Inequality as a Problem of Constitutional Law

We are a system that is no longer capable of self-correction. Any system - any organism - that is no longer capable of self-correction dies. - Jared Bernstein

The historian of science, Thomas Kuhn, set forth the process of scientific revolutions as follows: A paradigm shift (a revolution) creates a new paradigm. Over time, that paradigm develops anomalies. The theory is reformed to accommodate each anomaly. Eventually, the paradigm reaches a crisis, meaning it is no longer capable of reform. A new paradigm emerges which solves the anomalies. This is known as a paradigm shift or revolution. This is where I believe we are. Our current cultural, political and economic paradigm has reached a state of crisis and reform of the paradigm is no longer a viable option. We must have a completely new paradigm. My thesis is that what is required is a thorough modernization of our Constitution. And it appears this may be an easier task to accomplish that we might imagine.


With respect to our Constitution, my analysis seeks to restore the spirit of our Constitution, but suggests modernization to confront and fetter the power of global oligarchs and to confront technological change as well as emergent problems with war power. Ultimately, our Constitution appears like a great innovation that was never updated to confront global oligarchs and multi-national corporations - powers every bit as destructive as the unfettered power of the state. Senator Franken has suggested a constitutional amendment to the effect that "corporations are not people." This would certainly be helpful, but in my view, not even close to enough. Effectively restraining the negative effects of oligarchs and corporations, requires the kind of procedural “shock and awe” our Framers employed against the police power. This requires not only restraining the specific negative effects of such powers (all of them that can be identified), but of strengthening the rights and institutions of the people. With respect to our economic system, I believe what is required is to make it a political economy and not merely a stand-alone economic system. Currently, our economic theory operates without any stated goal other than GDP growth. We know that it is actually operating very efficiently to enrich the very wealthy, but even those who seek to reform it are consistently unable to connect economic arguments to a coherent political theory. At times John Rawls is called into service and at times Utilitarianism, but most often, no reason is given at all. I actually believe Keynes understood intuitively the political theory I’m advocating, but he never developed it as a political theory. My argument is that the political theory understood by Keynes is enshrined in our Constitution, but its purpose has been wholly undermined by circumstances not anticipated by our Founding Fathers.

The Purpose of Constitutions

A constitution has two purposes: First, it checks and balances power so as to create a government operating for the good of the people and not solely for the benefit of the few (tyranny). This requires a theory about human nature with respect to power and a theory of how to not only restrain that power, but to harness it for the public good. Second, a constitution necessarily embodies a theory of the purpose of government. I argue that our Constitution’s theory of the purpose of government is that the purpose of government is to provide the conditions necessary for human flourishing, which in our founding documents is defined as inalienable rights to “life, liberty and the pursuit of happiness.”

The Problem of Power

 It is a well-known saying of the Anglo-American tradition that: “Power corrupts and absolute power corrupts absolutely.” So, the basic theory of human nature is that people are basically good, but something happens when they get too much power. However, our Founding Fathers recognized something much more subtle: It is not power that corrupts, but rather, if the system of government (its constitution) allows abuse of power, that system will, over time, select for those individuals who will abuse that power at the expense of the common good. So, the basic theory of human nature is that some people are good and some are not: we are varied. If the constitution allows for corruption, that system will select for those people willing to corrupt that system. Those not willing to corrupt the system will not participate and will self-select out of the competition. Thus, if a tyranny exists - that is to say if a government is governing for the benefit of the few - it is not human nature that needs to be changed, but the constitution. In Darwinian terms, you have created an environment (a constitution) that, over time, selects for that behavior.

The communist solution to profit-motive was to re-educate and punish in order to stamp out such impulses; the neoliberal solution to altruism (and any mention of redistribution) is to shriek and brand all such talk as class warfare (and, of course, hunt down every last communist on the face of the earth). But our Framers saw all human motives as: 1) the inevitable product of liberty (liberty is to faction as air is to fire); and 2) capable of being harnessed in service of the public good and restrained from their destructive tendencies. The Takings Clause of the US Constitution provides a good example.

