Article I § 8 clause 3:
The Congress shall have Power . . . To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
How does regulating commerce with anybody relate to the core compacts of the natural rights polity, and to the legitimate functions of a jural society, an ecclesiastical society, a secular social compact, and a religious social compact? Because the Constitution is inherently a secular social compact, the question is best rephrased as, How does regulating commerce relate to the lawful functions of a secular social compact and its two lawful sub-compacts? — If the States were to ratify the Constitution, and if every citizen within each State were to consent to such regulation of commerce, then every citizen would be party to a compact that holds such regulation by the Constitution / secular social compact to be a function of the social compact. Such regulation of commerce would certainly be legitimate under such circumstances of unanimous consent. — But isn’t expecting every citizen to consent to this expecting something that is extremely unlikely to ever happen? — Yes! It’s almost totally unlikely that every citizen in every ratifying State would consent, as an individual party to the Constitution / secular social compact. But diligent students of the Constitution know that the Constitution is not so much a compact that ties together individuals as a treaty that ties the States together. Even though this is true, an individual citizen of State X is directly influenced by this regulation of commerce only if this citizen (1)trades with a foreign nation, (2)trades with someone in one of the other States, or (3)trades with someone in an Indian Tribe. So under the original intent of the Constitution, these are the only circumstances in which this individual citizen’s consent might be required under Article I § 8 clause 3.
Because a jural society’s authority can only be lawfully exercised within its territorial jurisdiction when the jural society establishes subject matter jurisdiction over a given case or circumstance, it cannot lawfully own the land over which it has territorial jurisdiction. It might lawfully own some small segment thereof for the sake of having a jail and a courthouse. But there is absolutely not equivalence between a jural society’s territorial jurisdiction and its authority to own land. The same is true of a strictly defined ecclesiastical society, but the latter kind of compact is even more limited than a jural compact in its authority over land. Because these two kinds of sub-compacts are so limited in their inherent power over land, and because a secular social compact only exists to coordinate the functions of these two sub-compacts, it’s reasonable to wonder where this power "To regulate Commerce with foreign Nations, and among the several States, and with Indian Tribes", comes from. Did the framers just make it up, or is it, at its roots, rationally consistent with the metaconstitution and natural rights polity?
If commerce across international borders, i.e., "with foreign Nations", poses, or is likely to pose, a threat to anyone within the territorial jurisdiction of this secular social compact’s jural society, and if this threat is significant enough to be deemed a delict, then this jural compact has subject matter jurisdiction, and therefore authority to regulate such commerce across its international borders. In fact, if the united States were a genuine natural rights polity, and some given foreign nation were not, then trade with such foreign nation would be riddled with risk of infiltration of bio-weapons, nuclear suitcase bombs, poisonous foods, etc., all of which would require inspection. Such inspection costs money, so it’s reasonable that whoever was importing such goods would need to pay some kind of inspection fee. Such fees should not be deemed a revenue source so much as an offset to the expense of the inspection. Under such circumstances, it’s reasonable to see a need for Congress to have power to regulate commerce with foreign nations.
If the united States were a genuine natural rights polity, and if Indian Tribes encompassed by the territorial jurisdiction of the secular social compact’s jural compact were not committed to the natural rights polity, then it’s reasonable that Congress would have power to regulate commerce with Indian Tribes, for reasons similar to those given for foreign Nations.
If all the States were genuine practitioners of the natural rights polity, then there would be practically no reason for the general government to regulate commerce between the States. But the States are not such practitioners, even though the Constitution was a major step away from the authoritarian regimes that marked practically all of human history before it. Likewise, the Constitution itself, at a face-value reading, also doesn’t define a genuine natural rights polity. The metaconstitution should be understood to be a set of interpretational policies aimed at converting the Constitution into the natural rights polity through interpretation. Similar to the way the courts have used loose constructionism to reinterpret the Constitution to turn it into a socialist and authoritarian scheme, the metaconstitution is a way to interpret the Constitution by way of the belief that the framers on the whole were aiming at the natural rights polity, not authoritarianism. In fact, between the formation of the Articles of Confederation and the formation of the Constitution, none of the States was close to practicing the natural rights polity. In fact, many States had trade barriers, in the form of tariffs, between States. The historical fact is that the Constitution gave Congress the power to regulate commerce between the several States primarily for the sake of eliminating the trade barriers between the States under the Articles of Confederation. Because of the long-term domination of loose constructionism in the courts, Congress’s power to regulate commerce between the States is generally understood to be something entirely different from this.
Let’s assume that citizen Y tries to trade with any one of these three entities mentioned in the clause, and let’s assume that citizen Y consented to abide by this regulation of commerce at the time that he/she consented to be a citizen. Assuming that the citizen’s informed consent was freely given at citizenship declaration, his/her further consent to abide by this regulation of commerce is not necessary. If this citizen’s informed consent was not freely given, then the citizen is in fact a denizen and not a citizen. But let’s assume that regulation of commerce regarding these three entities is restricted to what’s reasonable under the natural rights polity, as just indicated. This would mean that this restricted regulation of commerce would be reasonable regardless of whether the entity doing the trading was a citizen or a denizen.
