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The Future of the Constitution, Part One

Opening Billboard: Funding for this program is provided by the Bernard and Irene Schwartz Foundation, the Smith Richardson Foundation, and the Lynde and Harry Bradley Foundation.
WATTENBERG: The Constitution is America’s framework for government. It has survived over two centuries with only a few amendments. But despite its apparent simplicity, interpreting the Constitution is difficult. Although Americans have a strong libertarian identity, they also support big government programs that the Founders never dreamed of. Should the original intent of the Founders be what matters most when interpreting the Constitution? Or can it be a living document interpreted in new ways as America changes?
To find out, Think Tank is joined this week by Richard A. Epstein. He is the James Parker Hall Distinguished Service Professor of Law at the University of Chicago. His new book is 'How Progressives Rewrote the Constitution,' published by the Cato Institute.
The Topic Before the House: The Future of the Constitution, Part One. This Week on Think Tank.
WATTENBERG: Richard Epstein. Welcome to Think Tank.
EPSTEIN: Nice to be here.
WATTENBERG: Our normal custom, which I would like to follow here, is to ask you for a bit of biography. Where you were born, what kind of family, what you studied, what you were interested in and not too long, but enough to give us sort of a grounding, and then we’ll go on to the thesis of your very interesting book with which I have some disagreements, but I have some disagreements with a lot of things, so.
EPSTEIN: Okay, well, I was basically born in New York in 1943 in Brooklyn. I was raised -- my father was a doctor; my mother worked in the office. We moved out to Great Neck, Long Island with the migration, 1954. Went to Columbia College and then I guess the big transformation was I went to law school at Oxford, England and the first thing I ever studied was Roman Law which sort of gave me a different mindset on the profession for most other people. I came back to Yale Law School, I was somewhat of an outsider, and then immediately started to teach, first at the University of Chicago…
WATTENBERG: Were you there when Robert Bourque was teaching?
EPSTEIN: He was -- I never had him. I took a class, and a very influential class with Ward Bowman who taught me about the anti-trust stuff, which I had not understood by anything that I had beforehand. I go out to Southern California, and teach there when I’m twenty-five for four years, and then go back to the University of Chicago and my education is kind of a mix between very classical 19th century legal principals a fair bit of Roman law as I mentioned before a study of some law and economics which I picked up along the way, although I was never formerly trained in it and eventually got into constitutional law.
Richard Epstein, make your case.
EPSTEIN: Well, sure... Essentially the original Constitution was one which started from a presumption that we ought to act with some degree of distrust with respect to government, and in two particular areas that held more or less through the critical 1937 term, one of them had to do with Federalism where it was understood to some extent that competition between states was critical to make sure that you didn’t have oppressive legislation.
WATTENBERG: That’s the so-called laboratories of democracy.
EPSTEIN: To some extent, and then on the other hand that federal power was needed to make sure that goods and services could move flowly... you know, flow freely back and forth across the nation, and in addition, there was always the sense that faction could take over with respect to various kinds of regulations…
WATTENBERG: Fact… faction, that’s Madison Ten or something like that?
EPSTEIN: Yes, that’s Madison Ten. What it does is it tends to give legislation that takes from one group and gives to another and almost invariably those who are forced to surrender lose more then those who win and so that what happens is you try to see both the individual rights and the structural issues as way…
WATTENBERG: Hold it.
EPSTEIN: Okay.
WATTENBERG: You said that this redistribution…
EPSTEIN: Uh-huh.
WATTENBERG: Hurts those who give more then it helps those who get.
EPSTEIN: Yes.
WATTENBERG: Take Social Security or Medicare.
EPSTEIN: Those are not what programs I’m talking about, but go take them…
WATTENBERG: Well, it may not be what you’re talking about, but it’s what I’m talking about. Now, or take specifically Medicare, a very interesting law about Medicare, it’s 1% of your wages I think…
EPSTEIN: No, it’s 2.9, but that’s okay.
WATTENBERG: But I think, well, but that’s half and half. Whatever it is, it has no tap on it.
EPSTEIN: That’s right.