In 1066, William the Conqueror seized all of the lands in England creating the power of Eminent Domain. Those living on the land were permitted to stay on the land in exchange for rent to the King. This system worked fine under William the Conqueror, who did not exploit this power (showing that it is not power itself that corrupts). However, William the Conqueror’s successor - William Rufus - was not so principled and began leveraging this power to extort excessive rents and fill his own coffers. Over hundreds of years and many bloody rebellions, the people were able to establish a balance between the right of private property and the power of eminent domain. The people have the right of private property and the government may only take private property for public use and must provide just compensation. Thus, the proper use of the power of eminent domain is retained, but the destructive features are checked. The government can take property to build roads, but not to fill its coffers (the public use requirement). And when that property is taken for public use, the citizen must receive compensation (the just compensation requirement). Our Constitution reads like a laundry list of these types of power-balancing solutions, where the power is harnessed to its proper use and its abusive tendencies are eliminated. To take another example, the government is allowed the power of search and seizure (necessary to serve its police function), but it must establish probable cause and obtain a search warrant to curtail abuses against citizens.

It is important to note that our Framers did not just limit state power, they strengthened the rights of the citizen so that the citizen could properly check police power abuses or indeed, govern (it is the people who are intended to be the sovereigns of a democracy). There would be a free press so that citizens would have accurate information. Imagine, for example, if a citizenry were misinformed about whether a state was manufacturing weapons of mass destruction and consented to war on that basis. A citizenry without accurate information cannot make good decisions and therefore, cannot serve as a check on abuses of power. Further, the citizens must be able to assemble and must have the right of free speech so that they can come together to discuss and solve problems of common concern, even if their concern is abuse of power. Additionally, the citizens must be free from invasions of privacy and suspicion-less search and seizure so that the government may not oppress those citizens who have assembled with the goal of checking abuses of power. These are the conditions of a democracy: Powers with destructive force must be harnessed to the public good, its abusive tendencies must be thwarted and the citizens must have the necessary tools to check abusive powers.

While England has a long history of checking police power (and that history is reflected in our Constitution), our Constitution is a pre-industrial document that did not foresee and therefore, did not adequately check, the power of global oligarchs and multinational corporations. From a constitutional perspective, the question is not whether markets or profit motive are good or bad. The constitutional approach suggests they are useful powers and motives which must be kept to their productive use and kept from destructive ends. Thus, the constitutional viewpoint is that profit motive and access to private property and capital is good when properly harnessed and checked, but can become a destructive force when structurally permitted to do so and not properly checked by an informed citizenry. This would suggest not a minor constitutional revision, but a thorough modernization. One provision will not do: You would have to approach oligarchs and corporations with the type of procedural “shock and awe” our Framers brought to bear against the police power. Each case of historical abuse, market failure and perverse incentives is considered and the rules required to enable and harness the power of wealth towards productive purposes are enshrined in the Constitution, not in legislation or regulations where such reforms can be easily eroded.

General Outline of a Modernized Constitution

So, what would such a constitution look like? Many people believe that the answer is to simply say that corporations are not people. But it is not so simple. When one looks at our Constitution it is clear that corporate power just was not considered. It is not just a matter of saying corporations are not people; we must consider their proper use (as a tool of innovation) and keep them from their destructive tendencies. For example, a corporation should be able to petition the government for redress of grievances, but we do not want that to become a system of bribery. So, a rule for effective, but not abusive lobbying is required so as to allow access, but not undo influence. Corporations' contribution to elections should be strictly confined if not eliminated. The problem of monopolies and too-big-to-fail banks should be constitutional (as legislative acts are too easy to unwind). Worker’s rights to organize should be constitutionally guaranteed. The media should be free from both undo state and corporate influences. The problem of revolving-door corruption, environmental externalities and corporate liability require constitutional solution. Income inequality will have to be limited constitutionally. Corporations proprietary (anti-innovative) tendencies will have to be checked. The list is quite long, but the solution must be constitutional (legislation and regulations would be piecemeal and quickly undone). Moreover, it will necessarily require multiple provisions that not only harness markets, but strengthen the citizens' ability to serve as a meaningful check against abuse.

In addition to harnessing potentially destructive powers to their productive purposes, a constitution sets forth a theory about the best form of government. Our current cultural narrative comes from Ayn Rand. The system, in her view, should be designed to reward the industrial producer/job creators. Selfishness and the profit motive is not only good, altruism is evil. The youth are told to work hard and gain the technical skills to work for the productive, industrial corporations or the bureaucracy of the state (the ultimate prize, of course, would be to become an oligarch). The non-producers are lazy parasites who should not be encouraged in their laziness by government hand-outs. The counter to this story in our culture comes from “The Reformers.” The Reformers accept the central Randian premise: Yes, the goal should be to maximize production. However, the Reformers believe that the people who have succeeded are not necessarily the best, but are mainly lucky. Society’s winners were born to good families, they are mainly white, they are mainly men, they are mainly able bodied and so on. The losers are not inferior, they are just unlucky and therefore, the humane thing to do is to provide them with a safety net. 

