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Why Democrats Could Win in 2016
Sen. Bernie Sanders, Hillary Clinton at Democratic presidential debate in Las Vegas, October 2015. Joseph Sohm / Shutterstock.com
With the hotly contested Iowa primaries only two weeks away, the level of political polarization is higher than it’s been in decades. Hillary Clinton and Bernie Sanders are veering sharply to the populist left as they each champion a brand of democratic socialism. On the Republican side, the rise of Donald Trump and Ted Cruz reveals the rise of a muscular conservatism that appeals to the far right. By November, this political divide will become more pronounced. No one will be able to say, to quote George Wallace’s oft-repeated remark, that there is not a “dime’s worth of difference” between the two parties.
One area of huge contention is domestic policy. The two Democratic frontrunners are responding to a strong anti-market sentiment by pushing for higher taxes, more income redistribution, and more extensive regulation, targeting both large businesses and wealthier individuals. Income inequality is at the center stage. On these issues, though, the Republican candidates offer a more pro-growth agenda, but do so only in muted terms. If Republicans want to win in November, they must boldly articulate an alternative to the policies of Clinton and Sanders.
One of the most interesting political trends of recent years is the rise of progressive populism. These days, the American left uses the term “progressive” much more frequently than the word “liberal” to describe itself—which represents a symbolic shift. The word “progressive” consciously hearkens back to the era between 1900 and the election of Franklin Roosevelt in 1932. The Progressive Movement held that, in an industrial age, markets did not function adequately, that the antitrust laws did not meet the challenges of the modern industrial economy, and that the imposition of a large administrative state, technically expert but politically aware, was needed to contain powerful private sector firms. These are essentially the same claims Democrats make today, even though the economy is more regulated than ever before.
The chief targets of the Progressives were many key Supreme Court decisions that opposed their worldview. The Court’s 1895 decision in United States v. E. C. Knight blocked systematic regulation of the economy by ruling that manufacture, mining, and agriculture fell outside the limits of Congress’s commerce power, so much so that in 1906, the passage of the Pure Food and Drug Act only let the federal government regulate drug manufacture in the territories, even though it could block the shipment of adulterated or misbranded drugs in interstate commerce. Likewise, in the 1905 case of Lochner v. New York, the Supreme Court sharply limited the power of both the state and federal government to impose maximum hours or minimum wage laws on the economy. Three years later, the Court struck down a federal collective bargaining statute in Adair v. United States, and seven years after that it did the same with respect to state collective bargaining law. To top it all off, in Loewe v. Lawlor (1908), the Supreme Court unanimously applied the 1890 Sherman Act to secondary union boycotts. That decision sparked a furious progressive blowback in the 1912 Presidential election, after which Loewe was overturned by Section 6 of the 1914 Clayton Act that explicitly exempted unions from the operation of the antitrust laws.
Each of these decisions contributed to the enormous growth in productivity during the period before the New Deal. But as the ideological battles raged on, the entire edifice of the Old Court was eventually struck down in a series of decisions. Most notable were National Labor Relations Board v. Jones & Laughlin Steel (1937) and Wickard v. Filburn (1942). The two cases expanded the power of the federal government to regulate all economic activities. This meant that the 1938 revisions of the federal drug act allowed Congress to expand its jurisdiction to cover manufacture within the state. In addition, Jones & Laughlin Steel brushed aside all opposition to mandatory collective bargaining at the state and federal level. And any objection to the widespread reliance on administrative agencies to run the new ambitious state was ended by key decisions such as Yakus v. United States, which in 1944 sustained a criminal conviction for a violation of price control laws, and NBC v. United States, which in 1943 upheld the allocation of broadcast frequency under the flaccid standard of the public interest, convenience, and necessity.
The contrast between the progressive and classical liberal views could not be more vivid. Justice Felix Frankfurter blanched at the thought that the Federal Communication Commission could be limited to setting the rules of the road for radio broadcast. He thought their delegated powers allowed them to determine “the composition of that traffic.” A year later in The Road to Serfdom, Friedrich Hayek presented the opposite vision. The genius of a highway system was that it set the rules of the road and allowed private individuals, each in pursuit of their own mission, to enter and exit as they saw fit—a privilege that was denied to commercial carriers under the Motor Vehicle Act of 1935. By the end of World War II, the entire classical liberal synthesis had been decisively rejected.
