The Commerce Clause
The “Commerce Clause” is the second most abused power of the Federal Government. The Commerce Clause is contained in Article 1, Section 8, Clause 3. It states:
Congress shall have the power “To regulate commerce with foreign nations, and among the several States, and with the Indian Tribes.”
The Commerce Clause was not intended to give the Federal government the power to regulate interstate commerce. Instead, it was designed to prevent the States from regulating interstate commerce. The goal was to create a “free trade zone” within the thirteen states.
Commerce at the time meant trade and the transportation of goods and services. The “Commerce Clause” was never intended to regulate farming, manufacturing, retailing or any other activity carried on exclusively within the borders of one state. It only insured that the States would not be able to regulate or tax the transportation of goods between states.
Under various court cases the Supreme Court has expanded the meaning of the “Commerce Clause” to cover products which are transported between the States. It was then expanded to cover any business that uses any products which are transported between states, including any company that uses or accepts credit cards or uses national banks. Finally, the definition was extended even to intra-state products which could compete with interstate commerce. The Federal Government now has the power, and does so, to regulate yard sales. Since this clause states that Congress has the power “To regulate commerce with foreign nations …” I am surprised that they haven’t attempted to regulate production of goods in foreign countries. Maybe that will be next.
This vastly expanded interpretation of the Commerce Clause has given Congress the ability to regulate virtually every aspect of our lives and has virtually eliminated all States Rights. Now, Congress is arguing that the Commerce Clause can be used to force individuals to purchase health care insurance! What’s next? Can they force us to purchase cars from Government Motors and eat broccoli? Can they tell us we cannot eat red meat, eggs and dairy products because they contain cholesterol?
The following article was written by Sheldon Richman, senior editor at the Cato Institute in 1995. It is the best example I have found of how the government expands its powers over the states and the citizens.
The Commerce Clause: Route to Omnipotent Government
In 1990, the U.S. Congress passed a law forbidding possession of a firearm within 1,000 feet of any school. The Gun-Free School Zones Act was touted as a blow on behalf of education and against violence among children. Two years later, Alfonso Lopez Jr., a 12th-grader at Edison High School in San Antonio, Texas, carried a concealed .38 caliber pistol to school. First he was charged under Texas law, which forbids possession of guns on school grounds. But the next day, federal agents charged Lopez under the Gun-Free School Zones Act, and the state charges were dismissed.
Thus began one of the most important cases – and one of the most important decisions – for the U.S. Supreme Court in the last 60 years. It would turn out to be significant because the case bore directly on a clause in the U.S. Constitution that almost from the beginning, and particularly since the New Deal, has been used to justify a radical expansion of the power of the central government in the United States: the clause that delegates to Congress the power to “regulate … commerce among the several states.” The sensible person will ask, “What does the commerce clause have to do with students bringing guns to school?” The court’s majority said “nothing.” It has been a long time since the Supreme Court last refused to let the central government use the commerce clause to expand its power. That is why Lopez is such an important case.
Let’s back up a bit. Before adoption of the Constitution, states, under the Articles of Confederation, had erected protectionist barriers that interfered with the free flow of trade in the new country. One of the main reasons for the Constitutional Convention was to remedy that problem. The framers’ solution was the commerce clause, which was intended to make a free trade zone out the United States. (The clause also delegated to Congress the power to “regulate” trade with foreign nations and the Indian tribes. We will hold until later the question of whether this was a good way to solve the problem.)
At first, the clause was closely interpreted as referring to interference by the states with the flow of commerce. In 1824, Chief Justice John Marshall’s Court, in the first big case involving the commerce clause, Gibbons v. Ogden, struck down a New York law creating a steamship monopoly for traffic between New York and New Jersey. Marshall laid down the principle that for the national government to have jurisdiction, the issue must involve interstate commerce; i.e., it must involve the trafficking of goods (not manufacture) between two or more states. He also recognized that the enumeration of the interstate commerce power implied unenumerated (concerning intrastate commerce) and thus undelegated.
Gibbons may have gotten things off to a good start, but it did not last. Marshall sprinkled just enough bad seeds that, taken out of context, would allow later justices, legal scholars, and political opportunists to cultivate the commerce clause into a general power to do anything that could conceivably affect interstate commerce.
For example, in 1870, the Court upheld federal inspection of steam passenger vessels that remained within a single state but carrying goods shipped from or destined for other states. The problems here were two: the inspection law was not intended to prevent state interference with free trade, and the subject of regulation was private enterprise. Thus, we can glimpse the beginning of the modern view that the commerce clause granted to Congress a plenary power to regulate anything that had the potential to affect interstate commerce.
