Jacob Hornberger, founder of The Future of Freedom Foundation, published a series of essays by the title “Economic Liberty and the Constitution” The last essay explains how the Minimum Wage became law with the help of the Supreme Court.
Hornberger points out that the Courts consistently ruled that Minimum Wage laws were unconstitutional on the grounds that that they violated the liberty of contract as guaranteed by the Due Process clause of 14th Amendment to the U.S. Constitution. Under threat of Franklin Delano Roosevelt’s of packing the Supreme Court with younger justices more sympathetic to his socialist policies, five of the four justices rule in favor of upholding Washington State’s minimum wage law in the case of West Coast Hotel v. Parrish.
The era of economic liberty in America came to end in the 1937 case of West Coast Hotel v. Parrish.
The Court’s reversal of previous constitutional precedence unleashed a torrent of socialist welfare programs and state regulatory paternalism that has yet to be stopped.
It’s safe to say that most Americans don’t even know the extent of the economic revolution that took place in their country during the 1930s. They continue to believe that the Great Depression was caused by natural forces and that FDR “saved” freedom and free enterprise with his new system of welfare and regulation, according to Hornberger.
In addition to Hornberger’s essay, economic freedom must be seen as is a moral matter that requires either self-regulation of its practitioners or societal sanctions against unjust practices.
Capitalism is the best political economy possible only when governed by moral principles. Self-interested pursuit of wealth alone cannot make it a just system, only its practitioners can. The myth of the capitalist market is that it, not government bureaucrats, biggest and most influential corporations, wealthy self-interested elites, or the lying traders of goods or services, mysteriously regulate itself to the benefit of all.
Adam Smith didn’t even believe that. He was a rotten egalitarian when it came to public policy of business. He knew big corporations were quasi-government organization with potentially dominating power requiring regulatory oversight to protect the small business concerns. After all, corporations are created and given person (citizen) status by government through incorporation law. Because the corporation was to serve the common good of its community, getting and maintaining licensing was tied to the fulfillment of stated goals of local benefit. With the rise of national corporations like the railroads, local accountability and benefit ended. Today, national monopoly laws have effectively ended for the good of international corporate competitiveness. That is why a few multi-national corporations dominate 80% of nearly all of their respective markets. It is called globalism. The mystery is how it is connected to socialism.
Jacob Hornberger’s essays on “Economic Liberty and the Constitution” are accessible at The Future of Freedom Foundation website.