Volatility

February 23, 2011

Relocalization and Federalism vs. the Commerce Clause (Wickard v. Filburn and Peak Oil)

 

When we ponder the real implications of the Stamp mandate and the Food Control bill (my main exposition is here, parts one and two), we’re talking about a (so far) politicized civil war where constitutionalism is one of the battlegrounds. This the context for our confrontation with aggressive Commerce Clause power as embodied most infamously in the SCOTUS case Wickard v. Filburn.
 
This case was actually the climax of a line of similar cases extending the Commerce power. It’s most notorious for extending this power to a product created for personal use. But we can take it as the capstone thus far of this aggressive SCOTUS Commerce Clause doctrine. The case is now argued to be the precedent which ought to validate the mandate to buy a worthless Stamp, which mandate is the centerpiece of the health insurance bailout.
 
But when we explore the implications of this case, we’ll see:
 
1. How its logic, once extended from excessive action (the case in Wickard, namely growing grain in excess of one’s quota) to inaction, and once extended from excessive selling to insufficient buying, will justify literally any government mandate to buy any rent-extracting privately purveyed product.
 
2. How this is the broad ideology of coercive commodification itself, and how the SCOTUS has perverted the Constitution into the service of this tyrannical corporatist agenda. Therefore, relocalization is not just a set of actions which may be odious in the eyes of kleptocracy, but a rogue ideology, since it espouses a point of view and set of principles fundamentally opposed to those of corporate commodification.
 
The logic of SCOTUS Commerce Clause jurisprudence, as exemplified by Wickard, is part of the general corporate subversion of all American values of freedom and self-determination. It’s intended to help prevent by force our economic and political self-redemption through our ability to take our lives back in our hands by resuming our old, long neglected responsibilities to produce for ourselves.
 
A basic principle of Food Sovereignty is that food production and distribution logically, we can say rightfully, start at the natural levels of subsistence and then the local/regional market. The overwhelming majority of food production is logically of this nature, and so the only legitimate government action upon food markets would be action which enhances this. (My definition of enhance: To make something better according to the vector of its natural evolution.) By contrast, food commodification is at best an appendage, an optional ornament. That governments, corporations, and globalization cadres have conspired to force all food production and distribution into compliance with the demands of globalized commodity markets is a crime against humanity.
 
At the level of the Constitutionally legitimate Commerce power, the government cannot interfere in the natural, beneficial action of this market by chartering corporations, establishing the IP regime, or other such empowering of monopoly. The Commerce Clause, as originally depicted in Gibbon v. Ogden, was supposed to restrain the states from imposing such monopoly, not empower the federal government to do so.
 
But the Agricultural Adjustment Act (AAA), and other government agricultural policy of the 1930s, was intended to prop up precisely this kind of commodified corporate agriculture. (Given the energy premises of the time, this national market may have needed to exist. And given that premise, along with the servitude of agriculture to the finance sector and the Great Depression this sector caused, the AAA may have been a reasonable countermeasure intended to buffer grain prices. This kind of Tower of Babel of creating one problem, then creating another problem to coexist with the first problem (instead of just solving it), and so on, is characteristic of Big Government liberalism like the New Deal. Obamacare and the Food Control bill pretend to be these kinds of massive kludges, but they’re really further corporate assaults masquerading as Big Government do-gooderism.)
 
The AAA imposed quotas on how much wheat acreage farmers could grow. The goal was to constrain supply in order to boost the price. It would prevent the race to the bottom where farmers responded to harvest price deflation by planting greater acreage, which would only further depress the price. This tragic cycle is endemic to the farm sector wherever finance is allowed to control the land, the money, and the credit supply. Allegedly, the AAA quotas would benefit the farmers themselves and not rentier middlemen. In that case, a farmer like Filburn who exceeded his quota in order to maximize the amount of grain he could bring to market and/or minimize the amount he had to purchase for on-site use would be free riding on the price support.
 
Whatever Filburn himself was doing isn’t the main point here. The point is the malevolent doctrine the court expounded in deciding against him (Robert Jackson writing the decision).
 
