Searching for the Administrative State

It is common to find discussions of the administrative state in the scholarly works of history, political science, law, and economics.  However, it is uncommon to find a definition of the very concept — “administrative state” – being treated in these discussions.  The result is a great deal of confusion and misunderstanding regarding what we are discussing.  Does the administrative state simply refer to the explosion of regulation and bureaucracy in the twentieth and twenty-first centuries?  Does it refer to the extent of discretion given to administrative personnel?  Or is it something altogether different?

If the term “administrative state” merely referred to the existence of an efficient administrative apparatus that possessed discretion in the execution of law, then there is little question that an administrative state was established very early in American history.  We are obviously familiar with agencies such as the Post Office and the Bank of the United States.  But Jerry L. Mashaw, a distinguished Professor of Law at Yale Law School, argues in Creating the Administrative Constitution for a much bolder proposition regarding the existence of the administrative state at the time of the Founding: “we should rid ourselves of the nostalgic idea that the emergence of administrative governance in the twentieth century upset the grand design of a non-administrative state” that we had in the Founding.  For, as he seeks to demonstrate, “From the earliest days of the Republic, Congress delegated broad authority to administrators, armed them with extrajudicial coercive powers, created systems of administrative adjudication, and specifically authorized administrative rulemaking.”  Thus the agencies that we have today, in Mashaw’s view, are to some extent anticipated by powerful agencies created during the first decades of the republic.

Mashaw’s book is a masterful sweep of the legal and institutional arrangements that early American statesmen adopted in addressing complex problems.  It is an indispensible resource for understanding the administrative and legal history of the national government.  Yet without a clear definition of what the modern administrative state is, one still comes away thinking that these early attempts at regulation do not constitute a full-fledged administrative state.  There certainly was regulation, administration, and discretion prior to the Civil War, but there are important – even fundamental – differences between the Founders’ institutions and our own.

The Myth of Antebellum Laissez-Faire

Students of the Founding are keenly familiar with Alexander Hamilton’s famous pronouncement in Federalist 68 that “we may safely pronounce, that the test of a good government is its aptitude and tendency to produce a good administration.”  Yet in spite of this famous passage, scholars often assume that America was largely unregulated during its first hundred years, and therefore we tend to see American government as unencumbered with a significant administrative apparatus prior to the Progressive Era.

This view of America during the nineteenth century is a myth, as some scholars have long understood.  Economic and legal historians such as Harry N. Scheiber’s Ohio Canal Era and William Novak’s The People’s Welfare have noted the pervasiveness of regulation in early America.  A series of books published a half-century ago under the direction of Oscar and Mary Handlin outlined the role of government regulation at the state level during the antebellum period.  Jonathan Hughes’ The Governmental Habit Redux discussed in great detail the economic controls established at America’s inception.  And very recently, Brian Balogh’s A Government Out of Sight chronicled the extensive national government intervention in the American economy during the nineteenth century.  These are only a few of the works that have noted the extent of regulation taking place in early America.

But these scholarly works have not focused extensively on the institutional dimensions of American government during this period.  This is Professor Mashaw’s task: to explore the administrative institutions that were created to carry out these extensive functions at the national level.  The book chronicles in impressive detail these administrative practices during the first hundred years of the republic, and concludes that they constitute an “administrative constitution” that fills the blank in the Constitution where administration might have been addressed.  Anyone looking to understand the administrative structures the Founders established will find Mashaw’s book a wealth of information about the details of administration during the antebellum period.

The thesis of Mashaw’s book is relatively straightforward.  The “conventional view” of administrative law, Mashaw notes, is that “the American national administrative state, and with it federal administrative law, emerged with the late nineteenth-century passage of the Interstate Commerce Act of 1887.”  Prior to the creation of the ICC, there was no administrative state in America.

Mashaw argues that the conventional view is a myth.  Congress didn’t wait until 1887 to establish strong administrative bodies; they are present in American history from the beginning.  Administrators possessed broad authority, as well as adjudicative and rulemaking powers well before the ICC was established.  Furthermore, these administrators often operated independently of presidential direction.