WATTENBERG: Unlike Social Security, so if you’re Michael Jordan from Chicago or somebody who’s making 100 million dollars a year, and it’s 1% of you -- whatever it is, it’s in the millions of dollars and it’s going to poor, elderly sick people…
EPSTEIN: Well -- and some of them were not so poor, not so elderly, and not so sick. Uh, Medicare is a funny business, but…
WATTENBERG: Okay, well, but -- but among other people and it’s just not in their benefit, it’s in your benefit in the sense that when you go out into the street you don’t have to step over a lot of [unintelligible] like in Calcutta, you don’t have to step over a lot of old, skinny, dying people.
EPSTEIN: I -- that’s a sheer myth. The health care on the deductible giving Medicare’s bloated expenditures is greater then what people used to have to pay in total. The program in fact not only taxes Michael Jordan, it taxes teenagers who are trying to work because everybody gets their first dollar and the old but consumption under the program is extraordinary because nobody faces close to the marginal costs so the recipient class is a group that pays about one quarter of the total price and the effect is to drive up the cost of medical services for others by gobbling them up at below market rates.
WATTENBERG: But, but…
EPSTEIN: This is not a safety net; this is a snare and a trap for large numbers of people. Popular with those who receive it, but not so popular with those who have to pay. It’s a deadweight social [INAUDIBLE] on average.
WATTENBERG: … we live in a democratic republic.
EPSTEIN: Well the…
WATTENBERG: And, and this document that you quote begins We the people, we the people make these determinations and one of the determinations we made subsequently to assure for the common welfare, also a quote from the constitution, which says that we’re going to -- once we have lifesaving drugs, it would be immoral not to provide them for all and so we do.
EPSTEIN: No, I -- again, I think it’s wrong. First of all, common welfare did not mean providing individual welfare for individual people it clearly was taken in line with the common defense and what it meant in effect is that the government has to provide goods that markets can’t supply. Standard non excludable public goods, it’s just a historical transformation of no sense whatsoever to make it read the other way.
WATTENBERG: Well…
EPSTEIN: And in addition to that, what happens is everyone of the programs that you are talking about creates statement [INAUDIBLE] with which impoverish people, doesn’t enrich them, and the reason I gave the statement that the losers lose more then the winners gain is that every single progressive reform that I talk about in that book creates, props up, and strengthens cartels and monopolies and they have the tendency of giving less to the winners then they take from the losers.
WATTENBERG: Well, but…
EPSTEIN: So this is not essentially… and I wasn’t talking about redistribution, but I’m happy to talk bout it.
WATTENBERG: Well I know…

EPSTEIN: The programs that I’m talking about, one dead loser after another.
WATTENBERG: Yeah, I -- I understand, -- what we’re getting into and we’re going to get discussive about it, is whether the constitution is rigid or whether it’s living, and can be reinterpreted over time in light of new circumstances, sometimes wrongly, sometimes rightly, sometimes overextended…but always with the taproot of elected representatives of We the people. Even Supreme Court Justices and Court of Appeals Justices, they are appointed by elected officials.
EPSTEIN: Sure they are, but again, this is not a pure democratic institution. If you were to make that then every First Amendment argument, every Dormant Commerce Cause argument would all be beside the point, and the truth about the matter is it’s a system in which democratic politics could give good collective results in some cases and horrific ones in others and the task of constitutionalism isn’t to make the people democratically at large succeed, it’s to make sure that when they do act it’s to advance the common interest in which everybody benefits rather then having these factual struggles…
WATTENBERG: What’s an example of, of something that everyone benefits from?
EPSTEIN: Well…
WATTENBERG: I -- I can’t think of anything.
EPSTEIN: Well, you can’t -- you can get certainly a lot closer by having in effect clean air across the population, by having pollution controls, as opposed to a minimum wage which will benefit unions and hurt non-union labors of less skill and less political influence.
WATTENBERG: Yes, but -- but libertarians or classical liberals like yourself, objective vehemently to the Environmental Protection Action and the Environmental Protection Agency and all the…
EPSTEIN: No, that’s not correct. Why would we -- the issue is not whether you have the agency; when you are dealing with pollution the question is how it operates. And to the extent that it’s designed to overcome the inability of private individuals to [INAUDIBLE] to control pollution, I’m all in favor of it. I’ve never seen anyone who opposed it. There’s no class [INAUDIBLE] liberal. Whoever said that the control of pollution is an illegitimate government function but to the extent that it operates in disguised ways, like for example, to say that all wetlands become public property so nobody can build without compensation, then what it does is it transforms the basis…
WATTENBERG: Look, Richard, Richard…
EPSTEIN: …and I’m opposed to those actions.
