Lessig on Building a Better Bureaucrat

by on December 24, 2008 · 24 comments

Before commenting on Lawrence Lessig’s latest call to abolish the Federal Communications Commission (he issued a similar call for the FCC’s abolition earlier this year, which I commented on here), let’s recall what Tim Lee posted yesterday about “Real Regulators“:

Too many advocates of regulation seem to have never considered the possibility that the FCC bureaucrats in charge of making these decisions at any point in time might be lazy, incompetent, technically confused, or biased in favor of industry incumbents. That’s often what “real regulators” are like, and it’s important that when policy makers are crafting regulatory scheme, they assume that some of the people administering the law will have these kinds of flaws, rather than imagining that the rules they write will be applied by infallible philosopher-kings.

Ironically, Prof. Lessig — who typically defends many forms of high-tech regulation like Net neutrality and online content labeling — is essentially agreeing with Tim’s critique of bureaucracy. But Lessig seems to ignore the underlying logic of Tim’s critique and instead imagines that we need only reinvent bureaucracy in order to save it. But I’m getting ahead of myself. First, let’s hear what Lessig proposes.

In a Newsweek column this week entitled “Reboot the FCC,” Lessig argues that the FCC is beyond saving because, instead of protecting innovation, the agency has succumb to an “almost irresistible urge to protect the most powerful instead.” Consequently, he continues:

The solution here is not tinkering. You can’t fix DNA. You have to bury it. President Obama should get Congress to shut down the FCC and similar vestigial regulators, which put stability and special interests above the public good. In their place, Congress should create something we could call the Innovation Environment Protection Agency (iEPA), charged with a simple founding mission: “minimal intervention to maximize innovation.” The iEPA’s core purpose would be to protect innovation from its two historical enemies–excessive government favors, and excessive private monopoly power.

As was the case with his earlier call to “blow up the FCC,” I am tickled to hear Lessig call for shutting down an agency that many of us have been fighting against for the last few decades. (Here’s a 1995 blueprint for abolishing the FCC that I contributed to, and here’s PFF’s recent “DACA” project to comprehensively reform and downsize the agency.)

But is Lessig really calling for the same sort of sweeping regulatory reform and downsizing that others have been calling for? And has he identified the real source of the problem that he hopes to correct?  I don’t think so. There are 3 basic problems with the argument Lessig is putting forward in his essay. I will address each in turn.

(1) Real Reform or Just Reshuffling of Deck Chairs?

The first problem is that Lessig isn’t really calling for complete abolition of the FCC; just the transfer of many of its regulatory responsibilities to the supposedly less “corrupt” new Innovation Environment Protection Agency (iEPA). As you read the paragraphs below, note how in the process of re-branding the FCC as the “iEPA,” Lessig seems to be handing that new agency a lot of the FCC’s old powers:

The iEPA’s first task would thus be to reverse the unrestrained growth of these monopolies. For example, much of the wireless spectrum has been auctioned off to telecom monopolies, on the assumption that only by granting a monopoly could companies be encouraged to undertake the expensive task of building a network of cell towers or broadcasting stations. The iEPA would test this assumption, and essentially ask the question: do these monopolies do more harm than good? With a strong agency head, and a staff absolutely barred from industry ties, the iEPA could avoid the culture of favoritism that’s come to define the FCC. And if it became credible in its monopoly-checking role, the agency could eventually apply this expertise to the area of patents and copyrights, guiding Congress’s policymaking in these special-interest hornet nests.

The iEPA’s second task should be to assure that the nation’s basic communications infrastructure spectrum— the wires, cables and cellular towers that serve as the highways of the information economy—remain open to new innovation, no matter who owns them. For example, “network neutrality” rules, when done right, aim simply to keep companies like Comcast and Verizon from skewing the rules in favor of or against certain types of content and services that run over their networks. The investors behind the next Skype or Amazon need to be sure that their hard work won’t be thwarted by an arbitrary decision on the part of one of the gatekeepers of the Net. Such regulation need not, in my view, go as far as some Democrats have demanded. It need not put extreme limits on what the Verizons of the world can do with their network—they did, after all, build it in the first place—but no doubt a minimal set of rules is necessary to make sure that the Net continues to be a crucial platform for economic growth.

