Federalism Research Paper or Presentation Assignment Instructions

1

The Classical Liberal Synthesis

THE CLASSICAL LIBERAL TRADITION of the founding generation prized the protection of liberty and private property under a system of limited
government. That tradition also rejected the optimistic view that self-

interested individuals could through an ingenious array of private volun-

tary agreements preserve public order against civil strife. The determined

aggressor had to be suppressed by fi nes, imprisonment, exile, or even

death, if he could not be persuaded to cooperate by lesser means. Gov-

ernments, moreover, needed at the very least the powers of taxation and

eminent domain to obtain both fi nancial resources and particular assets

in order to maintain both liberty and political order against random vio-

lence and unregulated militias. Anarchy is not a viable option in the long

term. Power always enters to fi ll a void. The people who fail to form a

government, whether by custom, as under the British constitution, or

conscious deliberation, as with ours, will have rulers thrust upon them

who will not be to their liking. The preemptive strike by decent people in

search of what Justice Benjamin Cardozo once termed “ordered liberty”

offers the only path for beating back the obnoxious intruder.1

Yet by the same token, organized governments can easily turn, as

they all too frequently have done, into instruments of evil, precisely

because no ordinary person can stand up to government offi cials backed

by public force. Contemporary Americans tend not to worry about the

threat of insurrection or turmoil because our nation has happily mas-

tered the orderly succession of political power, a matter that was very

much on the minds of the Framers in Philadelphia who devoted much

effort to coordinating the actions of state militias and federal power to

Epstein, R. A. (2014). The classical liberal constitution : The uncertain quest for limited government. ProQuest Ebook Central http://ebookcentral.proquest.com
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18 Preliminaries

guard against invasion, insurrection, disunion, and rebellion.2 Virtually

no one remembers this constitutional provision: “No State shall, with-

out the consent of Congress, . . . engage in war, unless actually invaded,

or in such imminent danger as will not admit of delay.”3 Note that the

clause does not specify, invaded by whom? But the best efforts of the

Framers’ all-star cast could not prevent a destructive Civil War over

the issue of slavery that was fi nessed but not resolved at the Constitu-

tional Convention.4 Our constant preoccupation with current events,

moreover, obscures the dismal record over most of recorded history of

the “simple” task of maintaining the security of the person and prop-

erty against private aggression, without inviting state-sponsored death,

imprisonment, and expropriation. Truth be told, most political efforts

to run the gauntlet between anarchy and tyranny have ended in disap-

pointment and disaster. The societies best able to navigate that narrow

channel are ever conscious of the lurking perils on both sides. Their odds

of success improve greatly if they greet warily any extension of govern-

ment power. Gerald Ford pithily explained why political power is always

a double-edged sword: “A government big enough to give you every-

thing you want is a government big enough to take from you everything

you have.”5 The Founders would have agreed.

This deep ambivalence toward state power is evident in the classical

liberal tradition. Its central Lockean premise, the evils of slavery not-

withstanding, was that governments were created by individuals who

were free, equal, and independent in the state of nature. The opening

passage in the Massachusetts Constitution of 1780 faithfully tracks this

synthesis:

Article I: All men are born free and equal, and have certain, natural,
essential, and unalienable rights; among which may be reckoned the
right of enjoying and defending their lives and liberties; that of acquir-
ing, possessing, and protecting property; in fi ne, that of seeking and
obtaining their safety and happiness.6

The protection of these rights was said to rest in the words of the

Declaration of Independence. The basic message is, oddly enough, a

positive one. It assumes, correctly, that an institutional framework that

allows most people to act in ways that benefi t themselves and the larger

society through enterprise, loyalty, cooperation, charities, and thrift will

develop those positive personal characteristics that lead to fruitful social

interactions on matters political, social, and commercial. The classical

Epstein, R. A. (2014). The classical liberal constitution : The uncertain quest for limited government. ProQuest Ebook Central http://ebookcentral.proquest.com
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The Classical Liberal Synthesis 19

writers assumed that this class of sociable behaviors was embedded in

human nature. Thus, “[one] recent review suggests that similarities

result from the existence of four basic sets of intuitions involving: (a)

