Category Archives: Academic Papers

Fourteenth Amendment: The Privileges or Immunities Clause

 Section 1 of the Fourteenth Amendment reads: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

As Constitutional scholar Erwin Chemerinsky has written (in The Supreme Court and the Fourteenth Amendment: The Unfulfilled Promise), “The simplest, and perhaps most elegant, way of understanding the Fourteenth Amendment is to view the Privileges or Immunities Clause as protecting rights from government interference, the Equal Protection Clause as assuring equal treatment, and the Due Process Clause as prescribing the procedures that government must follow when it takes away life, liberty or property.”(1151-52)

Although subsequent case law has relied far more substantially upon the Due Process and Equal Protection Clauses, the history of the Amendment suggests that the Privileges or Immunities Clause was originally intended to play a far more vital role than has subsequently been the case.

The Privileges or Immunities Clause should not be confused with the Privileges and Immunities Clause of Article IV, Section 2 of the Constitution. That clause reads “The Citizens of each State shall be entitled to all Privileges and Immunities in the several states,” and has been applied to situations where residents of one state have been disadvantaged under the laws of another state; in other words, to situations involving the refusal of a state to treat U.S. citizens from other states equally under its laws.

History

Passage of the Privileges or Immunities Clause and the rest of the Fourteenth Amendment was a direct outgrowth of the national debate over slavery, and the subsequent emancipation of the slaves during the Civil War. In the aftermath of that war, Congress confronted a number of thorny issues: what would be done about the rebel leaders? Would the defeated states contribute to paying off the Union’s debts? Would slave owners be compensated for the loss of their property? What measures would be required of the defeated states as a condition of their full re-admittance to the Union?

While the Republican Congress wrestled with these and other issues, and engaged in arguments with Democratic President Andrew Johnson about their resolution, the governments of the former slave states were passing measures intended to prevent the freed slaves within their jurisdictions from enjoying the same rights accorded to white citizens. There was little or nothing Congress could do about these efforts. The Constitution offered no remedy to people treated unequally or unfairly by state and local governments, as the Supreme Court had made abundantly clear in 1833, in Barron v. Baltimore.

John Barron was one of the owners of a wharf in Baltimore’s harbor. The wharf had been quite profitable; however, as the city expanded and more and more development occurred, the city allowed large amounts of sand to be dumped in the harbor. The build-up of sand eventually deprived Barron and his partners of the deep waters they needed in order to continue their successful operation of the wharf. Barron sued the city to recover a portion of his financial losses, citing the Fifth Amendment’s prohibition on taking private property for public use without just compensation. The Supreme Court ruled that the Fifth Amendment, and the other provisions of the Bill of Rights, applied only to actions by the federal government.

The Barron decision thus prevented Congress from using provisions of the Bill of Rights to punish states that acted to oppress or disadvantage former slaves, no matter how official or egregious the act.

Several Senators and Representatives had come to believe that the Constitution should be amended so that the limitations of the Bill of Rights would restrain state level governments, but the first section of the Fourteenth Amendment owes both its form and substance to Ohio Representative Jonathan Bingham, who authored the language and worked tirelessly for the enactment of the Fourteenth Amendment. In an important speech that later was reprinted as a pamphlet (One Country, One Constitution, and One People: Speech of Hon. John A Bingham of Ohio in the House of Representatives, February 28, 1866, In Support of the Proposed Amendment to Enforce the Bill of Rights), Bingham argued that the proposed Amendment was not an intrusion on states’ rights, as some asserted, because no state had the right “to withhold from any citizens of the United States, on any pretext whatever, any of the privileges of a citizen of the United States.” He insisted the Amendment was necessary to correct both the racial inequities upheld by the Supreme Court in the infamous Dred Scott decision, and the economic injustices allowed by Barron v. Baltimore.

The Fourteenth Amendment was ratified on July 28, 1868, but only after passage of the punitive Reconstruction Acts. Re-admittance of former Confederate states to the Union was conditioned upon that state’s vote to ratify, a coercive measure still cited by opponents of the Amendment who argue that ratification under duress should be considered ineffective.

A reading of the legislative history of the Fourteenth Amendment strongly suggests that its supporters saw the Privileges or Immunities Clause as the vehicle to incorporate the Bill of Rights, that is, to impose the limitations on federal action enumerated in the first eight Amendments on state and local government actors as well. The Supreme Court, however, declined to read the Clause in that way, and in The Slaughterhouse Cases,  dramatically limited its scope.

The Slaughterhouse Cases

The State of Louisiana awarded a 25-year monopoly to Crescent City Livestock Landing and Slaughter-House Company. Other abattoirs were ordered closed, and the legislature authorized the fining of competing businesses.  The Court majority dismissed claims that this favoritism violated the Fourteenth Amendment, and narrowed the Privileges or Immunities Clause into virtual irrelevance.

In a 5-4 decision, Justice Samuel Miller held that the first sentence of the Fourteenth Amendment, “All persons born and naturalized in the United States and subject to the jurisdiction thereof, are citizens of the United States and of the State where they reside,” distinguished between two citizenships, one of the United States and one of the state. He further held that the second sentence, forbidding abridgment of the Privileges and Immunities of citizenship, applied only to situations in which a state was abridging federal rights.

“The privileges and immunities of citizens of the United States are those which arise out of the nature and essential character of the national government, the provisions of its Constitution, or its laws and treaties made in pursuance thereof, and it is these which are placed under the protection of Congress…” The Court limited application of the Equal Protection Clause to protection “of the Negro Race,” and upheld the grant of the monopoly as a proper exercise of the state’s duty to protect public health.

Most legal scholars today agree with the four dissenters, who read the protections of the Amendment more broadly. The Slaughterhouse Cases ignored the plain effect of the language, and gutted the Privileges or Immunities Clause. In America’s Constitution: A Biography, Yale law professor Akhil Amar explains why credible legal scholars today do not consider the Slaughterhouse Cases a plausible reading of the Amendment.

Current Status and Interpretation

Perhaps the best summary of the unfortunate and continuing consequences of the opinion in the Slaughterhouse Cases was written by Kimberly C. Shankman and Roger Pilon in a 1998 Cato Policy Brief, No. 326,  Reviving the Privileges or Immunities Clause to Redress the Balance Among States, Individuals and the Federal Government.

Although intense litigation under the [Fourteenth] amendment should not surprise, what is surprising is that most of it has taken place not under the Privileges or Immunities Clause, which was meant to be the principal font of individual rights, but under the Due Process and Equal Protection Clauses. Using the Due Process Clause, judges have “incorporated” most of the Bill of Rights under the Fourteenth Amendment, then applied those protections against state actions to find the actions unconstitutional. More recently, judges have used the Equal Protection Clause to the same effect and others, raising all manner of questions about the scope of their authority and the grounds of their reasoning. In all of this, however, neither liberals nor conservatives have given more than a moment’s attention to the cardinal clause of the Fourteenth Amendment, the Privileges or Immunities Clause, which remains uncited, unlitigated, uncommented upon–in a word, unnoticed. Whole chapters of modern constitutional law casebooks are devoted to due process and equal protection while privileges or immunities are dismissed in a few pages at most. Like the bark of the hound in the canon of Sherlock Holmes, what is most striking about the Privileges or Immunities Clause in the canon of Constitutional law is its absence.

Bibliography

Amar, Akhil Reed. 2005. America’s Constitution: A Biography. Random House.

Chemerinsky, Erwin. 1992. “The Supreme Court and the Fourteenth Amendment: The Unfulfilled Promise,” Loyola of Los Angeles Law Review. Vol. 25: 1143-1158. June.

Magliocca, Gerard N. 2013. American Founding Son: John Bingham and the Invention of the Fourteenth Amendment. New York University Press.

Shankman, Kimberly C. and Roger Pilon. 1998. Reviving the Privileges or Immunities Clause to Redress the Balance Among States, Individuals and the Federal Government. Cato Policy Analysis, No. 326.

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Sheila Suess Kennedy

Professor of Law and Public Policy, School of Public and Environmental Affairs

Indiana University Purdue University Indianapolis

 

Legal Regime and Public Service: Legitimacy, Ethics and Comparative Context

International and comparative studies have the ability to enlarge our worldviews and inform our policy landscape, but only if we are sensitive to context.[1] Learning from the “best practices” of other countries works best when the practices being shared are technocratic: traffic management, water treatment, construction standards and the like.  When lawmakers move to import more complicated policies and practices, especially those requiring some measure of political support and implicating government services and actions, the prospects become considerably more fraught.[2]

Public law and public management are inescapably particularistic, rooted in very specific national norms and reflective of the regimes within which they operate. Indeed, the discipline of public administration is defined as analysis and management of the public’s business as that business is defined by a particular society at a particular time. Efforts to study or replicate “best practices” from other countries, even other Western democratic countries, without due regard for the governing premises and legal systems of the society within which those practices occur are at best inexact and at worst counterproductive.

There’s a Reason They’re Called Norms

The importance of legal and social context presents educators and public officials with a significant challenge: how do we learn from each other while recognizing and respecting the cultural distinctions that shape and define legal approaches to governance? The ongoing debate over the proper approach to comparative public administration pedagogy raises both normative and technical questions about what those of us teaching law and policy tell our students. Several such questions come immediately to mind: How do we teach students to approach public policy with an informed sensitivity to the operation of national norms? How do we identify and assess the function and relative importance of mediating institutions—nonprofits and NGOs—in countries with very different understandings of the roles such organizations should fill? How do we ensure that students will recognize and accommodate the systemic structures that empower or constrain public officials in different constitutional contexts? How do we connect ethical practice to foundational legal principles? In short, how do we marry relevant legal norms to public management skills and practices, so that public policy and administration will be informed by both sets of competencies?

A well-regarded American introductory public affairs text describes the policy process as a series of eight steps: 1) establish the context; 2) formulate the problem; 3) specify project objectives; 4) explore alternative solutions; 5) set the policy; 6) develop an implementation plan; 7) monitor and evaluate; and recycle the process.[3] This prescription and sequence begins with an instruction to understand the context because a failure to do so is likely to lead policymakers astray.

“Establishing the context,” necessarily starts with national histories and legal systems, because those are the forces that shape distinctive national cultures and norms, and thus establish the relevant context. Where they exist, constitutions are controlling declarations of public policy, embodying a society’s fundamental philosophical assumptions about law, legitimacy and government power. Constitutions dictate the ways in which citizens “formulate the problems” and effectively foreclose exploration of certain “alternative solutions.” To take illustrative examples from America, the United States Constitution does not permit officials to entertain the “alternative solution” of imposing martial law when burglary rates get too high,[4] or the “alternative solution” of censorship when music lyrics are deemed by a majority of Americans to be too suggestive.[5] It does not permit American deficit hawks to reduce welfare rolls by feeding only Caucasian children,[6] or to combat pollution by appropriating privately owned property.[7] The U.S. Constitution and the jurisprudence it has generated control the methods Americans use to “set the policy” and how we proceed with the “implementation plan.” In civil law countries, where case law does not constitute legal precedent in the same way court decisions do in common law countries,[8] the guidance provided by the relevant Constitution is textual rather than jurisprudential, but that document nevertheless requires managers to discharge their responsibilities within the framework of rules provided.

Accountability and Legitimacy

Failure to follow the applicable rules, failure to operate within the appropriate legal or constitutional context, undermines legitimacy—the very definition of which is “operational rules rooted in constitutional or societal norms.”[9] A legitimate exercise of authority, no matter how coercive, is different from the exercise of raw power unrestrained by adherence to codes rooted in normative values, and members of the polity can be counted on to see it differently.[10] Being perceived as legitimate is especially critical to the continued effectiveness of those serving in local government agencies who must make and implement policies having an immediate and concrete impact on the citizens with whom they regularly interact.

Constitutions and other settled legal regimes circumscribe the arena within which public policy debate may legitimately occur in a given society; familiarity with applicable legal principles and the culture they have shaped also provides citizens with a common language allowing for meaningful democratic dialogue.[11] Lawmakers and public officials operating within a particular regime need not agree with every choice required by a nation’s constitution, but in order to communicate effectively with their fellow-citizens, they do need to understand what those choices were, why initial legal or constitutional decisions were made, and why and how they continue to matter (or not). Without that essential shared framework, public policy issues cannot be properly framed or their connection to the regime clearly understood; they will tend to be viewed as isolated and unconnected challenges rather than aspects of a coherent approach to the use of state power. It is likely that the absence of a recognizable and readily perceived connection to a familiar regime—the inability to connect new approaches and practices comfortably to a pre-existing worldview or frame of reference–is one of the many barriers to the creation of effective pan-national and international bodies.

It is important to recognize that unless they are trained to look for inconsistent normative assumptions, inhabitants of different cultures will take for granted the universality of their own worldviews. This very human tendency makes it difficult to identify significant differences in the cultures of democratic countries that on the surface seem quite similar.  To offer just one example, the term “public affairs” implies the existence of both public and private realms. A generally underappreciated reality is that even in Western democratic countries, legal and constitutional systems define those spheres very differently.

In the United States, the legal system draws a constitutionally significant distinction between the public sector, defined as government and its agencies and officials, and civil society, defined as the multitude of nongovernmental, voluntary communal and religious associations through which individuals may act and connect. That distinction is a crucial, if unarticulated, element of most U.S. policy decisions, because only government actors can violate the American Bill of Rights, which limits government actions but not private behaviors.[12] Based upon this particular understanding of the relationship of public and private behaviors, the American Constitution does not grant affirmative rights; it limits the power of the state to infringe private ones. This is not the case in many other Western democratic states, where it is common to have a constitutional system that both restrains and empowers government,[13] and where social entitlements frequently are embedded in the constitution. As a consequence of these differences in legal context, public managers working in different countries must confront a different set of questions when they are contemplating collective social action.

 An example of the practical significance of such legally disparate worldviews can be seen in the responses of different systems to efforts to privatize previously governmental functions. The move toward greater privatization has gained popularity in a number of countries over the past quarter-century despite considerable confusion over the precise meaning of the term.[14] The government continues to determine the need for the program or service, funds it, and remains ultimately responsible for its management; however, the relevant agency enters into an arrangement—typically a contract, but sometimes a grant or other partnership arrangement—with a private or nonprofit organization to deliver the service or otherwise perform the designated function. In the United States, during the past century, these arrangements have fundamentally transformed governance. The scope of government action has increased at all levels of our federal system, but the truly radical changes have been in the means through which agencies of government address service delivery and public problem-solving.[15]

In the United States, a transfer of sovereignty to nongovernmental agents is more than merely a management problem, as it is in many other countries, because constraints on the use of public authority are fundamental to the United States’ political and constitutional order. The Bill of Rights restrains only government action, making it essential that citizens and public managers alike be able to identify when government has acted. The growth of contracting arrangements has made that identification increasingly problematic, blurring the boundaries between private and public action and making it difficult in many situations to determine whether a particular action or decision can fairly be attributed to government. The result, in the opinion of many scholars has been a loss of essential governmental accountability and thus legitimacy.[16] Note, however, that this is not an issue in countries with constitutions that do not rest on foundations of “negative liberty.”  In those regimes, public service delivery by private contractors or NGOs raises management issues, not constitutional ones. Different systems embed different concepts of accountability and legitimacy.

