I. Introduction
Constitutionalism is all the rage around the world today. Every serious student of the topic recognizes, indeed insists, that each nation, especially each emerging nation, should adopt a written constitution to shape the organization of its government. As a matter of common agreement, these constitutions are set apart from the ordinary business of lawmaking that every nation has to undertake on a routine basis. The usual conceit is that a national constitution entrenches the basic and more permanent elements of political governance, sufficient to justify their insulation from the political stresses of the day. It is also commonly agreed that the individuals entrusted with forming new constitutions in modern times do not have the luxury of making incremental improvements on preexisting institutions. The strategy of slow evolution did work within the English context, but it has not been imitated since. Unwritten constitutions necessarily require a period of time for evolution that is no longer feasible when constitutions are self-conscious documents written with a clear instrumental purpose. Conscious design, not Hayekian gradualism, is a necessity, not an option.
What judgments should inform the design of an optimal constitution? To flesh out this discussion, three interrelated questions have to be addressed. The first goes to an assessment of human nature: it seeks to identify the forces that drive individual and collective action. The last two go to the key issues of constitutional design. Of these last two questions, one deals with the structure of government. Does a constitution adopt a presidential or parliamentary system? How does it organize its legislature? Does it preserve judicial independence and allow for judicial review of legislation? The other question deals with the protection of individual rights such as due process of law, freedom of speech and religion, and the protection of economic liberties and private property.
In dealing with these questions, the fundamental inquiry is how best to deal with the size and scope of government institutions. To this, two approaches are possible. The first is the Lockean vision of limited government; the second is the progressive vision of a larger but more expert and benevolent government. I stand strongly in favor of the Lockean tradition, and seek in this essay to offer additional justifications for that set of insights. In order to take steps toward this end, I proceed as follows. In Section II, I briefly set out the three major questions that any regime of constitutionalism must face. In Section III, I outline the differences between the Lockean and progressive visions of constitutionalism. In Section IV, I defend the Humean account of “confin'd generosity” as the best brief summation of the nature of man. In Section V, I address the key structural issues that constitutional framers must confront. Section VI addresses the question of individual rights, and Section VII provides a short conclusion.
II. The Three Fundamental Constitutional Inquiries
A. Human nature
The first inquiry is as follows: What assumptions should designers of constitutions make about human nature, given that they themselves are flawed individuals? Will these assumptions change when constitutional designers think about the population at large, as opposed to the leaders of the nation? Are people to be regarded as virtuous or self-interested, and in what proportions?
Admittedly, it would be easy to design a workable constitution if the virtuous were in control. But it is far more difficult to do so when political actors are emboldened by their willingness to advance their own excessive self-interest at the expense of others. As James Madison memorably wrote in Federalist No. 51: “If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.”Footnote 1 And certainly, no constitutional government will be sustainable in the long run if all individuals are devils. The hard question is how to proceed with the task of constitutional design when the bulk of the population consists of individuals who fall somewhere between the two extremes, possessing both selfish and altruistic traits. This challenge is not made any easier given that political leaders often turn out to be more devilish and less angelic than the population at large. Stated otherwise, the wisdom of the Madison quotation lies in its awareness that character problems of the governed are often less critical than character problems of the governors, with their extreme and outsized personalities.
B. The institutions of government
Our second inquiry asks what institutional features a constitution can put into place—legislatures, executives, judges, administrative agencies—to help constrain the manifest and pervasive human imperfections in both the governed and the governors. On this point, there is a common understanding that any system of sound governance must decide which bodies can pass what laws. The simplest form of government is a single legislative body that operates by majority vote. But the advantage of speed may well be offset by the danger of oppression. The operation of legislative bodies is often slowed to avoid this risk. But which system should be adopted? Federalism? Bicameralism? Supermajority votes? Presidential vetoes? The range of possibilities is quite large, and the relative advantages are difficult to determine. As we shall see, no strong theory emerges to define these optimal structural features, so that it is difficult to draw any inference regarding what will work, or fail, in one country from what works, or fails, in another. The translation of social institutions across nations is often more difficult than the translation of legal doctrine, which often follows similar lines in quite dissimilar places.
C. The protection of individual rights
The third inquiry has to do with the entrenchment of individual rights against government interference. The two major questions here are the following: What are the particular rights that should be entrenched? And what state justifications should be allowed to override them? On this score, two kinds of individual rights can be identified. The first kind is comprised of personal rights such as freedom of religion, freedom of speech, and freedom from invidious discrimination. The second kind is comprised of economic liberties, including the rights to contract and own private property. With respect to the first, it is possible to believe in the protection of freedom of speech and still think that fraud, defamation, bribery, and assault should be subject to civil and/or criminal penalties. One can be in favor of freedom of religion and be opposed to human sacrifice, even when done in the name of religious liberty. One can be in favor of equal treatment regardless of race and sex, and still be in favor of state-run affirmative action programs or sex-segregated sports. With respect to the second kind of individual rights, one can believe in the protection of freedom of contract and also in the limitation of cartels. One can believe in the protection of private property but also allow for its taking for public use with the payment of just compensation. One can also believe that the justifications for the limitation of individual rights should be far broader, so as to encompass the imposition of antidiscrimination laws on religious hiring, campaign finance limitations, minimum wage laws, and zoning and antigrowth ordinances.
III. Lockean Versus Progressive Visions
Armed with these distinctions, the thesis of this essay is simple enough. The imperfections of human nature drive us toward the creation of complex constitutional structures that limit the speed and efficiency of government action in order to control the risk that government action poses to individual rights. As is evident from the previous discussion, the nature and extent of these dual constitutional protections—dealing with institutions and entrenched rights, respectively—depends in large part on the answer to the initial question on human nature.
On this score, there are two different visions. One originates in the Lockean tradition that finds—in answer to the danger of unbridled individual self-interest—a legal regime that couples strong property rights (broadly conceived) with limited government. Under this vision, the broad conception of property rights covers more than external objects; it also covers an individual's political and religious views, and the full use of his natural faculties.Footnote 2 This vision powerfully, albeit imperfectly, motivated the design of the American Constitution. At every stage, the original design of the American Constitution evidences a tradition of limited government and strong property rights that relies on the contribution of such figures as Montesquieu, David Hume, Adam Smith, William Blackstone, James Madison, and Alexander Hamilton.
Yet this approach to constitutionalism hardly commands universal assent today. In opposition there is a strong modernist tradition, starting in the late nineteenth century, which believes that intelligent legislation and administrative expertise are strongly needed to control the abuses that take place in unregulated markets. Government is regarded not as some necessary evil, but as a positive source for good that can ease the difficult transitions from a simple agrarian society to a post-industrial one.
