problem. Regulatory interference was already there:

The right of ownership in a manufacturing plant is . . . a privilege to operate the plant, plus a privilege not to operate it, plus a right to keep others from operating it, plus a power to acquire all the rights of ownership in the products. . . . This power is a power to release a pressure which the law of property exerts on the liberty of others. If the pressure is great, the owner may be able to compel the others to pay him a big price for their release; if the pressure is slight, he can collect but a small income from his ownership. In either case, he is paid for releasing a pressure exerted by the government-the law. The law has delegated to him a discretionary power over the rights and duties of others.13

Did these ideas play any role in American political life? Consider Franklin Delano Roosevelt's Commonwealth Club Address in 1932, where he emphasized the view, which he attributed to Thomas Jefferson, "that the exercise of the property rights might so interfere with the rights of the individual that the Government, without whose assistance the property rights could not exist, must intervene, not to destroy individualism, but to protect it. …

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