Econ 101 Court Cases - Econ 101 Court Cases Lochner v State...

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Econ 101 Court Cases Lochner v. State of New York -statute prohibits employee from working extra to earn money they may desire -private contract rights protected under 14 th amendment -right to purchase and sell labor is protected by this amendment -unreasonable and unnecessary to interfere -ultimately not w/in the police power of the state -bakers are capable of informed judgment, not wards of the state, so the gov’t should not be making decisions for them regarding their employment -would be w/in the power of the state if there would be a negative externality present -“equal footing”- if bakers and employers were not on equal footing regarding negotiations (similar to monopoly), it might be inefficient, thus detracting from the public good -this labor law does not detract from the “safety, morals, nor welfare of the public” -contract law can be regulated for the common good and well-being of society
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Unformatted text preview: -law must have been enacted for this purpose-dissenting opinion states the law was clearly enacted for the safety of those working in bakeries and is therefore well within the police power of the state Muller v. Oregon-despite many advances women are still dependent on men- lack informed consent-it becomes necessary to restrict the contractual rights of women when doing so prevents excessive female strain in the workplace-deciding issue- to allow excessive strain would hamper women’s ability to bear and care for children, a necessity for a robust society-women having healthy children is a positive externality of the market for female labor-women not being able to produce robust children would be a negative externality; it would be bad for society...
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  • Fall '06
  • WISSINK
  • Economics, Law, Market failure, Fourteenth Amendment to the United States Constitution, Externality

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