We find the core of the case here:
 

The effect of consumption of home-grown wheat on interstate commerce is due to the fact that it constitutes the most variable factor in the disappearance of the wheat crop. Consumption on the farm where grown appears to vary in an amount greater than 20 percent of average production. The total amount of wheat consumed as food varies but relatively little, and use as seed is relatively constant.

The maintenance by government regulation of a price for wheat undoubtedly can be accomplished as effectively by sustaining or increasing the demand as by limiting the supply. The effect of the statute before us is to restrict the amount which may be produced for market and the extent, as well, to which one may forestall resort to the market by producing to meet his own needs. That appellee’s own contribution to the demand for wheat may be trivial by itself is not enough to remove him from the scope of federal regulation where, as here, his contribution, taken together with that of many others similarly situated, is far from trivial.

 
We see the bad vector of the entire logic (from today’s point of view, certainly). The government is said to have a legitimate power to both restrict commodity supply and increase commodity demand, in the latter case by constraining self-production so that one is forced to resort to the commodity market.
 
In other words, interstate commerce is taken as the normative priority, indeed as a law of nature. Policy is to be considered sound according to how well it enforces this commodity prerogative. By contrast, local use and commerce (that is, the real nature of food markets) is to be judged and regulated according to its alleged affect on this normative interstate market.
 

It is well established by decisions of this Court that the power to regulate commerce includes the power to regulate the prices at which commodities in that commerce are dealt in and practices affecting such prices. One of the primary purposes of the Act in question was to increase the market price of wheat, and, to that end, to limit the volume thereof that could affect the market. It can hardly be denied that a factor of such volume and variability as home-consumed wheat would have a substantial influence on price and market conditions. This may arise because being in marketable condition such wheat overhangs the market, and, if induced by rising prices, tends to flow into the market and check price increases. But if we assume that it is never marketed, it supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat in this sense competes with wheat in commerce. The stimulation of commerce is a use of the regulatory function quite as definitely as prohibitions or restrictions thereon. This record leaves us in no doubt that Congress may properly have considered that wheat consumed on the farm where grown, if wholly outside the scheme of regulation, would have a substantial effect in defeating and obstructing its purpose to stimulate trade therein at increased prices.

 
It lays bare how personal/local consumption is to be regarded only from the point of view of commodification. It implies that it’s bad to produce for oneself rather than to participate in the commodity economy. In principle, a small farmer like Filburn should have to sell all his wheat to the corporate distribution system, and then buy back what he’ll personally use from the consumer market, at the rent-inflated consumer price. (Anyone familiar with Bolshevik agriculture, prior to and especially under Stalinism, will see the parallels. All authoritarian systems must necessarily view the farmer as a slave.) From the point of view of corporatized government ideology, to do anything for yourself, let alone relocalization as a principle and a movement, must be seen as antisocial, rebellious, even criminal.
 
In the end Jackson disparages much of the terminology previously used to try to delineate the Commerce power. “Production” vs. “consumption”; “direct” vs. “indirect” effects on commerce; whether something is or isn’t “marketing”. All that’s too annoying to be used in sweeping power seizures. Instead Jackson decides against any such limitations in favor of this formulation:
 

But even if appellee’s activity be local, and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce, and this irrespective of whether such effect is what might at some earlier time have been defined as “direct” or “indirect.”

 
This disintegrates any restraint on federal domination. It gives broad discretion, delivering us into the power of the government’s mere claim that any regulation, however tyrannical, has a “substantial economic effect on interstate commerce.”
 
For the most far-reaching interpretation, we can quote some related cases:
 

Congress’ power to keep the interstate market free of goods produced under conditions inimical to the general welfare…, may be exercised in individual cases without showing any specific effect upon interstate commerce……it is enough that the individual activity when multiplied into a general practice is subject to federal control, or that it contains a threat to the interstate economy that requires preventive regulation.

 
(Mandeville Island Farms v. American Crystal Sugar Company, 1948)
 

[T]he marketing of a local product in competition of a like commodity moving interstate may so interfere with interstate commerce or its regulation as to afford a basis for Congressional regulation of intrastate activity.