In short, Mashaw argues that “there has been no precipitous fall from a historical position of separation-of-powers grace to a position of compromise; there is not a new administrative constitution [in the twenty-first century] whose legitimacy should be understood as not only contestable but deeply problematic.”  Or, more bluntly, “The notion that we have fallen in the modern era from some prior state of separation-of-powers grace, and that reform of democracy involves going back to our nineteenth-century roots, is simply a mistake.”

Most of the chapters of the book are devoted to assembling evidence in defense of the thesis.  Traversing a wide variety of regulatory schemes including Jefferson’s embargo, banking during the Jacksonian period, the disbursement of public land, and the regulation of steamboat boilers, the book is remarkably well-researched and thorough.

Although previous works have demonstrated the pervasiveness of regulation during the early republic, Mashaw’s distinctive contribution is his analysis of the legal side of these developments.  Creating the Administrative Constitution has an extraordinary amount to teach us about the legal and political intricacies of administration, even prior to the Civil War.

Thus, one of the greatest lessons we can learn from Mashaw’s book is that pre-industrial life was not so uncomplicated.  The statesmen of the early republic had to think through very difficult questions concerning regulation and administration.  We are not so far removed from their experience that we cannot draw upon their wisdom.

Another fascinating lesson involves the use of private enforcers and common law remedies through courts in Founding-era administrative schemes.  Revenue collection and inspection were done not by professional experts but by citizens, and administrative officials were often personally liable for injuries done in the course of official business.  This gave courts and juries a prominent role in administration, but at the same time courts were highly reluctant to review discretionary actions of administrators for reasonableness, contrary to modern administrative law.

More broadly, Mashaw asserts that we can learn an important theoretical lesson from the way administration was approached during the nineteenth century.  Today we tend to see judicial review as the chief means of checking administrative power.  Mashaw contends that we get a much more complete picture from an examination of nineteenth-century practice.  Three different approaches to empowering and limiting administrative action were (and are today) adopted: political accountability to elected officials, internal accountability to superior administrative officials, and legal accountability through the judiciary.  Administrative lawyers tend to focus on the last of these approaches, but in the nineteenth century internal accountability was pervasive and effective in controlling administrative behavior.

Antebellum Administration

While its virtues are extensive, one could raise two issues with Mashaw’s book.  The first is that the work focuses exclusively on national administration.  State and local administration is discussed only in the context of the enlistment of state and local officials (and citizens) in carrying out national regulatory schemes involving revenue collection, determining eligibility for veterans’ pensions, and so forth.  Yet since the majority of regulation and administration was occurring at the state and local levels, a full understanding of the administrative constitution of the first hundred years of the republic requires looking into these state-level practices.  Though Mashaw can hardly be faulted for not providing such a comprehensive picture, the limitations of the project must be noted.

The second issue has to do with the book’s normative implications.  Mashaw suggests that we have always had an administrative state, and since it has such a long provenance, we should accord it legitimacy.

But the evidence suggests that there are, indeed, serious differences between the administration of the nineteenth century and that of the twenty-first.  The impressive array of evidence actually seems to support the contention that there has been a serious transformation towards an administrative state.  A brief review cannot pretend to be comprehensive, but several examples illustrate.

For instance, Mashaw notes that during the Federalist era “Congress deployed federal and state courts in somewhat novel ways,” authorizing criminal penalties and common law suits against administrative officials.  Even more important, courts themselves often carried out administration rather than administrative agencies.  Courts made specific determinations in naturalization and health and safety regulatory schemes during the early years of the Republic.  Using courts as administrators was a pervasive feature of early administration, in stark contrast to the approach of the administrative state.

Similarly, in the field of patents a major reform act in the 1830s created a Commissioner of Patents, who assumed from the courts the power to determine whether proposed inventions or discoveries were “sufficiently useful and important” to warrant a patent.  But even here, the Commissioner was not given rulemaking authority and the courts remained largely in charge of patent law.