suffering, harm, and violence; (b) reciprocity and fairness (including

revenge); (c) hierarchy, duty, respect, and related intuitions about the

social order and one’s place in it; and (d) purity and related intuitions

about chastity and piety.”7

This naturalist approach boosts the case for thinking that all social

organizations face much the same problems. Modern moral psychology

has given that point of view a big boost by stressing the dual norms

against the infl iction of harm and the reciprocity of exchange, as aug-

mented by a respect for authority and concerns with disgust. Thus, the

fi rst of these elements explains the persistence of the law of tort, and the

second the law of contract. The concerns about hierarchy make families,

private associations, and governments plausible, and the concern with

purity and chastity tie into what is commonly called the morals head of

the police power, in which the state was given, at least in the nineteenth

century, extraordinary latitude to regulate sexual behavior, gambling,

and other forms of sinful behaviors.

It should not, of course, be assumed that all individuals share all

these propensities in the same degree. Some have more of one trait

than another. Indeed it is precisely because enough people act on these

four intuitions that some form of durable social organization, while not

guaranteed, is at least possible. The stress on these four factors, more-

over, also serves as a useful reminder of the fragility of social relations,

which in turn makes it clear why, generally speaking, political theory

does not worry about the good guys. Rather, in its most accurate form,

it assumes a natural variation in the moral qualities and temperaments

of individuals. Its concern is how best to deal with the bottom tail of

the distribution—that minority of individuals, often tiny, who exhibit

powerful antisocial tendencies. Unfortunately, buying them off is worse

than useless, for rewarding bad actors surely encourages a long line of

fence-sitters to follow in their path. So political theory, not economics,

becomes the true dismal science as it works to fi nd some way to protect

the many from the aggression of the few.

Yet how is that mission justifi ed? One appeal that fi nds voice in the

Declaration of Independence is the “consent of the governed,” which

could not, of course, be individually and freely given. There are too

Epstein, R. A. (2014). The classical liberal constitution : The uncertain quest for limited government. ProQuest Ebook Central http://ebookcentral.proquest.com
Created from liberty on 2021-04-30 11:56:47.

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20 Preliminaries

many people, some unborn, separated by time, place, and sentiment, to

fi nd any historical contract worthy of its name. But that obvious and oft-

repeated objection does not make social contract theory either empty or

idle. The unifying vision of classical liberal theory insists that all individ-

uals must somehow leave the state of nature, in which all rights of life,

liberty, and property are perpetually at risk. But how? Voluntary coor-

dination will not work when antisocial defectors could bring down the

entire structure. The fatal weakness of the modern hard-line libertarian

views, such as those advanced by the late Robert Nozick,8 is that they

cannot explain how states rightly gain the legitimacy and the resources

needed to prevent violence, enforce contractual promises, and supply

needed social infrastructure. The key to solving these problems lies in

the domestication of coercion. Government works best when it forces

each individual to surrender some of his or her own liberty and property

to government in exchange for greater security for those rights that are

retained. The grand social contract is no actual agreement, which is why

it is called “social.” But at every stage it is meant to produce the same

win/win outcomes, just like ordinary contracts, and to do so in settings

where huge numbers of individuals are forced to participate in this joint

social venture.

Given this conception, any individual who seeks unilaterally to

deviate from the sound social contract is either a menace or a freeloader.

He is the former if he is willing to use force. He is the latter if he refuses

to contribute his share to the joint defense, thereby forcing it on others.

On controlling force, consistency is key. Allow one to deviate, and all

will follow until the state unravels. State coercion for one’s own good is

not some code word for misguided paternalism. Nor is it a contradiction

in terms. Rather, it is the minimum condition for the public provision of

certain collective goods.

