Right of Contract

By Greg Scandlen

We have learned a lot recently about the Commerce Clause and the transformation that took place in the Roosevelt-era Supreme Court from 1937 to 1945.

Never mind the principal of “stare decisis” that says the courts should respect and uphold previous decisions of the Court. That only seems to apply when there is a conservative nominee who might change the interpretations of previous progressive justices.

When a radical Leftist judge throws out 200 years of established precedent, he (or she) is just enlightened. Once the new radical interpretation has been made, God help any judge who might think it was poorly decided.

Now Reason Magazine reminds us of a similar radical change the Court imposed in 1937 – the complete abandonment of the fundamental and ancient principle of freedom of contract. This says that when two people willingly enter into a voluntary contract, the government’s only role is to enforce the terms of the contract.

In the Reason article Brian Doherty quotes David Mayer’s new book, “Liberty of Contract: Rediscovering a Lost Constitutional Right,” describing the right of contract as:

… a fundamental right, one aspect of the basic right to liberty safeguarded under the Constitution’s due process clauses, which prohibit government—the federal government, under the Fifth Amendment, and states, under the Fourteenth Amendment –from depriving persons of ‘life, liberty, or property without due process of law’…[but] following its ‘New Deal Revolution’ of 1937, it ceased protecting liberty of contract.

In an interview, Mayer explains that prior to 1937 the Court overturned a large number of laws involving such topics as minimum wage, state segregation laws, and laws requiring public school attendance and prohibiting parochial schools. These were tossed, not because the Court found the laws distasteful, but because they violated the freedom of contract.

Mayer argues that the current affection by the courts for “privacy” is too narrow and should really be expanded to freedom of contract. He says,

(T)he modern court’s protection of privacy rights from a libertarian perspective is too narrowly focused on issues about procreation and love. Why is it not equally fundamental to decide how many hours we work or our wage levels? There are all sorts of government regulation of our lives [in the world of business and economics] that interfere with the right to privacy too.

Certainly the current raft of suits over ObamaCare should include a freedom of contract argument. Why should I not be allowed to freely enter into a contract with an insurance company to provide the benefits of my choosing in exchange for willingly paying the premiums it requires.

How is that arrangement any business of the government?