Beyond these two tasks, what’s most needed from the iEPA is benign neglect. Certainly, it should keep competition information flowing smoothly and limit destructive regulation at the state level, and it might encourage the government to spend more on public communications infrastructure, for example in the rural areas which private companies often ignore.

“But beyond these limited tasks, ” Lessig claims, “whole phone-books worth of regulation could simply be erased. And with it, we would remove many of the levers that lobbyists use to win favors to protect today’s monopolists.”

Again, from what he’s said here, it sure doesn’t sound like “whole phone books worth of regulation” are being erased. What Lessig has done is essentially restate the current powers and responsibilities of the FCC.  I don’t see much serious downsizing being proposed here at all. Indeed, his call for Net neutrality regulation represents an expansion of bureaucracy.

Instead, what Lessig seems to be saying is that the new iEPA will do the job right because it will be less “corrupt” and enlightened. But that’s not true either.

(2) What Larry Doesn’t Get (about Bureaucracy)

Lessig is essentially calling for the same sort of “scientific” or “professional” bureaucracy that his progressive forefathers advocated a century ago when the modern regulatory leviathan was being envisioned and erected. But what has changed since then? Nothing. Special interests were able to gain influence then just as they do now.

This gets back to Tim Lee’s point about how many pundits and policymakers foolishly believe that everything will magically be better once rules are “applied by infallible philosopher-kings.” Apparently Lessig believes that lots of those folks will be walking the halls at the new iEPA. They’ll somehow be immune from the the “almost irresistible urge to protect the most powerful” that FCC bureaucrats have fallen prey to.

But Lessig provides no rational reason for us to believe that this will really be the case. And really, why should we believe that story? Do we have any good historical evidence to support such a proposition? To the contrary, everything we know from the history of regulation and bureaucracy tells us that exactly the opposite will be the case.

As I so often do when I debate quixotic progressives who say they can construct a more “enlightened” regulatory state, I invite Prof. Lessig to take a hard look at the definitive 2-volume Economics of Regulation by a far more experienced progressive Democrat, Professor Alfred E. Kahn. In Kahn’s masterwork, Prof. Lessig will find the following words of wisdom (and caution) from someone who spent a lifetime studying the issue:

When a commission is responsible for the performance of an industry, it is under never completely escapable pressure to protect the health of the companies it regulates, to assure a desirable performance by relying on those monopolistic chosen instruments and its own controls rather than on the unplanned and unplannable forces of competition.  …

Responsible for the continued provision and improvement of service, [the regulatory commission] comes increasingly and understandably to identify the interest of the public with that of the existing companies on whom it must rely to deliver goods.

(3) No Right to Petition Government ?

At this point, Prof. Lessig and his defenders will no doubt say that everything will be different this time around when they reinvent bureaucracy. The secret, they seem to suggest, is “getting money out of politics” or “ending corruption” by “special interests.” Again, hard to argue against any of that — except to say as we have here many times before that if Big Government exists, special interests will exist to influence it (probably unduly so). Thus, the logical solution is real regulatory reform and downsizing of bureaucracy. That is the only way we are ever really going to solve the problem Prof. Lessig wants to address.

But Prof. Lessig and his supporters are obviously not going to accept that. What they want is government activism without the ugly downsides of lobbying and special interest influence polluting the process. Is there any way to do it? Again, for the reasons I have stated here, I doubt it. But what, exactly, would it mean in practice to let them try?  I fear that what Prof. Lessig and many other “progressives” mean by “ending special interest influence” is really ending the free speech rights of citizens to petition their government if those citizens happen to be corporations.

Let’s remember what the First Amendment says:

“Congress shall make no law … abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

Now, I certainly realize how unpopular this will be to some, but if you believe in the plain text of the Constitution then you should respect the right of citizens (including corporate entities) to petition (i.e., “lobby”) the government for consideration of their interests, especially if the government is imposing significant regulatory burdens on them. Calling for limits on the ability of the regulated to petition their regulators is a fundamental betrayal of the plain language of the First Amendment.

I don’t want to put words in Prof. Lessig’s mouth, but I have a feeling that this is where his proposal is heading. He says that the staff of his new iEPA will be “absolutely barred from industry ties” but doesn’t really spell out what that means. If it just means limits on who can be hired for certain positions in the new agency, I’m generally fine with that (even though I do not for one minute believe it will magically “end corruption.”) If, however, Lessig and his fellow progressives want rules restricting the ability of “interests” to communicate with this new agency, then I find such a proposal quite troubling.

