September 15, 2014

On the Occasion of the 20th Anniversary of the Institute for Justice

Bruce Kovner in Washington, D.C.

Chip, Professor Epstein, members of the IJ community, thank you for the honor and privilege of speaking to you here tonight on this wonderful celebratory occasion of the 20th Anniversary of the founding of the Institute for Justice. It has been an inspiring weekend for me in which I have been reminded again and again of the human impact of what IJ is fighting for and of the essential principles that inform this struggle. That IJ has been a leader in that battle for twenty years now is a testament to the vision of the founders of IJ, to the hard work and good judgment of all of those who have carried it forward, to IJ’s heroic clients, and to the members of the broader community who have sustained and supported IJ over the years. IJ has an extraordinary story to be proud of and I think I can say that everyone in this room joins me in thanking and congratulating the institution for its courage, commitment and accomplishment over the past two decades.

There is hardly a more important task we bear as citizens of the United States than to preserve, protect and defend the institutions and cultural foundations of liberty in our country. The merest cursory review of most of the nations of the world is enough to remind us how rare it is to have the traditions of a truly free society so well established as they are in our nation, so deeply engrained and embodied in our laws, so reflected in our traditions, so fiercely held in the beliefs of our people. We were the First New Nation (to borrow Seymour Martin Lipset’s phrase), a nation forged out of a unique consensus regarding private property, individual rights and representative government, and embodied in our Constitution and the Bill of Rights.

IJ’s role as an advocate for this precious tradition of liberty is what we are here to celebrate tonight. Were it not for this advocacy, the cause of liberty—its articulation as a goal for our society, its defense in our courtrooms throughout the land—would be ever so much weaker than it is today.

There are so many in this room who can testify to this as their very personal story. It is hard not to be angered by the arbitrary intrusions of local and state government aimed at limiting competition with established interests. And it is equally hard not to be moved by IJ’s frequently successful fights on behalf of individuals who have run up against these laws and need help in gaining access to markets to earn their living.

I was a taxi-cab driver once upon a time—when, after graduate school, I was trying to put together enough money to get on with my life. I know that to someone starting out in life, or reshaping his future, or just trying to get by, nothing is more important than being able to pursue economic opportunity free of arbitrary rules imposed or enforced by the government. When I hear of IJ’s fight on behalf of commuter vans, casket makers, hairdressers, and indeed any small entrepreneur trying to make a living, I respond very personally. This is so not only because of my own experience, or that of my grandparents, who struggled to get a foothold in this country more than a hundred years ago or that of my parents and their siblings only a generation or two ago — it is much more than personal. It is no exaggeration to say that much of the reason for America’s extraordinary economic greatness is that it has nurtured an environment in which a small entrepreneur can flourish. How many times do we need to be reminded of the origins of great companies like Apple and HP that started under the most modest of circumstances and went on to create enormous economic advancement? The doors of economic opportunity were open to me and a whole generation of financial entrepreneurs who brought important innovations to investment management before they could be licensed and regulated out of business or blocked by their competitors, the big money center banks, the banks too big to fail, or by the government with its thousands of pages of regulations which raise the cost of doing business often to the point of making small entrepreneurship impossible. Now we have the Dodd-Frank legislation which will introduce hundreds, if not thousands, of new rules and which will threaten to smother small businesses before they achieve critical mass. For me, the defense of economic liberty is one of the crucial components of the kind of society that I want to live in—a society in which those without political connections can flourish, in which arbitrary interference of the state will not block economic opportunity for the little guy, and in which the creativity of the individual can blossom unfettered by state controls.

What can be more basic to our concept of personal liberty than the protection of our homes and the respect for private property? Yet life makes all too apparent that the powerful will seek to use state powers to take advantage of the weak. Whether in New London, Connecticut or Atlantic City, New Jersey; New York or Washington, organized and powerful interests will find an argument for taking the property of those less well organized or weaker. This manipulation of law by the powerful against the weak necessarily requires some countervailing force to prevent abuse. And that is another reason why I feel so passionate in my support of IJ. The defense of the less powerful against the attempts of organized interests to co-opt the law for their purposes is an heroic and necessary component of the kind of society in which most of us wish to live.

I am so very glad that I had a chance finally to meet Susette Kelo today. The flagrant abuse of eminent domain powers in her case moved the nation, and IJ’s sustained advocacy of her cause ultimately led to an extraordinary victory for the principles of liberty. I was lucky to have been at the Supreme Court for the Kelo case arguments. It was my first time there, and I was deeply impressed by the seriousness with which the issues were addressed and by the intelligence and wit of the Justices. Prepared in my adolescent years by hours of watching episodes of Perry Mason on black-and-white TV, I had assumed that the Courtroom would resound with uninterrupted speeches of eloquence and unassailable logic. I was therefore surprised that Justice Ginsburg allowed IJ’s Scott Bullock literally no more than 37 seconds—I counted them!—before she interrupted him with aggressive questioning. I was even more surprised when Justice Scalia jumped in with answers to Justice Ginsburg’s questions. This was clearly a lot more fun than Perry Mason.