This conflict in views between classical liberals and progressives is readily apparent in the American tradition, particularly in the post–Civil War period. The choice of outcomes was sealed in favor of the progressive vision with the judicially crafted constitutional revolution that culminated in the October 1936 term of the United States Supreme Court. In rapid succession, the Supreme Court issued its explicit repudiation of key elements of the Lockean tradition on matters of both institutional structure and individual rights. In addition, the role of separation of powers at the federal level as a check on the size and power of government was cut back by decisions that explicitly endorsed the rise of independent administrative agencies,Footnote 3 which could act pursuant to broad grants of delegated authority from Congress.Footnote 4
A similar transformation took place within the basic federalist structure of the United States Constitution. The original grant of legislative power to Congress under Article I of the Constitution was organized by an implicit reference to the doctrine of enumerated powers, under which the federal government could act only in certain well-specified fields, leaving the rest of the governance to the states. One advantage of this system of enumeration was that it minimized the likelihood that both the national and the state governments could control a single economic activity. That approach to limited government power was upheld when the commerce clause of the Constitution—“Congress shall have the power to … regulate commerce with foreign nations, among the several states, and with the Indian tribes”Footnote 5—was read by Chief Justice John Marshall (in 1824) to cover all forms of cross-border trade, transportation, and communication,Footnote 6 but to leave all internal commerce and other economic activities within a state to that state's sole regulation. But that definition of commerce was not broad enough to allow the federal government to impose comprehensive labor regulation and agricultural regulation on local businesses. To facilitate the expansion of federal power in the 1930s, in a stunning about-face, the commerce clause was interpreted far more expansively to allow the federal government to regulate all aspects of manufacturing, agriculture, and mining, so long as they had some “indirect effect” on interstate commerce, which they inherently always do.Footnote 7
Last, the nineteenth-century understanding of rights, which allowed for government control over monopolistic practices but not competitive ones,Footnote 8 gave way to a far more elastic vision of government power that allowed government to prop up monopolies or rip them down in accordance with its own policy preferences.Footnote 9 The clear import of the new constitutional structure was that all classical liberal devices, intended to slow down the expansion of government, were consciously replaced by a new set of doctrines that facilitated government growth. The justification was that only government administrative agencies—imbued with public spirit, enabled with technical expertise, and insulated from the pressures of market forces—could best run a complex economic system.Footnote 10 Within this framework, judicial review was regarded as a profound irritation that relied on a primitive defense of property rights in order to block the orderly introduction of the administrative state. The function of courts was to bless, not block, the new constitutional arrangements.
This post-1937 progressive constitutional vision does not entirely embrace this potent combination of majoritarian politics and the administrative state. Quite strikingly, on certain other questions, the triumph of the modern administrative state was tempered by the recognition of the massive dangers that majoritarian politics posed on explosive subjects, such as race relations in the United States. Before the ink was dry on the modern constitutional order as it pertained to economic liberties, a judicial reaction set in to make sure that no combination of majoritarian politics and administrative expertise could consign large portions of the American population to second-class citizenship. The only method to achieve this end was to reverse the move away from judicial review in those fields. Thus, in 1938, only one year after the consolidation of the New Deal hegemony over economic affairs, the Supreme Court held that it had an active role to play to ensure that “discrete and insular minorities” were not systematically disenfranchised by more powerful groups.Footnote 11 The momentum for judicial oversight led nearly inexorably to the 1954 decision of Brown v. Board of Education, Footnote 12 in which the Supreme Court undertook a massive federal intervention into local public policy when it ordered the end of segregated public schools throughout the nation.
This highly truncated version of American history shows how difficult it is to come to grips with the simplest of questions that face any system of constitutionalism—when to accept the outcome of majority votes and when to override them in order to take into account either institutional limitations on the organs of government, or the protection of individual rights. I now turn to a closer examination of three basic issues: How do we understand human nature? What does it tell us about the choice of government structures? And what does it tell us about entrenched individual rights?
IV. The Nature of Man
As to the working account of human nature, I believe that constitutional designers should be guided neither by the relentless Hobbesian account of individual self-interest, nor by the naïve republican accounts of an animated citizenry that deliberates anxiously in search of the public good. We have neither devils nor angels. Rather, two points stand out. First, as a general matter, the most accurate account of the median individual is that of a self-interested person who has, in Hume's memorable phrase, a “confin'd generosity” to other individuals.Footnote 13 Second, the Humean account of the median position needs to be supplemented, as noted earlier, by an account of the variance around that mean. Thus, the Humean insight is consistent with some small fraction of any population having deeply antisocial traits, just as some fraction will have highly laudatory ones. The function of constitutionalism can be best understood as an effort to structure governmental arrangements so that individuals in the bad tail of the distribution do not run roughshod over those who lie everywhere else on the distribution.
Hume's point has received a powerful reformulation in modern public choice theory—which I date from James Buchanan and Gordon Tullock's The Calculus of Consent (1962).Footnote 14 Their book starts with a simple question: How do self-interested individuals interact in both markets and political settings? Unfortunately, the analysis starts on what I think to be an oversimplified and incorrect assumption: that a form of relentless self-interest—good old-fashioned selfishness—animates all the activities of private individuals. In this case, at least, the stark assumption is an instructive one, for if it is possible to design institutions that have some chance of success in that hostile environment, those same institutions will surely do better in nations where at least some fraction of the citizenry displays some modest public spirit in support of its internal institutional arrangements.
Starting from Buchanan and Tullock's initial assumption, we get very different results for market and political institutions. In the former, we employ a naïve conception of laissez-faire that says individuals everywhere and always are free to do whatever they want, whenever they want,Footnote 15 so long as, at the very least, they keep their promises and avoid the use of force and fraud. On these very modest assumptions, the worst that can emerge is a set of private economic monopolies that crop up through voluntary mergers and cartelization. Yet these economic monopolies receive no special franchise or grant from the state, and thus are constantly at risk of erosion from new entry by outside parties, which they are powerless to resist. Put otherwise, if neither buyers nor sellers can organize themselves, the result of interactions of self-interested individuals is a move toward the formation of a competitive market.
That market will never assume the idealized form in which all parties have perfect information and in which transaction costs are zero. But such a utopian standard of competition makes the best the enemy of the good. The key variable is free entry of both capital and labor in all markets, which offers choices to consumers, workers, and businesses to undermine the power of extant monopolies.Footnote 16 So long as the state does not impose legal barriers to competition, through licensing or certification requirements, the other short-term obstacles to competition tend to wither, so that, in an imperfect way, open markets will move closer to a competitive ideal that maximizes social output for any given configuration of scarce resources, be they human, physical, or intellectual. Any residual problem with cartelization and mergers can be constrained by an intelligent antitrust law, whereby courts refuse to enforce contracts in restraint of trade. Cheating on cartels is likely to be pervasive, as each cartel member tries to chisel on prices to increase its market share. When everyone engages in this conduct, the cartel crumbles, which further minimizes the social losses from anticompetitive practices.
This model does not allow for any state support of the poor through mandated programs of redistribution. And in a world in which everyone is selfish, we can expect high levels of output but no voluntary support of the needy outside the contexts of families and friendships. But if we relax the assumption that all individuals are selfish, then nothing in this system prevents persons who have more than average levels of generosity from helping less fortunate individuals or groups. Efforts of this sort were common in laissez-faire regimes, with high levels of giving to hospitals, churches, and universities, and extensive assistance to the needy.Footnote 17 In the United States, for example, the late nineteenth century witnessed the founding of the University of Chicago by John D. Rockefeller, Stanford University by Leland Stanford, and Johns Hopkins University by Johns Hopkins.
It is worth noting that the levels of charitable giving in the United States, even today, are far higher than they are in Europe.Footnote 18 The older tradition of American individualism always called for extensive charitable giving on the ground that all individuals had some “imperfect obligation” to assist others in need, even if they retained full power to decide which persons received what benefits.Footnote 19 Ironically, levels of charitable giving have always been far lower in Europe (Great Britain is an important exception) than in the United States precisely because the care of the poor has traditionally been regarded largely as a government function.Footnote 20 The strong private response to the risks of deprivation and poverty should not be dismissed as idle talk. Indeed, the secret of voluntary charity is often the use of intermediate social groups—churches, schools, hospitals, youth groups—which organize giving so that individual donors no longer have to run background checks on potential recipients.