However, our Constitution provides a radically different vision that interestingly, has economic support. Paul Krugman won the Nobel Prize for a theory of trade which suggests that trade advantages are created by innovation. Innovations created in a location - say in textiles - create an advantage that entrenches and it makes it difficult for other nations to catch up. This has radical implications from the perspective of political theory because it means that it is not the industrial job creator that we wish to nurture, but the creative innovator. We do not wish to have a society that encourages industrial productivity, but rather, a society that actively encourages creativity and innovation. This was indeed the view of Aristotle and it is enshrined in our founding documents as the inalienable rights to life, liberty and the pursuit of happiness. What this meant for Aristotle and our Framers is that in order to be a creative innovator, you must be secure in the necessities of life (the right of life), you must be free from state or economic coercion (the right of liberty) and you must be free to pursue any interest you desire (the right to pursue happiness). These conditions, Aristotle and our Framers believed, are the source of creativity and innovation. The more of your citizens that have these conditions, the more enhanced your national ability to create and innovate, which, according to Professor Krugman’s theory, is the true wealth of nations.

This is not a childhood spent coping with economic crisis, state repression or engaging in only technical training useful to corporations or the state. It is a childhood where your material needs are met, where you are safe, where you are free from economic and state coercion and are allowed not only to receive training in science and art at public expense, but you are free to explore, imagine and interact with your environment. Its agricultural version is Jefferson’s yeoman farmer which we can hear echoes of from the farmer, author and environmental activist Wendell Barry. In its 19th century version, it is the childhood of Tom Sawyer. And in its post-war version, it is the egalitarian suburb where Paul Krugman read Isaac Asimov, dreamed of being an economist and won the Nobel Prize. Could that have happened in post-NAFTA Flint, Michigan? The people in Flint, Michigan are neither less talented nor unlucky, we let that happen. And if Professor Krugman’s theory of trade is correct, we did so at great cost not only to those individuals and their communities, but to our national economy. Economic dislocations that create a threat of local systemic failure should be treated as disasters and those communities should be supported in the same way banks are supported when they create the risk of national systemic failure: They should be supported so that they and their children are not condemned to a life of economic crisis, dislocation and erosion of skills. The effects of these events must create disadvantages that reverberate for generations. When food stamp recipients in disaster-stricken, abandoned communities create soda economies, I do not see vice that should be punished, but wasted innovative potential.

The political philosopher Martha Nussbaum has given us a more detailed version of the conditions of human flourishing as well as some broad suggestions for specific constitutional rights:

1. Life. Being able to live to the end of a human life of normal length; not dying prematurely, or before one's life is so reduced as to be not worth living.

2. Bodily Health. Being able to have good health, including reproductive health; to be adequately nourished; to have adequate shelter.

3. Bodily Integrity. Being able to move freely from place to place; to be secure against violent assault, including sexual assault and domestic violence; having opportunities for sexual satisfaction and for choice in matters of reproduction.

4. Senses, Imagination, and Thought. Being able to use the senses, to imagine, think, and reason—and to do these things in a "truly human" way, a way informed and cultivated by an adequate education, including, but by no means limited to, literacy and basic mathematical and scientific training. Being able to use imagination and thought in connection with experiencing and producing works and events of one's own choice, religious, literary, musical, and so forth. Being able to use one's mind in ways protected by guarantees of freedom of expression with respect to both political and artistic speech, and freedom of religious exercise. Being able to have pleasurable experiences and to avoid non-beneficial pain.

5. Emotions. Being able to have attachments to things and people outside ourselves; to love those who love and care for us, to grieve at their absence; in general, to love, to grieve, to experience longing, gratitude, and justified anger. Not having one's emotional development blighted by fear and anxiety. (Supporting this capability means supporting forms of human association that can be shown to be crucial in their development.)

6. Practical Reason. Being able to form a conception of the good and to engage in critical reflection about the planning of one's life. (This entails protection for the liberty of conscience and religious observance.)

7. Affiliation.Being able to live with and toward others, to recognize and show concern for other humans, to engage in various forms of social interaction; to be able to imagine the situation of another. (Protecting this capability means protecting institutions that constitute and nourish such forms of affiliation, and also protecting the freedom of assembly and political speech.)

8. Having the social bases of self-respect and non-humiliation; being able to be treated as a dignified being whose worth is equal to that of others. This entails provisions of non-discrimination on the basis of race, sex, sexual orientation, ethnicity, caste, religion, national origin, socio-economic status and species.