Although IJ lost the Kelo case (at least as far as judicial review at the Supreme Court was the issue), what happened after the case was decided was what was genuinely exceptional. As a legal debate, eminent domain had not, prior to the Kelo Case, made it to the top of the charts as a popular issue. But the example of the City of New London taking Susette Kelo’s home was a cause that resonated with the American people. Despite the Court’s decision, or more accurately because of the reaction against the Court’s decision, we have heard that over the next six years 43 states and eight state supreme courts strengthened the laws protecting us against eminent domain abuse. Instead of simply regretting the Supreme Court’s decision, IJ had the organizational flexibility and initiative to go out to the rest of the country to campaign for legislative reform of eminent domain. I must say I was personally astonished and inspired by that campaign, which created a victory out of an apparent Courtroom defeat. There can be few cases in the recent past which have delivered such a resounding reversal of a judicial decision at the hands of state legislatures. And few that have done more to call attention to the abuse of government discretion hiding under the rubric of “public purpose”. One can hope that IJ will have occasion to bring more cases that manage to reduce the scope of arbitrary government takings in the years to come.

I first became aware of IJ in another policy area in which it has come to play a leading role: School Choice. The failure of public schools in America to provide quality education has given rise to a passionate cry for change, for innovation in teaching and administration of schools, and for choices that give parents and children the ability to find educational services they need. Although few things are more important to a parent than quality education for their children, yet in virtually no other area of American life are the choices so constrained by monopoly. In most places, a single service provider—a public school district—is dominated or controlled by organizations which are unresponsive to parental preferences or concerns. Like the United States Postal Service, many or most school districts are government monopolies unresponsive to demands for change.

The School Choice movement gave a voice to parents and others who wanted to take some measure of control back from government bureaucrats and union-dominated school systems. It gave rise to an extraordinary outburst of energy and commitment from parents and the broader community. It recognized that education was too important to be left to monopoly and vested interests. One has only to look at the remarkable innovation in the area of charter schools and the new methods of empowering parents and students with scholarships to see that finally personal freedom and competition are bringing hope to parents and students as well as innovation to our public and private schools.

Sadly, this innovation has been resisted at every turn by the unions and other opponents of change. They have brought suits against school choice in Arizona, Indiana, Colorado, Florida, Illinois, Maine, Ohio, Michigan, Wisconsin, Pennsylvania – and that is only a partial list. And IJ has been there, time and time again, to fight for school choice. It is no exaggeration to say that IJ has become the most important institution in the country in the defense of school choice. The critical victories in the Zelman case in 2002, and just this April in Winn v. Garriott, have defeated the attack on school choice at the federal level as an unconstitutional “establishment” of religion. But although most of the obstacles have been clear from the field at the federal level, the battle against legal obstructionism at the state level remains. In coming years, as School Choice advocates create scholarship programs and other innovations, they will be challenged in the courtroom and challenged again. IJ, we can be sure, will be called for the defense.

It can be argued that the bulk of the cases involving the themes of economic liberty, eminent domain, and even school choice involve more or less straightforward attempts by those with economic interests at stake to use the coercive powers of the state to protect their own treasure and privilege. Although the parties will invariably cloak their goals with the protective camouflage of a public purpose or public good, it takes a disinterested observer relatively little effort to strip the costume off the participants and to see the effort for what it is. But the greater difficulty and danger lies when the encroachment on liberty is advanced by the well-meaning for purposes that are arguably aimed at some real or imagined public good. “The greatest dangers to liberty”, wrote Justice Brandeis in a 1927 decision, “lurk in insidious encroachment by men of zeal, well meaning but without understanding.” And eighty-four years later, the same point can be observed again and again on public policy issues that confront us today—from national security to taxation, from campaign finance to Obamacare. It is in IJ’s battle against this unceasing encroachment on our liberty by the well-meaning, by those who would trade liberty for their own “good causes”, that IJ performs its most fundamental service.

This is illustrated most starkly perhaps in IJ’s commitment to the fight to defend the most basic of our rights: free speech. Is there any right in the Constitution and Bill of Rights more important than free speech? Is there any language in the Bill of Rights clearer in its simplicity and moral force than the very plain statement that “Congress shall make no law…abridging the freedom of speech.” Yet for almost 40 years now Congress has passed laws that restrict political speech under the guise of controlling corruption or the appearance of corruption during Federal elections.

The McCain-Feingold act and other campaign finance laws, well-intentioned though they may have been, have put in place enormous obstacles to free speech. I can testify personally that it requires a high priced lawyer, actually several lawyers, to make sure that one doesn’t violate the thousands of pages of government regulations that are now in place. Violation of these laws carries with it severe criminal penalties—so my personal report is that these laws have a very strong “chilling effect” on speech. In recent months, the IRS has weighed into this mess by threatening to impose very substantial gift taxes on contributions to 501C4 organizations….entities organized for the purposes of issue advocacy—that is, for political speech.

