Let the People Rule

How Direct Democracy Can Meet the Populist Challenge

John G. Matsusaka

• Publisher: Princeton University Press
• Year: 2020
• ISBN:
  9780691199757
• Topic: Politics & International Relations
• Subtopic: Democracy
• Index: Politics & International Relations

How referendums can diffuse populist tensions by putting power back into the hands of the people Propelled by the belief that government has slipped out of the hands of ordinary citizens, a surging wave of populism is destabilizing democracies around the world. As John Matsusaka reveals in Let the People Rule, this belief is based in fact. Over the past century, while democratic governments have become more efficient, they have also become more disconnected from the people they purport to represent. The solution Matsusaka advances is familiar but surprisingly underused: direct democracy, in the form of referendums. While this might seem like a dangerous idea post-Brexit, there is a great deal of evidence that, with careful design and thoughtful implementation, referendums can help bridge the growing gulf between the government and the people.Drawing on examples from around the world, Matsusaka shows how direct democracy can bring policies back in line with the will of the people (and provide other benefits, like curbing corruption). Taking lessons from failed processes like Brexit, he also describes what issues are best suited to referendums and how they should be designed, and he tackles questions that have long vexed direct democracy: can voters be trusted to choose reasonable policies, and can minority rights survive majority decisions? The result is one of the most comprehensive examinations of direct democracy to date—coupled with concrete, nonpartisan proposals for how countries can make the most of the powerful tools that referendums offer.With a crisis of representation hobbling democracies across the globe, Let the People Rule offers important new ideas about the crucial role the referendum can play in the future of government.

PART I

Democracy Adrift

1

Disconnected by the Administrative State

IN A 2017 SPEECH, Supreme Court Justice Samuel Alito remarked that:

the vast majority of federal law is … made in a way that is never mentioned in the Constitution. It is promulgated by unelected executive branch officials in the form of federal regulations.… [T]he result has been a massive shift of lawmaking from the elected representatives of the people to unelected bureaucrats.¹

Justice Alito was referring to a phenomenon much discussed by law and public-administration experts, now commonly referred to as the “rise of the administrative state.” The rise of the administrative state is a primary cause of the disconnection between public opinion and policy, and a growing concern across the political spectrum.²

To understand this disconnection, we need to start with a picture of how laws are made in the federal government (the states use the same process, with minor variations). The federal government consists of three branches: the legislative (Congress, which includes the House of Representatives and the Senate), the executive (the president and federal agencies like the Environmental Protection Agency [EPA] or the Food and Drug Administration [FDA]), and the judicial (the Supreme Court and other lower courts). The people directly elect the members of Congress and—through the convoluted Electoral College system—select the president. Judges are appointed by the president with the Senate’s concurrence.

As originally envisioned in the Constitution, Congress would pass the laws (subject to a possible presidential veto that Congress could override with enough support), the president would administer the laws, and the courts would referee when disagreements arose in connection with the laws. For example, Congress would set the law determining the tariff rate on tea imports, the president (through customs officials that he appointed and managed) would collect the tariff revenue when the goods arrived at a port, and the courts would adjudicate disputes, such as when an importer and a customs official disagreed about whether the product imported met the definition of tea. Under this system, the laws are controlled by the people through their selection of members of Congress.

As the government has expanded, the president’s agents—those charged to help the president administer the laws—have multiplied. They are now scattered throughout numerous agencies, each of which focuses on enforcing a particular set of laws. The EPA monitors pollution and air and water quality; the FDA oversees the safety of new medical products. As these agencies have grown, the nature of their work has changed. Executive-branch employees, once tasked to administer the laws, are now empowered to make the laws. For instance, Congress has ceased setting tariff rates and given the power instead to the executive branch. This shift of lawmaking authority from the legislative to the executive branch constitutes the most important change in policy making from the founding of the nation to today.³

We have come to call this immense government bureaucracy with lawmaking power the administrative state. It is the central feature of modern government in every advanced democracy.⁴ The next task is to understand how and why the administrative agencies became the center of policy making.

Origins of the Administrative State

For the first hundred years, the government ran essentially according to the original plan. Congress formulated and passed the laws, the president administered them, and the courts adjudicated disputes. The executive branch was small, with only a few cabinet-level agencies: initially just the Departments of War, the Navy, State, and the Treasury, later supplemented with the Departments of the Interior, Justice, and Post Office.

In 1887, Congress created the first independent regulatory agency, the Interstate Commerce Commission (ICC), to regulate railroad rates and other railroad business practices. The move was a response to pressure from farmers and commercial shippers, who felt overcharged and exploited by railroads, and from the railroads themselves, who felt that competition had reached a ruinous level.

In setting up the ICC, Congress departed from its past practices in two important ways. First, instead of specifying rates itself, Congress simply stated that rates must be “reasonable and just” and left it up to the Commission to flesh out the details. Delegating this responsibility had significant advantages: it allowed experts to shape regulatory decisions and enabled more rapid adaptation to shifting market conditions than if Congress had played a hand’s-on role.⁵ Second, Congress gave the ICC some degree of independence from the president. Unlike traditional executive departments, where the head served at the president’s pleasure, ICC commissioners could be removed by the president only because of “inefficiency, neglect of duty, or malfeasance in office,” not over policy differences.⁶

The ICC was followed by a host of new agencies over the subsequent half century. During the Progressive Era, the FDA (originally Bureau of Chemistry) was set up to safeguard the purity of food and drugs, the Federal Trade Commission was created to promote fair trade practices and competition, the Federal Reserve System was empowered to regulate the banking system, and the Federal Communications Commission (originally Federal Radio Commission) was created to oversee radio and other telecommunications. The New Deal witnessed the creation of the Securities and Exchange Commission (SEC) to regulate securities markets and the National Labor Relations Board to regulate collective bargaining and prevent unfair labor practices. As with the ICC, these agencies often were set up as partially independent of the president.

