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This is known as the commerce clause and it has been used by Congress to justify many of the laws it has passed to mandate what businesses can and cannot do. Over the years Congress and the courts have continued to expand the meaning of this clause until today it is used as the authority for giving Congress the power to do just about anything it wants.
The United States Supreme Court has ruled that the commerce clause gives Congress the authority to regulate all business even within a state because they have an effect on interstate commerce. For this reason, Congress feels it has the power to control every aspect of all businesses based on this decision, including regulating the labor and services needed to produce the products that will eventually be sold.
Obviously, not everyone agrees with this interpretation and for this reason, the commerce clause has been more heavily debated than any other clause in the Constitution. At the heart of this argument is the meaning of three words: "commerce," "among," and "regulate." More specifically, the debates is about what exactly is commerce, why was the word "among the states" used instead of "between the states," and does the word "regulate" give Congress total control over how commerce is to be conducted in the states or does it simply mean that Congress is supposed to standardize the rules by which everyone in America conducts their business?
Increasingly the Supreme Court has held that even manufacturing (the making and assembling of products) and farming (the growing of food, both plant and animal) comes under the commerce clause because at some point these products will cross state lines and therefore come under the right of Congress to "regulate" or control their production. This interpretation has given Congress the authority to pass laws regulating wages, working conditions, safety rules, what ingredients can and cannot be in a particular product, and has even been used to regulate the price of items. It has also led to the government telling farmers what they can or cannot grow, what kind of chemicals they can or cannot use, and even regulating the price of their products.
Those who feel that this is a violation of the Constitution's principle of small government where the government is limited or constrained in what it can do argue that the Constitution only allows the government to "regulate" or, in other words, set a common standard of rules for products that are being sold between one state and another. It is their contention that any business conducted within a state, such as what happens when products are manufactured or grown on farms, is left up to the states to control because not only do these activities not cross state lines but they are not even acts of commerce since nothing is being sold.
However, the courts have said that because these items will eventually be sold and eventually cross state lines, they are nonetheless acts necessary before commerce can take place and therefore are subject to the power of Congress to regulate them. And even when a product may not be sold outside of a state, such as with produce, the courts have held that since the material used in the manufacture of their product came from out of state (such as the fertilizer to grow food, the gasoline to run tractors or machinery, or the feed used for animals) that also can be viewed as commerce "among the several states" and therefore justifies Congress "regulating" (i.e., controlling) every aspect of the production of every item.
When critics of this concept complain that this is not what the founders envisioned by this clause, the defenders argue that the justices of the Supreme Court, who are the supreme authorities on interpreting the Constitution, have said that this is what it means. But there are a number of problems with this argument.
The first is that the decisions of the Supreme Court are rarely unanimous, meaning that not all of the justices serving on the Supreme Court always agree with one another. In fact, many of the court's final decisions have been made by a one vote margin. In other words, had one justice voted the other way the decision of the court would have had the opposite effect on the law.
This then leads to the second problem with the Supreme Court. Thomas Jefferson wrote, "To consider the judges as the ultimate arbiters of all constitutional questions [is] a very dangerous doctrine indeed, and one which would place us under the despotism of an oligarchy. Our judges are as honest as other men and not more so. They have with others the same passions for party, for power, and the privilege of their corps." To think that those who sit on the Supreme Court are not influenced in their interpretation of the Constitution by their own political ideology is to be ignorant of history and human behavior.
Supreme Court justices are appointed by the President of the United States and confirmed by the Senate and both of these offices are highly political in nature. A Democrat President and Senate will pick and support someone for the Supreme Court who is sympathetic to their ideology and the same is true if both of these institutions are controlled by Republicans. However, when one political party controls one branch of government but not the other then the confirmation process become highly contentious as the Senate does all it can to prevent the President's pick from being appointed, all based on the political views of the person being considered to sit on the Supreme Court.
The third problem with the Supreme Court argument is that, because of the differences in political views, the Court has changed its opinion on the Constitution over the years. During the early part of our country's history, the Court handed down decisions that are the very opposite of those being rendered by today's Court. In fact, this is the very reason why both political parties fight so hard to fill the Court with justices who will interpret the Constitution according to their party's political philosophy.
Then how can we determine how to understand the commerce clause as it was intended to be understood? The answer is: By understanding why this particular clause was put in the Constitution.
Everything in the Constitution is there to address a particular problem and provide a solution to correct it. More than that, during the Constitutional Convention and during all the ratifying conventions nearly every word in the Constitution was hotly debated, therefore each word in there has a specific meaning. Since all thirteen states agreed to abide by the terms of the Constitution as written , then it is important for us to understand what it was they agreed to if we are to follow a written document that is not only the supreme law of the land but which all federal officials, including the Supreme Court justices and every member of Congress, has taken an oath to uphold and defend.