Similarly, most European governments routinely contract with religious organizations; separation of church and state, if it exists at all, is framed very differently than in the United States.[17] American courts have long held that, whatever else the First Amendment’s Establishment Clause may mean, it definitely precludes the use of tax dollars to advance religion or support religious endeavors.[18] On the other hand, faith-based and religious organizations remain free to contract with agencies of government to provide secular services, and local units of government fund thousands of them to provide job training, childcare, adoptions, homeless interventions and a plethora of other human services.[19] Legally, public managers must ensure that the contracting organizations providing these services are not engaging in constitutionally prohibited activities, i.e., that they are not proselytizing clients, requiring their attendance at church services or engaging them in prayer. The ability of cash-strapped government agencies to assure compliance with these constitutionally required prohibitions is virtually non-existent; as a result, the propriety and legitimacy of governmental partnerships with religious organizations has from time to time become a heated and bitterly contested political issue.[20] This is simply not a problem in most of the E.U., where close partnerships between governments and religious bodies are common, and do not raise issues of legitimacy.

These outsourcing issues are far from trivial. They do not simply reflect different ways of delivering social services. Instead, they implicate the previously-referenced, normative understandings of accountability—a concept absolutely integral to the legitimacy of public actionIn an important article on outsourcing and the New Public Management, Peters, Guy and Pierre, made precisely this point:

The basic problem in both theories [outsourcing and NPM] is that the linkage between control and accountability—the heart of democratic theory and a democratic system of government—has been confused. Both models of public administration seek to replace political power derived from legal mandates or elected office with an entrepreneurial style of leadership or—with NPM—a remote and indirect model of leadership. This creates two different problems, derived from different perspectives on governance and citizenship. First, if elected political leaders have such limited control over public administration, is it reasonable to hold them accountable for the decisions and actions of the public service, and if elected officials should not be held accountable, then who is accountable?[21]

Contracting with a third-party surrogate for service delivery is simply one example of the complex interplay between basic governmental institutional theories and managerial efforts to improve service delivery. Peters, Guy and Pierre quite accurately note the problem with assigning accountability—the problem with determining who is responsible for what. There is, however, an even more foundational accountability issue, and it brings us back to the central concern of this article, the role of national political culture in determining accountability. It is necessary, but not sufficient, to identify the person or institution responsible for a particular government action. It is even more critical to ask the question “accountable to what?” What is the system of rules, what are the normative expectations, against which we are to measure action and determine accountability?  If we do not understand that legal and cultural context, we cannot form a coherent theory of accountability, and without a coherent theory of accountability—a theory that is grounded in normative expectations and transparent enough to allow citizens to identify responsible actors—we simply cannot teach a discipline called public administration. At most, we can offer technocratic skill training.

A Question of Ethics

Legal cultures not only dictate perceptions of accountability and legitimacy, they also provide the framework within which a polity defines ethical public service. One of the thorniest problems faced by employees of multinational businesses is how to navigate the ethical landscape in countries where payments that would be considered bribes in the U.S. are common and expected. Often, laws forbidding such practices exist, but as relatively new and to-date ineffective grafts on pre-existing and more forgiving legal systems.[22] Law shapes culture, but the process takes many generations, and ingrained practices are demonstrably difficult to eradicate.

Much of the recent literature on what constitutes ethical behavior in the American context has focused upon explication of specific ethical principles, the challenges of contracting out, the New Public Management, and the consequences of America’s increasing “marketization” and a corresponding diminution in concern for the public good.[23] These are important topics, but considerably less attention has been paid to the importance of the nexus between ethical public behavior and the relevant legal culture.  Yet as scholars have long recognized, ethical public service is rooted in, and defined by, the legal context within which it occurs.

In the United States, ethical public service is ultimately defined as consistency with the American Constitution and Bill of Rights, and that consistency is essential to government legitimacy.[24] It is important to emphasize the often-conflated distinction between personal and professional ethics in this context. While personal ethics are very important to avert what Adams and Balfour have called “administrative evil,”[25] the professional ethical obligations emphasized by Rohr and Rosenbloom, among others, require fidelity to the principles of the American legal and constitutional system. As Kennedy and Schultz have written,

The decision-making procedures and substantive protections for rights found in the Constitution and Bill of Rights define the first layer of duties and obligations that public servants have. Together, they define how decisions are to be made (procedural justice) and what can be decided or done (substantive fairness or justice)…the Constitution and Bill of Rights form the first tier of a public administration or public service ethic.[26]

Lawmakers and public officials, as well as those who teach them, need to recognize both the constitutional roots of public sector ethics, and the negative systemic consequences of frequent deviations from exemplary behavior. Average citizens may not be able to articulate the constitutional bases of their discomfort with conflicts of interest and other ethical departures, but they expect public servants to understand that they have an obligation to place the public good above private interest. When breaches of the public trust engender widespread cynicism, it is not only a situation constituting a genuine threat to the conduct of the business of government, but also a failure to understand the relevant constitutional and civic culture and context. As noted above, ethical and effective public performance depends significantly upon consistency with the legal and constitutional context of the relevant regime.

 Comparative Public Administration: Some Final Observations

Unfortunately, conscientious public affairs instructors who understand they must begin any comparative exercise with an introduction to the basic assumptions of a regime do not have a wealth of pedagogical materials available to them. Too many books dealing with comparative public administration and law ignore or slight foundational social and contextual differences, preferring to highlight the more technocratic issues common to governments everywhere.  There are a few scholars who have argued for the importance of grounding public management pedagogy in the relevant political theory.  Michael Spicer’s book, The Founders, the Constitution and Public Administration, published in 1995, made a strong case for the importance of a public management rooted in a nation’s constitution.[27] “The purpose of this book,” Spicer noted in his introduction “is to examine the worldviews underlying public administration and the Constitution.” Although Spicer directed his attention to the U.S. Constitution, all legal systems are constitutive of national cultures to a greater or lesser extent, and they all shape the worldviews of those who operate within them. Differences in those worldviews can be seen in the varying attitudes toward government that characterize different countries, even when the countries being considered are all constitutional democracies. In the U.S., as public administration has concentrated on the need to legitimize the administrative state, it has found itself at odds with a polity fixated on the need to limit government power, a central U.S. Constitutional concern. As a result, administrative actions that are taken for granted in European countries with strong administrative traditions often generate accusations of illegitimacy in highly individualistic America.

Unlike citizens of countries characterized by racial or ethnic homogeneity, American identity is rooted in allegiance to a particular worldview; it is based upon an understanding of government and citizenship originating with the Enlightenment and subsequently enshrined in the U.S. Constitution and Bill of Rights. Understood in this way, “constitutional culture” has a considerably broader scope than law and policy; it is an expression of the ongoing dialectic between society’s legal norms and the broader culture within which those norms are situated and must be understood. The American “constitutional culture” arises from the operation of our constitutional values in a radically heterodox culture, and the effects of that interaction on policy choice and contestation.

Decisions made by those who designed America’s constitutional architecture shaped contemporary definitions of public and private, notions of governmental and personal responsibility, and conceptions of human rights. They dictate the manner in which we frame and understand civic responsibility, and allocate collective social duties among governmental, nonprofit and private actors. In short, as with regimes elsewhere, those initial constitutional choices have been constitutive of a distinctive American culture. What Kennedy and Schultz have called “the Constitutional Ethic” is behavior grounded in, and compatible with, the United States Constitution.[28] In the U.S. and elsewhere, when significant segments of a population do not know the history, philosophy or contents of their legal system, they are unable to make informed judgments about the propriety of behavior of their public officials.

Unlike many of our European allies and trading partners, the American Constitutional ethic grows out of an approach to government based upon—and structured to so as to minimize—political distrust.  The battle to separate from England was triggered by distrust of King George III and the British Parliament.  The weak government of the Articles of Confederation was rooted in distrust of central authority; the Constitution of 1787 was the result of distrust of both weak decentralized government and “majority factions” that could infringe upon the rights of individuals. In fact, the entire American constitutional machinery—separation of powers, checks and balances, federalism, bi-cameral legislatures—grew out of an effort to address this fundamental suspicion of concentrated power, and the belief that abuses of power are likely in the absence of structural constraints on administrative behavior.

This mistrust could be considered constructive, since it led to the creation of institutional limitations on abuses of power.  But a culture of distrust also has quite negative implications for democratic governance: distrust of individuals who are in a position to abuse power for personal gain or to engage in other forms of self-dealing.  That sort of mistrust is corrosive.  It generates public suspicion that those who participate in government are corrupt. When such suspicion or cynicism becomes pervasive, it becomes much harder for government to generate citizen engagement, let alone the voluntary compliance necessary to achievement of public purposes.[29]

If it is important for citizens to believe in the honesty of those who serve, and that most officials be viewed as trustworthy public servants, it is equally important that government officials not only be honest, but that they be seen to be honest—both personally honest and honest in their fidelity to the relevant legal regime and its ethics of public service. As a consequence, conflicts of interest and the appearance of impropriety—while considered improper in virtually all regimes—will be defined differently in the U.S. than in India, for example, just as office-holders’ sexual peccadillos generate quite different responses in the U.S. than in France.

A nation’s legal and social culture are products of a complex interplay between its history, religious and ethnic composition and legal regime, and the latter consists of considerably more than a nation’s founding documents and/or assumptions. Citizens of one country are unlikely to fully understand and appreciate the nuances of another nation’s culture without considerable effort and exposure, but that should not deter us from recognizing the fundamental challenge of comparative law and policy: Measurements of legitimacy and accountability are necessarily contextual, and public administrators focused upon the importation of “best practices” need to preface that exercise with a review of the nature of the practice at hand and the extent to which its success or failure requires an administrative context within which it makes sense.

Unfortunately, there is no simple test for appropriateness; each case must be assessed on its merits. What we can do, however, is highlight the issue and its significance.

All constitutions and legal systems rest upon considered normative judgments about the conduct of public affairs, judgments that have their roots in the particularities of that country’s history and experience. Trying to teach comparative law or public administration without constant reference to those foundational judgments is like trying to teach reading without reference to the alphabet.

 

References

Alberti, A., & Bertucci, G. (2006). Replicating innovations in governance. In Innovations in Governance and Public Administration: Replicating What Works (pp. 1-25). New York, NY: United Nations.

Bonser, Charles F., Eugene B. McGregor Jr., and Clinton V. Oster Jr. 1996. Policy Choices and Public Action. Upper Saddle River, N.J. Prentice-Hall.

Cortazar, Juan Carlos. 2006. “Learning from Best Practices in Public Management: A Methodological Approach” in Alberti & Bertucci (eds) Innovations in Governance and Public Administration: Replicating What Works. New York, NY: United Nations.

Cross, F. B. (2001). The error of positive rights. UCLA Law Review, 48, 857-924.

Frederickson, H. George. 1993. “Ethics and Public Administration: Some Assertions” in Ethics and Public Administration, H. George Frederickson (ed). Armonk, NY: M.E. Sharpe.

Gilmour, Robert S. and Jensen, Laura S. 1998. “Reinventing Government Accountability: Public Functions, Privatization, and the Meaning of ‘State Action.’” Public Administration Review

Hartmus, D. M. (2008). Teaching constitutional law to public administrators. Journal of Public Affairs Education, 14(3), 353-360. Retrieved from http://www.jstor.org/stable/40215822

Heady, F. (2001). Public administration: A comparative perspective. New York, NY: Marcel Dekker, Inc.

Kennedy, Sheila Suess. “Checks and Balances? Or L’etat, C’est Moi?” The Remnant Review Vol. 2, No. 1, 2006. pp. 65-78.

Kennedy, Sheila Suess. (2001) “When is Public Private? State Action, Privatization and Public-Private Partnerships.” George Mason Civil Rights Law Review. Vol. 11 #2, Spring. 203.

Kennedy, Sheila Suess and Wolfgang Bielefeld. (2006)  Charitable Choice at Work: Faith-Based Job Programs in the States. Georgetown University Press, Washington D.C.

Kennedy, Sheila and Schultz, David. 2011. American Public Service: Constitutional and Ethical Foundations. Jones & Bartlett Learning.

Kettl, Donald F. 2002. The Transformation of Governance: Public Administration for Twenty-First Century America (Interpreting American Politics). Johns Hopkins Press.

Lupu, Ira C. and Robert W. Tuttle. 2003. The State of the Law 2003: Developments in the Law Concerning Government Partnerships with Religious Organizations. Roundtable on Religion and Social Welfare Policy. Albany, NY: Rockerfeller Institution of Government.

Lupu, Ira C. and Robert W. Tuttle. 2004. The State of the Law 2004: Developments in the Law Concerning Government Partnerships with Religious Organizations. Roundtable on Religion and Social Welfare Policy. Albany, NY: Rockerfeller Institution of Government.

Lynn, Laurence E., Jr. 2001. “Social Services and the State: The Public Appropriation of Private Charity.” Social Service Review.

Lynn, L.E., Jr., Heinrich, C. J., & Hill, C. J. (2000). Studying governance and public management: Challenges and prospects. Journal of Public Administrations Research and Theory, 10(2), 233-262.

 

McGrath, C., Moss, D., & Harris, P. (2010). The evolving discipline of public affairs. Journal of Public Affairs, 10, 335-352. doi: 10.1002/pa.369

Metzger, Gillian E. 2003. “Privatization as Delegation.” Columbia Law Review 103: 1367-1502.

Pierre, J. (1995). Bureaucracy in the modern state: An introduction to comparative public administration. Northampton, MA: Edward Elgar Publishing Limited.

Peters, G. B., & Pierre, J. (1998). Governance without government? rethinking public administration. Journal of Public Administration Research & Theory, 8(2), 223-243.

