C
APITALISM AGAINST
F
REEDOM
Katya Assaf *
I NTRODUCTION
1.
C APITALISM AND F REEDOM
2.
A LTERNATIVE C ONCEPTS OF F REEDOM
3.
F REEDOM AND THE L EGAL S YSTEM
(A) The Doctrine of Standing
(B) Harmful Speech
(B.1) Individual and Collective Interests
(B.2) Economic and Non-economic Interests
(C) Affirmative Action
(C.1) Affirmative Action under Judicial Review
(1)The "Compelling Interest" Requirement
(2) The "Narrow Tailoring" Requirement
(C.2) A Right to Affirmative Action?
(C.3) Capitalism, Equality and Freedom
(D) Market vs. Politics
(D.1) Objections to the Neoliberal Position
(D.2) Some Insights from Social Psychology
(D.3) Market, Politics and the Legal System
(1) Safety Standards
(2) The Media
(3) Advertising and Compelled Disclosure
(E) Further Examples and a Broader Outlook
4.
C ONCLUSION : T HE P HANTOM OF L IBERTY
* Assistant Professor, Law School, the Hebrew University of Jerusalem. This article is dedicated to the memory of C. Edwin Baker, who has inspired this project and encouraged me to undertake it. I would like to thank Margit Cohn, David Enoch, Moshe S. Goldberg, Daphna Lewinsohn-Zamir, Michal Shur-
Ofry, Joseph Raz and Eyal Zamir for their helpful comments, insights and suggestions.
1

I
NTRODUCTION
This Article touches upon one of the most controversial concepts in philosophy and the legal theory—the concept of freedom. While there is a broad consensus that freedom is one of the most important ideals that every society must seek to achieve, there is much dispute and disagreement on the question what freedom is.
In this Article, I neither aim to present an inclusive list of the various perceptions of freedom nor to advocate one specific understanding of this term. My goal is merely to point out that the US legal system is based on a rather narrow understanding of freedom. While the legal system very extensively protects the aspects of freedom that fall into its narrow perception of this concept, it often disregards other important aspects of freedom.
More specifically, I will argue that our legal thought is profoundly influenced by the capitalist ideology. The essence of this ideology is that the state should provide individuals with best possible means to pursue their own financial gain. Capitalism is thus based on two major values: individualism and materialism.
This Article will demonstrate that the US legal system displays a strong tendency toward individualism and materialism. As a rule, individual interests—such as the interest to distribute pornography—are favored over collective ones—such as the interest to promote women's status in our society. Pecuniary interests—such as the interest to promote one's products—are favored over non-pecuniary ones—such as the audience's interest to shield itself from the flood of advertising.
This indicates a narrow perception of freedom: the legal system most readily secures one's freedom to pursue one's own pecuniary gain. The freedom to pursue one's nonpecuniary interests and collective interests has often deficient, if any, legal recognition. Meanwhile, the human personality has various aspects. People are often concerned with public issues such as clean environment, humane treatment of animals, equality and justice, etc. A legal system wishing to provide its citizens with meaningful freedom must take account of the various aspects of human nature. To be free means to be free to develop a harmonious and flourishing personality. It means to be free as a real, normal person, and not as a fictional legal character motivated solely by its own pecuniary interest.
This Article proceeds as follows: Chapter 1 explains what is freedom in the eyes of capitalism and elaborates on the influence of this view on our social and legal
2

thought. Chapter 2 offers alternative philosophical concepts of freedom. Chapter 3 illustrates the influence of capitalist thought in various fields of law. It shows how this influence results in restricting the aspects of freedom not captured by the capitalist world view. Chapter 4 concludes the discussion, arguing that the excessive focus on capitalist values creates an obstacle to one of our most important objectives as a society, which is developing moral standards.
1.
C APITALISM AND F REEDOM
Philosophy offers a broad variety of definitions of freedom, which are partly contradictory and partly complementary.
1
The contemporary Western legal and economic thought is most heavily influenced by one specific philosophic tradition: neoliberalism.
2
In a nutshell, neoliberalism holds that virtually all economic and social problems have a market solution.
3
This philosophy regards persons as exclusively self-interested and economically motivated actors.
4
The neoliberal theory greatly focuses on economic freedom and regards it as the most crucial component of personal freedom.
5
It is not hard to see that this view is rather limited. And yet, the fascinating thing about neoliberalism is that today it enjoys an unprecedented consensus in the legal, political and economic thought of the Western world.
6
Scholars offer a number of historical and political explanations to the rise of the neoliberal ideology.
7
I believe that the key to understanding the dominance of this ideology lies in its ties with capitalism.
1 See Ian Carter, Positive and Negative Liberty , T HE S TANFORD E NCYCLOPEDIA OF P HILOSOPHY
(Spring 2012 Edition), Edward N. Zalta (ed.), http://plato.stanford.edu/entries/liberty-positivenegative/ .
2 See, e.g., M ICHAEL C HARLES H OWARD & J OHN E DWARD K ING , T HE R ISE OF N EOLIBERALISM IN
A DVANCED C APITALIST E CONOMIES : A M ATERIALIST A NALYSIS (2008); Roger E. Backhouse,
Economists and the Rise of Neo-liberalism , 17 R ENEWAL 17 (2009).
3 H
OWARD & K ING , id.
at 1 (“The ideology is that all, or virtually all, economic and social problems have a market solution, or a solution in which market processes will figure prominently.”)
4 R OGER E.
B ACKHOUSE , H ISTORY OF P OLITICAL E CONOMY 364 (2005).
5 See, e.g., M ILTON F RIEDMAN , C APITALISM AND F REEDOM 12 et seq . (1962) (developing a general idea of freedom based on the liberty to act as a market player).
6 Perry Anderson, Renewals , 1 N EW L EFT R EVIEW 1 (2000) ("Ideologically, the novelty of the present situation stands out in historical view... For the first time since the Reformation, there are no longer any significant oppositions—that is, systematic rival outlooks—within the thought-world of the West..
Whatever limitations persist to its practice, neo-liberalism as a set of principles rules undivided across the globe: the most successful ideology in world history.”); H
OWARD & K ING , supra note 2, at 188-89;
B ACKHOUSE , supra note 2, at 355 et seq.; J OSEPH R AZ , T HE M ORALITY OF F REEDOM 1 (1986).
7 See, e.g., H
OWARD & K ING , id.
at 4 (explaining the rise of neoliberalism with the increasing sophistication of the productive forces and the economic requirements for their continued development); B ACKHOUSE , supra note 4, at 365 et seq. (arguing that neoliberalism was purposefully promoted by groups of influential economists opposing socialism); Susan George,
3

Although capitalism is in itself merely an economic structure, it requires a belief in certain ideals. The ideological dimension of capitalism has been indicated by the sociologist Max Weber. In his famous book, The Protestant Ethic and the Spirit of
Capitalism , he attempts to determine what psychological conditions made possible the development of capitalist civilization.
8 While the motive of economic self-interest has been commonplace in all ages, the great innovation of capitalism is in perceiving this motive as a virtue rather than a vice.
9 Weber argues that this psychological switch was made possible due to the wide acceptance of Calvinism, a protestant tradition that sees material success as a sign of god's favor.
10
Weber maintains that Calvinism established itself out of all other traditions because it managed to provide the ideological basis for the emerging economic system of capitalism.
11
He explains that the spirit of capitalism sees profit as an end in itself, and shows how this spirit is served by Calvinism, which similarly regards the pursuit of wealth as a duty, a
"calling."
12
Calvinism enabled the emergence of capitalism, but later the religious support became unnecessary, as the capitalist spirit took on life of its own.
13
The same line of thought may be employed to explain why certain philosophic theories gain broad acceptance, while others, while not less convincing, do not exert any significant influence on the legal, political and economic thought. Capitalism requires a certain state of consciousness
14
and people naturally tend to accept theories that support their way of life.
15
This may explain why since the emergence of capitalism the free market ideal became the unshakable basis of our economic thought; why the extremely economics-oriented philosophy of Chicago School has exerted so much influence on our legal thought; and why the (neo)liberal philosophy,
A Short History of Neo-liberalism, Conference on Economic Sovereignty in a Globalising World
Bangkok, 24-26 March 1999, available at http://www.globalexchange.org/resources/econ101/neoliberalismhist ("one explanation for this triumph of neo-liberalism[…] is that neo-liberals have bought and paid for their own vicious and regressive
"Great Transformation". They have understood[…] that ideas have consequences. Starting from a tiny embryo at the University of Chicago with the philosopher-economist Friedrich von Hayek and his students like Milton Friedman at its nucleus, the neo-liberals and their funders have created a huge international network of foundations, institutes, research centers, publications, scholars, writers and public relations hacks to develop, package and push their ideas and doctrine relentlessly").
8 M AX W EBER , T HE P ROTESTANT E THIC AND THE S PIRIT OF C APITALISM (Talcott Parsons trans., 1950).
9 Id . at 2, 53-4, 73-78.
10 Id . at 163-64.
11 Id . at 42-46.
12 Id . at 98-128.
13 Id . at 72-73.
14 Id . at 55 et seq.; H OWARD & K ING , supra note 2, at 51.
15 Richard Sosis, Why Aren’t We All Hutterites? Costly Signaling Theory and Religious Behavior , 14
H UMAN N ATURE 91, 96-98 (2003).
4

which is so much in tune with the capitalist ideology, dominates our contemporary discourse.
16
To accept the spirit of capitalism, people have to believe that the real essence of freedom lies in opportunities to act as a private market player. One has to perceive the limitation imposed on such opportunities by other private market players as wholly consistent with one's freedom. For instance, one has to be educated to a very particular concept of freedom to accept that not clinically underweight women are unable to work as models, 17 and at the same time to doubt whether Congress has the power to require all citizens to acquire a health insurance.
18
Capitalism has an inherent self-empowering mechanism. Capitalist values support strong legal protection of individual economic rights. At the same time, the spirit of capitalism tends to promote a social perception that regards rights with greater economic value as more significant. Yet, the value of economic rights depends on the scope of their legal protection.
19
The more protection such rights acquire, the greater their economic value becomes. The greater the economic value of such rights, the higher their status in the social consciousness. The higher the social status of economic rights, the more the legal system is inclined to protect them. The higher the scope of protection of such rights, the greater their economic value. And so on.
This tendency may be illustrated by the development of the publicity right—the right of famous persons to control the commercial exploitation of their names, likenesses etc. Until the 1950s, the legal practice had not recognized such right.
20
This meant, for example, that selling a poster with a picture of a celebrity did not require her consent.
Since the legal practice has stared recognizing the right of publicity, 21 this right has grown extremely profitable.
22
Because of its great economic value, people do not longer doubt its validity—it seems perfectly sensible that a celebrity should be able to
16 For sources describing these philosophies as dominant see supra notes 6-7.
17 See, e.g., Amy Brown & Helga Dittmar, Think “Thin” and Feel Bad: The Role of Appearance
Schema Activation, Attention Level, and Thin–Ideal Internalization for Young Women's Responses to
Ultra–Thin Media Ideals , 24 J OURNAL OF S OCIAL AND C LINICAL P SYCHOLOGY 1088, 1088-89 (2005)
("The body size of glamorous models is often more than 20% underweight, exceeding a diagnostic criterion for anorexia nervosa of 15% underweight").
18 See below , Chapter 3(E).
19 Felix Cohen, Transcendental Nonsense and the Functional Approach , 35 C OLUM .
L.
R EV . 809, 815
(1935) ("The vicious circle inherent in this reasoning is plain. It purports to base legal protection upon economic value, when, as a matter of actual fact, the economic value of a sales device depends upon the extent to which it will be legally protected").
20 J. T
HOMAS M CCARTHY , T HE R IGHTS OF P UBLICITY AND P RIVACY § 1:4 (2d ed. 2012).
21 Id.
22 Id.
at §§ 7:27, 7:31 (describing the market created by the right of publicity as "a multi-billion dollar industry").
5

control the commercial exploitation of her persona, be in on a poster on in an ad.
Following the intuition that valuable property should be entitled to strong protection, courts shape the scope of publicity right very broadly. Even evoking an association with a celebrity without her consent is frequently deemed to infringe on her publicity right.
23 This, of course, further increases the economic value of this right and consequently, its social status.
On a more general level, the spirit of capitalism promotes strong legal protection of private economic rights. This protection increases the value of such rights and consequently, their social importance. And this further ingrains the capitalist ideology in our society, as the belief in the importance of private economic rights is the very quintessence of this ideology.
Another factor that sufficiently contributes to establishing the spirit of capitalism in the social consciousness is advertising. Advertising, in its various forms, surrounds us everywhere. Being a private economic right, the right to advertise enjoys a very broad legal protection. Laws aimed to limit advertising are frequently found unconstitutional.
24
In a sense, advertising even enjoys a broader legal protection than political speech: while political speech cannot turn to "captive audiences," advertising can.
25
This is because unlike political speech, advertising is regarded as "neutral."
26
And yet, advertising is far from being neutral. In advertising, consumption is presented as the key to happiness and to success in career, love, friendship and any other field.
27
Although each advertisement promotes a different product, they all have a common message—the message that consumption is extremely important. This common message supports the view that the most crucial aspect of freedom is the individual economic freedom. This message lies at the very heart of the capitalist
23 Stacey L. Dogan, An Exclusive Right to Evoke , 44 B.C.
L.
R EV . 291, 303-8 (2003).
24 See below Chapter 3 (D.3) (3).
25 Lehman v. City of Shaker Heights , 418 U.S. 298, 304 (1974) (The court upheld the city’s policy of selling advertising space on buses only to “innocuous and less controversial” commercial advertising, but not to political advertising. Users of buses should not be “subjected to the blare of political propaganda.”)
26 Id.
27 Matt Getz, "Drowned in Advertising Chatter": The Case for Regulating the Ad Time on Television ,
94 G EO .
L.J. 1229, 1246 (2006) ("Consumption, not freedom or companionship or democratic participation, is touted (and too often believed) as the road to happiness and fulfillment"); R OBERT W.
M C C HESNEY , T HE P ROBLEM OF THE M EDIA 166 (2004) ("democracy, freedom, individuality, equality, education, community, love, and health [...] are reduced in one way or another to commodities provided by the market"); M ATTHEW P.
M C A LLISTER , T HE C OMMERCIALIZATION OF THE A MERICAN
C ULTURE 60 (1996); J UDITH W ILLIAMSON , D ECODING A DVERTISEMENTS : I DEOLOGY AND M EANING IN
A DVERTISING 140 et seq.
(1981); Bruce Ledewitz, Corporate Advertising's Democracy , 12 B.U. P UB .
I NT .
L.J. 389, 432 (2003).
6

ideology. I believe that advertising, due to its intensity and omnipresence, plays an important role in maintaining the hegemony of this ideology in our culture. As advertising educates us to focus on economic freedom, we become increasingly insensitive to deficiencies in the other aspects of freedom—aspects which the capitalist ideology does not capture.
2.
A LTERNATIVE C ONCEPTS OF F REEDOM
To depart from the narrow concept of freedom offered by the capitalist ideology, one has to abandon the limited view of a person as a rational wealth-maximizer and recognize other dimensions of human personality. Philosophers have long recognized the significance of non-egoistic motives of the human action.
28
For instance, Jean-
Jacques Rousseau has coined the term "general will"—the interest of persons not as individuals who pursue their own welfare, but as members of public who seek to discover and advance the public good.
29
Modern literature similarly speaks of a distinction between consumer preferences and citizen preferences.
30
These philosophical insights have a solid empirical support. A large body of experiments in which participants are asked to divide sums of money between them— so-called "Dictator Games" and "Ultimatum Games"—consistently show that in real life, people do not act as rational wealth maximizers. They share money with anonymous strangers who have no say in the division decisions and prefer to forgo a monetary gain than to accept a low offer.
31
These results cannot be explained without recognizing that people have an apparent tendency to altruism and a yearning for fairness.
32 In addition, so-called "happiness research" shows that people's individual
28 See, e.g., Andrew Youpa, Leibniz's Ethics, Section 3, T HE S TANFORD E NCYCLOPEDIA OF
P HILOSOPHY (Spring 2012 Edition), Edward N. Zalta (ed.), http://plato.stanford.edu/entries/leibnizethics/ ; Brian Leiter, Nietzsche's Moral and Political Philosophy 1.3, 4 , id.
at http://plato.stanford.edu/entries/nietzsche-moral-political/ ; Neera K. Badhwar & Roderick T. Long,
Ayn Rand 3.6, id.
at http://plato.stanford.edu/entries/ayn-rand/ .
29 Bertram, Christopher,
Jean Jacques Rousseau 3.1, id.
at http://plato.stanford.edu/entries/rousseau/#IdeGenWil .
30 See, e.g., Daphna Lewinsohn-Zamir, Consumer Preferences, Citizen Preferences, and the Provision of Public Goods , 108 Y ALE L.J. 377, 383 and the references cited in footnotes 14-15 (2006).
31 Gary Charness & Matthew Rabin,
Understanding Social Preferences with Simple Tests , 117 T HE
Q UARTERLY J OURNAL OF E CONOMICS 817, 817-18 (2002); Golnaz Tabibnia, Ajay B. Satpute &
Matthew D. Lieberman, The Sunny Side of Fairness: Preference for Fairness Activates Reward
Circuitry , 19 P SYCHOLOGICAL S CIENCE 339 (2008); Ernst Fehr & Klaus M. Schmidt, Theories of
Fairness and Reciprocity - Evidence and Economic Applications , CEPR Discussion Paper No. 2703,
Available at SSRN: http://ssrn.com/abstract=264344 , 5 et seq. (2001).
32 Id.
7

welfare may be negatively affected by unequal income distribution in their society.
33
Regardless of their own income level, people have an aversion to wealth allocations that they perceive as unjust.
34
The goal-frame theory offers a convincing account for the complexity of human motivation.
35 Contrary to the vision of homo economicus , people do not have one fixed set of preferences. Rather, they have a number of different, sometimes contradicting goals. The theory indicates three general goal frames: the hedonic goal frame that motivates actions that make one feel better right now; the gain goal frame that motivates one to guard and improve one's resources; and the normative goal frame that motivates one to act appropriately.
36
When a certain goal frame is focal, it dominates our motivation.
37
The activation of goals is strongly influenced by external circumstances. For instance, labeling a resource allocation game as "Community
Game"—and thereby activating the normative goal frame—greatly increases the frequency of cooperative responses as compared to labeling the same game as
"Wallstreet Game"—and thereby activating the gain goal.
38
To take another example, sometimes a salient hedonic goal frame makes one consume products that one generally—that is, in a gain goal frame—wishes to avoid.
39
The goal-frame theory provides a persuasive psychological explanation for the philosophic observation that people have both, egoistic "consumer" preferences and altruistic "citizen" preferences.
All this demonstrates that the perception of persons as pure wealth maximizers disregards important aspects of the human personality. Consequently, an excessive focus on individual economic freedom may fail to provide persons with true freedom, freedom that takes a meaningful account of the multi-dimensionality of their
33 Lester C. Thurow, The Income Distribution as a Pure Public Good, 85 T HE Q UARTERLY J OURNAL OF
E CONOMICS , 327 (1971); David Morawetz, Ety Atia, Gabi Bin-Nun, Lazaros Felous, Yuda
Gariplerden, Ella Harris, Sami Soustiel, George Tombros & Yossi Zarfaty, Income Distribution and
Self-Rated Happiness: Some Empirical Evidence, 87 T HE E CONOMIC J OURNAL 511 (1977); Ruut
Veenhoven & Wim Kalmijn, Inequality-Adjusted Happiness in Nations , 6 J OURNAL OF H APPINESS
S TUDIES 421 (2005); Alberto Alesinaa, Rafael Di Tellab & Robert MacCulloch, Inequality and
Happiness: Are Europeans and Americans Different?
88 J OURNAL OF P UBLIC E CONOMICS 2009 (2004).
34 Id.
35 Siegwart M. Lindenberg, Social Rationality and Well-Being , in H ANDBOOK OF R ATIONAL
C HOICE S OCIAL R ESEARCH 211 (R. Wittek, T.A. B. Snijders, & V. Nee eds., 2007), available at http://www.icsgraduateschool.nl/uploads/tineke/link%20in%20project%20proposal%20nr%206%20_Wittek%2003%
20Lindenberg%20V2-1.pdf
.
36 Id . at 217.
37 Id . at 213 14 .
38 Id . at 218.
39 Id . at 221.
8

personality. Now I will briefly present broader concepts of freedom as reflected in the writings of two modern philosophers—Joseph Raz and Hannah Arendt.
Joseph Raz offers a plausible alternative to the individualistic perception of freedom so deeply rooted in our legal thought. He maintains that freedom is not intrinsically valuable.
40 It is valuable only to the extent it allows a person to lead an autonomous life.
41
Autonomy is not one's ability to pursue her own self-interest. Rather, it is her ability to choose morally sound goals and to lead her life according to these goals.
42
The existence of valuable goals is a social rather than individual matter.
43 To secure the freedom of its citizens, the government has a positive duty to promote various morally sound ideals, so that individuals can choose how to build their lives from a variety of socially recognized goals.
44
Hannah Arendt's theory represents the very antithesis of the individualistic and materialistic concept of freedom. According to her view, genuine freedom can never be realized individually.
45
By its very essence, freedom is a public phenomenon.
46
True freedom means the freedom to act , that is, to take initiative, to introduce something genuinely new, unexpected and unpredictable into the world.
47
This freedom can be realized to its full extent only in the political sphere, where people debate, test and form their opinions on public matters through ongoing discourse.
48
Engaging in politics, one goes beyond one's private self-interest to realize the interests of a public world which we all share as citizens, such as equality, justice, and solidarity.
49
This is the very quintessence of freedom.
50
By contrast, the market in Arendt's view is not a place where one's freedom can be meaningfully realized.
51 Both consumption and production equate people.
52 The possibility to do something unpredictable und unexpected, to express one's unique
40 R
AZ , supra note 6, at 16-17.
41 Id.
at 203-7.
42 Id.
at 318, 424-25.
43 Id.
at 318-19, 424-25.
44 Id.
at 424-25.
45 H
ANNAH A RENDT , T HE H UMAN C ONDITION 30 et seq. (1958).
46 Id.
47 Id.
at 177-78.
48 Id.
at 244-45.
49 Id.
at 36 et seq.
50 Maurizio Passerin d'Entreves, Hannah Arendt, Section 6, T HE S TANFORD E NCYCLOPEDIA OF
Edward N. Zalta (ed.), P HILOSOPHY (Fall 2008 Edition), http://plato.stanford.edu/entries/arendt/#ActFrePlu .
51 A
RENDT , supra note 45, at 85 et seq.
52 Id.
9