 
(United States v. Wrightwood Dairy, 1942)
 
That sounds like if the Buy Local movement ever became a real threat to Walmart, Congress could pass a law to penalize it, in order to prop up Walmart’s market position. By now all government action has that effect as it is.
 
All government has to do is claim this power according to “the general welfare”. But nothing in principle prevents (or in practice has prevented) them from flipping all measures of the general welfare upside down to the pro-corporate opposite pole. That’s what made the doctrine so pernicious, that it depends so completely and tenuously on the saintliness of an uncorrupted government. No doctrine which so depends has any soundness whatsoever. That’s why regulation of corporate rackets can never work. Only a Big Government ideologue, conservative or liberal, could ever have trusted it, and no honest person could ever have considered it sound federalism.
 
So we see how the entire jurisprudence is set up to benefit the big producers and corporate distributors, as well as the finance parasites who manipulate these markets. The existence and rents of these entities and processes are taken as the existential norm and as the normative standard for all activity.
 
Relocalization in principle directly rejects this. It denies that commodity markets or corporate distribution networks have any right to exist at all, let alone to extract rents. Relocalization and Food Sovereignty recognize that the only measure of the validity of trade can be the bottom-up demand for it. But this can never be properly gauged until government’s artificial supports for corporate markets and goon assaults on the corporate behalf are removed.
 
Meanwhile, the government’s goal in arguing on behalf of its Stamp mandate is to get the SCOTUS to extend this commodity participation doctrine to complete inaction, to mere existence. A poll tax will now be extracted, not as the price of one’s voluntary or even involuntary participation in the voting ritual, but as the price of one’s participation in existence itself. Being alive shall now be considered a commodity market. And once there’s a tax on the probability of illness, there shall be no barrier in principle to a tax on health, or to literally breathe the air. Don’t laugh – it follows, and not at all tenuously, from the logic. Water privatization is already close in both principle and practice.
 
As for the Food Control bill, we see how the combination of Wickard and existing FDA doctrine already afford wide negative government latitude to restrict any action whatsoever. Add the enhanced powers the Food Control bill bestows upon the FDA, its vastly increased power over produce, and the affirmative requirements of a SCOTUS decision upholding the Stamp mandate, and the power potential will be absolute and totalitarian. There will be literally no legal restriction on what the government can forbid or require us to do within the realm of commerce, nor will there be any restriction on how far this commercial realm extends.
 
Where it comes to food, the FDA already arrogates the power to define milk as pasteurized milk only. With the new bill’s extension of this power, the government will have complete license to declare any fruit or vegetable as GMO only, or as having been grown using a patented seed, or a synthetic fertilizer, herbicide, or pesticide. Those are just a few examples.
 
I’ve seen some pieces claiming that the Wickard doctrine already meant the government could dictate how you grow your vegetable garden. That wasn’t actually true before, since Wickard dealt with grain acreage regulation under the AAA. But with this new Food Control bill extending FDA power over all produce, it’s true now.
 
We see how past attempts by growers of so-called “specialty crops”, that is regular fruits and vegetables, to receive some of the same subsidies as the big five “commodity crops”, was to play a dangerous game. It would have been much better for the reform advocates of the last Farm Bill to have stuck with getting rid of all subsidies rather than accepting a deal which spread a few crumbs around. That only brought fruit and vegetable produce further into the conceptual/legal realm of commodity crops, even though the markets for them can never be anything like those for grain.
 
Let’s sum up. It was originally in Gibbons v. Ogden that John Marshall said the federal government had vast fiat power over commerce except where constrained by Congress itself. This was a direct contradiction of the claims of the Federalist papers and a confirmation of the suspicions of the so-called “Anti-Federalists” (i.e. the real federalists). Here Marshall was claiming that the point of this arrogation was to allow for a progressive federalization upwards, so that the SCOTUS could use the Commerce Clause to overturn state-chartered monopolies. According to the economic logic of the ascent of fossil fuels, this may have made sense. But if we allow that, by the same token we must then reason that post-oil, where the vector of the economy is to relocalize, we must harmoniously refederalize downward. (The fact that this process is also in accord with what we’ve learned about political morality and the true democratic imperative is an added reason we must do it.) 
 