Pollitt, Christopher (2011) accessed at http://blogs.worldbank.org/governance/30-years-of-public-management-reforms-has-there-been-a-pattern

Rohr, John. 1999.  Public Service, Ethics, and Constitutional Practice. University of Kansas Press.

Rosenbloom, David H., Carroll, James D. and Carroll, Jonathan D. (2000) Constitutional Competence for Public Managers: A Casebook. Wadsworth Publishing

Salamon, Lester M., ed. 2002. The Tools of Government: A Guide to the New Governance. New York: Oxford University Press.

Spicer, Michael. 1995. The Founders, the Constitution, and Public Administration: A conflict in worldviews. Georgetown University Press.

Taube, C. (2002). Baltic Diversity: Comparing Constitutions. Jurisprudencija30(22), 42-46.

 

 

 


[1] Sheila Suess Kennedy, Context Matters: Pedagogy and Comparative Public Administration, Croatian and Comparative Public Administration 161-172 (2013), available at http://en.iju.hr/ccpa/ccpa/downloads_files/06%20Kennedy.pdf

[2] Id.

[3] Charles F. Bonser et al., Policy Choices and Public Action (Prentice-Hall 1996).

 

[4] U.S. Const. art. I, § 2, cl. 15.

[5] U.S. Const. amend. I; See also Miller v. California, 413 U.S. 15 (1973).

[6] U.S. Const. amend. XIV, § 1.

[7] U.S. Const. amend. V.

[8] The Common Law and Civil Law Traditions, in The Robbins Collection (The University of California at Berkeley), available at http://www.law.berkeley.edu/library/robbins/pdf/CommonLawCivilLawTraditions.pdf

[9] Kennedy, supra note 1, at 166.

[10] See, for example, reactions to police actions when officers are perceived to have disregarded constitutional limits, or exceeded their authority.

[11] Footnote: a concern voiced by many Americans is that we are losing that common language.

[12] See generally Sheila Kennedy & David Schultz, American Public Service: Constitutional and Ethical Foundations (Jones & Bartlett Learning 2011); D. M. Hartmus, Teaching Constitutional Law to Public Administrators, 14 J. Pub. Aff. Educ. 353 (2008); Frank B. Cross, Article, The Error Positive Rights, 48 UCLA L. Rev 857, (2001); and Sheila Suess Kennedy & Wolfgang Bielefeld, Charitable Choice at Work: Faith-Based Job Programs in the States (Georgetown University Press 2006) [hereinafter Charitable Choice at Work].

[13] Cross, supra note 12.

[14] Although “privatization” literally means ceding government-run enterprises to the private sector, much as Margaret Thatcher did in England, most of these arrangements are more accurately described as “contracting out.” Sheila Suess Kennedy, When is Public Private? State Action, Privatization and Public-Private Partnerships, 11 Geo. Mason L. Rev. 203 (2001).

[15] See Charitable Choice at Work, supra note 12; Kennedy & Jensen 2005; Lester M. Salamon, The Tools of Government: A Guide to the New Governance, (Oxford University Press 2002); H. George Frederickson, Ethics and Public Administration: Some Assertions, in Ethics and Public Administration (H. George Frederickson ed., 1993); and Donald F. Kettl, The Transformation of Governance: Public Administration For Twenty-First Century America (Interpreting American Politics) (Johns Hopkins Press 2002).

[16] Gillian E. Metzger, Privatization as Delegation, 103 Columbia L. Rev. 1367-1502 (2003); See also Sheila Suess Kennedy, When is Public Private? State Action, Privatization and Public-Private Partnerships, 11 Geo. Mason L. Rev. 203 (2001); and Robert S. Gilmour & Laura S. Jensen, Reinventing Government Accountability: Public Functions, Privatization, and the Meaning of “State Action,” 58 Pub. Admin. Rev. 247 (1998).

[17] For a compendium of research on the various relationships between church and state in Europe, see International Consortium of Law and Religion Studies, http://www.iclars.org/

[18] See Murdock v. Pennsylvania, 319 U.S. 105 (1943).

[19] Charitable Choice at Work, supra note 12.

[20] Id. See also Ira C. Lupu & Robert W. Tuttle, The State of the Law 2003: Developments in the Law Concerning Government Partnerships with Religious Organizations, Roundtable on Religion and Social Welfare Policy, available at http://www.rockinst.org/pdf/faith-based_social_services/2003-12-the_state_of_the_law_2003_developments_in_the_law_concerning_government_partnerships_with_religious_organizations.pdf; Ira C. Lupu & Robert W. Tuttle, The State of the Law 2004: Developments in the Law Concerning Government Partnerships with Religious Organizations, Roundtable on Religion and Social Welfare Policy, available at http://www.rockinst.org/pdf/faith-based_social_services/2004-12-the_state_of_the_law_2004_partnerships_between_government_and_faith-based_organizations.pdf; and Laurence E. Lynn, Jr., Social Services and the State: The Public Appropriation of Private Charity, Social Service Review (2001).

[21] G.B. Peters & J. Pierre, Governance without Government? Rethinking Public Administration, Journal of Public Administrations Research and Theory 223-243 (1998).

[22] For an illustrative discussion of the infirmities of such measures, see “Latin American Anti-Corruption Laws Ineffective” at http://www.latin-corporate.com/2012/11/latin-american-anti-corruption-laws-ineffective/

[23] April Ejka-Ekins, Teaching Ethics in Public Administration, 48 Pub. Admin. Rev. 885-891 (1998); See H. George Frederickson, Public Ethics and the New Managerialism: An axiomatic Theory, in Ethics and Public Management (H. George Frederickson ed., 2005); Metzger, supra note 13; Peter W. Singer, Corporate Warriors: The Rise of the Privatized Military Industry (Cornell University Press 2003); Steven R. Smith & Michael Lipsky, Nonprofit for Hire: The Welfare State in the Age of Contracting (Harvard University Press 1993); and Lisa A. Zanetta & Guy B. Adams, In Service of the Leviathan: Democracy, Ethics, and the Potential for Administrative Evil in the New Public Management, 22 Administrative Theory and Practice 534-554 (2000).

[24] John Rohr, Public Service, Ethics, and Constitutional Practice (University of Kansas Press 1999); Rosenbloom Carroll & Caroll 2000; and Paul C. Light, Preface: An Audacious Task, 71 Pub. Admin. Rev. S5-S6 (2011).

[25] G.B. Adams & D.L. Balfour, Unmasking Administrative Evil (Sage Publications 1998).

[26] Kennedy & Schultz, supra note 12, at 74-75.

[27] Michael Spicer, The Founders, the Constitution, and Public Administration: A Conflict in Worldviews (Georgetown University Press 1995).

[28] Kennedy & Schultz, supra note 12.

[29] John T. Scholz, Voluntary Compliance and Regulatory Enforcement, 6 Law and Policy 385-404 (1984); Organization for Economic Cooperation and Compliance (OECC), Reducing the Risk of Policy Failure: Challenges for Regulatory Compliance (2000), available at http://www.oecc.org/dataoecd/23/37/46466287.pdf.

Fiscal Magic: Outsourcing and the Taxing Power

 Seth B. Payton and Sheila Suess Kennedy


Abstract

Some state and local governments in the United States are increasingly outsourcing services through third-party surrogates. In some instances, outsourcing is used as a mechanism to raise revenue to cover current deficits or pay for goods that would otherwise require increasing taxes. We argue that certain forms of outsourcing have been used to mask accountability for the levying fees that are substantively indistinguishable from taxes and thus shift tax burdens. We call for additional research to examine the shifting cost burden associated outsourcing deals and the increased challenge of maintaining public fiscal accountability.

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Government authority to tax is directly related to the provision of public goods and services. The relationship between taxing authority and taxpayer is shaped by demands for goods and services and budget constraints. Principles like transparency, neutrality, equity, and fairness have long been held essential to the proper exercise of the taxing power (Stiglitz 1999; Mikesell 2010). The recent legal argument that there is no ‘‘reasonable’’ distinction between a tax, a fee, or a penalty does not render the matter moot.1 The imposition of a tax by a governmental unit possessing statutory taxing power is subject to certain constraints. The governmental unit that fails to comply with those constraints risks loss of legitimacy.

The purpose of this article is to examine one of the ways in which local government officials may relinquish taxing power. In this article, it is argued that outsourcing is used to pay for hidden costs using a powerful ‘‘fiscal illusion.’’ The fiscal illusion associated with outsourcing is so powerful it might be deemed ‘‘fiscal magic.’’

The fiscal magic which is alluded in this article evades transparency and therefore legitimacy. This article first presents a brief explanation of the notion of fiscal illusion—a term that repre- sents multiple hypotheses for how the costs of public goods and services are hidden and diffi- cult to calculate. Then this notion is extended to show how tax arrangements not designed for, but used to, support outsourcing also can hide real costs from the public. Such hidden costs result in another sort of fiscal illusion. This notion is applied to a case study in Indianapolis, Indiana—a city that has vigorously embraced the   outsourcing   of   goods   and   services historically provided by government, within a state that has done likewise. Finally, this article concludes with some thoughts on the wider implications of these notions.

 Fiscal Magic and Fiscal Illusion

Like good magicians, sometimes public officials are able to deflect the attention of their taxpayer audience from what is actually important in understanding how taxes pay for government goods and services. When public officials are able to pull this kind of trick, they get the public to believe that some managerial magic has been performed on the costs and associated tax reven- ues rather than having them understand that the bargain price is an illusion. Nevertheless, what has happened in reality is that a good illusion has passed for magic. This is equivalent to a stage show. The ‘‘trick’’ results in what public finance scholars call a fiscal illusion.

Fiscal Illusion

When public officials’ implement shifts in the tax burden which are not transparent to the taxpayers and create the impression that the resulting tax burden is better than it is, they are using a fiscal illusion. Clearly, public officials may have an incentive to do this. Public officials can look fiscally conservative while covertly addressing constituent demands at a perceived lower cost. Fiscal illusion is a concept based upon the notion that taxpayers do not always understand the real costs at which they receive public goods and services. Oates (1988) specifically presents five potential forms of fiscal illusions used by public officials: (1) tax structure complexity; (2) income elasticity of tax structure; (3) renter illusion; (4) the flypaper effect; and (5) debt illusion. He notes that Puviani (1903) and Buchanan (1967) suggest that political leaders may fragment tax levies through complex tax structures to make it difficult for taxpayers to accurately identify the actual costs associated with public goods and services. In addition, public officials may benefit from the hidden tax burden shift from landlords to renters, creating  a  renter  illusion,  which  leads  to increased spending when a jurisdiction is made up of a larger fraction of renters. Furthermore, public officials may offset taxes collected from highly income elastic sources when economic circumstances are beneficial for the underlying tax base (i.e., income elastic tax structure) or from intergovernmental revenues (i.e., flypaper effect). Finally, when taxpayers are confronted by borrowing strategies that displace the current costs of public services and goods onto future generations they may be denied the transparency necessary to calculate those costs as part of the tax burden and suffer from a particular fiscal illusion, what might be called debt deception and Vickrey (1961) calls ‘‘debt illusion.’’

Oates (1988) explains that the empirical evidence has yielded mixed results for various fiscal illusion hypotheses. Those hypotheses are difficult to test. Outcomes sought are whether or not circumstances exist that reduce the perceived costs of public and goods and services.

This article suggests that fiscal illusion may occur through an additional mechanism, the out- sourcing of the taxing power—a fiscal mechan- ism we provocatively refer to as fiscal magic because it encompasses and transcends typical fiscal illusionary strategies. This is an illusionary tactic that is easier to explain. It is a case in which the power to tax for providing public goods and services has been delegated to the nongovernmental sector. A case from Indiana- polis, Indiana, illustrates the fiscal transfer asso- ciated with our hypothesis of fiscal magic in which public officials relinquish a portion of their taxing power to finance a particular project that is not disclosed as such. Specifically, the case looks at the sale of a public sewer and water utility to generate revenue for the repair of side- walks and streets.

Outsourcing as a Source of Fiscal Illusion

Outsourcing, privatization, and contracting2 are terms employed to describe mechanisms intended to provide government services through third-party surrogates. There are liter- ally hundreds of scholarly articles on these and various other aspects of contracting and the New Public Management. These terms have been subject to comprehensive scholarly analysis by scholars in public administration, political science, and law among others (e.g., Dannin 2006; Minow 2000; Chassy and Amey 2011; Milward 1994; Milward and Provan 1993, 1998, 2000; Brudney et al. 2003; Hefetz and Warner 2004; Winston et al. 2002; Kennedy and Jensen 2006; Kennedy and Bielefeld 2002; Kennedy 2003; Dannin 2008; Fernandez 2007; Marvel and Marvel 2007; Kennedy 2001; Metzger 2003; Gilmour and Jensen 1998). Yet, little of this literature has focused on the relationship between outsourcing and taxation. Specifically, it has not examined how the former affects the levying of the latter when delegating to vendors and other third parties the inherently governmental authority to raise fees or tax. There remains an unanswered question. Has outsourcing been used effectively to mask accountability for the levying of fees that are substantively indistinguishable from taxes and thus shift tax burdens?

 Creating Fiscal Illusion through Outsourcing Taxation: The Indianapolis Water Utilities Payments in Lieu of Taxes (PILOT)

The State of Indiana and especially the City of Indianapolis have been among the units of government most enthusiastic about outsourcing and have entered into transactions that highlight the sort of question to which we allude. Indi- ana’s Toll Road contract to lease the Indiana Toll Road to a private consortium for seventy- five years drew criticism for a number of reasons, not the least of which was the ceding of authority to raise tolls to a private vendor; that contract was similar to infrastructure outsour- cing elsewhere (Gilmour 2012). Had the Gover- nor and legislature opted for a bond issue secured by higher toll revenues instead of leasing arrangement, the State’s yield may have been substantially higher. Such a decision would have required the legislature to raise tolls (these tolls fall within the definition of fees, rather than taxes); however, the lease transaction shifted the decision—about raising them from legislators to the private vendors and made it a business rather than a political decision. This insulated elected legislators from the consequences of a potentially unpopular decision. Rates for use on a public property went up, but ‘‘the public’’ did not pay more and ‘‘public officials’’ did not decide to raise the rates—fiscal magic!

Indianapolis Water and Sewer Utility Sale

The subsequent sale of Indianapolis’ water and sewer utilities was a highly sophisticated transaction that raised far more complicated issues. The Indianapolis Water Company had operated as an investor-owned utility for most of its existence. In 2002, during the Peterson Administration, the City of Indianapolis purchased the water company, citing the need to control costs. A number of experts publicly charged that the city paid too much for the utility; whether or not those criticisms were justified, the city found itself facing significant deferred maintenance costs and a lack of employees with the expertise needed to oversee management of the utility. The Peterson administration also negotiated a settlement with the Environmental Protection Agency of a protracted lawsuit over numerous environmental violations caused by an inadequate city-owned sanitary sewer system.