personality, does not exist in this sphere.
53
Arendt is deeply concerned with consumerism as the ideal of the modern society.
54
As our society becomes preoccupied with consumption and production, as private economic interests triumph over the public sphere, genuine freedom disappears, causing deep unhappiness.
55
Arendt calls for reactivation of our capacities as citizens through the recovery of a common, shared political world where individuals can express their identities, establish relations of reciprocity and solidarity and engage in an ever ongoing process of constructing their collective identity.
56
Both Raz and Arendt attribute crucial importance to aspects of freedom that lie outside the private economic sphere. Even if one does not fully accept their views, the brief insight into their theories demonstrates the extreme one-dimensionality of the capitalist vision of freedom. In the next Chapter, I will demonstrate how the legal system tends toward this narrow vision of freedom thereby leaving crucial aspects of freedom without adequate protection.
3.
F
REEDOM AND THE
L
EGAL
S
YSTEM
This Chapter brings up four examples from diverse fields of law to illustrate the tendency of the US legal system to reduce the concept of freedom to the liberty of pursuing one's economic gain. This phenomenon is a broad trend and I do not aim to list all its manifestations. Also, I do not intend to argue that the legal system always disregards the non-materialistic and non-individualistic aspects of freedom. My only goal is to demonstrate that the tendency to do so exists.
(A) The Doctrine of Standing
The doctrine of standing has been developed by the judicial practice based on Article
III of the Constitution.
57 This doctrine requires the plaintiff, who seeks to invoke the power of the judicial authority, to establish a personal stake in the case.
58 The purpose of this doctrine is to ensure one of the basic democratic principles: the separation of
53 Id.
54 Id.
at 107 et seq.
55 Id.
56 Id.
at xii; R AZ , supra note 6, at 400 et seq.
57 James Keenley, How Many Injuries Does It Take? Article III Standing in the Class Action Context ,
95 C AL .
L.
R EV . 849, 849-50 (2007).
58 Id.
at 875. See, e.g., Ass'n of Data Proc. Serv. Orgs., Inc. v. Camp , 397 U.S. 150, 152 (1970) ; Flast v.
Cohen , 392 U.S. 83, 100-01 (1968); Schlesinger v. Reservists Comm. to Stop the War , 418 U.S. 208,
218 (1974).
10

powers between the legislative and the judicial branch. While Congress should regulate affairs of general policy, courts may only intervene to protect distinct individual interests.
59
To prove standing, the plaintiff has to argue that the alleged violation causes her an injury in fact, which is different from the injury suffered by the public at large.
60
While interpreting the doctrine of standing, courts show a strong tendency toward the values of individualism and materialism. One of the most prominent examples of this tendency is found in the field of environmental law. The requirement of "injury in fact" constitutes a most serious obstacle to legal suits in this field.
First of all, an environmental organization is not regarded as an entity having a specific and legally recognized interest in the protection of environment.
61
Rather, to bring a suit, it must identify members who individually have standing to sue.
62
To do this, the organization must argue that the enjoyment of these specific members from a natural resource has suffered as a result of the alleged law violation.
63
This is best done by showing economic harm;
64
potential damage to health may sometimes also
59 Note, Deference to Legislative Fact Determinations in First Amendment Cases After Turner
Broadcasting ,111 H ARV .
L.
R EV
. 2312, 2315 (1998) (“The judicial role is limited to the resolution of cases and controversies governed by standing and injury requirements; judicial discretion is cabined by interpretations of existing law and precedent. In contrast, legislative bodies enjoy wide latitude in choosing which issues to address and which policy choices to pursue. According to this analysis, legislatures, rather than courts, should make the factual determinations underlying policymaking.”). See also Marbury v. Madison , 5 U.S. (1 Cranch) 137 (1803); Nixon v. United States , 506 U.S. 224, 228-29,
237-38 (1993); Turner Broad. Sys., Inc. v. FCC , 520 U.S. 180, 199 (1997).
60 Isil Yildiz, Standing First: Addressing the Article III Standing Defects of Rule 23(B)(3) Class
Actions Composed Wholly of Future Claimants , 26 R EV .
L ITIG . 773, 784 et seq.
(2007). See, e.g.,
McElhaney v. Eli Lilly & Co ., 93 F.R.D. 875, 878 (D.S.C. 1982); Friends of the Earth v.
Laidlaw
Environmental Services Inc.
, 528 U.S. 167 (2000); Am. Canoe Ass’n v. City of Louisa Water & Sewer
Comm’n , 389 F.3D 536 (6th Cir. 2004).
61 See, e.g., U.S. Public Interest Group v. Heritage Salmon Inc., No. Civ. 00-150-B-C, 2001 WL
987441 (D. Me., Aug. 28, 2001) (a citizens' watchdog group was found to have standing to sue under the Clean Water Act because its individual members may have suffered an injury from the alleged pollution into of waterways); Sierra Club v. Environmental Protection Agency , 292 F.3d 895 (D.C. Cir.
2002) (holding that to have standing, the arganization has to shaow that least one of its members would be harmed by the challenged order); Grassroots Recycling Network Inc. v. Environmental Protection
Agency , No. 04-1196, 2005 WL 3078187 (D.C. Cir. Nov. 18, 2005) (holding that an environmental group lacks standing to challenge an Environmental Protection Agency regulation because the group could not show actual harm to any individual member).
62 Id.
63 Id.
64 E.g., American Farm Bureau v. EPA, 559 F.3d 512 (2009) (in an action brought by farmers and manufacturers against the U.S. Environmental Protection Agency on its revaluation of pesticides, the court denied standing because the plaintiffs did not suffer economic injury); U.S. Public Interest Group
(2001): (in an action against water pollution, the court held that each of the plaintiffs has to show some concrete or particular injury resulting the alleged violation, specifically emphasizing economic harm).
11

suffice.
65
Although non-economic aesthetic interest in clean and beautiful environment is sometimes recognized as actionable,
66
standing has hardly ever been found based on this interest alone.
67
The element of geographical proximity is crucial to showing standing in environmental suits.
68 Therefore, law violations that affect large areas, such as forests, seas or the ecological system generally are non-actionable.
69
Thus, ironically, the more pervasive the ecological damage, the more difficult it is to stop the violation.
Aware of this difficulty, Congress and state legislators sometimes enact "citizen suit provisions" in environmental laws, granting "any person" standing to sue.
70
Yet, courts have largely undermined this legislative intent, holding that such provisions cannot replace the requirement of injury in fact.
71
Moreover, it has been stated that
Congress does not have constitutional power to grant standing to public members that have not suffered a specific injury.
72
This interpretation of the separation of powers principle is not the only possible option. There are many democratic countries in which courts wholeheartedly accept the legislative intent to give up standing requirements.
73
Furthermore, what kind of injury is "injury if fact" is a matter of point of view. Courts have chosen to perceive injury in terms of one's strictly individual, preferably economic, interests. This choice outlines the circle of interests that are legally recognized as matters of one's concern. Consider, for example, that under the current law, individuals and organizations can do nothing to stop the following violations:
65 E.g., Hazardous Waste Treatment Council v. U.S. EPA, 886 F.2d 355 (1988); Sierra Club v.
Chemical Handling Corp ., 824 F.Supp. 195 (1993).
66 Friends of the Earth v.
Laidlaw Environmental Services Inc.
, 528 U.S. 167 (2000) (finding standing based on an alleged recreational, aesthetic, and economic harm); American Canoe Association Inc. et al. v. City of Louisa Water & Sewer Commission et al., No. 02-6018, 2004 WL 2423536 (6th Cir. Nov.
1, 2004) (recognizing that health, economic, recreational, aesthetic and environmental interests establish standing).
67 But see Ecological Rights Foundation et al. v. Pacific Lumber Co ., No. 99-17076 (9th Cir., 2000)
(standing found based solely on aesthetic injury).
68 Id . (daily geographical proximity as a crucial element of standing); Sierra Club v. Chemical
Handling Corp ., 824 F.Supp. 195 (1993) (people living in the neighborhood affected by the alleged pollution have standing to sue); Simsbury-Avon Preservation Society LLC et al. v. Metacon Gun Club
Inc., No. Civ. 3:04CV803JBA, 2005 WL 1413183 (2005) (homeowners who live near a gun club have standing to sue the club for dumping ammunition-related pollutants).
69 See infra notes 75, 77-78.
70 E.g., The Clean Water Act, § 505, 33 U.S.C. § 1365; The Clean Air Act, § 304, 42 U.S.C. § 7604;
Endangered Species Act, § 11(g), 16 U.S.C. § 1540(g).
71 Lujan v. National Wildlife Federation, 497 U.S. 871 (1990); Lujan v. Defenders of Wildlife , 504 U.S.
555 (1992).
72 Lujan v. Defenders of Wildlife, id. at 577.
73 For example, in the EU and in Israel, the patent law does not impose any standing requirements and as a matter of fact, courts never deny plaintiffs standing in patent matters.
12

opening up of public lands for mining,
74
harm to national forests,
75
illegal use of pesticides,
76
pollution damaging the ozone layer
77
and acts that may result in extinction of endangered species.
78
Courts simply think that such violations should not matter so much to any individual or a group to regard them as an "injury." In other words, people should mind their own business.
79
It is easy to see how this legal situation restricts crucial aspects of freedom—the freedom to choose morally sound goals and to lead one's life according to these goals, to use Raz's terminology; the freedom to take initiative and lead changes in the public sphere, to borrow Arendt's terms.
As their real motivation enjoys no legal recognition, environmental organizations sometimes try to raise artificial claims, such as decline in the market value of their member's homes,
80
expenses on organizational activities caused by the violation,
81 increased taxes the violation is likely to bring about
82
or the need to invest money and resources educating the general public about the violation.
83
In one case, the plaintiff even attempted to claim that the interest in Indian artifacts made of eagle feathers justifies the protection of living eagles.
84
These (usually vain) attempts best illustrate the inadequacy of the legal perception.
The current interpretation of the standing doctrine excludes environmentalists from the legal discourse and forces them to speak the language of private economic interest. The restriction of freedom associated with silencing one's discourse is
74 Lujan v. National Wildlife Federation, 497 U.S. 871 (1990).
75 Sierra Club v. Morton, 405 U.S. 727 (1972); Summers et al. v. Earth Island Institute et al.
, No. 07-
463, 2009 WL 509325 (2009).
76 Natural Resources Defense Council v. Environmental Protection Agency et al., No. 04-1438, 2006
WL 538183 (2006).
77 Id.
78 Lujan v. Defenders of Wildlife , 504 U.S. 555 (1992); Allard v. Frizzell , 536 F2d 1332 (1976).
79 For discussion and critique of this legal situation see Christopher D. Stone , Should Trees Have
Standing? Toward Legal Rights for Natural Objects, 45 S.
C AL .
L.
R EV . 450 (1972)
;
Cass R. Sunstein,
What's Standing After Lujan ? Of Citizen Suits, “Injuries,” and Article III, 91 M ICH .
L.
R EV . 163
(1992); Robert D. Bullard, Environmental Racism and “Invisible” Communities , 96 W.
V A .
L.
R EV .
1037 (1994); Eileen Guana, Federal Environmental Citizen Provisions: Obstacles and Incentives On
The Road To Environmental Justice , 22 E COLOGY L AW Q UARTERLY 1 (1995); Cass R. Sunstein,
Standing for Animals (with Notes on Animal Rights) , 47 UCLA L.
R EV . 1333 (2000)
80 Grassroots Recycling Network Inc. v. Environmental Protection Agency , No. 04-1196, 2005 WL
3078187 (2005).
81 Animal Legal Defense Fund v. Quigg, 932 F.2d 920 C.A.Fed. (Cal.),1991.
82 In Defense of Animals v. Cleveland Metroparks Zoo United States , 785 F.Supp. 100 (1991).
83 American Farm Bureau v. EPA, 559 F.3d 512 (2009).
84 Allard v. Frizzell , 536 F2d 1332 (1976).
13

described by Pierre Bourdieu as "symbolic violence."
85
Symbolic violence is a very powerful tool of suppression, as it relates to the very modes of the human cognition.
86
Educated into culturally dominant modes of thought, the subjects of such violence usually accept it as legitimate.
87
We can see this happening as environmentalists seek to redress economic injuries in courts.
This phenomenon is not unique to environmental law. Non-profit organizations openly seeking to advance public interest regularly fail the injury requirement.
88 For example, such organizations were found to have no standing to file a suit against racial discrimination in private schools,
89
against sport events that allegedly violated a state's gambling code
90
and against a demolition of buildings that should have served as low-income housing.
91
By contrast, social justice advocates that choose to resort to claims of financial loss sometimes do succeed. Thus, in one case an organization representing Spanish-speaking employees claimed that the defendant's employment policy was discriminatory.
92
The organization was found to have standing on the basis of the potentially increased revenue from membership fees it might get if the discriminatory barriers to selection were eliminated.
93
In another case, a non-profit group arguing that the common areas in a city did not allow access to persons with disabilities was held to be injured by the need to invest resources to determine if the property complied with applicable statutes.
94
The legal discourse of strict individualism is further illustrated by cases dealing with animal cruelty. It has been repeatedly held that individuals and organizations having general interest in observing animals living under humane conditions have no standing to sue.
95 By contrast, people who have developed a personal contact with a
85 P
IERRE B OURDIEU , D ISTINCTION : A S OCIAL C RITIQUE OF THE J UDGMENT OF T ASTE 1-2 (Richard Nice trans., 1984).
("[A] gentle violence, imperceptible and invisible even to its victims, exerted for the most part through the purely symbolic channels of communication and cognition.")
86 Id.
87 Id.
88 E.g., Warth v. Seldin , 422 U.S. 490 (1975); Concerned Citizens for the Preservation of Watertown,
Inc. v. Planning and Zoning Com'n of Town of Watertown, 118 Conn. App. 337, 2009 WL 4348678
(2009) (both cases dealt with zoning policies). See also infra notes 88-90.
89 Allen v. Wright , 468 U.S. 737 (1984).
90 Nebraskans Against Expanded Gambling v. Neb. Horsemen's Protective Assoc ., 605 N.W.2d 803
(2000).
91 Community Stabilization Project v. HUD , No. 01-2022 WL 272313 (8th Cir. Minn. 2002).
92 Chicano Police Officer's Ass'n v. Stover, 526 F.2d 431 (10th Cir. 1975).
93 Id . at 440-41.
94 Metropolitan St. Louis Equal Housing Opportunity Council v. Lighthouse Lodge, 2009 WL 1576735
(W.D. Mo. 2009).
95 Animal Legal Def. Fund v. Glickman , 130 F.3d 464, 468 (D.C. Cir. 1997); Lujan v. Defenders of
Wildlife , 504 U.S. 555 (1992).
14

particular animal do have standing when such an animal is mistreated.
96
Consequently, animal rights organizations try to find appropriate plaintiffs that had connection to some of the animals they are willing to protect.
97
Such plaintiffs may enable the organization to require lawful treatment of several specific animals, while their real commitment to protection of all the species remains unrealized.
98
All this clearly illustrates how the narrow legal concept of freedom disempowers a wide range of human aspirations. The doctrine of standing thus serves to close the doors of the courtroom in front of persons not motivated by their personal financial gain. This unjustifiably restricts their freedom to pursue their most legitimate goals.
The current legal situation restricts freedom in an additional way. It is well-known that the legal system promotes social norms.
99
The fact that one's inspirations are legally protected certainly adds to their social recognition. And social recognition is most crucial for the ability to choose one's goals: rather than inventing their goals themselves, people pick them up from the existing range of socially recognized aspirations. This is why, in Raz's view, freedom can be achieved only by providing a great variety of socially approved goals.
100
Denying non-egoistic goals legal recognition, the legal system weakens their social status. This has the effect of narrowing the range of socially acceptable goals and restricting the freedom of all citizens.
(B) Harmful Speech
Speech sometimes causes harm and is sometimes legally restricted for this reason.
Yet, since free speech is one of the most dearly cherished ideals of the US legal system, it is very selective in allowing for such restrictions. Observing which types of harmful speech are permissible and which are restricted allows a glimpse into the value system underlying the legal thought. Naturally, the more importance the legal system attaches to a certain interest, the more it will tend to allow restrictions on
96 Id.; Alternatives Research and Developments Foundation v. Glickman, 101 F.Supp.2d 7
(D.D.C.,2000).
97 Id.
98 Rob Roy Smith, Standing on Their Own Four Legs: The Future of Animal Welfare Litigation after
Animal Legal Defense Fund, Inc. v. Glickman, 29 E NVTL .
L. 989 (1999) ("[I]njury to a particular animal, rather than an animal species, became a well-established interest sufficient to establish injury in fact").
99 Alfred L. Brophy, Norms, Law, and Reparations: The Cese of Ku Klux Klan in 1920s Oklahoma, 20
H ARV .
B LACK L ETTER L.J. 17, Footnote 15 and the cited references (2004).
100 R
AZ , supra note 6, at 398.
15

speech in the name of this interest. The following discussion will show that while dealing with harmful speech, the legal system tends to favor individual interests over collective interests and economic interests over non-economic ones.
(B.1) Individual and Collective Interests
The central tool of restricting harmful speech is the defamation tort. This tort is applicable to individuals and corporations.
101 Yet, a defamatory statement concerning a group of persons is subject to liability only if one may infer a reference to an individual member: this happens when the group is sufficiently small or when such personal reference may be understood from the circumstances.
102
By contrast, harmful speech targeting a group as a whole does not constitute defamation.
Scholars have repeatedly pointed out the deficient regulation of two types of harmful speech: racist speech and pornography.
103
Empirical and theoretical studies show that both these types of speech cause negative stereotypes, discrimination and violence.
104
Yet, only the most radical forms of these types of speech—incitement to immediate violence and obscenity—are forbidden.
105
In the course of the last century, several state legislators have attempted to restrict racist speech, enacting laws and ordinances against "group libel." The Supreme Court invalidated such regulations on numerous occasions on free speech grounds.
106
Similarly, in the famous American Booksellers v. Hudnut case, the Antipornography
Civil Rights Ordinance of Indianapolis was struck down as unconstitutional.
107
The court in this case entirely accepted the arguments of feminist activists regarding the effects of pornography. It contended that pornography tends to perpetuate subordination of women, which in turn leads to affront and lower pay at work, insult
101 Restatement (2d), Torts § 577.
102 Id.
, § 564A.
103 See, e.g., Catharine A. MacKinnon, Francis Biddle's Sister: Pornography, Civil Rights, and Speech , in F EMINISM U NMODIFIED : D ISCOURSES ON L IFE AND L AW 163 (1987); Note, A Communitarian
Defense of Group Libel Laws , 101 H ARV .
L.
R EV . 682 (1988); Mari J. Matsuda, Public Response to
Racist Speech: Considering the Victim's Story , 87 M ICH .
L.
R EV . 2320 (1989); Richard Delgado, Are
Hate-Speech Rules Constitutional Heresy? A Reply to Steven Gey, 146 U.
P A .
L.
R EV . 865 (1998);
Evan P. Schultz, Group Rights, American Jews, and the Failure of Group Libel Laws, 1913-1952 , 66
B ROOK .
L.
R EV . 71 (2000).
104 MacKinnon, id.
at 179; Matsuda, id.
at 2336-38.
105 For racist speech see Brandenburg v. Ohio , 395 U.S. 444, 446-49 (1969) (racist speech must be tolerated unless it constitutes an imminent incitement to violence); for pornography see the following discussion of American Booksellers v. Hudnut, 598 F. Supp. 1316 (S.D.Ind. 1984) .
106 See, e.g., Gitlow v. New York , 268 U.S. 652 (1925); Near v. Minnesota, 283 U.S. 697 (1931);
Garrison v. State of La., 379 U.S. 64 (1964); Tollett v. U.S., 485 F.2d 1087 (8th Cir. 1973).
107 598 F. Supp. 1316 (S.D.Ind. 1984).
16

and injury at home, battery and rape on the streets.
108
Interestingly, for this very reason pornography was held to be in the hard core of constitutionally protected speech—speech that presents a controversial viewpoint; speech that affects how people see the world, their fellows, and social relations.
109
This line of jurisprudence is based on the view that speech regulation must be
"content neutral."
110
There is no such thing as a false idea, and so Congress and the government do not have the power to favor certain viewpoints over others.
111 This view stems from the more general "neutrality principle" recognized by the liberal philosophy.
112
According to this principle, the government should be neutral regarding the ideals of good life. It cannot promote true ideals and hinder false ones, since everyone should be absolutely free to choose her own ideals of good life.
113
The neutrality principle is illusory. Every significant governmental or legislative action is based on a certain vision of good and bad. Every conflict resolution favors certain interests over others. For instance, permitting a Nazi demonstration in front of
Holocaust survivors' homes
114
favors free speech right of the former group over mental peace and dignity of the latter. Neutrality principle is simply a rhetorical tool that helps justifying certain normative choices. It is particularly useful to establish superiority of interests most favored by the liberal philosophy over other interests.
Specifically, the view that the legislator has no power to restrict racist speech and pornography, no matter how severe the damage such speech may incur, reflects the perception that individual interests are absolutely superior to collective interests. Note that the neutrality principle does not prevent legislation forbidding racial and gender discrimination at work, 115 in education, 116 housing, 117 credit transactions, 118 etc.
Neither do the First Amendment principles prevent restrictions on racially or sexually
108 Id.
at 1320.
109 Id.
at 1336 et seq.
110 See, e.g., Boos v. Barry , 485 U.S. 312, 329-30 (1988); R.A.V. v. City of St. Paul, 505 U.S. 377, 382-
83 (1992); United States v. Playboy Entm't Group, Inc., 529 U.S. 803, 811-12 (2000).
111 Gertz v. Welch , 418 U.S. 323, 339-40 (1974)
112 For description and critique of this principle see R AZ , supra note 6, at 110 et seq.
113 Id.
114 Collin v. Smith, 578 F.2d 1197 (7th Cir. 1978).
115 E MPLOYMENT C OORDINATOR D ATABASE , Chapter 2 (2012) (describing state laws regulating discrimination practices in employment).
116 R
ONNA G REFF S CHNEIDER , E DUCATION L AW , Appendix B (2011) (listing selected state provisions prohibiting discrimination in education).
117 The Fair Housing Act, 42 U.S.C. §§ 3601 et seq.
(banning discrimination based on race, color, gender, religion, or national origin, in the sale, rental, financing, and brokerage of housing).
118 Equal Credit Opportunity Act, 15 U.S.C. § 1691 et seq.
(prohibiting discrimination in credit transactions on the basis of gender, race, national origin and other factors).
17

denigrating speech targeting specific individuals. That is, we do not really believe that the idea of discrimination deserves as much legal protection as the idea of equality.
Yet, classifying the personal interest against discrimination under the category of "the right to equality," while putting the respective collective interest under the label of
"ideals of good life" allows the legal system to protect the former while disregarding the latter.
In cases of harmful speech targeting an individual, the legal system recognizes the conflict between one's right to a good name and the freedom of speech. But when harmful speech targets a group, courts see no legally significant interest to counter the freedom of speech. This is because the interest to prevent discrimination is perceived as not neutral, as opposed to the right to free speech. Yet, there is no such thing as moral neutrality in political decisions.
119
Favoring free speech over the interest to prevent discrimination is no less "promoting an ideal of good life" than doing the opposite. The legislator and the government cannot stay neutral as to such ideals: all their significant actions promote some of them and suppress others.
120
The crucial issue here is similar as in environmental cases: courts readily accept the need to remedy an individual injury, but are hostile to the idea of redressing a collective injury of the same kind. The main rationale behind restricting racist speech and pornography is to stop nurturing the prejudices, stereotypes, discrimination and denigration in our society. Like clean environment, this is a public interest.
121
Preventing citizens from enacting laws that advance these ideals restricts their freedom to realize the interests they have as citizens in equality, justice and solidarity—the very quintessence of freedom in Arendt's view.
122
I do not wish to argue that harmful speech targeting a group should be regulated according to the same rules that apply to speech targeting individuals. But I do believe that both cases involve conflicting interests, none of which should be absolutely superior to the other. Advancing a morally better society is an important aspect of freedom. This is a significant interest that should be balanced against the right to free speech.
119 R
AZ , supra note 6, at 117 et seq.
120 Id.
.
121 Raz describes such interests as "public goods”: “It is a public good, and inherently so, that this society is a tolerant society, that it is an educated society, that it is infused with a sense of respect for human beings, etc." Id.
at 199.
122 A
RENDT , supra note 45, at 36 et seq.
18

