Accommodating Competition: Harmonizing National Economic Commitments

By Baker, Jonathan B. | William and Mary Law Review, March 2019 | Go to article overview

Accommodating Competition: Harmonizing National Economic Commitments


Baker, Jonathan B., William and Mary Law Review


TABLE OF CONTENTS  INTRODUCTION                                             1151 I. THREE PUBLIC COMMITMENTS                              1152   A. Private Economic Rights                             1153   B. Competitive Markets                                 1154   C. Social Safety Net                                   1155   D. Commitments in Tension                              1156 II. HARMONIZING COMPETITION WITH PRIVATE RIGHTS          1157   A. Munn                                                1158   B. Addyston Pipe                                       1161 III. HARMONIZING COMPETITION WITH THE SOCIAL SAFETY NET  1163   A. The New Deal-Era Constitutional Revolution          1164   B. Competition Policy as a Political Bargain           1166 IV. CONSTITUTIONALIZING COMPETITION?                     1171 

INTRODUCTION

At two critical moments, the United States worked out ways to harmonize a national commitment to protect and foster competitive markets with other deep public commitments affecting economic regulation. In the nineteenth century, the Supreme Court confronted the problem of whether a government that is required to protect contract and property rights could also act to prevent the exercise of market power. (1) Any restraint on a seller's ability to charge monopoly prices, after all, would necessarily limit its contractual freedom and constrain how it uses its private property. (2) Later, in the mid-twentieth century, the political system had to reconcile the important public role in assuring competitive markets with the government's ability to displace competition in order to protect the vulnerable. (3) This Article will examine those critical moments, with a focus on the way the legal and political system accommodated the competition norm.

The first of the three public commitments involving economic regulation, the protection of property and contract rights, is recognized in the Constitution. (4) The other two commitments, to assuring competitive markets and to preventing economic hardships to vulnerable market participants through social insurance and regulation, lack direct textual support in the Constitution. They nevertheless have become deeply entrenched norms of the type that William Eskridge and John Ferejohn refer to as "superstatutory." (5) Accordingly, the nineteenth century harmonization problem required the Supreme Court to construe the constitutional mandate for public protection of economic rights so that it would accommodate what was then an emerging norm of permitting governmental action to protect competition. (6) The twentieth century harmonization problem was worked out by the political system as a whole, not just the courts, after the Supreme Court accepted that economic rights did not prevent wide-ranging regulation and redistribution. (7)

One might think that the judiciary would resolve any conflict between a constitutionally recognized commitment and a subconstitutional commitment--the harmonization issue that arose during the nineteenth century--by allowing the former to trump the latter. (8) That did not happen. Rather, the commitment to competitive markets probably had more protection in the courts in the late nineteenth century than it does today, after the mid-twentieth century resolution of the conflict between subconstitutional commitments. (9) That is one reason why the public commitment to assuring competitive markets is now endangered. (10)

Part I of this Article sketches the three entrenched public commitments involving economic regulation. Parts II and III explain how the commitments were accepted and harmonized in the nineteenth and twentieth centuries. Part III also explains why the Constitution does not stand in the way of the erosion of competition commitment. Part IV concludes with a brief skeptical discussion of the possibility of constitutionalizing a commitment to competition.

I. THREE PUBLIC COMMITMENTS

Three broad public commitments--entrenched norms accepted and enforced by public institutions--underlie the modern U. …

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