These new agencies signaled an expansion of the government’s responsibilities. Unlike traditional departments that were designed to carry out the government’s business (such as collecting taxes, delivering the mail, or national defense), the new agencies were built to protect consumers and workers from economic forces that arose in the wake of industrialization, urbanization, and the emergence of what has been called a “consumer culture.” That Congress acted by creating agencies instead of regulating directly reflected a growing recognition that regulatory problems and solutions were complex enough to require expert engagement. Congress could state its broad goals in the enabling legislation, leaving it to those with technical expertise—“technocrats”—to develop the detailed implementation rules that Congress had neither the expertise nor time to produce on its own. These agencies can thus be seen as a response to the growing complexity of the American economy, as well as the expanding scope of the problems that government chose to address. In addition to creating these new agencies, Congress delegated more and more responsibilities to existing agencies (more on this below). The end result was that by the end of the 1930s, the locus of government decision making had shifted from Congress to the agencies.

After World War II came to an end, Congress took a close look at the sprawling administrative state it had constructed in a piecemeal fashion, and was not entirely happy with what it saw. The public had also soured on administrative agencies after exposure to the inefficiencies and arbitrariness of wartime agencies. In an attempt to rein in administrative discretion, Congress passed (by unanimous vote in both houses) the Administrative Procedure Act (APA) of 1946, now seen as “the fundamental charter of the U. S. administrative state.”⁷ The APA brought a host of changes: it imposed complex procedures by which agencies were to propose and promulgate regulations, required transparency in the regulatory process, mandated an opportunity for public comment on proposed regulations, and provided a role for judges to oversee agency decisions (elaborated over time through a series of court decisions). Otherwise, it left agencies with substantial discretion to set policy.

Another wave of agency building took place in the 1960s and early 1970s as the country confronted a new set of economic and social problems, culminating in the presidency of Richard Nixon. Increased public concern with the damage caused by industrial pollution to the environment and public health led to the creation of the EPA in 1970. The emergence of an automobile culture led to creation of the National Highway Transportation Safety Administration to monitor motor-vehicle safety, also in 1970. Growing concern over workplace injuries and deaths led to the Occupational Safety and Health Administration (OSHA) in 1971. The proliferation of consumer products that were not covered by existing agencies (that is, products other than food, drugs, alcohol, tobacco, guns, and cars) prompted creation of the Consumer Product Safety Commission in 1972.

The new century brought new crises, met once again with new agencies. After the terrorist attack on September 11, 2001, in an effort to provide a more coordinated approach to public safety inside the country, Congress created the Department of Homeland Security by combining 22 separate agencies into a single department. The Consumer Financial Protection Bureau, the newest agency, was created in 2010 in response to the financial crisis three years earlier to protect consumers from unfair practices by financial institutions. These agencies, like those that came before, reflected Congress’s desire to frame basic policy approaches and directions for regulation, while leaving the implementation details to experts.

A Picture of the Administrative State Today

As of 2019, there were somewhere between 70 and 117 separate federal agencies, depending on how one defines an agency.⁸ Those agencies collectively employed about 1.4 million workers, not counting the Department of Defense (with more than 700,000 employees) and the Postal Service (about 500,000 employees). By way of comparison, in 1900 there were about 10 federal agencies with 15,000 civilian employees.

Agencies administer the laws, in part by taking enforcement actions, and in part by issuing rules and regulations. In 2016 alone, more than 97,000 pages were added to the Federal Register—the federal government’s official journal—including 3,853 final rules and 2,391 proposed rules. The president also issued various executive orders and memorandums. In addition to rules and regulations, agencies often issue advisory letters (e.g., the SEC’s so-called “no-action letters” in response to requests from companies). Although these rules are not “laws” in the sense of acts passed by the legislature, most of them have the force of law, so for all practical purposes are equivalent to laws. The volume of laws that emerges from executive agencies every year dwarfs the amount produced by the Congress.

A close look at a few important issues that are now largely governed by executive agencies (or the executive directly) illustrates how decision-making authority has moved from Congress to the agencies.

Environment

The nation’s environment is protected by a series of laws enforced primarily by the EPA, but also by the Department of the Interior and Department of Agriculture. The EPA, an independent agency whose head is appointed by and can be removed by the president, was established in 1970 on the recommendation of President Richard Nixon, as mentioned above.

Stripped down to its essentials, environmental regulation has two components: (1) a list of “contaminants” that are considered unhealthy, and (2) a set of standards governing emissions of the unhealthy contaminants—how much can be emitted, where, and under what conditions. Congress, in principle, could make both determinations. For example, it could declare that arsenic is harmful to health, and prohibit coal mines from releasing more than a certain amount into nearby streams. Yet these sorts of determinations are complex. To determine how much (say) arsenic in drinking water is harmful to human health requires scientific knowledge concerning water systems, air systems, geology, chemistry, human health, industrial processes and technologies, and so forth. Rather than make these decisions itself, Congress has delegated them to the EPA.⁹

The EPA’s authority comes from a series of laws concerning air, water, and land pollution. The Clean Air Act of 1970, considered the nation’s first substantive environmental statute, instructs the EPA administrator to reduce air pollution that may “endanger public health or welfare,” but gives the administrator substantial discretion on how to go about this mission. To emphasize ...