Voices for Reason - Policy Digest: Regulatory State Edition | The Ayn Rand Institute

Policy Digest: Regulatory State Edition

In Tuesday’s Wall Street Journal, Alex Tabarok reviews a new book that provides yet another glimpse into the inner workings of our destructive regulatory state. The book, called Innovation Breakdown: How the FDA and Wall Street Cripple Medical Advances, chronicles the fight by a company called MELA Sciences to win approval from the FDA for a noninvasive method for detecting skin cancer. Initially enthusiastic about the product, the FDA later turned against the company when a new FDA director with a less favorable view of business came on board. The author of the book, who was the company’s CEO at the time (he has since retired), spent a year of his life at great personal cost fighting with the FDA before prevailing.

For more insights into why the regulatory agencies are inevitably ruled by bureaucratic whim rather than anything like the rule of law, check out Ayn Rand’s
essay, “Have Gun Will Nudge.” A few months back, I wrote a short article noting other examples of regulatory “nudging” in action
here.

Speaking of the regulatory state, Tammy Bruce wrote a nice op-ed recently about the EPA’s decision to garnish the wages of people who haven’t paid fines they owe. The garnishment process is nothing new in the law, but the EPA’s view that it is entitled to garnish wages without benefit of a court order is. Bruce views this an abuse of power, and in one sense she is obviously correct, as regulatory agencies today exercise all three powers of government (legislative, executive, and judicial) under one roof.

But to the original proponents of the regulatory state — progressive intellectuals like Woodrow Wilson and Frank Goodnow — avoiding the constitutional separation of powers was a feature of regulatory agencies, not a bug. They thought the Constitution was outmoded and wanted to “free” government from its restraints so it could better direct our lives. James Madison called the concentration of government’s powers in one department “the very definition of tyranny.” The architects of the regulatory state called it “progress.” You can judge who was right.

For more on the origins and evolution of the regulatory state, check out the writings of professors Ronald J. Pestritto and John Marini, both of whom I had the pleasure of meeting recently at the Claremont Institute’s Lincoln Fellowship. The Heritage Foundation has published some of their articles and those of their colleagues here and here. And if you are interested in more about the progressives and their influence on American law and politics, I highly recommend Pestritto’s books Woodrow Wilson and the Roots of Modern Liberalism and American Progressivism: A Reader (with William Atto) and a book Marini edited with Ken Masugi called The Progressive Revolution in Politics and Political Science.