Bokhari bought a black Lincoln sedan and began offering cut-rate rides — an average of $25 — to and from the airport, around downtown and in neighborhoods not well served by taxis. After one year he had 12 cars. Now he has 20, and 15 independent contractors with their own cars, and a Web site, and lots of customers. He also has some enemies, including the established taxi and sedan companies and a city government that is, as interventionist governments generally are, devoted to regulations that protect the strong by preserving the status quo.
With the quiet support of the taxi companies, which have not raised rates since Bokhari and some similar entrepreneurs went into business, the limo companies got regulators to require a $45 minimum charge for any ride. Not content with that gross injury, government added crippling insults: It limited the age of cars and number of miles on them — regardless of the cars’ condition — and forbade dispatches via cellphones, which is how start-up limo companies operate.
Represented by the Austin office of the Institute for Justice, the nation’s only libertarian public interest law firm, Bokhari is seeking judicial recognition of his constitutional right to economic liberty. Since the New Deal, courts, with no textual or any other constitutional basis, have distinguished between economic and non-economic liberty. Giving the former scant protection, courts have permitted any government infringement of it that can be said to have a “rational basis.” This absurdly permissive test has produced a charade of judging — a dereliction of the judicial duty to protect liberty. The courts’ dereliction of duty has been presented as noble deference to popular government.
But the Constitution, and especially the 14th Amendment, is supposed to protect the individual’s liberty, including economic liberty, from government’s depredations. One purpose of that amendment’s protection of “the privileges or immunities” of U.S. citizenship was to defend the economic liberties of freed slaves from laws restricting entry into trades and businesses — laws written to insulate white Southern businessmen from competition. But the amendment protects all the “privileges or immunities” of all Americans.
In 1873, in a 5 to 4 decision in the Slaughterhouse Cases, the Supreme Court, without any warrant from legislative history of the 14th Amendment, construed “privileges or immunities” so narrowly as to make it a nullity. Now, however, Bokhari may help catalyze a reconsideration of the constitutional basis of economic liberty.
In 2002, the U.S. Court of Appeals for the 6th Circuit struck down a Tennessee law that prohibited anyone without a license from selling caskets. The court said that the law did nothing to protect the public and merely shielded licensed funeral directors from competition: “Protecting a discrete interest group from economic competition is not a legitimate governmental purpose.” This victory was achieved by the Institute for Justice.
In 2004, however, the 10th Circuit appellate court upheld an Oklahoma law requiring online casket retailers to have funeral director’s licenses, which require several years of course work, a one-year apprenticeship, the embalming of 25 bodies and two written exams. The court did not dispute that this is protectionism for funeral directors, but it breezily wrote that “while baseball may be the national pastime of the citizenry, dishing out special economic benefits to certain in-state industries remains the favored pastime of state and local governments.”
The 10th Circuit is right about the practice but disgracefully tolerant of treating economic liberty as a plaything of politicians, who should be forbidden from favoring some interests and disfavoring others. The 6th Circuit is correct that government acts illegitimately when it abets “transfer seeking” — the use of laws to transfer wealth from the disfavored to the favored. The Supreme Court, which is supposed to resolve such contradictions among the circuits, should seize the opportunity to correct a 139-year-old error.
Fortunately, immigrants such as Bokhari often remind this nation, which they have embraced, of the national principles that drew them here. Unfortunately, the nation often needs reminding.