Advocates for the administrative state typically promote it on the basis of its great usefulness in contemporary society. Without the expertise that administrators bring to their work, they say, we could not deal with the complexity of the world around us. Although, in the wake of the Supreme Court’s ruling in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65, this is no longer part of the rationale for deference to administrative decision-makers in Canadian law, this view is still widely held by administrative theorists in North America. Indeed it is part of the pro-administrativist critique of Vavilov, for example in a post by Mary Liston over at Administrative Law Matters. But this view is fundamentally wrong, even backwards.
A passage from Matthew Lewans’ book Administrative Law and Judicial Deference captures this traditional view nicely. Compared to the past,
we must tackle a broader array of complex social issues―human rights, immigration, national security, climate change, economic policy, occupational health and safety, public access to health care and education, etc―about which there is deep disagreement. And we cannot hope to address these issues intelligently without harnessing the experience, expertise, and efficiency the modern administrative state provides. (187)
Other pro-administrativists, if they have not themselves written such things, would I think wholeheartedly agree with them. To the extent that I specifically criticize Professor Lewans’ argument, below, it is only in a representative capacity.
One thing to note about this passage, and its innumerable equivalents elsewhere, is that it is not supported by any detailed arguments or evidence. The hopelessness of intelligently dealing with the issues that consume contemporary politics without “harnessing the experience, expertise, and efficiency” of the bureaucracy is simply asserted by writers and taken on faith by readers. But I think we need to query these claims before accepting them, and not because I have watched too much Yes, Minister to have much faith in the experience and expertise, let alone the efficiency, of the administrative state.
More fundamentally, the state ― and especially the administrative state ― often is not merely lousy at addressing complexity intelligently, but actively opposed to doing so. The reason for this is that its laws and regulations, to say nothing of its discretionary rulings, serve to eradicate rather than harness the information needed for intelligent behaviour in a complex world. They give both the rulers who wield them and the citizens who clamour for them the illusion of purposive action and control, while actually preventing the operation of the mechanisms that serve to communicate information about the world much more effectively than laws and regulations ever can: prices and markets.
As F.A. Hayek famously pointed out in “The Use of Knowledge in Society“, there is an enormous amount of information that even the best experts armed with the boundless powers of the modern administrative state cannot acquire: information about the circumstances, needs, and desires of individuals and organizations. This information is unlike the scientific, technical knowledge that experts might be able to centralize in the hands of the bureaucracy. In particular, this local knowledge changes much too quickly to be communicated and assimilated by an authority. As Hayek explains, “the economic problem of society” ― that is, the question of how to use the resources available to us most effectively ― “is mainly one of rapid adaptation to changes in the particular circumstances of time and place”. From this,
it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders.
I would add also that, even if a “central board” could acquire information as fast as individuals and businesses, it could not make new rules to reflect this information fast enough, or consistently with the requirements of the Rule of Law, which include the relative stability of the legal framework.
But how do individuals acquire knowledge which, Hayek insists, even a sophisticated bureaucracy cannot gets its hands on? The answer is, through market prices, which reflect aggregate data about the relative scarcity of goods and services available in a given time and place: “Fundamentally, in a system in which the knowledge of the relevant facts is dispersed among many people” ― which is to say, in any society in which there many people, and especially in complex modern societies to which pro-administrativsts such as Professor Lewans refer, “prices can act to coördinate the separate actions of different people in the same way as subjective values help the individual to coördinate the parts of his plan”.
Hayek gives the example of how, if something people need to produce other things other people need becomes more scarce, such as its price goes up
without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly; i.e., they move in the right direction.
The right direction, that is, from society’s perspective ― the direction of the society’s overall resources being used more effectively where they are most needed. Hayek pointedly describes the functioning of the price mechanism, its ability to economically and quickly communicate information no bureaucracy could gather “by months of investigation” as a “marvel”. He is right.
But, to repeat, the state all too often prevents this marvel from happening. The state outlaws market transactions, and so prevents the communication of information through market prices, left, right, and centre, and interferes with those transactions it doesn’t outlaw. Ronald Reagan summed up the state’s ― and the statists’ ― thinking: “If it Moves, Tax it. If it Keeps Moving, Regulate it. And if it Stops Moving, Subsidize it.” This is not all the state does, of course. The state, if it functions well, also enables markets by keeping peace, protecting property rights, and enforcing contracts. They state may supplement markets by correcting genuine market failures, though these are rather fewer and further between than statists tend to assume. But there’s no denying that much of what the state does, and especially much of what pro-administrativists ― be they on the political left (as most of them have long tended to be) or on the right (as the followers of Adrian Vermeule and other
common good will-to-power conservatives, about whom co-blogger Mark Mancini has written here) consists in overriding, displacing, and even criminalizing markets, and so destroying rather than harnessing information. The state not only is stupid; it makes us less intelligent too.
The administrative state, specifically, is especially guilty of this. To quote Professor Lewans once more ― and again, in a representative capacity ―
There are good reasons why legislatures invest administrative officials with decision-making authority. While a legislative assembly might be able to forge sufficient consensus on broadly worded objectives as a platform for future action, it might reasonably conclude that interpretive disputes regarding those objectives outstrip the capacity of the legislative process. (199)
To be clear, “interpretive disputes” here are disputes about the specification of these “broad objectives”, as well as the means through which the objectives, so defined, are expected to be achieved. What Professor Lewans is saying is that delegation of power to the administration vastly increases the state’s overall ability to regulate ― that is to say, to override, displace, and criminalize markets. Legislatures might never achieve consensus on the detail of a regulation, and so wouldn’t enact any since they need at least a bare-bones consensus to enact law. But thanks to the dark wonders of delegation, the need for consensus is dispensed with, or at least reduced, and more regulation can be enacted. And of course the administrative state is simply bigger than a legislature, so it has more person-hours to expend on producing ever more regulation. The legislative process ― at least, proper legislative process, not what all too often passes for it ― is also time-consuming, while one of the supposed virtues of the administrative state is its flexibility. Faster regulatory change, while it cannot actually be effective enough to substitute or account for the information transmitted through the price system, is more disruptive to markets.
If we actually want to address the issues that confront complex contemporary societies intelligently, the administrative state is not our friend. More often than not, it serves to reinforce the state’s ability, to say nothing of its resolve, to prevent individuals and businesses from acting intelligently in the face of complexity by eliminating or falsifying the information they need to do so. At best, the administrative state then tries to provide a simulacrum of an intelligent response ― as, for example, we ask bureaucrats to puzzle out who may come to our countries to work based on what they, from their cubicles, deem to be market needs, instead of simply opening the borders and letting employers and potential workers make their own arrangements.
Why, then, are people ― and more and more people, too, as the emergence of right-wing pro-administrativsim shows ― so convinced that the administrative state is necessary? Some, alas, are not especially interested in social problems being solved effectively. They even make a virtue of inefficient institutions, slower economic growth, and more coercion. Such feelings may be especially widespread among the
common good will-to-power crowd. But more people, I suspect, simply misunderstand the situation. As Hayek pointed out,
those who clamor for “conscious direction” … cannot believe that anything which has evolved without design (and even without our understanding it) should solve problems which we should not be able to solve consciously.
They think that central direction, which only the state, and specifically the administrative state, can provide is necessary. They are mistaken, and in a way that is the sadder because they unwittingly demand the exact opposite of what they actually hope for.