Regardless of whether the Constitution is a compact with States, or a compact with the individual citizens of the States, 2 in our times, this regulation of commerce is not limited to these three entities, but intrudes into the personal lives of practically every citizen of every State. There are two different things that we need to do for the sake of clarity. First, we need to ask whether the products that are the objects of this "Commerce" are somehow a threat to the property rights of individual citizens. If such products are indeed such threats, then this might be grounds for the jural society to "regulate" the movement of such products across the geographical boundaries of the United States (the nation as a whole), across the geographical boundaries between States, and across geographical boundaries between States and Indian Tribes. — Second, we need to examine more closely how ecclesiastical societies function within the guidelines of these basic jurisdictional principles. We need to do the latter to see if there is a way that the general government might function as a legitimate ecclesiastical society, and in so functioning, regulate commerce in the manner prescribed by Article I § 8 clause 3.
(1)Since threats are legitimate grounds for injunctions within traditional Anglo-American jurisprudence, and since an injunction is an equitable remedy within the same jurisprudence, there might be grounds for claiming that the jural society has a duty to install a set of permanent injunctions against such threats. 3 Such permanent injunctions would, in effect, be regulatory restraints against such threats. For example, if no one were watching our borders, it would be simple for foreign terrorists to bring nuclear suitcase bombs and bio-weapons across the border. Domestic terrorists might even import such threats without restraint. No sane country would allow this, and no sane citizen would tolerate it. It’s reasonable to believe that every weapon of mass destruction is inherently a threat. Such weapons demand permanent regulatory injunctions so that the threat is curtailed. 4
In contradistinction to this, some people are threatened by things by which other people are not threatened. Some people might be threatened by butterflies. Here’s a real-world example of this kind of threat: Some people demand that the government regulate everything that people eat, drink, smoke, or take as any kind of drug or medicine. The general government has definitely overstepped the limitations established by (a)"foreign Nations", (b)"among the several States", and (c)"with the Indian Tribes", with regard to what people put into their bodies. It has established agencies like the Food and Drug Administration and the Drug Enforcement Administration to act as "big brother" towards every private citizen of every State, totally ignoring State boundaries and jurisdictions. According to the global covenant, by interfering with what a given human being puts into his or her self, according to his or her own private conscience, the general government and the State governments are violating private property rights on a massive scale, and perpetrating bloodshed against citizens ad nauseam. — Such regulatory injunctions established by Congress are by no means limited to the commerce that pertains to what people eat, drink, smoke, or otherwise put into themselves. They are also no longer limited to national and State borders. We are therefore being led to conclude that with the exception of a few types of extremely dangerous products that inherently demand regulation (i.e., "weapons of mass destruction", disease control, and pest control), Congress – through this regulation of Commerce clause – is perpetrating bloodshed against its citizens on a massive scale. But before we accept this conclusion, we should examine more closely how ecclesiastical societies function within the guidelines of the global covenant. Perhaps there is some kind of general ecclesiastical society that has legitimate grounds for regulating Commerce on this grand scale (or on any scale).
(2)The basic assumption behind the existence of a broadly defined ecclesiastical society is that the parties therein consent to being party. The same is true of any kind of social compact as a whole, except that the jural society’s need to establish a geographical jurisdiction, for practical reasons, entails that if a person doesn’t want to be party to the social compact, then such person needs to either vacate that geographical jurisdiction, or be allowed to have the status of denizenship. — When we examined the Abrahamic Covenant in the hermeneutical prologue, we determined that many people within Abraham’s social compact were probably too overwhelmed with other concerns to think through all the ramifications of consenting to being party to his social compact. So rather than think it all through, they simply acquiesced, thereby becoming party by default. It’s true that Abraham practiced slavery, and thereby practiced institutionalized bloodshed. It’s also true that this was probably a necessary concession to the level of human fallibility common to his day. It’s also true that most of his slaves probably acquiesced to being party to his social compact, the males acquiescing to being circumcised. This is probably true because it was probably more convenient for them to remain slaves than it was for them to risk running away, or to risk being exiled. It’s also true that if humanity doesn’t focus on improving, then humanity will backslide into allowing history to repeat itself. — The point of reviewing these facts about the Abrahamic Covenant is to remind us that acquiescence within a society, and within a social compact, is probably generally more common than consent. And that’s OK, as long as the acquiescence is not coerced. Either acquiescence or consent will suffice to make the contracts adjudicated by a strictly defined ecclesiastical society lawful and functional. But as soon as someone is being forced to conform to a societal standard, we need to take issue with that acquiescence, because it’s coerced. When there is institutionalized force, and broad-based acquiescence, it’s essential to investigate whether bloodshed is being perpetrated.
in the midst of America, say, in one of the States in middle-America, a group of people get together, where all such people having capacity, agree to live in a certain way. Suppose they all agree to live by the Bible, committing themselves to upholding biblical standards of morality. Suppose these agreements form the basis upon which they commit to conducting commerce, educating their kids, respecting one-another’s private property, adjudicating disputes, worshipping God, marking a distinction between themselves and the rest of America, etc. Suppose this group of people becomes owners of a single, large, contiguous chunk of real property. Suppose this group of people own this real property outright, with no liens or mortgages or anything of that nature against this property whatever. Suppose this group of people even registers their absolute ownership of this contiguous chunk of land with the State, thereby ensuring the legal sovereignty of their broadly defined ecclesiastical society over this land. Suppose that in order to ensure that the lifestyle to which they pledge themselves holds sway over this land, they all agree to the terms of a covenant that they agree will govern the use of all of this land. Suppose they divide this contiguous chunk of land into parcels, where each family owns at least one parcel. Suppose that this community is formed on this land through the agreement of all that have capacity, and suppose that this community operates harmoniously and prosperously for a number of years. — Now suppose that a child is born to one of the families in this community. Suppose this child is raised and educated within this community. Suppose that after this child reaches the age of majority, he decides that everything that the community is built on is bunk. Suppose he starts randomly and regularly violating the rules laid down by the founders of this broadly defined ecclesiastical society. In order to maintain the standards of their community, what do the elders of this community do? — The options open to the community are (a)change the standards to fit the rebel; or (b)give the rebel the option and help to conform to the standards; or (c)if the rebel still refuses to comply, exile the rebel from the community until such time that the rebel repents.