The New Deal victory ushered in a period of consolidation and retrenchment. The Republicans swept back into power in 1946, and that year saw the passage of the Administrative Procedure Act, still very much alive today, to rein in the widely perceived excesses of administrative power under the earlier New Deal statutes. One year later, Congress passed, over a Truman veto, the Taft-Hartley Act that limited the scope of the original 1935 Wagner Act, but which by no means undid the earlier law. And so the stage was set for a longish period of American legal scholarship where the major task of academic lawyers was to make sure that the new administrative state operated with dispatch and good sense. The enterprise should not be belittled today, given the vast difference between an administrative state that tolerates corrupt union elections and one that seeks to give union members a fair shot at appointing the leaders whom they prefer.
Yet, what was notable about this activity was that Congress set the major parameters of regulation, and the courts took the faithful implementation of the law as their task. The mood of the time was captured in the famous mid-twentieth-century course entitled The Legal Process, led by Harvard professors Henry Hart and Albert Sacks, which taught students the virtues of an incremental adjustment of the legal system to the new challenges that it faced. Moving back to first principles was decidedly second-tier. Instead, both left and right made peace with the major innovations of the New Deal, which they sought to rationalize and understand.
Yet the turn away from theory could not last. Even with the apparent mid-century serenity, the rising pressure on race relations, culminating with the 1954 desegregation decision in Brown v. Board of Education, forced questions of theory to the fore on matters of race. And it was only a short time thereafter that this more reflective mode of inquiry made its way into other areas. The rise of the law and economics movement in the 1960s and 1970s was important because it provided various intellectual tools that mounted a challenge to the unquestioned sway of regulation over large swathes of the economy.
Thus in 1959, Ronald Coase wrote the Federal Communications Commission, which had the temerity to argue that the market could do a better job in allocating spectrum use than the FCC, which never created coherent administrative criteria for frequency allocation. In 1962, James Buchanan and Gordon Tullock wrote The Calculus of Consent, which showed how easy it was for majoritarian institutions to fall prey to faction and intrigue. Writers like Henry Manne stressed the importance of the market for corporate control, which was inconsistent with the cozy relationship between big government and big business exemplified by the legal protection afforded to AT&T before its monopoly was broken up in 1982. And so it happened that competition, not regulation, became the new watchword for the overall legal system.
Today, the classical liberal challenge to the New Deal view of the world is stronger than ever. Underneath any piece of New Deal legislation lays the grubby reality of cartel formation in labor and agricultural markets. Fortunately, the high court is taking halting steps to return to the pre–New Deal state of affairs now that Friedrichs v. California Teachers Association may well undermine coerced union contributions and Horne v. Department of Agriculture has already punctured the invulnerability of the raisin cartel.
Yet the progressives have simultaneously revived New Deal principles by advocating for greater regulation to jump-start the flagging economy. In addition, the rise of “critical legal studies” and an ever-greater concern with race, gender, and inequality has moved much of the legal community further to the left. At the same time the law and economics community fractured, giving rise to strong pro-regulatory movements.
None of this conceals the vulnerability of the progressive agenda. Of course, the economy is in vast need of prompt and powerful improvement. But in order to prescribe a cure, it is necessary to diagnose the underlying ailment. Back in 1935, it was hard to find any coherent intellectual opposition to the ever-greater surge of government power. It was all too common then to confuse the size of a firm with its market power, and to assume that any restriction on the contractual freedom of the employer necessarily improved the position of the employee. Anyone who reads the Findings and Policies of the NLRA should be struck by its misguided and outdated argument that its vast administrative apparatus could increase the efficiency of the economic system or the real income of employees.
The tragic feature of today’s populist revival is that it uses obsolete economic and political philosophy to propel the case for additional layers of regulation. These are likely to prove more counterproductive than the initial New Deal blunders because the second round of regulation comes off a diminished economic base. The current slow growth environment and the reduction of labor market participation only compound the miseries of the poor and the vulnerable, whom the progressives want to protect. Yet as long as the Republican candidates fail or refuse to address this challenge, the odds will only increase that the next president will be deeply committed to policies that will cement the Obama legacy of economic stagnation and political turmoil. The intellectual tools to combat these false hopes are available. Let us hope that the Republican nominee will deploy them to maximum advantage.
