The Commerce Clause as a limited enumerated power
Bob Zadek describes the Constitution as saying nothing about free markets, capitalism or any economic system, and as originally drafted giving the government enumerated powers as of 1789. In his account the federal government could do very little in economics other than keep interstate commerce—commerce between the states—regular: it could regulate it, which he says meant keep it regular. Because the government, as Madison observed, had only limited powers, there was in his framing no need to worry about free markets, since the government was never given the power to mess with the markets in any event Mike Munger is Taking Public Choice Seriously (2019).
Mike Munger responds to the broader point about power rather than to the clause itself, arguing that many people go into government because there is something they want to accomplish, and that people who work for government often find the Constitution frustrating because it says they lack the power to do the thing they care about—true, he says, of people on the left and the right. He describes a slow accretion over time of the powers of the state, and says that since Roosevelt, since the 1930s and the Great Depression, Americans have come to expect more from government Mike Munger is Taking Public Choice Seriously (2019).
The Interstate Commerce Act and the Commission
Randall Holcombe says the Interstate Commerce Act was passed in 1887 largely to regulate railroads, and that the idea was that it was in the interest of the general public for the federal government to control rail rates and rail routes. Because the general public does not have much knowledge and does not have the time to learn what is going on, he argues, the Interstate Commerce Commission and other government agencies end up being controlled by the economic elite, working against the general public. He offers this as similar to the idea of Munn v. Illinois Randall G. Holcombe on Liberty in Peril (2019).
In the same episode Bob Zadek draws out the political arithmetic of the Munn case: it was farmers versus the grain elevator operators, and there are politically more farmer voters than grain elevator operators. On his account the grain elevators were denied the right to say they were offering a service at a stated price, with the market left to decide whether that price was right. He compares this to rent control, where there are more renters than landlords, and to minimum wage law, where there are more voting employees than voting employers, describing the pattern as vote buying by officials who pander to voting majorities Randall G. Holcombe on Liberty in Peril (2019).
The Kingsbury Commitment and cross-subsidization
Bill Frezza describes the telecom industry at the turn of the last century—the late 1800s going into the pre-World War I era—as tremendously competitive, with dozens of companies competing to wire up the country and invention coming from all over, including the first electromechanical switch, the Strowger switch, developed by an undertaker. He dates the change to about 1913, the era of the trustbusters; Bob Zadek notes it was also the year of the income tax, and Frezza agrees the things are related. AT&T, Frezza says, ran long-distance lines and hooked cities together, and would tell a city phone company it wanted to hook it up to the long-distance network—not hooking up any of its competitors—and then offer to buy the business. After the government sued for antitrust, the company made a deal called the Kingsbury Commitment, which Frezza calls the foundation of the public utility model in telecom, and then the electrical industry, and then the gas industry across the country for basically a hundred years. Under that deal, codified between 1913 and 1934 when the FCC was formed, the company would be the only legal phone company in the country and would wire up the whole country, charging the stockbroker downtown the same price as the farmer out in Iowa even though it costs ten times as much to serve the farmer, by cross-subsidizing the system. Frezza says the Interstate Commerce Commission got involved Bill Frezza’s History of Telecom Innovation (and Not) (2015).
Bob Zadek characterizes this as a huge cross-subsidy and a wealth transfer: the urban dweller or urban business person pays a hidden tax, and the money is transferred to the farmer in Iowa, and you cannot do anything about it if you want to have a phone. He says governments long ago learned that private business can be made to do their bidding by being the tax collectors, and asks whether this is not the structure of Obamacare and of banking in America Bill Frezza’s History of Telecom Innovation (and Not) (2015).
