final paper

MPA 611

Public and Administrative Law

Belhaven University

Unit 3

Economic Law and Policy

1

■ Economic History

■ Capitalism and Free Markets

■ The Commerce Clause, The Contract Clause,

and Business Regulation

2

Unit 3 Topics

■ 16th Amendment (1913)

❑ Allowed Congress to collect taxes from individuals

❑ Realization that import taxes caused more harm than good and

restricted access to foreign goods and markets

❑ Recognition that an alternative mechanism to fund the federal

government was necessary

■ Laffer Theory

❑ Cutting income taxes → business growth --> increased

government revenue (trickle-down effect)

❑ Higher tax rate → less incentive to operate or expand business

operations

❑ “Kansas Experiment” -- failure

3

Case Study on Taxes

■ Study of the production, consumption, and

transfer of wealth

■ Perplexing problem -- Inequality

❑ Why do some have more than others?

❑ How does economic policy explain this?

4

Economics

■ Gibbons v. Ogden

■ “Congress shall have power to regulate commerce with

foreign nations, and among the several States, and with

the Indian tribes.”

❑ Comprehends every species of commercial intercourse

between the U.S. and foreign nations

❑ No sort of trade can be carried on between the country

and any other to which this power does not extend

❑ Commerce among the States cannot stop at the external

boundary line of each State, but may be introduced into

the interior

5

The Commerce Clause

■ Article 1, Section 10 of U.S. Constitution

■ Prohibits states from interfering with private

contracts

■ Enacted to prevent state legislatures from giving

special privileges, such as waivers from debts owed

under private contracts, to friends and supporters

■ The free market should be left top operate absent

government interference in most cases

6

The Contract Clause

■ Extended equal protection to all U.S. citizens

❑ Primarily to prohibit discrimination against

African-Americans

❑ Corporations saw it as an opportunity to acquire

more rights as legal entities than their historic

charters afforded them

7

14th Amendment

■ Interstate Commerce Act (1887)

❑ Established Interstate Commerce Commission

❑ Regulated railroads, bus, and trucking industries

❑ Dissolved after deregulation of these industries

■ Sherman Antitrust Act (1890) ❑ Prevent corporations from placing unreasonable restraints

on trade through use of monopolies or other barriers to

interstate trade

■ Clayton Act (1914) ❑ Added price discrimination and exclusive dealing

arrangements to criminal violations

8

Early Business Regulations

■ Social Security Act (1935)

■ Medicare and Medicaid National Health

Insurance Program (1965)

❑ Prevent corporations from placing unreasonable

restraints on trade through use of monopolies or

other barriers to interstate trade

9

Other Regulations

■ Complete reading assignments.

■ Complete writing assignments.

■ Answer discussion questions.

■ Complete unit quiz.

10

What’s Next?

■ Fandl, K. J. (2019). Law and public policy. New

York, NY: Routledge.

11

References