Morton Horwitz on the public-private distinction (1982)

Please note that this post is from 2018. Evaluate with care and in light of later events.

In his 1982 law-review article, “The History of the Public/Private Distinction,” legal historian Morton Horwitz wrote, “The distinction between public and private realms arose out of a double movement in modern political and legal thought.”¹

He concluded that in the late twentieth century, the distinction was breaking down as “private institutions were acquiring coercive power that had formerly been reserved to governments.”

The Public Realm

First, in the sixteenth and seventeenth centuries, according to Horwitz, new ideas about “a distinctly public realm began to crystallize” as theories of soverignty appeared alongside the “emergence of the nation-state.”²

Horwitz points to, among other indications, legal doctrines of the late medieval period that distinguished between the monarch’s feudal lands, which were to be treated as private property and could be sold or transfered like any other property. But a new vision of “crown lands” (“in essence, public lands”) emerged in English law. This land, while still controlled by the monarch, could not be fully transfered to anyone else (i.e., “he could not alienate” this land).³

The Private Sphere

Second, beginning especially in the seventeenth century, new theories of rights developed to limit state power in reaction to the claims of the monarch and the English parliament to unrestrainedly make law. These “natural rights” theories “stake[d] out distinctively private spheres free from the encroaching power of the state.”⁴

Horwitz describes the early origins of the “private sphere” as appearing in the theories “of Locke and his successors,” but argues that “only in the nineteenth century was the public/private distinction brought to the center of the stage in American legal and political theory.” It was, he says, the market that provided “a central legitimating institution,” especially when it came to the “distinction between public law and private law.”⁵

Effects of the public/private distinction

The public/private distinction had two particularly key effects that would be felt well into the future:

First, corporations were increasingly freed from “regulatory public law premises” (i.e., essentially that they had some level of duty and obligation to work on behalf of the body politic and were bound in some sense to those goals) that had limited them previously (note that prior to the nineteenth century, corporations were created by specific governmental acts for specific purposes, rather than by purely private actors as a means of business organization).⁶

Second, contracts became increasingly understood as purely private matters between “consenting individuals in which the state should have no interest.” This limited doctrines in equity that protected against, for example, unfair contracts based on unequal bargaining positions, etc.⁷ This laid the groundwork for the emergence of “liberty of contract,” as in the (in)famous Lochner v. New York decision from 1905.

Justifications for the distinction

A key goal of more “orthodox” nineteenth-century jurists was “to create a legal science that would sharply separate law from politics”:

By creating a neutral and apolitical system of legal doctrine and legal reasoning free from what was thought to be the dangerous and unstable redistributive tendencies of democratic politics, legal thinkers hoped to temper the problem of “tyranny of the majority.”

The private successes that came to some through “free market”—idealized as distributing such rewards “on a supposedly neutral and apolitical basis”—needed to be protected against “public intrusion.”⁸

To put it differently, the growing gap between the wealthy and the poor during the Gilded Age, which was generating attackes from Populists, Progressives, workers, farmers, and the rest of the “majority,” required new legal doctrines to protect and preserve it. Otherwise, the majority might well rise up and redistribute the wealth more fairly and equally.

But is private power really different from public power?

After the 1905 decision in Lochner, numerous jurists sought to undermine the public/private distinction that supported the constitutionalization of “liberty of contract.” In particular, many legal thinkers attacked the very characterization of the “invisible hand” behind free-market theories, ridiculing its supposedly “neutral and apolitical” nature:

All law was coercive and had distributive consequences, they argued. It must therefore be understood as a delegation of coercive public power to individuals, and could only be justified by public policies.⁹

By the 1980s (with “Reaganism” ascendant), when Horwitz was writing, he argued that the twentieth century back-and-forth about the nature of public and private interest and the role of the state had culminated in a revival of a kind of individualism that did not believe that the public realm stood above self interest—and had led to “a relapse into a predatory and vicious conception of politics.”¹⁰

Horwitz finished by saying that “reality has a funny way of intruding.” As in the Gilded Age, when worries about over-powerful corporations were growing into public demands for action, the distinction between private and public power had grown blurry by the late twentieth century:

The attack on the public/private distinction was the result of a widespread perception that so-called private institutions were acquiring coercive power that had formerly been reserved to governments.¹¹