Nothing is more central to human flourishing than work. Other animals expend energy to survive. But man evolved to make conscious toil for food and shelter. This aspect of our heritage is reflected in a psyche that for most still requires work for contentment. Sigmund Freud was not right about everything, but he was certainly correct that love and work are the necessary conditions of a satisfied life.
While modern America has cleared out obstacles to love, however unconventional, it has put up more and more impediments to work. Begin with the tax code. It raises most income from labor, not consumption. As a result, the government discourages work more than is required to run its operations. Nor can the decision to tax labor heavily be justified by concern about inequality. For those who want their taxes progressive, a consumption tax can be made as progressive as an income tax.
Second, minimum wage laws prevent the least talented and able among us from participating in work.
Almost exactly 200 years ago, the British House of Commons rejected a peacetime income tax. Henry Brougham, a Whig member of Parliament, mobilized public opinion against the tax, and after a raucous debate in the Commons, his side won by 37 votes. This revolt against the government that had led Britain to victory over Napoleon barely a year before, and the government’s response, marked an important turning point.
Previously I praised America’s Unwritten Constitution by Akhil Amar and then offered my first reservation about the book. My second reservation is its treatment of economic liberty. Professor Amar sees the greatness of the Constitution in the unfolding of democracy and equality. But economic liberty is also in the Constitution’s DNA and yet he seems to leave it out of the American story.
I also thought unfounded one historical claim, which itself surprising, because Professor Amar is generally very reliable. In a discussion that attacked theories of interpretation that would justify reasoning striking down economic regulation, as in Lochner v. New York, he wrote: “The 1913 ratification of Federal Income Tax Amendment, one of the most notable populist events of the twentieth century, blessed redistributive economic policy by endorsing a tax that everyone understood would likely feature a progressive structure taxing the wealthy at steeper rates than the poor.” One does not have be a libertarian to wonder whether the proposition that this amendment blessed redistributive economic policy in general is an overstatement. In fact, the 16th amendment can be seen as attempt to find an stable source of revenue other than tariffs, which were not only inefficient but often regressive, rather than a general endorsement of redistribution.
In any event, regulatory powers and taxing powers are different constitutional concepts. Economists then and now almost universally see redistribution through taxation as a superior policy, because it does not lead to as much distortion and loss of innovation as does redistribution through regulation. Thus, the 16th amendment cannot be said to extinguish whatever constitutional restrictions there are on redistribution through regulation.
More generally, our Constitution protects economic freedom in many ways.
October's Liberty Forum on Congressional power to define the substance of the 14th Amendment is now available and features essays from Joshua Hawley, Kurt Lash, and John Harrison. Losing the gun in Canada: Pierre Lemieux reviews Arming and Disarming: A History of Gun Control in Canada in our feature Books essay this week. Bart Wilson @Econ Lib: What's wrong with utilitarian behavioral economics? Daniel McCarthy on John Locke's colonial capitalism: Liberal, Libertarian, or License. Mollie Hemingway: Can We Finally Start Talking About the Global Persecution of Christians? Daniel Mitchell on October 3rd, 1913 as the worst day in American history. The Unwinding: Reviewing George Packer's account…
In his new book, Why Coolidge Matters: Leadership Lessons from America’s Most Underrated President, Charles C. Johnson claims that ‘Silent Cal’ wasn’t so much silent as he was silenced. But today, thirty years since Tom Silver’s underrated book about America’s underrated thirtieth president, Coolidge and the Historians, that is changing. In addition to Johnson’s book, we also have Amity Shlaes’s new biography, Coolidge, a prequel of sorts to her bestseller, The Forgotten Man: A New History of the Great Depression. Undoubtedly, there is growing interest in Coolidge that, although somewhat delayed, is especially timely for the present. Here are six lessons for President Obama from the not-so-silent Cal Coolidge.