(B.2) Economic and Non-economic Interests
The defamation tort theoretically allows relief of both economic and non-economic interests.
123
Yet, a closer analysis reveals that the former are strongly favored over the latter.
First, consider that a corporation may allege defamation only if (1) the corporation is one for profit and the matter tends to prejudice it in the conduct of its business or (2) although not for profit, the corporation depends on financial support from the public, and the matter tends to interfere with its activities by prejudicing it in the public estimation.
124
This rule is another example of imposing the capitalist discourse on non-profit corporations. Although their declared purpose is other than making profits, they may state their injury from defamatory speech only in pecuniary terms. Thus, in one case, a newspaper accused a public benefit organization for suppression of obscene literature of "engineering" crimes in order to receive a part of fines it was entitled to under the law.
125
To prove defamation, the organization alleged that it was "dependent upon voluntary contributions for its support and to enable it to carry out the purposes of its incorporation." The publication, it argued, would destroy the public belief it enjoyed, which would ultimately result in pecuniary loss.
126
This is an interesting case, since the very alleged injury of defamation was in impairing the organization's
"unsullied reputation for disinterested public service uninfluenced by selfish motives or the expectation of pecuniary benefit or reward."
127
This somewhat inconsistent line of argumentation illustrates the difficulty of public benefit organizations to state their case in legally acceptable terms. Moreover, if a corporation's only financial support comes from membership fees, it cannot suffer any pecuniary loss, and, therefore, cannot sue for defamation at all.
128
123 R
ODNEY A.
S MOLLA , L AW OF D EFAMATION , Chapter 9 (2012) (discussing the remedies available for defamation).
124 Restatement (2d), Torts § 561.
125 New York Society for the Suppression of Vice v. MacFadden Publications Inc.
, 129 Misc. 408 (Sup.
Ct. 1927).
126 Id.
at 566-67.
127 Id.
128 Electrical Board of Trade v. Sheehan, 214 App. Div. 712 (1st Dept 1925).
19

Further, as a rule, emotional damage does not suffice by itself to base a defamation claim,
129
while pecuniary damage, of course, does.
130
This rule makes one's personal reputation much more vulnerable to injury than one's business reputation. For example, consider that when a media corporation mistakenly showed a picture of a child with her godparents during a television broadcast reporting sexual abuse by the child's biological patents, the godparents' action for defamation failed.
131
The alleged damage of reputation among community, friends and family was found insufficient, since the plaintiffs showed no lost income as a result of the broadcast.
132 By contrast, in another case, a person appeared in a commentary broadcast and complained about the poor performance of her car.
133
She mistakenly named the person who was the owner of the car dealership at the time of the broadcast as the one who sold her a
"deathtrap" although in fact she bought the car form the previous owner of the dealership. In this case, defamation was found.
134
Similarly, while a false statement of a person's disease
135
or death
136
is generally non actionable, a false statement of deficient professional capacities
137
or insolvency
138
is defamatory per se , that is, even without a proof of damage. As one court has noted,
"[t]he management and credit of a corporation and its solvency are all most carefully guarded by the law."
139
By contrast, in one case a concurring opinion has observed that the legal practice "trivializes and denigrates the interest in reputation."
140
Business good name thus enjoys much broader legal protection than personal reputation. This discrepancy cannot be explained in terms of the First Amendment.
Speech relating to personal affairs may be as important to protect as speech relating to
129 E.g., Richie v. Paramount Pictures Corp., 544 N.W.2d 21, 29-30 (Minn. 1996) ("defamation claim cannot succeed based only on humiliation or other types of emotional harm"); Hubbard v. United Press
International, Inc., 330 N.W.2d 428 (Minn. 1983).
130 E.g., De Mankowski v. Ship Channel Development Co ., 300 S.W. 118 (Tex. Civ. App. 1927);
Maytag Co. v. Meadows Mfg. Co.
, 45 F. 2d 299 (C. C. A. 7th 1930).
131 Richie v. Paramount Pictures Corp., 544 N.W.2d 21 (Minn. 1996).
132 Id . at 29-30.
133 Hearst Corp. v. Hughes , 466 A.2d 486 (1983).
134 Id.
at 488.
135 Bitsie v Walston, 85 NM 655 (App. 1973).
136 O'Neill v. Edmonds , 157 F. Supp. 649 (E.D. Va. 1958); Thomason v. Times-Journal, Inc., 379
S.E.2d 551 (Ga. App. 1989); Cohen v. New York Times Co., 153 A.D. 242 (N.Y. App. Div. 1912).
137 Moriarty v. Greene , 732 N.E.2d 730 (1st Dist. 2000); Interstate Optical Co. v. Illinois State Society of Optometrists, 1927 WL 4075 (1st Dist. 1927).
138 Lion Oil Co. v Sinclair Ref. Co., 252 Ill App 92 (1929); Downey v United Weatherproofing, Inc.,
363 Mo 852 (1953).
139 Maytag Co. v. Meadows Mfg. Co.
, 45 F. 2d 299, 302 (C. C. A. 7th 1930).
140 Miami Herald Publishing Co. v. Tornillo , 418 U.S. 241, 262 (1974).
20

business issues, especially in our economic-oriented society.
141
The information about one's deficient professional capacities or insolvency may be no less important to communicate than the information about one's disease or death.
A legal tool that increases the gap between the legal protection of business reputation and personal reputation is trademark law. Traditionally, trademark law is designed to preserve the business goodwill by preventing consumer confusion as to the source of goods and services.
142 Yet, with the course of time, trademarks ceased to be mere indications of origin. They have evolved into symbols embedded with values, styles, identities and souls.
143
The legal protection of trademarks has expanded accordingly, further encouraging corporations to invest enormous sums in building up their trademark images.
144
This is a good example of the self-empowering mechanism of capitalism mentioned in Chapter 1: the greater the value of a trademark, the broader the scope of its legal protection. The broader the scope of trademark protection, the higher its economic value, and so on.
The turning point in the legal thought regarding trademarks came with the introduction of the "doctrine of dilution."
145
This doctrine expanded trademark protection beyond consumer confusion.
146
One of the branches of this doctrine is known as "tarnishment." Tarnishment occurs when a famous trademark is used in a manner that clashes with its wholesome image. Typically, this type of infringement is found when famous trademarks are placed in contexts of sexual activity
147
or illegal drugs.
148
Examples of trademark uses enjoined as tarnishing include posters displaying "Enjoy Coca-Cola" logo with the second word altered so as to read "Enjoy
Cocaine," 149 t-shirts bearing an imprint resembling the General Electric trademark
141 "Matters of public concern" are increasingly focused on the views of commercial interests rather than a wider range of matters of human concern.
142 J.
T HOMAS M C C ARTHY , M C C ARTHY ON T RADEMARKS AND U NFAIR C OMPETITION § 2:5 (4th ed.
2012).
143 Katya Assaf, Brand Fetishism, 43 C ONN .
L.
R EV . 83, 92-98 (2010).
144 Id.
at 103-106.
145 For description of this doctrine see M C C ARTHY , supra note 142, at § 27:37.
For its historical development see Robert N. Klieger, Trademark Dilution: the Whittling away of the Rational Basis for
Trademark Protection , 58 U. Pitt. L. Rev. 789 (1997).
146 M
C C ARTHY , id.
147 See, e.g., Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema Ltd., 467 F.Supp. 366 (S.D.N.Y.);
Toys "R" Us, Inc. v. Akkaoui, 40 U.S.P.Q.2d 1836 (N.D.Cal. 1996); Kraft Foods Holdings, Inc. v.
Helm , 205 F.Supp.2d 942 (N.D.Ill. 2002).
148 See, e.g., Coca-Cola Co. v. Gemini Rising, Inc., 346 F.Supp. 1183 (E.D.N.Y. 1972); NBA Properties v. Untertainment Records LLC, 1999 WL 335147 (S.D.N.Y. 1999).
149 Coca-Cola Co. v. Gemini Rising, Inc., 346 F.Supp. 1183 (E.D.N.Y. 1972).
21

reading "Genital Electric,"
150
a satirical pictorial essay entitled "Monkeying Around with Tarzan and Jane" depicting Tarzan and his wife Jane engaged in sexual activities
151
and a porn film entitled "Debbie Does Dallas" with the leading actress dressed similarly to the trademarked uniform of the Dallas Cowboys Cheerleaders.
152
This case law stands in a sharp contradiction to the legal practice on defamation tort.
Defamation protects only against provably false statements of fact.
153
This rule is mandated by the First Amendment: it assures that public debate will not suffer for lack of "imaginative expression" or "rhetorical hyperbole." 154
Satire, caricature, parody and other offending publications do not fall into the scope of defamation, since they do not constitute statements of fact.
155
For instance, when a magazine depicted the first sexual encounter of a nationally known television commentator as "a drunken incestuous rendezvous with his mother in an outhouse," the court declined the action for defamation. The parody was only a rhetorical hyperbole and could not reasonably be understood as a statement of fact, it reasoned.
156
Similarly, when Andrea Dworkin, a radical feminist strongly opposed to pornography, appeared in a series of sexually explicit cartoons and given the epithet
"asshole of the month," the court found no defamation, since no statements of fact were made.
157
In another case, a humorous publication implying that a lawyer serves his customers illegal drugs was found non-actionable.
158
In other words, caricatures involving of sex or illegal drugs are permitted when their subject is a real person, but are forbidden when their subject is a trademark.
Moreover, in order to protect "open and robust debate," courts do not allow public figures to recover for defamation made without actual malice.
159 There is no similar limitation on trademark infringement claims. And finally, while dealing with defamation cases, courts consider preliminary injunctions as unconstitutional prior
150 General Electric Co. v. Alumpa Coal Co., 205 U.S.P.Q. 1036 (D. Mass. 1979).
151 Edgar Rice Burroughs, Inc. v. High Soc. Magazine, Inc.
, 7 Media L. Rep.1862 (S.D. N.Y. 1981).
152 Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema Ltd., 467 F.Supp. 366 (S.D.N.Y.).
153 See, e.g., Hustler Magazine v. Falwell , 485 U.S. 46, 50 (1988); Milkovich v. Lorain Journal Co.,
497 U.S. 1, 18-20 (1990).
154 Milkovich, id.
at 20.
155 M
ARGARET E.
O'N EILL , L IBEL AND S LANDER § 156 (2012)
156 Hustler Magazine v. Falwell, 485 U.S. 46, 57 (1988).
157 Ault v. Hustler Magazine, 860 F.2d 877 (9th Cir. 1988).
158 Catalfo v. Jensen, 657 F.Supp. 463 (D.N.H. 1987).
159 New York Times Co. v. Sullivan, 376 U.S. 254, 283 (1964).
22

restraints on free speech and do not grant them. By contrast, in trademark cases, such injunctions are granted as a matter of routine.
160
One of the reasons why business goodwill enjoys such strong protection when embodied in a trademark is that trademarks are defined as intellectual property.
As
Felix Cohen has noted, the word "property" has a kind of magical power in our capitalistically-oriented legal system:
161
it automatically strengthens the protection of the right in question.
Thus, much less is allowed to say about a trademark than about a living person. Yet, in our consumer society, trademarks play important cultural roles.
162
It may be therefore as important to allow free discourse in relation to trademarks as in relation to living persons.
163
Mocking the all-important aura of trademarks is no less important for the free discourse than making fun of famous public figures.
164
In addition, trademarks often protect organizations with certain political, social or cultural influence.
165
In such cases, protecting trademarks against tarnishment equals shielding the respective organizations from satire and parody. Consider that while placing
Andrea Dworkin in a pornographic context is allowed, doing the same to Dallas
Cowboy Cheerleaders is forbidden.
The discussion on harmful speech reveals the following value hierarchy: an unorganized group of people (such as a gender of a race) enjoys no protection; an organized group (corporation or organization) enjoys protection inasmuch as its goals are related to pecuniary income; business reputation, especially if embodied in a trademark, is protected much more than personal reputation; and individual people are much more protected against pecuniary loss than against injury to their personal reputation. Thus, for instance, our legal system is ready to tolerate pornography and racist speech at the expense of bearing the risk of increased violence against women and minority groups. At the same time, it is not willing to tolerate trademark tarnishment—such as "Genital Electric" or ""Enjoy Cocaine"—due to the risk of decreased sales.
160 Mark A. Lemley & Eugene Volokh, Freedom of Speech and Injunctions in Intellectual Property
Cases , 48 D UKE L.J. 147 (1998) (describing and criticizing this situation).
161 Cohen, supra note 19, at 820-21.
162 Katya Assaf, The Dilution of Culture and the Law of Trademarks , 49 IDEA 1, 70 (2008).
163 Id.
164 Id.
at 78-81.
165 Id.
at 19-21.
23

This legal situation is questionable. It does not seem to reflect the value system of most people. In addition, as already mentioned, the legal system has the effect of creating social norms.
166
In its current state, it signals that humiliation of one's race or gender should not be perceived as painful; that public benefit organizations should not care much about anything besides their revenues; that bad reputation among friends and family should not matter as much as income loss. The legal system thus effectively promotes a social perception of acceptability (and maybe even desirability) of an excessive preoccupation with one's material welfare.
This legal situation may be one of the factors reinforcing the modern consumer culture. Numerous scholars hold the view that the excessive materialism of our society causes dissatisfaction, frustration and unhappiness.
167
As Hannah Arendt convincingly argues, this happens because of the loss of freedom associated with materialism: the consumer culture averts people from being socially and politically active. Meanwhile, social and political activity embodies the very quintessence of genuine freedom.
168
Therefore, legally supporting cultural materialism is another way of restricting freedom.
I will conclude this discussion with the following example: PETA is a worldwide animal rights organization whose initials stand for "People for the Ethical Treatment of Animals." In 2001, PETA won a trademark infringement case against a person who called his website PETA: People Eating Tasty Animas, parodying the original trademark.
169
There is a good deal of irony in this victory if one considers the numerous defeats the organization has suffered in the pursuit of its main goal: animal protection.
170
(C) Affirmative Action
(C.1) Affirmative Action under Judicial Review
166 See supra note 99.
167 See, e.g., E RICH F ROMM , T HE S ANE S OCIETY (1955); H ERBERT M ARCUSE , O NE -D IMENSIONAL M AN
(1964); R OBERT E.
L ANE , T HE L OSS OF H APPINESS IN M ARKET D EMOCRACIES (2000); B RUNO S.
F REY
& A LOIS S TUTZER , H APPINESS AND W ELL -B EING : H OW THE E CONOMY AND I NSTITUTIONS A FFECT
H APPINESS (2002).
168 A
RENDT , supra note 45, at 107 et seq.
169 People for the Ethical Treatment of Animals v. Doughney , 263 F.3d 359 (4th Cir. 2001).
170 E.g., People for Ethical Treatment of Animals, Inc. v. Barshefsky, 925 F.Supp. 844 (D.D.C.,1996);
People for Ethical Treatment of Animals v. Department of Health, 917 F.2d 15 (Cal. 1990); People for
Ethical Treatment of Animals, Inc. v. California Milk Producers Advisory Board, 125 Cal.App.4th 871
(1st Dist.2005).
24

Equality is recognized as one of the most important social goals by many philosophical theories,
171
including liberalism.
172
It is also one of the dearest ideals of the American legal system, embodied in the Equal Protection Clause.
173
Yet, equality is a highly contested concept.
174
Thus, the liberal philosophy regards equality as a potential threat to freedom.
175 It opposes state intervention designed to redistribute wealth more equally among society members.
176
All redistribution policies essentially take property from one group of people and give it to another. The restriction of freedom imposed by such compulsory giving is unacceptable, according to the liberal view.
177
Redistribution of resources between society members should occur solely through voluntary market transactions.
178
This approach exerts considerable influence on the way the American legal thought copes with social inequality. Although the Federal law prohibits racial and sexual discrimination in the public sector,
179
it does not provide any mechanisms to promote equality as a matter of end-result. That is, no federal law requires employers or educational institutions to take steps for increasing the representation of minority groups. While some federal statutes allow affirmative actions, no statute proscribes them.
180
The Fair Employment Act of Wisconsin even specifically states that it does not require affirmative action programs to correct imbalances in the workforce.
181
It is a well-known fact that certain minority groups, most notably Afro-Americans and women, have been suffering from severe legal and social discrimination over the
171 See Stefan Gosepath, Equality , T HE S TANFORD E NCYCLOPEDIA OF P HILOSOPHY (Spring 2011
Edition) , Edward N. Zalta (ed.), http://plato.stanford.edu/entries/equality/.
172 R
OBERT S UGDEN , T HE P OLITICAL E CONOMY OF P UBLIC C HOICE 11 (1981).
173 U.S. Constitution, Amendment 14: “"no state shall ... deny to any person within its jurisdiction the equal protection of the laws." [
174 See Gosepath, supra note 171 (describing the various philosophical visions of equality); Michel
Rosenfeld, Decoding Richmond: Affirmative Action and the Elusive Meaning of Constitutional
Equality, 87 M ICH .
L.
R EV . 1729, 1729-30 (1989) (“Although both proponents and opponents of the constitutionality of affirmative action profess to be committed to the ideal of equality, no compromise on the proper method to achieve that ideal looms on the horizon.”)
175 Gosepath, id.
at 3.2.
176 Id.
177 Id.
178 Id.
179 42 U.S.C.A. § 2000d "No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance."
180 For example, both the Civil Rights Act and the Transportation Equity Act may all ow race-based affirmative actions, but do not require them. See J
AMES A CRET & A NNETTE D AVIS P ERROCHET ,
C ONSTRUCTION L ITIGATION H ANDBOOK § 16:41 (2d ed. 2011): “Federal law, Executive Order No.
10925, § 301 and 42 U.S.C.A. § 2000d, prohibits racial discrimination but does not require any employer to grant preferential treatment on the basis of race or gender.”
181 Wis. SA 111.31(3).
25

history. Only relatively recently have these groups acquired legal equality.
182
Yet, formal equality of legal rights has proven insufficient to achieve racial and gender equality as a matter of social fact.
183
Both Afro-Americans and women are still significantly underrepresented in many important sectors of education, employment and public life.
184
In spite of the absence of a legal requirement, various state and federal institutions, occasionally attempt to alleviate racial and gender inequalities by the means of affirmative actions. First attempts to introduce affirmative actions targeting Afro-
Americans were made during the early 1960s, in tune with the more general understanding of the evils of segregation that began to emerge during that time.
185
These attempts were largely circumvented by courts during the late 1970s and the
1980s, as the neo-liberal philosophy started dominating the legal thought.
186
In the landmark Regents of the University of California v. Bakke decision of 1978, the
Supreme Court found an affirmative action program practiced by UC Davis Medical
School unconstitutional.
187
While the court admitted that race may be one of a number of factors considered by the school in passing on applications, it concluded that set aside seats for a certain race unjustifiably exclude applicants of other races.
188
A further significant step in the development of affirmative action jurisprudence is
City of Richmond v. J.A. Croson , given in 1989.
189
In this case, the Supreme Court for the first time subjected an affirmative action program favoring Afro-Americans to the
182 For instance, until the 1910s, women did not have the right to vote in most states. The Civil Rights
Act of 1964 prohibiting racial discrimination was enacted as late as 1964.
183 Elizabeth S. Anderson, Integration, Affirmative Action, and Strict Scrutiny , 77 N.Y.U.
L.
R EV . 1195,
1208 (2002) (“In 1964, when the Civil Rights Act was passed, it was easy for many-- including the framers of the Act--to imagine that ending intentional employment discrimination […] would be sufficient to achieve the Act's integrative goal. But it quickly became evident that these means were grossly insufficient to meet this goal. Centuries of legal discrimination and social subordination had left stubborn legacies, including de facto segregation, that continued to pose barriers to black opportunity.
To remedy these problems, it was and still is not enough simply to stop discriminating[.]”)
184 See, e.g., United States Department of Labor, The African-American Labor Force in the Recovery, http://www.dol.gov/_sec/media/reports/blacklaborforce/ : “Blacks are under-represented in the sectors that have experienced the greatest job growth during the recovery, including manufacturing and professional and business services. […] Blacks are under-represented in Science, Technology,
Engineering, and Mathematical (STEM) occupations accounting for about 8 percent or less of jobs in computer and mathematical occupations (6.9 percent), life, physical, and social science occupations
(7.4 percent), and architecture and engineering occupations (5.2 percent) in 2011.”
185 Thus, the Civil Rights Act of 1968 ensured equal housing opportunities for all races; in Brown v.
Board of Education , 347 U.S. 483 (1954) the Supreme Court declared state laws establishing separate public schools for black and white students unconstitutional.
186 Emily Eschenbach Barker, The Changing Face of Liberalism in Workplace Democracy: The Shift from Collective to Individual Rights , 36 Vt. L. Rev. 303 (2011).
187 438 U.S. 265 (1978).
188 Id.
at 307-10.
189 488 U.S. 469 (1989).
26

same scrutiny test as applied to policies discriminating against this group.
190
Since this decision, courts adopted a general policy of treating affirmative actions the same way they treat discriminating practices against minority groups.
191
According to this view, just like a discriminatory policy against Afro-Americans and women infringes upon the right to equality of these groups, affirmative actions infringe upon the right to equality of whites and males.
192
Today, the general rule is that all racial classifications, no matter if they benefit or disadvantage a minority group, are subject to strict judicial scrutiny. As one court noted, "racial classification, regardless of purported motivation, is presumptively invalid under equal protection clause and can be upheld only on extraordinary justification."
193
Gender classifications are examined with intermediate scrutiny.
194
To survive a judicial review, the institution undertaking an affirmative action must show a compelling state interest
195
in the action and convince that the action is narrowly tailored
196
to satisfy this interest. Both these requirements are interpreted very restrictively.
(1)The "Compelling Interest" Requirement
In order to prove a compelling state interest it is not enough to show that the target minority group is severely underrepresented in a particular industry or in a specific
190 Rosenfeld, supra note 174, at 1731-32.
191 Scott Cummings, Affirmative Action and the Rhetoric of Individual Rights: Reclaiming Liberalism as a “Color-Conscious” Theory , 13 H ARV .
B LACKLETTER L.
J. 183, 192-93 (1997).
192 Id.
at 193-94; William Bradford Reynolds, Individualism Versus Group Rights: The Legacy of
Brown , 93 Y ALE L.J. 995, 1003 (1984) (“in no instance should an individual's rights rise any higher or fall any lower than the rights of others because of race, gender, or ethnic origin [..] any compromise of this principle is discrimination […] and such behavior is no more tolerable when employed remedially, in the name of “affirmative action” or “racial balance”).
193 Eisenberg v. Montgomery County Pub. Sch.
, 197 F.3d 123, 131 (4th Cir. 1999).
194 E.g., Clark v. Jeter, 486 U.S. 108 S. Ct. 1910 (1988); Coral Const. Co. v. King County , 941 F.2d
910 (9th Cir. 1991); Concrete Works of Colorado, Inc. v. City and County of Denver, 36 F.3d 1513
(10th Cir. 1994); Florida A.G.C. Council, Inc. v. Florida, 303 F. Supp. 2d 1307 (N.D. Fla. 2004).
195 See infra notes 196-210.
196 See infra notes 216-222.
27