If the rebel’s behavior is not bloodshed, then the powers and authority of a jural society do not rightly apply to his behavior. If his behaviors are bloodshed, then that’s an altogether different issue whose remedy we’ve addressed plentifully elsewhere. So let’s assume that his behaviors are not bloodshed. Let’s assume that he does things like (a)yelling during worship services, (b)using foul language regularly, (c)insulting elders, (d)spitting tobacco on so-and-so’s coffin during a funeral service, (e)farting and making lewd noises during prayer services, (f)having consensual sex with unmarried female parties to the ecclesiastical compact, and (g)having non-consensual sex with his own livestock on his own property. Suppose this rebel does all of these things regularly and habitually, and suppose he absolutely refuses to reform. And suppose he became an owner of a parcel of land within this covenant community prior to the time that he started behaving this way. And suppose he committed to being a party, and to abiding by the terms of the covenant, prior to his taking possession of this parcel of land. What does the ecclesiastical society do? — If it’s written into the covenant that after the community has attempted to help such a party to reform, and after the party continues to rebel against community standards, that the community’s remedy to this situation is to expel this party from the community, with all this expelled person’s land and all the chattel that he leaves on the land going to the community’s highest bidder, then that’s precisely what will happen to this person. He will contractually forfeit his real property to the community, at which time the community will sell the property to the highest bidder, and he will be exiled from the community, and his presence within the geographical jurisdiction of that ecclesiastical society will be treated as a trespass. — Since social compacts that are based on unanimous consent are rare, let’s consider what would happen to this rebel if the community operated by majority rule. It’s reasonable to assume that this ecclesiastical society was based on some kind of compact / covenant that allowed for such compact / covenant to be amended. So the options open to the community were, (a)change the standards of the community to fit the rebel, and do so by majority rule rather than by unanimous consent; (b)help the rebel to conform to the existing standards; or (c)exile the rebel. The main difference between unanimous consent and majority rule is that in majority rule, all parties have agreed in advance to acquiesce to the majority’s decision. This would be one of the terms of the compact to which each party agrees at the time that they become party to the compact.
Now that it’s laid bare how human law within a broadly defined ecclesiastical society operates by consent – including the prior consent of the rebel, where such consent was given when he became a party with capacity – we can return to the original question: Within the guidelines of the global covenant, is there a legitimate way for Congress to "have Power . . . To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes", and to do so by such ecclesiastical mechanisms? — Please notice that the only jural grounds for such regulation of commerce is if the products being conveyed are "weapons of mass destruction" or other things that obviously threaten damage to person and/or property. Also please notice that we’ve already ascertained that it’s extremely unlikely that all the citizens of all the States would give prior consent to such regulation of commerce. Such unanimous consent was not given at the time of the ratification of the Constitution, and it has never been given since. In fact, we can surmise that as a general rule, the larger the population of human beings, the less likely unanimous consent is about anything. 5 All this is leading us to conclude that there is no ecclesiastical mechanism by which Congress has sound moral grounds for regulating commerce. But before we make a final conclusion about this, we should consider the possibility that the thirteen States that ratified the Constitution were ecclesiastical societies.
It’s true that each of the thirteen states had elected representatives, legislatures, etc. But it’s also true that not all people who were old enough were allowed to vote. Women were not allowed to vote. Slaves were not allowed to vote. Often people who did not own land were not allowed to vote. In short, most of the adult populations of each of those thirteen States did not have the ability to consent to issues internal to their own State, much less to Article I § 8 clause 3 of this new Constitution. Some of the colonies started out as sincere attempts at creating genuine ecclesiastical societies (broadly defined) based upon Biblical principles. For example, the history of the settling of New England by the Pilgrims and Puritans still echoes in some quarters of modern American culture. But the fact is that in every one of these States, such endeavors quickly gave way to more commercial interests and concerns. So by this unanimous consent standard, none of these States were ever lawful ecclesiastical societies in the broad sense of that term. So there’s no way a general ecclesiastical society could be built on the shoulders of these hypothetical State ecclesiastical societies.
We’re bound to conclude that there was no ecclesiastical mechanism by which Congress had sound moral grounds for regulating commerce across any borders, or in any way. As long as we understand "regulate Commerce" to be some kind of proactive action taken by government, the only lawful such action is some kind of legislative injunction against a whole class of potentially delictual threats. This means that the framers were wrong in their original intent, because they did not spell this out. They should have marked the distinction between delicts and more ecclesiastical desires, if they intended to avoid all the pits and ditches modern implementations of the Constitution have entered.