Fortunately, we have regained some ground in the last few years in reasserting the right to unfettered speech—and IJ has been a leader in that fight. The Citizens United and the Speech Now cases pushed back against the increasingly broad powers of the Federal government to restrict speech—as did some members of Congress in protesting the IRS moves. The Courts are increasingly allowing themselves to consider to what extent free speech interests are being compromised by campaign finance regulation. But this is a very near thing. The argument that the state has a broad interest in preventing corruption can be used so very expansively. It is a powerful siren call that can justify almost any state attempt to restrict speech. “The Kagan Principle” it has been called by James Taranto of the Wall Street Journal, this doctrine seemingly enunciated by Justice Kagan in the Citizens United Case, that the state is entitled to adopt more and more restrictions on speech (or regulation of electoral expenditures which amounts to the same thing) if it asserts that corruption is a problem that needs to addressed. The concept of corruption in this line of reasoning appears to be so broad as to be nearly empty of meaningful content. Is the mere donation of money to an issue advocacy group a form of corruption? All the fuss over “corporate donations” in the Citizens United case, you may recall, involves what are sometimes called “501C4”s, which are special purpose entities, “corporations” formed by groups of people for the purpose of advocacy, for speech, on some issue of the day. I personally regard these entities as essential to my political speech, especially in a world in which personal contributions are subject to criminal penalties if you get them wrong. If I want to advertise my belief in the cause of personal liberty, or school choice, or anything else, prior to a Federal election … Is that going to be classified as impermissible? As some form of corruption? Is this consistent with the prohibition that Congress shall make no law abridging freedom of speech? In Citizens United and Speech Now, IJ successfully argued that such speech should not be denied. But, it was a very close thing. Five to four in favor of free speech and personal liberty. Only one vote away from yet another insidious encroachment on our liberties.

The American political experiment, this nation conceived in liberty, has been alive and well for some two hundred and thirty-five years. It’s in the nature of the case that the struggles we have with great problems test our values and require us to find compromises between competing goals. We have done so in the context of many great moral issues and external threats and today we continue to be tested by all manner of problems, some very real and some perhaps not so real or at best seen through a glass darkly. In all of this, we have managed to preserve a tradition of liberty which sustains the most innovative economy in the world and nurtures a quality of life of which we can be proud. But…it is not a sure thing. The American public believes in many things and the American political process sometimes brings into power leaders who emphasize the benefits that may conceivably accrue from enlarging government powers. We do not have to look far today to see many such examples. But if we do not protect our liberties when we go about trying to solve problems, they will be sliced and diced away, eroded by the temptations to serve other goals, traded away for bogus claims of a glittering but Utopian future.

It is true that Americans believe in liberty. Public opinion polling suggests that between fifty and seventy percent of us will typically assert that the Federal government has too much power or that it poses a threat to the rights and freedom of ordinary citizens. But it is also true that sixty percent of Americans believe that the government should do more to solve problems or that the government should insure that all Americans have adequate healthcare, or do more to fight poverty. This close balance between the commitment to limited government and the desire for government solutions creates one of the most characteristic tensions of the American political system. We have some 50,000 elected officials competing to put together coalitions of voters to elect and re-elect them to their public offices. In the ever-present kaleidoscope of foreign and domestic problems, in the continual contest between competing elites of politicians bidding for votes, the balance of power between those who advocate more limited government and those who advocate more extensive coercive powers of government constantly shifts with the rhythm of events. We put politicians in office who advocate less government and the public supports them until the agenda shifts. We elect officials who take a more expansive view of government powers, we observe them, we become disillusioned with them, and then, the pendulum swings again, and we throw the rascals out. Surely, the American people want both less government and more—and our institutions, our press, our politicians, and even our judges reflect this. We live in a 5-4 world in which only a vote or two decides whether our law will favor the promotion of liberty or the extension of government coercion.

Thus the debate over the shape, reach, and character of governmental powers is ongoing and the outcome uncertain. We are here in this room tonight because we are all supporters of the incredibly important work of the Institute for Justice in fighting for liberty. In this grand game, we will always need to be vigilant in preventing the encroachments of the state’s coercive power on individual liberties. The debate will go on forever. We will have on our side our founding documents and our long history of law and culture in defense of liberty. But the interpretation of these documents will always be the subject of intense debate. In this, IJ is not only important but irreplaceable. No organization in our country is more dedicated to waging this battle with all the tools of our law, tradition and intellect as is the Institute for Justice. For twenty years, IJ has stayed this course, fought our battles, defended our liberties. Over the next twenty years, we will rely on IJ to continue this battle and we will pray that our complex and divided political system will continue to sustain this uniquely American tradition that has made our nation the great exemplar of liberty that it remains today.