Economic Regulation in the United States: The Constitutional Framework

The United States of America is well-known (and occasionally well-liked or loathed) as the world\u27s largest free-market capitalist nation. Indeed, many assume that since the United States for more than two centuries has had an economic system based on liberal principles, Adam Smith\u27s invisible hand of capitalism must have been embedded in the United States Constitution from the beginning of the American republic. Yet government at all levels in the United States has historically exercised significant regulation of economic and commercial activity-regulation inconsistent with laissez-faire capitalism. The purpose of this article is to consider several questions: (1) what are the constitutional sources of governmental authority in the United States to regulate economic activity?; (2) what are the differences in regulatory powers between the federal and state levels of government?; and (3) what are the limits on the regulatory powers of government in the United States? I should emphasize that in this article I do not intend to advocate for or against government regulation as the proper policy in any specific area; instead, I intend to explore the circumstances under which regulatory policies chosen by policymakers are consistent with the Constitution