The Economic Basis of Public Interest (Classic Reprint)

Excerpt from The Economic Basis of Public Interest

It is a rather astonishing fact that so few scholars should have been interested to attack directly the definition of public interest as it is used by American courts. It is the basic statement of the right of the government to interfere in business affairs. Under its aegis public utilities arise and the police powers are brought to bear in the field of industry.

There is a complete body of literature about the police powers; there has been a vast amount of writing about public utilities; but it has not had to do with the fundamental question of the rights of the public in private business - or business our generation has supposed to be private; or the question of where it is that the rights arose by which those businesses are controlled which we have come to look upon as quasi-public. It is at once clear that if one business is in this sense private and another sufficiently public so that it may be regulated, the difference between the privacy of the one and the public nature of the other must be due to the relationship the business bears to the welfare of the public. A business can only be "public" or "quasi-public" because it affects the "public." This much inheres in the term.

May a business once unimportant to this public become important? May a business which once was allowed to go about its affairs free of regulation, suddenly become so important that regulation becomes imperative? And does the system of law we inherit permit us to make these regulations? I think the answer to all these questions is: yes!

But when does a business become so important and so dangerous that it may and must be regulated? It seems strange that, with all the effort that has centered upon problems of the police power and public utility control, that there has been so little effective curiosity as to just what qualities arc necessary in a business for it to be regulated.

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