According to legal historians, one of the main reasons for instigating the Constitutional Convention in 1787 was because the various States had created obstacles to interstate commerce, like protective tariffs. Such obstacles were an impediment to the confederacy’s prosperity. The framers almost unanimously hoped to eliminate such barriers. 6 — If the State social compacts had been created by unanimous consent, and then ruled by majority rule, where all State citizens pledged consensually to abide by such majority rule, then if trade barriers were erected by one State against another, then the existence of such trade barriers fell naturally under the jurisdiction of the State’s narrowly defined ecclesiastical compact. But if a single individual lived within the geographical jurisdiction of that State; where such individual had capacity; where such individual had never pledged to be party to the compact thus ruled by majority rule; and where such individual was directly and negatively impacted by such trade barriers; then such trade barriers were bloodshed against this individual, because such trade barriers violated this individual’s property rights. Given that many people in 18th century America were denied the vote, even though they otherwise had capacity, it’s difficult to see how such trade barriers could fall within the lawful jurisdiction of a lawful ecclesiastical society. We’ve already seen that such trade barriers cannot be lawfully executed by a jural society except as lawful injunctions against real and serious threats. Since there is virtually no sign that the framers or their fellow citizens clearly distinguished the jural and ecclesiastical functions of government, we conclude that such trade barriers almost inevitably imposed an unlawful abuse of property rights on some individuals, and this abuse of property rights was almost inevitably bloodshed perpetrated by the State government. — We’re led by this inevitable chain of reasoning to conclude that when the framers mentioned "regulate Commerce" in Article I § 8 clause 3, they were speaking largely of eliminating trade barriers between States, where such trade barriers were unlawful from the point-of-view of the global covenant.
If all subsequent legal conceptions of "regulate Commerce" were aimed at eliminating unlawful trade barriers, our country might be in fine shape today. Given that the obstacles to commerce that they were trying to eliminate were tariffs created by State governments, the original intent of the framers, regarding "regulate Commerce", may have been largely lawful. But their understandings of the distinctions between jural compacts and ecclesiastical compacts – at least their expressed understandings – were insufficient to keep this clause from being grossly abused.
Before the Welfare State:
In the jurisprudence of the supreme Court, the regulation of commerce with Indian tribes, and with foreign nations, has never been especially controversial. But the regulation of commerce "among the several States" "generated more litigation between 1789 and 1950 than any other clause in the Constitution and eventually became the single most important source of national power". 7 There was not much debate over the Commerce Clause at the Constitutional Convention. The first decision by the supreme Court that interpreted the Commerce Clause was Gibbons v. Ogden (1824). New York had granted a monopoly of steam navigation on its waterways. The supreme Court held that the monopoly violated a statute of the general government. In writing the opinion, Chief Justice John Marshall said that the general power to "regulate Commerce" "acknowledges no limitations, other than are prescribed in the Constitution". 8 Cracking a Pandora’s box of unlimited general regulation, Marshall indicated his belief that "among the several States" should be understood to not be limited to commerce that crosses State borders, but such regulation "may be introduced into the interior". 9 But he stopped short of claiming absolute power for the general government by saying that commerce "which does not extend to or affect other states" is outside the scope of general regulatory powers. 10
Like Gibbons, most of the general Commerce Clause cases between 1789 and 1887 involved State laws that were alleged to create "unconstitutional burdens on interstate commerce". 11 They were therefore generally cases that acted to implement the original intent of the framers – to eliminate unwarranted barriers to interstate commerce, where such barriers were created by the State governments. But Marshall’s expansive interpretation of the Commerce Clause – acknowledging "no limitations, other than are prescribed in the Constitution", and making allowances for general intervention "into the interior" of the States – along with the Court’s general lack of appreciation for the difference between jural and ecclesiastical jurisdictions, left the whole general government free to expand its propensity to "regulate". This eventually allowed the creation of the first regulatory agency of the general government, via the Interstate Commerce Act of 1887, which was followed in 1890 by the Sherman Antitrust Act. Such interference in commerce would eventually lead the general government to be more of an impediment to merchants and traders at law than the States ever were.
The Interstate Commerce Act created the Interstate Commerce Commission, which was made up of five people selected by the President. This commission was empowered to oversee railroad companies whose lines crossed State borders. Its assignment was to make sure freight rates charged by the railroads were "just and reasonable". It didn’t have the power to set rates, but it did have the power to prohibit certain otherwise legal business practices, examine contracts, compel cooperation with investigations, force production of annual reports, and force adoption of a uniform accounting system. — If the railroads were privately owned, then how did Congress ever get power to interfere with them? Did they pose a threat – a real and present danger – to anyone?
The original intent of the framers, regarding the Commerce Clause, was primarily to eliminate trade barriers that were created by State governments. That this is true can be seen also by looking at their attitudes towards monopolies. — During the reign of Queen Elizabeth I, royal patents were commonly given to private companies and individuals. These patents were essentially grants of exclusive privileges to trade in certain commodities or to trade along certain trade routes or in certain places. By the time King James I became the reigning monarch, there was widespread resentment against monopolies and the royal patents that enabled them. As a result, James I believed that such royal patents / monopolies were counterproductive – that they limited trade and thereby crippled business, prosperity, and tax revenues. The judges in his courts agreed with him and often held that monopolies violated the common law. This attitude was codified in 1624 in the Statute of Monopolies, 21 James I, Chapter 3, which held that all royal monopolies not only violated the common law, but also violated the fundamental law of England. The only exception allowed in this statute was an allowance for temporary grants of patents for invention. The same basic laws were common in the colonies at the time of the War for Independence. In fact, when Thomas Jefferson was in France, he realized how debilitating monopolies granted by the monarchy were, calling them "shackles on commerce". In his letters he called for an explicit constitutional prohibition against government-granted monopolies. 12 Likewise, George Mason "was afraid of monopolies of every sort". 13 It’s obvious that grants of monopoly were anathema to the prevailing values of the framers. So the "regulate Commerce" clause was never intended to imply that it was OK for the general government to randomly establish monopolies. This is clear in spite of the fact that the Constitution granted Congress power to establish a monopolistic hold on road building and post offices. 14 The latter two instances of monopoly are just more proof that the Constitution was a "sheaf of compromise". 15 The evidence is clearly against grants of monopoly made by the general government.
