Testing the Waters of Economic Liberty

WASHINGTON – In 1927, seven years before the board game was created, Washington state decided to play monopoly. It gave a private interest the exclusive right to operate a ferry on 55-mile long Lake Chelan in the northern Cascade Mountains. The state apparently will defend this folly until Judgment Day, when state officials will get an earful from the Creator who – we have Jefferson’s word for this – endowed everyone, including Jim and Cliff Courtney, with the rights to liberty and the pursuit of happiness.

The Courtney brothers’ happiness would be enlarged if they could operate a competing ferry. But 84 years ago Washington state asserted a principle much favored by all of America’s governments, the principle that it may parcel out certain economic liberties sparingly and only to those who can prove to government that their exercise of their liberty will satisfy some government-concocted criteria.

That principle lacks constitutional warrant and repudiates the nation’s foundational philosophy. Hence the national importance of the Courtney brothers’ litigation, which asks courts to correct judicial mistakes of 1873 and 1938.

The brothers live in Stehekin on the lake’s northern tip and provide recreational services to people who manage to get there from Chelan on the lake’s southeast end. But people can get to Stehekin only by plane or boat. And during the summer season, when the boat schedule is most convenient, the two boats operated by the state-conferred monopoly make only one trip a day in each direction, and both depart at the same time in the same direction.

But before the Courtney brothers can give travelers a better choice, they must receive from the state a “certificate of public convenience and necessity.” The burden is on them to prove that the current monopolist’s service is not “reasonable and adequate.” At least four would-be competitors tried and failed to get such a certificate; the most recent attempt generated a 515-page transcript.

How did America reach the point where aspiring entrepreneurs, seeking to improve their lot by improving other people’s choices, must approach government on bended knee to beg it to confer upon them a right – the right to compete? How did America stray from its foundational principle that government exists to protect pre-existing rights, not to apportion such rights as it creates and chooses to bestow? Read on.

The Courtney brothers are represented by the Institute for Justice, which battles government infringements of individuals’ liberties – particularly economic liberties. In an 1873 decision, the Supreme Court (divided 5-4) defined Americans’ “privileges or immunities” – the 14th Amendment’s language meaning rights – narrowly. The court recognized only a few rights, mostly essential to national citizenship, and not including economic liberty.

In 1938, the court bowed to the progressive desire to empower government to allocate wealth and opportunity. The court decided – without citing a supportive constitutional text, there being none – that economic liberty should be assigned a status markedly inferior to that of “fundamental” liberties. This spurious dichotomy jettisoned America’s natural rights tradition reflected in the Ninth Amendment’s protection of unenumerated rights “retained by the people.”

The Courtneys’ litigation is a little lever that could move the entire nation back toward the Founders’ vision. It will do so if it advances the presumption of liberty. This, says Georgetown University law professor Randy Barnett, is the principle that the government must be required to justify its restrictions on liberty, rather than requiring citizens to prove that the liberty they wish to exercise is somehow “fundamental” and therefore not an optional gift from government.

The Courtneys deserve judicial engagement where judges actively judge in defense of economic liberty. This means active enforcement of the principle that neither Congress nor the states are entitled to determine the limits of their powers. The Constitution made this determination before the mistakes of 1873 and 1938.

Washington state’s creation of the ferry monopoly is what governments have increasingly done since courts misconstrued the Constitution in a way that licenses governments to dispense particular economic favors by restricting general economic liberty. It is now routine for government to have transactions with rent-seekers – private interests who want public power used to confer advantages on them, or disadvantages on competitors.

This case from a remote region of Washington state explains much about a Washington 2,200 miles away. Start with a misbegotten constitutional principle that denigrates economic liberty as less than fundamental, and thus licenses government to ration such liberty. You end with the pandemic rent-seeking that defines the nation’s capital.

The Patriot Post® · Testing the Waters of Economic Liberty