This vision of markets is, however, incomplete. No market can generate sufficient resources to combat the use of force and fraud. Nor will uncoordinated voluntary efforts lead to the organized provision of public goods—streets, defense, courts, and infrastructure—a deficiency which has long been the bane of some extreme forms of libertarian theory that rule both taxation and the power of government to take private property completely out of bounds.Footnote 21
So we need a state after all. Nonetheless, before we lurch to the other extreme, we must pay some attention to institutional arrangements. As a matter of ideal political theory, unanimous consent should be obtainable by all rational persons acting from behind the veil of ignorance: each, after all, receives in principle the benefits of greater security that outweigh his loss of liberty and property. In practice, however, no one is tucked entirely behind the veil of ignorance in the design of political institutions; serious risks (such as oppression) necessarily arise in the exercise of power by any collective body. In light of these risks, the ideal political system need not, and probably should not, operate by simple majority vote. It is for this reason that many constitutions divide power between two houses of a legislature, intended to offset each other. In other instances, supermajority votes are required to pass key kinds of legislation, or, in presidential systems, legislation can be blocked by an executive veto, subject to some legislative override.Footnote 22 Political institutions have a territorial and not a membership base. Accordingly, they cannot rely on the initial authority obtained by unanimous consent at formation of the institution to justify their monopoly of force within a given territory.
The precarious justifications for political institutions should shape our attitudes toward them. The key point here is that within the context of political institutions, any model that posits political actors who act out of individual (or group) self-interest generates implications that are far more chilling than those raised by the power of businesses that are constrained by the prospect of new entry into the market. Every system of political organization must, at some time, bind individuals who have not consented to the particular program at hand. The dangers of political paralysis are too great otherwise. But any system that does not have complete unanimous consent faces the risk of faction and capture. Depending on the particular political configuration at any moment, certain majority or minority groups may be able to take advantage of the inevitable gaps and glitches within the constitutional order to wield a disproportionate influence over political processes for their own narrow purposes. And gaps there will be, for constitutions inevitably make wrong institutional choices or use phrasing whose ambiguity only becomes clear when it is too late to change the text.
In light of these imperfect institutional structures, the basic point can be put in a simple way. Any society has individuals that array themselves along a distribution from very good to very evil. There is little that can or need be done to deal with the former. There is much that needs to be done to combat the corrosive influence of the latter. Unfortunately, political institutions can operate by a one-way ratchet, so that once evil persons take over power, it can only be pried from them by massive protests or overt coups, many of which fail.
The lesson we learn about politics is that it hardly matters that Thomas Hobbes was wrong in his insistence that all human beings are animated by a relentless self-interest. It is daunting enough that some small fraction of the population fits that description. The need to maintain order is the first order of political business, and this can be subverted by authoritarian figures. But even if that risk is controlled, the less serious but more pervasive risks of corruption and favoritism still remain. The question is what set of institutions and entrenched rights are best able to deal with these multiple prospects. As a general matter, there is little reason to be optimistic in light of the staggering number of failed efforts at decent government. Any discussion about how constitutions create institutional arrangements and entrench individual rights should not proceed on the assumption that the counterweights to these destructive political forces are always at hand. Sound constitutions do not provide safe havens. They only improve the odds of good government.
V. Constitutional Safeguards
There are, roughly speaking, four different kinds of institutional protections that could be included in a constitution: democratic elections; federalism; separation of powers; and an independent judiciary. Under the broad category of elections, constitutional framers must decide such issues as who is eligible to vote and which systems are used to aggregate individual votes in order to represent the collective choice. Is majority vote sufficient, for example, or is some supermajority required? Under federalism, framers must decide how political power should be distributed between two layers of government, where one has a larger geographical reach than the other.
The third kind of protection, separation of powers, could arise at any level of government. Under this general framework, the framers must decide whether political power should be funneled through a parliamentary system, in which the ministers who wield executive power are members (indeed leaders) of the legislative branch, or whether we should adopt a presidential system in which the executive branch is outside the legislative branch and holds some form of veto power over it. Both systems leave open the following further question: Which kinds of tasks should be taken out of the realm of legislative control and delegated to legislatively created agencies? Finally, the framers must organize the judicial power within this system. How should judges be appointed, and should they at all times be independent from the political branches of government by being unaccountable to them? If so, should judges have the power to override political decisions in order to protect either the structural or individual-rights elements of the constitution? And if they have such power, should the political branches, in turn, be able to override their judgment, and if so, by what mechanism?
I shall review each of these permutations in turn in order to establish this depressing thesis: There is no sure way to deduce the optimal structure of a constitution, even for those who are sensitive to the risk of excessive concentration of government power. Some combination of these four kinds of institutional protections is strictly necessary, but the relative advantage of one set of institutional arrangements relative to another is hard to sort out in the abstract, as so much of institutional design depends on factors such as territorial expansion, ethnic composition, and social infrastructure, which vary widely across nations. Quite simply, there is no strong theory of constitutionalism that clearly demonstrates the dominance of one structure over another.
A. Democratic elections
The first and most powerful constraint on political actors is the use of general election procedures that are intended to take ultimate political authority out of the hands of dangerous political factions. But these safeguards are far from fail-safe, and in too many contexts they degenerate into a democratic kleptocracy in which a single individual who gains power through a phony election can reduce a nation to ruin by acts of terror and confiscation. Think of such notable heads of state as President Saddam Hussein, President Robert Mugabe, President Kim Jong Il of North Korea, President Vladimir Putin, President Mahmoud Ahmadinejad, and (lagging not too far behind) President Hugo Chavez. None of these despotic leaders have repudiated the form of elections. None have used the title King. But they have all rigged elections and disregarded constitutional provisions in their successful efforts to consolidate unacceptable levels of political power.
No sound constitutional order can tolerate the unconstrained concentration of power in the hands of a single man, meaning that creating institutions capable of preventing the domination and manipulation of public elections has far greater urgency than is commonly recognized. This also demonstrates the attractiveness of binding term limits for powerful individuals in public office, in order to create a check against the possible abuses of power in democratic politics. Even here, however, there are no impregnable fortifications if President Putin can switch from president to prime minister in a regime with term limits.
Fortunately, in many Western democracies at least, national political cultures are marked by a willingness of elected leaders to allow themselves to be voted out of power.Footnote 23 That simple practice of orderly political succession rules out a descent into disguised presidential dictatorships. But even if orderly succession can be maintained, the prospects for democratic political institutions operating well without any additional checks are still quite grim. Sometimes the risk can be countered by an independent judiciary or by civilian control of the military, but these innovations in the end are subject to the same corrupting influences that plague all key constitutional design choices.
Ultimately, it is exceedingly difficult to develop effective institutions to guard against even evident perils, given the multiple ways in which bad actors can abuse their power. For example, a simple majority, without shame, may decide to expropriate the property of a minority (often individuals in a different region or members of a different ethnic group). Or a small group may hold out for a larger share of a future gain by taking advantage of different voting rules to block an important social improvement. The supermajority requirements that protect against the first form of abuse could easily intensify the second. Because of this, the exact choice of basic voting rules is difficult to state in advance, and it is difficult to maintain these rules even when they are embodied in a constitutional order.
The bottom line from this quick discussion is that the framers of national constitutions should seek to minimize these problems of political faction by increasing, through every available means, the scope of market institutions relative to political institutions. The justification for slimming down government does not rest on some optimistic ground that markets are always efficient and always immune to various forms of corruption. Nothing reaches that level of perfection. The reason is more modest: warts and all, the corrective forces of competition are likely to prove more resilient and effective than any set of political checks against the use of government power. The fewer matters that are left to regulate, the more robust any set of elective political institutions will turn out to be. It is easier to constrain a government that has fewer powers than it is to constrain one with many.