Since the words in the commerce clause have created so much contention, in order to help resolve this confusion it is important for us to first understand what problems existed in America in 1787 concerning commerce and that will help us understand the solution which the Constitution provides to correct these problems.
Before the Constitution was ratified and approved, each of the thirteen States of America were bound together by a document known as the Articles of Confederation. Under this agreement, each state retained its own independent sovereignty, meaning that it ruled itself and no other governmental power could interfere with its right to make and enforce its own laws. Since this is how nations behave, the thirteen states at this point in time can be likened to being thirteen independent nations, each with their own head of state (called a governor), it's own legislature, its own court system, and its own unique set of laws. Thus, under the Articles of Confederation whenever these thirteen states met together in what was called the Continental Congress, they did so as equals, meaning that no state or group of states acting as a governmental body had the right to impose its will on any other state.
Because of this, all decisions reached by the Continental Congress, were voluntarily agreed to and those agreements were binding only so long as any state chose to abide by them. But if a state no longer wanted to adhere to the terms of any agreement they had once made, there was no way to compel them to keep their promise. Thus, any decision made by the Continental Congress was almost useless.
Since each state was sovereign, they each made their own separate agreements with different foreign countries to trade and sell items of mutual interest. As all economists know, trade is the lifeblood of prosperity, for without it a country cannot create much wealth. However, in 1787 America, not every state had the same opportunity for doing trade with other countries. Therefore, some states became quite wealthy because of their trading abilities while other states were economically poorer.
To transport goods from one country to another required ships and ships require ports where merchandise can be loaded and unloaded. The town of Boston in Massachusetts had one of the best harbors in America with New York City having the second best port while the port at Philadelphia was third in size. Those states south of Philadelphia had even smaller ports and some had none at all such as Rhode Island and Connecticut and most of the southern states. For this reason Massachusetts and New York were very prosperous while many of the Southern states were far less prosperous.
Worse yet, when new states were created, such as Vermont, Kentucky, and Tennessee, their borders had no access to the sea which meant they had no means of directly receiving or selling goods with foreign countries. Therefore they were forced to have their goods loaded and unloaded in a different state as well as transporting these goods through a state over which they had no power to control its laws.
Those states with large ports made the best of their advantage over those who had little or no ports by charging a tariff to have their goods transported across state lines. A tariff is a tax (also called a "duty") which can be added to the price of a product. When a country places a tax on the merchandise they are exporting to another country it is called an export tariff. But countries can also put a tax on a product coming into their ports from another country. This is called an import or a port tariff and these tariffs are determined by each country and they can not only be different for different countries but on different products.
For example, China could charge an export tariff on their electronics coming to America that is different than the tariff they put on the same product they are exporting to Vietnam, and that tariff might be different for pencils they are exporting to America. At the same time America could charge an import tariff for blue jeans that are coming from China. When one country raises their tariffs that another country objects to, that other country might then raise their tariffs on the offending country. This is what is called a tariff war or a trade war.
The same situation existed between the thirteen states in America under the Articles of Confederation. Those goods that a particular state wanted but had to get from other state would often have to pay an added export tax before the goods entered their state. That meant that besides the cost of transporting something from one state to another, the cost would be further increased by an added tax just for crossing the state line. This not only generated more money for the prosperous states but, at the same time, it made the less fortunate states pay much higher prices for products than their neighboring states.
For example, New York imposed a tax on all merchandise being shipped to and from Connecticut and New Jersey. Seeing this, New Jersey decided to retaliate by putting its own tax on a lighthouse owned by the state of New York but which was built on land within New Jersey's state borders. Connecticut levied a tax on all produce coming out of Massachusetts as it sailed down the Connecticut River and this led to Massachusetts retaliating by imposing an import tariff on all goods coming into its ports.
Furthermore, to attract more business from overseas, some states greatly reduced their import tariffs thereby gaining a monopoly over certain products. If other states wanted these products, they would have to have them shipped to their ports from another state and pay a high export fee.
What began to happen can accurately be described as a trade war between the states. Since merchants increase their business by selling their goods outside of their state, by having to pay added tariff fees, this either lowered a company's profits or made their product so expensive by the time it got to the marketplace that it dampened the sales for that item.
But good were not only shipped by sea but also by river and roads. Back in the mid to late 1700s there were no "roads" as we now know them. Instead, people traveled on worn trails that belonged to no one, which meant that no one was responsible for keeping them in repair. As a result travel by carriage or wagon was often a difficult journey.
During the rainy season the muddy roads were slippery to travel on and became deeply rutted. For this reason carriages and wagons often become stuck in the mud and could easily become broken. When the rains stopped, the dirt dried, leaving deep, hard ruts in the road along with potholes made from people digging their wagon wheels out of the mud. Because travel by land was often hard and damaging to wagons weighted down with heavy merchandise, businessmen preferred to move large volumes of their product by river or sea whenever possible.