WATTENBERG: If there was no one against it why do they have to pass a law to have it?
EPSTEIN: Because what happens is people are in favor of laws, quite obviously, because they know that if left to their own devices, some people will cheat and will pollute off the private gain, and so what you need to do is…
WATTENBERG: And it took, and it took from 1789 to 1970…
EPSTEIN: No.
WATTENBERG: … 3 to make it happen?
EPSTEIN: No, no, no. I think that’s just wrong again.
WATTENBERG: Right.
EPSTEIN: Because there are all sorts of protections against various kinds of environmental despoliation before that time. A common law of nuisance which is designed to deal with pollution dates to roman times and to medieval English times and it was always you pollute we enjoin. I mean, it was a pretty tough body of law. So I mean, you can’t sort of say that it is a statute which when dealing with pollution you worry about whether they’re using it for anti-competitive purposes or whether or not they’re using it for legitimate purposes.
WATTENBERG: Okay.
EPSTEIN: That’s the way it works in international relationships…
WATTENBERG: Let’s -- let’s move on for a moment.
EPSTEIN: Okay.
WATTENBERG: Let’s get definitional for a moment so our viewers will understand what we’re talking about or what you’re talking about. you and I are going to be tossing around a number of terms that are all in your book; progressives, liberals, libertarian, classical liberal, American liberal, if you could briefly give us sort of a thumbnail sketch so we know what we’re talking about, it would be useful.
EPSTEIN: Okay. A libertarian, which I am not in a pure sense, generally only prizes voluntary cooperation and will not allow for the government to either tax or use the imminent domain power. Classical liberals will generally allow taxation with a flat or uniform rate and will certainly allow the use of imminent domain in a wide rage of circumstances. Liberals, for these purposes, accept all of the uses of state powers…
WATTENBERG: American liberals or classic liberals?
EPSTEIN: American liberals. Modern liberals. All of the uses of state powers that the classical liberals set, but they are strongly in favor of additional forms of regulation, many for which deal with the redistribution of wealth, and others which create collective bargaining and labor regulation so that they turn out to be willing to tolerate many kinds of statement [INAUDIBLE] which they think, as experiments, will improve overall social welfare. And my disagreement with them is not with the test of social welfare, but they’re always picking the wrong techniques, and in the name of social welfare, what they tend to do is to advance partisan or special interests instead of the common welfare…
WATTENBERG: You know, we had a fellow here at AI, a former Clinton Administration [unintelligible], Paul London, who was an Assistant Secretary of State, Assistant Secretary of Commerce, who did something called -- he wrote a book that the AI Press published called The Competition Solution.
EPSTEIN: Uh-huh.
WATTENBERG: And his view was that although we talk about a lot of these regulations and protection and everything else, there’s not a whole lot there that we have deregulated in the last twenty years. Airlines, telephony, finance, junk bonds and the list goes on and on and on and on.
EPSTEIN: That’s not completely true. Telephony was not unregulated; it was re-regulated in the most ghastly form imaginable [unintelligible].
WATTENBERG: Well yeah, except that you walk down the street and every kid has a cell phone…
EPSTEIN: Government managed to impede that by [INAUDIBLE]…
WATTENBERG: …and is talking over the internet.
EPSTEIN: That has nothing to do with the deregulation issue, that was all the landline stuff…
WATTENBERG: No.
EPSTEIN: … the Clinton Administration passed a bill which was okay and the FCC mulled it.
WATTENBERG: Look, the American culture was in some large measure, and I use… underscore the word culture, in some large measure by that living document, and it created a way of life that allowed these things to flourish. That -- that we were good, we were able to scare the soviets about star wars because we had the kind of culture where kids could go in their garage -- where kids could go in their garage and tinker with computers.
