The Institute for Justice — a group that I like very much — does a lot of economic liberty cases; and though the cases are very hard to win, IJ wins them a surprising amount of the time.
Their most recent high-profile case is especially interesting; it deals with a state-backed casket cartel in Oklahoma. They lost at the court of appeals, but they’re asking the Supreme Court to hear the case; their theory is that the statute is justified by nothing more than a desire to enrich one group (licensed funeral directors) at the expense of another, and consumers be damned. As IJ points out, “Oklahoma requires anyone selling a casket to become a State-licensed funeral director even though casket retailers do not handle dead bodies or arrange funeral service, but instead merely sell what one federal court aptly described as ‘a glorified box.’ Obtaining an Oklahoma funeral director’s license requires at least two years of full-time college course work, a one-year apprenticeship that requires the embalming of 25 bodies, and two exams.” Not the best way to help consumers.
In fact, the court of appeals held that, under its view of the Constitution, naked economic favoritism is quite permissible: “We also note, in passing, that while baseball may be the national pastime of the citizenry, dishing out special economic benefits to certain in-state industries remains the favored pastime of state and local governments.” I’m surprised the issue hasn’t gotten more attention.
I’m not sure that the Constitution should be interpreted as providing broad economic liberty protections. I support economic liberty as a policy matter, but while the Constitution does clearly block some interferences with such liberty (consider the Takings Clause, the Contracts Clause, and the part of the Due Process Clause that prevents the deprivation of property without due process), it leaves the government with lots of room to regulate. I’m not sure how much room it leaves — I haven’t done serious research on the subject — but I suspect that it leaves enough even for legislation that simply tries to favor one business group over another.
I know, though, that my friend and coblogger Randy Barnett takes a different view; and in any event, this is a very interesting subject. And even if it turns out that the Tenth Circuit is right and that naked economic favoritism for one industry is constitutional, it’s still a pretty bad idea, and I wish that the media did more to cover how these laws harm consumers as well as competitors.
UPDATE: Todd Zywicki reminded me that he posted about this case as well several months ago; check out his thoughts.
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