Monopolies are one example, although there really aren’t many of them and today we are *way* to quick to call a company one (ex. Microsoft). Utilities/infrastructure-based services are another example. If you need a telephone pole on my property or wires all over my town to provide your service, I would expect that the government has some hand in that. Neighborhood effects are another example – if what you’re doing effects me in a negative (or positive) way and there’s no reasonable way to pay me back (or charge me) then the government should intervene. Example: polluting my neighborhood. There are a few other times when I would expect government intervention into the market, but not nearly as many as we have today.

The central goal of the government in the economy, in my opinion, is to allow private individuals to enter agreements freely. We provide a framework for that (contract laws, courts system, etc) and let people interact as they please. Children will *always* be an exception. Children cannot make decisions, so I have no problem making laws to restrict their behavior, alter their wages, or provide a more stringent framework.

Adults however, should have the freedom to make decisions for themselves. The jobs that pay the most should be the jobs that are in shortest supply – the jobs our society needs to have filled the most and are willing to pay for. A lot of jobs (Lawyers/Doctors) have pay that is *artificially* high because government restrictions on who can and cannot practice law and medicine keep supply low. The other side of the spectrum are the cotton farmers who are being subsidized heavily just to stay in business. The net result there is not only is that money out of the taxpayers pocket, but it also cripples markets in other countries where they can no longer compete.

So, by and large I take the stance that the government should just butt out.

This decision led to the court-packing crisis of FDR’s administration, http://www.hpol.org/fdr/chat/. Many people believe that this proposal of FDR’s–to add up to six more justices to the Supreme Court, who would obviously favor the overruling of Lochner and implicitly allow his social policies to go forward (which had been continuously struck down by the Supreme Court)–lead to the “switch in time that saved nine,” http://www.msu.edu/~pipc/courtpacking.pdf, meaning that Justice Robert’s decided to start holding economic legislation to be constitutional.

Today, all economic legislation (maximum hours/minimum wage, etc.) need only be rational in order for the Supreme Court to find them constitutional. Almost nothing gets struck down on this form of deferential review. The Supreme Court ruled in West Coast Hotel v. Parrish, http://caselaw.lp.findlaw.com/scripts/getcase.pl?navby=case&court=us&vol=300&invol=379, that “the constitution does not speak of freedom of contract.” In West Coast Hotel, the Court upheld minimum wage hours in Washington, and with that, Lochner was dead.

I don’t think that there’s any chance of the current Supreme Court striking down economic legislation, so the debate thus moves to Congress.