However, when a state's border was that of a river, arguments between states erupted over who had the right to use it. This then led to a reluctance to improve the waterways, which meant that travel by river never got any better. When a river flowed from one state into another state, problems still arose but for different reasons. If one state wanted to retaliate against another state, they would either dam the river to keep it from flowing freely into another state or they would deliberately obstruct a river so as to prevent a boat of one state from using that same rive in another state, thereby forcing the merchandise to be unloaded off the boat and be transported by land.
Because each state was sovereign, when it came to the selling and transportation of merchandise from one state to another each state did what they felt was in their own best interest. If what one state did hurt another state economically it didn't matter to them. Thus, instead of the states working together for the good of everyone, the states acted more like competitors with each other as they sought to undermine one another's economy to their own advantage.
It didn't take long before serious disputes began to arise between the states and since there was no impartial third party to whom they could complain or seek redress, the animosity between the states kept growing and threatened to break out into violence, and the longer the dispute went unresolved, the violence would inevitably lead to war between the states, just as had happened among the independent nations of Europe many times before.
Men such as James Madison, Alexander Hamilton, George Washington and others clearly saw that the Articles of Confederation were inadequate to preserve the unity of the states and that another form of government was needed if war between the states was to be averted. Furthermore, if foreign countries saw that America was not a good place to do business with, commerce between America and other countries would dramatically decline and if that happened America's hope of becoming a prosperous nation would never be realized.
Worse yet, foreign countries, such as Great Britain, were looking for opportunities to seize land in America. If a war broke out between two American states, there were foreign countries who were eager to take sides in the conflict as a way to gain control or influence over American territory.
Therefore, in May 1787 fifty-six men - representatives from twelve of the thirteen states - met in Philadelphia to discuss how to create a better system of government that would unite the thirteen independent states into one cohesive nation. Up until this time there was no real United States of America. That term only existed on paper. Instead, this country could have been more accurately called the disunited States of America.
As these fifty-six men discussed how to create a government system that would ensure a more perfect union, the thorniest problem they faced from the very beginning was that of the right of each state to govern themselves. Each delegate came prepared to vigorously defend this right for their state but, at the same time they knew that, without some sort of a higher governmental body which all the states were answerable to, the states would never work together. Furthermore, they also knew that unless all the states were united into one nation, America would never prosper and eventually it would cease to exist, either through internal wars or conquest from other countries, or both, so it was imperative that they find a way to cooperate with one another.
Yet, no state wanted to give up their right to completely govern themselves but when it became evident that the states had to give up at least some of their sovereignty, they then turned their attention to discussing how this newly created central government could use its power to resolve some of the problems that plagued America, and one of those problems had to do with the disputes over commerce, meaning the transportation and sale of merchandise between the states.
The document they devised to resolve these national problems is known as the Constitution of the United States of America. The underlying foundation of this document is that, while the states had to give up some of their sovereignty, the federal government was extremely limited in the authority it had over the states, and what authority it did have was specifically enumerated in the Constitution.
When it comes to commerce, the Constitution states: "The [federal] Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general Welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States…" (Article I, section 8, clause 1) "... to regulate commerce with foreign nations and among the several states and with the Indian tribes; to establish a uniform rule of naturalization, and uniform laws on the subject of bankruptcies throughout the United States." (Article 1, section 8, clause 3).
It then goes on to say that "No tax or duty shall be laid on articles exported from any state. No preference shall be given by any regulation of commerce or revenue to the ports of one state over those of another, nor shall vessels bound to or from one state be obliged to enter, clear, or pay duties in another." (Article 1, section 9).
It continues saying "No state shall without the consent of the congress lay any imposts or duties on imports or exports, except what may be absolutely necessary for the executing of its inspection laws; and the net produce of all duties and imposts shall be for the use of the Treasury of the United States and all such laws shall be subject to the revision and control of Congress" (Article 1, section 10).
From the historical context of the problems of commerce under the Article of Confederation and the resolution of those problems under the Constitution, it is clear that the word "commerce," as used during the time the Constitution was written, was referring to the transportation and sale of merchandise between the states. In fact, there were no problems with commerce outside of this definition.
There were no problems associated with the manufacturing of goods nor were there any problems associated with farming, nor were there any problems associated with the sale and transportation of goods inside of any state. Therefore the word "commerce" as used by the writers and ratifiers of the Constitution had no reason to include in their document a remedy for problems that did not exist.
