The Constitutional Liberty We Lost

Legal scholar David Mayer explains why liberty of contract is about more than economics

Brian Doherty
Reason Magazine

“For a period of exactly 40 years, from 1897 to 1937, the Supreme Court protected liberty of contract as a fundamental right, one aspect of the basic right to liberty safeguarded under the Constitution’s due process clauses, which prohibit government—the federal government, under the Fifth Amendment, and states, under the Fourteenth Amendment—from depriving persons of ‘life, liberty, or property without due process of law’…[but] following its ‘New Deal Revolution’ of 1937, it ceased protecting liberty of contract.”

So writes David N. Mayer, professor of law and history at Capital University, in his new book Liberty of Contract: Rediscovering a Lost Constitutional Right. Although progressive legal scholars have derided liberty of contract as merely a tool of plutocrats—the most famous liberty of contract case, Lochner v. New York (1905), overturned maximum working hour laws for bakers in New York—Mayer argues that a wide range of individual liberties were properly protected under the doctrine.

Senior Editor Brian Doherty interviewed Mayer by phone in January about how and why liberty of contract was briefly a key part of the Supreme Court’s arsenal of defenses against government action, and why it’s a shame we’ve lost it.

Reason: Why is a book about the lost constitutional doctrine of liberty of contract worth writing and reading now?

David N. Mayer: We are facing a vast expansion of the 20th century regulatory and welfare state, and in debates over the welfare state it’s important that people understand that the regulatory state has been built on a number of important myths: myths about economics, myths about history, and myths about constitutional law. I hope my book shatters one of the most important myths about early 20th century constitutional law.

The traditional story goes back to Justice Oliver Wendell Holmes’ dissent in Lochner. The decision struck down a maximum hour law for bakers, and according to Holmes the majority was reading a laissez-faire economic theory into the Constitution. He accuses the majority of “enacting Mr. Herbert Spencer’s Social Statics,” referring to the most famous classical liberal English philosopher of the time.

That’s entirely wrong. The majority didn’t decide the case based on any kind of economic theory. The majority decided based on well-established principles of constitutional law. But Holmes’ accusation stuck and was repeated by several generations of Progressive movement activists, including the people who in the early 20th century were pushing these new kinds of laws—minimum wage and maximum hour laws that the Court was striking down in liberty of contract cases….

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