More On Superpenalties

On Monday, I presented my draft paper on “Constitutional Liability Rules” to the Workshop in Political Theory and Public Analysis, which is run by Dan Cole (my former colleague) and by Elinor Ostrom, who won the Nobel Prize in Economics in 2009. This was a really fun event on Indiana University’s Bloomington campus, and I got some terrific feedback on the project.

The part of the draft that has my attention is the concept of a “superpenalty,” which I’ve discussed in some prior posts as a liability rule that allows a government institution or official to do something that is disfavored, but only if that body or person is willing to pay for that privilege by making an unusual political sacrifice. There are two examples in our Constitution. The first is the Direct Tax Clause, which permitted Congress to tax slaves but held that such a tax would also have to be paid by states with no slaves. The other is Section Two of the Fourteenth Amendment, which provided that states could bar African-American men from voting if they were willing to have fewer members of the House of Representatives and fewer votes in the Electoral College.

One lesson from these examples is that a superpenalty is a way of surmounting high political transaction costs. Race was our most intractable problem, and so at both the Founding and Reconstruction leaders turned to a super penalty to help bridge the divide. (That experiment was short-lived in the case of the Fourteenth Amendment, as within two years the Fifteenth Amendment was ratified to deal with voting rights.) The advantage of that approach is that each side got something useful. Those who wanted to advance a goal (no slave taxes or more voting) made progress, but those who opposed that goal retained the right to refuse if their preference intensity was high enough. I think this could be a useful tool for global constitutionalism, especially in the Arab world where a set of new constitutions will be written in the coming years and there are many tough transaction cost problems that must be solved.

Here’s a final thought.  The supercommittee established by the debt ceiling deal last month is operating under a superpenalty.  Intransigence on both sides will be met by a harsh sequestration. This is an attempt to break the deadlock between the parties on the budget. We’ll see if it works, though the deal suffers from the flaw that it can be changed after the 2012 election.


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4 Responses

  1. Andrew Coan says:

    Interesting. What about the Equal Protection Clause? Certainly one way to understand it is as a generalization of the principle underlying the Direct Tax Clause: if you want to do something painful to someone else, you must also do it to yourself.

  2. Ken Arromdee says:

    Would “you can have the individual mandate, as long as you call it a tax” be a superpenalty, given the political sacrifice in admitting one is raising taxes?

  3. Gerard Magliocca says:

    Andrew — I discuss the Equal Protection Clause in the draft. It depends whether you want to call that a penalty or a superpenalty.

    Ken — It’s a penalty, maybe not a superpenalty. (Clearly, I need to do more to distinguish these terms.)

  4. Joe says:

    “which permitted Congress to tax slaves but held that such a tax would also have to be paid by states with no slaves”

    I’m confused by this. Congress (see Art. I, sec. 9 too) couldn’t merely apply a tax on slaves? Or, some sort of excise on slave trading ala an occupation tax? How would that be paid by states with no slaves? The direct tax provision gives them the POWER to tax more than slaves, but they don’t have to use it that way.

    The sacrifice to me is the enumeration requirement that benefits slave states.