But just because the evidence is overwhelmingly against interpreting the Commerce Clause to allow general grants of monopoly powers, does this mean that the evidence is overwhelmingly in favor of doing the opposite? In other words, is it legitimate to interpret the Commerce Clause (a)to assume that monopolies develop naturally in any economy that is not planned and centrally controlled, (b)to assume that such natural monopolies are inherently evil, and (c)to assume that it’s the general government’s job to eliminate such monopolies?
These assumptions are essentially assumptions made by 19th century socialists and communists like Karl Marx. They are not assumptions likely to have been made by any of the framers. It’s far more likely that the consensus among the framers was that a monopoly granted by one of the States might have an adverse effect on trade across that State’s borders. Such trade would need to be regulated in the same way that interstate tariffs would need to be regulated. They would need to be regulated for the sake of eliminating artificial barriers to interstate commerce. With these things understood, we can return to the Interstate Commerce Commission.
After the War Between the States, the general government "subsidized railroad and canal building, the improvement of harbors, the establishment of rural roads and state lines, and the operation of international steamship companies.". 16 State officials and officials of the general government often gave land and money to these transportation entrepreneurs. So grants of privilege and largesse from public coffers were often made. Monopoly grants had been odious to most Americans, but not so much so to followers of the Hamiltonian national consolidation. So many of these grants were covert. Nevertheless, they gave inordinate economic power to these transportation entrepreneurs as surely as Queen Elizabeth’s royal patents had done likewise. So Congress and the State legislatures came under great pressure from the general population to do something about the apparently abusive trade practices of these transportation entrepreneurs. Like the "trusts" addressed by the Sherman Antitrust Act, the railroads were perceived to be monopolistic businesses that hurt the little people. So Congress responded by passing these laws to "regulate Commerce".
If these transportation entrepreneurs had developed without any government assistance, and if they were privately owned, any government regulation would have been a violation of property rights, both as a regulatory taking and as a violation of the unalienable Rights to contract. But even though these businesses may have been privately owned, like the Queen’s royal patents, they were in essence royally subsidized. They created a government-induced market distortion as surely as Elizabeth’s monopolies. People complained. Rather than acknowledging their complicity in the creation of these market distortions, politicians listened to the "intellectuals" of their day, and made erroneous assumptions about how a market based entirely upon consent operates. Rather than fixing the original problem by ceasing the dispensation of unlawful privileges, the government created a regulatory agency to do two things: (1)pretend to fix the problem, so that the people would believe the problem was fixed; (2)create more market distortion by interfering with private property. — This pattern has been repeated ad nauseum since 1887: (a)The government creates a problem by misusing its taxing, spending, or other authority. (b)The government misidentifies the cause of the problem by blaming someone or something other than the government itself. (c)The government creates a pseudo-solution, thereby creating an all-new and different problem. The government repeats this loop until the entire society is tied in such knots that it will inevitably implode.
The Sherman Antitrust Act was specifically designed to prohibit monopolies, especially interstate monopolies. The first section prohibits contracts that restrain interstate commerce. The second section prohibits any one from monopolizing such trade. The third section gives details about how to prohibit restraint of trade. The implicit assumption behind both such "restraint" and such monopolization is that government has no hand in the creation of such restraint and monopoly. The assumption is that such restraint and monopoly are the natural by-products of free trade. This shows that even as early as the last quarter of the 19th century, Americans were being influenced by Marxist ideas. Karl Marx is the paragon of such assumptions, even though he was certainly not the only person to expound them.
In any competitive business, business people naturally try to do their best to present the best product or service that they can. When they present a better product or service than their competitor, the vagueness of the Sherman Antitrust Act makes them vulnerable to being accused by regulators of restraining trade, and attempting to monopolize their industry. The Sherman Antitrust Act therefore claims that an activity is malum prohibitum, when in fact, such activity is an unalienable Right. Simply producing a better product than someone else cannot possibly be rightly called bloodshed. The Sherman Antitrust Act therefore doesn’t regulate business. It simply gives government a club with which to arbitrarily threaten businesses. Over the history of this act, huge and powerful businesses have often gone untouched, while smaller businesses have been terrorized, sued, threatened, and disbanded, all with extremely arbitrary motives. 17
During the last quarter of the 19th century, the supreme Court often tended to constrain Congress’s delegation of regulatory power. Not only did the Court restrain Congress, but after the 14th Amendment was ratified, it also tended to constrain the States’ regulatory powers. This is because the 14th Amendment prohibits States from depriving "any person of life, liberty, or property, without due process of law". So the abuse of property normally inflicted by State governments was then being inhibited. Even though the supreme Court tended overall to limit both general government and State regulatory interference with private property and the right to contract, there were also decisions during this period that set precedents for future regulatory abuse. For example, in Munn v. Illinois, Chief Justice Waite wrote, "Property does become clothed with a public interest when used in a manner to make it of public consequence, and affect the community at large. When . . . one devotes his property to a use in which the public has an interest, he . . . grants to the public an interest in that use in which the public has an interest, and must submit to be controlled for the common good.". 18 Even though Munn "upheld legislative power to control railroad rates, it also ruled that governmentally set rates were not subject to judicial review". 19 Chicago, Milwaukee & St. Paul Railway Co. v. Minnesota, via Justice Blatchford, said, "If the company is deprived of the power of charging reasonable rates for use of its property, and such deprivation takes place in the absence of an investigation by judicial machinery, it is deprived of the lawful use of its property, and thus, in substance and effect, of the property itself, without due process of law and in violation of the Constitution of the United States." 20 So the Court had an inclination to protect private property, but by no means a flawless inclination.