After a new administration was installed, the city’s ability to assume the costs of the deferred maintenance of the water company and the leg- ally required upgrades to the sewer system were further challenged by newly enacted property tax caps in 2008. Those caps reduce the amount of revenue the city can collect by limiting the property tax bill to 1 percent for homestead property, 2 percent for other residential and agricultural property, and 3 percent for the remainder real and personal property of gross assessed value. Effectively, the property tax caps amounted to savings for taxpayers and less revenue for local governments.

Citizens Energy Group Purchase

Faced with mounting costs and recognizing that the operation of utilities requires specialized skills not within the city’s core mission, the city decided to sell the water and sewer utilities to Citizens Energy Group (formerly, Citizens Gas and Coke Utility). Founded in 1887 as Consumers Gas Trust Company, Citizens was established as a public charitable trust, controlled by a self-perpetuating Board of Trustees who appoints the company’s directors. Citizens is widely regarded as a well-run utility management company, and the decision to vest control of all the city’s utilities in a public trust had much to recommend it. Citizens not only had the management depth and expertise to administer the water and sewer systems, its unusual legal status of Charitable Public Trust removed many of the concerns that attend a transfer of public functions to a for-profit third party.

The structure of the transaction, however, raises a number of disquieting questions about transparency, the locus of the tax burden, and the funding of public services generally. The Mayor promoted the sale of the utilities by promising to use the proceeds for needed infra- structure repairs for streets and sidewalks. Two legal documents governed the transfer: a mem- orandum of understanding and the contract of sale. Stripped to the essentials, the agreement called for Citizens to pay for the acquisition of the water and sewer systems by assuming their combined existing liabilities, totaling nearly 3.5 billion dollars. However, a straightforward assumption of liabilities would not have resulted in an ‘‘up front’’ cash windfall that the city hoped to use to repair infrastructure and supplement dwindling tax revenues.

Tax Increase Paid by Ratepayers Pays for Bond Issue

Therefore, the money for the infrastructure repairs was generated through the modification of PILOT amounts payable to the city by Citizens Energy as a not-for-profit entity. PILOT to municipalities for the foregone taxes on real estate or for changes in the taxable status of organizations are common in the United States. As part of the transfer agreement, Citizens ‘‘voluntarily’’ recalculated the amount due annually to the city under the statute requiring a PILOT payment. The city then issued bonds, secured by the PILOT increase, and used the proceeds of those bonds to repave streets and repair other decaying infrastructure. The Mayor, running for reelection, could and did claim credit for completing very visible public improvements ‘‘without raising taxes.’’

The higher PILOT payments by Citizens, meanwhile, become part of the calculation of the utility’s rate base which if increased will be passed on in rates to the utility’s clients. Under Indiana law, had Citizens simply ‘‘overpaid’’ for the water and sewer systems, the amount by which the purchase price exceeded the fair market value of the acquired assets would not have been an allowable basis for calculating the rate. PILOTS, however, are an allowable expense in the rate base.

This highly sophisticated financing scheme for the sale raises both legal and policy issues. The PILOT statute provides that the appropriate maximum payment will be equivalent to the property tax that would be due on tan- gible property owned but for that property’s exempt status. The terms of the sale—a transfer in exchange for assumption of debt—confirmed that both parties assigned a negative value to the tangible property; what Citizens was purchasing was an intangible value—the ongoing income stream of rate payments. It is by no means clear that a PILOT payor can ‘‘voluntarily’’ raise its payment, although when that question was raised to a member of Citizens’ board, the authors were told that the board had obtained and relied upon a legal opinion that the strategy was permissible.

Bifulco et al. (2012) recently addressed the distinction between selling government assets for the purpose of avoiding deficits (or raising additional revenue) and selling government assets that may have more value under private ownership. The problem associated with selling assets to cover current deficits or as a revenue mechanism to cover current costs is that it creates a fiscal illusion by masking the ongoing fiscal burden for which proceeds from the sale of the asset are being used. What occurs in the Indianapolis case is that a not for profit financed the purchase of local government assets by taking on a tax debt with that same local government: the local government is issuing debt against the asset to pay for the purchase of the asset and its maintenance. Eventually, the purchase price will have to be covered in the maintenance and operating costs.

The upshot is that Citizens will need to raise its rates in order to pay both for necessary infrastructure improvements for the utility and the increased PILOT payments. Higher rates to cover the costs of infrastructure repair and maintenance would have been necessary in any event; that is, even if the city had retained control of the utilities, those costs would be fees borne by ratepayers.

The amount by which rates must be raised to cover the additional PILOT, however, is another matter. It shifts the cost of street and infrastruc- ture repair from property taxpayers to utility ratepayers. As a result, the linkage between the tax cost and public benefit of street and sidewalk repair is severed: ratepayers pay the upfront bill for a public good enjoyed by all taxpayers and taxpayers only pay later, if the PILOT payments do not cover the debt to be retired.

Conclusion

To the extent that accountability requires transparency, efforts to pay for public infrastructure but avoid a ‘‘tax increase’’ will increasingly challenge fiscal accountability. Hidden, or insulated, expenditures will feed into unrealistic public expectations about the costs of public services. Despite a rich literature dealing with other aspects of contracting and privatization, however, these sorts of transactions, and their implications for tax policy and public finance, have received inadequate attention. We do not know how widely these strategies are being used, how much control over revenues government agencies are ceding to private actors, the effects of the shifts in tax burden, or the long- term consequences of today’s ‘‘let’s make a deal’’ approach to financing public goods. We need research to answer these and other questions raised by novel approaches to public finance and taxation.

Because accountability requires transparency we need to work on increasing it in practice, too. Whether we call these charges taxes, fees, or penalties, and whether we call these increasingly complicated relationships privatization, public–private partnerships, contracts for services, or outsourcing, one thing is clear: the discretion in the contracting relationship should be open and transparent to inspection by both the participants and the public. It is important to specify and make readily available the actual costs of tax levies or uses changes, bond issues, bond-funded projects, purchase agreements, and asset transfer among many other multisector transactions. One thing that can be done is to require broader financial impact assessments and make these publicly available before deals are made. Another is to ensure that better contracting measures are in place that force costs in the operation and financing of public enterprise to be made public. These sorts of arrangements have potential to change the face of public administration and public finance: fiscal illusion must be dispelled by letting the public in on the trick.

Notes

The recent U.S. Supreme Court decision from the National Federation of Independent Business v. Sebelius, ruled the Affordable Care Act a proper exercise of Congressional authority under the taxing power. That decision highlighted not only the surprisingly contested question of what consti- tutes a tax but equally contested and blurred dis- tinctions between a ‘‘fee,’’ a ‘‘penalty’’ and a tax.

  1. It has been pointed out that ‘‘privatization,’’ prop- erly understood, does not fall in this category. Privatization is the sale of government assets to the private sector. (Thatcher’s sale of steel mills to private interests in Great Britain, for example.) In the United States, however, the term is used

 

 

 

 

interchangeably with outsourcing and contracting to mean the practice of delegating public service delivery to third parties.

 

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Author Biographies

 

Seth B. Payton is an assistant professor of public affairs at the Indiana University School of Public and Environmental Affairs on the Indiana University–Pur- due University, Indianapolis campus. His research is rooted in state and local public policy and finance. He  studies  the  impact  of  institutions  on  local

 

government revenue and the impact of neighborhood dynamics on the ability of local government to deliver public goods.

 

Sheila Suess Kennedy is a professor of law and public policy at the Indiana University School of Public and Environmental Affairs on the Indiana University–Purdue University, Indianapolis campus. Much of her research examines ethics in public admin- istration. She has authored or coauthored multiple books and academic articles examining ethics in public administration. Her most recent book is American Public Service: Constitutional and Ethical Found ations.

Civic Identity, Civic Deficit: The Unanswered Questions

With Heather McCabe, J.D./PhD.            

The current concern over civic education and what might be called our “civic deficit” is founded upon a generally accepted belief that civic knowledge is an important foundation of democratic self-government. There is substantial research linking civic literacy—defined as knowledge of the constitutional and historic bases and current structure of American government–to civic participation and engagement, although definitions of both civic knowledge and civic engagement vary widely. Beyond those connections, however, we are left with a striking absence of empirical research on some very foundational questions: what do we mean by “civic literacy” and “civic knowledge”? Is there some essential, identifiable body of knowledge that civically literate people must know? Do people with and without such knowledge understand America differently, and if so, in what ways? How does informed participation differ from un- or misinformed engagement, and how do the outcomes differ? What evidence do we have to support the widespread belief that civic literacy matters, that there is some irreducible level of civic knowledge critical to the success of the democratic experiment?

There is no dearth of theory on the importance of informed citizenship. In their important book What Americans Know About Politics and Why It Matters, Delli Carpini and Keeter cite Locke’s belief that it is the “obligation of all citizens to act in ways consistent with the public interest.” (p.29). Acting in the public interest requires understanding what the public interest is, and possession of sufficient information to make informed decisions about where it lies. In a letter written by James Madison to W.T.Barry, Madison emphasized the importance of civic knowledge, saying, “A popular government, without popular information or the means of acquiring it, is but a prologue to a farce or tragedy, or perhaps both.” For his part, Alexis de Toqueville believed that “each new generation is a new people that must acquire the knowledge, learn the skills an develop the dispositions or traits of private and public character that undergird a constitutional democracy.” (Branson, 1998).

The emphasis placed on civic competence was one justification for the limited franchise that originally characterized U.S. government. The knowledgeable citizens Madison and de Tocqueville were describing were propertied white males, comparatively privileged and educated men who alone were deemed likely to possess the civic skills necessary to participation in self-governance. Michael Schudson argues that the concept of the “informed citizen” as we know it today did not really emerge until the end of the Progressive Era, with the rise of mass media and the ideal of universal public education. (Schudson, 1999) Prior to the 1890s, voters were handed their ballots by party functionaries, so-called “ticket peddlers,” who provided pre-printed slates of candidates. The voter did not mark the ballot; he simply placed the party’s “ticket” in the ballot box. Beginning in 1888, states began to adopt the “Australian” ballot, which was printed by the government and required a decision by the voter. As Schudson says,

“The Australian ballot shifted the center of political gravity from party to voter. Voting changed from a social and public duty to a private right, from a social obligation to party enforceable by social pressure to a civic obligation or abstract loyalty, enforceable only by private conscience. The new ballot asked voters to make a choice among alternatives rather than to perform an act of affiliation with a group.” (emphasis in original)

If the individual voter was to choose between alternatives, he (and it was still only “he”) needed to be informed, to understand what the alternatives represented and to have the skills needed to evaluate their consistency with American constitutional premises and the common good.

This belief in the importance of informed citizens—whether founded on Lockean philosophy or derived from the growing power vested in the voters—is now virtually universal. It has become an accepted axiom of political culture. While a few hardy souls dispute the nature and amount of knowledge needed for informed democratic participation (Levine, 2013), most political commentators accept the premise and profess their distress when faced with overwhelming evidence that large numbers of voters are woefully uninformed. As former Representative Lee Hamilton recently wrote,

The truth is, for our democracy to work, it needs not just an engaged citizenry, but an informed one. We’ve known this since the nation’s earliest days. The creators of the Massachusetts Constitution of 1780 thought the notion important enough to enshrine it in the state’s founding document: “Wisdom and knowledge, as well as virtue, iffused generally among the body of the people,” they wrote, are “necessary for the preservation of rights and liberties.” (Center on Congress, 2003)

If democratic theory is correct, and a civically literate population is essential to liberal democratic self-governance, the concerns raised by available data are understandable and appropriate.  Research from a multitude of sources gives evidence of a widespread lack of constitutional competence and civic literacy in the United States. Only 36 percent of Americans can correctly name the three branches of government (Annenberg Public Policy Center Judicial Survey, 2007). Fewer than half of 12th grade students can describe the meaning of federalism (National Assessment of Educational Progress, 2006). Only 35.5% of teenagers can correctly identify “We the People” as the first three words of the Constitution (1998 National Constitution Center Survey). The National Assessment of Education Progress (NAEP) 2006 report on civics competencies indicates that barely a quarter of the nation’s 4th, 8th and 12th graders are proficient in civics, with only five percent of seniors able to identify and explain checks on presidential power.

These and many similar research findings clearly demonstrate that those surveyed are woefully ignorant of the subject matter on which they were being tested. What they do not show, however, is the materiality of that subject matter; that is, we have no empirical research that identifies a body of knowledge acquisition of which is essential to informed citizenship. We can certainly speculate: knowing the three branches of government and their respective duties, for example, certainly seems like the sort of civic information citizens need in order to cast an informed vote or otherwise participate in the political process. On the other hand, knowing the composition of the Supreme Court or the names of particular Justices, while desirable, is probably less critical. If we are going to engage in collective hand-wringing over the state of the democratic enterprise, it would seem prudent to identify those elements of civic knowledge that are demonstrably linked to informed citizenship.

It isn’t only the absence of empirical research on that question and many others that erects barriers to reasoned debate about our civic deficit. National efforts to improve civics education and civic literacy are also limited by the widespread belief that knowledge about our history and governing structures is of importance only in the political arena. There is less recognition of its theoretical and practical importance in other areas. In the age of the administrative state, anyone concerned with policy—from business enterprises regulated by the state, to medical researchers dependent upon government grants, to science teachers under pressure to teach religious doctrine in the classroom—quickly finds that knowledge of the nature and extent of the rules to which they are subject and the mechanisms that are available to them is a critical element of disciplinary competence. Increasingly, civic information and civic skills are required for effectiveness in arenas far removed from the political.

An example can be found in the field of social work.  Social workers frequently work with clients from vulnerable populations.  As a part of their work, social workers must advocate within institutions and systems (governmental agencies, regulated organizations) in order to assist their clients in obtaining needed services.  In addition, social justice is a guiding principle of social work (Swenson, 1998; Breton et al, 2003; NASW, 1999) and social workers are expected to advocate within the policy arena when existing policies are not meeting their clients’ needs.   If social workers need to address a policy, either at an individual client level or a system level, they must have the requisite civic knowledge to do so.  They must understand the difference between a legislative statute and an administrative policy.  Additionally, they need to be able to identify whether the policy is a federal, state, or local issue.  If social workers do not have the basic civic knowledge needed to parse out these details, they are unable to appropriately advocate on behalf of their clients.  The same need for civic understanding applies to any enterprise that interacts with government at any level, or is subject to government regulation. Civic competency is necessary for any person, industry or organization seeking to have an impact on the policy environment within which it operates.

