Any reasonable approach to analyzing the role of the law in American society must address the real fact that there demonstrably exists more than one sort of law in America and that these laws function in different ways and to different ends. While the overall goal of the Constitution and the UCC is substantially similar (that overall goal being a more-or-less functional society in which certain behaviors are punished and others accepted), one would be hard-pressed to lump them into the same category without being overly broad. This paper addresses the powers established in the Constitution and their effects on commerce. It will therefore be unacceptably broad and overly generalizing when viewed through the lens of more specific legislation, just as the converse is true. This paper is divided into two parts: the first will discuss the in-principle effects of the law on business; the second will use specific examples from the field of interstate transportation.
When we speak of the Constitution and business, we are speaking of the underlying federal laws that govern the interaction between private parties and the government. However, although no such conflict is even in principle possible for our purposes, it is important that we address a fundamental principle of American law: preemption (Melvin, chapter 2.4). In essence, preemption means that where federal and state law directly conflict, federal law supersedes state law. This is somewhat related to another principle: constitutionality. If legislation (even federal legislation) is deemed incompatible with the Constitution, its unconstitutional effects cannot be applied.
In the particular case of governmental regulation of commerce, Congress has relatively broad powers. We therefore should not expect to deal too much with the question of constitutionality of federal legislation and therefore primarily need consider preemption. And in the realm of commerce, the authority of the federal legislature is very broad indeed. Ultimately, congress may regulate interstate commerce at will, and may regulate any form of intrastate commerce that has substantial effects on interstate commerce. Careful observers will note that the privilege of Congress to regulate intrastate commerce, so long as it affects interstate commerce, represents a substantial power on the part of Congress.
So the final question that this paper addresses is just this: what role does the law play in business and in society today? It seems obvious, going from the reading on the Constitution, that one role of law (perhaps even the fundamental role) is to create a framework within which regulation can occur (Melvin, chapter 2). Another role of the law, exemplified in the legal aphorism “contract law expects both parties to behave reasonably, and punishes them to the extent to which they do otherwise,” is to prescribe appropriate behavior. It does this through criminal provisions and civil ones. A third role of the law is to create systems that are conducive to the prosperity of the nation. A number of coherent systems present themselves at every turn: should the legislature pursue a genuine free market, or err on the side of governmental regulation? Their choice is predicated on their desire to form a system that promotes the prosperity of the entire nation.
An example of each role is here given from the alcoholic beverages industry. The first role, that of providing a framework within which regulation occurs, is satisfied by the Constitution itself, which lays out the circumstances under which the government may and may not regulate the industry. The second role, that of prescribing acceptable behavior, is exemplified first in the individual state laws setting, for instance, the minimum drinking age. Here the state acts in a way that does not create a regulatory framework or contribute to a larger system but instead forbids certain behaviors to serve a specific, narrow public interest. The third role, that of creating a consistent system that works to the benefit of the entire state, can be seen exemplified in, for instance, national and state-level taxation and licensing of alcoholic beverage stores. Here, the state acts to create a coherent and consistent system that promotes acceptable behaviors (safety of beverages, etc.) and works to the benefit of the state by generating tax revenue.
Ultimately, the question of what role the law plays in society and business is not a particularly complicated one, at least not at this level of specificity. There are a number of legitimate roles of the law, and many gradations, combinations, and variations of those roles. But these roles can be summarized accurately under the headings of a few overarching goals: to provide a framework for consistent regulation (this goal is typically, but not always, satisfied by the Constitution), to prescribe certain specific behaviors as appropriate and categorize others as forbidden or punishable, and to create a coherent system that works for the benefit of the entire state. Within each of these goals, it is important that we keep in mind the primacy of the Constitution over all other American forms of law, and the primacy of legitimate federal law over state law where they directly conflict. To illustrate these principles, a few basic examples have been presented from the alcoholic beverage industry.