B. Federalism
The question of whether to adopt federalist institutions does not have a firm answer as a matter of general political theory. Much depends on the configuration of two key variables: population size and geographic distribution of ethnic groups. The latter point deserves some special attention here, because there is often good reason to believe that ethnic tensions, accumulating over decades or centuries, cannot be mediated by government structure at all. For example, the political separation into Protestant Northern Ireland and Catholic Ireland may have reduced the level of conflict, but it surely has not eliminated it. Distrust on both sides has precluded any effective unification of the country, no matter what safeguards could be built into the constitution. Even the separation itself has not put an end to all the violence. The same can be said of the painful separation in 1947 of Pakistan from India, which involved major migrations of populations across large distances in an effort to reduce the ethnic tensions in what quickly became two separate nations. Whatever the border tensions that arise after separation, these are less threatening to peace and good order than massive internal violence verging on civil war. More recently, the breakup of the former nation of Yugoslavia into the new nations of Slovenia, Croatia, Bosnia and Herzegovina, Macedonia, Montenegro, and Serbia (which contains two autonomous provinces, Kosovo and Vojvodina) shows how fragile and bloody the business of nation building can be.Footnote 24 In a sense, it is best to look at the territorial separation as a failed merger between two or more firms that could not overcome the cultural differences between them. But even the territorial divisions are not perfect; they often expose the ethnic minorities that are left behind to various forms of retaliation and political discrimination. It is difficult to mend deep divisions.
The problem of integration is also acute within corporate cultures, where mergers are often greeted with dread by employees who (if they are retained) suspect that two cultures will not mesh. In the case of Daimler/Chrysler, the sardonic joke before its breakup was: “How do you pronounce Daimler/Chrysler? Answer: Daimler, the Chrysler is silent.” All joking aside, it is also best to think of territorial division as a most imperfect solution. After all, the trapped minorities on either side of the border may be left more vulnerable by virtue of a territorial realignment than they would have been in a unified state. But in the grim business of international statecraft, it is all too predictable that imperfect accommodations will lead to horrific outcomes.
In some situations, strong national pressures lead to the decision to retain a single nation, notwithstanding evident tensions. That seems to have been the right call with respect to Iraq after Saddam Hussein was deposed. The Kurds, Sunnis, and Shiites have multiple grievances against each other that no outsider can quite begin to fathom. Separation by territories within a confederation is a sensible idea because it allows for local governments to take up some essential functions (e.g., education and social welfare programs) in a way that has little impact on other groups.
Separation by territories within a confederation may also explain why the principle of “subsidiarity” has emerged to take such a central role in modern discussions of federalism.Footnote 25 Under that principle, each particular decision is assigned to the smallest political unit in which the bulk of its economic and political consequences are likely to be felt:
The principle of subsidiarity is defined in Article 5 of the Treaty establishing the European Community. It is intended to ensure that decisions are taken as closely as possible to the citizen and that constant checks are made as to whether action at [European] Community level is justified in the light of the possibilities available at national, regional or local level. Specifically, it is the principle whereby the [European] Union does not take action (except in the areas which fall within its exclusive competence) unless it is more effective than action taken at national, regional or local level. It is closely bound up with the principles of proportionality and necessity, which require that any action by the Union should not go beyond what is necessary to achieve the objectives of the Treaty.Footnote 26
The principle of subsidiarity represents a careful compromise. Land use disputes are assigned to cities; commuter rail systems are assigned to state or regional authorities; airline grids and defense are assigned to national bodies. That system helps ensure that government officials and private citizens with the greatest knowledge and interest address a particular problem. But that system also runs the risk of exposing local minorities to political retaliation unless the national body has some power to veto local decisions. And there is no rule for deciding whether an action is “more effective” at one level or another. Subsidiarity is a broad standard that is intended to guide discussion, not resolve it. Everyone agrees that there is a core of good sense in the principle. No one is sure how far it goes.
General standards work relatively well when levels of trust are high, but when trust is lacking, indeterminate standards often yield to rules. Consistent with this principle, the procedures that set out government powers tend to become more explicit as the depth of ethnic divisions increases. At this point, the fear of exploitation tends to shift the control mechanisms from broad principles to specific veto rights.
Just that type of institutional design is found in the elaborate constitutional structure in Bosnia-Herzegovina, which sports three separate presidents (representing the Bosnian Muslims, Croats, and Serbs), each of whom is given the ability to veto any government decision that he or she deems to be “destructive of the vital interests” of the representative population.Footnote 27 This proposition is meant to remove the veto power from decisions that do not pose a threat to the stability of each independent ethnic group, but to leave a second-order mechanism to control decisions that pose a threat to the discretion of the presidents. Thus, the presidents' discretion is subject to both a political check and an independent legal check—a presidential veto must be ratified by a two-thirds majority of what is termed a “home” parliament, whose ethnic composition tracks the ethnic constituency of each of the three presidents. All these solutions were introduced only after a period of extended ethnic strife. The object lesson is that the only regimes that have a chance to cope with the residual distrust are those that take explicit cognizance of the previous high levels of ethnic hostility in order to guard against its corrosive effects.
In other places, like Canada, where the French-English split is a constant tension, total separation into two independent nations always remains an option. Yet the federal arrangement in Canada seems to limp along tolerably well, because it too is filled with local options that, in turn, blunt the power of national authorities. Thus, under the Canadian Charter of Rights and Freedoms adopted in 1982, no judicial decision striking down a legal provision has the final say, for the national parliament or state legislature, as the case may be, is free to reenact the same provision for a period of five years by simple majority vote, which in turn can be extended for additional five-year terms.Footnote 28 The Quebec legislature has done just that on multiple occasions, in refusing to respect the bilingual provisions of the Canadian Charter.Footnote 29
In the United States, it took a civil war to eliminate slavery, but not its deep racial tensions. Thus, in the aftermath of the Civil War, the United States adopted the Fourteenth Amendment, which allowed states to initiate legislation but also assigned to either the Congress or the courts the task of ensuring that these state laws did not violate certain extensive guarantees of fundamental rights.Footnote 30 It was a determined effort to respect the principles of federalism, on the one hand, and to limit their scope, on the other. It was impossible, however, to predict how the issue would play out. The initial effectiveness of the strategy was blunted by the acceptance of “separate but equal” in the 1896 decision of Plessy v. Ferguson, Footnote 31 which at once legitimated school segregation, segregation in public transportation, and antimiscegenation laws. The campaign for racial equality then took a long and painful backtracking until the 1954 decision in Brown v. Board of Education, Footnote 32 which held simply that there was “no place” for racial segregation under the equal protection clause of the Fourteenth Amendment. There were no constitutional amendments that could account for a shift in judicial holdings. Instead, national reflection and nonstop litigation led to a total change in worldviews.
The situation in the European Union today is driven in part by the importance of national divisions and distrust, which have both worked to limit the central power in Brussels. The EU functions best as a free-trade zone, and less effectively as a federal regulator that uneasily divides its power with its nation-state members. This is due, in part, to the fact that the internal divisions in the EU are far more profound than those in the United States. Each of the member states of the EU has long been an independent national sovereign and continues to act independently in military and international affairs.
The EU thus presents the converse of the United States, whose constitutional order puts control over foreign affairs squarely at the national level, where it is divided between Congress and the president, with occasional intervention from the courts.Footnote 33 The simple point here is that high levels of internal trust make the difficult task of organizing power across a federal system far easier in the United States than it would be elsewhere. Americans today think nation first and state secondFootnote 34—a change in personal identity that did not create any convulsions.
This arrogation of power to the center of government may have profound economic consequences in the creation or control of monopoly power, but that has to be put in perspective. The key point is that no configuration of American federalism increases the chances that national power will be used to kill, imprison, or rob dissenting individuals. The worst that the United States did as a nation was the creation, during World War II, of the Japanese internment camps whose validity was upheld in Korematsu v. United States (1944).Footnote 35 This was, in my view, both a constitutional blunder and a colossal mistake of public policy,Footnote 36 for which the United States rightly apologized in 1976Footnote 37 and voted reparations in 1988.Footnote 38 At no time, however, did that internment ever pose a threat to the lives of the detainees. Similarly, the entire episode surrounding the prisoners in Guantanamo Bay has brought forward a level of judicial resistance that was not evident during World War II; indeed, with respect to Guantanamo, the antigovernment forces (of which I was one) managed to win in the courts what they could not win with the president or Congress.Footnote 39
For all its weaknesses, the American federal system does not regularly spin out of control on a mass scale, and this relative stability allows the U.S. to prevent the kinds of massive abuses that are found elsewhere. There is no American exceptionalism here, as other democracies exhibit similar forms of political stability. But there is at least some sense in which the federal structure, in the U.S. and elsewhere, creates a diffusion of power that avoids the risk of wholesale breakdown.