Fear of Faction

The ability to create a government that meets this objective is driven

by the need to control the dangerous human tendencies that do not

disappear even after civil society is formed. To the contrary, the anti-

social individuals in a state of nature can rely on guile, intrigue, and

coercion within the new political order. The modern rubric for analyzing

these problems is public choice theory,9 which asks how self-interested

Epstein, R. A. (2014). The classical liberal constitution : The uncertain quest for limited government. ProQuest Ebook Central http://ebookcentral.proquest.com
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The Classical Liberal Synthesis 21

behaviors of both individuals and groups undermine public welfare

while playing within the imperfect rules of the political game. In the

crudest terms, each individual or faction will work overtime for a larger

slice of a smaller pie—leaving a smaller share of a smaller pie for every-

one else.

One constant danger is that the political structure may easily

unravel, even though all individuals do not fi t this selfi sh description.

Once some people work the political process for partisan advantage,

others will follow suit, if only in self-defense. The worst actors within

the system can dictate the tempo for all through rhetoric, coalition

building, committee hearings, horse-trading, agenda setting, and smear

campaigns. This rough-and-tumble process will yield some public-

regarding legislation, but frequently it will generate outcomes that sat-

isfy only narrowly partisan interests. James Madison used the term

“faction” to describe these risks in Federalist No. 10:

By a faction, I understand a number of citizens, whether amounting to
a majority or a minority of the whole, who are united and actuated by
some common impulse of passion, or of interest, adverse to the rights
of other citizens, or to the permanent and aggregate interests of the
community.10

The breadth of Madison’s defi nition tracks the magnitude and per-

sistence of the problem. As Madison recognized, factions come in all

shapes and sizes, which is why either “a majority or a minority of the

whole” can be the dominant, i.e. prevailing, faction. These factions,

moreover, can organize along any natural fault lines: occupation, region,

race, religion, or sex. They can coalesce around any issue: war, tariffs,

or national expansion. Suffi ciently emboldened, adroit politicians can

broker deals across coalitions over unrelated questions by invoking the

time-honored principle “if you scratch my back, I will scratch yours.” In

the absence of any strong social or institutional constraints, a dominant

faction could use its voting power or political clout to confi scate the

wealth of the political losers, or, more subtly, to hobble their economic

activities with legal restrictions. Nor will the propertied classes, often a

minority in number, necessarily come out on top, especially if the vast

majority of the population is allowed to vote transfer payments to itself

from, as they are now called, the top 1 percent. That is why Madison

declaimed that people were “weary” of the “long chain of repetitions,”

in particular, of debtor relief statutes that necessarily compromised

Epstein, R. A. (2014). The classical liberal constitution : The uncertain quest for limited government. ProQuest Ebook Central http://ebookcentral.proquest.com
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22 Preliminaries

“personal security and private right.”11 That problem has not dissipated

in today’s modern mortgage crisis, where we have seen repeated gov-

ernment efforts to prevent, without visible success, the foreclosure of

home mortgages in default, which undermines long-term credit mar-

kets by creating an involuntary wealth transfer from creditors to debtors

while simultaneously reducing the value of real estate once it is under-

water.12 The Federalist Papers knew how to accentuate the negative.

Unfortunately, this problem cannot be cured by requiring unani-

mous consent for political action. Let every political actor have a veto

right, and political paralysis will follow. The challenge, therefore, is to

develop some way to avoid the twin perils of paralysis and exploitation.

Madison’s own proposal, as outlined in Federalist No. 10, was woefully

inadequate. His optimistic claim was that the “extended republic”—i.e.,

the national government—provided adequate protection against the

operation of factions. Either he or Alexander Hamilton put the point

baldly in Federalist No. 51: “In the extended republic of the United States,

and among the great variety of interests, parties, and sects which it

embraces, a coalition of a majority of the whole society could seldom

take place on any other principles than those of justice and the general

good. . . .”13

This passage suggests that national governments with built-in

checks and balances are more impervious to factions for two reasons.

First, a national government attracts a higher caliber of men to run for

public offi ce, who in turn would be willing to resist factional temptation.