© 2016 by the Board of Trustees of Leland Stanford Junior University
Published in Law, Politics
I am grossly under qualified to comment on the legal cases you cite. I do agree with your first 2 paragraphs and expect you to be excoriated for them.
Reading about a time when the Supreme Court would overturn federal regulations because the government lacked constitutional authority . . . it’s like a dream. Can you imagine what kind of economic productivity we would have if the 10th Amendment were obeyed and the federal government had to mind it’s own business?
The headline should be changed to “Why Democrats WILL win in 2016.” They keep telling every one they can vote themselves free stuff. That’s all it takes.
Many would dispute the contention that Trump is a conservative. Autocrat or oligarch might be a more apt label.
So, is the opposite of muscular conservatism wimpy leftism? ;)
A simpler answer to the question posed in the title is that the Democrats can win because they offer a lot of free stuff. This answer is elaborated in another post.
The 2016 election is over but the shouting. HRC is going to win it in a landslide. Her gender making for the first womyn POTUS plus free stuff during a bad economy is an easy sell. The GOP message of tough love and helping business to drive the economy will get completely destroyed by a corrupt media that is more a Democrat propaganda arm than anything else.
As for the cases you cite. Well I can’t speak to them other than to notice that once HRC gets her new SCOTUS selections the constitution will be interpreted differently as new “rights” are found and old “right” will be lost. So all previous case law will be reviewed in a new progressive insight.
DudePerson of fluid gender, way to bring me down.Edit: Fixed the gender reference.
New (honest) democrat slogan: We’ll tax your boss till he can’t afford your salary.
Prozac, brother…Prozac.
Pure awesomeness.
Sadly that stuff is regulated so I will have to rely on alcohol.
Isn’t it more like: We’ll give you more the free stuff than you can imagine and the fat cats are gonna pay for it all.
Edit: Honest Democrat slogan = oxymoron.
Change it to “peroffspring” to really fix it. You’re offending me otherwise. And do avoid the temptation of “person/daughter” as the slash is clumsy, ambiguous, and offensive all at the same time. Still depressed?
How about carbon based lifeforms of mostly water? That way you cover that I identify as a male or a female or a parrot.
Follow Arthur C. Clarke’s lead and go with carbon-based biped.
Yes, even more so.
Democrats sell redistribution and security, Republicans sell growth and opportunity. One is close at hand and usually winds up being a trifle, the other requires effort and uncertainty and can deliver a bundle.
Regulation: Obamacare is now making a difference for about 3% of Americans while punishing about 2/3rds. Meanwhile tax reform remains lost in the abyss.
If given a choice between more effort and less, the laws of physics always apply – conservation of energy. If given a choice between security and uncertainty, false security is preferred.
The GOP could very well get shellacked in 2016 and instead are acting as if the choice is between two “Anti-establishment” candidates who frankly offend many on many levels, not the least of which they lack much experience outside their narrow existence. Trump’s unchecked id and Cruz’s malleable ambition are no match against the possibility of relief from life’s responsibilities.
Which sums it up.
Boy, you really have it in for Cruz, in a pretty emotional way. Basically, you seem to blame him for being good at his job.
“The intellectual tools to combat these false hopes are available.”
I am not that silly.
Cruz is very clever. A great debater. To ignore his sleight of hand is unwise. These can be great tools if you feel he represents you. You do. But don’t take him to be some pure, non-politician, Anti-establishment hero. I think you will be disappointed.
He practices his art with skill and at the highest levels to gain the most for himself. Again this is good if you support him, but don’t start the campaign for sainthood yet. The man is facile and malleable to the moment. He mimicked Paul on NSA and voting against defense appropriations when Paul was rising; then when Trump showed up on immigration and the TPP, he slid to a new posture: then Carson rose with the faithful and he adopted a tone opposing gay marriage except when he was in New York asking for money; and, when Rubio started to move he became a hawk on terrorism and defense. Whenever an opponent has made a move, Cruz has arrived just in the nick of time to claim he was for whatever they are for and explaining why his votes were poison pills, strategy, tricks or whatever. Again, what is his position on ethanol and farm subsidies? Against them, but for them. You decide.
