The Curative Power of Law and Political Economy

Amy Kapczynski —

Ask not for whom the First Amendment tolls: It tolls for you.  Or so I argue in an essay just published at the Columbia Law Review online.  It’s called “The Lochnerized First Amendment and the FDA: Toward a More Democratic Political Economy”—a boring title for a vital and urgent problem.  Courts, speaking in the name of the First Amendment, are “freeing” us from regulatory approaches that have worked for decades to protect us from snake oil and inform us about the products we put in our bodies. How did we arrive here? And how might demo­cratic prerogatives retain control over the webs of commodity exchange upon which our lives depend?  The essay addresses these questions, trying along the way to model how law and political economy analysis can contribute to our understanding.

The FDA is a key accomplishment of both the Progressive Era and the New Deal and perhaps the most muscular of all federal agencies. It regulates one-fifth of the consumer economy, and has enjoyed extraordinarily high levels of influence and public trust throughout its long history.  This popularity may have something to do with the fact that the FDA gained its powers through successive waves of democratic demand for its intervention when “free markets” proved deadly.  (If you don’t know the story of thalidomide, which left a trail of destruction around the world in the 1950s and 1960s, here is a vivid introduction). Perhaps unsurprisingly, the FDA has also been a prime target of neoliberals, who resent its extensive powers.  Industry lobbying and sustained criticism from Chicago-school types and have had an impact; several recent laws have weakened the agency.  But the respect and support the FDA commands have made legislative assaults challenging.  Perhaps that is why industry—and industry funded groups—have invested in the use of the courts to attack its power.

What does that attack look like?  The cases are astonishing.  Some suggest that drug companies have a free speech right to market drugs for unproven uses.  These threaten the system that the FDA has used for decades to develop the evidence we need to understand whether drugs work.  Nonetheless, citing these cases, the FDA appears poised to substantially deregulate drug marketing.  New commercial speech doctrine may also be the demise of a law passed recently to protect consumers from misleading claims about supposedly low-risk tobacco products.   E-cigarette companies (mostly backed, apparently, by big tobacco) argue that Congress doesn’t have the power to force them to validate claims that their products are low risk, though we know relatively little about their long-term implications.

The logic of these cases could go quite a bit further, even undermining the FDA’s ability to regulate medicines and tobacco altogether.  I don’t spell out the many possible implications for food, supplements, and cosmetics, but you can read between the lines.

How did this happen?  Here’s where law and political economy offers important insights. If we read the cases that build this new commercial speech doctrine, cases like Virginia Pharmacy and IMS v. Sorrell, with the literature on neoliberalism in mind, we see that they have been deeply shaped by market supremacist thinking. They mobilize images of markets, subjects, and the state that are not only contestable, but deeply undemocratic.

How we might we best respond to this new and rather ghoulish First Amendment?  There are some excellent doctrinal arguments that could bring the courts back from the brink, as I describe in the essay.  Importantly, though, these cases should also cause us to rethink our needs for public infrastructure.  If courts thrust us into a world with more limited authority over private markets, we must envision a much more substantial role for the public—in this case, for example, by expanding public funding for health research. This approach would sidestep recent court decisions in addition to having far-reaching benefits for health democracy or health justice. It is also an instance of a broader point. By undermining public-oriented regulation of private companies, the advance of market supremacy inside of constitutional doctrine paradoxically pushes the campaign for democratic control up a level.  New public infrastructure that displaces or routes around an increasingly ungovernable private sector would, in addition to cutting out the profit-oriented middleman, more easily brush off a Lochnerized First Amendment.  The parallels to Medicare For All—spurred on by attacks to the ACA—are easy to see.

The piece was a response to the superb conference and volume on “Free Expression in an Age of Inequality” put on recently by Columbia Law School, Columbia Law Review, and the Knight Institute.  If you’ve read this far, you’re incurable, and you should also check out the other pieces published as part of the symposium, especially Jed Purdy’s “The Bosses Constitution.”  People often ask me for work describing how to “do LPE.”  These two pieces provide possible examples.

Amy Kapczynski (@akapczynski) is a Professor of Law at Yale Law School. 

