The Administrative Process

"That’s exactly right. Landis is one of the high priests of the administrative state as it developed in the United States during the New Deal under President Roosevelt. He was a commissioner at the Federal Trade Commission, which is the competition authority in America. He was one of the architects of the Securities and Exchange Commission, and I think chair it for a while. Later, in the 1960s, he was an advisor to incoming President Kennedy on all of these things. For a while, he was the Dean of the Harvard Law School, but his career unravelled as a result of various personal disasters. “That is what the debate about the administrative state is ultimately about: its dryness belies its importance to how we govern ourselves.” In the mid-30s he wrote this book, which was, in a sense, the manifesto of the administrative state. It’s a book I suspect is not terribly well known outside of America, but ought to be. It captures a number of the main themes of the debate that continues to this day. At the heart of Landis’ argument is the idea that the economy and society have become a lot more complicated: that expertise capable of comprehending that complexity therefore matters above all else, but that we can’t expect our elected representatives to have the necessary expertise. Part and parcel with that, he envisages regulatory bodies which make policy, write rules, investigate compliance with those rules, and adjudicate enforcement measures. That, of course, looks like a complete violation of the doctrine of the separation of powers. Get the weekly Five Books newsletter In other words, he seems to advocate a system of regulatory agencies that almost sweeps away the standard separation of powers between legislature, executive and judiciary because, somehow, he sees that as outdated. Instead, you need to divide government by subject matter: competition policy, labour market policy, capital markets, monetary policy, and so on. Each subject would have a specialist agency responsible for (more or less) everything in that field, with decisions made by a group of commissioners: hence the Securities and Exchange Commission , Federal Trade Commission , Commodities and Futures Trading Commission , and so on. At that stage, in the 1930s and 40s, I think he regarded it as largely benevolent. Nor did he pay much attention to the prospect of capture by industries. Later, when he was advising president-elect Kennedy, he changed tack. He concluded that these agencies should be led by a single head to give them greater dynamism, and that the single head ought to be closer to the president, so that the president can coordinate policy across the various agencies. That’s a rather different vision. Again, I think he didn’t foresee the pitfalls. In a sense, much of the subsequent debate about the administrative state, and about even about central banks, revolves around finding problems with Landis’ vision."