Historian Paul Moreno has written an excellent book for those who seek a better understanding
of social forces that led to the development of a fourth branch of the U.S.
governmentthe administrative state, which regulates life in Americaand for those who
hold out hope for a strengthening of the constitutional order. I call the book excellent
because, first of all, it is well written; it is a pleasure to read. Second, it is creatively organized
and thereby provides the reader with a discussion of the combination of historical and
political economy forces that produced three large waves of regulatory activity. And, finally,
it is well researched and heavily documented. It is definitely not a polemic, but the authors
normative values do shine through. I note that the footnotes and references provide
a network of avenues for further education on the topic.
But in a meaningful way this short book is more than all this, for it provides
philosophical interpretations of competing notions that played through the nations
founding, the development of constitutional bedrock, and later modification if not
obliteration of important constitutional constraints.While enjoying the story, the reader
will encounter Hegel, Napoleon, Tocqueville, as well as Washington, Adams,
Hamilton, and then Wilson, Reagan, and a score of other major figures and players
whose actions and thoughts influenced the evolving nation-state.
After my first reading, it occurred to me that The Bureaucrat Kings is an excellent
companion to Bruce Ackermans book The Decline and Fall of the American Republic (Cambridge, Mass.: Belknap Press of Harvard University Press, 2010). Ackerman
describes major institutional changes that have enabled the concentration of political
power in the executive branch and thus have strengthened the hand of executive-branch
regulators, and Moreno explains how regulator power and reach have been enhanced.
Both works are examples of positive analysis motivated by normative concerns.
Moreno begins with an interpretation of the Founders constitution, moves to
a discussion of the limited state, then focuses on the vastly disruptive effects of the Civil
War that by way of Reconstruction partly established the nations first extensive
bureaucracy. He then moves to a discussion and analysis of four major regulatory
wavesthe Progressive Era, the New Deal, the Great Society and rise of new social
regulation, and, finally, the deregulation and re-regulation that arose in the period
19752010. The book concludes with far less than optimistic thoughts on how the
regulatory state might be escaped.
Along the way, the reader encounters literary gems that cause one to pause, maybe
even to jot down notes, and certainly to read a second time. To illustrate, I offer a sample
from Tocquevilles discussion of a form of administrative despotism that can be
produced by a modern democracy. Taken to extreme,
[t]he sovereign power extends its arms over the entire society; it covers the
surface of society with a network of small, complicated, minute and uniform
rules, which the most original minds and the most vigorous souls cannot
break through . . . ; it does not break wills, but it softens them, bends them
and directs them; it rarely forces action, but it constantly opposes your acting;
it does not destroy, it prevents birth; it does not tyrannize, it hinders, it
represses, it enervates, it extinguishes, it stupefies, and finally it reduces each
nation to being nothing more than a flock of timid and industrious animals,
of which government is the shepherd. (qtd. on pp. 3132)
Gasp! One wonders what Tocqueville would make of the eighty thousand pages of the
annual Federal Register.
As one who has spent the better part of a career teaching regulation, doing
research in the area, and being employed in government regulation, I was surprised
to learn that the federal governments first major foray into regulation was not
associated with the Office of the Comptroller of Currency in 1863 or with the
formation of the Interstate Commerce Commission in 1887, but with the creation
of the Steamship Inspection Service in the Treasury Department in 1852. But it is in
Morenos retelling of the Commerce Commission story that I have found another
gem to add to my bootlegger/Baptist collection. The story involves advice given by
Grover Clevelands attorney general, Richard Olney, to a railroad executive.
According to Olney, the commission could be of great use to the railroads [the
bootleggers]. It satisfies the popular clamor for a government supervision of railroads
[the Baptist element] at the same time that that supervision is almost entirely nominal. The part of wisdom, Olney continued, is not to destroy the commission,
but to utilize it (qtd. on p. 49).
I suppose it is understandable that I would most appreciate Morenos treatment of
the fourth wave of regulation from 1975 to 2010, the wave that encompassed most of
my professional career. This chapter reminds us that the post-Watergate period began
with congressional reshuffling of powers away from the executive branch. Attempts to
obtain legislative veto power and formation of the Congressional Budget Office are two
examples of this reshuffling. Stagflation and losses of consumer well-being then fed an
executive-branch effort to show how anticompetitive forces of regulation contributed
to the nations ills. Regulatory reform became the cause du jour during the Ford, Carter,
and Reagan administrations. As a result, two of the older economic regulatorsthe
Interstate Commerce Commission and the Civil Aeronautics Boardwent out of
business. Other economic regulatory activities from banking to natural gas to telecommunications
were sharply revised. For a rare time in modern history, liberal politicians
joined with their more market-oriented political cousins in supporting
regulatory reductions in the name of enhanced consumer well-being. But while economic
regulation was fading fast, social regulation that covered actions focused on the
environment and safety and health was exploding.
Recognition that the economic cost of the new social regulations could be immense
led presidents from Nixon to Ford, Reagan, Bush, Clinton, and finally Trump to
institutionalize regulatory review. Many regulatory scholars will take issue with
Morenos assessment of the Reagan administrations hard-hitting regulatory-reform
efforts. When considering the relative merits of different administrations initiatives,
some point positively to how President Reagan issued stronger executive orders that
required benefitcost analysis of proposed executive-branch regulations and strengthened
theOffice of Information and Regulatory Affairs, making it the regulatory czar to oversee
and manage the regulatory process. Moreno is of a different mind. He sees Reagans
executive-branch circling of the wagons as implicitly fortifying executive-branch regulation
as opposed to dismantling it. Moreno puts it this way: The Reagan campaign
confronted the administrative state principally on the ground of efficiency, not on
more fundamental constitutional or libertarian grounds. Ironically, Reagans efforts to
control the administrative state strengthened it (p. 133). With admirable insight,
Moreno points out that although required White House regulatory review did make
issuing new rules more difficult, it did not affect agency efforts to impose standards by
informal meansthe threat of lawsuits especially (p. 133). Even now, as President
Donald Trumps Office of Information and Regulatory Affairs implements his order to remove two existing regulations for each one added and, where possible, to block finalization of pending rules he finds offensive, the focus is on the regulators, not on Congress, where all regulation is born.
Is there an escape hatch, a way to refresh the constitutional republic and constrain the expanding regulatory state? In his final chapter, Moreno discusses several avenues that might lead to meaningful reform, but he ultimately leaves the reader without a global positioning system that may guide him or her to a classical liberals paradise. Instead, he closes by calling on Federalist No. 1 and reminding us that the American people were the first people in history to be able to establish a government from reflection and choice, and not to depend for their political constitution on accident and force. The people need to reflect and chooseto think and voteand I hope that this history will help them to do so (p. 152).