The Aggregation Principle

Last time I wrote about Anderson, I discussed how her theory related to constitutional incorporation. This time, her analysis made me think about another constitutional concept: the aggregation principle. 

The aggregation principle was established in a case I have talked about in a prior blog post, Wickard v Filburn (1942). The Commerce Clause states that the federal government has the power to “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” The federal government used this to establish wheat quotas. As a result, farmers could not produce more wheat than the quota allotted them. Filburn was a farmer who produced more wheat than the quota allowed him too. However, the amount of wheat he sold was less than the quota; he used the extra wheat to feed his livestock. The court ruled that this was illegal as it violated the quota and upheld the quota as constitutional.

The Court established that Wickard’s excess wheat production would need to have a substantial economic effect for the government to have the power to regulate it. Wickard’s production certainly has an economic effect as his loophole allows him to sell the entirety of his quota as opposed to having to keep some of it for his livestock, decreasing the supply of wheat. The question is whether or not this effect can be considered substantial.

The aggregation says that Wickard’s individual actions did not have a substantial effect on the wheat market, but if all crop quotas only applied to wheat sold, not wheat produced, the effect on interstate commerce would be substantial. The amount of crops produced would increase substantially as a number of farmers would use Filburn’s loophole. Thus, the Court established that Filburn’s “own contribution to the demand for wheat may be trivial by itself is not enough to remove him from the scope of federal regulation where, as here, his contribution, taken together with that of many others similarly situated, is far from trivial.”

A simplified version of Filburn’s view of the market can be represented through a prisoner’s dilemma model. Filburn will be on the y axis and other farmers will be on the x axis.

	1 quota of wheat  (Other farmers)	2 quotas of wheat (Other farmers)
1 quota of wheat (Filburn)	Filburn makes less money, wheat prices controlled	Filburn makes less money, wheat prices out of control
2 quotas of wheat (Filburn)	Filburn makes more money, wheat prices controlled	Filburn makes more money, wheat prices out of control

A rational Filburn would of course choose to produce more wheat. The stability of wheat prices depends totally on actions of other farmers, Filburn would of course produce more in order to make more money. The problem is that many other farmers would enter into the same game, leading to the Nash Equilibrium of all farmers producing 2 quotas worth. This would lead to an unstable wheat market.

The aggregation principle basically says that looking at these questions from the viewpoint of the individual is ineffective. As Anderson says, “Any group of people whose members refer to one another as `we' and who, in virtue of that fact, see themselves as ready to be jointly committed to acting together, will properly regard the object of their choice to be a single joint strategy. They will thereby constitute themselves as members of a single collective agent.” Thus, in order to answer questions at the collective level, we need to consider them as collective agents. When asking if an act has a substantial effect on interstate commerce, we cannot think of the act as singular; we must consider it an act committed by all people. If we use this approach, it becomes clear that the aggregation principle is a valid way to consider constitutional questions. 

Note: I don’t necessarily agree that the control of wheat prices is good for society. The court does not need to judge on this.

Another Note: I actually disagree with the Filburn decision but not because of the aggregation principle.