Both progressives and conservatives fundamentally misunderstand our most important founding document.

This coming week, Harvard University Press will publish my new book, The Classical Liberal Constitution: The Uncertain Quest for Limited Government. This 700-page volume took me over seven years to complete, and it offers a distinctive third approach to constitutional law that helps explain why the current Supreme Court’s conceptual framework is in a state of serious intellectual disrepair on many, but by no means all, issues.

Conventional wisdom divides constitutional judges and scholars into two warring camps: conservative and progressive. The classical liberal offers a third point of view, by explaining how our Constitution secures a system of strong property rights and limited government. It does so by rejecting the deep antitheoretical strand that often guides both conservative and progressive thought, and leads both groups—for somewhat different reasons—to support a highly deferential, if misnamed, “rational basis” test to assess the constitutionality of congressional and legislative action.

The Lochner Syndrome

Conservative thinkers often start their constitutional analysis with neither text nor structure, but with their own view of the proper role of the Supreme Court in a democratic society. In their view, the essential choices about the social and economic structure properly belong to the political branches of government at both the federal and state level.

The view holds that the judiciary should override statutes and executive actions only in exceptional cases. They think no judge should translate his policy objections to particular laws into constitutional terms. Thus, in The Tempting of America, Robert Bork called the Supreme Court’s 1905 decision in Lochner v. New York—which by a five-to-four vote declared New York’s controversial maximum-hours law unconstitutional—an “abomination” that “lives in the law as the symbol, indeed the quintessence of judicial usurpation of power.”

Unlike conservatives, progressives defend these laws. But their judicial attitude is driven by the same skepticism about judicial intervention in economic matters. That is the message of Justice Oliver Wendell Holmes’ famous Lochner dissent: “a constitution is not intended to embody a particular economic theory, whether of paternalism and the organic relation of the citizen to the State or of laissez faire.”

So it is that two giants at the opposite ends of the political spectrum make the identical mistake: Neither thinks that it is possible to map onto the U.S. Constitution a substantive theory of government. Holmes makes that mistake when he talks about “a constitution” when the proper frame of reference should be the United States Constitution. Bork decries Lochner as “judicial usurpation” because he denies that there can be an independent textual or structural basis for striking down any economic regulation, no matter how misguided it may be.

What is perverse about both positions is that a constitution (indeed any constitution) is adopted precisely to establish some permanent framework in which laws can be made and validated. An ancient constitution could follow Justinian’s maxim “quod principi placuit legis vigorem habet,” which states, “that which is pleasing unto the prince has the force of law.” However, the U.S. Constitution explicitly rejects this approach by adopting all sorts of measures intended to diffuse the power of public officials: in part through federalism, in part through the division of government power into the Congress, the President and the Courts. These structural protections are augmented by a broad catalogue of individual rights, which checks both federal and the state power. Judicial usurpation is, to be sure, one sin. But to read these broad protections narrowly is the inverse mistake of judicial abnegation.

As applied to Lochner’s maximum hour law, the legislature should be required to justify exactly why, in a free society, it has the right to make a judgment about how many hours individuals should work and under what conditions. That point may not be absolute, but by the same token, ordinary liberty does carry with it the presumptive right to choose employment of one’s choice, with narrow exceptions for military service and jury duty.

Otherwise, surely under our Constitution, no state could order its citizens to accept certain jobs against their will. The same principle against governmental interference with individual liberty also is at work when government seeks to stop people from working in a job of their own choosing. If A uses force to prevent B from working for C, he commits the tort of interference with advantageous relations, and can be enjoined from that behavior. Put government in the role of A, and it is in exactly the same position.

The Police Power Exception

Of course, government prohibits people from engaging in criminal activity and taking advantage of the helpless. Indeed, both of those long-standing social norms have become embedded in the police power, under which federal and state governments may regulate individual activity to protect, as the phrase goes, “the safety, health, morals and general welfare” of the public at large. Inclusive as this list may seem, it does not negate key constitutional guarantees. In particular, the police power rationale does not let government pass overtly paternalist legislation on the one hand or overtly anticompetitive legislation (as in Lochner) on the other.

It is here that the underlying substantive vision matters. Under the classical liberal constitution, maintaining a free and open market for both capital and labor is an essential government function, which resonates in the explicit guarantees with respect to contract, private property, and the freedom of speech and the press. These apparently disparate guarantees are all linked together by the common sentiment that the state must show a serious justification before it can limit their exercise. The class of justifications is not open-ended, and it never includes the anticompetitive and protectionist legislation that is routinely sustained based on a supposed need to correct abuses of the market that are unrelated to duress, fraud, and monopoly.

More specifically, the proper scope of the police power is tied to the two reasons that lead people to join a political compact in the first place. The first reason is to control the use of force and fraud. The second is to allow state taxation and coercion to facilitate gainful interactions among individuals who are unable by themselves to create the much needed public goods—including defending against foreign threats, maintaining domestic order at home, and providing the common infrastructure of roads and other public facilities—because of insuperable transaction costs. The simple but powerful notion that justifies these coercive actions is that all individuals receive just compensation from the state for their tax dollars in the form of a higher level of personal security and economic prosperity.

