Saturday, June 16, 2012

Troubled Bridge over Waters

David Frum has a nice piece up this morning about the sclerotic and overcrowded "Ambassador" (heh!) bridge between the US and Canada, held in durance vile by a Forbes 400 bazillionaire who just can't grasp the virtues of competition when it comes to his own little hidey hole.  Frum may not have noticed that he is a tapping into a classic episode in United States Constitutional history.  Tht would be the case of Charles River Bridge v. Warren Bridge,  regarded by those who remember as an inflection point in the history of creative market capitalism.  Oyez supplies the crib  notes:
In 1785, the Massachusetts legislature incorporated the Charles River Bridge Company to construct a bridge and collect tolls. In 1828, the legislature established the Warren Bridge Company to build a free bridge nearby. Unsurprisingly, the new bridge deprived the old one of traffic and tolls. The Charles River Bridge Company filed suit, claiming the legislature had defaulted on its initial contract.
 Answer: by a vote of 5-2,  sorry.  The legislature did not give an exclusive privilege when it granted the charter, and did not take away anything requiring compensation when it granted another one.  Oez again:
In balancing the rights of private property against the need for economic development, the Court found that the community interest in creating new channels of travel and trade had priority.
The case may be read as a pendant to Dartmouth College v Woodward, decided just  18 years before, in which the court barred the State of New Hampshire from rewriting the charter it had granted to Dartmouth College. A skeptic might examine both cases and say that there is less here than meets the eye: if it's all a matter of contract interpretations, let the state enter into any contract it wishes, or can get away with.  This seems too narrow a view:A number of historians have shown how the 1820s-30s can be understood as the time when Adam Smith entered the popular consciousness, and we began to understand the sovereign as not merely a grace-and-favor grantor of valuable privileges, but as a traffic cop with the job of building in infrastructure in which enterprise might flourish.

It didn't last, of course.  Another generation, elites had learned how to grasp the levers of power and turn them to their own advantage (indeed, is not the very definition of "elite" "one who grasps the levers of power and turns them to its own advantage?").   Then we get "the trusts," and then the heyday of America as the world's dominant economic power.  Then 1973 and the beginning of 39 years of trying to figure out what the hell was the license number of the truck that just hit us.  Any questions, class?

Oh yes, the final irony: the majority opinion in Charles River Bridge bears the name of Roger B.Taney, much more famous for this.

Followup:  A cursory Google shows that the bridge story is old news to folks along the riverside.  I didn't take much time, but I'll offer a special Underbelly Bright Shiny Object to the first person who can point me to a source in which the bridge-owner identifies himself as a "libertarin."

No comments: