Nearly 50 years ago, Lewis Powell, a big-firm lawyer in Richmond, had a dream: What if American business took over the then-liberal Supreme Court and turned it into a defender of capitalism and large corporations? Powell set out his ideas in the summer of 1971 in a confidential memorandum for the U.S. Chamber of Commerce, with a bombastic title: “Attack on American Free Enterprise System.” Within months, President Richard Nixon appointed Powell to the court, and he helped bring about the pro-corporate transformation he had called for in his memo.
Powell could hardly have predicted just how much success his vision would have over the next half-century, in almost every area of the law. The Supreme Court would repeatedly rule in favor of corporations and the rich, and against the middle class and the poor — undermining unions, paving the way for lower taxes and generally playing an underappreciated role in reshaping the economy in ways that hurt working people. Democratic presidential candidates and the media generally attribute growing inequality to policies adopted by Congress and presidents, and to larger forces like automation, but the Supreme Court deserves a sizable share of the blame.
By the numbers, the transition in the court’s position on business-related issues has been dramatic. One study, from 2009, found that businesses won 28 percent of their cases before the court led by Chief Justice Earl Warren (over the period 1953 to 1969) but 64 percent under the current court, led by Chief Justice John G. Roberts Jr. Another found that Justice Samuel Alito and Roberts are the No. 1 and No. 2 most pro-business justices, respectively, to serve since 1946.
The court’s past half-century of favoring the rich and powerful coincides almost exactly with the period when the richest Americans have left the rest of the nation behind. The “World Inequality Report 2018,” produced by Thomas Piketty and other economists — the most recent available — identified two chief drivers of economic inequality in the United States: unequal educational opportunity and an increasingly regressive tax system. The modern court has contributed greatly to both.
The court’s role as a force for inequality started a few years before the Powell memo — in 1969, when Nixon became president. Nixon shared the business community’s skepticism toward the Warren court, and he campaigned on a promise to change it. That court had spent the past 15 years promoting civil rights, starting with Brown v. Board of Education, and expanding the rights of poor Americans, with rulings like Harper v. Virginia Board of Elections, a 1966 decision striking down poll taxes. In Nixon’s first three years in office, he appointed four justices, one of the fastest rates of turnover in history. The new members — Warren Burger (the new chief justice), Harry Blackmun, William Rehnquist and Powell — were more sympathetic to big business than their predecessors.
The ways in which the court drove inequality were wide-ranging. In 1976, in Buckley v. Valeo, it held for the first time that money is First Amendment-protected speech and struck down limits on spending in political campaigns. That began the dismantling of campaign finance laws, clearing the way for wealthy Americans, and then corporations, to use unlimited amounts of money to influence elections. In labor law, the court turned against unions — a trend that reached its nadir in 2018 with Janus v. AFSCME, which held that government unions cannot require nonmembers to pay fees for being represented in collective bargaining.
Most important, however, were the court’s decisions concerning education and desegregation. In the early 1970s, a consensus was quickly forming among law professors and lower courts that the Constitution’s equal protection clause required equitable funding across rich and poor school districts in a state. When parents and students from a poor, heavily Mexican American district challenged Texas’s school finance system, a federal district court ordered the state to equalize funding.
In 1973, however, in San Antonio Independent School District v. Rodriguez, the court, by a 5-to-4 vote, reversed that ruling, upholding the right of states to oversee school systems in which spending was tied to property values — meaning poorer districts typically had less money than wealthier ones. Some of the harshest critics of this decision have compared the court’s willingness to accept government-imposed inequality in schools to Plessy v. Ferguson, in which the court upheld segregated railroad cars, confirming the doctrine of “separate but equal.”
Then, the following year, the court ruled that states could provide children with a de facto segregated education. This time, students in Detroit, represented by the NAACP, challenged a system in which blacks were concentrated in urban schools, surrounded by heavily white suburbs. A federal district court ruled that Michigan had to bus children between Detroit and its suburbs to create integrated schools for all.
But in 1974’s Milliken v. Bradley, the court overturned that ruling, again by a 5-to-4 vote, and held that if a state’s schools were segregated because whites and blacks lived in different districts, courts were powerless to act. The class lines in the suit were not straightforward — much of the opposition to busing came from working-class whites — but the effect was to lock many poor blacks in segregated, failing urban schools.
Rodriguez and Milliken entrenched inequality deeply in American education. The quality of the education that children receive today depends to a great extent on how much money their district has, and the gaps in funding among districts in a single state can be enormous. At the end of the Obama administration, the U.S. Department of Education concluded that 6.6 million students in the highest poverty districts in 23 states were being “fundamentally” shortchanged by funding inequities. Those districts, the department found, spent 15.6 percent less than the lowest poverty districts – making an enormous difference in the quality of teachers, equipment, textbooks and other educational “inputs” a school can afford.
Researchers have documented a link between low spending levels and racial segregation and inequality. One study found that for students from low-income families, a 10 percent increase in per-pupil spending for all 12 school years was associated with earning nearly 10 percent higher wages in adulthood and a lower incidence of adult poverty.
As for the nation’s nonprogressive tax system, a significant portion of blame lies with the court’s unraveling of campaign finance laws starting in the 1970s: These decisions rely on the dubious claim that money is speech and therefore deserves constitutional protection. The court’s rulings gave more political power than ever to the rich, who used that influence to drive down their own tax rates.
Higher taxes on rich people are popular — in one recent poll, 76 percent of registered voters wanted them to pay more. But wealthy campaign contributors have been blunt about conditioning future donations on lower tax rates. When the 2017 Trump tax bill was pending, Sen. Lindsey Graham (R-S.C.) warned colleagues that if Republicans did not get it passed, the “financial contributions will stop” and incumbents would lose their jobs. When lawmakers voted, more of them listened to their contributors than to their constituents.
A dramatic example of the contemporary court’s attitude toward the poor came in 2012, when it narrowly upheld most of the Affordable Care Act. That part of the opinion marked a victory for people who could not afford health insurance. Yet in the same ruling, the court limited the law’s Medicaid expansion, on unconvincing constitutional grounds that it involved coercion of states by the federal government. That decision effectively took Medicaid away from millions of the poorest Americans (given that 14 states still have declined to expand the program). One study estimated that more than 15,000 deaths could have been avoided over four years if all states had expanded Medicaid.
If President Trump is reelected and replaces even one liberal justice, a larger conservative majority could go much further. The court could strike down Obamacare — it agreed last month to hear a case challenging it — and continue the deconstruction of the social safety net that poor and middle-class Americans rely on (for example, by holding that Congress lacks the constitutional authority to pass sweeping laws like the federal minimum wage).
In his 1971 memorandum, Powell warned that business interests were “under broad attack” and urged them to be “more aggressive.” Today, however, most Americans believe that it’s ordinary people who need protection against big corporations and plutocrats. The public may not fully grasp the role the court has played in exacerbating inequality. But Democratic presidential candidates may find a receptive audience if they explain that connection — and promise voters a court that puts ordinary Americans ahead of the 1 percent.
CORRECTION: This article originally provided an incorrect date for the Supreme Court’s Harper v. Virginia Board of Elections decision, which struck down poll taxes. It occurred in 1966.