Transit, passenger trains and the Commission
Randal O’Toole, introduced by Bob Zadek as a Cato Institute senior fellow who works on urban policy and transportation issues and as author of The Vanishing Automobile and Other Urban Myths, tells the story of transit nationalization. In the late 1950s it was clear intercity passenger trains were fading and the railroads were losing money on them; the Interstate Commerce Commission wrote that it expected they would all disappear by 1970, which O’Toole says was almost true if not for the government taking them over. In 1958 Congress wrote a law making it easier for railroads to drop intercity passenger trains, expecting it to apply to trains like Chicago to New York or Chicago to Los Angeles; but the railroads also had commuter trains in Boston, New York, Chicago, Philadelphia and maybe one or two other cities, and some decided to drop some of those, producing a kerfuffle because downtown areas in those big cities depended on commuter trains Never let a good crisis go to waste (2020).
O’Toole says this was a way to protect downtown property owners, and that Congress passed a law to help subsidize any state or local governments that took over those commuter trains; because Congress cannot pass a law protecting only four or five cities, it said it would subsidize any city or state that took over any public transit—buses, trains, cable cars, anything. That law passed in 1964, when the vast majority of the transit industry was private and profitable; within five years almost every city took over its transit system and subsidies poured in. He describes a double subsidy—subsidies to the trains and land-use subsidies and regulations—and calls it a giant scam, costing taxpayers not just the $50 billion spent subsidizing transit but billions more on high-density housing along transit lines. He contrasts transit’s poor resilience in crises with highways and automobiles Never let a good crisis go to waste (2020).
The commerce power and federal criminal law
Bob Levy, outlining five arguments against the OSHA vaccine mandate for private employers not dependent on federal money, argues fourth that to the extent the feds say the mandate is simply a regulation of interstate commerce, a health mandate is not a proper exercise of the commerce power. He cites the Obamacare case, where he says the court validated Obamacare under the taxing power but decided the mandate to buy health insurance was not an appropriate exercise of the commerce power—you cannot mandate people to engage in commerce so that you can then regulate them for having engaged in commerce. His fifth argument is that the feds may not commandeer private parties to do what the feds themselves cannot do A Libertarian Legal Perspective on Vaccine Mandates (2021).
Harvey Silverglate, in a different episode, describes how federal fraud is essentially undefined: the statute reaches fraud committed through the use of the U.S. mails or in interstate commerce—if you commit a crime and travel from New Jersey to New York, you have federalized whatever you have done—or the use of telephones. The crimes are ill-defined; as long as you operate with the use of the mails or in interstate commerce, you have committed a federal crime, defined by whatever the federal government decides should be criminal this week. He invokes the common-law principle that nobody should be prosecuted unless they knew what they were doing and intended to commit a readily defined crime, and says that is what has been lost in the federal system, citing his book Three Felonies a Day: How the Feds Target the Innocent The FBI: Our Uninvited Federal Police Force (2022).
Across episodes:
The excerpts show the same question argued in more than one episode, with the treatment shifting from the clause’s reach to its administration. In the 2019 Holcombe episode the Interstate Commerce Act of 1887 and the Interstate Commerce Commission are the vehicle, and the argument is regulatory capture: Holcombe says the Commission and other agencies end up controlled by the economic elite, against the general public. In the 2020 O’Toole episode the same Commission appears as an actor in its own right, writing that it expected intercity passenger trains to disappear by 1970, before Congress acted. Between them, the 2015 Frezza episode supplies the cross-subsidy mechanism and the 2021 Levy and 2022 Silverglate episodes carry the clause forward as a limit (a health mandate) and as a hook (federal fraud). The clearest development is the addition of the public-choice account by Bob Zadek and Munger in 2019, which reframes the clause as one enumerated power among several undergoing accretion.
What the sources do not cover
The excerpts do not state the constitutional text of the Commerce Clause, its article or section, or any case holding on its scope beyond the references to the Obamacare case and Munn v. Illinois. They do not give the Interstate Commerce Commission’s creation date other than the 1887 Act, its termination, or its successor arrangements. They do not describe the Interstate Commerce Act’s substantive provisions, penalties or later amendments. Dates and titles are given only where the speakers state them.