Can a Federalism Amendment Lead to Liberty?

Some states are trying to fight back against the ever-menacing growth of the federal government by passing "Sovereignty Resolutions," but as Randy Barnett mentions in today's WSJ.com opinion pages,

While well-intentioned, such symbolic resolutions are not likely to have the slightest impact on the federal courts, which long ago adopted a virtually unlimited construction of Congressional power.

Barnett is a constitutional law professor at Georgetown, and he continues, describing one way in which the states really could assert their influence; by "petition(ing) Congress for a convention to propose amendments to the Constitution." The apparent goal of his proposal is to "restore a healthy balance between federal and state power while protecting the liberties of the people."

Any restriction of federal power at this point would be welcome, but what specific proposals is Barnett advocating?

One simple proposal would be to repeal the 16th Amendment enacted in 1913 that authorized a federal income tax. This single change would strike at the heart of unlimited federal power and end the costly and intrusive tax code. [bold added]

Repealing the federal income tax is perhaps one of the most important things that could be done to increase liberty, and would be a major win for individual rights. But is the ultimate goal of Barnett's proposals fully free laissez-faire capitalism, or an incremental, even pragmatic, change? He doesn't say, but his next suggestion indicates it's the latter:

Congress could then replace the income tax with a "uniform" national sales or "excise" tax (as stated in Article I, section 8) that would be paid by everyone residing in the country as they consumed, and would automatically render savings and capital appreciation free of tax. [bold added]

Barnett then goes on to detail proposed language that a "Federalism Amendment" could have. While he has some interesting ideas that would, in fact, reduce some federal influence on individual lives, the problem with such a proposal is that it does not explicitly defend individual rights. "States Rights" is not only a difficult concept to rally around, it misses the fundamental point that simply checking federal power over the individual with state power over the individual does not change the fact that individual rights are being violated.

Of course, we can't just "flip a switch" and abolish rights-violating government. But as George Reisman wrote in Capitalism: A Treatise on Economics, those who are working for a fully laissez-faire society must do so consistently and explicitly, without wavering in their pursuit of their long-range goals. This doesn't mean that interim steps are not valuable or necessary. But they cannot be made pragmatically.

Chapter 20 of his book is available in printable form on his website, and details "a basic outline of the long-range political program [a capitalist movement] would have to follow, including a description of how the most difficult steps in the program might actually be accomplished." It is a must read for those who wish to achieve such a society.

In this light, Reisman's words are both instructive and inspirational. Under the heading, "The Importance of Capitalism as a Conscious Goal," he writes:

The first thing that those in favor of capitalism must do is to make the conscious, explicit decision that they seriously want to achieve a fully capitalist society and are prepared to work for its achievement. We need to view ourselves as active agents of change, working toward a definite goal: laissez-faire capitalism.

The advocacy of laissez-faire capitalism, indeed, of capitalism in any explicit form, has not been present in the political spectrum. In the United States, the political controversies of the last several generations have been carried on between the "liberals," who stand for socialism, and the "conservatives," who stand for nothing except what other groups, including the liberals, have managed to establish as the country's tradition.

The success of the liberals/socialists in enacting their program shows that what we need is a group of educated and articulate individuals who adopt the achievement of capitalism as their goal. Such individuals, dedicated to maintaining constant progress toward capitalism, would constitute a de facto capitalist political party, even if the name of such a party never appeared on a ballot. By virtue of constantly offering their own definite program for political change, they would seize the political initiative. Instead of merely attacking the socialistic proposals of the "liberals" and then yielding to them and abandoning the fight once the proposals happened to be enacted, as is the almost invariable practice of the conservatives, they would always strive to move in the direction of capitalism. As an essential part of the process of doing so, they would never tire of assaulting intellectual targets as far behind enemy lines as possible--such as social security, antitrust legislation, and public education. Never would they accept the existing state of society as immutably given and deserving of preservation merely because it exists. Always they would seek to change the existing state of society until it represented laissez-faire capitalism.

Laissez-faire capitalism would represent their fixed star so to speak. To the extent that present conditions departed from it, they would be radical in seeking to change present conditions. To the extent that conditions in the past had approximated laissez-faire capitalism, they would be reactionary in seeking to reestablish such conditions. To the extent that present conditions were consistent with laissez-faire capitalism, they would be conservative in seeking to preserve those conditions. [all emphasis added]

How does Barnett's "Federalism Amendment" proposal stand up in this context? It's difficult to say based on just the WSJ article. In it, he does not provide a principled defense of his ideas based on capitalism or individual rights, and instead simply seeks to balance federal power by referring to the Founders' original intent in the Constitution. It has been said that, for the Tea Parties to be successful, they must fight for something positive, not just reduced government spending and taxation, and I fear that calls for "States Rights" or originalism in Constitutional interpretation will also fall flat as a rallying cry.

With that said, could not his proposal be used to move the country closer to laissez-faire, as long as it was accompanied by a principled, wide-ranging effort? Could it fit into what Reisman describes below?

The political proposals I make are short- and intermediate-range, as well as long-range in nature. I believe that it will take several generations to achieve a fully capitalist society, mainly because of the time required for the educational process. It will not be enough just to present our long-range goals. It will be necessary to advocate a whole intervening series of short- and intermediate-range goals whose enactment will represent progress toward our long-range goals. The major political task in the years ahead will be continuously to formulate such short and intermediate range goals, and to keep the country moving in the direction of full capitalism by means of their successive achievement.

I think the "Federalism Amendment" idea could be employed in this fashion, even with the transfer of an income tax to sales/excise taxes, as long as it accompanied a reduction in welfare state expenditures, and an overall significant reduction in the tax burden on all individuals. If the shift to sales taxes ends up taking the same amount of property as the income tax, and if the program is enacted without the explicit long-range intent of defending individual rights and moving toward a fully free market, then Barnett's proposal will simply serve as a temporary stop-gap at best, and a dispiriting, Tea Party-killing debacle at worst.

Barnett concludes by saying,

Could such a Federalism Amendment actually be adopted? Stranger things have happened -- including the adoption of each of the existing amendments. States have nothing to lose and everything to gain by making this Federalism Amendment the focus of their resistance to the shrinking of their reserved powers and infringements upon the rights retained by the people. And this Federalism Amendment would provide tea-party enthusiasts and other concerned Americans with a concrete and practical proposal by which we can restore our lost Constitution. [bold added]

Note the focus on state's rights, and the mention of "rights retained by the people," and ask whether this is really worth working toward. Are we trying to restore our "lost Constitution," including its original flaws, or to stand proudly, as individuals, confident in a government sworn to protect those rights? Are individual rights inviolable, or should state or federal governments dole out whatever is left after their power grabbing and regulating?

I appreciate his attempt to check federal power, and a return to the old Constitution would be better than what we have today, but it is not enough. All Barnett needs now is a principled defense of individual rights at the core of his argument, with capitalism as the ultimate goal, and we could have an important first step on the road to liberty.