In Lochner v. New York (1905), the Court negated a State law that fixed maximum hours for bakers, on the grounds that the law violated the freedom to contract. In United States v. E. C. Knight Co. (1895) the Court made a clear distinction between manufacturing and commerce, and indicated that manufacturing was outside the scope of the "regulate Commerce" clause. These and other decisions tended to impede regulators. But shortly after the turn of the century, the Court started abandoning the distinction between manufacturing and commerce. In Swift & Co. v. United States (1905), the Court held that a price-setting agreement between meat-packers was a restraint on commerce, even though the "restraint" was a contractual agreement between private citizens, and even though it was local, and not necessarily across State borders. Justice Holmes wrote for the majority, indicating that "the movement of cattle from one state to another for meat processing and subsequent shipment of meat to other parts of the country constituted a ‘typical, constantly recurring course,’ a current or stream of commerce, and the effect of local price-fixing upon interstate commerce was not ‘accidental, secondary, remote or merely probable’". 21 This conception came to be known as the "stream of commerce" doctrine. "Eventually the doctrine became the basis for upholding the economic legislation of the late New Deal years.". 22 This stream of commerce doctrine opened Pandora’s regulatory box still more, thus making property rights immensely more vulnerable to government perpetrated bloodshed.
In Anglo-American jurisprudence, "Police power is the exercise of the sovereign right of a government to promote order, safety, health, morals and general welfare within constitutional limits and is an essential attribute of government.". 23 According to the global covenant, there is a clear distinction between two very different types of police power, jural and ecclesiastical. "[T]he Constitution nowhere permitted Congress to legislate in behalf of the public health, morals, safety, or welfare.". 24 In other words, by any reasonable reading of the Constitution, police powers of the general government are extremely restricted. From the point of view of the global covenant, general police powers should be restricted almost exclusively to jural police powers. According to the original intent of the framers, police powers generally are "reserved to the States respectively, or to the people". 25 But given the 14th Amendment, the police powers of the States are also extremely restricted. 26 This means that police powers generally are "reserved" not to the general government, and not to the States, but to the people. But Congress has found a way to legislate on behalf of general police powers, "by indirection". It has done so through the Commerce Clause. 27 — In Champion v. Ames (1903), 28 a statute of the general government aimed at eliminating the trafficking of lottery tickets across State lines was challenged. The Court held in favor of the statute. In this decision, "both proponents and opponents viewed the decision as establishing a de facto federal police power.". 29 Even if this usurpation of police power by the general government was not malicious, there’s no doubt that it’s pernicious.
In the Lochner case, Justice Peckham, who wrote the majority opinion, speaking of the New York law that limited the maximum hours that bakers could work, said that "There is no reasonable ground for interfering with the liberty of a person or the right of free contract, by determining the hours of labor, in the occupation of a baker . . . . They are in no sense wards of the state.". 30 This opinion is certainly consistent with any reasonable reading of Article I § 10 paragraph 1, which says, "no State shall . . . pass any . . . Law impairing the Obligation of Contracts". 31 Besides that, human beings have an unalienable Right to contract, so long as such contract doesn’t constitute bloodshed. — But three years later, in Muller v. Oregon (1908), the supreme Court reversed its position in Lochner. Oregon had a law that limited women’s labor in factories and laundries to ten hours a day. The Court found in favor of the law, thereby in effect claiming women to be "wards of the state", incapable of bargaining for themselves. In 1917, in Bunting v. Oregon, the Court upheld a 1913 law that set maximum hours for both men and women, thereby making both men and women "wards of the state".
These cases have nothing to do with interstate commerce, but everything to do with the general government’s violation of the rights of private citizens to contract. But the arrogation of police power by general government during the early part of the 20th century was just getting started. In the Shreveport Rate Cases (1914), the Court claimed that the "interstate and intrastate transactions of carriers are so related that the government of the one involves the control of the other, it is Congress and not the State, that is entitled to prescribe the final and dominant rule". So as of 1914, the Interstate Commerce Commission was taking control not only of interstate railroad rates – which was inconsistent with a studied view of the original intent of the framers, since it focused on regulating private property, rather than on eliminating State-created barriers to interstate commerce – but this commission was also taking control of intrastate rates – again violating private property rights and the unalienable Right to contract.
The early part of the 20th century is sometimes called the "progressive era" because the common view of progress at that time was one of consolidating general police powers in the national government. In the same way that the War Between the States had laid new foundations for a consolidated nation, and abandonment of the framers’ concept of a confederate republic, 32 the "progressive era" aimed at further consolidating the nation. It laid the foundations for the massive expansion of national police powers that occurred during the "Great Depression". It’s impossible to understand this nationalization of power without understanding the cause of the depression. The best way to understand the cause of the depression is to understand the cause of the stock market crash in 1929.
