An Economist’s View of the Commerce Clause – Dr. John Beck

In the course of this lecture, I will review how the courts have interpreted the commerce clause.  I will also express an opinion – what might be called a “strict interpretation” – about how the commerce clause ought to be interpreted from a legal standpoint, although as an economist I have no professional expertise to do so.  However, as an economist I do have expertise in analyzing what economists refer to as “market failures,” situations in which free markets may fail to achieve a theoretical ideal allocation of resources and government intervention may lead to a better outcome.  Economists have also developed a theory of “public choice,” analyzing how the political process works in ways which further “special interests” at the expense of the “public interest.”  (There are problems with defining the “public interest,” but I shall nevertheless use this phrase to describe policies that many people would consider preferable to policies favoring narrow special interests.)  As I proceed through the historical review of particular cases involving the commerce clause, after discussing the legal arguments, I will ask from an economic standpoint has the commerce clause:

(i) empowered the federal government to intervene when intervention would further the “public interest,”
(ii) allowed government intervention that does not serve the “public interest,”
(iii)  prohibited undesirable government intervention, or
(iv) prohibited government intervention that would be desirable?

So what does the commerce clause say?

“The Congress shall have Power … To regulate Commerce with foreign Nations, and among the several States …” (Article I, Section 8)


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