EPSTEIN: And that’s fine, but that’s not the same thing. The -- the actual history of cell phones, which you referred to, FCC probably buys its assistance on obsolete technologies probably retarded their development by fifteen to twenty years. I mean, this was an absolute scandal…
WATTENBERG: Okay.
EPSTEIN: … in terms of ineptness, so, yeah, all the stuff on free enterprise, that’s great. You talk about adapting circumstances when you talk about commerce amongst the several states, they didn’t know about airlines in 1789, there’s commerce amongst several states right now. There are all sorts of adaptations, but the difference between them is they are adaptations by taking old principals and applying them to new circumstances and the progressives just threw away the old principals and they applied new circumstances…
WATTENBERG: Well…
EPSTEIN: … new principals to old circumstances.
WATTENBERG: Yeah, but they -- the progressives as I understand American History, Theodore Roosevelt was the trust buster, he was the -- he was an anti monopolist, the Sherman and Clayton Acts were antimonopoly. Now, they were not perfect…
EPSTEIN: And they were never opposed by the -- by the classical liberals.
WATTENBERG: Okay, therefore what?
EPSTEIN: Therefore…
WATTENBERG: So we’re, we’re all marching together…

EPSTEIN: No, it’s not that. If you’re trying to find the difference, as I say in the book, between the classical liberals and the progressives you don’t take the issues on which they agree, you take the issues on which they disagree.
WATTENBERG: Which were?
EPSTEIN: Those things, for example, the progressives were strongly in favor of state mandated collective bargaining and the classical liberals were against it. And the collective bargaining produces labor monopolies, all sorts of rigidities. Open labor markets produce a uniform increase of wages that go across the board.
WATTENBERG: Okay.
EPSTEIN: Even today, the labor union has failed in the private sector because it’s so inefficient.
WATTENBERG: Well, let me give you the pro -- two -- two strong cases that the labor unions make. One is that they guarantee the employer a stable, except for wildcats strikes, with all their problems, corruption, nepotism, whatever, they guarantee the employer a stable workforce, which…
EPSTEIN: That’s bull.
WATTENBERG: … but their name is on the paper and they signed it.
EPSTEIN: Well, you can …
WATTENBERG: Okay.
EPSTEIN: … get your name on other documents that they can sign without being…
WATTENBERG: And the other thing is my daughter who happens to work for the American Federation of Teachers has a wonderful bumper sticker which says something to the effect of “Unions, the folks who gave you the weekend.” Now, with all the things that you can say are problems with unions, in many ways, they have been an extremely progressive force in America.
EPSTEIN: I disagree with everything you said.
WATTENBERG: Well, okay, but I …
EPSTEIN: I …
WATTENBERG: I was in the Johnson administration -- excuse me, I was in the Johnson Administration when the unions who had a very difficult time with race in their own -- in their own membership were 100% in favor of the desegregation law.
EPSTEIN: And…
WATTENBERG: Now, do you have a problem with the desegregation laws?
EPSTEIN: Well, let’s go back…
WATTENBERG: They’re anti-constitutional?
EPSTEIN: No they’re -- look, you’re speaking with such vagueness. Desegregation could mean state imposed racial segregation; I have no problem with getting rid of that, it’s an abomination. But if the -- if you’re trying to figure out the history of unionism, they were the ones who were most active in segregation because of their monopoly power, and what they did is they managed to wipe out thriving black unions and put them under white domination, all in a period between 1920 and 1950, I mean, this was a very sorry history. They didn’t give you the short weekend; productivity gives you the short weekend. Hours in the workforce, 59 in 1900, strong anti-union sentiment, down to 50 by 1925. Where did those 9 hours come from? They came from increased productivity. You cannot get blood from a stone. All unions can do is redistribute wealth in their favor, they cannot generate it. And they don’t create stability, they create rigidity.
WATTENBERG: Oh.
WATTENBERG: Let us stipulate that we disagree.
EPSTEIN: Oh, yes.
WATTENBERG: Okay, let me ask you about something. The constitution which you and I both think is a grand and great document, first of all, it acknowledges slavery and secondly, it does not outlaw slavery, all it does is says that after 1820 you can no longer import slavery.
EPSTEIN: 1808.