9. Other Species. Being able to live with concern for and in relation to animals, plants, and the world of nature.

10. Play. Being able to laugh, to play, to enjoy recreational activities.

11. Control over one's Environment.

• Political. Being able to participate effectively in political choices that govern one's life; having the right of political participation, protections of free speech and association.

• Material. Being able to hold property (both land and movable goods), and having property rights on an equal basis with others; having the right to seek employment on an equal basis with others; having the freedom from unwarranted search and seizure. In work, being able to work as a human, exercising practical reason and entering into meaningful relationships of mutual recognition with other workers.
(I would add access to capital, freedom from excessive debt, no debtor's prison, bankruptcy rights).

This is the vision of the life of a citizen of a democracy. Does it lead to laziness? History tells us the contrary is true. As Adam Smith noticed, free and secure citizens given access to property and capital are furiously productive. It is only when denied opportunity that individuals are driven into inactivity and their skills allowed to erode. It is, therefore, opportunity that creates productivity and lack of opportunity that harms productivity. Lack of productivity does not exist because people are not desperate enough; according to Aristotle and our Constitution, exactly the opposite is true. It is precisely when people lack the basic necessities that they lose their ability to be productive. Cutting benefits and failing to provide stimulus to disaster-stricken communities is not only cruel, it is an affront to the spirit of our Constitution. There are citizens whose innovative potential is being wasted to their own detriment, almost certainly to their children’s detriment and, finally, to the detriment of our nation's wealth.

Thus, if we were drafting a constitution, it would include rights supporting the vision of life suggested by Professor Nussbaum and it would include the current elaborate checks on police power as well as added elaborate checks on the power of wealth. Moreover, it would have to strengthen democratic rights of a free press (free from state and corporate influences), free access to the internet and all academic publications. It would have to modernize the checks on police power to include internet communication. It would have to modernize the war powers to include situations not considered by our Framers (for example, attack from stateless individuals, intervention in a foreign war involving genocide, intervention in a foreign civil war, intervention in a foreign war based on invasion of a weaker nation or breach of international treaty, etc.; it is clear our Framers only considered civil war and attack by a state, no other situations were, or fairly could have been, foreseen). Finally, unlike our Framers, we have the ability to measure and monitor abuses of power as well as the happiness of our citizens (see, for example, Amartya Sen's Human Development Index; this could also be bolstered with monitoring of inequality, monitoring of corruption, monitoring of imprisonment rates, monitoring of imprisonment of journalists and whistleblowers, monitoring of failure to prosecute known lawbreakers in positions of power, etc.).

As someone trained in political theory and constitutional law, our Constitution looks like the first computer ever invented tying to run a modern, industrial society. Our Constitution was an amazing innovation (its defects notwithstanding), but it can and should be modernized to restore the original intent of a democracy with citizens given the conditions and tools necessary for innovation. That is the vision of the inalienable rights to life, liberty and the pursuit of happiness. The state has its uses and must be large and vital. Similarly, private property, capital and corporations are useful tools to enable innovation. However, the state, capital and corporations must be humble servants of an innovative citizenry; never their masters.

This is possible, but will require a thorough (not piecemeal) modernization of our Constitution. Though this may seem an ambitious undertaking, it has three virtues. First, it is still an option open to us as citizens, even though our efforts at lobbying and electoral correction have utterly failed (and, in my opinion, cannot succeed). Second, it suggests a powerful coalition of groups that do not currently see themselves as related: from labor, to environmentalists, to those concerned with inequality, to those concerned with corporate abuse, to those concerned with internet privacy and state transparency, to those concerned with excessive war powers and so on. Third, it may not be as difficult as we assume and may be possible through majority vote. If we do not constitutionally check the power of the corporate state and modernize our Constitution, reform will come in inches and be eroded in days and, as Keynes understood, violence will be the inevitable result.

The problem of inequality - and indeed a host of problems - are problems of constitutional law. Our democracy is broken, but it can be fixed: deliberately, lawfully and without bloodshed. Many will balk at the notion of modernizing our Constitution. However, we are citizens of a nation founded on principles of the Enlightenment. We must be determined to see the Constitution as a tool to be refined and not as an unalterable holy text. Our pre-industrial Constitution cannot be fixed through minor amendments (like that suggested by Senator Franken). The time for reform is past and would not accomplish our goals even if they could succeed. What is required now is a radical rethinking of our Constitution so as to restore it to its original purpose of providing its free citizenry with the conditions and tools of creative innovation.