When President Calvin Coolidge nominated his fellow Amherst College alumnus Harlan Fiske Stone to the court in 1925, many assumed that Stone, a lifelong pro-business Republican and former Wall Street lawyer, would protect the laissez-faire economic policies that Coolidge believed the Constitution mandated.
However, Stone wound up leading the court’s liberals, including legal luminaries Louis Brandeis and Benjamin Cardozo, with stirring dissents against decisions striking down economic regulations.
Stone unleashed his greatest fury at a 1936 decision overturning the New Deal’s controversial Agricultural Adjustment Act (AAA). To increase devastatingly depressed prices for agricultural goods, the AAA taxed agricultural processors to fund subsidies for farmers who limited their output.
The Constitution’s text, which allows Congress to tax and spend to provide for the nation’s general welfare, seemed to authorize the AAA. But the court’s conservative majority ruled that Congress could not tax and spend to regulate agriculture, even if agriculture substantially affected the nation’s welfare.
The majority opinion argued that this limitation – which appears nowhere in the Constitution – was necessary to prevent Congress from enacting a raft of horrible regulations that would redistribute wealth throughout the economy.