institution.
197
That is, promoting racial or gender diversity in itself is usually not recognized as a compelling public interest.
198
A compelling interest is only recognized when the affirmative action aims to remedy past discrimination.
199
Furthermore, showing that discrimination existed in the past in the relevant industry is not enough to justify an affirmative action: 200 redressing historic discrimination and societal imbalances is not regarded as a compelling state interest.
201 Rather, it is necessary to show that the specific institution undertaking the affirmative action used to practice discriminatory policies against the target minority group.
202
Some courts go as far as stating that each beneficiary of an affirmative action must personally be a past victim of discrimination.
203
197 Dallas Fire Fighters Ass'n. v. City of Dallas, Texas, 150 F.3d 438 (5th Cir. 1998) (Dallas's affirmative action plan for the city's fire department invalidated; the court held that statistical analysis showing that minorities had been underrepresented in higher ranks did not suffice to justify the plan);
Maryland Troopers Ass'n, Inc. v. Evans, 993 F.2d 1072 (4th Cir. 1993) (affirmative action for state police found unconstitutional despite underrepresentation of Afro-Americans at ranks above trooper);
Gratz v. Bollinger, 123 S. Ct. 2411 (2003) (a University’s undergraduate affirmative action program struck down in spite of finding that Afro-Americans were underrepresented in the student body).
198 E.g., Hayes v. North State Law Enforcement Officers Ass'n, 10 F.3d 207, 210 (4th Cir.1993) (“the
City has not provided sufficient evidence to survive summary judgment on its claim that racial diversity […] constitutes a compelling state interest”); Lutheran Church-Missouri Synod v. F.C.C., 141
F.3d 344, 354 (D.C. Cir. 1998) (“We do not think diversity can be elevated to the “compelling”
[interest] level”); Grutter v. Bollinger, 137 F. Supp. 2d 821, 850 (E.D. Mich. 2001) (“the fact remains that the attainment of a racially diverse class is not a compelling state interest”).
199 E.g., City of Richmond v. J.A. Croson Co., 488 U.S. 469, 470 (1989) (“The city has failed to demonstrate a compelling governmental interest justifying the Plan, since the factual predicate supporting the Plan does not establish the type of identified past discrimination in the city's construction industry that would authorize race-based relief under the Fourteenth Amendment's Equal
Protection Clause.”);
O'Donnell Const. Co. v. District of Columbia, 963 F.2d 420, 425 (D.C. Cir. 1992)
(District of Columbia Minority Contracting Act invalidated because the state failed to show past discrimination); Contractors Ass'n of Eastern Pennsylvania, Inc. v. City of Philadelphia, 91 F.3d 586,
596 (3d Cir. 1996) (“The municipality has a compelling state interest that can justify race-based preferences only when it has acted to remedy identified present or past discrimination”).
200 City of Richmond, id.
(“A generalized assertion that there has been past discrimination in the entire construction industry cannot justify the use of an unyielding racial quota, since it provides no guidance for the city's legislative body to determine the precise scope of the injury it seeks to remedy”); Main
Line Paving Co., Inc. v. Board of Educ., School Dist. of Philadelphia, 725 F. Supp. 1349, 1359-60
(E.D. Pa. 1989).
201 Wygant v. Jackson Bd. of Ed., 476 U.S. 267, 268 (1986) (“Societal discrimination, without more, is too amorphous a basis for imposing a racially classified remedy”); J.A. Croson Co. v. Richmond, 822
F.2d 1355, 1357-58 (1987) (“[t]o show that a plan is justified by a compelling governmental interest, a municipality that wishes to employ a racial preference cannot rest on broad-brush assumptions of historical discrimination[.]...Findings of societal discrimination will not suffice; the findings must concern ‘prior discrimination by the government unit involved.”); Grutter v. Bollinger, 137 F. Supp. 2d
821, 869 (E.D. Mich. 2001) ("the effects of general, societal discrimination cannot constitutionally be remedied by race-conscious decision-making").
202 Id.
203 City of Richmond v. J.A. Croson Co., 488 U.S. 469, 474 (1989) (Invalidating an affirmative action plan, the court reasoned: “[t]he class of persons benefited by the Plan is not limited to victims of past discrimination by white contractors in the city, but encompasses persons who have never been in business in the city”).
28

Past discrimination policy must be proven with specific evidence of illegal raceconscious decision-making.
204
Statistical evidence showing severe underrepresentation of the minority group in the past
205
or evidence of particular instances of discrimination
206
is insufficient.
Most affirmative action programs fail to satisfy this strictly interpreted requirement of compelling interest.
207
For example, in two cases, courts held that poor reputation of universities in Afro-American community and a hostile campus climate do not constitute present effects of past discrimination sufficient to justify an affirmative action.
208
In one of these cases, the court noted that the unfriendly campus environment was probably the result of a general social hostility and cannot be specifically attributed to the past discrimination policy of the university itself.
209
In the City of Richmond case dealing with governmental construction contracts, the court expressed the view that it is completely unrealistic to assume that in the absence of discrimination, minorities would choose to participate in the construction industry in lockstep proportion to their percentage in population.
210
The disparity between whites and Afro-Americans in this industry might result from phenomena other than discrimination: Afro-Americans might be disproportionately attracted to another market.
211
For example, Afro-Americans "are more than proportionately represented in the transportation industry, but considerably less than proportionately represented in the wholesale trade, manufacturing, and finance industries," the court noted.
212
204 Id.
at 500.
205 Dallas Fire Fighters Ass'n. v. City of Dallas, Texas, 150 F.3d 438, 441 (5th Cir. 1998); Associated
General Contractors of Ohio, Inc. v. Drabik, 214 F.3d 730, 735 (6th Cir. 2000).
206 Associated General Contractors of Connecticut v. City of New Haven, 791 F. Supp. 941, 946-47 (D.
Conn. 1992); Rothe Development Corp. v. Department of Defense, 545 F.3d 1023, 1048 (Fed. Cir.
2008); Jackson v. Cerpa, 696 F. Supp. 2d 962, 964 (N.D. Ill. 2010).
207 E.g., State (Dept. of Administration) v. Department of Industry, Labor and Human Relations, 77
Wis. 2d 126 (1977); Krajco v. State Bureau of Personnel, 1977 WL 3770 (Wis. Cir. Ct. 1977);
Associated General Contractors of California, Inc. v. Coalition for Economic Equity, 950 F.2d 1401
(9th Cir. 1991); L.D. Mattson, Inc. v. Multnomah County, 703 F. Supp. 66 (D. Or. 1988); Main Line
Paving Co., Inc. v. Board of Educ., School Dist. of Philadelphia, 725 F. Supp. 1349 (E.D. Pa. 1989); F.
Buddie Contracting Co. v. City of Elyria, Ohio, 773 F. Supp. 1018 (N.D. Ohio 1991); Milwaukee
County Pavers Ass'n v. Fiedler, 922 F.2d 419 (7th Cir. 1991); Malabed v. North Slope Borough, 335
F.3d 864 (9th Cir. 2003).
208 Podberesky v. Kirwan, 38 F.3d 147, 154-55 (4th Cir. 1994); Hopwood v. Texas, 78 F.3d 932, 952-53
(5th Cir. 1996).
209 Podberesky, id.
210 488 U.S. at 507.
211 Id. at 503.
212 Id.
29

This jurisprudence has been criticized by numerous scholars.
213
Indeed, the view that the enormously disproportionate representation of Afro-Americans in prestigious businesses
214
may be unrelated to their historical discrimination seems to severely distort the reality.
215
Applying economic analysis, Martin J. Katz has demonstrated that racial disparities in a lucrative market like construction contracting cannot be adequately explained without reference to discrimination.
216
Indeed, we have no reason to assume that there are systematic differences in productivity between racial groups or that workers from different racial groups are not equally rational. If so, it is impossible to explain why Afro-Americans should be disproportionately attracted to lower paying industries like transportation over lucrative ones like construction.
217
(2) The "Narrow Tailoring" Requirement
The "narrow tailoring" requirement imposes another heavy burden on institutions wishing to undertake affirmative actions. Even where past discrimination has been proven, the defendant must demonstrate a "strong basis in evidence for its conclusion that remedial action is necessary."
218
Since in every minority group there are members that are not disadvantaged in any way, affirmative actions based on race or gender will normally be over-inclusive.
219
Therefore, the judicial practice strongly favors the
213 E.g., Anderson, supra note 183; Barker, supra note 186; Cummings, supra note 191; Rosenfeld, supra note 174; Lindsay C. Patterson, Individual Rights and Group Wrongs: An Alternative Approach to Affirmative Action, 56 M ISS .
L.J. 781 (1986); Martin J. Katz, The Economics of Discrimination: The
Three Fallacies of Croson, 100 Y ALE L.J. 1033 (1991); Elizabeth M. Iglesias, Structures of
Subordination: Women of Color at the Intersection of Title VII and the NLRA. Not!, 28 H ARV .
C.R.-
C.L.
L.
R EV .
395 (1993); Reginald Oh, Re-Mapping Equal Protection Jurisprudence: A Legal
Geography of Race and Affirmative Action, 53 A M .
U.
L.
R EV . 1305 (2004); Joanne Villanueva, The power of Procedure: The Critical Role of Minority Intervention in the Wake of Ricci v. Destefano, 99
C AL .
L.
R EV . 1083 (2011); Dan M. Kahan, Foreword: Neutral Principles, Motivated Cognition, and
Some Problems for Constitutional Law, 125 H ARV .
L.
R EV . 1 (2011); Catharine A. MacKinnon,
Substantive Equality: A Perspective, 96 M INN .
L.
R EV . 1 (2011).
214 See supra note 184.
215 P
ATRICIA J.
W ILLIAMS , T HE A LCHEMY OF R ACE AND R IGHTS 106 (1991): "I cannot but marvel at how, against a backdrop of richly textured facts and proof on both local and national scales, in a city where more than half the population is black and in which fewer than 1 percent of contracts are awarded to minorities or minority-owned businesses, interpretative artifice alone allowed this narrow vision that […] there was no proof of discrimination.”
216 Katz, supra note 213.
217 Id.
at 1044-45.
218 Richmond v. J.A. Croson Co., 488 U.S. 469, 500 (1989).
219 See, e.g., Fullilove v. Klutznick, 448 U.S. 448, 540-41 (1980); City of Richmond v. J.A. Croson Co.,
488 U.S. 469, 506 (1989); Adarand Constructors, Inc. v. Pena , 115 S. Ct. 2097, 2128-29 (1995);
Associated General Contractors of Ohio, Inc. v. Drabik , 214 F.3d 730, 737 (6th Cir. 2000). Some scholars share this view: see T ERRY E ASTLAND , E NDING A FFIRMATIVE A CTION : T HE C ASE FOR
C OLORBLIND J USTICE 121 (1996); R ICHARD A.
P OSNER , T HE D E F UNIS C ASE AND R EVERSE
D ISCRIMINATION , IN T HE E CONOMICS OF J USTICE 372 (1981).
30

use of race- and gender-neutral means, such as promoting small businesses or socially disadvantaged individuals.
220
While such means are considered legitimate, race- and gender-based preference is regarded as a "drastic" step, which should better be avoided.
221
Courts repeatedly state that racial integration can be achieved through race-neutral means.
222
Accordingly, affirmative action policies requiring that a certain percentage of employees or subcontractors belong to a minority group, that a good faith effort is made to reach out to these groups or that other steps are taken to assist minority groups in obtaining certain positions are routinely held to be unconstitutional.
223
In
Hopwood v. Texas the court noted: "[t]he use of race, in and of itself, to choose students simply achieves a student body that looks different. Such a criterion is no more rational on its own terms than would be choices based upon the physical size or blood type of applicants."
224
As Martin J. Katz convincingly argues, race-neutral policy is likely to be ineffective in remedying discrimination.
225
Such a policy will always aid top aspirants from its target pool. For instance, a policy that provides preferential treatment to small businesses will help the most effective small businesses to enter the relevant industry.
226
Yet, because of injuries of past discrimination, Afro-Americans are likely to be significantly underrepresented at the top of such an aspirant pool, just as they are underrepresented in the relevant industry itself.
227
Therefore, to remedy discrimination, it is indispensable to use a race-based policy.
228
(C.2) A Right to Affirmative Action?
Does any disadvantaged group have a right to a preferential treatment? The answer is clearly "no." Furthermore, the federal law does not prevent state legislators from
220 City of Richmond, id.
at 520 (holding that Richmond's affirmative action program was not narrowly tailored because it did not consider “the use of race-neutral means to increase minority business participation in city contracting”); Associated General Contractors of Ohio, id.
; Podberesky v. Kirwan,
38 F.3d 147, 160-61 (4th Cir. 1994) (similar statements).
221 State (Dept. of Administration) v. Department of Industry, Labor and Human Relations, 252 N.W.2d
353, 359 (1977).
222 See supra note 220.
223 E.g. ,City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989); Adarand Constructors, Inc. v.
Pena , 115 S. Ct. 2097 (1995); Adarand Constructors, Inc. v. Slater, 228 F.3d 1147 (10th Cir. 2000).
224 78 F.3d 932, 966 (5th Cir. 1996).
225 Katz, supra note 213, 1045-48.
226 Id.
227 Id.
228 Id.
at 1048-52.
31

banning affirmative action plans in their states altogether. Thus, in 1997, California voters adopted Proposition 209 that amended the state constitution, outlawing any preferential treatment on the basis of race, sex, color, ethnicity or natural origin.
229
This Proposition invalidated all pre-existing outreach and affirmative action programs in California and effectively cancelled all California statutes proscribing such programs. Accordingly, affirmative action and minority participation programs have been consistently struck down after its passage.
230
Proposition 209 was challenged in court by a non-profit organization for the promotion of economic equity.
231
The plaintiff argued that outlawing affirmative actions, the state legislator denied certain groups their constitutional right to equal protection.
232
The Court of Appeals found this argument illogical: "the central tenet of the Equal Protection Clause teeters on the brink of incoherence."
233
The alleged burden that Proposition 209 imposes on those who would seek race and gender preferences is a burden that the Constitution itself imposes, the court concluded.
234
Another issue that is noteworthy in the context of affirmative action is standing.
Plaintiffs challenging affirmative actions usually have no trouble to show standing.
Thus, white applicants rejected by state university schools are routinely granted standing to challenge affirmative action programs favoring Afro-American candidates.
235
White students have standing to challenge a scholarship program designed for Afro-American students.
236
To challenge a governmental employment plan, the plaintiff does not even have to claim that it has lost a specific contract because of the unequal treatment.
237
It is enough to show that the plaintiff is a
229 Article I Section 31 of the California Constitution.
230 E.g., Hi-Voltage Wire Works, Inc. v. City of San Jose, 24 Cal. 4th 537 (2000); Connerly v. State
Personnel Bd., 92 Cal. App. 4th 16 (3d Dist. 2001); C & C Const., Inc. v. Sacramento Mun. Utility
Dist., 122 Cal. App. 4th 284 (3d Dist. 2004).
231 Coalition for Economic Equity v. Wilson, 122 F.3d 692 (9th Cir. 1997).
232 Id.
at 696-97.
233 Id.
at 702.
234 Id.
Similarly, in Hi-Voltage Wire Works, Inc. v. City of San Jose, 24 Cal. 4th 537 (2000), the
Supreme Court of California held that the mere fact that affirmative action is permissible under federal law does not preempt a state law that prohibits affirmative action.
235 E.g., Grutter v. Bollinger, 137 F. Supp. 2d 821, 847 (E.D. Mich. 2001); Hopwood v. Texas, 78 F.3d
932, 966 (5th Cir. 1996).
236 Podberesky v. Kirwan, 38 F.3d 147, 154-55 (4th Cir. 1994).
237 Bras v. California Public Utilities Com'n, 59 F.3d 869 (9th Cir. 1995); Northeastern Florida
Chapter of Associated General Contractors of America v. City of Jacksonville, Fla., 508 U.S. 656
(1993); Cerrato v. San Francisco Community College Dist., 26 F.3d 968 (9th Cir. 1994); Adarand
Constructors, Inc. v. Pena, 515 U.S. 200 (1995); Connerly v. State Personnel Bd., 92 Cal. App. 4th 16
(3d Dist. 2001).
32

potential candidate for contracts regulated by the affirmative action.
238
Thus, corporations claiming that they are ready and able to bid on governmental contracts, but the discriminatory policy prevents them from doing so on an equal basis, are routinely granted standing.
239
Such corporations are awarded lost profit damages upon finding that the affirmative action programs in question are unconstitutional.
240 In another case, discrimination alone has been held to constitute irreparable harm.
241
Things are quite different when the plaintiff is a potential beneficiary of an affirmative action. Thus, in Indianapolis Minority Contractors Association v. Wiley, a group of Afro-American individuals who owned contracting businesses in Indiana brought an action against Indiana transportation officials, challenging the manner in which Indiana administered minority-owned business participation requirements in federal highway funding scheme.
242
The statutory scheme in question required that each recipient of federal funds expend at least 10% of these funds with small businesses owned and controlled by socially and economically disadvantaged individuals (DBE), stating that Black Americans, Hispanic Americans, Native
Americans, Asian Pacific Americans, and women are rebuttably presumed to be
"socially and economically disadvantaged."
243
The plaintiffs claimed that Indiana did not satisfy this requirement by giving business to companies that are not truly disadvantaged, thereby diverting business from legitimate DBEs.
244
The Seventh
Circuit Court of Appeals held that the plaintiffs did not have standing to sue, since the statutory scheme did not provide specific goals or quotas for participation by any particular disadvantaged group.
245
It did not guarantee any specific benefit to any identifiable individual, and thus did not create any enforceable rights.
246
Note that had the statutory scheme provided specific goals or quotas for participation by a particular disadvantaged group, it would most probably have been found unconstitutional. It is a consistent line of judicial practice that affirmative actions
238 Id.
239 E.g. Northeastern Florida v. City of Jackonville,
508 U.S. 656, 666 (U.S.Fla.,1993); Cerrato v. San
Francisco Community College Dist., 26 F.3d 968, 976 (9th Cir. 1994); W.H. Scott Const. Co., Inc. v.
City of Jackson, 199 F.3d 206, 212-13 (Miss. 1999).
240 E.g., W. R. Grace & Co. v. United Rubber Workers, 461 U.S. 757, 757-58 (1983) ; Grutter v.
Bollinger, 137 F. Supp. 2d 821, 847 (E.D. Mich. 2001).
241 Monterey Mechanical Co. v. Wilson, 125 F.3d 702, 715 (9th Cir. 1997).
242 187 F.3d 743 (7th Cir. 1999).
243 Id.
at 746-47.
244 Id.
at 747.
245 Id.
at 752.
246 Id.
33

establishing quotas or goals for specific minority groups are not "narrowly tailored" to remedy past discrimination.
247
Under this legal situation, no individual may ever have standing to claim a right for preferential treatment.
248
(C.3) Capitalism, Equality and Freedom
The legal situation in the field of affirmative action reflects the individualistic approach of the American legal system. The view that equal treatment in present should normally be enough to ensure equality implicitly assumes that as soon as discrimination ceases, members of the minority group stop being different in any relevant aspect. This view is based on an atomistic vision of individuals, which is part of the liberal philosophy.
249
In contrast to this view, effects of racial discrimination spread among group members and persist over time.
250
Facts speak for themselves: job markets are highly racially segregated today, although Afro-Americans have long acquired equal legal rights.
251
There are numerous factors that make racial discrimination a collective rather than individual matter.
First, racial discrimination results in financial disadvantage, which usually persists across generations.
252
Second, in many markets personal relations and name recognition are important—a factor that additionally undermines the chances that a member of a historically disadvantaged racial group will be employed in such markets.
253
As Elizabeth S. Anderson describes, "[i]f a firm denies one's neighbor a job due to discrimination, one loses a potential role model, a source of information about job openings at the firm, and a connection who could provide a credible job reference to the firm's owner. [...] Once these disadvantages become shared, one's community becomes a site of concentrated and self-reinforcing disadvantage, perpetuating the effects of discrimination over time." 254
Third, a history of discrimination may result in conditioning the members of minority groups not to strive to achieve high professional positions. Thus, a boy in an average
247 See supra note 223.
248 For discussion and critique see MacKinnon, supra note 213, at 8; Katz, supra note 213, at 1034;
Villanueva, supra note 213.
249 Cummings, supra note 191, at 187-88.
250 Anderson, supra note 183, at 1206-07.
251 See supra note 184.
252 Cummings, supra note 191, at 1042-43.
253 Id.
at 1041-43. Anderson, supra note 183, at 1202 .
254 1206-07.
34

white family is more motivated to pursue prestigious high education than a girl in an average Afro-American family. A related point is that social stereotypes and prejudices are not easy to dismantle.
255
Many people still believe that prestigious jobs are most suitable for white males, and such perceptions unconsciously influence members of the dominating group as well as victims of discrimination themselves.
256
Long-term social devaluation results in continuous stigmatization of the minority group accompanied by a corresponding feeling of a low self-esteem among minority group members.
257
The failure to see these simple truths stems from the general aversion of the US legal system to the narrative of collective rights and collective wrongs.
258
The liberal philosophy holds that only individuals may be entitled to rights and subjected to responsibilities.
259
Thus, courts are ready to accept that poverty results in inequality of educational and professional opportunities and to uphold affirmative actions based on individual socio-economic factors.
260
They are even ready to allow individual institutions to correct their own wrongs of past discrimination.
261
What they are not ready to do is to recognize that the society as a whole is responsible for discrimination and that the minority group rather than individual victims of discrimination should bear the right to remedy.
262
The current intellectual climate of strict individualism, fueled by the spirit of capitalism, makes such recognition inconceivable.
Yet, viewing affirmative action through the lens of individualism misses its main point. The idea of affirmative action is to make a group better off. No doubt there are socially and economically disadvantaged individuals among whites and among Afro-
Americans alike. The problem that affirmative action seeks to solve is that the percentage of such individuals in the Afro-American group is sufficiently higher
255 MacKinnon, supra note 213, at 8.
256 Anderson, supra note 183, at 1202-03.
257 Hope Landrine & Elizabeth A. Klonoff, The Schedule of Racist Events: A Measure of Racial
Discrimination and a Study of Its Negative Physical and Mental Health Consequences, 22 J OURNAL OF
B LACK P SYCHOLOGY 144 (1996).
258 See Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 239 (1995) (“[the concept of] "creditor or debtor race“ [is] "alien to the Constitution's focus upon the individual").
See also Katz, supra note 213, at 1051-52; Patterson, supra note 213, at 782-83.
259 Cummings, supra note 191, at 188-89 (“Individuals, not groups, possess rights in a liberal democratic society. The individual is the only "self-originating source of valid claims").
260 See supra note 220.
261 See supra note 199.
262 Iglesias, supra note 213, at 428-29; Patterson, supra note 213, at 784-85, 794-95. Nevertheless, some scholars believe that group rights generally and affirmative action in particular are not antithetical to the liberal theory: see R ONALD D WORKIN , T AKING R IGHTS S ERIOUSLY 91-92 (1978); W ILL
K YMLICKA , L IBERALISM , C OMMUNITY , AND C ULTURE (1989)
.
35