Today we see the full fruition of the core anti-federalist doctrine, as the small producer/consumer is conscripted into the corporatized commodity system and regulated according to how his action or inaction will be most subject to corporate rent extractions. We see how this doctrine, which was always anti-democratic and anti-federalist, is especially pernicious as we now enter upon the post-oil, post-capitalist era. (The question may arise: If this view of Peak Oil constitutionalism is correct, then shouldn’t Congress and the SCOTUS naturally come around to it, as they’ve allegedly complied with economic and political necessity in the past? But one of the main goals of neoliberalism’s pre-feudal onslaught was to establish this terminal kleptocracy, to corrupt the Congress and the SCOTUS beyond redemption, to prevent any such democratic adjustment. So no, these cannot be reformed, and they will not reform themselves.)
 
The New Deal style of ever greater technocratic control over the economy, still virulent in the minds of so many today, was alleged to be better for everyone. Today we know that it didn’t work to spread prosperity, but was only part of the scam. At best, it was a feature of the rise of the Oil Age. The same sort of policy is purely reactionary and malevolent during energy descent (the decline of fossil fuels). The same goes for the expansive view of the Commerce Clause in the first place.
 
So here’s one of today’s Constitutional imperatives: Constrain this rogue Commerce power.
 
Would that hobble government’s regulatory authority?
 
1. Good. All government action is pro-corporate by now.
 
2. Our main Constitutional project must be to abolish corporations anyway.
 
All this must be placed in the context of the relocalization of economies and polities. In every way, relocalization = breaking free of central government power. We don’t need or want corporations to exist, and we don’t need or want the expansive Commerce power to exist.
 
One last reminder – today, the federal government no longer protects us from economic or political assaults. It only enables and empowers them. That’s where we must locate Wickard-style jurisprudence, and that’s where we must locate policy like the health racket Stamp mandate and the Food Control bill.

19 Comments

  1. Russ/All,

    Sorry to be off topic here, but a few minutes ago, I started to check out the Naked Capitalism site and was surprised when I noticed a big “Stand with Walker” ad, and then in smaller print “Against Union demands”.

    Could anyone explain why this ad is there, and is there nothing Yves could do to eliminate right-wing propaganda like this from her site? Or maybe she has no control over it?

    And again, Russ, sorry to go off topic, and I’m planning to read your latest post as soon as I have time.

    Thanks

    Comment by Frank Lavarre — February 24, 2011 @ 1:55 pm

    • I think those adds are generated merely by mentions of key words, like a name, at the site. The software seems pretty stupid as far as differentiating between hostile and friendly mentions. I haven’t frequented enemy sites enough to know if e.g. Republican sites have pro-Obama ads.

      Comment by Russ — February 24, 2011 @ 2:51 pm

    • Most ad servers on the internet will serve an ad without regard to its ideological content. If you have a contract with an ad server, they don’t allow you to screen out specific ads they’re serving. The only way to do that would be to chose another ad company, very few of whom choose to exercise editorial control over the content they serve.

      Comment by paper mac — February 24, 2011 @ 3:08 pm

    • Thanks Russ and paper mac. So the ads are automatically generated by key words. I figured it must be something like that, but wasn’t sure.

      Still, it’s pretty ironic to have the Walker ad there, although I’m not sure this is the best word to describe it.

      Comment by Frank Lavarre — February 24, 2011 @ 3:22 pm

  2. Russ, can you elaborate a bit on how you see food markets working in a relocalised context? I’m particularly interested in this statement:

    “It would prevent the race to the bottom where farmers responded to harvest price deflation by planting greater acreage, which would only further depress the price. This tragic cycle is endemic to the farm sector wherever finance is allowed to control the land, the money, and the credit supply.”

    What is it about financial control that creates gluts? Is it the nature of a large market in which producers don’t know one another and can’t collaboratively decide on production levels for a given growing season?

    Comment by paper mac — February 25, 2011 @ 7:30 am

    • Under the combined system of the crop lien and bankster-controlled money (in whatever forms and under whatever names), the basic principle is to make the farmer buy his debt high and then deflate the crop prices come harvest time. The farmer’s only recourse is to plant more acreage and try to make it up on volume. But the predictable effect of this is to glut the market and drive the price down further.