Beyond the underappreciated practical importance of civic knowledge to professional practices and business operations of various kinds, beyond the more widely recognized concerns about connections between civic literacy and democratic stability, the sociological literature suggests that the existence of a common body of civic knowledge may play an even more vital role in promoting civic cohesion, due to its function in promoting social capital and its centrality to what has been called “civic religion.” Work done in these areas has considerable relevance to questions about the role of civic literacy in a diverse polity.

References in the United States to social capital can be traced back to 1916 (Putnam, 2000), but widespread interest in the concept did not arise until the mid 1980s with Bourdieu (1986).  The concept was popularized in sociology by James Coleman (1988); it was introduced into general political discourse by Robert Putnam, primarily with the publication of Bowling Alone: The Collapse and Revival of American Community (2000). While there are numerous definitions of social capital, there is general agreement that social capital develops and rests upon norms of trust and reciprocity (both specific and generalized), which develop between people in social networks. Social capital can also build solidarity, which develops as a product of common group fate. Social capital has been defined as either “bridging” or “bonding,” depending upon the “thickness” of the connections involved. Social capital is understood to facilitate coordination, reduce transaction costs, and enhance the flow of information. Civic engagement has been demonstrated to build social capital. (MacGillivray & Walker, 2000).

The term “civil religion” was first coined in 1967 by Robert N. Bellah, in an article for Daedalus that remains the standard reference for the concept. While the proper content of a civic religion has been and remains the subject of heated debate, the purpose of such an overarching value structure is to provide citizens with a sense of common purpose and identity. (Despite the claims of some conservative Christians, Christianity does not provide that social glue; the United States is not and never has been an officially Christian country, although it has been culturally Protestant, and the dramatic increase in religious and cultural diversity over recent decades makes Christian doctrine even less suited to such a task.) The importance of a common value structure, and its relevance to civic literacy, has been explained by one scholar thusly:

The U.S. Constitution contains no reference to deity, and specifically rejects the use of any religious test for citizenship or public office. In order to be consistent with the Constitution, any civil religion must respect the nation’s commitment to individual autonomy in matters of belief, while still providing an overarching value structure to which most, if not all, citizens can subscribe. This is no small task in a nation founded upon the principle that government must be neutral among belief systems. This constitutionally-required state neutrality has long been a source of considerable political tension between citizens intent upon imposing their religious beliefs on their neighbors and those who reject efforts to enforce religious hegemony. Thus far, no proposed value system or theorized civil religion has been entirely able to resolve that conflict. To the extent that Americans do endorse an overarching ideology or civil religion, it is a belief system based upon the values of individual liberty and equal rights enshrined in the U.S. Constitution and Bill of Rights. (emphasis added) (Kennedy, 2011)

We do have ample research showing that greater civic knowledge leads to greater civic engagement. (Galston, 2001; Galston, 2004; Milner, 2002) Civic engagement generates social capital, which connects Americans to each other with bonds of trust and reciprocity. While we have little empirical research on the role of civil religion, it is also believed to forge bonds between citizens and to facilitate the collective civic enterprise. Given America’s growing diversity, such a civic value structure necessarily rests upon our common constitutional values. Civic literacy –knowledge of American history, constitutional premises and governing structures—is thus a necessary component of civil religion, and to the extent that it fosters civic engagement, a generator of social capital.

                                                CONCLUSION

We have ample research about what Americans do and do not know. What we need is research into the causes and consequences of that civic deficit. At a minimum, we need sound empirical investigation into the following questions:

  • What are the essential elements of civic literacy? That is, what is the content of a minimal level of civic knowledge necessary to effective citizenship?
  • What aspects of civic knowledge are most predictive of civic engagement, defined as regular voting, and political activism (work on a campaign, attendance at public meetings, and other indicators of civic involvement)?
  • With respect to those who are civically and politically active, are there measurable, meaningful differences between those who are civically-literate and those who are not?
  • Why have former efforts to improve citizenship education failed to have a lasting effect? What can we do differently in the future to make and sustain improvements?
  • Are there measurable differences in levels of civic literacy between identifiable groups? For example, are scientists more or less civically literate than lawyers? Are members of certain religions more or less literate than others? Are people who harbor homophobic or anti-immigrant or anti-Muslim opinions less civically literate than those who are more accepting of diversity?
  • What are the connections between civic literacy and mass media? How has the dramatic “morphing” of media, and the accompanying changes in the ways in which Americans access information affected levels of civic knowledge?

There are many other research areas we might suggest. These examples only begin to scratch the surface of a pressing research agenda that needs to be “operationalized” and pursued. But the answers to these and similar questions are an essential precondition to thoughtful action to address our civic deficit, and finding the scholars to address them and the resources to support those scholars is an increasingly critical task.

There is widespread recognition that our government institutions are broken. We will not fix them with exhortations alone. Doctors rely on accurate diagnoses in order to prescribe the right medicines; similarly, academics and concerned citizens must base our recommendations on credible empirical evidence. We can’t fix our systems—biological or political—until we really understand what has gone wrong and why.

 

 

Works Cited

Annenberg Public Policy Center. (2007). Annenberg Public Policy Center Judicial

Survey. Retrieved from

http://www.annenbergpublicpolicycenter.org/Downloads/20071017_JudicialSurvey/Judicial_Findings_10-17-2007.pdf.

 

Bourdieu, P. (1986). The Forms of Capital. In J. Richardson, (Ed.) Handbook of Theory

and Research for the Sociology of Education. New York: Greenwood, p. 241-258.

 

Branson, M. (1998). The Role of Civic Education: A Position Paper. Calabasas, CA. The

Center for Civic Education.

 

Breton, M., Cox, E.O. & Taylor, S. (2003). Social Justice, Social Policy, and Social

Work. The Social Policy Journal, Vol.2, Issue 1.  

 

Coleman, J. S. (1988). Social Capital in the Creation of Human Capital.  The American

Journal of Sociology, Vol. 94, p. S95-S120.

 

Delli Caprini, M.X. & Keeter, S. (1996). What Americans Know About Politics and Why

It Matters. New Haven: Yale University Press.

 

Galston, W.A. (2001). Political Knowledge, Political Engagement, and Civic Education

Annual Review of Political Science, Vol.4, 2001, pp. 217-234.

 

Galston, W.A. (2004). Civic Education and Political Participation. PS: Political Science

& Politics, Vol. 37, Issue 2, pp.263-266

 

Kennedy, S.S. (2011). Civil Religion. [Web Blog]. Retrieved from

http://sheilakennedy.net/2011/02/civil-religion.

 

Levine, P. (2013, January 17). What Did You Voters Know and Understand in 2012?

[Web Blog]. Retrieved from http://peterlevine.ws/?p=10620.

 

MacGillvray, A. & Walker, P. (2000). Local Social Capital: Making it Work on the

Ground. In T. Schuller, Social Capital: Critical Perspectives. Oxford: Oxford University Press, p.197-211.

 

Milner, H. (2002). Civic Literacy: How Informed Citizens Make Democracy Work.

University Press of New England

 

National Assessment of Educational Progress. (2006). NAEP-Civics 2006: The Nation’s

Report Card. Retrieved from http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2007476.

 

National Association of Social Workers (1999). Code of Ethics of the National

Association of Social Workers. Retrieved from          http://www.socialworkers.org/pubs/code/code.asp.

 

National Constitution Center. (1998). National Constitution Center Teens’ Poll.

Retrieved from http://ratify.constitutioncenter.org/CitizenAction/CivicResearchResults/NCCTeens’Poll.shtml

 

Putnam, R.D. (2000). Bowling Alone: The Collapse and Revival of American Community.

New York: Simon & Schuster, p. 19-20.

 

Schudson, M. (1999). The Good Citizen: A History of American Civic Life. Cambridge,

MA: Harvard University Press.

 

Swenson, C.R. (1998). Clinical Social Work’s Contribution to a Social Justice

Perspective. A Journal of the National Association of Social Workers, Vol.43, Issue 6. 

 

The Center on Congress. (2003, November 15). Why We Need An Informed Citizenry.

Bloomington, IN.

 

Talking Politics? What You Need to Know Before You Open Your Mouth

                                            Introduction

As Daniel Patrick Moynihan famously observed, we are all entitled to our own opinions, but not to our own facts. Arguments based on manufactured histories or distorted realities are intellectually dishonest and ultimately unproductive—and they are particularly destructive in an era when there is no universally trusted “mainstream” media to correct spin, misrepresentations and outright lies.

What we are trying to do with this brief publication is identify some of the most common areas of confusion and/or misunderstanding—those distortions of accepted history, economics and/or science—that seem most often to characterize our contemporary political/social arguments, and to distinguish between facts that have been documented and agreed to by responsible people of all ideological perspectives, and the different conclusions and interpretations that may be drawn from those facts. To use an analogy from the courtroom, two sides to a conflict may “stipulate” to what happened, but then proceed to argue in good faith about what those agreed-to stipulations really tell us.

Why do we say that agreement on definitions and documented facts is important? Take the recent debates about the Affordable Care Act—aka “Obamacare”—as an example. People may have very different opinions about the wisdom of the policy choices involved, but our decision to repeal, implement or amend the Act depends upon agreement about what it actually says and does. If opposition to the policy is based upon “death panels” that don’t exist, or its defense is based upon an insistence that the individual mandate isn’t government coercion, the likelihood of reasoned discussion—let alone agreement on policy changes—disappears.

Or take the ongoing battles over religion in the nation’s schools. There are genuine arguments to be made about the proper application of the Establishment Clause in the context of public education. But just as we can’t have those reasoned disputes with people who insist that the First Amendment doesn’t require separation of church and state, we cannot have productive conversations with people who insist that all the Founders were Deists who believed religion was unimportant.

Basing one’s arguments on verifiable fact and accepted history actually helps people make more persuasive cases for their own points of view. We all encounter people who have a legitimate point worth considering, but who—because they are basing their argument on erroneous facts, or demonstrating a lack of understanding of important basic concepts—get dismissed out of hand. Credibility requires verifiable evidence. You might want to use that perfect quote from Thomas Jefferson that you saw on the Internet, but if it is bogus, you’ve just undermined your own position. Defending alternate realities is like arguing about whether a fork is a spoon—it doesn’t get you any closer to a useful resolution.

This brief pamphlet contains basic facts about the U.S. Constitution, economic concepts and systems and the nature of science and the scientific method that every citizen should know—facts and definitions that can serve as solid starting points from which you can build more persuasive arguments for your preferred policies, whatever they may be.

 

What Everyone Should Know about the Constitution and American Legal System:

1) What is Government?

This may seem like a silly question, but in an age of outsourcing and privatization, it’s often harder to identify government than you might think. (For example, tax dollars pay the salaries of more than 18 million people employed by private companies or nonprofit organizations under contracts with government agencies. Are they part of government? It depends.)

Governments were originally defined as entities having the exclusive right to exercise legitimate coercive power. They were established to keep the peace and control the kinds of behaviors that a given society believes to be inconsistent with public order. It is a truism that a government strong enough to protect us is a government strong enough to oppress us, and some of our most acrimonious debates arise from concerns that by giving the government enough authority to do particular jobs, we may be giving it the power to unduly limit our liberties.

Government—sometimes referred to as “the state” (not to be confused with states, like Indiana or California) or the “public sector” (not to be confused with “the public square,” a very different concept) is also a mechanism through which we citizens collectively do things that would be difficult or impossible to do individually—issue currency, defend the nation’s borders, clean up waterways or pave roads. There are two non-governmental sectors: nonprofit and voluntary organizations or associations (sometimes called civil society or the nonprofit sector), and private persons, families and businesses—the private sector.

The role of government has grown significantly over the years, and thanks to new agencies performing new tasks and the growth of public-private partnerships of various kinds, its presence isn’t always obvious. But here’s a good rule of thumb: If an agency is managed by someone we’ve elected—or by someone appointed by someone we’ve elected—and if it is financed with our tax dollars, it’s probably government.

 

Why It Matters

In the United States, it is particularly important that we know government when we see it, because our constitutional system is largely based on a concept of “negative liberty.” The Founders believed that individual rights do not come from government; rather, they are “natural.” We are entitled to certain rights simply by virtue of being human (thus the term “human rights”), and government must respect and protect those rights.  The U.S. Bill of Rights is essentially a list of things that government—“the state”—is forbidden to do. For example, the state cannot prescribe our religious or political beliefs, search us without probable cause, or censor our expression—and it is forbidden from doing these things even when popular majorities favor such actions.

Those limitations don’t apply to private, non-governmental actors. The government can’t control what you read, for example, but your mother can. The government can’t tell you what to say but (at least at work) your boss can. Your public (government) school can’t make you say a prayer, but a private or parochial school can. The doctrine known as “state action” is shorthand for these limits on government intrusions. If government hasn’t acted, or isn’t involved, neither is the Constitution. Private actors can break other laws, like civil rights laws, but only government can violate the Bill of Rights. That makes it pretty important to be able to recognize when government has acted.

 

2) What is a Constitution?

Constitutions are different in kind from the statutes and ordinances passed by legislative bodies. They are statements of broad principles that govern and limit what kind of laws legislatures may properly enact and what sort of actions government officials can properly take. While parts of the U.S. Constitution deal with specific, practical matters—how old must someone be to run for President? What is the function of the courts?—they also are statements of important principles meant to guide and constrain lawmakers and government authorities in the future. (There is a very big difference between “there shall be a traffic signal at First and Main Streets” or “there will be no smoking in public places” and “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated.”) A government is said to be legitimate when its laws and the actions of its public officials are consistent with the principles of its constitution.

Two hundred plus years after the American Constitution was drafted, lawmakers and judges must consult the text and context of our Constitution, in order to decide what the drafters’ original intentions were and the nature of the values they were trying to protect. Since there were many participants in the Constitutional Congress, and they did not speak with one voice, there were often differences of opinion about the meaning of the various provisions of the Constitution and Bill of Rights even then.

Why It Matters.