because of historical discrimination. Its goal is making the proportion of disadvantaged individuals similar in both racial groups. This is an idea of group equality rather than individual equality. Of course, this goal cannot be achieved by any equal treatment of individuals from the two groups.
263
The legal tendency toward materialism is also manifest in the context of affirmative action. The neoliberal philosophy presumes that public institutions should function, as much as possible, similarly to private market players: their actions should be, as much as possible, profit maximizing.
264 Following this view, courts regard "the fittest" candidate as someone having a legally enforceable right to a governmental contract.
This right is taken for granted, as opposed to the right of a minority group member for preferential treatment.
265
Note that this view is not the only possible one: were our legal thought not so laden with materialistic values, it would be imaginable to regard the government as an institution that should be primarily concerned with social justice. It would then make sense that the government may favor equality ideals over economic considerations.
Furthermore, affirmative action programs that do withstand judicial scrutiny are usually based on economic factors. The logic of materialism may make sense of preferential treatment when it is granted to economically disadvantaged individuals and entities. The idea that less money results in poorer opportunities, which in turn result in less money is entirely consistent with materialistic thought. In contrast, the idea of granting preferential treatment to historically disadvantaged groups is hardly explicable in materialistic terms.
The capitalist narrative of individualism and materialism strips the position of minority group members of its historical and social context.
266
This decontextualization enables the counter-intuitive position that there is no difference between discriminating policies and affirmative actions: while the former disadvantage a minority group, the latter disadvantage the majority group.
267 The difference between the two cannot be recognized without looking at the historical
263 Fallon & Weiler,
Firefighters v. Stotts: Conflicting Models of Racial Justice , 1984 S UP .
C T .
R EV . 1,
27 (1984).
264 H
OWARD & K ING , supra note 2, at 3.
265 See above, Part C.2.
266 Rosenfeld, supra note 174, at 1767-68; Patterson, supra note 213, at 783-84, 790-91.
267 Reynolds, supra note 192, at 1003; Cummings, supra note 191, at 193-94; Oh, supra note 213, at
1331-32.
36

background that associates harsh feelings of devaluation and humiliation with the latter form of discrimination, but not with the former.
268
Contrary to the atomistic vision, humans are not isolated beings.
269
Group affiliation is one of the central tools of constructing our identity and one of the major sources from which we derive meaning in our lives.
270 Discrimination of the group one belongs to distorts one's ability to feel pride in group identification, thereby obstructing one's ability to build a wholesome personality.
271 Afro-Americans belong to a disadvantaged group , a fact that is in itself associated with feelings of shame, denigration and injustice.
272
This is exactly what affirmative actions seek to change.
Equality of racial groups would allow Afro-Americans to take pride in their group association, in their cultural and historical heritage. This point makes the difference between disadvantaged Afro-Americans and similarly placed whites. Yet, because of the non-materialistic and non-individualistic character of this aspiration, it fails to gain validity in the current legal climate. Affirmative action programs aim at improving the social status of the targeted minority group as a group. If this goal is achieved, group members are likely to be more satisfied with their social identity.
This, in turn, will provide group members with better tools for building harmonious personalities and finding meaning in their lives. This will further open up a wider range of life patterns for them.
273
The judicial hostility toward affirmative action programs thus ultimately results in hindering the freedom of minority group members in one of its most crucial aspects.
The current legal situation negatively affects freedom in an additional way.
Affirmative action programs are actually attempts to create a more equal and tolerant
268 Neil Gotanda, A Critique of “Our Constitution is Color-Blind”, 44 S TAN .
L.
R EV . 1, 49 (1991).
269 Christopher Heath Wellman, Liberalism, Communitarianism, and Group Rights, 18 L AW AND
P HILOSOPHY 13, 25 (1999) (Humans are not isolated beings affected by only those factors to which they cnsent; to the contrary, they are social persons who are continually nurtured and influenced by their familial, filial, cultural, and political allegiances); C HARLES T AYLOR , M ULTICULTURALISM AND
“T
HE P OLITICS OF R ECOGNITION
” 32 (Amy Gutmann ed., 1992).
270 Cummings, supra note 191, at 203-04, 220-21.
271 Id.
at 233; Jurgen Habermas, Struggles for Recognition in the Democratic Constitutional State, in
M ULTICULTURALISM 107, 129 (Amy Gutmann ed., 1994).
272 Landrine & Klonoff, supra note 257.
273 Cummings, supra note 191, at 233 (“recognizing racial groups as critical sites of individual selfdetermination and political participation advances liberalism by allowing identity-formation among people of color to proceed in contexts that provide tangible and attainable images of different life paths while simultaneously affirming their humanity and sense of self-worth”).
37

society.
274
Thus, when a medical school decides to increase the percentage of Afro-
American students by an affirmative action program,
275
it expresses its own perception as to what equality and tolerance means. The school thus positions itself in a certain way, allowing students from all races to take part in its political message.
Persons who believe in the ideal of racial integration may thus consider affirmative action programs as a positive factor while deciding whether to join various institutions. Invalidating affirmative actions, courts deprive such persons of a tool of realizing their freedom—the freedom to act in tune with their moral values, in Raz's terms, the freedom to join an effort to create a better society, in Arendt's terms.
276
This restriction of freedom is not a negligible one: as psychological research shows, believing that the organization one belongs to is acting fairly toward its members significantly contributes to one's happiness.
277
(D) Market vs. Politics
This part will discuss two decision-making tools found in our society: the market and the political process. The neoliberal philosophy strongly prefers market to politics.
The first two sections will point out the weaknesses of this view. The third section will outline and discuss the current position of the legal system on this issue.
(D.1) Objections to the Neoliberal Position
One of the central characteristics of neoliberalism is the conviction that the society should make its choices as much as possible through the free market rather than through the political process.
278 Milton Friedman explains this position in terms of the liberal vision of freedom. The political process, he argues, requires conformity—the decisions made represent only the view of the majority, while the laws enacted thereby apply to everyone. The minority is thus coerced to conform.
279 By contrast, in the market, conformity is largely unnecessary, as a very wide range of people's
274 Patterson, supra note 213, at 799 (“As a matter of social utility, preferential treatment is often the only means of interrupting a cycle of disadvantage. It is on this intangible level that benefits, such as a greater social harmony, are viewed as the advantages resulting from a more equal society”).
275 Regents of Univ. of California v. Bakke, 438 U.S. 265 (1978).
276 R AZ , supra note 6, at 318, 424-25; A RENDT , supra note 45, at 36 et seq.
277 Steve Williams, The Effects of Distributive and Procedural Justice on Performance , 133(2)
J OURNAL OF P SYCHOLOGY : I NTERDISCIPLINARY AND A PPLIED 183 (1999).
278 H OWARD & K ING , supra note 2, at 1.
279 F
RIEDMAN , supra note 5, at 22-23.
38

choices can be represented simultaneously.
280
Therefore, to ensure the freedom of citizens, as many issues as possible should be left in the hands of the market.
281
Governmental action inevitably involves coercion and hence, should be undertaken only when absolutely necessary, such as in the case of national defense.
282
This traditional neoliberal position has been criticized from several points of view.
One line of critique puts forward that while market processes evoke self-interested choices, political processes encourage people to think on the good of the community as a whole.
283 In this context, scholars note that while making their consumer choices, people often behave in a way that seemingly contradicts their political convictions.
284
There are at least three different reasons for this phenomenon.
First, in our consumer role we act as individuals. Collective actions, such as boycotts, are difficult to organize.
285
A consumer may wish to channel the market in a certain direction, but refrain from expressing this wish through her buying behavior, as she does not expect other consumers to cooperate and bring about the desired change.
286
For instance, a French consumer may oppose the proliferation of American songs on the radio, but still listen to them. The political process enables the consumers to take an organized collective action. Indeed, in France there is a law providing that at least
40% of songs on the radio during prime time hours must be French.
287
In addition, a consumer can never be sure how the producer will understand her behavior.
288
For instance, if the consumer refrains from buying a snack, the manufacturer may wonder if the reason lies in its high price, the fact that it contains artificial colors or the discriminatory employing policy of the corporation.
Second, people are not always aware of the consequences of their consuming decisions. This factor is known as "tyranny of small decisions": while the consumers choose a certain market option or refrain from choosing it, they often do not realize
280 23-24.
281 22-24.
282 Id.
283 James M. Buchanan, Individual Choice in Voting and the Market, 62 T HE J OURNAL OF P OLITICAL
E CONOMY 334, 336 (1954); Daphna Lewinsohn-Zamir, Consumer Preferences, Citizen Preferences, and the Provision of Public Goods , 108 Y ALE L.J. 377, 382-83 (2006) (summarizing this argument) see the sources cited in footnote 12.
284 Id.
285 Bailey Kuklin, Self-Paternalism in the Marketplace , 60 U.
C IN .
L.
R EV . 649, 674-75 (1992).
286 Lewinsohn-Zamir, supra note 283 391-99.
287 Loi n° 94-88 du 1er février 1994 modifiant la loi no 86-1067 du 30 septembre 1986 relative à la liberté de communication, Article 12.
288 Kuklin, supra note 285, at 673.
39

that their choice shapes the supply.
289
For instance, if the residents of a certain location refrain from travelling by train, this may lead to cancelling the railroad services at this location, although this result may be undesirable for them.
290
Third, people usually think of consumption only in the narrow context of their own wants and needs. Most of them do not realize the consequences of their consuming decisions for other people, animals and the environment.
291
This happens because in the discourse about products, the voice of corporations is almost entirely dominant: they decide which issues to bring to the fore. Because of the shared interest of corporations, this discourse is very much limited. It concentrates around the personal benefits products bring and obscures all other product dimensions.
292
For example, we are encouraged to consider the aesthetic value of clothes and jewelry rather than the labor condition under which they were manufactured.
293
This is in contrast to the political discourse, in which issues are usually discussed from diverse perspectives.
Thus, the buying behavior does not always reflect our values. Buying a t-shirt produced by child labor in China does not equal voting for the legitimacy of such practice. Therefore, when product dimensions other than the direct benefit to the consumer are at stake, a legislative action may be the appropriate route. For example, several years ago, the European Union has passed an act banning animal tests for cosmetic purposes.
294
This means that the majority of EU citizens believe that cosmetics do not justify animal suffering. Yet, they were apparently incapable to express this preference in their buying behavior in a way that would drive the cosmetic producers experimenting with animals out of market.
Another point of critique relates to the distinction between "first order" and "second order" preferences. First-order preferences are our immediate wishes; second-order preferences are our preferences about preferences: for instance, an addict may prefer not to prefer smoking.
295 Several philosophers note that a person is free only when
289 Alfred E. Kahn, The Tyranny of Small Decisions: Market Failures, Imperfections, and the Limit of
Economics, 19 K YKLOS 23 (1966).
290 Id.
at 25-29.
291 M
C A LLISTER , supra note 27, at 60-61; R OBERT A.
D AHL & C HARLES E.
L INDBLOM , P OLITICS ,
E CONOMICS , AND W ELFARE 421-22 (1953).
292 M C A LLISTER , id.
293 Id.
294 The 7 th Amendment to the EU Cosmetics Directive, 2003/15/EC, adopted on 27 February 2003.
Israel adopted a similar law in 2007.
295 Sven Ove Hansson, & Till Grüne-Yanoff, Preferences, Section 5, T HE S TANFORD E NCYCLOPEDIA
OF P HILOSOPHY (Fall 2011 http://plato.stanford.edu/entries/preferences/ .
Edition) , Edward N. Zalta (ed.),
40

acting according to her second-order preferences.
296
For instance, according to
Rousseau, "moral liberty … alone makes [a person] truly master of himself; for the mere impulse of appetite is slavery, while obedience to a law which we prescribe to ourselves is liberty."
297
Yet, the human behavior is not fully controlled; we often regret the choices we make and sometimes do not have the willpower to refrain from certain modes of behavior, such as eating fat food. In terms of goal-frame theory, this happens because of contradictions between our various frames—while being in a hedonic goal frame
(hunger), we may be not able to function according to our gain goal frame (not to gain weight).
298
The market, by its very nature, is much more designed to satisfy our immediate desires and impulses rather than our higher-ranking goals.
299
This becomes obvious if one considers the vast proliferation of food most consumers would like to avoid,
300 the excessive consumption of prescription drugs in the US,
301
and the number of TV programs and movies most viewers regard as superficial and dull.
302
Accordingly, scholars suggest that we engage in "self-paternalism" and use the political process as a tool of channeling the market so as to reflect our high-ranking preferences.
303
A related line of argumentation concentrates on the fact that while on the market, the strength of one's voice depends of one's economic power, the political process, at least ideally, tends toward equality.
304
Producers in most cases have more economic power than consumers, and they exploit this power to manipulate the demand according to
296 E.g., Harry Frankfurt, Freedom of the Will and the Concept of a Person , 68 J OURNAL OF
P HILOSOPHY 5 (1971).
297 J EAN J ACQUES R OUSSEAU , T HE S OCIAL C ONTRACT 28 (2008), originally published in 1762.
298 Lindenberg, supra note 35, at 221.
299 D AHL & L INDBLOM , supra note 291, at 391.
300 Tamara Piety,
Market Failure in the Marketplace of Ideas: Commercial Speech and the Problem that Won’t Go Away , 41 L OY .
L.A.
L.
R EV . 181, 221-22 (2007).
301 See, e.g., Ralph Gonzales et al., Excessive Antibiotic Use for Acute Respiratory Infections in the
United States, 33 C LINICAL I NFECTIOUS D ISEASES 757 (2001) ("In 1998, an estimated 76 million primary care office visits for acute respiratory infections resulted in 41 million antibiotic prescriptions.
Antibiotic prescriptions in excess of the number expected to treat bacterial infections amounted to 55%
(22.6 million) of all antibiotics prescribed for acute respiratory infections, at a cost of
∼
$726 million.")
For discussion see Elizabeth C. Melby, The Psychological Manipulation of the Consumer-Patient
Population Through Direct-to-Consumer Prescription Drug Advertising, 5 S CHOLAR 325 (2003)
302 See, e.g., Are Americans Really Dumb? Or Is This Something Altogether Different?, http://www.youyoung.com/are-americans-really-dumb-or-is-this-something-altogether-different/
303 Kuklin, supra note 285; Cass R. Sunstein, Legal Interference with Private Preferences , 53 U.
C HI .
L.
R EV . 1129, 1140-41 (1986).
304 Buchanan, supra note 283, at 340.
41

their interests.
305
The liberal myth of demand controlling the supply is thus far from true. Producers' interests often differ from those of the consumers. The most obvious examples are dangerous and addictive goods, such as cigarettes, alcohol, prescription drugs, weapons and gambling games. While producers of these goods are interested to increase their consumption as much as possible, this clearly contradicts the interest of the consumers and sometimes of society as a whole. Another evident example is food.
Fast food chains add chemicals that enhance its smell, increase one's appetite and make the food addictive.
306 They use artificial colors even in vegetables and fruits to make them look fresher, rifer and juicier.
307
In addition to manipulating our behavior, these chemicals have adverse effects on our health.
308
A further weakness in the neoliberal theory results from identifying market with freedom and politics with control. People are not free to act as they please on the market: their possibility of performing certain transactions depends on the willingness of other market players to cooperate.
309
This "spontaneous control" has been indicated as the most basic control technique in all societies.
310
Arguably, this control technique is often the most tyrannical one a person is ever subjected in her life. Yet, it is usually not perceived as a form of control at all.
311
This happens because, as a rule, spontaneous control does not involve direct orders or bans; rather, it gives the feeling of free choice.
312
A not clinically underweight woman may perceive her inability to work as a model as unfortunate, but not a form of control, as she knows that nothing prevents her from trying to get such a job. On the other hand, a law prescribing that clinically underweight women may not work as models would have been perceived as a restriction on the freedom of occupation of both, models and their employers.
Control on the market does not always wear the form of stronger players dominating the weaker ones.
313 Consumers themselves control each other by making certain choices and refraining from other choices. Contrary to the neoliberal vision, the market is not a framework for independent individual choices. No single person has
305 D
AHL & L INDBLOM , supra note 291, at 414-15.
306 Linda Melos, Why You Can’t Eat Just One, http://lindamelosnd.com/articles/why-youcan%E2%80%99t-eat-just-one .
307 Mike Adam, How Food Companies Fool Consumers with Food Coloring Ingredients Made From
Petrochemicals, http://www.naturalnews.com/022870.html#ixzz226CmZ6tc .
308 Id.
; Melos, supra note 306.
309 Buchanan, supra note 283, at 339-40.
310 D
AHL & L INDBLOM , supra note 291, at 99.
311 Id.
at 100-03.
312 Id.
313 Buchanan, supra note 283, at 339-340.
42

the power to direct the market as she desires: she may feel sorry that a certain product is no longer distributed, that a product she would like to purchase has never been produced, that the high prices of certain products make them unavailable for her, etc.
314
The market is a human network. Human networks, like all other networks, are characterized by movement of almost all members of the system toward similar behavior.
315 Out of a large variety, consumers concentrate around a very small number of products, driving all other products out of market.
316 Others' buying decisions thus severely restrict the individual consumer choice.
Furthermore, the purchasing decisions of people around us determine to a large extent what we should own. This phenomenon is not limited to the "Veblen effect" of conspicuous consumption and status-seeking.
317
The consumption choices of the majority sometimes create new physical necessities for everyone: for instance, if many persons own cars and washing machines, public transportation and public laundries may become less accessible and convenient. Similarly, when new technologies become widespread, the old ones grow obsolete and can no longer be used. In addition, the buying decisions of others establish consumption customs that are perceived as normal behavior. Today most people in the US drink coffee in the morning, own a microwave, a TV, a pair of sneakers, a mobile phone, etc.
All this has led several scholars to conclude that market freedom is illusory.
318
In most cases, we are really free only to choose the brand, the model, the color, etc. of a certain product—and this creates an illusion of freedom—but we are not really free to refrain from its consumption altogether.
319
Of course, it is not impossible to deviate from social norms, including consumption norms. But such deviations require special efforts. For instance, being a vegetarian, eating only organic products, staying away from fast food, buying only US-made products, avoiding cosmetics that have been tested on animals or products of child
314 Id.; D AHL & L INDBLOM , supra note 291, at 424-5.
315 Michal Shur-Ofry, Copyright, Complexity and Cultural Diversity – A Skeptic's View, in
T RANSNATIONAL C ULTURE IN THE I NTERNET A GE 7-8 (Adam Candeub & Sean Pager eds., forthcoming
2012), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1829449 .
316 Id.
at 7.
317 T HORSTEIN B.
V EBLEN , T HE T HEORY OF THE L EISURE C LASS : A N E CONOMIC S TUDY OF
I NSTITUTIONS (1899).
318 E.g., D AHL & L INDBLOM , supra note 291, at 99-103; Buchanan, supra note 283, at 339-40.
319 Venkatesan, Experimental Study of Consumer Behavior Conformity and Independence , 3 J OURNAL
OF M ARKETING R ESEARCH 384, 385 (1966).
43

labor—all these require not only significant physical efforts, but also mental efforts associated with deviations from social norms and one's own cognitive habits.
320
Of course, the larger the deviating group, the easier it is for a single person to join it. This is because the market may fail to supply the products or the information required to maintain certain consumption choices if the group wishing to make these choices is not large enough. Thus, being a vegetarian is much easier than buying only US-made products or avoiding products of child labor. In addition, a deviation by a large group is more likely to become a legitimate alternative to the general norm thus making the deviation mentally easier for the individual.
321
All this demonstrates that the choices we make as consumers are always collective. I believe that here lies the most crucial weakness of the free market ideal: contrary to the neoliberal vision, the choice between market and politics is not a choice between an individual and a collective mode of decision-making. Rather, this is a choice between two modes of collective decision-making that both involve coercion and require conformity. And yet, there is an important difference between these two modes of collective decision-making. While the political process is usually accompanied by intensive discussions and opinion exchange, this is much less true for the market. As mentioned above, the discourse around products is very much limited and almost entirely focused on physical product qualities and prices.
322
Although sometimes consumers do exchange opinions about products, most influence in the market setting comes from simply observing the others' buying behavior.
323
Therefore, I believe that the market process is roughly analogous to group decisions whereby individuals observe each others' behavior, but do not have an opportunity for discussion. On the other hand, the political process is analogous to group decisions after a discussion. In the next section, I will employ insights from social psychology to argue that the political process has advantages over the market process under certain circumstances.
320 Wander Jager, Breaking ’Bad Habits’: a Dynamical Perspective on Habit Formation and Change, in H UMAN D ECISION M AKING AND E NVIRONMENTAL P ERCEPTION : U NDERSTANDING AND A SSISTING
H UMAN D ECISION M AKING IN R EAL -L IFE S ETTINGS (Laurie Hendrickx, Wander Jager & Linda Steg eds., 2003).
321 David C. & Matz, Wendy Wood, Cognitive Dissonance in Groups: The Consequences of
Disagreement , 88 J OURNAL OF P ERSONALITY AND S OCIAL P SYCHOLOGY 22 (2005).
322 See supra note 291.
323 See infra note 354.
44

(D.2) Some Insights from Social Psychology
Group decision-making processes have been studied on a wide range of cognitive, judgmental and creative tasks.
324
Research has found that group decisions made after discussion are significantly superior to individual decisions, to decisions made without discussion and even to decisions made by the most highly-skilled members of the group.
325
The mere necessity to justify their opinions frequently encourages individuals to think more logically and analytically, to use more complex decision strategies requiring greater investment of time and effort.
326 This frequently results in disapproving one's own conclusions and correcting one's own errors.
327
Discussion produces a higher level of interest, personal involvement and a sense of responsibility, thus causing individuals to put more effort into the task, to think more carefully and to be more self-critical.
328
Further, discussion reveals a greater number of viewpoints, causes the group to examine a problem more thoroughly and to consider a wider number of solutions thus increasing the chance of selecting a sound answer.
329
Individuals bring different sets of values into the discussion. The competition between these values results in a more objective view of the problem. This factor was found especially significant in increasing chances of drawing valid conclusions.
330
During discussions, individuals change their views when presented with persuasive counterarguments, especially if they were previously unaware of these arguments.
331
324 See, e.g., Robert L. Thorndike, The Effect of Discussion upon the Correctness of Group Decisions,
When the Factor of Majority is Allowed For, 9 T HE J OURNAL OF SOCIAL P SYCHOLOGY 343 (1938);
Ernest J. Hall, Jane S. Mouton & Robert R. Blake, Group Problem Solving Effectiveness Under
Conditions of Pooling vs. Interaction , 59 T HE J OURNAL OF S OCIAL P SYCHOLOGY 147 (1963); Charles
R. Holloman & Hal W. Hendrick, Adequacy of Group Decisions as a Function of the Decision-Making
Process , 15 T HE A CADEMY OF M ANAGEMENT J OURNAL 175 (1972); Peter Chalos & Sue Pickard,
Information Choice and Cue Use: An Experiment in Group Information Processing, 70 J OURNAL OF
A PPLIED P SYCHOLOGY 634 (1985); Randy Y. Hirokawa, The Role of Communication in Group
Decision-Making Efficacy: A Task-Contingency Perspective , 21 S MALL G ROUP R ESEARCH 190 (1990).
325 Chalos & Sue Pickard, id.
; Hirokawa, id.
; Dean C. Barnlund, A Comparative Study of Individual,
Majority, and Group Judgment, 58 T HE J OURNAL OF A BNORMAL AND S OCIAL P SYCHOLOGY 55 (1959);
Janet A Sniezek & Rebecca A Henry, Accuracy and Confidence in Group Judgment , 43
O RGANIZATIONAL B EHAVIOR AND H UMAN D ECISION P ROCESSES 1 (1989); Gayle W. Hill, Group
Versus Individual Performance: Are N + 1 Heads Better Than One?, 91 P SYCHOLOGICAL B ULLETIN
517 (1982).
326 Philip E. Tetlock, Accountability and Complexity of Thought, 45 J OURNAL OF P ERSONALITY AND
S OCIAL P SYCHOLOGY (1983).
327 Id.
; Barnlund, supra note 325; Mouton & Robert R. Blake, supra note 324.
328 Barnlund, id.
at 58-59.
329 Id.
330 Id.
331 Eugene Burnstein & Amiram Vinokur, Testing Two Classes of Theories about Group Induced
Shifts in Individual Choice, 9 J OURNAL OF E XPERIMENTAL S OCIAL P SYCHOLOGY 123 (1973)
45

