'Value is not a fact': reproduction cost and the transition from classical to neoclassical regulation in Gilded Age America

The paper draws on Siegel (1984) to argue that, while paving the way for constitutionalizing the free market in Lochner v. New York (1905), the reproduction cost method that the Supreme Court established in Smyth v. Ames (1898) as the preferred technique for assessing the value of a business for regulatory purposes also exposed the conventional character of any valuation exercise, against the claims of objectivity made by classical economists and mainstream jurists. The inconsistency between recognizing that “value is not a fact” and the classical laissez faire philosophy underlying the Court’s jurisprudence did not escape progressive critics, who concluded that government could legitimately fine tune regulation in order to affect a business’s value and pursue alternative socio-economic goals.