Crisis and Leviathan in Reverse?

One of the truly great–and somewhat neglected–classic conservative books of the last generation is Robert Higgs’s 1987 book Crisis and Leviathan: Critical Episodes in the Growth of American Government.  The book explores what is sometimes called the “ratchet effect,” that is, how government always seems just to grow and grow without limit.  He reviews and discounts a number of the conventional hypotheses about the growth of the modern state, such as “modernization,” in favor of a more simple explanation, what Higgs calls the Crisis Hypothesis: government always uses a “crisis” to expand its power and reach permanently.  It’s a generalized variation of the famous Randolph Bourne comment that “war is the health of the state,” though economic crises, the Great Depression being Exhibit 1, serve nicely too.

I’ve been wondering for a long time whether we might someday start to experience a reverse effect from the Crisis Hypothesis, that is, that a social and/or political crisis would have the result of shrinking Leviathan rather than growing it further.  The conditions preceding the 1980 election, and Reagan’s arrival on the scene, looked like it might be Crisis and Leviathan in reverse, but as I’ve noted several places, in some ways the Reagan years appear to have been a mere speed bump (or a traffic stop) on the road to bigger government.

But then along came Obama and especially Obamacare, and suddenly we’re perhaps on the cusp of reversing the New Deal era presumption of the constitutionality of the regulatory state. Beyond the narrow argument over the Obamacare mandate is a current of questioning of the premises of New Deal liberalism, such that two judges on the DC Circuit Court of Appeals this week called for a wholesale revision of judicial review of economic regulation.  Orin Kerr flags this over at the Volokh Conspiracy: “In a concurring opinion today in Hettinga v. United States, Judge Janice Rogers Brown (joined by Judge Sentelle) contends that the Supreme Court should overturn its rational basis caselaw in the economic area and return to a Lochner-era regime of judicial scrutiny for economic regulations.”

From the opinion itself:

As the dissent predicted in Nebbia, the judiciary’s refusal to consider the wisdom of legislative acts—at least to inquire whether its purpose and the means proposed are “within legislative power”—would lead to only one result: “[R]ights guaranteed by the Constitution [would] exist only so long as supposed public interest does not require their extinction.” In short order that baleful prophecy received the court’s imprimatur. In Carolene Products (yet another case involving protectionist legislation), the court ratified minimalist review of economic regulations, holding that a rational basis for economic legislation would be presumed and more searching inquiry would be reserved for intrusions on political rights.

The practical effect of rational basis review of economic regulation is the absence of any check on the group interests that all too often control the democratic process. It allows the legislature free rein to subjugate the common good and individual liberty to the electoral calculus of politicians, the whim of majorities, or the self-interest of factions.

Wow.  If you think the arguments about Obamacare at the Court last month gave liberal the vapors, wait till they get a load of this.  I predict heads will explode.  (There’s more at Kerr’s link.)

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