Furthermore, from a reading of the Constitution itself, it is plain that the reference to commerce was mostly confined to the subject of taxes, duties, and imposts (custom tax) on both exported and imported goods at ports of any state. Since this is where all the problems of commerce occurred under the Articles of Confederation, the Constitution sought to remedy this problem by giving the federal government the power to resolve the issue of export and import taxes. To claim that the word "commerce" includes the manufacture of goods and the growing of food inside of state boundaries or the labor or services needed to produce saleable products is not supported by either the historical record or the context in which this word appears in the Constitution.
Furthermore, the federal government's power over commerce was only to resolve disputes. If there was no problem with goods flowing from one state to another then there was no need for the federal government to become involved in the transportation and sale of merchandise.
This understanding then also eliminates the argument that the term " among the several states" can mean " within the boundaries of each of the states." The context of all references to commerce found in the Constitution refer to "taxes, duties, and imposts" of both exported and imported goods coming to and from foreign lands into or going out of America, or the transporting of goods between the boundaries of the various states of America. Thus the phrase, "among the several states" can be more clearly written as "between any and all states."
But perhaps the most controversial word in the commerce clause is "regulate." What later congresses and courts have said is that this word means "the right to control, manage, direct, or be in command of." Therefore it is their contention that Congress has the right to be in complete control over all aspects of commerce, including the manufacture and farming of goods that will eventually be sold, and including the right to tax all goods at every level of production.
This definition is wrong for several reasons. First of all, the right to tax as stated in Article 1, section 8, clause 1 is specifically mentioned in reference to "duties" and "imposts" which are port fees. What this clearly means is that Congress had the right to regulate the rate of tariffs being charged for products coming into and going out of the United States to and from foreign countries.
The Constitution also clearly states that the reason why Congress was in charge of controlling these import and export fees with foreign countries was to allow the federal government the means of raising money to pay for the debts of the government. History shows that when the federal government first began in 1789, it's only source of revenue came exclusively from these tariff taxes. (A tax on people's income didn't happen until the 16th Amendment in 1933). During President Washington's first term as President, Congress did put a tax on the making of whiskey but this led to a rebellion among whiskey makers which led Congress to eventually remove this onerous tax.
Secondly, the Constitution clearly states that "to regulate commerce" means "to establish a uniform rule." Thus, in the context in which the Constitution uses the word "regulate" it means "to standardize, even out, normalize, or to set in order." This definition is further clarified in section 9 when it says, "No preference shall be given by any regulation of commerce or revenue to the ports of one state over those of another, nor shall vessels bound to or from one state be obliged to enter, clear, or pay duties in another." In other words, the Constitution did away with all tariffs between the states, thereby eliminating the problems that were involved with commerce among the several states.
Under the Articles of Confederation each state set their own taxes on commerce as they saw fit but under the terms of the Constitution, Congress was to regulate or decide what the taxes would be on the import and export of goods coming from foreign countries, and that these taxes would be uniform, so as to ensure that no one state was shown preference over another. In other words, the tariff rates were the same regardless of which port the goods were shipped out of or shipped into.
Thirdly, it was the issue of tariffs between the states that nearly brought them to war with one another because there were no means available under the Articles of Confederation to resolve disputes between them. The Constitution solved this problem with the creation of the federal court system. The Constitution states that "The Judicial power [of the federal courts] shall extend… to controversies between two or more states; [between a state and citizens of another state *]; between citizens of different states; between citizens of the same state claiming lands under grants of different states" (Article III, section 2, clause 1) (* the 11th Amendment).
Each state has their own court system with their own Supreme Court that resolved disputes within their state but the Constitution provides for a federal court system whose power extends only to cases involving disputes between the states. Thus, it acts an impartial third party when states or citizens of different states wish to contest a problem between themselves, and this was exactly what was happening with the issue of commerce between the states but not within the states.
Fourthly, and most importantly, the strongest opposition to the Constitution at the time it was first proposed was that it took away from the states some of their right to completely and totally govern themselves. Therefore the Constitution was deliberately written to give the federal government limited powers over the states and those powers were specifically listed in the document. Furthermore, the 10th Amendment states that any power not listed in the Constitution is automatically reserved (belongs) to the states.
It is inconceivable that the Constitution limits the power of the federal government over the states except in the area of commence where it can exercise complete and total control over every aspect of the sale, transportation, production, employment, service, and working condition needed to make every kind of product both within each and every state as well as between the states.
The fact that the commerce clause of the Constitution has been used, even by the Supreme Court, as an excuse to give Congress wide ranging and far reaching powers over every aspect of commerce in America doesn't make its interpretation correct. If the Constitution is the supreme law of the land, as it states in Article VI, clause 2, and all federal officials take an oath to uphold and defend the Constitution, then, like any legal document, it is important that we correctly understand its meaning and its intent. It is when we allow those in power to change the meaning of its words to suit their own purposes, that the Constitution will no longer preserve our rights and freedoms from an all powerful government.
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