Brevity is good when it works. The author may find the requirements unreasonable.
One thing to consider is presenting the evidence of airline deregulation – which led to much lower costs for consumers. There are other examples.
However, Republicans want to talk economic growth which to the average voter sounds like something for the rich with little for them. The Democrats talk redistribution, investment in people, and security – ideas that sound wonderful to a middle class that has seen a somewhat hidden rise in their benefits (healthcare coverage costs paid by companies have risen), but little in terms of real wages.
The President that did more for deregulation than most, was Jimmy Carter who appointed Alfred Kahn head of the CAB. Dr. Kahn then worked assiduously to kill it and succeeded. It became part of the anti-regulation lore and was often incorrectly credited to Reagan.
Professor Epstein could certain name a number of legal avenues to restore freedom of contract. There are legislative ones too, but most cannot survive the 60 vote Senate filibuster threshold.
I am not that silly, either. No one will do what I want 1000% of the time.
But what a change to have someone mostly on my side good at the damn game.
And here, people blame me for putting purity over practicality.
Bryan go with Cruz! And Godspede!
I just can’t get comfortable – not as comfortable as I want. He has many shifting positions of convenience in his race to get to the White House after just two years in the Senate. And while “all of the other guys do it”is true, for me it is no reason to select one guy over the other.
Trump, it is now clear, is pretty much a seat-of-the-pants expedient executive. Many are right to suggest he might be for fixing things rather than downsizing government.
However, back to Dr. Epstein, I believe Cruz might take some executive actions to limit regulation and perhaps put Dr. Epstein on the FCC – or at least one of his proteges. So that runs in your favor too!
Until then, Ted has been a bit too slippery for me and I fear his negatives might hurt in the fall when, as the professor says, the Democrats will be much stronger. Our exuberance is ahead of us, I fear.
I don’t know if you have read, Overruled by Damon Root. It pieces together in comprehensible language and history the struggle for economic freedom and the right to contract which is essentially what Dr. Epstein is writing about here. I have read most of these cases and studied them in law school. They can be dry, but this book is easy to grasp.
Thanks, I will add it to me “To Read” list. Damn work getting in the way of good research. :)
Yeah Bryan, that work thingy – such a distraction.
But, the book is short and most importantly, it starts at the beginning of economic rights or right to contract in the US and comes to today with many references to Dr. Epstein and his colleagues. This is an added bonus. What is so interesting is the explanation of how a few people in the Conservative/libertarian movement transformed their thinking from favoring non-intervention by the courts (Bork) to intervention to protect the 2nd Amendment, property and other rights (Epstein). The discussion of the strategy alone is worth the read.
And rest assured, Ted Cruz will approve! In fact, he may make it required reading.
The smarter the man, the greater his obligation to share his ideas with the busy and the less smart.
Einstein understood this. “Okay, I’ll dumb this down for the folks in Rio Linda. E=mc2, okay?” he might have thought, in a more longish way.
McLuhan enjoyed coining aphorisms. “The medium is the message” pops. “Societies have always been shaped more by the nature of the media by which men communicate than by the content of communication” less so, but does come in under 140 characters.
The 20 page version of Hayek’s The Road to Serfdom in the April 1945 issue of Reader’s Digest readied millions for the post-war fight against collectivism. It’s sitting here on my bookshelf, and I’m sure I’ll get around to reading it one of these days.
Not a problem. After we’re done taxing him we’ll subsidize him.
Thanks for the history lesson, by the way.
Professor Epstein, do you have any sense of the degree to which the war mentality led to these decisions? Do you think they would have been decided the same way in peacetime, either before or after the war?
Good one, though the full Star Trek line is “ugly giant bags of mostly water.” Or “carbon-based units infesting Enterprise.”
I am aware of both quotes but we are talking about me here and nobody likes to think of themselves as ugly or and infestation so I combined both lines to make a comment that is greater of its parts.