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Aug 25, 2011 10:48 pm

Constitutionally Impaired?


I agree with most of what Walter Williams says here, so let me churlishly focus on the bit I disagree with:

You might say, “Williams, while there are gray areas in the Constitution, the U.S. Supreme Court would never brazenly rule against clear constitutional prohibitions!” That’s nonsense. The first clause of Article 1, Section 10 mandates that “No State shall … pass any … Law impairing the Obligation of Contracts.” During the Great Depression, the U.S. Supreme Court upheld a Minnesota law that restricted the ability of banks to foreclose on overdue mortgages, thereby impairing contracts made between lender and borrower. To prevent this kind of contract impairment – routinely done under the Articles of Confederation – was precisely why the Framers added the clause.

Lysander Spooner

I agree, of course, that the Supreme Court has little compunction about overriding “clear constitutional prohibitions.” But I don’t think the example Williams has chosen proves his case. To uphold the obligation of a contract does not mean to uphold whatever the contract says; otherwise contracts to sell oneself into slavery, or contracts to assassinate another person, would be legitimately enforceable. Thus contracting to do X is not by itself sufficient to incur an enforceable obligation to do X.

And as Lysander Spooner argues:

“The obligation of contracts,” here spoken of, is, of necessity, the natural obligation; for that is the only real or true obligation that any contracts can have.

The court’s decision in Home Building & Loan Association v. Blaisdell thus counts as violating the constitutional prohibition on impairing the obligation of contracts only if those contracts were legitimately enforceable under natural law. Now maybe they were and maybe they weren’t; that moral question is not my current concern. My point is simply that one cannot determine whether the court violated the constitution in this case without addressing that moral question; it’s not something that one can simply read off the words.  


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