Second, the cost of organizing factions at a distance is higher than it is

at the state level. But Madison was unduly optimistic on both counts,

as he himself subsequently recognized. No political body is immune to

the risk of political intrigue. The relative performance at different gov-

ernment levels depends on such evanescent factors as the mix of people

and issues at any given time. Thus, once power migrates to the national

government, the political hacks will follow the scent to its new abode,

urged on by local electors who want their representatives in Congress

to look after the interests of the home state. (Back in 1787, state legisla-

tures wanted their appointed senators to take their cues from the local

politicians.) On the second point, the greater costs of organizing national

coalitions are often offset by the greater gains to be obtained. That said,

important questions over the proper division between national and state

Epstein, R. A. (2014). The classical liberal constitution : The uncertain quest for limited government. ProQuest Ebook Central http://ebookcentral.proquest.com
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The Classical Liberal Synthesis 23

authority remain: uniform national laws work better for trade, but local

governments are better able to respond to variations in local conditions,

as with land use regulation. In the end, no single strategy can deal with

this hydra-headed problem. Redundancy and multiple safeguards are

needed at all levels of government, and the Constitution provides them.

Anti-Federalists and Republicans

The drafters of the Constitution, rightly then, did not take a sunny view

of political man. Their classical liberal concerns, moreover, forged the

common link between the Federalists who supported the new Consti-

tution and the Anti-Federalists who were united in opposition to it. As

the late Herbert Storing accurately stressed, theirs was a family squabble

“of men agreed that the purpose of government is the regulation and

thereby the protection of individual rights and that the best instrument

for this purpose is some form of limited, republican government.”14 That

agreement over ends, with disagreement on means, led the two sides

to join on the issue of the desirability of what Madison called in Feder-

alist No. 10 “the extended republic,” which embraced the entire United

States. The Anti-Federalists’ opposition to the Constitution depended on

their own paean to the small republic, which they thought was more

in touch with local interests, and thus more likely to inculcate the civic

virtue that allows citizens to resist factional temptations.15 They made

the same mistake as the Federalists in reverse, by underestimating the

possibility that local majorities could exploit local minorities for whom

the exit option is too expensive—a problem that plagues local land use

regulation to this day. Quite bluntly, no matter how the Constitution

parcels out tasks between state and national governments, the risk of

faction remains endemic. Both the Federalists and the Anti-Federalists

overclaimed for their respective national and local preferences. Their

disputes over system design do not square with modern political con-

ceptions. All sides of the debate couched their arguments in terms of

natural rights to liberty and property, and structural protections against

government abuse. None of the participants in this historical intellectual

fray were social democrats or progressives, let alone socialists.

Storing also notes that the Anti-Federalists shared the Federalists’

affection for limited and republican government.16 In his formulation,

Epstein, R. A. (2014). The classical liberal constitution : The uncertain quest for limited government. ProQuest Ebook Central http://ebookcentral.proquest.com
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24 Preliminaries

the word “limited” is evident enough: the powers that are given to the

government are limited, so that it could not extend its reach into all

areas of human life. That understanding was part of Hamilton’s defense

of judicial review in Federalist No. 78: “The complete independence of

the courts of justice is peculiarly essential in a limited Constitution. By a

limited Constitution, I understand one which contains certain specifi ed

exceptions to the legislative authority; such, for instance, as that it shall

pass no bills of attainder, no ex post facto laws, and the like.”17 On this

issue, again, there was no intellectual divide between the Federalists and

their opponents.

The term “republican” requires more explication in light of per-

sistent confusion about its meaning. Historically, “republican” was a

sensible, if imperfect, response to the purifi ed and restrained form of

popular government, the sort against which Madison inveighed in Fed-

eralist No. 10: “The instability, injustice, and confusion introduced into

the public councils, have, in truth, been the mortal diseases under

which popular governments have everywhere perished.”18 Manifestly,

republicans opposed the monarchical, English-style regime. Historically,

however, a republic was also defi ned in opposition to a democracy, in par-

ticular a popular democracy, which to them connoted demagogic rule

by the masses, whose political power could easily trample on the very

rights of liberty and property that government was sworn to preserve.

Indeed, on this issue, Madison was far from alone, as other writers of

the time also chimed in on the dangers of wayward state governments.

