Econ 101: The Role of the Courts in the Economy

     History has proven the efficacy of market capitalism in producing wealth for the masses. The fall of the Soviet Union, the movement of China and India to market economies, and the influx of immigrants into capitalist countries all offer empirical evidence to support the theoretical conclusions of Ludwig von Mises and F.A. Hayek that only the free market can result in a high standard of living. However, it is important to realize that market capitalism can exist only within a political structure that is based on individual freedom and rule of law. Even within the United States, this must be protected. One of the fundamental ways that our Constitution protects us against a coercive government that would impede or destroy the market system is the separation of powers between the three branches of government.

     The debate over President Bush's appointment to the U.S. Supreme Court shows a lack of understanding of the importance of the separation of powers and the proper role of the Court. As Madison put it in Federalist 47: The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self appointed, or elective, may justly be pronounced the very definition of tyranny.

     The Constitution lays this out, with each branch's powers enumerated in a separate article. Article 1, Section 1 states: All legislative powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and a House of Representatives. Article 3, Section 1 states: The judicial power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. It seems pretty clear that neither the Supreme Court nor the lower courts have the power to legislate. The courts may only judge.

     One of the primary functions of the courts is to assist in the protection of property rights, including contracts. Indeed, the power to declare a law unconstitutional was not established until the 1803 case of Marbury v. Madison, when Chief Justice John Marshall held this to be the case. Yet the debate over the Harriet Miers nomination and now the Samuel Alito nomination is largely a debate about how these judges will affect the ability of the Court to, in effect, legislate. Are these judges liberal or conservative? This question should be irrelevant to the nominating process, since the Court should be enforcing the law, not making it. Yet clearly Americans have forgotten, or do not know, that the judicial branch is not a policy-making branch, and the media have generally failed to cast enlightenment on the issue.

     In 1850, Frederic Bastiat, one of the greatest French political philosophers, wrote that a just government is one that fulfills the duty of protecting life, liberty and property. He based this on the assumption that we have a natural right to self defense and that we form a government as an organization of this natural right. Therefore a government that violates a person's rights by taking from one person and giving to another engaged in what he called legalized plunder. Bastiat knew of the dangers of the legislative and executive branch engaging in legalized plunder, but he couldn't envision that the courts would be a place where this occurred.

     To quote from his book, The Law: Have the people ever been known to rise against the Court of Appeals, or mob a Justice of the Peace, in order to get higher wages, free credit, tools of production, favorable tariffs, or government-created jobs? Everyone knows perfectly well that such matters are not within the jurisdiction of the Court of Appeals or a Justice of the Peace. Unfortunately, today we do indeed see the very thing that Bastiat thought could not happen use of the courts to legislate.

     The Founders did not think that one day the courts would be used to affect governmental policy. In Federalist 78, Hamilton wrote: Whoever attentively considers the different departments of power must perceive, that, in a government in which they are separated from each other, the judiciary, from the nature of its functions, will always be the least dangerous to the political rights of the Constitution; because it will be least in a capacity to annoy or injure them.

     Clearly, this is not the case today. The fact that special interest groups on both sides have and will spend millions of dollars on ads in an attempt to affect the nominating process shows more is at stake than judicial power. As soon as Alito was nominated for the Court, senators such as Ted Kennedy (D-Mass.) began discussing cases that Judge Alito had ruled on while on the Court of Appeals. These senators stated that when Alito ruled that a law was constitutional that he was showing he was in favor of the law. The implication was that if he was not in favor of the law he should have ruled the law unconstitutional. Thus, they advocated using the judicial branch to legislate, violating the Constitution and ruling based on personal whims instead of written law.

     The debate over these Supreme Court nominations is fierce because so much now is at stake. Rather than needing 218 votes in the House and 51 in the Senate plus the presidents signature to set policy, one only needs 5 votes on the Supreme Court. Since the justices are appointed for life, a Court that legislates is a very powerful body. It is also something that the Founders would find appalling and dangerous to our liberty. We protect our liberty only by having a majority of justices who enforce the Constitution, including our right to property. We protect the market process, which is responsible for the great wealth the average person has in the United States, only by protecting our liberty from the coercive power of government.