The Uneasy Case Against Occupational Licensing (Part 2)

Frank Pasquale and Sandeep Vaheesan–

Successful ideological entrepreneurs change policy-makers’ focus and their presumptions. Those on the right, in particular, have been very effective at shifting attention from core confrontations of capital and labor to peripheral conflicts among laborers. We see this repeatedly in inequality policy, where fundamental tensions between capital and labor are ignored, obfuscated, or trivialized by a tidal wave of technocratic reframing. Continue reading

The Uneasy Case Against Occupational Licensing (Part 1)

Frank Pasquale & Sandeep Vaheesan–

Obama-era technocrats and Trump cronies may not agree on much, but they have made common cause against occupational licensing. That focus undermines important social objectives while obscuring far more important problems in the labor market. In this post, we cover the basics of licensing, and then reframe current attacks on it. In our next post, we will explain why licensing’s mix of consumer protection and labor market stabilization is a legitimate policy option for a wide range of occupations.

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Reconstructing the Administrative State

Blake Emerson –

In the early weeks of the Trump presidency, Steve Bannon declared that one of its principal tasks would be the “deconstruction of the administrative state.” Though Bannon has since left the White House, this project has so far proved one of its most enduring preoccupations. Administrative bodies such as the Environmental Protection Agency, Departments of Health and Human Services, Justice, and Education, and Federal Communications Commission have reversed course on key progressive initiatives such as reductions in carbon emissions, healthcare insurance enrollment, police reform, redress of campus sexual harassment and assault, and net neutrality.

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The tenured civil service is being sidelined, or even targeted by opposition research firms hired by their own departments. The recently enacted tax bill promises to starve the government of the resources to sustain the remaining pillars of the welfare state, namely Medicare, Medicaid and Social Security. And the appointment of Justice Gorsuch to the Supreme Court casts doubt on the future of a core principle of administrative law—that courts should defer to agencies’ reasonable interpretations of statutory ambiguities.

This effort to rein-in the regulatory state has been at the center of the conservative agenda since the 1930s, and ascendant since Reagan. It overlaps with a broader neoliberal policy framework that many centrist Democrats share, which remains skeptical of the public provision of goods and services, and “command-and-control” regulation. Bill Clinton’s bipartisan mantra that “the era of big government is over” has steadily eroded regulatory and welfare institutions, and fulfilled its own prophecy that bureaucrats are incapable of promoting the public good.

As we near the pinnacle of this era of governance, Bannon’s declaration throws into relief a constituent feature of any viable counter-movement. If we are to develop a political program capable of rescuing the American polity from private domination, economic inequality, and caste hierarchy, we must think through what kind of administrative apparatus could carry that program into action. One that sees its role primarily as correcting market failures, “nudging” individuals to make decisions the expert deems wise, and maximizing aggregate social welfare, is likely to simply reproduce the logic of private enterprise within government.

The hegemonic framework for policy reasoning today—cost-benefit analysis—attempts to approximate market pricing where it does not exist, asking, for example, how much people are “willing to pay” to avoid certain kinds of harms. Such methods can be useful in ensuring that decision-makers fully take into account the economic effects of proposed courses of action. But they instill a regulatory ideology where the model of formally free, reciprocal, and competitive exchange predominates over the practice of joint action motivated by a common aim. We come to approach even political rights and obligations as priced commodities rather than as products of either reasoned agreement or social struggle. Instead of a cost-benefit state, we need a state that simulates an egalitarian society and stimulates a democratic politics.

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Your Money or Your Life?

Amy Kapczynski – 

High drug prices are a major problem in the United States. In the Washington Post today, Aaron Kesselheim and I have an op-ed about what President Trump could do – immediately – to lower drug prices, if he had any intention of following through on all of those campaign promises and tweets. 649816939_1280x720(We also explain why his nomination of Alex Azar to head HHS is a clear sign that he will do none of this.)

Here I wanted to say more about the stakes of the drug pricing problem, and about one option we describe – a little known patent “eminent domain” power that could be a powerful tool to lower drug prices.

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Entrepreneurship Can Be Unproductive or Destructive

Frank Pasquale –

rifles-to-be-burned-in-kenya-2016

Entrepreneurship in the international arms trade leaves everyone (except the entrepreneur) worse off.

In contemporary American law, few figures are as lionized as the “entrepreneur.” Lobbyists evoke entrepreneurship as a cornucopia of better goods and services at lower prices. Even ostensibly academic business law courses tend to offer a narrative of wise incremental development of legal doctrine toward enabling disruption, easy entry into markets, and ultra-flexible corporate forms. The lawyer is ideally, in this view, a fixer capable of profit-maximizing distributions of responsibility and liability. Some even dream of automating this role via smart contracts, to ensure even more rapid entrepreneurial activity.

Professional Responsibility courses also tend to adopt a similarly reverential attitude toward the business client, instilling an ethic of “zealous advocacy” in generations of students. Few question whether the near-evacuation of ethical self-reflection from advocacy roles systematically advantages dubious (or worse) business propositions.

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