At the Constitutional Convention, Hamilton was explicit: “The members

most tenacious of republicanism,” he observed, “were as loud as any in

declaiming agst. the vices of democracy.”19 Similarly, Elbridge Gerry from

Massachusetts spoke at the Constitutional Convention of “The evils we

experience from the excess of democracy.”20 As early as the 1800 presi-

dential election, earlier meanings had been transformed when Thomas

Jefferson defeated the Federalist John Adams as the candidate of the

Democratic-Republican Party.21 But in 1787 the terms “democracy” and

“republicanism” were used as opposites, not synonyms.

These concerns with popular democracy date back at least to Aris-

totle’s Politics, which lists democracy, along with tyranny and oligarchy,

as one of the three “perversions” of governments, whose “right”22 forms

are Polity (or the Republic), Kingship, and Aristocracy. The same fear

of popular majorities is also evident in much of the English historical

Epstein, R. A. (2014). The classical liberal constitution : The uncertain quest for limited government. ProQuest Ebook Central http://ebookcentral.proquest.com
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The Classical Liberal Synthesis 25

writing in the pre-revolutionary period, when authors who opposed

monarchy were equally troubled with the dominant patterns of demo-

cratic politics.23

Historically, therefore, it is not just for stylistic reasons that the

Constitution says that the “United States” (not just one branch of it)

“guarantees to each state a republican form of government.”24 The fear

was that state governments could become monarchies or degenerate

into popular democracies, which the United States was duty-bound

to forestall, by the use of force if necessary. The risk of monarchy is

of course easier to guard against than the risk of democracy, for the

line between a desired republic and its degenerate democratic twin

is hard to draw in the face of the countless permutations of govern-

ment structures. But the Guarantee Clause does (or at least should)

call into question the use of popular initiatives and referenda on par-

ticular issues—the former allows individuals to propose legislation and

the latter allows them to vote on it—precisely because the classical the-

ory regarded reliance on direct popular decisions as the hallmark of

unsound democratic practice. Nonetheless, the point was lost on the

Supreme Court, which has deemed the Guarantee Clause nonjusticia-

ble,25 even though it obligates the United States and not just Congress

to make good on this guarantee.26

But whatever the historical ambiguities on this matter, the

Anti-Federalists did not embrace the now fashionable “republicanism”

that allows the government to demand personal sacrifi ce or even indi-

vidual valor in the service of some higher, overriding vision of com-

munity good.27 Apart from the fi rst three words of the Preamble—“We

the People”—the Constitution is utterly devoid of stirring aspirational

rhetoric. Rather, the term “republican” had a more modest offi ce in the

historical debates. Under a republican regime, only a legislature—one

whose members were always selected by complex procedures—could

pass laws. An important correlative was that deliberation was limited to

“res publicae”—literally, “public affairs.” Matters of war and peace fi t that

bill, as do the creation of systems of public roads and courts. But there

is nothing in the republican view of political deliberation that treated

individual decisions on what property to own, food to buy, jobs to offer

or accept, or wages to pay or receive as matters properly falling into the

public domain. Finally, the Constitution consciously refused to allow the

direct election of key public offi cials, as discussed further on.

Epstein, R. A. (2014). The classical liberal constitution : The uncertain quest for limited government. ProQuest Ebook Central http://ebookcentral.proquest.com
Created from liberty on 2021-04-30 11:56:47.

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26 Preliminaries

Deliberation, Incentives, and Votes

None of these structural concerns meant that the Founders were

opposed to deliberation and debate among public offi cials or the public

at large. Deliberation is the hallmark of every private board of directors

for businesses and nonprofi t organizations alike. Without deliberation,

public bodies would be forced into making uninformed collective deci-

sions on matters of life and death that bind even dissenters. No nation

can declare war for only some of its people. The inability of a collective

body to fi rst ascertain and then express the often divergent desires of its

constituent members drives the need for extended deliberative processes

in corporations and other private bodies. The same requirements are

even more imperative in public bodies, where dissenters can no longer

exit the project by selling their individual shares. It would be inconceiv-

able for any effective system of political governance to function in its

absence. Never forget that the Constitution itself is the quintessential

deliberative doctrine. Hamilton opens Federalist No. 1 with a reminder

that the people of the United States had to ask themselves …