It was a short step to creation of the Interstate Commerce Commission in 1887, which cartelized the railroads and regulated their rates.
One last barrier had to be hurdled. Taking the lead from Marshall, succeeding courts insisted on confining the commerce power to commerce, the movement of goods; production was regarded as prior to commerce and thus outside federal jurisdiction. In 1895, the Court would not let the central government use the Sherman antitrust law to stop the merger of sugar refiners. In 1903, the Court upheld a federal prohibition on the interstate trafficking in lottery tickets. In 1918, it struck down a prohibition on the interstate shipment of goods produced in plants using child labor.
But as Richard Epstein has written, the barrier between production and commerce was “not as well-defined” as the Court held. After all, a market economy is an integrated web of activities in which everything affects everything else, however remotely. Manufacturing arrangements can influence commercial activities. It was only a matter of time before the barrier would disappear and the national government would begin to regulate production directly.
Looking back, the progression from the early cases to the New Deal, when all inhibitions on federal regulation of the economy were dispelled, appears inexorable. Too much had been conceded along the way. The mooring of the commerce clause – the principle that state governments could not erect trade barriers – was too long lost, the distinction between government and private acts too long forgotten. (The Sherman Act outlawed private combinations in restraint of trade.)
In 1937, the Court upheld the National Labor Relations Act, which compelled employers to engage in collective bargaining, holding that the commerce clause subsumed those things “affecting commerce.” In the particular case, the Court said that phrase meant “tending to lead to a labor dispute burdening or obstructing commerce.”
After President Roosevelt threatened to pack the Court to dilute the influence of the uncooperative “nine old men,” a majority of the justices took to the most expansive definition of the commerce clause like a drunk to drink. The Court blessed the secretary of agriculture’s power to set minimum prices for milk sold intrastate. “The marketing of intrastate milk,” wrote the Court in 1942 Wrightwood Dairy case, “which competes with that shipped interstate would tend seriously to break down price regulation of the latter.” Yes, so? What was the Court’s point? Only that nothing – especially not liberty – should be permitted to get in the way of the national government’s power to regulate the economy.
As hard as it may be to notice, Wrightwood Dairy still preserved something of a distinction: the intrastate sale of milk obviously entailed an act of commerce. Did that mean the commerce clause barred the national government from regulating noncommercial activities? Not for long.
Enter Roscoe Filburn, an Ohio dairy and poultry farmer, who raised a small quantity of winter wheat – some to sell, some to feed his livestock, and some to consume. In 1940, under authority of the Agricultural adjustment Act, the central government told Mr. Filburn that for the next year he would be limited to planting 11 acres of wheat and harvesting 20 bushels per acre. He harvested 12 acres over his allotment for consumption on his own property. When the government fined him, Mr. Filburn refused to pay.
Wickard v. Filburn got to the Supreme Court, and in 1942, the justices unanimously ruled against the farmer. The government claimed that if Mr. Filburn grew wheat for his own use, he would not be buying it – and that affected interstate commerce. It also argued that if the price of wheat rose, which is what the government wanted, Mr. Filburn might be tempted to sell his surplus wheat in the interstate market, thwarting the government’s objective. The Supreme Court bought it.
The Court’s opinion must be quoted to be believed:
“[The wheat] supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat in this sense competes with wheat in commerce.”
As Epstein commented, “Could anyone say with a straight face that the consumption of home-grown wheat is ‘commerce among the several states?'” For good measure, the Court justified the obvious sacrifice of Mr. Filburn’s freedom and interests to the unnamed farmers being protected: It is the essence of regulation that it lays a restraining hand on the self-interest of the regulated and that advantages from the regulation commonly fall to others.
After Wickard, everything is mere detail. The entire edifice of civil rights legislation stands on the commerce power. Under this maximum commerce power, the government has been free to regulate nearly everything, including a restaurant owner’s bigotry. The Court has held that if Congress sees a connection to interstate commerce, it is not its role to second guess.
What is refreshing about the recent Lopez case is that five justices were able to say that something could exceed the scope of the commerce clause. despite the government’s strained argument that guns in schools degrade education and hence economic performance and interstate commerce, the majority said a federal prohibition on such possession is beyond Congress’s enumerated powers.
In a concurring opinion, Justice Clarence Thomas struck at the very foundation of the modern interpretation of the commerce clause and hinted that future cases could bring big changes.
That’s fine as far as it goes. But as Jefferson warned, the natural tendency is for government to grow. Like a poisonous vine, it sprouts through any gap. What is really needed is a repeal of the commerce clause and an amendment to the Bill of Rights that says: “Congress and the states shall make no law interfering with production and commerce, foreign or domestic.”