WATTENBERG: 1808, you can no longer import slavery. Now, the way that was changed was through a genocidal war by a -- by a people -- run by Abraham Lincoln, Ulysses Grant and William Sherman who many people think waged genocidal warfare, raised and burned the south, the great march to Atlanta, so the constitution said one thing and it was resolved by brute force.
EPSTEIN: I -- look, I am not defending everything in the original constitution. All I was defending was those portions of it which promoted essentially, competition among state governments and a protection of a group of economic liberties. There were many other things about the constitution is wrong. The Electoral College has never functioned as a deliberative body; it was a mistake to think that it should have been done that way.
WATTENBERG: Well, it…
EPSTEIN: … our constitution is filled with blunders and gaps, but I don’t have to defend everything to defend some things.
WATTENBERG: The Electoral College is now constituted that because of the way the system is organized, you really cannot amend it. We talked about disenfranchisement, the greatest disenfranchisement in America are people who do not live in swing states, who live in New York or Texas or California, where the vote for electors is not in play.
EPSTEIN: I think the answer is you will get occasional Bush v. Gore type situations, but the Electoral College, for the most part, is relatively small impact on the outcome of elections. It has an enormous impact on the way in which you campaign, but, again, I’m not trying to either defend or attack that position. My view is nothing that a classical liberal in terms of what he thinks government ought to do has profoundly to say about which way you do it. I will say this, the great genius of American party systems is we have been able to avoid proportionate legislation, proportionate representation. What that does is it makes it…
WATTENBERG: Except -- except in the democratic primaries.
EPSTEIN: Yeah, well but it -- as a fine -- I could live with it …
WATTENBERG: Right.
EPSTEIN: … there because they are not voting bodies…
WATTENBERG: Right.
EPSTEIN: … otherwise, you get the [INAUDIBLE], and what happens is…
WATTENBERG: And they kick our -- half our…
EPSTEIN: A tiny little fraction is the swing body. Two party systems first past the post, produces better democratic government and to the extent that our constitution has helped facilitate it, that’s better, but I’m -- I’m interested -- in this book I’m only talking about two sorts of issues. One of the things that’s clear is that the judges in the -- the classical judges through in the towel on the redistribution issue. I think they may have been wrong, they were fine with progressive taxation. I don’t talk about that. I talk about the issues which essentially defined the swing in the court during the new deal period, from the pre ’37 period to the post ’37 period.
WATTENBERG: Okay, I, I…
EPSTEIN: And that’s -- so it’s a different book, you know, we could talk about the other stuff.
WATTENBERG: Well no, I -- you’re a man with eclectic knowledge…
EPSTEIN: Absolutely.
WATTENBERG: And I want -- I want to talk about a lot of things.
EPSTEIN: Go right ahead.
WATTENBERG: Now nobody would disagree that thinking on the court has evolved.
EPSTEIN: Yep.
WATTENBERG: You seem to, in general, oppose that notion…
EPSTEIN: No.
WATTENBERG: … that you -- you wish they didn’t -- you wish they’d stuck to the text.
EPSTEIN: No, I didn’t say -- look, the…
WATTENBERG: Okay, well…
EPSTEIN: The book was quite different.
WATTENBERG: Don’t tell me about the book; tell me about what you think.
EPSTEIN: I said -- look, in some cases like the commerce clause, the Dormant Commerce Clause, which essentially says that the court will strike down anti competitive activities by the states is a non textual innovation. And what happens is…
WATTENBERG: Give me an example here.
EPSTEIN: I mean, suppose one state wants to basically impose a high tax on goods that are shipped in from another state.
WATTENBERG: Right.
EPSTEIN: There is nothing in the federal constitution that makes it clear that that’s illegal. It’s a judicial invention…
WATTENBERG: Okay.
EPSTEIN: Which essentially preserved the open market in commerce and goods…
WATTENBERG: Right.
EPSTEIN: … in the United States.
WATTENBERG: In terms -- in terms…
EPSTEIN: I’m not saying that.
WATTENBERG: So in terms of its effects, you are in favor of the reinterpretation of the constitution.
EPSTEIN: Well, it depends on what it is.
WATTENBERG: No, in -- in that instance.