      Even if farmers in a given area could in theory coordinate their plantings, it’s probably impossible for farmers across a vast geographical area to do so, given differing seasons, climate, soil conditions, etc. Only the government was able to try to do that. (Besides, that the government probably would want to go after as antitrust action, since that would actually be productive people colluding rather than corporate rackets, who of course are allowed to collude.)

      New Deal programs like the AAA tried to stabilize this with production limits and other price supports. But by the early 70s the system was failing again, largely on account of government throwing the production limits out the window. On the contrary, the Nixon administration openly exhorted farmers to maximize volume (Stalinist fashion).

      Agriculture secretary Earl Butz ranted “Get Big or Get Out”, that everyone must plant “fencerow to fencerow”.

      So while the old direct payments, “crop insurance”, and other programs remain in place, these are now just pure welfare payments within a context where there’s no longer any attempt to constrain production. The banks found it harder to manipulate markets the old way.

      So whatever rationale Wickard jurisprudence might have had under a New Deal regime where production was being fully managed by the government at least in part to help the farmer get a better price, that rationale has long since ceased to exist. As usual, whatever partial good existed within a bad system is eradicated, while all the bad parts remain.

      On the other hand, if food markets could be liberated from globalization and the bank tyranny, they’d be restored to their natural local/regional basis. Supply and demand would be functions of the regional real economy rather than a global commodity exchange where banksters coordinate strategic money flows to control all prices at all times to maximize their (and other corporate middlemen’s) robberies at the expense of the producer and the consumer.

      A regional real economy would be largely self-sufficient, and all prices/exchanges including those for the farmer would be homeostatic within that naturally stable system. Confederated grain and seed storage programs etc. could inexpensively provide whatever backstop was needed to insure against regional crop disasters.

      Comment by Russ — February 25, 2011 @ 9:27 am

      • Russ, John Michael Greer, in his book “The Long Descent”, writes about the vast number of clubs and associations that most Americans belonged to (Oddfellows, etc.). These used to function as mutual insurance schemes. Everyone had to “pay their dues” (some weekly amount).

        I think the “granges” worked like that for farmers.

        “The motto of the Grange is: In essentials, unity; in non-essentials, liberty; in all things, charity.” (wiki)

        Comment by Lidia17 — February 25, 2011 @ 3:00 pm

      • Yes, the banks and the railroads waged vicious political and economic war against the Grange, and later the Populists, to break such action against them.

        This fight was one of the spurs to the SCOTUS campaign to fabricate fraudulent corporate “personhood” rights, to help them fight anti-railroad state legislation, much of which was pro-farmer.

        I know more about the Farmers Alliance and Populist movement, which supplanted the Grange, than I do about the Grange itself. But those are models for institutions we need to develop again.

        Comment by Russ — February 25, 2011 @ 3:06 pm

  3. Hello,

    It is a pleasure to read these articles and see a fresh perspective on how seemingly good actors paved the way to hell. Well, that and the rest of the legislative, bureaucratic, and judicial actors who seem to have violated their function and purpose as public servants.

    Would all food have to be localized under the system you envision? It is nice to taste things from other parts of the world. In colder climates, couldn’t the regular diet be pretty bland?

    On a more serious note, there are a few organizations, one of which in my local area, which use a self-regulated barter system based on credits. The idea is to create a monetary system that is managed within a local community. Do you see this as the way currencies would be handled in the future?

    How might regions trade outside of their own local currencies? It seems like an administrative nightmare.

    One last issue that I wonder about:
    if we were to move to more decentralized economies, then we will have to forgo some labour specialization, so what might a labour distribution look like?

    Taken from https://www.cia.gov/library/publications/the-world-factbook/fields/2048.html

    For instance, here is Canada:
    agriculture: 2%
    manufacturing: 13%
    construction: 6%
    services: 76%
    other: 3% (2006 est.)

