Wednesday, December 13, 2017

The End of Economic Freedom (Part VI)

Originally, the Court found First Amendment rights did not apply to commercial speech (Valentine v. Chrestensen, 1942). However, that outcome changed in Virginia State Board of Pharmacy v. Virginia Consumer Council (1976). In this case, the Court held that commercial speech was protected speech. After all, it is extremely difficult to distinguish between commercial and non-commercial speech. This makes perfect sense since the Constitution provides for Freedom of the Press (commercial businesses) which includes advertisements. However, just four years later in Hudson Gas and Electric Company v. New York the Court introduced a new level of scrutiny for commercial speech (intermediate scrutiny). Thus, commercial speech is held to a higher level of scrutiny than non-commercial speech. The most egregious court ruling for commercial speech was the 2002 decision in Nike v. Kasky. In this case, the California Supreme Court found that speech used by Nike to defend itself from allegations that it makes their products in third world country sweat shops was not protected speech. Even if the information is factual, it is best for companies to defend themselves by remaining silent to avoid further lawsuits. This is a move to silence companies from using anti-government or anti-regulatory speech. The bottom line is that companies who seek to prove an economic freedom using freedom of speech rights still face an uphill battle since commercial speech faces a higher level of scrutiny than non-commercial speech.

An interesting case was Daimler Chrysler Company v. Cuno (2006). The Court dismissed the case since the plaintiff had no standing. Thus, the lower court ruling was overturned. This case did not involve economic freedom, but instead a concept known as “competitive federalism”. In this case, the defense argued that states offering favorable tax rates to recruit or lure companies from another state was unconstitutional. Although the Sixth Circuit agreed with the defense, this result was a sham. If this result is correct, then why bother to have states. This opinion implies that all states should have the same tax rates and tax laws. This would destroy federalism (state and federal government) separation of powers in the Constitution. Some say the biggest right for citizens is the right to vote. I disagree, the biggest right for citizens is the right to travel seamlessly throughout the United States. Individuals and companies can “vote with their feet” and move to states that have more favorable laws for social and or economic issues. It would be a huge injustice for corporate and individual rights if competitive federalism is destroyed by the courts. This would further stifle job growth, cause product costs to rise, and eliminate innovation. It would also force companies to send more manufacturing jobs overseas.

The Supreme Court has yet to garner any First Amendment rights to corporate logos or any type of branding. State court cases over logos and branding have been at best mixed. For instance, a Florida statute prevented a lawyer from using a pit bull as its logo. Another speech issue of great importance to corporations is government compelled speech. The government compels corporate speech all the time. Consider the dairy farmers “Got Milk?” campaign. The government compelled dairy farmers to contribute to a fund to run these ads. In Glickman v. Wileman Brothers and Elliot, California farmers sought to stop a compulsory government fund for peaches and plumbs. The Supreme Court held that the government can compel money to promote products even if some farmers sought to use money to personally promote their own products. The Court backtracked a bit in United States v. United Foods when it held compelled government speech (money) for mushroom adds was unconstitutional. But the Court continued its destructive ways on businesses in Johanns v. Livestock Marketing Association when the Court held the government can take money from farmers to promote beef: remember the adds “Beef: It is what is for dinner.”? This was compelled government speech. If A has a better product than B then it makes little sense for A to advertise with B, but this is what is happening under compelled government speech. Compelled speech may take other forms as in the Masterpiece Cakeshop case where the government compels store owners to appease the rights of customers even if they conflict with the rights of store owners. Another future 2018 case, National Institute of Family and Life Advocates v. Becerra, is a case where a California law attempts to compel pregnancy centers to offer patients abortion options. That is analogous to having the government compel McDonalds into selling wholefood options – this would violate their free speech.

Today, economic freedom and the right to work, face a bigger uphill climb than even slavery. Since the adaption of the Constitution, at least half the country thought slavery was unconstitutional and even fought a war to end the barbaric institution. At least half the country thought segregation and Jim Crow laws were wrong until they were finally overruled. Today, both the Left and Right continue to see decisions such as Lochner as being wrongly decided. However, both the Left and Right agree that the Slaughter House cases were decidedly incorrectly but neither side (other than Clarence Thomas) is willing to overrule the case. Both sides believe the Privileges and Immunities clause was improperly taken out of the Fourteenth Amendment in the Slaughterhouse decision. But both sides are leery as to how the other side will interpret the amendment. The Left fears that the privileges and immunities clause will allow the Right to bring back economic freedoms and overturn much of those horrid decisions of the FDR progressive Court. On the other hand, the Right fears that the Left will use the privileges and immunities clause to justify welfare. In any event, the right thing to do is to overrule the Slaughterhouse case and bring back the privileges and immunities clause. The Left has already made huge inroads towards a welfare society even without the clause. Although, I find it inconceivable there is any Constitutional argument to defend welfare with or without the privileges and immunities clause, no one will fight it. Why? Because welfare is about buying votes and it is not really about helping the poor. As we have seen with ObamaCare: Once a welfare program is created it is essentially impossible to get rid of it even if it poorly designed, inefficient, and costing taxpayers more than it should. More and more citizens feel entitled to more money even if they do not deserve it. The sense of entitlement has stemmed from how we have demonized lawful and hardworking individuals and companies. In essence, the poor are poor because of corporations and wealthy individuals. In modern America: The poor are always right and the rich are always evil and wrong.

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