Constitutional framers are always in a position to ask whether a federalist system is an effective diffuser of power. But it is hard to determine in the abstract which federal system is best. What is clear is that the more ambitious the total level of government activities, the harder it is for constitutional drafters to design an ideal set of institutions. Shrinking the scope of government activities should ease the burden of system design, but will by no means eliminate it. Even the smallest of modern governments has an impressive portfolio of activities. A good deal more work remains to be done.
C. Separation of powers
The third key structural choice concerns the separation of powers, which is normally coupled with the extensive use of checks and balances among different branches of government. A system of separation of powers reserves certain distinct government functions for different branches of government. The most common division dates back to Montesquieu's 1748 masterpiece, The Spirit of the Laws. Footnote 40 That book was written at a time when the English king was rapidly losing his control over executive matters within the realm, and about forty years before the American Constitutional Convention of 1787 and the French Revolution of 1789.
Montesquieu's articulation of the ideal division between the executive, legislative, and judicial functions was not new, for many of the same ideas can be found in John Locke's Second Treatise of Government. Both books have left their imprint on the American Constitution. The first three articles of the U.S. Constitution start with a sharp tripartite delineation between the making of the law, the enforcing of the law, and the adjudication of disputes under the law. This arrangement still retains a common-sense aspect that is not completely obliterated by the endless efforts to draw sharp lines between legislative and executive functions. A legislative decision to build post offices in major towns generally allows the executive to decide which towns to include and where to build the post offices.Footnote 41 The legislative decision to impose tariffs on foreign goods normally leaves it to the executive to figure out which tariff should be put on which class of goods. The legislature may authorize the hiring of executive branch employees, but may it create a civil service to combat the spoils system, whereby the new administration is able to replace all routine employees with members of its own party? Ultimately, Chief Justice William Howard Taft held, in an exhaustive opinion, that civil service regulations did not impinge on the executive function for routine employees, but did so for a first-class postmaster in Portland, Oregon.Footnote 42
The situation becomes still more complex when the demands of the administrative state lead to efforts to change the checks and balances between the separate branches of government. Within the American system, there are constant efforts on the part of the various constitutional players to alter their respective powers by mutual agreement, and these efforts provoke extended controversy because of the challenge they pose to both separation of powers and checks and balances.
One instructive American example concerns whether a duly passed statute can authorize a single house of Congress to overturn a decision of the Immigration and Naturalization Service granting asylum to an alien. That procedure does not comply with the usual requirements for enacting a law, which requires passage by both houses of a bill that is then presented to the president for signature.Footnote 43 The Supreme Court answered the question in the negative in Immigration and Naturalization Service v. Chadha (1983), properly in my view.Footnote 44 The doctrine of separation of powers is put in place precisely to limit the freedom of contract among the political branches. The beneficiaries of these structural restrictions are members of the public at large, so that only a constitutional amendment, not a political agreement, may deprive them of such protection. Elected officials have fiduciary duties to the public at large, and cannot act solely out of personal or political expediency. Other theorists disagree, and insist that so long as the overall framework by which these agreements take place is adopted through legislation that meets the constitutional requirements of bicameralism and presentment, it is simple folly to insist that the administrative treatment of individual cases, such as an application for asylum in the United States, be handled in the same fashion as a basic statute.Footnote 45 To that response there is the further reply that single cases should never be regarded as matters for the Congress to resolve, so that any ability to challenge these decisions must be taken through the courts.Footnote 46 However, notwithstanding the holding in Chadha, legislative vetoes are more common in the United States than ever before. Administrative imperatives can trump constitutional text.
Clearly, any system of separation of powers faces a constant tension between the need for prudence and the need for speed. The key point for these purposes is not whether these various decisions are right under the specific provisions of the U.S. Constitution. The key, rather, is to remind people that a few hard choices at the margins do not undermine the basic conceptual distinction between legislation and its executive enforcement. Under the American system, it would be wrong for the president to build any roads or post offices without receiving any authorization from Congress, which could, if desired, specify the exact location for such post offices. It should also be evident at some level that the expansion of government roles from the eighteenth century to the twentieth would have posed immense challenges to the operation of government without the creation of independent agencies, whose status under the original American Constitution is dubious at best (except for those who think that it makes perfectly good linguistic sense to locate in the executive branch agencies that act, as Justice George Sutherland put it, “quasi-legislatively and in part quasi-judicially”).Footnote 47
There is little doubt that the demands of rate regulation (for example) would lead a new constitution to be more tolerant of independent administrative agencies than the framers of the U.S. Constitution were, since they had no reason to foresee the magnitude of this particular problem.Footnote 48 Indeed, the law on this point is so difficult that most people within the United States do not know which administrative functions are securely in the executive branch (like the Environmental Protection Agency) and which are independent agencies (like the Securities and Exchange Commission and the National Labor Relations Board). And in general, the melding of executive and legislative functions is less problematic than the melding of either the legislative or the executive branch with judicial functions, where concerns with institutional bias play an important part. For these purposes, the key point is that the principle of separation of powers tells constitutional framers that, while some lines between functions must be drawn, a constitution cannot itself specify with precision where those lines should be drawn.
Once these lines have been drawn, however, the complementary principle of checks and balances allows each branch of government to block actions by the others. The American Constitution allows the president to block legislation by veto, which in turn can be overridden by a two-thirds vote of each house of Congress. Once again, the details of the system of checks and balances matter, but the system is not clearly constrained by any general theory. For example, there is no deep division as a matter of principle between a two-thirds vote and a three-fourths vote to override a presidential veto. But a veto override is far less likely with the three-fourths provision, which would give a major boost to the power of the president.
The question then arises: How should these two principles (separation of powers and checks and balances) be put together? On this score, Americans should be careful about exporting their constitutional arrangements to the rest of the world.Footnote 49 One obvious concern here is that a stable political environment reduces the pressures to get the perfect system of separation of powers, just as it reduces the pressures to have the perfect brand of federalism. Americans do well on constitutional issues because the relatively high level of political cohesion and internal stability in the U.S. enables cooperation between the different branches of government.
Classical liberal principles demand at least some division of powers to prevent the excessive concentration of political power. Nonetheless, a commitment to the principle of separation of powers does not require a presidential system or rule out-of-bounds a system of parliamentary control, whereby the electorate may vote for its representative but has no direct say on the selection of the ruling party or its key officials. The split ticket—voting for one party for president, and the other for the House or Senate—is a hallmark of the American political system. Necessarily, it has no place in any parliamentary system, where all voters are restricted to a single choice of their local representative. Due to party loyalty, a party with a bare majority is better able to dominate the British Parliament than the United States presidential system, where party discipline is weaker. Under the latter, for example, a bill must have 60 percent support in order to close off debate in the Senate, and a byzantine committee structure can hamper the passage of many popular bills before they reach the floor of either house. We learn, then, that swiftness and caution can be forces for either good or evil, depending on who is in charge.