Great Depression: 33
The depression was caused by deflation. The start of the deflation goes to the stock market crash in October, 1929. Although understanding the stock market crash gives us an at least partial understanding of what caused the depression, it doesn’t tell us anything about why the depression lasted so long. — There had been a huge credit expansion throughout most of the 1920s. The central bank – the Federal Reserve system created by Congress via the Federal Reserve Act of 1913 34 – was the protagonist in this credit expansion, by way of its rediscount policies, etc. 35 The easy credit was used largely to buy stocks, so stock prices became extremely inflated during 1927-1929. 36
The demand for stocks, and the rise in stock prices, was driven especially by loans to stockbrokers. Stocks that were bought on margin were a crucial cause of the crash. People who buy stocks on margin pay only a small part of the price of the stock, and borrow the rest from the broker. If the stock price rises greatly, the buyer can make a large profit on a small investment. But the broker can demand payment on these loans at any time. — Marginal buying became extremely popular during the late ‘20s. It was a binge of stock speculation enabled by the Federal Reserve Board’s credit expansion policies. 37
By 1929 it was clear to some that prices on common stocks had virtually no relationship to any profit that might come from dividends. The Federal Reserve Board sent this message to member banks: "The Federal Reserve Act does not . . . contemplate the use of the resources of the Federal Reserve Banks for the creation or extension of speculative credit. A member bank is not within its reasonable claims . . . when it borrows either for the purpose of making speculative loans or for the purpose of maintaining speculative loans." 38 Shortly thereafter, President Herbert Hoover tried to persuade "Reserve Banks to refuse rediscount to banks which were lending largely on stocks.". 39 The Federal Reserve Board eventually raised the rediscount rate to 6 percent. This stroke of credit contraction is probably the proverbial straw that broke the camel’s back. 40
There was not any significant expansion of the money supply after the end of 1928. So credit contraction, deflation, and depression were inevitable. The stock market crashed on October 24, 1929. There was already a significant sell-off happening by the beginning of October. The sell-off escalated until there was "wild selling and a disastrous break in prices on October 24". 41 Margin brokers called for more money to cover their loans, so many stocks were sold. Many people had to withdraw their deposits from banks, and the banks were compelled to call in loans. In spite of efforts by major bankers in New York City to steady the market, the wild selling continued until the bottom fell out of the market on October 29. Many investors were totally wiped out. 42
Although the credit contraction may have started earlier, it became an obvious fact of everyday life when the stock market crashed. It immediately motivated margin buyers to search everywhere for cash so that they could keep their stocks. This is part of what started the liquidity crisis that happened when huge numbers of people were trying to turn their assets into cash. But the credit contraction also made it desirable for ordinary people to liquidate their assets. So this credit contraction produced a giant liquidation. 43
In this situation, if the credit contraction / liquidation / deflation / depression is allowed to fully run its course, unimpeded by government interference in the economy, it is the first stage of a recovery. A credit expansion is comparable to a fever. It is an abnormal state for an economic system in the same way that a fever is abnormal for a human body. When the fever breaks and the body temperature returns to normal, recovery begins. A time was needed for people to pay their debts and accumulate a surplus. But debt payment is difficult during a deflationary period because liquid assets are scarce. 44
During the 1920s, the United States had become the world’s largest creditor country. The American credit contraction drastically impacted European nations. Their debt payments to Americans shriveled up and died. As a result trade with foreign nations was reduced radically. Domestic unemployment became prodigious, and domestic industrial production shrank. Even so, by the end of the summer of 1932, there were signs of recovery.
During the Hoover administration, the general government intervened in the economy to curtail liquidation and deflation. Instead of allowing the fever to run its course, the government was in effect trying to keep the fever going. They tried to keep wages and prices artificially high, rather than allowing them to accommodate to the reduced money supply. These efforts only prolonged the problem. 45
Bank closings increased between October, 1929 and 1932: 659 in 1929; 1,352 in 1930; and 2,294 in 1931. According to Hoover’s memoirs, this was 25 percent of the total number of banks. 46 Hoover also claimed that congressional investigations into the banks indicated "a rottenness far worse than even I had anticipated". 47 The banking system was definitely at the heart of all these problems. Specifically, fractional reserve banking was at the heart of all these problems. 48 Federal Reserve banks were responsible for creating the fever by artificially inflating the money supply, and promising to pay demand depositors money they didn’t have. — As part of the Hoover administration’s efforts at curtailing liquidation and deflation, it tried to keep banks afloat, rather than allowing the fever to run its course. Hoover did this by expanding government aid for farm credit and home loan credit, and by creating the Reconstruction Finance Corporation. These efforts probably reduced the rate of bank failures, which were 1,456 in 1932, a 40 percent decline. But the credit contraction was not allowed to run its course. The government’s interference only delayed the inevitable. 49
Although the Hoover administration had not introduced any new regulatory programs, and even though they didn’t attempt to centrally control business activity or to establish government-run businesses, their intervention in the economy prolonged the economy’s adjustment to the credit contraction. The adjustment and recovery might have been close to complete by the end of 1932 if the government had taken a hands-off approach. 50 Instead, by February of 1933, the force of liquidation returned, threatening the entire banking system with collapse. A full-blown banking panic was under way by the middle of February. As rigor mortis started to set into the country’s financial machinery, the commercial and industrial machinery also started freezing up. 51
By the time Roosevelt became President in March, 1933, he almost certainly had already decided to eliminate the gold standard. But the problem wasn’t with the gold standard. It was with fractional reserve banking. 52 By eliminating the gold standard, Roosevelt would be taking what little control ordinary people had over their money, away from them. — Even though Hoover tried to artificially keep the credit expansion alive, he was committed to the gold standard, and he opposed a government managed currency. In contrast, Roosevelt had no commitment to the gold standard, and favored a government-managed currency. In his memoirs, Hoover said, "Currency convertible into gold of the legal specifications is a vital protection against economic manipulation by the government. As long as currencies are convertible, governments cannot easily tamper with the price of goods. . . . They cannot easily confiscate the savings of the people by manipulation of inflation and defalcation. . . . " 53 Also, when currency is convertible to gold, anyone who attempts to manipulate the money supply can be called to account. 54
When Roosevelt took office, he did not call the money manipulators to account. The credit expansion had happened through manipulation of the money supply. All the bank closings were the result of ordinary people trying to distill the currency down to its foundation in gold. The government, through the Federal Reserve Act of 1913, had officially adulterated the money supply. 55 The depositors were trying to get it pure again. 56
Roosevelt took advantage of the banking panic of 1933 by initiating the most grandiose usurpation of power in American history, comparable only to Lincoln’s. 57 But unlike Lincoln, Roosevelt identified no singular evil, like slavery, to redeem his actions. The manipulation of the money supply by the Federal Reserve was certainly a singular evil. 58 But Roosevelt never identified this evil as such. The evil that Roosevelt identified was some kind of nebulous "national emergency". Marxists, adhering to their special mythology, claimed it was the whole capitalist system. But Roosevelt, for the sake of pursuing his home-grown breed of socialism, preferred to leave the problem almost totally unidentified, pointing first at this, and then at that. "[H]e did not identify the ideological underpinnings of what he was proposing." 59 — It was another classic case of the government creating a problem, misidentifying the problem, then creating a solution that would do little more than create another problem. But human beings are capable of enduring even totalitarian abuse for generations, as though the whole system were sublime.
