During the Great Depression, the U.S. Congress enacted many laws intended to foster economic recovery by restricting marketplace competition. Today, there is a wide consensus among historians, economists, and political scientists, including many who support the New Deal on the whole, that these anti-competition statutes were ill-advised and counterproductive.
One striking recent illustration of the extent to which time and experience have discredited the New Deal crusade against “cutthroat competition” was a U.S. Supreme Court hearing nearly two years ago at which a California raisin farmer and his wife challenged the Agricultural Marketing Agreement Act (AMAA) of 1937. Raisin farmers Marvin and Laura Horne contended before the High Court that the U.S. Department of Agriculture (USDA) could not could not collect accumulated bills and fine them for having refused for years to fork over a portion of their crop, a requirement authorized by the AMAA.
The AMAA empowers an elected board of bureaucrats known as the Raisin Administrative Committee (RAC) to issue “agricultural marketing orders” mandating that farmers surrender a portion of their crop every year. How much farmers are required to surrender depends on the estimated size of the entire annual U.S. raisin crop.
The confiscated raisins are taken out of the commercial domestic market. The principal avowed goal of this program is to prevent “overproduction” that could drive down the price of raisins. Foreign sales of the raisins also raise money for domestic advertising programs for unbranded raisins.
At the March 2013 Supreme Court hearing in Horne v. USDA, liberal Justice Stephen Breyer exclaimed, “I can’t believe Congress wanted taxpayers to pay for a program that’s going to mean they have to pay higher prices.” Conservative Justice Antonin Scalia compared the RAC to a highway robber barking at the Hornes, “Your raisins or your life!”
After hearing the case, the nine justices unanimously found that the U.S. Court of Appeals for the 9th Circuit had wrongly refused to consider the Hornes’ claim that the AMAA as implemented by the RAC is an unconstitutional violation of their Fifth Amendment rights. The High Court remanded the case back to the 9th Circuit, ordering it to rule on the question of whether or not the confiscation of the Hornes’ crop with insufficient or even no reimbursement amounted to a taking of their property without due process of law.
Not surprisingly, the anti-property rights 9th Circuit found last May that the bureaucratic confiscation of raisin crops, even without any compensation whatsoever, was not an unconstitutional taking, because, supposedly, the Fifth Amendment’s takings clause affords less protection to personal property like crops than to “real” property like land or soil. But the Hornes appealed this unfavorable ruling, and last week the Supreme Court agreed to take up their case for a second time. (See the link below from Reason Magazine’s web site for more information.)
Based on the cold reception the nine High Court justices gave the USDA’s case in 2013, the Hornes have good reason to hope that they will win a decisive victory this time. After all, as the Reason commentary notes, James Madison, one of the architects of the takings clause, once wrote that the U.S. system was “instituted to protect property of every sort.”
Unfortunately, at this time there is no judicial relief in sight for business employees whose economic rights are trampled by monopolistic unionism in a way that is remarkably similar to the impact of the AMAA and the RAC on the Hornes. Just as the AMAA empowers elected bureaucrats to confiscate raisins from farmers in order to prevent “too many” of them from being sold in the American private-sector marketplace, the National Labor Relations Act (NLRA) and the Railway Labor Act (RLA) empower elected union officials to impose productivity-quashing work rules on union members and nonmembers alike. The aim of such work rules, in many cases, is to “protect” workers’ jobs by preventing them from producing too much, just as the RAC aims to keep raisin prices high by deterring farmers from growing too many.
Moreover, under the NLRA and the RLA, workers who may or may not think they benefit from work rules that keep them from being “excessively” productive are forced to fork over dues or fees to the union acting as their “exclusive” bargaining agent, just as the Hornes have been ordered to turn over a share of their raisins to the RAC’s agents.
The actual intent of the NLRA, as some of the sponsors of the 1935 law openly admitted, was to raise prices and thus enable employers to pay workers more. Hence, what Justice Breyer found so shocking about the AMAA as implemented is also true of the NLRA (and the RLA), by design.
Unfortunately, up to now courts have been unwilling to consider arguments that federal labor laws are unconstitutional takings of workers’ hard-earned pay. The fact is, just as raisin farmers may with good reason believe they actually benefit from the very competition that elected bureaucrats seek to curtail, employees may have good reason to believe they benefit from the very competition union bosses seek to stop with restrictive work rules.
Now that the Supreme Court seems inclined to find the AMAA to be unconstitutional as well as absurd, perhaps the days of the NLRA and the RLA may also be numbered.