The performance of a parliamentary system can also depend critically on whether its elections are carried out under a Westminster system, which gives all power to the party first past the post, or a proportionate representation system, which lets small parties gain a far larger say in the political process. Such a slight shift in voting rules profoundly alters the political landscape. The differences between the two forms of parliamentary governments may well dwarf those between presidential and parliamentary systems that share the common feature of operating with two dominant parties. Since minority parties have no say in a parliamentary first-past-the-post system, they tend to shrivel and die. Conversely, since minority parties can often hold the whip hand in proportionate representation systems, they tend to proliferate and flourish under such systems. The incentives in these systems are so powerful, and the effects so predictable, that the basic pattern has long been called Duverger's law.Footnote 50
It would, however, be unwise to insist on the superiority of proportionate representation solely because it weights minority interests more heavily. One risk is that the small parties will systematically exert excessive influence in the formation of new government coalitions, which will no longer map well onto the preferences of the voting public. Let there be three parties with 40 percent, 40 percent, and 20 percent of the legislative seats, respectively, and the smallest party can form a winning coalition with either of the two dominant parties. The politics become only more complex as the number of splinter parties increases. This endless bargaining rises to an art form in such places as Italy, Israel, and New Zealand (after it retreated from the Westminster system).Footnote 51
There are other differences between the presidential and parliamentary systems that are hard to assess. The definite four-year term for the American president, for example, differs sharply from the outer limit of five-year terms before national elections must be called in parliamentary systems. The ability of the ruling party, or its prime minister, to dissolve parliament on short notice and call for a new election gives the incumbent an advantage that is denied to presidents in presidential systems. Yet under a parliamentary system, the ability to force a vote of confidence against the ruling coalition puts it at a disadvantage, holding it hostage to the small groups within the coalition.
There is no easy translation from a belief in limited government to either of these two systems. Parliamentary systems are more likely to change dramatically, as England's did with Margaret Thatcher's rise to power in 1979, since she did not have to face the more chaotic institutional framework of the U.S. Congress. Conversely, the parallel rise to power of Ronald Reagan in 1981 in the United States was less transformative because the House of Representatives remained in Democratic hands throughout Reagan's two terms, and the Senate remained in Republican hands only through 1986. That high variability is again both a blessing and curse, for the system that gave Great Britain Margaret Thatcher had previously produced leaders with far lower wattage—which can also be said of the run of American presidents from the founding of the nation onward. It is hard to identify which system produces abler leaders or why.
Ultimately, therefore, the choice of government form reduces to a battle of relative imperfections that trades off risks of hasty action and debilitating paralysis, both accentuated by factional discord. It may well be that inertia will prove the deciding factor in stable systems. Change is costly, and usually unwise unless some manifest defect cries out for correction. Yet at the same time, when difficulties become crises, the empirical evidence shows a rapid shift from presidential to parliamentary systems or the reverse. Thus, one exhaustive review concludes that between 1950 and 2003, there were, worldwide, 123 constitutional changes, of which sixty-seven went from presidential to parliamentary forms of government and fifty-six in the opposite direction.Footnote 52 It is very difficult to detect a global consensus in the wake of this evidence.
Figuring out the desirability of these changes is an even more difficult challenge, given the ebb and flow in both directions. One set of studies purported to find that presidential systems that had lower levels of government spending also had about 6 percent lower GDP than parliamentary systems, and that welfare spending was about 2 to 3 percent less, with somewhat lower levels of corruption and, more dubiously, somewhat lower levels of production.Footnote 53 But these findings have been challenged on a variety of technical grounds, including the model's inability to explain why the choice of governmental form should be treated as independent of other historical and political forces.Footnote 54 Skepticism seems warranted for the simple reason that there is no unique presidential or parliamentary system, and it is likely that the variations within each type could prove as important as the variations across types. The powers of presidents and legislatures can be tweaked in so many ways that differences within each group could easily matter as much as differences between the two groups.
Some lawmaking power could be taken out of the legislative process, either by initiative or referendum,Footnote 55 and given directly to the electorate. That approach would avoid the factions in government, and it would produce a clean up-or-down vote on a given question. But it could also lead to results that are politically divisive, as was proven in California in 2008, where the passage of Proposition 8 has prohibited gay marriage, at least for the moment,Footnote 56 but only at the cost of much bitterness and mutual recrimination in the aftermath. One important dynamic relates to the complex interactions when referenda on controversial issues appear on Election Day, for by altering the overall electoral turnout, they can easily alter the outcome of general elections. It is commonly thought, for example, that the strong support for Proposition 8 among African Americans boosted the turnout in the presidential election to the advantage of Barack Obama, who carried the state handily.
Yet here, as with federalism, it is appropriate to end on a note of caution. There are many nations where ethnic conflicts are so embedded that no system of separation of powers and checks and balances can work. Deep ethnic conflicts in the mottled distribution of a population within a small nation make it impossible to orchestrate any physical separation or federal system. At this point, ornate checks and balances are the last feeble hope. A textbook example is the highly unstable situation in Lebanon, where the fragile 1943 accommodation called for a Christian Maronite President, a Sunni prime minister, and a Shiite parliamentary speaker.Footnote 57 That arrangement started from the correct political presumption that each interest group should hold veto power over major structural changes, a feature that is indispensable in any political setting driven by ethnic distrust. But this compromise proved short-lived given the relative growth in Shiite population, which resulted in the first of many ethnic civil conflicts in the late 1950s. The country's subsequent history has hardly proved easier, for the internal instability in Lebanon has led to partial occupations by Israel and Syria, as well as huge internal conflicts with the rise of Hezbollah. There are some situations that are beyond cure, absent political miracles.
D. Judicial power
But what of the judicial power? That discussion divides itself conveniently into three questions. The first asks the purpose and organization of the judicial system. The second addresses the selection of judges. The third concerns the power of judicial review, that is, the ability of a court to strike down a properly formulated action of the legislative or executive branch in either a presidential or parliamentary structure, on the ground that it is inconsistent with the constitution.
In a classical liberal regime, courts exist to resolve individual disputes that arise under the general law. The key obligation in this system is to make sure that neither the executive nor the legislature denies any person or organization the opportunity to have his, her, or its grievances resolved before a neutral tribunal. That conception of judicial power is clearly found in Locke's Second Treatise Footnote 58 and in Montesquieu's Spirit of the Laws. Footnote 59 On this point, the American Constitution follows the English practice, guaranteeing access to the courts both as a matter of due process and by the writ of habeas corpus, which cannot be suspended except under extraordinary circumstances.Footnote 60
This model of judicial power works well for traditional legal disputes, but it has been called into question by the rise of the modern administrative state, which often places greater stress on the identification and use of judicial power. For example, specialized rate courts are often used in states to deal with the heavy burden of rate-making proceedings. And it is common to assign high-volume issues, such as workers' compensation cases, to specialized tribunals that deal with these issues on a regular basis, with matters of law often resolved by appeal to the ordinary court.
In general, there is little that an optimal constitution should do to eliminate the rise of these specialized tribunals. Nonetheless, some limits should be set on the use of such tribunals. For example, specialized courts outside the judicial system are used in the United States in labor relations cases, where the National Labor Relations Board (NLRB) operates under a five-person board whose chairman is appointed by the president and whose other four members are by custom divided evenly between the two political parties.Footnote 61 The NLRB oversees an extensive statutory regime that organizes union elections, resolves unfair labor practices, and formulates general policy. This field is fraught with sharp divisions along party lines. Even though some level of judicial review by independent courts is available, the NLRB mixes judicial functions with legislative and administrative ones. There is no reason why the judicial function in these cases should be lodged in a single body whose members are chosen exclusively because of their partisan positions. Polarization along political lines is thus the order of the day. Keeping the deciding vote in the hands of the president thus tends to increase the dominance of the party in power, which is inconsistent with strong separationist principles. Keeping specialized tribunals within the political branches of government is, on balance, a risk that no sound system of constitutional law needs to run.
In choosing judges, once again, there is no uniform approach. Within the American system, federal judges are nominated by the president but only appointed after they have been confirmed by a majority of senators, with no participation of the House of Representatives.Footnote 62 At the time of the founding, senators were chosen by state legislatures, and a deliberative body, the Electoral College, chose the president. The most popular element of government, the House of Representatives, was shut out of the process altogether.