EPSTEIN: Well, in that instance, essentially I think that if I’d done it originally, I don’t know that I’d have come out that way but I’m certainly not going to change doctrines which have basically been the lynchpin of a successful democracy.
WATTENBERG: Alright.
EPSTEIN: But the expansive federal control over the affirmative commerce palate is when Congress operates. I’m very much opposed to that because all I see coming out of it is people rigging agricultural markets so’s to make it hard for any city kids to buy food. You know, um…
WATTENBERG: You know, the -- the -- hold on a second. The cost of food, in part because of technology…
EPSTEIN: Yeah.
WATTENBERG: … and in part because of immigrants [INAUDIBLE] labor… in part because of new fertilizers, has plummeted. People have greater caloric intake, I mean, we have an obesity problem in this country now.
EPSTEIN: I agree, but in 1935 when these decisions were there you could go back and check the literature…
WATTENBERG: Yeah.
EPSTEIN: … and every calorie lost resulted in stunted growth for some kid. Yes, we’ve beaten that problem today, but …
WATTENBERG: Okay.
EPSTEIN: … again, it’s a mistake now that -- to say that simply because we are not at the verge of starvation that an inferior economic arrangement in the huge waste from agricultural subsidies is a good thing. You can’t run agricultural subsidies if you have a weak commerce palate…
WATTENBERG: But they are…
EPSTEIN: … and you get rid of that corruption.
WATTENBERG: But they are minimal.
EPSTEIN: They are not minimal. Twenty billion dollars.
WATTENBERG: Well, twenty -- twenty billion dollars in a, what, twelve trillion dollar economy…
EPSTEIN: Yeah.
WATTENBERG: … is, is…
EPSTEIN: Well.
WATTENBERG: … is a piece of cake.
EPSTEIN: No, it’s not.
WATTENBERG: I mean, yeah.
EPSTEIN: Because if you just duplicate the sugar [INAUDIBLE] and so forth, I -- I think it’s wrong…
WATTENBERG: Alright.
EPSTEIN: … but what you have to do is not judge every particular misallocation in terms of the GNP, but in terms of the area in which it’s regulated…
WATTENBERG: Well -- well look, nobody…
EPSTEIN: …50% loss in the areas of regulation. That’s worth noting.
WATTENBERG: Okay, no one is going to argue that our politics is perfect, or near perfect, that there are abuses, but somebody up there loves us and it’s worked out pretty well.
EPSTEIN: That…
WATTENBERG: And that’s all I’m going to say.
EPSTEIN: And I will give you the following answer.
WATTENBERG: Yeah.
EPSTEIN: We have made the fewer mistakes in our major rivals, and that accounts in part for our relative success and in part of it is judicial doctrine of the Dormant Commerce Clause which I think is so key, started in the 1820s, it’s been going around here for close to two hundred years…
WATTENBERG: Now explain again, the Dormant Commerce Clause.
EPSTEIN: That’s basically the judicial willingness of the Supreme Court to strike down state protectionist legislation without any explicit [INAUDIBLE].
WATTENBERG: But you favor it?
EPSTEIN: I favor it, and I’m certainly not trying to change that…
WATTENBERG: Okay, alright.
EPSTEIN: I’m trying to be anti-monopoly. That’s what I’m trying to be.
WATTENBERG: Some of your -- some of your colleagues at the Cato Institute.
EPSTEIN: Friends.
WATTENBERG: What?
EPSTEIN: Yeah, go ahead.
WATTENBERG: Okay. Say taxation is theft.
EPSTEIN: Well, that’s silly.
WATTENBERG: That’s silly, okay?
EPSTEIN: That’s the whole point. The difference between the libertarian and the classical liberal.
WATTENBERG: Okay, alright. They also, as a general matter, as an institution and unlike some other institutions, I believe they take -- they have a think tank, their own positions…
EPSTEIN: Okay.
WATTENBERG: They are almost invariably in favor of lower and lower defense costs.
EPSTEIN: I’m not with them on that, either.
WATTENBERG: Okay. Richard Epstein we will continue this discussion. Thank you for joining us on Think Tank. And thank you. Please remember to send us your opinions and comments via email. We think it makes for a better program. For Think Tank I’m Ben Wattenberg.
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