Making This Work

The willful suppression of private competition does not come within a country mile of serving these objectives. Instead, misguided legislation often spends public dollars to make all private citizens worse off than they would otherwise be, which is not the case when the sensible enforcement of the antitrust laws controls cartels and other anticompetitive activities.

It is just this basic pattern that explains the greatest successes of our constitutional order. When the justices escape their habitual skepticism about the power of legal theory, they can work wonders by making those key judgments needed to implement the classical liberal constitution. When the justices care about outcomes, they become classical liberals in spite of themselves. Here are two examples.

The First Amendment states that that Congress “shall make no law abridging the freedom of speech.” But it is possible to bring this abstraction down to earth in a way that is consistent with the general constitutional plan. The first point to note is that freedom of speech has to be read broadly to cover, as it does, all forms of expression. No devotee of judicial restraint could think that the First Amendment protects the words spoken in a play but not the gestures of the actors. Yet at the same time, no notion of textual literalism could defend the proposition that the protection of freedom of speech allows individuals to foment riots, to cheat their customers, or to organize cartels.

Now the classical liberal account of wrongful conduct shapes the police power exceptions to the basic constitutional guarantee. Yet by the same token, the Court has increasingly recognized that it is an indefensible stretch to think that this conception of the police power sustains the campaign finance laws, like McCain/Feingold, which limit corporate speech and thus thwart the active political competition they should advance.

Progressives may like this legislation, and some (but by no means all) conservatives may tolerate it. But under a classical liberal constitution, the only proper way to limit political contributions is to enforce the constitutional limitations on government power. Once the scope of government is so limited, individuals and groups no longer have any incentive to lobby governments for benefits that they can no longer dole out free of constitutional restraint.

The identical classical liberal argument applies with equal force to structural issues. As a textual matter, the Constitution gives Congress the power “to regulate commerce among the several states.” It does not in so many words restrict the power of the state to act when Congress does not. But from the early nineteenth century on, courts have developed a Dormant Commerce Clause jurisprudence that has worked wonders in preserving an internal common market for goods and services within the United States.

But why did it succeed? Because the justices, both conservative and liberal, tasked with constitutional enforcement, have always been keenly aware of the dangers that state barriers pose to domestic trade and national prosperity. Far from deferring to anyone, they have taken the task of constitutional design seriously and have adopted the classical liberal presumption of distrust to trade barriers, which are now subject to narrow police power justifications.

Any state, under the watchful eye of the Court, may keep out various kinds of animals and materials that pose a serious danger to the health and safety of the citizens. But they reverse field on Lochner because they now rigorously enforce the line between health and safety regulation on the one hand and anticompetitive legislation on the other. They don’t take refuge in the weak rational basis test to let state governments do as they please, but root out anticompetitive laws (like many maximum hour laws) masquerading as safety regulations.

Getting the Court Back Into the Game

The bottom line here is that the same mindset that works for individual rights works for understanding of the structural constitution. In both areas the result of energetic government, or what Clark Neily calls “judicial engagement,” pays handsome and enduring public dividends. The principles embodied in the classical liberal constitution are not those that work only in this or that era. They are principles for the ages, which is why they deserve to be embedded in constitutional jurisprudence. Yet all too often, these basic principles are rejected for ephemeral concerns that undermine our constitutional well-being.

It is not possible in this short essay to go through the many permutations on this common theme that are developed at length in my book Classical Liberal Constitution. But it is imperative to remember that eternal vigilance is indeed the price of liberty. When our Supreme Court drops its guard and defers to the federal government on matters of taxation and regulation, we end up with a huge government that saps the energy of a nation and gives us the tragedy that is Obamacare.

The Court’s progressives uphold these laws because they believe in their efficacy, even though labor unions and agricultural cartels always work against the long-term aggregate interests of the community. For their part, conservatives often practice a narrow and misguided originalism that ignores the foundational economic principles that lend coherence to the Constitution as a whole. The classical liberal approach does neither. It rejects both the judicial restraint of the conservatives and the economic naiveté of the progressives, and in so doing supplies the only blueprint for judicial action that can help lift this nation from its current malaise. We pay a high price for straying from first principles.

Richard A. Epstein, Peter and Kirsten Bedford Senior Fellow at the Hoover Institution, Laurence A. Tisch Professor of Law at New York University, and senior lecturer at the University of Chicago, researches and writes on a broad range of constitutional, economic, historical, and philosophical subjects. He has taught administrative law, antitrust law, communications law, constitutional law, corporate law, criminal law, employment discrimination law, environmental law, food and drug law, health law, labor law, Roman law, real estate development and finance, and individual and corporate taxation. His publications cover an equally broad range of topics. His most recent book, published in 2013, is The Classical Liberal Constitution: The Uncertain Quest for Limited Government (2013). He is a past editor of the Journal of Legal Studies (1981–91) and the Journal of Law and Economics (1991–2001).