To further insulate members of the judiciary, their terms are for life, or technically during “good behavior.” This goes far beyond term limits to insulate judges from political pressures.Footnote 63 The reason for the adoption of this practice under the American Constitution was doubtless the conception that the purpose of judges was to protect propertied interests from political expropriation. The criticism is that such protection entrenches people of privilege who already exert too much power over the political branches of government. The move for direct election of judges, often for limited terms, has taken hold in some states, which in turn generates a pressure on judges to play to the gallery on critical decisions. The anti-elitist impulse is quite evident here. But the choice between methods of selection remains highly controversial everywhere.
Even more controversial than the role of specialized administrative tribunals or the rules for selecting judges is the hot-button issue of judicial review. Judicial review, of course, gives courts the power to strike down legislation that falls outside the permissible boundaries of the constitution. Judicial review in the United States was established in the 1803 case of Marbury v. Madison, Footnote 64 in which there was an explicit contradiction (on a narrow question of the Supreme Court's jurisdiction) between what the Constitution required and what the legislature decreed.
Unfortunately, most constitutional issues do not have such matchless clarity. Many key judgments on federalism, separation of powers, and individual rights depend on controversial readings of basic texts. The difficult question is whether unelected judges should be allowed to override proposals (e.g., minimum wage or maximum hours laws) that command strong levels of political support in a highly polarized political situation. On this, there is nothing inevitable about the American solution, which has produced decisions as appallingly misguided as Dred Scott v. Sandford in 1857 (upholding the second-class status of slaves by denying that they could become citizens of the United States even when freed)Footnote 65 and as inspired, if controversial, as Brown v. Board of Education in 1954 (ordering desegregation of public schools throughout the United States, chiefly in the South).Footnote 66
The usual way of phrasing the problem of judicial review is to ask whether unelected judges should be able to negate the power of democratic majorities who act after prudent political deliberations. On that question, much depends on which public decisions one believes should be made by government authorities in the first place. Thus, from the classical liberal perspective, any collective deliberation concerning financial appropriations for war and peace is not a suitable area for judicial intervention, and on these matters courts everywhere have long taken a hands-off position. But the case for judicial intervention can easily shift in the opposite direction when the conflict concerns the protected right of an individual to a fair trial when charged with an offense that could result in the loss of life, liberty, and property. In this case, a strong role for the judiciary is far more appropriate in light of the dangers of individual oppression.Footnote 67
Finding an appropriate test to decide when courts should intervene is more difficult when dealing with economic and social matters. Classical liberals tend to prefer definitions that tie the public interest to classic economic definitions of a public good that stress nonexcludability, that is, actions in which the supply of a particular good or service to one individual necessarily provides it to a second.Footnote 68 At this point, judicial intervention is appropriate to ensure that some individuals do not free-ride off the contributions and labor of others. But other theorists tend to think that any burning issue of public dispute is a proper subject for legislative action, which calls for a far narrower scope for judicial review than classical liberals endorse.
There is little question that, globally, the call for some system of judicial review has gained ground recently, often through adjudication of major constitutional questions in specialized constitutional tribunals set up exclusively for that purpose. But it is far from obvious that any judicial decision of constitutional import should necessarily be immunized from political review. In some instances, that review is exceedingly hard to obtain, as under the highly restrictive amendment process set out in Article V of the United States Constitution. It is therefore always possible to avoid that process by using a weaker system of judicial review, such as some variation of the legislative override that is found in the Canadian Charter, which provides that if a court strikes down a legislative act or provision, “Parliament or the legislature of a province may expressly declare in an Act of Parliament or of the legislature, as the case may be, that the Act or a provision thereof shall operate notwithstanding” the court's decision.Footnote 69
The Charter outlines the fundamental social and legal rights of Canadians. Note that the Canadian provision does not call for any supermajority vote to override the determinations of any court, which has allowed Quebec to use this provision to resist the imposition of English-language requirements—long a source of tension between Quebec and Canada as a whole.
Regardless of the particulars of this dispute, the Charter's legislative override sets too low a bar on normative grounds. A more sensible approach would probably be to follow the model of the veto provisions in the United States Constitution, such that a two-thirds vote in each house of a bicameral system would be sufficient to undo the decision. That approach gives a dual form of protection. First, the legislation in question has to pass muster at two separate times. Second, it takes a substantial majority to override judicial claims that protect individual rights.
What, then, does the optimal structural constitution look like when all the moving parts are considered together? The issue is clearly difficult to resolve. At best, we can identify a set of constraints through separation of powers, checks and balances, and judicial review. But these animating principles are consistent with both presidential and parliamentary systems, leaving it quite undecided which of these is in better harmony with sound governance. On this point, the classical liberal will differ from the champion of the modern social democratic state, given that the latter has far greater confidence in the impartiality and expertise of administrative tribunals to which a social democratic state routinely extends extensive powers. But the fact here is that it is hard sledding to think of any universal truth that guarantees the supremacy of one form over the next. The plusses and minuses of any proposed change are often so evenly matched that there is much to be said for the view that the status quo should endure in democratic societies. The truth is that nations become more adept in dealing with familiar structures, so that the costs of transition are likely to swamp the gains from some alternative state of the world that may well be less attractive than the one that has been abandoned. This recognition of the simple point that established institutions may work better than they appear to on paper is not a call for stagnation, but a call for care in making changes that could prove to be more disruptive than valuable. This is a Burkean gloss on a classical liberal constitution.Footnote 70
VI. Individual Rights and Liberties
Let me now turn to the last topic, where the question is what stance the optimal constitution ought to take on matters of individual rights to liberty, property, or equal treatment before the law. On this question, I believe it is possible in principle to reach conclusions more categorical than those that are possible under the structural questions. More precisely, the preference for competition over monopoly is a sine qua non for sound social and economic relationships.
Start with the economic side of the coin. Constitutional framers should rely on general demonstrations that monopolies are inferior to competition on the ground that monopolies create welfare losses by allowing parties to restrict entry into markets, raise prices, and reduce output. This set of consequences does not depend on the peculiar historical evolution of any country. One reason why a sensible version of antitrust laws in the United States, or competition laws in the European Union and elsewhere, makes sense is that such laws translate well from one society to the next. Indeed, there may not be any peculiar set of local circumstances that displace the proposition that monopolies are inferior to competition. This is an ideal topic for constitutional protection that can easily be couched in the language of freedom of contract, private property, or ordinary economic liberties by constitutional framers who are so inclined to act.
This constitutional preference for competitive markets does not offer any refuge for those forms of behavior that are suspect within the classical liberal framework. Protections against force and fraud, against tortious interference with contract, against defamation, and against monopolization are all consistent with this point of view. The pre-1937 Supreme Court in the United States has often been attacked for its unprincipled protection of the rich and the powerful. That charge certainly has traction on matters of race relations, with the rise of the separate but equal doctrine of Plessy v. Ferguson (1896). But on economic matters, there is no evidence that the Supreme Court was consciously unprincipled in its decision-making. With the occasional lapse, it sought to protect competitive forces against anticompetitive regulations (at the time called “labor regulations”) that all too often masqueraded as rules intended to protect health or safety.Footnote 71 The ten-hour maximum workday struck down in Lochner v. New York (1905),Footnote 72 for example, surely was intended to blunt the competition of nonunion laborers.Footnote 73 And the major decisions that repudiated Lochner were all efforts to introduce cartel-type arrangements in either labor or agricultural markets.Footnote 74 Regardless of constitutional structure, it should always be possible to construct a coherent system of individual rights to property and liberty by giving due weight to the power of the state to maintain ordered liberty, without tolerating state sponsorship of various barriers to entry or state-supported monopolies.