In addition, individuals tend to shift their judgments so that they are more in tune with valued social norms: for instance, people express less racist and more feminist views after a group discussion.
332
By contrast, where discussion does not take place, the decisions of the majority are not better than those of the average group member and are significantly worse than those of the most competent group members.
333
Much more troubling, being exposed to decisions made by others exerts considerable influence on individuals.
334 People who learn that others do not share their view, loose confidence in their opinion and tend to change it.
335
This frequently produces errors in individual judgment.
336
Thus, in a classical experiment, Solomon Asch demonstrated that people tend to disregard their own judgments and yield to the majority opinion even when the task is as simple as comparing the length of three lines.
337
The ability of an individual to resist group pressures which run counter to her judgment was found to be quite small.
338
Meanwhile, people are usually unaware of the degree to which they are influenced.
339
Moreover, when asked, nearly all individuals state that independence is preferable to conformity.
340
All this has led social psychology scholars to conclude that group consensus attained without discussion is likely to be an empty achievement.
341
To be productive, consensus requires that each individual contribute independently out of her experience and insight.
342
Consensus that comes under the dominance of conformity tends to distort individual experience and undermine the individual potential for creativity and productiveness.
343
Solomon Asch notes: "That we have found the tendency to
332 David G. Myers & George D. Bishop, Discussion Effects on Racial Attitudes , 169 S CIENCE 778
(1970); Genevieve Paicheler, Norms and Attitude Change II: The Phenomenon of Bipolarization , 7
E UROPEAN J OURNAL OF S OCIAL P SYCHOLOGY 5 (1977).
333 Barnlund, supra note 325, at 57-58.
334 Morton Deutsch & Harold B. Gerard, A Study of Normative and Informational Influences Upon
Individual Judgment, 51 T HE J OURNAL OF A BNORMAL AND S OCIAL P SYCHOLOGY 629 (1955).
335 L EON F ESTINGER , A T HEORY OF S OCIAL C OMPARISON P ROCESS 6 (1954).
336 Deutsch & Gerard, supra note 334, at 635.
337 Solomon E. Asch, Opinions and Social Pressure , 193 S CIENTIFIC A MERICAN 31 (1955).
338 Deutsch & Gerard, supra note 334, at 635; Thorndike, supra note 324, at 344.
339 Martin F. Kaplan & Charles E. Miller,
Group Decision Making and Normative Versus
Informational Influence: Effects of Type of Issue and Assigned Decision Rule, 53 J OURNAL OF
P ERSONALITY AND S OCIAL P SYCHOLOGY 306, 312 (1987).
340 Asch, supra note 337, at 35.
341 Deutsch & Gerard, supra note 334, at 635.
342 Asch, supra note 337, at 35.
343 Id.
; Deutsch & Gerard, supra note 334, at 635.
46

conformity in our society so strong that reasonably intelligent and well-meaning young people are willing to call white black is a matter of concern."
344
Applying these findings on the topic of our discussion, we can speculate that in their buying decisions, people often yield to social pressures without noticing it. Lacking a meaningful discussion mechanism, the market has a much greater potential to distort individual opinion and personal judgment than the political process. It tends to influence one's behavior by mere pressure to conform rather than by logical argument that may change one's views. Consequently, one's buying decisions are much less likely to reflect one's genuine convictions than one's political choices. The market is therefore much more likely to produce consensus which is an "empty achievement" than the political process is.
Indeed, research shows that market choices can be very easily distorted. Experiments have found that in their consuming decisions, people are highly susceptible to group pressure.
345
For example, in an experiment with three identical suits people strongly tended to prefer the suit chosen by other persons around them.
346
Manipulations with information on popularity were found to have the effect of "self-fulfilling prophecy": books mistakenly omitted from a best seller list had fewer subsequent sales;
347 software that received artificial downloads earned substantially more real ones;
348 wrong data on popularity of music considerably influenced the evaluation of the music, both positively and negatively;
349
people's evaluation of the taste of coffee was found to be very susceptible to social influence.
350
The tendency to yield to social pressure in the market setting, frequently results in socalled "herd behavior": doing what others are doing, even when one's private judgment suggests something else.
351
This type of behavior leads to "informational
344 Asch, id.
345 Venkatesan,
supra note 319, at 384.
346 Id.
at 386.
347 Matthew J. Salganik & Duncan J. Watts, Leading the Herd Astray: An Experimental Study of Self-
Fulfilling Prophecies in an Artificial Cultural Market, 71 S OCIAL P SYCHOLOGY Q UARTERLY 338, 339
(2008).
348 Id.
349 Id.
at 351. This effect has its limits, though.
350 Robert E. Burnkrant & Alain Cousineau, Informational and Normative Social Influence in Buyer
Behavior , 2 T HE J OURNAL OF C ONSUMER R ESEARCH 206 (1975).
351 Abhijit V. Banerjee, A Simple Model of Herd Behavior, 107 T HE Q UARTERLY J OURNAL OF
E CONOMICS 797, 798 (1992).
47

cascades"—mass behavior based on very little information.
352
A theoretical model of an informational cascade describes the choice between restaurants A and B. The first person gets a signal according to which A is slightly better than B, and chooses A.
The next person gets a signal that B is slightly better than A, but chooses B because of the tendency to disregard one's own information in favor of imitating the others' behavior. Further, everyone in the group gets a signal that B is better, but chooses A, because the others before her have done so. Finally, the whole group ends up choosing A although it is practically certain that B is better.
353 Empirical data confirms that people tend to act according to this model.
354
When people ignore their own information and imitate the others' behavior, their decision becomes uninformative to others.
355
Cascades thus undermine the benefit of diverse information sources.
356
Because of the widespread presence of informational cascades, mass social behavior is often based on very little information.
357
These insights can provide a further explanation of consumer behavior seemingly contradicting one's convictions. People may consume fast food or watch certain TV programs not because they are strongly convinced that these choices are beneficial for them, but simply because of the human tendency to follow trends. Similarly, even being aware of the consequences that consumption of products of child labor, cosmetics tested on animals or environmentally detrimental goods has, people may continue to consume such products simply because the natural tendency to behave like others can be stronger than these concerns.
I believe that the neoliberal presumption in favor of the market has no basis. The market does not entail more freedom than the political process does. On the contrary, the market may invisibly direct human behavior, taking it far from one's beliefs. The political process, on the other hand, may give individuals a better opportunity to make choices that express their real convictions. Hence, the legal system should not be suspicious of attempts to regulate the economic activity through legislation unless
352 Sushil Bikhchandani, David Hirshleifer & Ivo Welch, A Theory of Fads, Fashion, Custom, and
Cultural Change as Informational Cascades, 100 T HE J OURNAL OF P OLITICAL E CONOMY 992, 994
(1992).
353 Banerjee, supra note 351, at 798-99.
354 E.g., Utpal M. Dholakia & Kerry Soltysinski, Coveted or Overlooked? The Psychology of Bidding for Comparable Listings in Digital Auctions, 12 M ARKETING L ETTERS 223 (2001); Jen-Hung Huang &
Yi-Fen Chen, Herding in Online Product Choice , 23 P SYCHOLOGY & M ARKETING , 413 (2006).
355 Bikhchandani, Hirshleifer & Welch, supra note 352, at 994.
356 Id.
at 1009.
357 Id. at 994.
48

there are special reasons for that. Whenever people wish to replace their collective choice through the market with their collective choice through politics, courts should presume that the latter choice reflects people's views more accurately and ultimately results in more freedom.
(D.3) Market, Politics and the Legal System
In this section I will demonstrate that the legal system strongly prefers the market over the political process as a decision-making tool.
The US legal practice has a long tradition of aversion towards laws attempting to regulate the market, especially when the rationale behind the regulation is other than economic efficiency. Such laws have been oftentimes struck down by courts.
Historical examples include Dred Scott v. Sandford (1856) finding an act prohibiting slavery to be an unconstitutional restriction on private property;
358
Lochner v. New
York (1905) invalidating a ten-hour workday limit for bakers, on the ground that it interfered with the freedom of contract between employers and employees;
359
Coppage v. Kansas (1915) overturning a statue forbidding employers to exact a promise not to join a labor organization as a condition of retaining employment, on the ground that it infringed on the rights of personal liberty and property;
360
Hammer v. Dagenhart (1918) holding that an act banning child labor violates the Commerce
Clause;
361
Adkins v. Children's Hospital (1923) finding that a minimal wage law for women arbitrarily interferes with freedom of contract, imposes on the employer the burden of supporting a partially indigent person and attempts a classification, as a means of safeguarding morals, without reasonable basis; 362 and Mikell v. Henderson
(1953) striking down a cruelty to animals statute because it resulted in outlawing the business of raising fighting cocks.
363
Modern instances of judicial aversion toward legislative attempts to regulate the market are found in a great variety of fields. I will now discuss three examples to illustrate this tendency: (1) safety standards; (2) the media; and (3) advertising and compelled disclosure.
358 60 U.S. 393 (1857).
359 198 U.S. 45 (1905).
360 236 U.S. 1 (1915).
361 247 U.S. 251 (1918).
362 261 U.S. 525 (1923).
363 63 So.2d 508 (Fla.1953).
49

(1) Safety Standards
The Consumer Product Safety Act authorizes the Consumer Product Safety
Commission (CPSC) to issue product safety standards,
364
establish labeling requirements,
365
as well as to ban hazardous products.
366
The Environmental
Protection Agency (EPA), 367 the Occupational Safety and Health Administration
(OSHA)
368
and the US Food and Drug Administration (FDA)
369
have similar authorities.
Since these regulatory bodies have the power to restrict economic freedom, it is unsurprising that their acts are subject to a rigorous judicial review.
370
They bear the burden to show that the risk they seek to reduce or prevent is a real one.
371
This burden is a rather demanding one. For instance, a CPSC rule banning ureaformaldehyde foam insulation in residences and schools issued after a six-year investigation was invalidated because the court found the evidence collected by the
CPSC during that time not to be substantial enough to prove that the material created an unreasonable risk.
372
Further, the agency must convince that the regulation is an effective means to achieve the desired purpose. Thus, a requirement to affix signs warning about the risk of spinal injury and paralysis to swimming pool slides was held to be insufficiently based on evidence that such signs would actually reduce the risk of these injuries.
373
Similarly, in another case the Supreme Court invalidated an OSHA health standard which reduced the amount of permitted occupational exposure to benzene from 10 ppm to 1 ppm.
374
While there were indications that leukemia might result from exposure to 10 ppm, OSHA failed to show that lowering the exposure level would eliminate this risk, the court reasoned.
375
364 15 U.S.C. §§ 2051−2084, Sec. 7 (a)(1).
365 Sec. 7 (a)(2)
366 Sec. 8.
367 Toxic Substances Control Act, 15 U.S.C. §§ 2601-2697 .
368 The Occupational Safety and Health Act 29 U.S.C. §§ 651-678.
369 Food, Drug and Cosmetic Act, 21 U.S.C. §§ 301-399.
370 See infra notes 373-379.
371 Aqua Slide N Dive Corp. v. CPSC, 569 F.2d 831 (5th Cir. 1978).
372 Gulf South Insulation v. CPSC , 701 F2d 1137 (5th Cir. 1983).
373 Aqua Slide N Dive Corp. v. CPSC, 569 F.2d 831 (5th Cir. 1978).
374 Industrial Union Department v. American Petroleum Institute, 448 U.S. 607 (1980).
375 Id.
at 631-32.
50

Finally, the regulatory bodies have a heavy burden to show that the objective of the regulation cannot be adequately reached by a less burdensome means.
376
Thus, in one case, the court struck down an EPA ban of asbestos-containing products because of unsubstantial evidence that the EPA considered all necessary evidence and promulgated the least burdensome regulation essential to protect the environment.
377
In another case, an FDA ban on a hazardous toy was invalidated, since the court contended that labeling the item as unsuitable for children should suffice.
378
This strict approach is unjustified. Obviously, most people would like to avoid not only products and materials whose danger has been steadfastly proven. For most people, a substantial probability that a product or a material is hazardous is ground enough to avoid it. That is, most people would probably choose to avoid ureaformaldehyde foam insulation that the CPSC found dangerous after a six year investigation. Further, most people would opt for measures lowering the danger, such as reducing the amount of exposure to benzene or affixing warning signs, even if the efficacy of such measures is not proven with certainty. Finally, most people would opt for eliminating the supply of products whose danger has been positively proven, such as in the case of asbestos and the hazardous toy, than using less radical means.
The interest in preserving a wide range of product choice and occupational opportunities is not significantly affected by safety standards, as they do not result in banning certain types of goods or occupational activities altogether. On the other hand, the interest in preventing exposure to hazardous materials and products is usually very substantial. That is, it is probably not the consumers' freedom of choice or the employees' freedom of occupation that the courts are concerned with while striking down regulations of hazardous products and materials. The courts' real
376 Universal Camera v. NLRB, 340 U.S. 474, 478 (1951) (“The ultimate question is whether the record contains ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. If it does, the Commission has sustained its burden of adducing “substantial evidence on the record as a whole” and the rule must be affirmed. If not, the rule must be vacated”); Aqua Slide N
Dive Corp. v. CPSC, 569 F.2d 831, 840 (5th Cir. 1978) (“The Commission [has] to shoulder the burden of examining the relevant factors and producing substantial evidence to support its conclusion that they weigh in favor of the standard”) Gulf South Insulation v. CPSC , 701 F2d 1137, 1150 (5th Cir. 1983)
(“Congress and our circuit's precedents require us to take a “harder look” to determine whether rules adopted under the Consumer Product Safety Act are supported by substantial evidence”).
377 Corrosion Proof Fittings v. Environmental Protection Agency, 947 F.2d 1201, 1215-16 (5th Cir.
1991).
378 R.B. Jarts, Inc. v. Richardson, 438 F.2d 846 (2d Cir. 1971).
51

concern is undoubtedly with the freedom to use such materials and to sell such products. This is evident from the rhetoric of the decisions.
379
I believe that this concern is given too much weight. There should be no freedom to sell products and use production materials people would rather avoid. It is one of the most basic premises of the free market philosophy that the demand should control the supply.
380
In the idealistic scenario pictured by the neoliberal philosophy, the consumers realize their economic freedom by choosing products on the market, while the producers merely satisfy the consumers' desires.
381 The right of the consumers to discourage the supply of certain products through their buying behavior is unquestionable. Thus, if the hazardous toy were driven out of the market simply because of lack of demand, this would seem as an entirely justified restriction on the manufacturer's freedom to sell it. This position should not change when the decision to stop the supply of the toy is made through the centralized process of legislation rather than through the cumulative effect of individual choices. As already noted, the spontaneous control exercised by market players over one another is no less tyrannical than governmental control.
382
The failure of the free market dynamics to discourage the use of hazardous materials and the supply of unsafe products may occur for various reasons. It may be either due to lack of information, lack of market power, or lack of time and resources to make a reasonable decision. As explained above, the political process is analogical to a group decision made after discussion in that it allows group members (through their representatives) to join resources, critically examine all relevant information and find sound solutions.
383 Striking down safety legislation, courts create a legally protected right of powerful corporations to "divide and rule," that is, to exploit the weakness of consumers and employees acting as a crowd of diffuse individuals.
(2) The Media
379 See Aqua Slide N Dive Corp. v. CPSC, 569 F.2d 831, 842 (5th Cir. 1978) (discussing the loss of sales the requirement of affixing warning signs may bring about); Corrosion Proof Fittings v.
Environmental Protection Agency, 947 F.2d 1201, 1215 (5th Cir. 1991) (“in certain cases, the least burdensome yet still adequate solution may entail somewhat more risk than would other, known regulations that are far more burdensome on the industry and the economy”).
380 L
UDWIG VON M ISES , H UMAN A CTION 257-58 (3d ed., 1963).
381 Id.
382 D AHL & L INDBLOM , supra note 291, at 100-03.
383 See supra notes 325-332.
52

In the context of media, the judicial hostility to any kind of content regulation emerged in the 1970s, as the ideas of Chicago School became dominant.
384
In a number of cases, courts invalidated laws requiring TV and radio stations to provide noncommercial programming of educational and informative nature or to provide channels for public, governmental and educational access.
385 All these laws were found to be inconsistent with the First Amendment.
386
In addition, the US Court of
Appeals invalidated the "fairness doctrine," which required broadcasters to cover important controversial issues and to give a reasonable opportunity for the presentation of contrasting viewpoints.
387
In the same vein, the Supreme Court overturned a Florida statute requiring newspapers to provide reply space to political candidates who have been criticized in the newspaper.
388
Even a self-regulatory code limiting the amount and the length of TV commercials was found invalid in light of the Sherman Act.
389
Today it is already well-established that restrictions on media content may only be made in order to protect minors and should be narrowly tailored for this purpose.
390
Thus, for instance, attempts to ban pornographic, indecent or "patently offensive" programming are routinely struck down as unconstitutional.
391
Even statutes forbidding depictions of such objectionable activities as animal cruelty
392
and child pornography
393
have been invalidated.
This laissez-faire approach to media is based on the neoliberal view, according to which the market—viewers, readers and listeners—and not the government ought to determine what best serves the public interest.
394
According to this view, the audience
384 See supra note 186.
385 FCC v. Midwest Video Corp., 440 U.S. 689, 695-96 (1979); Quincy Cable Television, Inc. v. FCC ,
768 F.2d 1434, 1463 (D.C. Cir. 1985); Century Communications Corp. v. FCC, 835 F.2d 292, 304-05
(D.C. Cir. 1987).
386 Id.
387 In re Syracuse Peace Council, Memorandum Opinion and Order, 2 FCC Rcd. 5043 (1987).
388 Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241 (1974).
389 United States v. National Ass'n. of Broadcasters, 536 F. Supp. 149 (D.C. Cir. 1982).
390 E.g., Reno v. American Civil Liberties Union, 521 U.S. 844, 845-46 (1997); American Civil
Liberties Union v. Ashcroft , 322 F.3d 240, 251-52 (2003); American Civil Liberties Union v. Mukasey,
534 F.3d 181, 187-207 (3d Cir. 2008).
391 E.g., Erznoznik v. City of Jacksonville, 422 U.S. 205 (1975); Denver Area Educational
Telecommunications Consortium, Inc. v. FCC, 518 U.S. 727 (1996); Alliance for Community Media v.
FCC, 1996 WL 354027 (1996); United States v. Playboy Entertainment Group, Inc., 529 U.S. 803
(2000).
392 U.S. v. Stevens, 533 F.3d 218 (3d Cir. 2008).
393 Ashcroft v. Free Speech Coalition, 535 U.S. 234 (2002).
394 Les Brown, Self-Regulation in American Television in Areas Aside from Program Content, 13
C ARDOZO A RTS & E NT .
L.J. 705, 708-09 (1995).
53

itself would kill off any program it is not interested in.
395
Any governmental regulation restricting the freedom of the broadcasters dictates to the audience what kind of media content it should consume and thus, constitutes unacceptable paternalism.
396
This view directly stems from the neoliberal vision of the market as the site where freedom can be most fully realized. As discussed above, this position has several weaknesses. As far as media is concerned, the most serious flaw of the neoliberal idealization of the market lies in disregarding the disparity between the producers' and the consumers' interests. In the field of media this disparity is especially severe because of its particular financial structure: since broadcasters gain most or all of their revenues from advertising rather than from the audience, they are much more interested to broadcast advertising than anything else. Since the repeal of time and length limits on advertising, its amount is steadily growing. According to surveys, people feel that "the amount of advertising is out of control," that they are "constantly bombarded" by commercials and that advertising on the TV disrupts and hinders speech.
397
People use every possible technique to avoid the commercials.
398
Thus, the market mechanism clearly does not allow the audience to shape the media content according to its interests.
399
What is more, the broadcasters shape the non-advertising content of media according to the sponsors' rather than the audience's interest.
400
Media sponsors are interested in programs that promote good and non-skeptical mood.
401
They prefer light and entertaining programs that do not raise controversial social or political issues.
402
Harsh critique of the government and more generally, any radical political views are undesirable.
403
Several big media sponsors have even formulated these principles in explicit rules.
404
395 Id.
396 Id.
397 Getz, supra note 27, at 1233.
398 Id.
399 Id.
400 M
C A LLISTER , supra note 27, at 37-40.
401 Id.
at 47-48. Edwin C. Baker, Advertising and a Democratic Press, 140 U.
P A .
L.
R EV . 2097, 2153-
56 (1992).
402 Baker, id.
at 2157-64; M C A LLISTER , id.
at 41-43; B EN H.
B AGDIKIAN , T HE M EDIA M ONOPOLY 207-
08 (1983).
403 M C A LLISTER , id.
at 48-50.
404 Id.
at 49; Baker, supra note 401, at 2151-52.
54

