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Samuel Gregg: Constitutions, Culture, and the Economy

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Writing in Public Discourse, Acton Research Director Samuel Gregg notes that while Constitutional law has often been used to shape economies, there are limits to the law’s ability to influence economic culture:

The Supreme Court’s decision to uphold Obamacare sharply reminds us of constitutional law’s significance for economic life. NFIB v. Sebelius, however, is not the first or even the most controversial effort to use constitutional law to shape economies. Both America and European countries have a decades-long history of doing so.

Throughout America, for instance, amendments to state constitutions have been used to cement right-to-work laws in place. Across the Atlantic, European nations such as Germany and Spain have written public debt limits into their constitutions. In 2010, the Nobel Prize economist James Buchanan called for what he described as the “constitutionalization” of money. Ongoing failures to prevent the politicization of monetary policy meant, Buchanan argued, that America’s constitution required amending to bestow genuine independence upon a monetary authority. In Buchanan’s words: “Something analogous to the independent judiciary, under the Supreme Court, seems required—a monetary authority that is independent of politics, but which remains itself bound by the parameters set out in the constitution itself.”

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Joe Carter Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).


  • Roger McKinney

    Nice article! Mises would have agreed. He wrote that no government can rule against the will of the majority for very long, not even dictators. The Supreme Court has shown no concern for the Constitution in over 150 years. It merely rubber stamps popular opinion. It does so in the name of protecting the public esteem for the court.
    Instead of limiting the will of the majority to protect the minority using the principles of the Constitution, it regularly crushes minorities beneath the boot of the majority. It did that with slavery, Indian policy, and treatment of the Japanese during WWII. It is doing that now with healthcare.

  • There are a couple of problems with Gregg’s story. The first is that it fails to recognize that Eucken was writing about a constitution under the presumption of civil law rather than common law. That the right to freedom contract was to preserved conflicted with the problems caused by enforcing collusive agreements. What ought to be law was responsive too much to moral constraints and not enough to economic constraints! Laws arbitrarily passed according to moral convictions are blind to unintended consequences, but legal systems sensitive to negative feedback, such as the common law process, can reach efficiency over time.
    The second problem is the possible confusion with a constitution’s influence in shaping an economy, in the sense that an economy is a managed system, with the idea that a constitution shapes the market. Shaping has a positive connotation, but any shaping of markets ought to be properly understood as an intervention in markets. Cartels are necessarily the consequence of intervention, quite frequently well-intentioned regulations. When a constitution places parameters it ought to be placing those constraints on those in power, not on the market.
    Buchanan would say that intervention got in the way of markets. Markets are places where exchange happens. And Buchanan would say that an exchange is an exchange is an exchange. All exchange is legitimate in that it is voluntary.
    In short, when Gregg says that “all economies are subject to some degree of human design” he should go farther and say that all deliberate design which does not proceed according to an evolutionary path is bad. These interventions deter the process by which markets form as the consequence of human action, but not of human design, to cite Hayek.
    Indeed, Buchanan was working too much from a place of status quo while also trying to describe ideals. The appropriate benchmark for monetary systems has been set by Larry White instead. Competitive free banking avoids the issues of both constitutional control and cartelization.
    The idea that a constitution should positively assert public norms is frightening to me. Let it merely keep the decision makers of corporate action bored or busy disagreeing. Jordan Ballor is closer to the truth in pointing to church and family as the socially shaping institutions of norms.
    As far as Eucken’s perspective on inner orders is concerned, I’d like to know whether Gregg hears Rudolf Eucken in Walter’s statement. Rudolf being a student of Hegel, that is.