An Empirical Appraisal of the Liberty of Contract

From approximately 1895-1937, the US Supreme Court interpreted the Constitution¿s Due Process clauses to implicitly protect a ¿Liberty of Contract¿¿the right of individuals to make contracts without arbitrary government interference. The Court relied on this principle to invalidate a variety of regulatory measures, including maximum hours and minimum wage laws. The Court abandoned its enforcement of this doctrine in 1937, and today, the Liberty of Contracts widely condemned by legal thinkers as right-wing judicial activism. Supposedly, the Court's protection of contractual freedom imposed a strict laissez-faire ideology on the country,interfered with Progressive reform legislation, and harmed public welfare¿especially that of workers, consumers, and the poor. But such claims are often made without empirical support. My aim here is to evaluate, based on the surviving data and evidence, the practical impacts of the Liberty of Contract by examining a) the extent to which the doctrine interfered with policymakers¿ efforts at economic regulation, and b) the economic and social effects of notable decisions in which the Court invalidated legislation on Liberty-of-Contract grounds.