Understanding the difference between a constitution and an ordinary law is important for a number of reasons, not the least of which is that constitutions are statements of national aspirations and beliefs about the proper way for citizens to live together. Understanding what values the Founders were trying to protect helps us apply those values to situations they could never have envisioned. It’s a safe bet that James Madison did not have an opinion about government regulation of porn on the Internet, for example. But he most certainly had strong opinions about the value of protecting free expression. The Founders who drafted the Fourth Amendment’s Search and Seizure provisions could hardly have foreseen technology that allows police officers to “see” marijuana growing inside a house from across the street. Our Courts must decide how the Founders would have applied the principles that were so important to them to such new “facts on the ground.” (This process is what legal scholars mean when they talk about the “living Constitution.”) If we don’t know the history and philosophy that motivated the Founders’ choices, we can’t form educated opinions about the application of their principles to modern situations.

3) What Was the Enlightenment?

The Enlightenment is the name given to the 18th Century cultural, intellectual and philosophical movement that produced science, empirical inquiry, and the “natural rights” and “social contract” theories of government legitimacy on which our system is based. Enlightenment thinkers included Isaac Newton, Voltaire, Montesquieu, Hobbes, John Stuart Mill, John Locke and many, many others. The Enlightenment ushered in profound changes in the way people thought about science, education, liberty and the role of government.

Why It Matters

The Enlightenment changed the definition of liberty. The Puritans and Pilgrims who came to America defined religious liberty as “freedom to do the right thing”—freedom to worship and obey the right God in the true church, and to use the power of government to ensure that their neighbors did too. The Founders who crafted our constitution some 150 years later were products of the Enlightenment and its dramatically different concept of liberty.  Enlightenment philosophers defined liberty as personal autonomy—an individual’s freedom to make his own moral and political decisions, free of government coercion. In the Enlightenment’s libertarian construction, liberty meant freedom to “do your own thing,” so long as you did not thereby harm the person or property of someone else, and so long as you recognized the equal right of others to do their “own thing.”  The U.S. Constitution is based upon the Enlightenment understanding of liberty.

The Enlightenment also gave us John Locke’s “social contract” theory of government. Locke believed that government legitimacy rested on a theorized agreement—a ”social contract” –between citizens and their governments. Citizens gave the state a monopoly on the use of coercive power in return for the state’s protection of their property, and its maintenance of public order and safety. (This was a dramatic change from belief in the divine right of Kings, a belief that had long justified monarchy.) In Locke’s view—adopted by the Founders—power came from the people, who authorized government to exercise that power for specific purposes, and who could revoke that authority if the government failed to keep its part of the bargain.

4) What is the Bill of Rights?

When the Constitutional Convention drafted a document to replace the unworkable Articles of Confederation, that document did not include a Bill of Rights. The omission was not because there was a disagreement over the importance of those rights; it was because the new government was seen as one of delegated powers, and those powers did not include censoring speech, dictating religious beliefs and otherwise infringing fundamental liberties. Those who opposed adding written guarantees to the constitution also worried that any effort to enumerate, or list, basic liberties would inevitably omit some. Nevertheless, it quickly became clear that the new constitution would not be ratified unless proponents promised to enact a Bill of Rights spelling out specific liberties that government could not infringe.

As passed, the first eight Amendments listed rights that the government was specifically forbidden to infringe; the Ninth and Tenth Amendments were added to address the concerns of Founders like Alexander Hamilton, who worried that any list of protected rights would inevitably leave some out. The Ninth and Tenth Amendments—sometimes called the “Rights and Powers” Amendments—were intended to make it clear that just because a right wasn’t “enumerated” didn’t mean people didn’t still have that right, and to affirm that powers not specifically given to the federal government were retained by the states and/or the people.

The Bill of Rights initially limited only federal government action. It wasn’t until the Fourteenth Amendment was ratified, in the wake of the Civil War, that the Bill of Rights’ limits on government power were applied to state and local government actors as well. The 14th Amendment prohibited states from denying their own citizens the “privileges and immunities” of American citizenship; as a result, in a series of cases interpreting the Amendment, the Supreme Court ruled that Americans are entitled to the same fundamental rights no matter which state they live in. You don’t lose your right to vote, for example, or your right to choose your own religion or reading material, when you move from one state to another. Today, when we refer to the Bill of Rights, we typically mean the first ten Amendments plus the Equal Protection and Due Process Clauses of the 14th Amendment.

Because the Bill of Rights incorporates the Enlightenment understanding of liberty as a negative, that is, as our right to be free of government interference with our fundamental rights, only government can violate the Constitution.  If there has been no state action—the legal term meaning action taken by a unit of government—the constitution isn’t involved.

Why it Matters

The Bill of Rights raises and answers an important procedural question: who decides? Who decides what prayer you say, what book you read, how many children you have? In our system, government doesn’t get to decide these and other very personal matters—we individuals decide these things for ourselves. The Bill of Rights doesn’t tell us what we should value or how we should live our lives; it protects our right to make those decisions for ourselves, free of the interference of government.

The Bill of Rights not only limits what government can do, it limits what popular majorities can vote to have government do. In fact, the Bill of Rights is sometimes called a “libertarian brake” on the power of the majority. The Bill of Rights ensures that a majority of your neighbors cannot vote to make you a Baptist or an Episcopalian; they also don’t get to vote on your reading materials or your political opinions. When people don’t understand that the Bill of Rights limits what majorities can vote to have government do, they often misunderstand court decisions that uphold the right of individuals to hold unpopular positions or unconventional beliefs. The courts are not endorsing the choices made by those individuals; rather, they are protecting the right of individuals to make their own choices. When legislators fail to appreciate the limits imposed by the Bill of Rights, they often enact unconstitutional laws that deprive citizens of their liberties. When people don’t understand the operation of the 14th Amendment, they don’t understand that the Bill of Rights applies to all levels of government, including state and local authorities.

5) What are Checks and Balances?

The U.S. Government is divided into three branches: Executive (sometimes called Administrative), legislative, and judicial. We refer to this Constitutional structure, or architecture, as Separation of Powers, and it is fundamental to the American form of government.

The purpose of dividing government powers and responsibilities in this way was twofold. Enlightenment thinkers believed such a system would be more efficient, a division of labor that would make the best use of specialized skill and expertise. Judges would be better at judging if that was the bulk of their responsibilities; legislators would be more adept at passing laws, and so forth. They were also convinced that a division of power would keep any one branch from becoming too powerful and thus threatening the liberties of citizens. Each branch would check the powers of the other branches.

The legislative branch passes the laws. The executive branch administers those laws. And the judiciary—ultimately, the Supreme Court—determines whether the laws passed by legislators and the actions of the administration are consistent with the Constitution and Bill of Rights.

Checks and balances don’t stop with the division of the federal government into three separate branches. The system devised by the Founders also gave significant authority to state and local units of government, further dividing power. We call that structure federalism. If you have a zoning issue, for example, you take your case to your local, municipal government; if you want to lobby for changes to family or marriage laws, you approach state legislators. Local, state and federal authorities have different, although sometimes overlapping, jurisdictions. Federalism obviously raises the possibility of conflicts between federal and state laws; when that happens, the Constitution’s Supremacy Clause provides that the federal law prevails.

Why it Matters.

Understanding the structure of our government is important for many reasons. If you want to effect a change, you need to know who has the authority to make that change. (Griping about a zoning ordinance to a member of Congress may make you feel better, but it’s not likely to do much good.) Understanding how the branches interact is also necessary in order to cast informed votes; at election time, the airwaves are filled with political advertisements blaming officeholders for doing or failing to do something. Often, the effectiveness of that charge depends upon voters not understanding where the actual responsibility for action or inaction lies. This is particularly true of political campaigns for chief executives—Governors or the President. People unfamiliar with checks and balances tend to believe that the President or Governor can simply decide to make some change, and it will happen. That is very rarely the case; even appointments to policymaking positions or the courts often require ratification by the legislative branch. We need to understand the operation of checks and balances and the way they limit the exercise of power in order to arrive at informed opinions about elected officials’ performance.

 

6) What is Judicial Independence?

In the federal courts, judges are appointed for life, and can be removed only for improper behavior. This is an important part of our system of checks and balances. We elect a President, who appoints members of the executive branch; we elect the men and women who represent us in Congress. Those two branches are thus “answerable” to voters. We can dismiss them—vote them out—if we don’t like the way they discharge their duties. The courts, on the other hand, are not supposed to do voters’ bidding; they are responsible to the Constitution and the rule of law, not to popular passions or the electorate.

Why It Matters.

Removing judges from electoral politics was intended to insulate the courts from political pressure. When judges must decide high-profile or highly charged cases, we want them to make those decisions on the basis of their reading of the law, the facts and the Constitution—not out of fear of being voted out of office by a public that may favor a different result. When judges are elected, as they are in some states, and must raise campaign money in order to mount a campaign, there is also a concern that they will weigh the positions of campaign contributors more heavily than the demands of justice or the requirements of the rule of law. When judges make poor decisions—and some will—we nevertheless want those decisions to be based upon their considered judgments, not on political expediency.

 

7) What is Freedom of Speech?

Most of the people who want to ban a book or a painting, who want to protect the flag or the Virgin Mary from desecration, are acting on their belief in the nature of the public good. They see unrestrained freedom as a threat to the social fabric. The Founders did not minimize the danger of bad ideas; they believed, however, that empowering government to suppress “dangerous” or “offensive” ideas would be far more dangerous than the expression of those ideas—that once we hand over to the state the authority to decide which ideas have value, no ideas are safe. (Where fundamental liberties are concerned, majority rule is a lot like poison gas—it’s a great weapon until the wind shifts!)

Like our legal and economic systems, the Free Speech clause of the First Amendment is based upon a belief in the marketplace–if you make a better widget, it will beat out the competition; if you have a better idea, it will eventually emerge victorious. Accordingly, in our system, the antidote to bad speech is not suppression; it is more and better speech. Every so often, we must remind ourselves that the First Amendment was intended to protect all ideas, not just good ideas, or those with which a majority or substantial minority may agree. As Justice Oliver Wendell Holmes memorably put it, the Free Speech Clause of the First Amendment was meant to protect “the idea we hate.”

While government must respect our right to express our own opinions—while it cannot control the content of our message—it can constitutionally regulate the time, place and manner of that expression. Such restrictions, however—no sound trucks in residential neighborhoods after 10:00 pm, for example—must be reasonable, must be content neutral (that is, not based upon the idea being expressed), and must apply to everyone equally.

Why It Matters.

John Stuart Mill made perhaps the most enduring moral argument for free speech, writing  “If all mankind minus one were of one opinion, and only one person were of the contrary opinion, mankind would be no more justified in silencing that one person than he, if he had the power, would be justified in silencing mankind.” This argument rests on respect for the integrity of the individual conscience—respect for the “inalienable” right of each individual to form and exchange opinions voluntarily, and to attempt to persuade others of the validity of those opinions. In addition to this argument for the importance of protecting free speech as an individual right, however, Mill and other Enlightenment philosophers believed that a robust “marketplace of ideas” was the mechanism most likely to guarantee that truth would emerge from public debate.

 

8) What is Separation of Church and State?

The phrase “separation of church and state” refers to the operation of the First Amendment’s religion clauses. The phrase itself does not appear in the Constitution. (Its first documented use was by Roger Williams, founder of Rhode Island, well before the Revolutionary War.) The most famous use of the phrase came from Thomas Jefferson; when Jefferson was President, a group of Danbury Baptists wrote to him asking for an official interpretation of the First Amendment’s religion clauses. Jefferson’s response was that the Establishment Clause and Free Exercise Clause were intended to “erect a wall of separation” between government and religion.

Historians tell us that the Establishment Clause went through more than 20 drafts, with the Founders rejecting formulations like “there shall be no National Church.” The Establishment Clause prohibits the government from making any law “respecting an establishment of religion.” The courts have uniformly held that this language not only forbids the government from establishing an official religion or state Church, but also prohibits government actions that endorse or sponsor religion, favor one religion over another, or that prefer religion to non-religion, or non-religion over religion.

The Free Exercise Clause prohibits government interference with the “free exercise” of religion. Americans have the right to choose their own beliefs, and to express those beliefs without fear of state disapproval. Together, the Free Exercise Clause and the Establishment Clause require government neutrality in matters of religion. Government can neither benefit nor burden religious belief.  One way to think about the operation of the religion clauses is that the Establishment Clause forbids the public sector (i.e., government) from favoring or disfavoring religion, and the Free Exercise Clause forbids government from interfering with the expression of religious beliefs in the public square (i.e., the myriad non-governmental venues where citizens exchange ideas and opinions.)

It’s important to note that the courts have endorsed some restrictions on religious observance (as opposed to belief)—for example, your religion may call for sacrificing your first-born, or smoking dope, but your rights under the Free Exercise Clause don’t extend that far!

Why It Matters.

Some of Americans’ most heated arguments are rooted in religion. This has always been the case, even in colonial times, when “religious diversity” mostly meant “different kinds of Protestant.” As we become more religiously diverse as a nation, it becomes even more important to understand the constitutional limits on the rules that government can impose.

When states misuse their authority to play favorites, to privilege some religious beliefs over others, people who do not share those privileged beliefs are relegated to the status of second-class citizens. Separation of church and state prevents adherents of majority religions from using government to force their beliefs on others, and it keeps agencies of government from interfering with the internal operations of churches, synagogues and mosques. As government becomes more pervasive, knowing where to draw the line between what is permissible and what is not becomes more difficult, making it even more important to understand the original purpose of the religion clauses.

As to that original purpose, there are few explanations better than the one offered by John Leland (1754-1851), an evangelical Baptist preacher with strong views on the individual’s relationship to God, the inviolability of the individual conscience, and the limited nature of human knowledge. He wrote, “religion is a matter between God and individuals; religious opinions of men not being the objects of civil government, nor in any way under its control…Government has no more to do with the religious opinions of men than it has with the principles of mathematics.”

 

9) What is Freedom of the Press?

It is interesting to consider why freedom of the press was singled out for specific protection in the First Amendment. After all, the Free Speech clause obviously protected journalists as well as other citizens. Why include a specific provision about freedom of the press?

The answer is that the architects of our constitution believed that self-government requires the free and uninhibited flow of information. They wanted to be extra-certain the government kept its hands off that information. So while the First Amendment protects all expression, the free press provision emphasizes the importance of protecting the specific kind of expression we call “journalism.” Note that the constitution doesn’t protect persons called “journalists.” It protects the act of journalism. The activity of “journalism” ensures the availability of information that is in the public interest.

