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The 1918 Case That May Have Foreshadowed Obamacare's Demise

It took decades for Congress to address the problem. When, at long last, federal legislation was passed, some people raised constitutional objections, but few took them seriously. The objections required the Supreme Court to adopt unheard-of constitutional theories, hamstringing well-established powers on the basis of hysterical fears about a tyrannical federal government. Even the law’s opponents were surprised when the Court took those objections very seriously. Some warned that the Court was overreaching, and that its intervention would seriously hurt large numbers of innocent people, but the Court thought it was more important to rein in Congress. 

You might assume I’m talking about health care reform. I’m not. I’m talking about child labor—and a 1918 decision by the Supreme Court that history has not looked kindly upon. 

The parallels between the child labor issue and the health care issue are remarkable. In both cases, the legislation in question was the product of a decades-long struggle. Universal health care has famously been a goal of American liberals since Theodore Roosevelt proposed it in 1912. The movement to abolish child labor, for its part, stretches back to the first years after the Civil War: When the Knights of Labor was founded in 1869, its constitution included a provision calling for abolition of child labor, and a similar position was adopted by the American Federation of Labor when it was created in 1886. The National Child Labor Committee was organized in 1904, and the first federal law was introduced in 1906. For his part, Roosevelt supported a national study of the problem.

Only the federal government could address the issue, since no state would act on its own. Even states that did not want child labor could not afford to get rid of it if their competitors still had it. Health care presents a similar problem: Any state that provides good medical care risks attracting sick people from other states. In both cases, unless Congress took action, the problem was going to stay unsolved. And so in 1916, Congress, using its power to regulate interstate commerce, banned the interstate shipment of the products of child labor. When it defended the law in Court, the government explained that this was an interstate problem: “The shipment of child-made goods outside of one State directly induces similar employment of children in competing states.”

Both then and now, challengers to the statutes had to propose that the Supreme Court invent new constitutional rules in order to strike them down. At the time it considered the issue in 1918, there was nothing in the Supreme Court’s case law that suggested any limit on Congress’s authority over what crossed state lines. On the contrary, the Court had upheld bans on interstate transportation of lottery tickets, contaminated food and drugs, prostitutes, and alcoholic beverages.

That’s why the Supreme Court’s invalidation of the law in 1918 astounded even those who had most strenuously opposed enactment. Hammer v. Dagenhart declared—in tones reminiscent of the Broccoli Objection to Obamacare—that if it upheld the law “all freedom of commerce will be at an end, and the power of the States over local matters may be eliminated, and, thus, our system of government be practically destroyed.” Justice Oliver Wendell Holmes, dissenting, wondered how it could make sense for congressional regulation to be “permissible as against strong drink but not as against the product of ruined lives.” The Court responded that unlike all the contraband that it had permitted Congress to block, the products of child labor “are of themselves harmless.” This meant a completely novel constitutional doctrine: The Court took unto itself the power to decide which harms Congress was permitted to consider when it regulated commerce.

The decision provoked a wave of national revulsion. Congress responded that same year with a second law, a tax on products of child labor. Here, Congress presumed it was surely acting within its rights. The Constitution gives Congress a nearly unlimited power of taxation. But the Court struck down this law, too, in Bailey v. Drexel Furniture Co., a decision that is unashamedly cited by opponents of the health care mandate (who need to beat back the claim that the mandate is a valid exercise of the taxing power). “To give such magic to the word ‘tax,’” the Court thundered, “would be to break down all constitutional limitation of the powers of Congress and completely wipe out the sovereignty of the States.” According to the Court, the problem was that Congress was trying to regulate manufacturing, which was a matter reserved to the states. Edward Corwin, one of the leading constitutional scholars of the time, noted with astonishment that the decision, “overriding previous decisions, makes the Court the supervisor of the purposes for which Congress may exercise its constitutional powers.”

Hammer v. Dagenhart was overruled in 1941. That year, in United States v. Darby, the Court upheld the Fair Labor Standards Act, which included restrictions on child labor. Bailey has never been formally overruled, but it has been neglected and regarded as a dead letter—until, that is, it proved useful in challenging the mandate. It hardly seems a coincidence that some opponents of the health care mandate, such as Jonathan Adler and David Bernstein, have found themselves to be newly sympathetic to the Supreme Court’s child labor cases. They offer two inconsistent responses: Child labor isn’t really so bad, and anyway at the time every state already had a law restricting child labor. This, however, ignores the enormous variation in child labor policy: Some laws were weak; others were ineffectively enforced. 

What the Court actually accomplished in 1918 was to thwart democracy and consign large numbers of children to the textile mills for more than two decades. Health care is another context in which the fear of federal power creates a serious risk of ravaging the lives of large numbers of actual people. If the law is upheld, no one is going to be forced to buy broccoli. But if the law is struck down, large numbers of people will die of preventable or treatable diseases, or be bankrupted by medical expenses. 

The other, and perhaps most important, analogy is that the challengers to the law, ordinary folk who have been persuaded that they are fighting to preserve their liberties, are likely to be badly hurt if they win. They are frightened of federal power, but they really should be frightened of their “friends” who are trying to shake off government regulation. The prevailing claim in Hammer was made by a father whose sons had been working sixty hours per week in a North Carolina factory. He claimed that the law violated his rights by depriving him of his children’s earnings. Several years later, Reuben Dagenhart, one of those boys, reflected on the constitutional rights that the Supreme Court had given him. “We got some automobile rides” from the wealthy businessmen’s committee that had financed the litigation. “They bought both of us a Coca-Cola. That’s what we got out of it.” At age twenty, having worked twelve hours a day since the age of twelve, now with a wife and child, he said, “Look at me! A hundred and five pounds, a grown man and no education. I may be mistaken, but I think the years I’ve put in the cotton mills have stunted my growth. They kept me from getting my schooling. I had to stop school after the third grade and now I need the education I didn’t get.”

“It would have been a good thing for all the kids in this state if that law they passed had been kept,” Dagenhart continued. If today’s Supreme Court strikes down health care reform, it’s not hard to imagine future Americans expressing similar regrets.

Andrew Koppelman is professor of law and political science at Northwestern University.