When the sovereign trades on his own account

The story reported by Reason concerns legal challenges to the Section 338 tariffs imposed on Canada, grounded in the major questions and nondelegation doctrines — the constitutional principle, roughly stated, that Congress must not hand blank-check authority over great matters to the executive without clear instruction. I find myself drawn to this not as a lawyer, which I was not, but as a student of what happens when sovereign power and merchant interest become one and the same hand.

In The Wealth of Nations I argued at length that the great engine of mercantile restriction is always the same: a producer interest, narrow and organized, persuades the legislature or the crown to raise the price for the many in order to protect the margin of the few. The tariff is the mechanism; the rhetoric of national security or reciprocity is the cover. Nothing in the nature of a tariff changes because it is decreed by executive order rather than enacted by deliberate legislation. The consumer still pays. The difference — and it is not a small one — is that legislation requires debate, coalition, and the friction of representative government. A decree requires only the will of one man.

The constitutional question, as Reason frames it, is whether Congress may delegate to the President the authority to impose tariffs of this magnitude without specifying the conditions, the limits, or the ends. The major questions doctrine — an inference I draw from the reported lead, not from my own memory of events — holds that decisions of great economic and political consequence require clear congressional authorization. I could not have known this doctrine by name, but I knew its spirit. I wrote that the power to grant monopoly, to levy duties, to close a market, was among the most consequential a government could exercise, and that its exercise without accountability to the public was the very definition of mercantile corruption.

Consider what a tariff on Canada actually is in practice. Canada and the United States share the longest peaceful border in the world, and their economies are laced together by supply chains so finely divided — in my old language, so thoroughly subjected to the division of labor — that the cost of a duty on one side echoes through workshops and households on both sides. The consumer of a finished good pays more; the manufacturer who imports an intermediate input pays more; the worker whose employer cannot absorb the cost pays with his livelihood. These costs are diffuse, invisible, and borne by millions. The benefit is concentrated, visible, and received by a few domestic producers who now face less competition. This is the anatomy of mercantile restriction in any era.

The institutional question — which is always the one I return to — is what framework disciplines this kind of executive action. A legislature that debates openly, hears from consumers and not only from producers, and must write the law in clear terms is a better institution than a single officer armed with a broad delegation and a theory of emergency. Courts that hold the executive to the limits of its statutory grant are doing the work that honest exchange requires: they are enforcing the rule that one party may not simply declare the terms of a transaction without the consent of the other. When Reason reports that the major questions and nondelegation doctrines bolster the legal case against these tariffs, it is, in my reading, reporting that the institutional framework is doing what it was built to do.

I will not pretend to know how the courts will rule, nor will I speculate on the political calculations of the present administration beyond what the headline and lead supply. What I will say is this: the question of who has authority to tax the exchange — and under what conditions, and subject to what scrutiny — is not a technical legal puzzle. It is a moral question about whether the sovereign serves the public or serves itself. History supplies too many examples of the latter dressed in the language of the former. The proper answer, in any well-ordered commercial republic, is that the power to tax must be constrained, legible, and accountable. That is not a prejudice of my century. It is the lesson of every century.