The Danger Of The Administrative State

Authored by Ethan Yang via The American Institute for Economic Research,

Lockdowns should have shown every American just how tyrannical and unreasonable our leaders can be. There are elected leaders like Governor Cuomo who have acted as outright tyrants, alienating everyone, even those in his own party. Then there are the unelected bureaucrats who wave away our liberties with the stroke of a pen from the secrecy of their massive offices with technocratic efficiency. This is all of course a sudden and dramatic curtailing of our freedoms. I would not be surprised that with this much public attention, some sort of effort will be made to roll back much of what has been done. Although lockdowns are certainly an existential threat to our long-term freedoms and system of liberal democracy, there has been another specter out there that many experts have been sounding the alarm on for decades. The growth of the administrative state. 

The chilling narrative about the growth of the administrative state, which is essentially the regulatory apparatus of the executive branch, is usually confined to specialist professions. The ever-present danger of a slowly expanding and unaccountable apparatus of bureaucrats that threatens to sap the life out of American society and drown it in a sea of paperwork is typically a concern that only keeps policy wonks and lawyers up at night. Although many lawyers probably celebrate this dystopian vision because they benefit from the compliance fees. The regulatory state not only threatens to make society that much slower and dreary with its excessive onslaught of regulation but it also makes us poorer. Robert Samuelson writes for the Washington Post that

“No one really knows by how much, but “there is ample evidence that regulation has expanded and that this expansion has limited economic growth,” as Ted Gayer and Philip Wallach of the Brookings Institution recently wrote. One study estimates that regulation has shaved 0.8 percent off the U.S. annual growth rate, which — if confirmed by other studies — would be huge.”

The regulatory state refers to organizations such as the Environmental Protection Agency, the Centers for Disease Control, the Federal Trade Commission, the Department of Education, the Department of Justice, the Internal Revenue Service, and all the other three-letter agencies in Washington, DC. If you would like to see how long the list of agencies is, take a look at the Federal Register, to which there are 455. That number is absolutely mind-boggling and you don’t need a fancy degree in political science like I have to say that society can function without their oversight. A paper by Peter Strauss at Columbia Law School notes that there are currently over 2 million civilians employed in the federal government alone. He notes that for context,

“The first Congress to meet once the Constitution was ratified created a Post Office and Departments of War, Navy, Foreign Affairs, and Treasury, each in unique ways suited to its responsibilities; this new government employed few civil servants to manage all its affairs. The first serious count of federal civilian employees, in 1816, reported that they numbered 4,837.” 

The drastic expansion of the administrative state has come at a cost to not only our liberty, which is slowly being eroded by a sea of paperwork and regulations, but it also undermines our democracy. According to Article 1 of the Constitution, the legislative branch or Congress is supposed to be the primary law-making body of our government. That is because if there are bad laws or laws society doesn’t like, we can hold people accountable. However, more and more power has been shifted to the executive branch because of the growth of the administrative state. Even the judicial system is losing power to the administrative state after the establishment of a legal doctrine known as Chevron Deference, which binds the court system to defer to the administrative agency’s interpretation of a rule, not the Constitutional interpretation of a sitting judge. It shouldn’t be too hard to assume that the interpretation will probably favor the ambitions of the agency, not the integrity of the Constitution. These issues and more form the basis of legal scholar Richard Epstein’s assertion that the administrative state is not congruent with rule of law in this country.

The worst part about all of this is that society continues to tell itself that those in the administrative state are simply humble public servants. Although I’m sure many of them are, the hard reality is that at the end of the day it’s a source of income and advancement for bureaucrats just like jobs in the private sector are for everyone else. This is the basic insight of Public Choice Theory, which is the common-sense realization that government agents are not angels, they are humans and follow human nature. That means that although many government agents may think they are serving the country, they are also limited by their own capabilities as humans as well as their desires. This is demonstrated by a phenomenon known as the Washington Monument Syndrome, which refers to how when a government agency is threatened with a budget cut or hiring freeze, they shun fiscal restraint in order to protect their own self-interests. The Washington Monument Syndrome gets its name because when the National Park Service was faced with budget cuts, instead of streamlining its finances like a normal private company they protested by shutting down the Washington Monument rather than taking sensible steps to cut costs. In the private sector there is a natural check on how much workers can demand, such as the threat of going out of business. In the public sector there are no such restraints. This is part of the reason why the bureaucracy simply grows and grows and grows, taking our freedom as well as our treasure as it does. 

Finally, there is the dark fact that there are ambitious people in the administrative state who want to make a name for themselves at the expense of their fellow countryman. If there aren’t any problems to solve, hotshot regulators are trying to move up the food chain by creating problems to solve by either targeting innocent private actors or trying to pump up their resumes with unnecessary sanctions. This problem is well known when it comes to the criminal justice system, as prosecutors leverage plea bargains to increase their incarceration statistics regardless of the guilt of the defendant and without ever having to take a case to trial, which is a constitutional right. However, this system of perverse incentives to simply rack up wins at the expense of society is present in the regulatory state as well as agencies bringing the government’s boot down on businesses just trying to provide a good service. 

I had a personal experience with this dynamic when I interned at a law firm providing pro bono services to private entities that were being pursued by trigger-happy regulators. The case I worked on was FTC vs D-Link Systems, which was settled finding no liability for any violations. The FTC in this case levied a claim that D-Link Systems was engaging in deceptive practices. However, upon investigation there were no rules that they violated, nor were there any widespread complaints from consumers to be found. The FTC was essentially going out of its way and leveraging vague rules to pursue a responsible corporation likely in the name of career advancement. That is because there are no rewards for doing nothing, even though that’s what the government should be doing when its citizens are being responsible. Sadly, not every private business has the resources to fight back against overzealous government regulators. Even worse, there is little being done to check the powers of the administrative state. In fact, many elected politicians simply see it as a way to shift blame away from themselves.

Key Takeaway

If lockdowns were a sudden and brutal assault on our liberties, the rise of the administrative state would be the silent killer. It keeps itself away from the public spotlight, only raising alarms for the communities it directly affects and policy wonks who enjoy ranting about taxes and federal codes all day. To the average person, the administrative state is not a problem until it is. Every year it grows and grows with little incentive to care for the trouble it has caused for the rest of American society. It is the true embodiment of the leviathan illustrated by Hobbes. Although there is certainly a time and place for regulatory agencies, today they have so greatly outgrown their bounds to the point they are becoming an unelected judge, jury, and executioner. What was a handful of executive agencies at the beginning of the republic has now become an expansive list of alphabet soup abbreviations, some with their own SWAT teams and court systems. The administrative state not only saps our treasure and stifles our creativity but it drains our spirit. If left unchecked it will surely turn this country of ambitious innovators and entrepreneurs into one of paper pushers and clerks.