The Founders were anything but naïve. They recognized that what they called the press and we call the media got it wrong a lot of the time. The newspapers of their own time were partisan rags that make our own politicized outlets look positively statesmanlike by comparison. But the Founders also believed that only the freest, most robust exchange of argument, information and gossip would safeguard liberty.  Neither Freedom of Speech nor Freedom of the Press rested on the notion that ideas are unimportant, that “sticks and stones can break my bones, but words won’t hurt me.” The Founders knew that ideas are often both powerful and dangerous. But they believed that giving the government power to determine which ideas and information can be transmitted or expressed was infinitely more dangerous.

Why It Matters.

An informed citizenry is ultimately the only guarantor of liberty and sound public policy, and in our complex modern society, citizens depend upon the media for that information. This role of mass media is sometimes called “the watchdog function,” and it is critically important to reasoned political decision-making.  One of the challenges facing American citizens in the age of the Internet is the fragmenting of the traditional media, and the loss of the fact-checking function it used to provide.  When citizens do not have reliable and credible sources of information, ideology and partisanship drive the national conversation. Whatever their faults and shortcomings, media providing what has been called “the journalism of verification” are critically important to democratic deliberation.

 

10) What is the Right to Assemble?

In addition to Freedom of Speech, Religion and the Press, the First Amendment provides for “the right of the people peaceably to assemble, and to petition the government for a redress of grievances.” The Supreme Court held in 1937 that the right to peaceably assemble “for lawful discussion, however unpopular the sponsorship, cannot be made a crime.”

 

Why It Matters.

When we think about assembling today, images of the Tea Party or Occupy Wall Street may come to mind, but this right to demonstrate, to engage in public protest, has been an important part of the American story for a long time. It protected union organizers, facilitated the civil rights movement of the late 1950s and early 1960s, and the gay rights movement of our own times. It has also protected those trying to derail those movements. Demonstrations—sometimes called “symbolic speech”—are part of the broad umbrella of expressive freedom that the Founders believed to be essential to ordered liberty. Protecting the right of citizens to come together to protest perceived injustices or highlight social problems is yet another “check” on the power of government. It empowers citizens to demand that their concerns be heard, if not necessarily addressed.

 

11) What is Search and Seizure?

Before the American Revolution, British soldiers entered the homes of colonists at will, searching any person or place they wanted and often motivated by nothing more than political animosity. Resentment of this practice was a significant cause of the Revolution. (To be fair, many Englishmen also objected to the use of “General Warrants” authorizing searches at the discretion of the authorities. William Pitt, addressing Parliament in 1763, famously said, “The poorest man may, in his cottage, bid defiance to all the forces of the Crown. It may be frail; its roof may shake; the wind may blow through it; the storm may enter; the rain may enter; but the King of England may not enter.”)

When America won independence, revulsion against such practices led to enactment of the Fourth Amendment, which provides that people have a right to be secure in their “persons, houses, papers and effects against unreasonable searches and seizures” and requires that police and other authorities have a warrant, issued upon “probable cause,” to conduct such searches.  The Amendment effectively prohibited searches unless government had cause to believe that a crime had occurred and a good reason to believe that a specific person or place contained evidence of that crime. Furthermore, the reasonableness of the search was not to be left to the discretion of an individual policeman; a search warrant was to be issued by an impartial magistrate.

Why It Matters.

The Fourth Amendment protects citizens against abuses of authority by erecting procedural safeguards against over-reaching and intimidation.  America, unlike totalitarian regimes, places the burden on government to show why it should be allowed to search, rather than on citizens to demonstrate why they should be left alone. The Fourth Amendment rests on the premise that individuals are entitled to be left alone unless there is good reason or “probable cause” to intrude upon their privacy. It would thus violate the Fourth Amendment if police stationed themselves on a public street and demanded that every third passer-by submit to a drug test, even if it could be demonstrated that a high percentage of those who lived in that neighborhood used drugs. The Fourth Amendment protects us against “fishing expeditions”—searches for something incriminating that are based solely on hunches, animosity or cultural stereotypes.

 

12) What is Due Process of Law?

The right of each citizen to “due process of law” is included in both the Fifth and Fourteenth Amendments. The Fifth Amendment provides that no person shall be “deprived of life, liberty or property without due process of law” and the Fourteenth Amendment reinforces that prohibition by declaring that “No State shall make or enforce any law which shall abridge the privileges and immunities of citizens of the United States; nor shall any State deprive any person of life, liberty or property without due process of law..”

The effect of this insistence on a fair process can be seen most clearly in the American criminal justice system. Unlike civil and canon law systems—sometimes referred to as inquisitorial systems—that were common in Europe at the time of the Revolutionary War, the American adversarial system requires that proceedings be public, rather than secretive, and gives the accused a presumption of innocence. (In other words, the “burden of proof” is on the prosecution, which must prove guilt “beyond a reasonable doubt.” The accused person need not prove his innocence.) People charged with crimes have a right to be tried by a jury of their peers, in a trial presided over by an impartial judge, and they have the right to refuse to testify—to “take the Fifth” as popular culture phrases it. If the prosecution loses, that’s it—the prohibition against double jeopardy means the state can’t try again.

These and other aspects of criminal law’s due process guarantees were efforts to address the imbalance between a powerful government and far less powerful individuals. The primary goal of our system is not to demonstrate the authority of an all-powerful state, it is to find the truth of a matter, and achieve justice.

Americans’ right to due process is not limited to the criminal justice system. Whenever government acts in a way that threatens a citizen’s liberty or property, the government must provide fair notice and an opportunity for that citizen to be heard. Due process in civil matters is based upon the individual’s right to insist that government actions meet the test of fundamental fairness. So when government proposes to take action that would violate what the courts have called “the liberty interest” (the right to enter into contracts, the right to engage in common occupations, the right to marry and bring up children, to worship freely, to acquire useful knowledge—in short, the right to enjoy the qualities of life recognized as essential to the pursuit of happiness), or when the government proposes to infringe a “property right” (licenses to practice a profession, social security entitlements, civil service employment) we have a right to be notified of the impending action and the reasons for it, and the right to argue about it—to confront witnesses against us, and to have our arguments heard by an impartial decision-maker.

There is one other type of due process, and it is widely misunderstood. This is substantive due process, sometimes called “the right to privacy.” Substantive due process shields private rights from the exercise of arbitrary power; it distinguishes between matters that are properly a concern of government, and thus subject to regulation, and those that are not. (The Supreme Court has ruled, for example, that the question whether married couples use birth control is a personal decision, not a decision that can constitutionally be made by government.)

Why It Matters

Due process is an essential element of the rule of law; the existence of a fair and open process that applies equally to everyone prevents the exercise of raw power, and arbitrary or capricious enforcement of the rules. In addition to being seen as “fair play,” due process is essential to social stability. When people feel that they have been treated unjustly, when they have been prevented from “having their say, or making their case, they are far less likely to abide by the law or official rulings.

Due process is also a tangible outgrowth of the Founders’ insistence on limiting state power. The U.S. Constitution draws a distinction between public and private, and substantive due process guarantees are one way we ensure that government does not overreach, does not intrude into decisions that are properly left to individuals. Both procedural due process and substantive due process are meant to limit the authority of government and prevent abuses of state power.

 

12) What Do We Mean by “Equal Protection of the Laws?”

Governments have to classify citizens for all kinds of perfectly acceptable reasons. We draw a distinction between children and adults, between motorists and pedestrians, between smokers and non-smokers. The Equal Protection doctrine prevents government from imposing inappropriate classifications; those based upon criteria that are irrelevant to the issue, or that unfairly burden a particular group.  The general rule is that a governmentally imposed classification must be rationally related to a legitimate government interest. A requirement that motorists observe a speed limit is clearly a classification related to government’s entirely proper interest in public safety. A law that imposed different speed limits on African-American and Caucasian drivers just as clearly would be improper.

Laws can be discriminatory on their face (i.e., only white males can vote); however, these days, laws meant to be discriminatory are usually crafted to achieve that result by design. That is, they are drawn to look impartial on their face, but to have a discriminatory effect. A rule that all firefighters weigh 180 or more pounds would prevent many more women from being employed than men, despite the fact that one’s weight is not a indicator of strength or the ability to climb a ladder, etc. There are also situations in which genuinely neutral laws are applied in a discriminatory fashion. (The phrase “Driving While Black” grew out of statistics suggesting that some police officers were disproportionately stopping black motorists for speeding.)

The courts will look more closely at classifications that burden constitutional rights, or disadvantage members of groups that have historically been subject to discrimination. Racial minorities and women fall into those categories. We call that process of taking a closer look “heightened” or “strict” scrutiny.

Why It Matters.

The constitutional requirement of equal protection is intended to prevent majorities from using government to disadvantage individuals and minorities of whom the majority may disapprove. Equal Protection guarantees—like all the other provisions in the Bill of Rights—restrain only government. Statutes may or may not address private-sector discrimination.

Essentially, the Equal Protection Clause requires government to treat citizens as individuals, not as members of a group. Laws are supposed to be based upon a person’s civic behavior, not her gender, race or other identity. So long as we citizens obey the laws, pay our taxes, and generally conduct ourselves in a way that does not endanger or disadvantage others, we are entitled to full equality with other citizens.  That guarantee of equal civic rights is one of the aspects of American life that has been most admired around the globe; it has unleashed the productivity of previously marginalized groups and contributed significantly to American prosperity.

 

13) What is the Difference between Civil Liberties and Civil Rights?

If you aren’t quite certain, you have a lot of company. The distinction is lost on many, if not most, citizens and on a good number of legislators.  Civil liberties are the individual freedoms protected by the Bill of Rights. They are rights that agencies of government must respect. Citizens of the new United States refused to ratify the Constitution unless a Bill of Rights was added, specifically protecting them against official infringements of their rights. Among our civil liberties are the right to free expression, the right to worship (or not) as we choose, and the right to be free from unreasonable searches and seizures. After the civil war, the Fourteenth Amendment added the Equal Protection Clause, prohibiting government from treating equally situated citizens unequally.  Only the government can violate your civil liberties.

Civil rights took a lot longer to achieve, and were—and still are—a lot more controversial. Congress passed the Civil Rights Act in 1964. Civil rights laws protect people against private acts of discrimination in employment, housing or education. The original Civil Rights Act applied to businesses engaged in interstate commerce—businesses that held themselves out to be “public accommodations” but were, shall we say, “selective” about which segments of the public they were willing to accommodate. State and local civil rights acts followed passage of the federal law. Civil rights laws generally include a list of characteristics that cannot be used to disfavor or discriminate against people: race, religion, gender, and so forth.

Why It Matters.

Knowing the difference between rights that are rooted in the constitution and those that are creations of statute helps Americans better understand our national history, and the arguments being made by groups that remain unprotected by civil rights laws.  For example, GLBT people in states with civil rights laws that do not prohibit discrimination on the basis of sexual orientation can legally be fired just for being gay. Landlords can refuse to rent apartments to them. (The Fourteenth Amendment’s Equal Protection Clause prohibits government employers from treating gays and lesbians differently, but it has nothing to say about private employers.)

Similarly, knowing which rights are constitutionally protected should allay concerns expressed by some religious groups that passage of a civil rights law will force them to change their religious beliefs. Since the Free Exercise Clause is a constitutional guarantee, the amendment of a civil rights measure to include protection for gays and lesbians would have no effect on the practices or preaching of churches that consider homosexuality sinful—just as civil recognition of divorce did not mean that the Catholic Church had to change its theological opposition to that practice.

 

What Everyone Should Know About the American Economic System

 

14) What is Capitalism?

Capitalism is defined as an economic and political system in which a country’s trade and industry are controlled by private owners for profit. It is characterized by free markets, where the prices of goods and services are determined by supply and demand, rather than set by government. Economists often define the ideal of free trade as a transaction between a willing buyer and a willing seller, both of whom are in possession of all information relevant to that transaction.

Why It Matters.

Understanding the importance of free trade to capitalism is important, because it defines the proper role of government in a capitalist system—as an “umpire” or referee, ensuring that everyone plays by the rules. For example, Teddy Roosevelt reminded us that monopolies distort markets; if one company can dominate a market, that company can dictate prices and other terms with the result that those transactions will no longer be truly voluntary. If Manufacturer A can avoid the cost of disposing of the waste produced by his factory, by dumping it into the nearest river, he will be able to compete unfairly with Manufacturer B, who is following the rules governing proper waste disposal. If Chicken Farmer A is able to control his costs and gain market share by failing to keep his coops clean and his chickens free of disease, unwary consumers will become ill. Most economists agree that in order for markets to operate properly, government must act as an “umpire,” assuring a level playing field.

This need for government is a response to what economists call “market failure.” There are three situations in which Adam Smith’s “invisible hand” doesn’t work: when monopolies or corrupt practices replace competition; when so-called “externalities” like pollution harm people who aren’t party to the transaction (who are neither buyer nor seller); and when there are “information asymmetries,” that is, when buyers don’t have access to information they need to bargain in their own interest. Since markets don’t have built-in mechanisms for dealing with these situations, most economists argue that regulation is needed.

Economists and others often disagree about the need for particular regulations, but most do agree that an absence of all regulatory activity undermines capitalism. Unregulated markets can lead to a different system, sometimes called corporatism. In corporatist systems, government regulations favoring powerful corporate interests are the result of lobbying by corporate and monied special interests that stand to benefit from them. You might think of it as a football game where one side has paid the umpire to make calls favorable to that team.

 

15) What is Socialism?

Socialism is the collective provision of goods and services. The decision whether to pay for certain services collectively rather than leaving their production and consumption to the free market can be based upon a number of factors. First, there are some goods that free markets cannot or will not produce. Economists call them public goods, and define them as both “non-excludable” –meaning that individuals who haven’t paid for them cannot be effectively kept from using them—and “non-rivalrous,” meaning that use by one person does not reduce the availability of that good to others. Examples of public goods include fresh air, knowledge, lighthouses, national defense, flood control systems and street lighting. If we are to have these goods, they must be supplied by the whole society, usually through government, and paid for with tax dollars.

Not all goods and services that we provide collectively are public goods. Policymakers have often based decisions to socialize services on other considerations: we socialize police and fire protection because doing so is generally more efficient and cost-effective, and because most of us believe that limiting such services only to people who can afford to pay for them would be immoral. We socialize garbage collection in more densely populated urban areas in order to enhance the livability of our cities and to prevent disease transmission.

Why It Matters.

Getting the “mix” right between goods that we provide collectively and those we leave to the free market is important, because too much socialism hampers economic health. Just as unrestrained capitalism can become corporatism, socializing the provision of goods that the market can supply reduces innovation and incentives to produce. During the 20th Century, many countries experimented with efforts to socialize major areas of their economies, and even implement  socialism’s extreme, communism, with uniformly poor results. Not only did economic productivity suffer, so did political freedom. (When governments have too much control over the means of production and distribution, they can easily become authoritarian.)