    And America:

    farming, forestry, and fishing: 0.7%
    manufacturing, extraction, transportation, and crafts: 20.3%
    managerial, professional, and technical: 37.3%
    sales and office: 24.2%
    other services: 17.6%
    note: figures exclude the unemployed (2009)

    How might we see these numbers be adjusted in a new economic reality? Do you believe in the economic ideas of comparative or competitive advantage?

    Anyway, keep up the good work.

    Comment by Transcent — February 25, 2011 @ 4:31 pm

    • Thanks transcent. I don’t have detailed answers to all those questions yet.

      Localized currencies, time banks, barter, and cooperative arrangements are certainly likely alternatives to centralized currencies, and any or all may be part of the mix. I mean to discuss that in detail at some point later on.

      Post-oil, labor certainly will become far less specialized, as we return to pre-fossil economies. Socioeconomically that ought to be a great improvement. Just look at all the bloat in those figures. I’ll just compare farming with the bogus “service” economy (which is now being liquidated), as well as kleptocracy’s support staff:

      agriculture: 2%
      services: 76%

      And America:

      farming, forestry, and fishing: 0.7%
      managerial, professional, and technical: 37.3%
      sales and office: 24.2%
      other services: 17.6%

      The mass transformation back to agriculture can either become the great liberation of humanity, if we choose to do it on the basis of political and economic democracy.

      Or, if we choose to submit to the path we’re currently on, it will end in history’s worst slave regime.

      Trading will eventually return to its pre-industrial character, as will other aspects of economy.

      Without fossil fuels and the industrialization which depends upon them, capitalism will never resume.

      But I don’t think we can unwind from capitalism to any kind of post-oil trade system in an orderly way (not because it’s theoretically impossible, but because the existing kleptocracy will insist on its own hard crash). It will have to crash, reach rock bottom, and then we’ll start over.

      But this crash doesn’t have to be so hard on everyone. The nuclei for the future communities can start cohering today, and through relocalization we can prepare to endure the transformation in as organized and affirmative a way as possible.

      Comment by Russ — February 26, 2011 @ 5:29 am

  4. [...] examples like the FDA’s milk “definitions” and the health racket Stamp mandate. Together these constitute such a prototype.   Broadsides of the time make clear how this was seen immediately as an early version of [...]

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  5. [...] of local and regional food production and distribution. Let’s recall, the seminal case Wickard v. Filburn centered on wheat production. The recent Food Control bill (taken in tandem with the health racket [...]

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  6. [...] the food movement is the government’s War on Raw Milk on behalf of Big Dairy. (But see also the commerce clause issue, with Obama’s Stamp Mandate seeking to break new “constitutional” ground. This [...]

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  7. [...] order to impose corporate rule. The government was already powerful and entrenched enough, while the system interpretation of the Constitution already seeks to dissolve all other levels of federali…   But globalization has been more important for the Europeans, who needed to undermine the [...]

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  8. [...] I’ve written previously about the totalitarian implications of the central government’s commerce clause power.   To review, the government claims a prerogative to impose any and every kind of regulation and [...]

    Pingback by Food Sovereignty, Raw Milk, and the Commerce Clause « Volatility — February 9, 2012 @ 7:21 am

  9. [...] thanks to totalitarian commerce clause jurisprudence. I’ve extensively covered this here, here, and here. (For the health racket bailout and Stamp mandate in general, see my [...]

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  10. Her air, her manners, all who saw admired; Courteous though coy, and gentle though retired; The joy of youth and health her eyes displayed, And ease of heart her every look conveyed….

    A great lie is like a great fish on dry land; it may fret And fling, and make a frightful bother, but it cannot hurt you. You have only to keep still and it will die of itself….

    Trackback by http://bookmarktheinternet.com/user.php?login=rodrigoorteg1129 — June 4, 2012 @ 1:17 pm

  11. [...] I don’t have anything to add, except that I’m pleased to see how the SCOTUS punted on the most totalitarian interpretation of the commerce clause, instead choosing to validate the mandate as a constitutionally allowed poll tax.   (This was a [...]

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  12. […] down Obama’s “health insurance” poll tax. But true anti-corporatists understood how essential it was to the corporate imperative that the commerce clause be extended in this total…   My point is that anti-corporatism demonstrates its superior predictive value, which in turn is […]

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