The Challenge Grant that Will Help IJ Make History

April 3, 2009

Americans need cause for hope. Every day brings word of some new government scheme or another financial blow. Opening the morning paper to face this news becomes a small act of courage. Given the government onslaught and the attacks on the free market at every level, it would be easy to give in to discouragement and cynicism, and many have.

At such a dark time, we hope you will take some comfort in the Institute for Justice. We were founded to face overwhelming, seemingly impossible-to-win challenges. Since the day we opened our doors in 1991, we have won “unwinnable” fights. The cases we take, and the issues we champion, are causes everyone else has given up as lost. We have persevered with our trademark resilience and optimism against incredible odds—we face, among other things, decades of case law ruling against us, opponents with virtually unlimited financial resources, and reporters with so many demands on their time it should be impossible to get their attention.

Despite all this, we have fought and we have won time and time again. And after even our most heartbreaking losses, we have remained unbowed. When the U.S. Supreme Court ruled against us in Kelo, we regrouped and with the help of friends and supporters turned a devastating defeat into a nationwide property rights movement.

So we are not resigned, and we are not cynical. In fact, we are poised to be more effective than ever, at a time when our work to vindicate the Constitution is of paramount importance. That is why we are so fortunate to have a wonderful and timely opportunity.

Recently, we were issued a challenge by one of our most loyal donors: Do more of what you do, and do it better than ever. Robert W. Wilson, a retired investor who has contributed to IJ each year since its founding, has given us an incredible opportunity to push back even harder against the unconstitutional growth of government in our daily lives. He has committed a total of $5 million to match increases in support from new and existing supporters.

The challenge grant has two components. Three million dollars will build and enhance IJ’s overall capacity by enabling us to increase our ability to file new cases, open new state chapters, expand our strategic research and legislative counseling capability, and build our network of grassroots activists. Two million dollars will provide the resources to wage a national campaign to restore constitutional protection for economic liberty­—the right to earn an honest living.

We officially launched the Campaign for Economic Liberty with the Nautical Tours case (see page 1). Through this campaign we will do for economic liberty what we did for eminent domain abuse: elevate the issue to national prominence through a strategic program of litigation, research, media relations, grassroots organizing and legislative counsel.

Indeed, the Institute for Justice is the only organization in the nation with a systematic, comprehensive approach to defending economic liberty. And as we launch this campaign, the need is greater than ever before.

Fifty years ago, one in 20 Americans needed a government license to work in their occupation. Today that number is close to one in three. In 1981, there were roughly 80 occupations that required a license in at least one state. Today there are 1,100. Forbes magazine has dubbed those pushing for such licensure “the new unions,” saying: “These modern-day guilds have replaced organized labor as the main vehicle for workers seeking to shield themselves from competition. As the economy has switched from manufacturing to services, some 28 percent of U.S. workers—or 43 million people—now belong to a licensed profession.”

The problem stems from the fact that all licensing schemes are governed by the same court-created legal standard, one that gives enormous deference to government. This is known as the “rational basis” standard whereby, so long as the government or the courts can conceive of any justification whatsoever for a government regulation, that regulation will stand. That legal standard is the target of this campaign.

Our efforts on behalf of entrepreneurs blocked from opening businesses by arbitrary laws will strike at the heart of a rule of law that defers to government in almost any economic affair, and will offer a dramatic counter-narrative to the rising call we now face for still more regulation. And in typical IJ fashion, we will produce results, case by case, establishing a constitutional rule of law that prevents the government from using its regulatory power to protect cartels or arbitrarily limit entry into a market.

If the courts are to play James Madison’s intended role as the bulwark of liberty, they must bring a presumption of individual liberty to their review of government actions. That is exactly what IJ and our clients seek with each and every case we bring. And as government officials at every level flex their muscles and expand their reach, constitutionally backed scrutiny of their actions by both the courts and the public is more important than ever. In the coming years, as we have done for nearly two decades, the Institute for Justice will be there to ensure that happens.

Chip Mellor is IJ’s president and general counsel.

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