Virtually all countries today have mixed economies. The challenge is getting the right balance between socialized and free market provision of goods and services.

 

16) What are the Differences between Socialism, Fascism and Communism?

In our highly polarized politics today, words like Socialism, Fascism and Communism are used more as insults than descriptions. There are numerous disagreements about the essential characteristics of these systems, probably because the theories underlying them were so different from the actual experiences of those who tried them.

Socialism may be the least precise of these terms. It is generally applied to mixed economies where the social safety net is much broader and the tax burden is correspondingly higher than in the U.S.—Scandinavian countries are an example.

Communism begins with the belief that equality is defined by equal results; this is summed up in the well-known adage “From each according to his ability; to each according to his needs.” All property is owned communally, by everyone (hence the term “communism”). In practice, this meant that all property was owned by the government, ostensibly on behalf of the people. In theory, communism erases all class distinctions, and wealth is redistributed so that everyone gets the same share.  In practice, the government controls the means of production and most individual decisions are made by the state. Since the quality and quantity of work is divorced from reward, there is less incentive to innovate or produce, and ultimately, countries that have tried to create a communist system have collapsed (the USSR) or moved toward a more mixed economy (China).

Fascism is sometimes called “national Socialism,” but it differs significantly from socialism. The most striking aspect of fascist systems is the elevation of the nation—a fervent nationalism is central to fascist philosophy. There is a union between business and the state; although there is nominally private property, government controls business decisions. Fascist regimes tend to be focused upon a (glorious) past, and to uphold traditional class structures and gender roles as necessary to maintain the social order.

Three elements commonly identified with Fascism are 1) a national identity fused with racial/ethnic identity and concepts of racial superiority; 2) rejection of civil liberties and democracy in favor of authoritarian government; and 3) aggressive militarism. Fascism has been defined by this radical authoritarian nationalism, with fascists seeking to unify the nation through the elevation of the state over the individual, and the mass mobilization of the national community through discipline, indoctrination, and physical training. Nazi Germany and Mussolini’s Italy are the most notable examples of Fascist regimes.

 

 

 

Why It Matters.

Understanding the differences among these different political philosophies is important for two reasons: first, we cannot have productive discussions or draw appropriate historical analogies if we don’t have common understandings of the words we are using. Second, we cannot learn from history and the mistakes of the past if the terms we are using are unconnected to any substantive content. When activists accuse an American President of being a Fascist or a Communist, labels that have been thrown at both President George W. Bush and President Obama, it trivializes the crimes committed by the Nazis and the Soviets and it makes it difficult, if not impossible, to engage in reasoned discussion about—or persuasive criticism of—whatever the President is doing that led to the charge.

 

17) What are the Differences between the Private, Nonprofit and Public Sectors?

Again, this may seem like a silly question, much like “what is government?” but in an era of blurring boundaries, it is important to recognize the distinctions between the sectors. The public sector is composed of government at all levels, local, state and federal. If it is government, it is part of the public sector. (Not to be confused with the public square, which is not a sector at all, but a shorthand phrase meaning the arenas where public debates occur.) Both the nonprofit and private sectors are private, in the sense that they are not government, but the nonprofit sector—sometimes referred to as “civil society”—is composed of voluntary associations dedicated to providing a public good rather than generating a profit. Nonprofit organizations are sometimes said to provide a buffer between impersonal government agencies on the one hand, and individuals and their families on the other. They range from professional associations to charitable organizations to religious communities and volunteer groups. Technically, the private sector is everything other than government and nonprofit and voluntary associations, but usually the term is employed to mean for-profit business enterprises.

Why It Matters.

Knowing whether a particular enterprise is part of government, a nonprofit organization, or a private, for-profit entity tells us a great deal about its mission and purpose, because the sectors have very different reasons for operating. Government, as we have seen, is the collective mechanism through which communities and nations provide services that either cannot be provided privately, or that policymakers have determined should be provided by the state.  Nonprofit organizations also have a social mission, either providing something that government is not or cannot provide, or supplementing government services deemed to be inadequate. Private sector enterprises exist to earn a profit. While we want government and charitable organizations to operate in a businesslike manner, those sectors are fundamentally different from business and pose very different management challenges.

One of the major debates among policymakers involves the effect of outsourcing (sometimes called privatization) on sector identity. Some scholars worry that too much government outsourcing—especially to nonprofit organizations—is both “hollowing out” government’s capacity to manage core government responsibilities, and turning nonprofits into less visible arms of the state. Knowing the differences between sectors and their missions allows citizens to monitor such practices.

 

18) What are Taxes and How are They Assessed?

Taxes have been called the price we pay for membership in society. How we tax, who we tax and how much, are probably the most hotly-debated political issues we confront, because what seems fair to one person seems unfair to another. Most people agree that governments need revenue in order to provide services, but they don’t necessarily agree on the services government should provide, the amount of revenue government really needs or the way government should raise that money.

 

Federal, state and local governments all have the power to tax, and policymakers must decide what to tax (earned income, dividends and interest, property, sales, inheritances?), who is taxed (nonprofits, for-profits, individuals, corporations?) and how it is taxed (progressively, regressively, proportionately?). Governments also must decide how much will be spent and for what, in order to determine how much money must be raised through the tax system. All of these decisions, and their economic consequences, are the subject of heated and legitimate debate.

Why it matters.

Americans believe passionately in fairness and equality. The tax system may be complicated, and taxing and spending decisions may be difficult to understand, but a basic knowledge of what the money goes for, how much goes where, and where it comes from is essential if we are to have productive discussions about tax fairness. (For example, surveys routinely show that large percentages of Americans believe we spend 25% of the federal budget on foreign aid, and that a ‘more appropriate’ amount would be 10%. We actually spend less than 1% on foreign aid.)

The American tax system depends upon the voluntary compliance of taxpayers. No constable comes to your door to check your books and calculate what you owe, although you may be audited if your tax return raises red flags. If the system is to work, if we expect people to report their incomes accurately and pay what they owe without coercion, the system must be viewed as fundamentally fair. Widespread misconceptions erode the public’s belief in the system’s legitimacy.

One of the most important misunderstandings of our tax system concerns the difference between the marginal tax rate and the effective tax rate. In a progressive tax system, reported income is divided into brackets. The marginal rate is the rate applied to dollars earned that fall in successively higher brackets. For example, let’s assume you earn $60,000, and there are no exemptions or other adjustments—that the whole 60,000 is being taxed. If the first 20,000 of income you earn falls in a 10% bracket, that first 20,000 will always be taxed at 10% or $2000 no matter how much more you earn. If the next 20,000 is taxed at the next highest rate—say 15%–you will pay $3000 on that 10,000, and if the next 20,000 is taxed at 20%, that amount will be taxed $4000.  Using this (grossly oversimplified) example, your marginal rate is 20%, but your effective rate—the actual percentage of your total earnings that you pay in taxes—is 15%. Your total tax, using this example, would be 9,000; if you were paying 20% on the entire 60,000, your tax bill would be 12,000. In real life, thanks to multiple exemptions, deductions and tax incentives, people making income subject to the highest current marginal tax bracket—36%–can bring their effective rates down dramatically. Millionaires often have an effective tax rate below 15%.

Many people understand this, but many others do not. When they read about the marginal rates of 50% or even 90% that used to be in effect, they think those rates were applied to the taxpayer’s entire earnings.

Another widespread misconception concerns the identification of federal taxes with the income taxes. Personal income taxes are federal taxes, but there are many other kinds of federal tax: the payroll tax, the federal excise tax, and various specialized taxes. While the income tax is mildly progressive—that is, as income rises into successive tax brackets, it is subject to higher rates—taxes like the payroll tax and federal excise tax on gasoline are considered regressive, because they take a larger percentage of the income of those who earn less. Furthermore, people who earn very little money or people with lots of deductions may not pay income tax, but almost everyone pays payroll and excise taxes.

 

19) What is the Difference between the Deficit and the Debt?

The deficit is the difference between the revenues government takes in (receipts) and what it spends (outlays) on an annual basis. Receipts are all of the money the federal government takes in from income, excise and social insurance taxes, fees and other income. Outlays are all federal spending, from social security and Medicare benefits, defense spending, administering the federal government and all its programs, to interest payments on the debt. When annual outlays exceed revenues, there is a deficit, and the Treasury must borrow the money needed for the government to pay its bills. It does so by selling securities and savings bonds to the general public and other willing buyers both in the U.S. and abroad. (Additionally, the Government Trust Funds are required by law to invest accumulated surpluses in Treasury securities. Securities issued to the public and to the Government Trust Funds then become part of the total debt. The national debt is composed of accumulated deficits.

 

Why It Matters.

Although pundits like to compare federal spending to the way individuals manage our households, the comparison is not really very apt, or helpful, because money that government spends has a large effect on the economy and job creation. Most economists—conservative or liberal—advise government to spend more or tax less during economic downturns, in order to lift economic performance. (Both government spending and tax cuts will stimulate the economy, although economists debate which approach is more likely to stimulate demand.) On the other hand, too much debt accumulated over too long a period can depress economic productivity by driving up the cost of business and personal borrowing, among other things. When government programs are cut too deeply in order to save money, jobs in the private and nonprofit sectors are lost, with a corresponding loss of tax revenues. (This is one concern with our defense budget, for example. Even though the Pentagon has determined we don’t need to spend so much, large-scale contractors with thousands of employees depend upon defense contracts for their existence.) In order to accurately assess proposals being made by our elected officials, it is important to understand whether we are talking about long-term or short-term spending, and what the effects of suggested reductions or increases in spending are likely to be.

20) What is the Debt Ceiling?

The Constitution requires that Congress make all spending decisions—the President proposes, but Congress disposes. Sometimes, as we’ve seen, Congress authorizes more spending than the government collects in revenue. That requires government to borrow the difference, in order to cover the deficit that Congress has authorized. For reasons that are not entirely clear, Congress also votes to authorize borrowing that will exceed the previously-set debt limit, or ceiling. This may seem a bit silly, since that vote comes from the same Congress that has already voted for the spending that requires the borrowing, but this practice of raising the debt ceiling has generally been uncontroversial, and for years the ceiling has been raised by votes from large, bipartisan majorities. More recently, a significant minority of Representatives has refused to vote to raise the ceiling.

Why It Matters.

It is unclear why some Representatives are refusing to cast the previously “pro-forma” vote to raise the debt ceiling, since failing to raise the debt ceiling would not do anything to reduce the national debt. Instead, it would be a vote for the U.S. to default on what it owes. If Congress were actually to fail to raise the ceiling, the results would be catastrophic; such an act would require the United States to stop paying many of its bills—including amounts owed to senior citizens for social security, defense contractors and members of the military who defend the country, and many others. Economists warn that such a failure to pay our bills could precipitate a worldwide economic collapse.

 

What Everyone Should Know About Science

 

21) What is science?

Science has been defined as the pursuit of knowledge and understanding of the natural and social world following a systematic methodology based on evidence. It requires the observation, identification, description, experimental investigation, and theoretical explanation of natural phenomena. Science is generally characterized by empirical inquiry; understood in this way, modern science dates back to the Enlightenment, when figures like Isaac Newton and Robert Boyle applied inductive reasoning to the methodological study of the physical world. The scientific method begins with the identification of a question or problem, after which relevant data are gathered, a hypothesis is formulated based upon that data, and the hypothesis is then subject to additional empirical testing.

Why does it matter?

Understanding what human activities can be classified as scientific, rather than philosophical, ideological or religious, is the only way we can determine the appropriate jurisdiction of governmental activities. If the House of Representatives’ Committee on Science and Technology is to properly evaluate matters that come before it, members of the Committee need to understand what counts as science and what does not. When public school boards are asked to include alternate theories of planetary and human creation in science curricula, they need to be able to distinguish between theories that are scientific—and thus appropriate for inclusion in a science classroom—and those that are based upon religious doctrine rather than empirical investigation.

 

22) What is a scientific theory?

Development of a scientific theory is a part of the scientific method. It involves summarizing a group of hypotheses that have been successfully and repeatedly tested.  Once enough evidence accumulates to support a hypothesis, a theory is developed, and that theory becomes accepted as a valid explanation of a particular phenomenon. Scientific theories must be based on careful examination of the facts.

In the scientific method, a clear distinction is drawn between facts, which can be observed and/or measured, and theories, which are scientists’ explanations and interpretations of the facts. Scientists can draw various interpretations from their observations, or from the results of their experiments, but the facts, which have been called the cornerstone of the scientific method, do not change. A theory must include statements that have what scientists call “observational consequences.” A good theory, like Newton’s theory of gravity, will also have unity, which means it consists of a limited number of problem-solving strategies that can be applied to a wide range of scientific circumstances. A sound theory consists of a number of hypotheses that can be tested independently. A scientific theory is not the end result of the scientific method; theories are constantly supported or rejected, improved or modified as more information is gathered so that the accuracy of the prediction becomes greater over time. In order to be considered scientific, hypotheses and theories are always subject to falsification.

Why It Matters

In everyday conversation, the word “theory” means something very different from its scientific meaning. Nonscientists use the word theory to mean speculation, or guess—“I have a theory about that.” When we fail to distinguish between our casual use of the term and its very different scientific meaning, we confuse discussions of science policy and science education. This has been particularly true of arguments surrounding Darwin’s Theory of Evolution. Some religious people believe that the theory of evolution is inconsistent with a belief in God. Other religious authorities disagree. They challenge the teaching of evolution in biology classes because they believe that it is “just a theory.” Such debates are seldom enlightening, because participants are using the same term to mean very different things; they are talking past each other.

 

23) What is falsification?    

Falsification is an essential characteristic of a scientific hypothesis or theory. Basically, a falsifiable assertion is one that can be empirically refuted or disproved. Falsifiability means that the hypothesis is testable by empirical experiment, and that it thus conforms to the standards of the scientific method. Merely because something is “falsifiable” does not mean it is false; rather it means that if it is false, then observation or experiment will at some point demonstrate its falsity. It is important to note that many things may be true, or generally accepted as true, without being falsifiable. Observing that a woman or a sunset is beautiful, asserting that you feel sad, declaring that you are in love and similar statements may be very true, but they aren’t science, because they can be neither empirically proved nor disproved. Similarly, God may exist, but that existence is not falsifiable—God cannot be dragged into a laboratory and tested. One either believes in His existence or not. (That’s why religious belief is called faith.)