Appearing to acknowledge that many of these examples do not rise to the level of a modern regulatory regime, Mashaw focuses on one particularly fascinating example which appears to be the first national regulatory agency: not the ICC, but the Board of Supervising Inspectors which implemented the 1852 Steamboat Safety Act.  The Board was in charge of inspecting vessels and boilers and licensing engineers and pilots for all steamboats.  The Board was given rulemaking authority and used that authority to develop navigation rules for vessels passing each other, as well as rules governing the types of instruments to be used in measuring boiler pressure.  It also had the power of adjudication in licensing cases, and local inspectors were able to withdraw licenses for a variety of reasons.

Mashaw points to the 1852 Steamboat Safety Act as a key piece of evidence.  In that legislation, he argues, Congress “combined the multimember structure, single-industry focus, and licensing/adjudication features of Progressive and New Deal regulatory commissions with the rulemaking capacities of later health and safety regulators like OSHA, NHTSA, and EPA.”  Thus he explicitly links the 1852 Act with Progressive and New Deal regulatory agencies.

But a closer look at the Steamboat Safety Act reveals fundamental differences.  The most crucial is that the legal standards to be enforced by inspectors were carefully delineated in the agency’s organic statute.  For example, the Steamboat Safety Act specified the maximum operating load of boiler pressure, required that the boilers be tested at 1.5 times the maximum operating pressure, established the thickness of the iron plate construction for boilers, and delineated the specific safety equipment that steam vessels had to carry, including the number of safety valves on the boilers.  Additionally, when the need for new safety standards became apparent, such as a requirement that all vessels carry lights to avoid collisions, the Board asked Congress to pass a law rather than assuming the power to promulgate a regulation under a vague safety mandate.

Finally, as Mashaw admits, the personnel were not chosen by a merit system but by the President (in the case of supervising inspectors) or judges and senior administrative officials (in the case of local inspectors).  The supervising inspectors were presumably removable by the President at will.  Thus, the method of staffing the agency was markedly different from that of modern administrative agencies.  Far from “anticipat[ing] the organizational form, the practical operation, and the congressional politics of much modern health and safety regulation,” the Steamboat Safety Act seems easily distinguishable from the agencies characteristic of our modern state.

Administration, or an Administrative State?

In short, Mashaw adeptly chronicles the pervasiveness of regulation and even administration in antebellum America.  But this does not decisively prove the existence of an administrative state.  An administrative state suggests the consolidation of legislative, executive, and judicial powers in the hands of experts rather than officials chosen directly or indirectly by the people.  If anything, many of the examples Mashaw adduces show how reluctant statesmen were to create agencies in the modern sense – even while they saw the need for effective administration.

This begs the question: Is it the scope of administration, or the kind of administration, that distinguishes where we are today from where we were in the nineteenth century?  Mashaw’s argument seems to be that we have only expanded the scope of administration – all of the essential characteristics were there in embryonic form in the nineteenth century.

Yet in order to demonstrate this, we would need some definition of what it means to have an administrative state.  The fact that we had administration since the Founding is unsurprising.  Even the fact that administrators had significant amounts of discretion and could enact rules to govern the enforcement and administration of federal laws is unsurprising.  After all, the Founders had no problem with administration, in the traditional sense of the term.  What they clearly did oppose are governmental institutions that made law, executed law, and judged law, especially when not constrained by frequent elections.

The simple point is that rulemaking and adjudication are not, in and of themselves, usurpations of legislative and judicial powers by agencies.  An agency can make rules to help disability adjudicators determine eligibility, and grant those adjudicators the power to determine eligibility in particular cases, as simple exercises of traditional administrative power – the power to carry out a statute.

To put it clearly: in the first hundred years of the republic, did we have administration, or an administrative state?  The existence of the former does not prove the achievement of the latter.