This state of affairs was made possible by the abandonment of the "fairness doctrine."
405
Several scholars claim that since that time, the media has lost its ability to develop a meaningful social and political discourse and turned into no more than a mode of light entertainment.
406
Hence, advertising-sponsored media is considered to be a serious threat for democracy.
407
A related line of critique argues that focused on entertainment and avoiding deep discussions of controversial issues, today's media turns citizens into consumers.
408 As mentioned above, the very quintessence of freedom according to Hannah Arendt is engaging in a public world which we all share as citizens, in which we can shape our opinion and act to promote equality, solidarity and justice.
409
Her view forcefully reveals how commercial media undermines freedom of its audience.
In the same vein, it may be said that the media is currently focused on satisfying our first-order preferences: more than anything else, it provides instant gratification. The second-order preferences of most people include being sometimes exposed to thought-provoking discussion of important social issues. In addition, people sometimes find it difficult to resist a constant consumption of media content they would ideally wish to avoid. This may be illustrated by an experiment made for marketing purposes: participants were asked to evaluate a TV show. While they watched the show, their brain responses were recorded using a brain-scan technology.
The show was evaluated negatively by most participants, although their brains showed emotional engagement and pleasure. The brain responses matched the actual market success of the show.
410
Marketing experts conclude that people's conscious responses cannot be trusted, as people often claim to hate what they actually like.
411
Yet, another conclusion is no less plausible: people prefer not to watch certain media contents, but sometimes find it difficult to resist them.
As discussed above, a person is genuinely free only when she acts according to her second-order preferences rather than yielding to her instant desires.
412 Hence, playing upon the inability to resist these desires, the media market eventually restricts the
405 In re Syracuse Peace Council, Memorandum Opinion and Order, 2 FCC Rcd. 5043 (1987).
406 Baker, supra note 401, at 2175-76.
407 Id.
at 2099, 2153, 2221-24. B AGDIKIAN , supra note 402, 209.
408 Id.
at 2176-77.
409 Ardent, at 36 et seq.
410 M
ARTIN L INDSTROM , B UY OLOGY : T RUTH AND L IES ABOUT W HY W E B UY 173-74 (2008).
411 Id.
at 173-75
412 See supra notes 296-297.
55

freedom of its audience. Nonetheless, educated into the capitalist vision of freedom, we take our possibility of making consumer choices in the field of media for genuine freedom.
The media itself is one of the most powerful factors that act to promote and preserve this perception. The media overflows us with advertising. Advertising encourages us to think of ourselves as consumers rather than citizens, to value consumption above everything else.
413 Advertising reduces our most cherished ideals—such as love, selffulfillment and success—to the banal act of purchasing commodities.
414 In addition, media sponsors explicitly instruct broadcasters to avoid any kind of critique on advertising, on the consumer culture or on the capitalist world order generally.
415
The media thus restricts the freedom of individuals in an additional way—it ingrains the narrow capitalist vision of freedom and does not let alternative visions to rise to the fore. It distracts our attention from non-economic and non-individualistic aspects of freedom, making it difficult to become conscious of instances where our freedom is undermined in these aspects. For instance, the capitalist vision of freedom promoted by the media helps us accept the idea that courts tend to dismiss suits not based on individual economic interests.
416
The media is one of the most important sources of information about the world around us. It shapes our perception of the reality, heavily influences our views and beliefs.
417
It is hard to overestimate the impact of the media on our lives and on the spirit of our society. And yet, most of our decisions as to what to watch and what to listen to are decisions of the moment. We do not realize the impact of these everyday decisions on our cultural and social landscape. The dissatisfaction so many people feel about today's media is thus inter alia a result of the "tyranny of small decisions" phenomenon.
Acting as individuals, we are unable to shape the media according to our interests. It is important to remember in this context that our consuming decisions are always collective. In the context of media this is especially true, since popularity is so
413 Getz, supra note 27, at 1246.
414 See supra note 27.
415 Baker, supra note 401, at 2149–52. See also Assaf, supra note 162, at 27-28.
416 See above , Part 3(A).
417 See generally M ICHAEL P ARENTI , I NVENTING R EALITY : T HE P OLITICS OF THE M ASS M EDIA (1986).
56

important in this market.
418
To survive, a media product must be extremely popular.
419
In our choices of the media products, we are very much influenced by the others' choices.
420
Trends in the field of media products are susceptible to small changes and easily manipulated.
421
This is why it seems safe to state that the media market resembles group decisions made without discussion. As discussed above, consensus attained under such circumstances is likely to be an "empty achievement," not representing the real convictions of individuals. We might speculate that after a thoughtful discussion, members of our society would not have voted for many of the most popular today's shows, the celebrity culture, the unshakable dominance of the
"happy end" genre, etc.
Under these circumstances, legislative regulation of the media seems essential.
Although the political process has its flaws,
422
it does provide a possibility of a coordinated collective action, an action resembling a collective decision made after a discussion.
It does provide an opportunity to discuss the different viewpoints, to examine the question thoroughly and to make decisions reflecting one's genuine convictions. The media content should be more than a result of a random play between market forces. It should include at least some elements that reflect our conscious and thoughtful choice.
(3) Advertising and Compelled Disclosure
In the past, commercial speech enjoyed no protection of the First Amendment.
423
This position was probably based on the intuition that commercial speech does not reflect
418 Shur-Ofry, supra note 315, at 4 ("winner-takes-all" phenomenon … is consistently observed across cultural markets: despite the large supply of works in the fields of culture and art – the vast majority of consumers prefer to concentrate on a small number of "star" works”).
419 Id.
420 Salganik & Watts, supra note 347, at 339.
421 Id.
422 For example, it may fail to reflect certain liberty values. See United States v. Carolene Prods. Co.,
304 U.S. 144, 152, Footnote 4 (1938) (recognizing that judicial review should correct failures of the political process). Further, the political process raises principal-agent problem: Barry R. Weingast,
Matthew D. McCubbins & Roger G. Noll, Structure and Process, Politics and Policy: Administrative
Arrangements and the Political Control of Agencies, 75 V A .
L.
R EV . 431, 433-35 (1989).
423 Valentine v. Chrestensen , 316 U.S. 52, 54 (1942) (“that the Constitution imposes no such restraint on government as respects purely commercial advertising”); Central Hudson Gas & Electric Corp. v.
Public Service Commission, 447 U.S. 557, 584 (1980) (“Prior to this Court's recent decision Virginia
Pharmacy Board v. Virginia Citizens Consumer Council , 425 U.S. 748 (1976), commercial speech was afforded no protection under the First Amendment whatsoever”). See also Donald E. Lively, Securities
Regulation and Freedom of the Press: Toward a Marketplace of Ideas in the Marketplace of
Investment, 60 W ASH .
L.
R EV . 843, 845-46 (1985) (“Until the mid-1970's, commercial speech was considered beyond the purview of the first amendment”).
57

one's real convictions and does not provide any significant contribution to the public discourse. As neoliberal ideas became dominant in the 1970s, this perception has changed. Advertising was recognized as constitutionally protected speech on the basis that it provides the consumers with product information, which is at least as important as providing them with information about the most urgent political debate.
424 It is noteworthy how this turn in the legal practice reflects the values of capitalism with its emphasis on the importance of consumption. The significance that the legal system ascribes to consumption is well illustrated by the following passage:
"The commercial market place, like other spheres of our social and cultural life, provides a forum where ideas and information flourish. Some of the ideas and information are vital, some of slight worth. But the general rule is that the speaker and the audience, not the government, assess the value of the information presented. Thus, even a communication that does no more than propose a commercial transaction is entitled to the coverage of the First Amendment."
425 a. Restrictions on Advertising of Certain Products and Services
Since the 1970s, courts consistently strike down restrictions on advertising that are not "narrowly tailored" to promote a compelling public interest.
426
Applying this test, courts have invalidated statutes restricting advertising of alcohol,
427
tobacco,
428 gambling games,
429
attorney services,
430
prescription drugs,
431
advertising directed at physicians,
432
as well as a ban on in-person solicitation by public accountants and a
424 Virginia Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748, 761-65 (1976)
(“As to the particular consumer's interest in the free flow of commercial information, that interest may be as keen, if not keener by far, than his interest in the day's most urgent political debate”); Bates v.
State Bar of Arizona, 433 U.S. 350, 364 (1977) (“The listener's interest is substantial: the consumer's concern for the free flow of commercial speech often may be far keener than his concern for urgent political dialogue”).
425 Edenfield v. Fane, 113 S. Ct. 1792, 1798 (1993).
426 See infra notes 428-434.
427 Lamar Outdoor Advertising, Inc. v. Mississippi State Tax Com'n, 701 F.2d 314 (5th Cir.1983);
Rubin v. Coors Brewing Co., 115 S.Ct. 1585 (1995); 44 Liquormart, Inc. v. Rhode Island, 517 US 484
(1996).
428 Lorillard Tobacco Co. et. al. v. Reilly, Attorney General of Massachusetts, 533 U.S. 525 (2001).
429 New Orleans Broadasting Association v. United States, 119 S.Ct. 1923 (1999); Greater New
Orleans Broadcasting Ass'n v. United States, 527 U.S. 173 (1999).
430 Bates v. State Bar of Arizona, 433 U.S. 350 (1977); Alexander v. Cahill, 598 F.3d 79 (2d Cir. 2010).
431 Virginia Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976); Thompson v. Western States Medical Center, 535 U.S. 357 (2002).
432 Washington Legal Found. v. Friedman , 13 F. Supp. 2d 51 (D.D.C. 1998).
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ban on direct-mail solicitations by lawyers to persons charged with traffic or criminal offenses.
433
This line of jurisprudence is questionable. Rather than providing information, advertising uses sophisticated psychological techniques that are difficult, and sometimes even impossible, to resist.
434 Consider, for example, that marketing experts openly recommend companies to invest their resources in advertising rather than in production.
435 That is, influencing consumers through advertising is more profitable than supplying them with quality goods. This fact demonstrates the power of advertising over the consumer. This power clearly goes far beyond what could be achieved by providing the consumer with mere product information. To be induced to purchase a product or a service by mere psychological techniques obviously contradicts the consumer's interest, especially when the purchasing decision is an important one—such as in the case of prescription drugs or legal services—or when the product or the service can damage the consumer in some way—as in the case of tobacco, alcohol or gambling games.
The consumer's interest not to be exposed to advertising and not to be influenced by it is recognized as wholly legitimate. Thus, legislation creating the "do not call" registry—a tool that helps individuals to avoid advertising—has successfully withstood judicial review.
436
Yet, in the eyes of the legal system, each individual has to find her own way to escape unwanted advertising. Collective actions through legislation are precluded. At the same time, the consumer's ability to escape the exposure to advertising or its influence is very much limited.
437
Under these circumstances, lack of legal restrictions on advertising practically equals a license to influence the consumer against her will.
Several further features of the capitalist philosophy are noticeable in the context of the judicial approach to advertising. While striking down restrictions on advertising, courts usually juxtapose the public interest—such promoting public health by reducing tobacco and alcohol consumption, the interest in reducing gambling
433 Ficker v. Curran, 950 F. Supp. 123 (D. Md. 1996).
434 See, e.g., Assaf, supra note 162, at 14 (discussing the “classical conditioning” technique).
435 Assaf, supra note 143, at 96-98.
436 Mainstream Marketing Services., Inc. v. Federal Trade Commission, 358 F.3d 1228, 1246 (10th Cir.
2004) (upholding the “Do Not Call” registry). See also Parma, Ohio, Codified Ordinances §§ 757.01-
757.06 (2009) (a state law providing residents with an option to prevent solicitation).
437 Victor J. Tremblay & Carol Horton Tremblay, Advertising and Welfare: New Perspectives on
Industrial Organization 1 (2012).
59

games—with the interest of individuals willing to obtain information about respective products and services and the interest of the manufacturers in conveying such information.
438
They usually conclude that the governmental interest in manipulating the demand may not justify preventing individuals from conveying and receiving information.
Here we can once again observe the strong tendency of the legal system to favor individual interests over collective ones. In addition, it is interesting to see that courts usually take account only of one side of the individual interest: to consume, in this context, to receive information that allows making the consuming decision. Courts seem to disregard the fact that individuals themselves may be willing to avoid consumption of certain products. Laws restricting advertising for such products may express individual second-order preferences. For instance, a person may be interested not to allow advertising to create or support her smoking or drinking habit.
This judicial view of advertising echoes with the spirit of capitalism that ascribes great importance to consumption. As we can see, the freedom to consume has much more weight in the eyes of the legal system than the freedom to refrain from consumption. Moreover, the economic damage that may be caused by a consumption decision based on insufficient product information is ultimately given more weight than the damage that the consumption of such product may cause. This is consistent with the general tendency of the legal system to favor economic rights over other rights. Another example of this tendency in the context of advertising is two class actions filed by smokers of cigarettes misleadingly labeled as "light."
439
In both cases, the plaintiffs were found to have standing, as they formulated their claims in terms of the economic damage resulting from paying a higher price for not less damaging cigarettes rather than in legally less conceivable terms of increased risk to health.
440
438 E.g., 44 Liquormart, Inc. v. Rhode Island, 517 US 484, 487 (1996) (“The fit here is not reasonable, since the State has other methods at its disposal [...] that would more directly accomplish its stated goal without intruding on sellers' ability to provide truthful, nonmisleading information to customers.”);
Lorillard Tobacco Co. et. al. v. Reilly, Attorney General of Massachusetts, 533 U.S. 525, 564 (2001)
(“We must consider that tobacco retailers and manufacturers have an interest in conveying truthful information about their products to adults, and adults have a corresponding interest in receiving truthful information about tobacco products.”)
439 Aspinall v. Philip Morris Cos., 442 Mass. 381 (Mass. 2004); Schwab v. Philip Morris USA, Inc.
,
449 F.Supp.2d 992 (E.D.N.Y. Sept. 25, 2006).
440 Aspinall v. Philip Morris Cos., id. at 398 (“Further, on the plaintiffs' theory of economic damages, which will be described next, the market price for Marlboro Lights was higher than it would have been had the cigarettes been honestly advertised and, therefore, all purchasers of the product paid more because of the deception.”); Schwab v. Philip Morris USA, id.
at 1019 (“[The plaintiff’s] claim is that they, and a class consisting of tens of millions of smokers, were induced by fraud to buy a kind of
60

b. Misleading Advertising
Although courts do recognize that there is a substantial interest to protect consumers against confusion,
441
laws designed for this purpose are often overturned because of deficient empirical evidence to prove the danger of confusion.
442 Courts explicitly mention that the legislator has to meet a heavy burden to justify such regulations.
443
Regulations aimed at preventing consumer confusion are frequently found to be more extensive than necessary For example, in a number of cases, courts overturned regulations banning the use of medical claims that are not supported by substantial scientific evidence, reasoning that the potential confusion may be negated by appropriate disclaimers.
444
Courts follow the same line while interpreting existing statutes protecting consumer against confusion: the general unwillingness to intervene in the market process results in a very restrictive interpretation of these statutes. For instance, false advertising claims assuring that a cigarette "filters best,"
445
that a hair pomade would restore the natural shade or colour,
446
and that a toothpaste would brighten the teeth
447
or that a candy makes weight-reduction easy
448
were all held to be mere "puffing": exaggerated seller's talk that no reasonable consumer would take seriously.
This line of jurisprudence markedly contradicts empirical research showing that exaggerated advertising claims do mislead consumers.
449
Nevertheless, even when faced with evidence of actual consumer confusion, courts frequently refuse to conclude that the advertisement in question is misleading. For example, the Mead cigarettes, “lights,” and that they suffered financial damage because they did not get what they thought they were getting—a more valuable, safer cigarette”).
441 deceptive or overreaching practices
442 R. Michael Hoefges, Regulating Professional Services Advertising: Current Constitutional
Parameters and Issues under the First Amendment Commercial Speech Doctrine , 24 Cardozo Arts &
Ent. L.J. 953 (2007) ("the Supreme Court has made it clear that states cannot constitutionally ban claims in professional services advertising merely because they are potentially misleading to consumers. […]Such claims can be constitutionally regulated as long as the regulation “serve[s] as an appropriately tailored check against deception or confusion”).
443 Peel v. Attorney Registration and Disciplinary Commission of Illinois, 496 U.S. 91, 109 (1990).
444 Alliance for Natural Health U.S. v. Sebelius, 714 F. Supp. 2d 48 (D.D.C. 2010); Pearson v. Shalala,
164 F.3d 650, 661 (D.C. Cir. 1999).
445 Quinby & Co. v. Funston, 177 N.Y.2d 736 (1958).
446 Herbold Lab., Inc. v. United States, 413 F.2d 342 (9th Cir. 1969).
447 Bristol-Myers Co., In re, 46 F.T.C. 162 (1949).
448 Carlay Co. v. F.T.C., 153 F.2d 493 (7th Cir. 1946).
449 Terence A. Shimp & Ivan Preston, Deceptive and Nondeceptive Consequences of Evaluative
Advertising , 45 T HE J OURNAL OF M ARKETING 22, 27 (1981); Janet Hoek & Philip Gendall, An
Examination of Puffery’s Effects on Consumers , ANZMAC 2007 Conference Papers 1031, 1036, available at http://conferences.anzmac.org/ANZMAC2007/papers/JHoek_2.pdf
.
61

Johnson & Co. v. Abbott Laboratories case dealt with an advertisement claiming that the Similac baby formula was the "1st Choice of Doctors."
450
The court was presented with survey evidence demonstrating that most consumers understood this claim to mean that a substantial majority of doctors recommended Similac and that they did so because of its medical superiority over other brands. None of these implications was true. Yet, the court concluded that the claim was non-actionable and noted generally that surveys cannot be employed to determine the meaning of words.
451 Similarly, in
American Italian Pasta v. New World Pasta , survey evidence was brought to demonstrate that a substantial number of consumers understood the slogan
"Americans' Favorite Pasta" as implying that the advertised brand was number-one, or at least national brand.
452
Again, this was not true. Relying on Mead Johnson , the court stated that the dictionary meaning of the word "favorite" was subjective and vague, and hence, the statement could not be regarded as a factual claim even if misunderstood.
453
What we can observe here is the already mentioned tendency of economic rights to get ever broader protection: originally justified with consumers' interest to receive information, the right to advertise grew to be a constitutional right of its own, largely allowing manufacturers to mislead consumers. This laissez-faire approach toward advertising results in giving the capital the right to rule. Having much greater economic power, manufacturers are able to overflow the consumer with advertising that has little informative value while failing to supply her with information she is interested in.
The spirit of capitalism exerts a substantial interest on the legal thought in the field of misleading advertising and mandatory labeling. The judicial practice in this field focuses on the individual interests of the advertisers and the consumers. What it fails to see is the public interest in advertising as a trustworthy channel of communication.
As a general communication tool, advertising is a public good. The lax legal approach to misrepresentation results in undermining the informative value of advertising in general. Indeed, surveys constantly show that people do not trust advertising and are
450 201 F.3d 883 (7th Cir. 2000).
451 Id.
at 886.
452 371 F.3d 387 (8th Cir. 2004).
453 Id.
at 394.
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very suspicious towards its claims.
454
Had courts examined misleading advertising more strictly, ads could have served to provide consumers with reliable information, to the benefit of both, consumers and producers. Yet, the excessively individualistic approach of the legal system results in disregarding the public dimension of advertising.
The materialistic aspect of the capitalist philosophy is noticeable in this context as well. The interest of corporations to sell and, more generally, the interest to increase the volume of trade, are perceived as so important that the consumer's interest to acquire accurate product information has to step aside. This is probably because the consumer's interest is not purely economic, as opposed to the interest of corporations.
In other words, the damage caused by the disappointment of teeth not becoming white or hair not recovering its color is legally regarded as less severe than the damage from not being able to sell a product. c. What Kind of Information Should Matter?
The informative value of commercial information is further undermined by judicial practice in the context of mandatory labeling. Laws requiring the manufacturers to disclose certain information are subject to strict judicial scrutiny because they compel speech.
455
Courts frequently overturn such requirements, finding them overly burdensome or not narrowly enough tailored to serve their purpose.
456
The State bears a particularly heavy burden of proof in this context: it has to provide significant empirical data—rather than a common sense conclusion—to demonstrate the existence of real, material harm and to convince that its regulation will alleviate it.
457
State legislators have made several attempts to enact laws requiring distributors to indicate the origin of food products, such as eggs, 458 meat, 459 fruits and vegetables.
460
454 Carl Obermiller et al., Ad Skepticism: The Consequences of Disbelief , 34 J OURNAL OF
A DVERTISING 7 (2005) ("roughly two-thirds of consumers claim they doubt the truthfulness of ads");
Stephen J. Hoch & Young-Won Ha, Consumer Learning: Advertising and the Ambiguity of Product
Experience , 13 T HE J OURNAL OF C ONSUMER R ESEARCH 221, 221 (1986) ("A recent national survey found that 60 percent of consumers agreed that "advertising insults my intelligence").
455 Ibanez v. Florida Department of Business and Professional Regulation, Board of Accountancy, 512
U.S. 136 (1994); Tillman v. Miller, 133 F.3d 1402 (11th Cir. 1998); In re R.M.J., 455 U.S. 191 (1982);
Mason v. Florida Bar, 208 F.3d 952 (11th Cir. 2000).
456 Id.
457 Id.
458 Foley, 172 Cal 744 (1916); State v Jacobson, 80 Or 648 (1916); United Egg Producers v.
Department of Agric. of P.R., 77 F3d 567 (Puerto Rico 1996).
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These statutes either required indicating the specific country or state of origin
461
or to mark the products as "foreign"
462
or "imported."
463
The goal of these statues was to enable the consumer to indicate potentially stale or unwholesome products.
464
Courts have consistently invalidated these statutes, reasoning that food products from foreign origin are not necessarily unwholesome, 465 that the labeling requirements burden the distributors more than necessary to provide the information for consumer choice,
466 that they unduly restrict liberty, 467 and violate the Commerce Clause.
468 The same conclusion was reached regarding a statute requiring distributors to notify the consumer about meat product not conforming to the state's ingredient standards.
469
Furthermore, courts consistently hold that a consumer's concern or her desire to receive the information in question is not sufficient to justify a mandatory labeling requirement.
470
Thus, in two decisions courts found that the state may not require milk manufacturers to identify that their milk is obtained from cows treated with rbST hormone. The use of this hormone was subject to intense public criticism.
471
Yet, the courts decided that consumer concern alone was insufficient to justify restriction on the constitutionally protected right to free speech.
472
This is because no significant differences existed between milk obtained from rbST-treated cows and non-treated cows.
473
Similarly, in another case the court found that the FDA had no basis upon which it could legally mandate labeling of food as genetically modified, since GM-
459 Tupman Thurlow Co. v. Moss, 252 F.Supp. 641 (M.D. Tenn. 1966); International Packers Ltd. v.
Hughes, 271 F.Supp. 430 (S.D. Iowa 1967); Ness Produce Co. v. Short, 263 F.Supp. 586 (D.C. Or
1966); Armour & Co. v. Nebraska, 270 F.Supp. 941 (D.C. Neb 1967).
460 Ex parte Hayden, 147 Cal 649 (1905); Polk Co. v. Glover, 305 US 5 (1938).
461 United Egg Producers v. Department of Agric. of P.R
., 77 F3d 567 (Puerto Rico 1996);
International Packers Ltd. v. Hughes 271 F.Supp. 430 (S.D. Iowa 1967).
462 Tupman Thurlow Co. v. Moss, 252 F.Supp. 641 (M.D. Tenn. 1966).
463 Foley, 172 Cal 744 (1916); International Packers Ltd. v. Hughes, 271 F.Supp. 430 (S.D. Iowa
1967); Ness Produce Co. v. Short, 263 F.Supp. 586 (D.C. Or 1966).
464 Foley, 172 Cal 744 (1916); State v. Jacobson, 80 Or 648 (1916).
465 Foley, 172 Cal 744 (1916); Armour & Co. v. Nebraska, 270 F.Supp. 941 (D.C. Neb 1967); Ness
Produce Co. v. Short, 263 F.Supp. 586 (D.C. Or 1966).
466 Foley, 172 Cal 744 (1916); Tupman Thurlow Co. v. Moss, 252 F.Supp. 641 (M.D. Tenn. 1966).
467 Ex parte Hayden, 147 Cal 649 (1905).
468 United Egg Producers v. Department of Agric. of P.R
., 77 F3d 567 (Puerto Rico 1996);
International Packers Ltd. v. Hughes, 271 F.Supp. 430 (S.D. Iowa 1967); Tupman Thurlow Co. v.
Moss, 252 F.Supp. 641 (M.D. Tenn. 1966); Ness Produce Co. v. Short, 263 F.Supp. 586 (D.C. Or
1966).
469 American Meat Institute v. Ball, 550 F.Supp. 285 (W.D. Mich. 1982).
470 Stauber v. Shalala, 895 F. Supp. 1178, 1193 (W.D. Wis. 1995); Int'l Dairy Foods Ass'n v. Amestoy,
92 F.3d 67, 73 (2d Cir. 1996); Alliance for Bio-Integrity v. Shalala, 116 F. Supp. 2d 166 (D.D.C.
2000).
471 Stauber v. Shalala, id.
at 1183.
472 Int'l Dairy Foods Ass'n v. Amestoy, 92 F.3d 67, 73 (2d Cir. 1996).
473 Id. at 79-80; Stauber v. Shalala, 895 F. Supp. 1178, 1189 (W.D. Wis. 1995).
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foods do not "present any different or greater safety concern than foods developed by traditional plant breeding."
474
The court reasoned that "if […] the product does not differ in any significant way from what it purports to be, then it would be misbranding to label the product as different, even if consumers misperceived the product as different." 475
What is most striking about this line of jurisprudence is its paternalistic character.
476
In all the mentioned cases there was a clear consumer demand for the information in question. This demand did not result in the market providing this information, because its disclosure obviously contradicts the distributor's interest. Yet, the demand for this information has created sufficient public pressure so that the legislator enacted laws requiring its disclosure. Invalidating such laws, courts implicitly state that they know better what is important for the consumer to know. And the only information that should matter for the consumer is information that results in physical differences between products.
The implicit message of these decisions is that the consumer should be protected against her own irrational decisions. This way of thinking is heavily marked with paternalism and frequently rejected by the legal practice in other contexts.
477
This point is particularly interesting because the neoliberal philosophy associates the market with freedom and governmental intervention with paternalism.
478
The mentioned decisions illustrate the falsity of this presumption: leaving an issue in the hands of the market may be much more paternalistic than regulating it through legislation.
This line of jurisprudence practically denies consumers the freedom of choice that is so dear to the neoliberal philosophy. An over-cautious consumer who does not want to buy genetically modified, hormone treated or imported food has no way to satisfy her preferences.
479 The same is true for a consumer who has a moral objection to
474 Alliance for Bio-Integrity v. Shalala, 116 F. Supp. 2d 166, 179 (D.D.C. 2000).
475 Id.
476 Nicole B. Cásarez, Don’t Tell Me What to Say: Compelled Commercial Speech and the First
Amendment, 63 M O .
L.
R EV . 929, 974 (1998) (“The Second Circuit erred … in Amestoy by applying an overly paternalistic understanding of what information is material to a reasonable consumer”).
477 For example, in the context of media regulation – see supra note 396.
478 F
RIEDMAN , supra note 5, at 28-32.
479 Cásarez, supra note 477, at 974 (“In effect, the court [in Int'l Dairy Foods Ass'n v. Amestoy ] said that because the government says rBST is safe, consumers do not need to know about it. However, as Judge
Leval noted in his dissenting opinion many consumer products once believed to be safe—including tobacco—were later found to be dangerous”).
65