Numerous decades in American history have witnessed fewer significant bills passed than were passed in Roosevelt’s first hundred days. This is because, in the name of "emergency", normal legislative procedures were truncated, or skipped entirely. Roosevelt used Congress like a rubber stamp starting with the Emergency Banking Relief bill. The Bill was designed by the executive, and accompanied by a message from Roosevelt: "I cannot too strongly urge upon the Congress the clear necessity for immediate action.". 60 The bill arrived in Congress on March 9. Before the end of the day, it had been passed by both houses, and signed by the president. Congress had practically no time to consider what they were doing. It’s reminiscent of the power the Roman Senate gave to Caesar. 61
Like Hoover, Roosevelt tried to raise wages and prices, and to reinflate the economy, thereby reintroducing the fever that was presumptively equated with prosperity. Instead, what he actually did, was extend the "Great Depression" by about a decade. The Democrat Party platform in 1932 criticized Hoover and the Republicans for trying to reestablish the credit expansion. But Roosevelt’s subsequent record as American history’s biggest deficit spender in peace-time to that date, clearly indicates that he didn’t put much stock in that platform. 62
The Emergency Banking Relief Act empowered the Treasury Department to recall all gold and gold certificates. 63 After that the government took gold away from private citizens and replaced it with fiat money. These are essentially cases of legalized theft. The consent of the average American was not requested, but his/her cooperation was coerced. In this process, Roosevelt embargoed the export of gold, thereby minimizing foreign control of the economy. Roosevelt and Congress also violated the right to contract by forbidding contracts that demand payment in gold. On June 5, 1933, Congress voided all public and private contracts that required payment in gold. 64 By taking such measures, Roosevelt saved the fractional reserve banking system. 65 But he did so with de facto laws – laws backed by the brute force of the state – that circumvented the Constitution, laws that are not de jure. Congress did not have the lawful power to void private contracts. 66 Without a constitutional amendment, Congress also lacked the power to force the States to violate the Constitution by making things other than "gold and silver Coin a Tender in Payment of Debts" (Article I § 10 paragraph 1).
By taking the country off the gold standard, Roosevelt put the country on a fiat paper currency that was managed by the government, 67 a currency that was not redeemable in substance. During the summer of 1933, Roosevelt studied planned currency theories. He became convinced that to make prices rise, the value of the dollar should fall. In other words, America needed inflation. 68
The role that the supreme Court played in this seizure of power by the general government was mixed. Congress went along with the power grab as long as Roosevelt looked like the savior in this "national emergency". The Court complied with the President with opinions like those in the Gold Clause Cases and cases involving the Social Security Act. 69 But during Roosevelt’s first administration, most of the justices still believed in the distinction between commerce and manufacturing, and in the distinction between activities that directly impact commerce versus those that are only indirect. 70 As a result huge chunks of New Deal legislation from 1933 to 1937 were nullified. 71 For example, the National Industrial Recovery Act of 1933 was declared unconstitutional in Schechter Poultry Corp. v. United States (1935). It attempted to give the president the power to make codes for fair competition, including regulation of wages and hours. It was nullified, at least partially, because it presumed to regulate intrastate commerce. 72 But beginning in 1937, most of the Court abandoned all doctrines 73 that in any way impeded the national government from accumulating power via the Commerce Clause. 74 So even though the supreme Court may have been a partial brake to Roosevelt’s runaway train, the brakes eventually burned out. The supreme Court became as much a rubber stamp as Congress. 75
"During the fifty years following the post-New Deal era Congress expanded national regulation into myriad aspects of the national life, using the Commerce Clause as the constitutional base, all with the supreme Court’s approval.". 76
The conclusion at which we inevitably arrive regarding Article I § 8 clause 3, is that the only morally legitimate grounds that Congress has for regulating commerce in any way, is the establishment of permanent injunctions against genuine, real, and imminent threats to the property rights of American citizens. 77 This lawful regulation of commerce is grounded in the jural impetus, and has no lawful foundations in the broadly defined ecclesiastical impetus. We are not calling for a violent revolution on these grounds, although violence at some point may be unavoidable. We are calling for a Glorious Revolution. 78 The accumulation of police powers by any government, where exercise of those powers is not based on consent, is inherently the operation of a "police state". Police states have more in common with protection rackets than they do with lawful governments.