Simone Gao: No doubt, the American government has become much more powerful. Dr. Pilon, who publishes the Cato Supreme Court Review, claims that America has entered into a post-constitutional state. Much of what the Supreme Court and Congress do is unconstitutional. Views of the Constitution and its role in government started changing at the end of the 19th century.
Roger Pilon: The great watershed that has given us modern leviathan, the modern redistributive and regulatory welfare state, came out of the ideas of the Progressive Era at the end of the 19th century and in the early decades of the 20th century. The progressives fundamentally rejected the original understanding of the Constitution. They wanted much larger government. They were social engineers. They were looking to European models of good government: Germany’s Bismarck’s social security scheme, for example. They were looking to British utilitarianism. They wanted to bring about change through statutes; whereas, earlier, individual relationships, one person to another, were ordered, for the most part, by common law principles of liberty, property, and contract—judge-made law, stemming from cases that arose when people brought complaints against their neighbor or against firms or against the government in some cases. And judges would have to adjudicate those complaints. Now under the progressives, they sought to bring about change through statutes. As I said, they were social engineers. In the early decades of the 20th century, the courts, for the most part, rejected those efforts, not entirely, but to a large extent.
Narration: Things changed drastically after President Franklin D. Roosevelt took office in 1933. America was deep in the Great Depression. In response, FDR and liberal democrats launched the New Deal between 1933-1936. It was a series of programs, public works projects, financial reforms, and regulations that included both laws passed by Congress as well as presidential executive orders during FDR’s first term.
Narration: The programs focused on what historians refer to as the “3 Rs”: relief for the unemployed and poor, recovery of the economy back to normal levels, and reform of the financial system to prevent a repeat depression. The New Deal included new constraints and safeguards on the banking industry and efforts to re-inflate the economy after prices had fallen sharply. Conservatives opposed the New Deal as hostile to business and economic development.
Simone Gao: The New Deal was first rejected by the Supreme Court but got pushed through later. What happened to this process? Here is Dr. Pilon again.
Roger Pilon: During the first four years of President Franklin Roosevelt’s term, when the Supreme Court found one program after another that he had introduced through Congress to be unconstitutional, either because it exceeded the powers of Congress or because it violated the rights of individuals. In 1937, early in that year, he unveiled his infamous court-packing scheme, his threaten to pack the Supreme Court with six new members so that he could have a court of his own making. Well, there was uproar in the country over that. It seemed to be an attack on the very rule of law. Nevertheless, the Court got the message, and it began rewriting the Constitution without benefit of Constitutional amendment. And it did it in three main steps: First of all, it eviscerated, got rid of, the fundamental principle under the Constitution, namely, the doctrine of enumerated powers, the idea that Congress has only 18 enumerated powers or ends that are authorized to it. You find that spelled out implicitly in the very first sentence of the Constitution. You see it explicitly spelled out in the 10th Amendment, the last documentary evidence from the Founding period, which reads, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” So the first thing the New Deal Court did in 1937, was get rid of that principle. And that opened the floodgates to the modern redistributive and regulatory state.
Roger Pilon: Then a year later, in 1938, the Court bifurcated the Bill of Rights and bifurcated the theory of judicial review. In other words, it distinguished two kinds of rights: fundamental rights and non-fundamental rights and two levels of judicial review. The effect was to reduce economic liberty to a second class status, which, in other words, enabled the Congress—and the states for that matter—to engage in much more regulatory and redistributive lawmaking. And finally, in 1943, the Court jettisoned the nondelegation doctrine. That’s the doctrine that comes, again, from the first sentence of the Constitution after the preamble, which reads: “All legislative power herein granted shall be vested in a Congress.” Not some, but all. What the Court did with that phrase was enable Congress to delegate ever more of its lawmaking power to the administrative agencies it had been, and would continue to be, creating. The some-450 —no one knows how many there are—such agencies of the executive branch that exist in Washington today. That’s where, today, most of the law that we live under is enacted, by rules, regulations, guidance, and so forth, passed by the IRS, the Internal Revenue service; the HHS, the Health and Human Services agency; the Federal Communications Commission; the Federal Trade Commission. I could go on and on with these very extensive executive branch agencies. And so that’s the origin of the modern executive state. And that’s how it was that we effectively—or rather the Court—effectively, after being browbeaten by Roosevelt, turned the Constitution on its head from an original document that authorized limited government to a document that authorized, effectively, unlimited government.
Roger Pilon: And so many of us, especially here at the Cato Institute, are of the view that this was a fundamentally illegitimate way to go about changing things in our system. The way to change them properly is this way that the Civil War amendments were—the way it was done under the Civil War amendments, by amending the Constitution, not by doing it through judicial ledger domain or sleight of hand.