genetic engineering or hormone treatment or prefers to encourage local producers.
480
This is notable, since neoliberalism positions itself as a value-neutral philosophy, accepting all visions of good life.
481
Here we can see that the legal system actually expects consumers to pursue one specific vision of good life, namely to acquire products based solely on currently available scientific information about their physical characteristics.
This picture is completed by the legal situation in the field of misleading advertising.
The legal rules and their enforcement make information on product dimensions other than its physical properties virtually unavailable. Courts have always been reluctant to recognize misrepresentation claims not referring to the physical properties of products or to their prices. For instance, in an early case, a district court held under that misrepresentation of conferring a benefit to a labor organization is not actionable, as the consumer has not been deceived in any way as to the goods themselves.
482
Today, courts do recognize that the modern consumer may be interested in truthful information about the labor conditions under which the product is manufactured,
483 about the impact of the production process on the environment, etc.
484
Unfortunately, this general recognition has little practical effect. Thus, most "environment friendly" and "cruelty free" claims found on the market today are demonstrably false.
485
The
FTC is apparently not troubled much by misrepresentations of this kind and does not take the necessary steps to prevent it.
486
Meanwhile, surveys show that the majority of
480 Int'l Dairy Foods Ass'n v. Amestoy, 92 F.3d 67, 76 (2d Cir. 1996) (Justice Leval, dissenting:
“Nowhere does the majority opinion discuss or even mention the evidence or findings regarding the people of Vermont's concerns about human health, cow health, biotechnology, and the survival of small dairy farms”); Jonathan Adler, Regulating Genetically Modified Foods: Is Mandatory Labeling the Right Answer?
, 10 R ICH .
J.L.
& T ECH . 1, 13 (2004) (“[T]he GM debate - is mostly about values and about ethical concerns. […] Anti-GMO proposals are not about health risks, but about how we feel about GM technology and how our foods should be produced”).
481 Supra note 113.
482 Samson Crane Corp. v. Union National Sales, Inc.
, 87 F. Supp. 218, 222 (D. Mass. 1949).
483 Nike v. Kasky , 539 U.S. 654 (2003).
484 Robert B. White, Preemption in Green Marketing: The Case for Uniform Federal Marketing
Definitions, 85 I ND .
L.J. 325, 327 et seq.
(2010) (discussing laws that regulate "green" marketing claims).
485 Id.
at 326 (In a 2007 study of 1018 products claiming environmental benefits in North American consumer markets, all but one made claims that were demonstrably false or that risked misleading intended audiences”); Delcianna J. Winders,
Combining Reflexive Law and False Advertising Law to
Standardize “Cruelty-Free” Labeling of Cosmetics, 81 N.Y.U.
L.
R EV . 454, 449 (2006) (“cruelty-free” labeling is “potentially misleading” and “not meaningful”).
486 White, supra note 484, at 343 ("since May 2000, the FTC has not prosecuted a single greenmarketing claim or issued any Green Guides revisions"); Winders, id. at 463 ("the FDA and FTC have declined to regulate “cruelty-free” claims. Despite citizen requests that they do so, no agency has proposed guidelines or rules on this issue").
66

consumers are willing to avoid products whose manufacturing process damaged the environment or involved cruel treatment of animals.
487
Obviously, individual consumers usually lack the resources and the motivation to undertake the investigation needed to discover deception of this kind. A tool that could be helpful here is naturally a class action. In California, two laws enabling to file a class action based on consumer fraud are California Unfair Competition Law and False Advertising Law. Both require the plaintiffs to demonstrate "loss of money or property." 488 Courts have interpreted this requirement to mean that the plaintiffs must demonstrate a misrepresentation as to the physical characteristics of the product.
489
Thus, in one case, the plaintiffs claimed that they were misled by a label "made in
USA," placed on products that contained foreign-made parts.
490
Although the court was convinced that the plaintiffs suffered injury because their patriotic desire was upset, it concluded that this injury did not amount to "loss of money or property."
491
In another case, consumers claimed that they bought milk based on the belief that the cows were treated according to criminal animal cruelty statutes.
492
They alleged that they bought milk they otherwise would not have bought if they had thought some of the producing herd may have been raised under cruel conditions. The court held that the plaintiffs have only suffered a "moral injury": they did not claim that the cruel treatment had a negative effect on the milk. The milk they bought was not physically inferior to other milk and thus, they “had the benefit of their bargain” and suffered no
"loss of money or property."
493
A similar conclusion has been reached in a case dealing with milk misleadingly labeled "Happy Cows." 494
This interpretation is not the only possible way to interpret the phrase "loss of money or property." Nothing in the language of the statute suggests that a physically inferior product brings about a "loss of money or property," while a product inferior in
487 White, id.
at 325 ("Surveys over the past fifteen years have consistently found that most consumers are more likely to choose products that claim to be environmentally friendly over products that do not make such a claim. A majority of these consumers are willing to pay up to five percent more for those products").
488 Bus. & Prof. Code § 17204; West's Ann.Cal.Civ.Code § 1770(a)(4).
489 See infra notes 490-494.
490 Kwikset Corp. v. Superior Court, 90 Cal.Rptr.3d 123 (Cal.App. 2009).
491 Id. at 129-31.
492 Animal Legal Defense Fund v. Mendes 160 Cal.App.4th 136 (2008).
493 Id. at 146-47.
494 People for Ethical Treatment of Animals, Inc. v. California Milk Producers Advisory Board, 125
Cal.App.4th 871 (1st Dist.2005).
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another dimension does not. The chosen interpretation is consistent with the general tendency of the legal practice to perceive injury in terms of individual economic interest. Recall that an injury to environment is not considered to consist an "injury in fact" sufficient to establish standing.
495
The same logic is apparent here: while courts readily acknowledge one's concern with the physical state of a product, they are extremely skeptical toward one's concern with its social desirability. I believe that this skepticism is unjustified. There is absolutely no basis to assume that a person would be more injured by a false claim of an exceptional quality of milk than by a false claim of humane cow treatment.
The liberal view, largely shared by the legal practice, regards the market as the best mechanism of regulating all types of social issues.
496
According to this view, people should be able to express most of their wishes through individual voluntary market behavior.
497
Confining the notion of injury to economic loss, courts restrict consumption to a mere tool of satisfying one's own material goals and sufficiently narrow the scope of public life that can be regulated through market behavior. The lax
FDA's policy toward misleading advertising as to the social desirability of products complements this picture. Lacking trustworthy information, people are unable to express their views on social issues related to manufacture processes through consumption.
This situation constitutes a most serious threat on liberty. Because of the aversion of the US legal system toward market regulation through legislation, people are largely unable to use this tool to express values and ideals related to consumption. It is noteworthy that the situation is different in the European Union and Israel, where such laws are not uncommon. For instance, both jurisdictions forbid animal experiments in cosmetic industry.
498 Under the US legal climate, such legislation would be unthinkable, although I dare speculate that US citizens object this practice no less than the European and the Israeli citizens do.
As the current discussion of the US legal practice reveals, mandatory labeling of cosmetic product tested on animals would not withstand judicial review, since this information has no effect on the end-product. For the same reason, misleadingly
495 See Part 3(A).
496 H
OWARD & K ING , supra note 2, at 1.
497 F
RIEDMAN , supra note 5, at 22-24.
498 For EU see Council Directive 93/35, 1993 O.J. (L 151) (EEC), P 3; for Israel see Cruelty to Animals
(Animal Testing) Act, 1994.
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advertising a product as not been tested on animals is unlikely to attract the FDA's attention and may well be deemed non-actionable by courts. That is, the US citizens virtually have no legal means of stopping the practice of animal experiments in cosmetic industry. As the examples above demonstrate, the same is true for genetic engineering, treating animals with hormones and animal cruelty. Neither do the US citizens have any means of encouraging local production over import.
We can observe here how the legal system confines the person to a rational wealthmaximizer, as envisioned by the capitalist ideology. This position is undesirable. As
Raz convincingly argues, freedom is not intrinsically valuable, but only to the extent it allows a person to lead an autonomous life—that is, a life guided by one's moral goals.
499
The current position of the legal system compromises the freedom of citizens to realize their ethical and political values in the name of the economic interests of manufacturers. It practically prefers the interest of corporations to use socially objectionable practices in production, to conceal and even to misrepresent information related to non-physical product dimensions to the consumers' interest to legally restrict certain production practices or to discourage them by their consumption behavior. Applying Raz's insight to this legal situation makes obvious that meaningful and valuable freedom is sacrificed here for the sake of a trivial one.
(E) A Broader Outlook
The previous parts of this Chapter have discussed four examples of the tendency existing in our legal system toward the values of individualism and materialism.
These examples have been intentionally taken from diverse fields of law, in order to demonstrate the broad range of this tendency. The specific legal phenomena discussed in each example have, for the most part, been criticized in literature for various reasons. Pointing out the influence of the capitalist ideology that is manifest in these phenomena, I intended to offer an alternative perspective on them.
This article has a broader aspiration though. It attempts to provide an analytical prism through which one may observe various legal phenomena. The excessive tendency toward materialism and individualism can be revealed in a plenty of legal phenomena and in virtually any field of law. Placing these issues in the context of capitalist ideology sheds some light on their roots, allowing a deeper understanding of their
499 R
AZ , supra note 6, at 16-17, 203-7, 318, 424-25.
69

inner logic. Awareness of the weaknesses found in the capitalist ideology and the associated (neo)liberal philosophy equips opponents of various legal phenomena with persuasive arguments.
For instance, the consideration doctrine in contract law doctrine holds that a promise is legally enforceable only when made in exchange for something of economic value.
500
This doctrine has been extensively criticized in literature.
501
The consideration doctrine is easily explicable in terms of the legal tendency toward materialism and individualism. Hence, the general critique on the capitalist ideology is fully applicable in this context. Thus, the excessive focus on egoistic motives results in legal disrespect for altruistic aspirations such as those standing behind a promise of a donation. Further, the fixation on economic motives prevents recognition of non-pecuniary benefits, such as gratitude received in exchange for a gift.
502
An additional example is campaign spending. Since the 1970s, the Supreme Court has been rather adverse toward limitations on private donations for political campaigns,
503 which coincides with the rise of the neoliberal philosophy. The famous Citizens
United decision of 2010 has further declared all governmental regulations in this field unconstitutional.
504
Though much ink has been already spilled criticizing this legal situation,
505
viewing it through the lens of capitalist ideology may offer a further insight. What we observe here is the strong legal preference for regulation through the market rather than through the political process, which is characteristic of the neoliberal thought.
506
The most relevant weakness of this view in the context of campaign spending is its failure to see that free market does not always mean more freedom than legislative regulation.
507
500 David Gamage & Allon Kedem, Commodification and Contract Formation: Placing the
Consideration Doctrine on Stronger Foundations, 73 U.
C HI .
L.
R EV . 1299, 1299-1300 (2006).
501 See, e.g., id.
; James D. Gordon, A Dialogue about the Doctrine of Consideration , 75 C ORNELL L.
R EV . 987, 991 (1990); Andrew Kull, Reconsidering Gratuitous Promises, 21 J.
L EGAL S TUD . 39, 53
(1992); Daniel Markovits, Contract and Collaboration, 113 Y ALE L.
J. 1417, 1477-81 (2004).
502 Hila Keren, Considering Affective Consideration , 40 G OLDEN G ATE U.
L.
R EV . 165 (2010).
503 See, e.g., Buckley v. Valeo, 424 U.S. 1 (1976) (invalidating limitations on individual campaign spending). For more examples and historical description see James A. Gardner, Anti-Regulatory
Absolutism in the Campaign Arena: Citizens United and the Implied Slippery Slope, 20 C ORNELL J.L.
& P UB .
P OL ' Y 673, 678 et seq.
(2011).
504 Citizens United v. FEC, 130 S. Ct. 876 (2010). For discussion see Gardner, id.
505 E.g., Gardner, id .; J. Skelly Wright, Politics and the Constitution: Is Money Speech?, 85 Y ALE L.J.
1001 (1976); Vincent Blasi, Free Speech and the Widening Gyre of Fund-Raising: Why Campaign
Spending Limits May Not Violate the First Amendment After All , 94 C OLUM .
L.
R EV . 1281 (1994);
David A. Strauss, Corruption, Equality, and Campaign Finance Reform , 94 C OLUM .
L.
R EV .1369
(1994).
506 H
OWARD & K ING , supra note 2, at 1.
507 Buchanan, supra note 283, at 339-40.
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The freedom that market is supposed to bring about is first and foremost the freedom of consumers. Yet, as discussed above, the demand is not always able to control the supply.
508
This is especially true in the field of campaign spending, where the interests of donating corporations are wholly independent of the interests of the citizens, who are the consumers of political campaigns. Consider for a moment politics as a market.
If this market functions well, the political ideals that consumers-citizens most like should be offered in the greatest amount. Since identification of consumers-citizens with the promoted political ideals hardly makes the campaign donations more profitable for a corporation, this model simply does not work. Campaign donations are usually made out of expectation of future cooperation with the politician and without any regard of the citizen demand for the campaign. The free market model is simply inapplicable in this area. The romantic vision of the market as a site of freedom inspired by the capitalist ideology is here completely out of place.
All that been said, this article obviously does not intend to claim that the US legal system never takes non-economic and collective interest into account. Laws providing for freedom of religious association, proscribing minimal wages, preserving the environment, forbidding animal cruelty etc. are all based on such values. Thus, the predisposition toward capitalist values may be strong, but these values do not always prevail in the legal scene.
In some cases, the tension between the capitalist values and other aspirations is rather articulate. A most recent example of this tension is the long-waited-for Supreme
Court ruling on the Patient Protection and Affordable Care Act.
509
Preceding this ruling, the new health care reform was invalidated as unconstitutional in the 11 th
Circuit,
510
but upheld in the 6 th
Circuit.
511
In a five to four opinion, the Supreme Court ultimately sustained large parts of the reform.
The main controversy of this case surrounded the question whether individuals may be required by the state to purchase and maintain health insurance coverage.
Interestingly, all but one judges 512 answered this question negatively: compelling
508 See Part 3(D.1).
509 Nat'l Fed'n of Indep. Bus. v. Sebelius , 132 S. Ct. 2566 (June 28, 2012).
510 Florida et al. v. U.S. Dep't of Health & Human Servs. et al.
, 2011 WL 3519178 (11th Cir. 2011).
511 Thomas More Law Ctr. et al. v. Obama et al.
, 2011 WL 2556039 (6th Cir. 2011).
512 Justice Ginsburg.
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individuals to buy a product clearly exceeded Congress's power under the Commerce
Clause.
513
Yet, the majority found a creative way out of this trap: under the Affordable Care Act, a failure to acquire a health insurance results in a compulsory monetary payment to the Internal Revenue Service. Though the Act described this payment as a penalty, the majority judges made an effort to characterize it as a tax.
514
According to them, it is within the court's power to disregard the designation of the payment and view its substance.
515 Emphasizing that the Affordable Care Act attached no further negative consequences to not buying health insurance, the majority concluded that the Act fell within Congress's taxing power.
516
The dissenters refused to follow the sophisticated logic of the majority and contended that the Act should be struck down.
517
This is a good illustration of the difficulty of the legal system to accept nonindividualist logic. A duty to purchase a health insurance is a self-paternalistic decision on a collective level: as a society, we decide that everyone should be protected against the unreasonable and potentially disastrous decision not to purchase a health insurance. This logic is unacceptable. But as the intuition of some judges speaks in favor of the reform, they try to find a way of representing the reform in terms that are compatible with the spirit of capitalism.
4.
C
ONCLUSION
: T
HE
P
HANTOM OF
L
IBERTY
Capitalism is usually associated with freedom. In this article, I have attempted to challenge this common wisdom. In fact, capitalism strongly favors only one dimension of freedom—the liberty to pursue one's personal economic gain. Living in the environment of flourishing consumer culture fueled by media and advertising, we learn to take this particular aspect of freedom as the quintessence of human liberty.
The main argument of this article has been that the notion of freedom is very much broader. What is more, personal economic liberty, important as it may be, often constitutes a rather trivial aspect of freedom as compared to other aspects.
Different aspects of freedom often come into conflict. In any case of such a conflict reaching the awareness of the legal system, a decision in favor of one of the aspects of
513 Nat'l Fed'n of Indep. Bus. v. Sebelius , 132 S. Ct. 2566, 2572-73 (June 28, 2012).
514 Id.
at 2594-2600.
515 Id.
at 2595-96.
516 Id.
at 2594-2600.
517 Id.
at 2609 et seq.
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freedom must be taken. The option not to decide does not exist, because deciding not to intervene equals favoring the status quo.
518
To be able to seek a just solution, it is important to realize the existence of such conflicts in the first place. Perceiving persons as mere wealth-maximizers, the legal system often obscures the fact that one's freedom has been compromised by a certain decision.
For instance, when courts deny non-profit organizations standing to sue for violations that negatively affect the environment, an animal species, a racial group or the society at large, they do not seem to be aware of the fact that such decisions restrict the freedom of these organizations in any way. This is exactly what finding lack of standing means: no personal rights of the plaintiff have been affected, there is no real conflict between the plaintiff and the defendant and therefore, the plaintiff is excluded from legally opposing the defendant’s behavior. Regardless of whether the denial of standing is justified in a specific case, it is important to see that a real conflict does exist and that denying standing means preferring the defendant’s interests over those of the plaintiff.
A decision denying the plaintiff standing never affects the plaintiff’s personal economic interests. In our capitalist-oriented cultural environment, this seems enough to ensure that the plaintiff’s freedom has not been restricted in any way. This article has attempted to dissolve this illusion. Philosophers and psychologists alike recognize the importance of the “citizen” dimension of the human personality, that is, of the human capacity to exercise altruism, to be concerned with social affairs and to act to promote public welfare. Moreover, many philosophers, including Joseph Raz and
Hannah Arendt, believe that exercising one’s “citizen” capacities is a much more important aspect of freedom than pursuing one’s own self-interest.
Following these insights, this article pointed out instances in which this important aspect of freedom is compromised by seemingly neutral legal doctrines. Preventing persons from enacting or enforcing laws that restrict racist speech and pornography, grant preferential treatment to historically disadvantaged groups, require the media to promote discourse on important social issues, mandate the disclosure of information related to the manufacturing processes, etc. touches upon the very heart of their freedom as citizens.
518 For an interesting discussion see R AZ , supra note 6, at 120-21.
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To conclude this discussion, I would like to make one further point. Legal standards alone cannot guarantee justice; only moral standards can. In democratic USA there was slavery, women were denied voting rights
519
and homosexuality was a crime.
520
I believe that it is one of our most important goals as a society to develop our moral standards and norms ever further, to move forward in our search for truth.
The legal focus on capitalist values may hamper this process. As noted above, laws prohibiting slavery, establishing working hours limit, prescribing minimal wages, prohibiting slavery etc. were struck down in the past in the name of private economic rights, such as freedom of contract and protection of property.
As Joseph Raz convincingly argues, "that it is the function of governments to promote morality."
521
A culmination of a social change is when it becomes part of the law.
Then it starts the process of becoming fully accepted and internalized. Just as today we can no longer imagine slavery, it may well be that haven’t the courts struck down the laws banning racist speech, this kind of speech would have been much more socially objectionable today. And if a law banning the distribution of products of child labor or cosmetic products that have been tested on animals is enacted today, perhaps in a few decades we will be unable to imagine the possibility of using such products.
Therefore, the hegemony of the capitalist values in our legal discourse essentially creates an obstacle to one of the most important social goals.
519 Women were granted voting rights by the federal law as late as 1920, with the enactment of the
Nineteenth Amendment.
520 Nemetz v. INS, 647 F.2d 432 (C.A. 4th Cir. 1981) (referring to state laws that ban homosexuality).
521 R
AZ , supra note 6, at 415.
74