The same insights, on the importance of competition and the dangers of monopoly, apply with equal force to various noneconomic liberties. The importance of freedom of speech means that no person should be allowed to prevent the free entry of others into political or artistic markets. Efforts, therefore, to impose limitations like the now-discredited Fairness Doctrine in telecommunications, whereby individual stations are required to give both sides of a divisive issue equal airtime, should be stoutly resisted.Footnote 75 Efforts to burden the speech of one party with obligations to present the views of another reduce the total amount of speech on matters of public concern. The task of getting well-rounded views in a marketplace is best accomplished by allowing others to enter, not by forcing current speakers to subsidize their rivals. Print or broadcast media should not be treated as isolated miniature markets when consumers can move within and across media instantaneously. It is quite sufficient if the overall market has balance, even if none of its components do. The same applies to the misguided history of campaign finance law, whose major effect is to entrench incumbents and to invert the protections of freedom of speech so that it no longer allows ordinary people and citizens to express their views close to election times when they matter most.Footnote 76 The culprit here is the progressive mind-set that misunderstands the overall structure of information markets by thinking falsely that all corporate speech is lined up on the same side of all issues.
Similar arguments apply to religious freedom, where the elaborate body of law that developed in the United States on free exercise and establishment is best understood as an effort to prevent the state from favoring, through either taxes or subsidies, one religion over another, or all religions over none.Footnote 77 The ban on cross-subsidies that animates any coherent account of the state regulation of religion is vintage classical liberalism. In contrast, the classical liberal should not insist on strict separationist principles when cooperation between religious and nonreligious organizations works for the mutual advantage of both.
Indeed, one can go further and say that any coherent constitutional account of individual liberties and property rights creates a sphere of protection that guards against the two major problems that plague any political order. The first of these deals with negative externalities such as aggression and pollution, whereby one person has an incentive to undertake actions that lead to private advantage and social losses at the same time. The second is the inability of private markets to overcome a range of coordination problems such as those that exist in network industries like telephones and railroads, where the need for the cooperation of all on key matters of interconnection precludes the realization of competitive markets. The first of these problems dates from the start of government, and the second arose with the increased pace of industrialization that required, and still requires, a complex social infrastructure.Footnote 78
This vision of constitutionalism is not compatible with the modern social democratic state, which lurches between competition and monopoly in the ways indicated at the outset of this essay. And to what end—to make the world safe for restrictive practices that reduce overall welfare, compromise individuals' liberty, increase administrative costs, create undue uncertainty, and generally subject politics to a set of factional pressures from which it finds it difficult to recover? The American experience reveals this simple picture. Where courts care about the classical liberal conception of matters of free speech and federalism, they do a fine job in preventing these various ills from taking place. The ability to keep commerce open across state lines is but one example. Where courts do not care, they claim that it is impossible to distinguish right from wrong and smart from dumb, so that all questions are resolved through legislation that produces a dizzying array of protectionist actions, whereby local businesses, in league with local governments, systematically exclude out-of-state competitors.
In some instances, the situation gets worse. Not only is it possible for modern constitutions to give short shrift to classical liberal rights of property and liberty, but they may also move strongly in the direction of positive rights—rights to housing, jobs, welfare, health care, or anything else that could be provided by ordinary markets if they were allowed to operate. Indeed, this massive program of government subsidies for all lay at the heart of Franklin D. Roosevelt's Second Bill of Rights,Footnote 79 which was comprised of rights whose correlative duties he nowhere specified. In these cases, of course, it is not possible to specify the quantities of the rights so allowed. All such details depend on the level of resources in society, the state of technology, the distribution of income, and myriad other variables that lack the permanence necessary for any kind of a constitutional order to grasp. And even if we accept that states may legitimately be committed to some constitutional articulation of positive rights, they should be careful about how far they go. Constitutions should not provide for these rights, but at most should make it clear that the legislature does nothing wrong when it provides for them in abundance.Footnote 80
There is massive danger in this effort to make government the provider of key support for all its citizens. The state creation of entitlements by fiat is a game without an end. Scarcity is a powerful constraint, no matter what choices are made on constitutional design. The positive rights in question can only be funded from taxes or other forms of exaction. The provision of positive rights therefore limits the scope of negative rights on the opposite side of the equation. The pattern that follows is yet another illustration of the downward spiral that comes when political actions are not constrained in areas where there is no strict necessity for collective action. The current malaise within the American system, which has been replicated worldwide, is not a function of faithful adherence to a constitution that tries in its substantive phase to limit the power of government. It stems from the opposite attitude, which holds that, on matters of entitlement, there should be no limits on the state to craft positive rights at will, funded by whatever device seems opportune at the moment. The cumulative deficit as program piles on program should be evident to anyone who examines the costs of health and welfare in the “out” years, that is, those years for which the present administration was not duty-bound under law to include future losses outside the budget window in its budget appropriations. Politics without constitutional constraint will always break down. And the current remedy of more government intervention will only compound the problem.
VII. Conclusion
The task of making constitutions is, on any account, harder than the task of making ordinary laws. The cardinal feature of constitutional structures is that they must have a certain degree of permanence; they must be resistant to nullification through ordinary legislation. At this point, the choices in design are hard for two reasons. First, the required level of ambition is greater. Second, the information available to make these choices is harder to come by. Any constitution that is drafted with respect to a particular controversy is not likely to outlive that controversy. Different rules will be required when the issues and the players change. It is therefore necessary to step back from particulars and look at the enduring features of human nature, in order to choose that structure that is likely to prove most resilient in the wide range of future disputes, whose content can only be dimly perceived.
Within this framework, the two enduring elements remain the scarcity of resources and the strong self-interest of individuals and groups. Any constitution born of short-term optimism will tend to ignore these restraints, which will lead to the formation of governments with excessive powers over the personal and economic affairs of their citizens. To avoid this problem, two key sets of choices must be made. The first set of choices is structural. It regards the processes by which laws are made by legislatures, enforced by executives, and interpreted by courts. On these complex questions, the general maxim remains that it is best to divide power so that the ambitions of one group or individual are checked by those of another. But that insight does not yield any clear articulation of which powers should be delegated to what bodies under what circumstances. In any particular case, the success of a constitution could depend on the size of the state, the ethnic mixture of its population, its ability to transition from colonial rule, and a thousand other contingent facts. Lawyers and political theorists can say little about the concrete choices. But on the question of what system of private rights should be preserved, I have little doubt that the fewer the positive rights created under a constitution, the more durable it will be.
It is better, therefore, to start with the second set of choices, which concerns the protection of property, contract, speech, and religion from government control. These rights, of course, cannot be absolute just because they are constitutional. But here, too, there is a theory that indicates how they should be structured. Competition is preferable to monopoly whenever it can be achieved. Constitutions should thus preserve competitive markets when possible, and should cautiously allow for the regulation of private monopolies when competition is not possible.
The implications of this overall analysis should be clear. The classical liberal objectives of limited government are, if anything, more important in societies that are divided by deep ethnic clashes. The strategy here is to reduce the pressures on the structural elements of government by reducing the number of decisions that government has to make. By stressing the control of force, fraud, and monopoly, and shying away from questions of positive rights and redistribution, the classical liberal conception relies on government force in those cases where it is likely to be backed by the strongest national consensus, across ethnic lines, for the exercise of government power. By reducing their span-of-control problems, governments would not have to dip deep into the pool of potential hires for public office. That selectivity, in turn, should allow government officials to recruit abler individuals into public service, and to devote more public resources to reaching sensible solutions on those questions that remain within the sphere of government action.
The same instinct applies with equal force to economic and noneconomic affairs. Setting up a constitution is no easy matter. It is altogether clear why so many constitutions that start with a flourish end in disaster. False optimism is the bane of this enterprise. No national framers can avoid risks, but they will do best if they recognize that their task is to design institutions and rules that cope with scarcity and self-interest in ways that are intended to preserve the life, liberty, and property of their citizens.