One final point: What exactly counts as a “special interest”? No doubt, Lessig and other progressives equate interests with corporations. But what about unions, co-ops, non-profits, schools, charities, think tanks, etc.?  They all petition government endlessly. Would Lessig limit their rights?

I hope Prof. Lessig takes the time to ellaborate on his proposal because he may have good answers to many of the quibbles I have raised here. I really do want to take him at his word and believe that he is ready to radically reform the regulatory beast that has so completely failed in its mission to improve consumer welfare.  But I have my doubts. And, sadly, I have history on my side.

  • http://www.cato.org/people/jim-harper Jim Harper

    What kind of insane person posts at TLF on Christmas eve? And what kind of jackass comments on Ch- nevermind.

    Merry Christmas, everyone!

  • http://www.cato.org/people/jim-harper Jim Harper

    Nice post, Adam. There seems to be a theme around here lately – whether the Progressive-era ideal of “scientific government” actually began to die when Stephen Breyer admitted its failure, or whether it just went into hiding for a while.

  • http://sethf.com/ Seth Finkelstein

    Adam, as I commented on Lessig's post, I thought his argument was particularly interesting for being aimed in a Libertarian direction, as an intellectual construct.

    What I didn't say, was that I thought it wouldn't work. Same problem as his _Eldred_ argument. The law professor arguing from abstraction, neglecting that in reality the theory is just in the service of the practice of business-worship. He'd likely just get mad at me then, for being too cynical.

    Thanks for providing me with proof. 1/2 :-)

  • http://www.cordblomquist.com cordblomquist

    Is there any way to get Professor Lessig to respond to this sort of critique more directly? I'd love to read a dialogue between Lee/Thierer and Lessig.

  • MikeRT

    Lessig is essentially calling for the same sort of “scientific” or “professional” bureaucracy that his progressive forefathers advocated a century ago when the modern regulatory leviathan was being envisioned and erected. But what has changed since then? Nothing. Special interests were able to gain influence then just as they do now.

    A government of technocrats is not likely to do much good, even when you look at it on paper. It's not enough that they be gifted in their field, but they must also be good administrators and be able to play politics. Usually, those characteristics cancel each other out which is no small part of the reason why these proposals have never worked when implemented. Let's not forget that despite being an engineer by profession, Herbert Hoover didn't have the administrative skills to streamline government regulation and spending in any ways that limited the damage of the stock market crash or the recession-turned-depression.

  • bradencox

    Wayne Crews and I proposed a pragmatic plan to strip most functions from the FCC in a paper we wrote a few years ago. In Communications without Commissions, we say the FCC of the near future should focus solely on spectrum, getting spectrum into the marketplace and resolving interference disputes. Three steps for reform:

    1. Restrict FCC jurisdiction so that it can't regulate IP-based services
    2. Eliminate economic regulation and divest social policy goals
    3. Restructure the FCC and Reform Spectrum

    We're at a pivotal time now, and policymakers should not perpetuate and generate new rationalizations for FCC oversight of communications. It's time for a true reformer.

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  • JimLakely

    Great post, as usual, Adam. I must say that I was intrigued to see numerous links and attention paid to Lessig call to “blow up” the FCC. The quick summaries of Lessig's thesis seemed to hint at a healthy libertarian viewpoint (after all, what is more libertarian than blowing up a federal agency.)

    Alas, Lessig's idea is to blow up the FCC and replace it with an even more focused and aggressive government bureaucracy. I'd prefer a status-quo incompetent FCC to a new regulatory regime. And I'm continually tickled by the “progressive” assumption that only government bureaucrats are objective and competent enough to know what's best for the public. By default, that is, anyone with “industry ties” works against the public interest — and the public (the market) is powerless to affect the technology world.

    Rubbish. If Lessig is genuinely interested in improving the Net experience for the public, he ought to be in favor of blowing up the FCC and using his influence to push the market to adopt his preferred policies. It's certainly a more honest, and probably quicker, road.

  • http://www.au.org Alan

    One aspect of this issue you don't seem to get… the American people want, and expect, and demand, that the government regulate commercial activity. And that includes commercial as well as consumer interests. All for very good reason.

    So the progressive vision of a “scientific” or “professional” bureaucracy is hopelessly idealistic and utopian? And what is it that you propose to fill the demand? The hopelessly idealistic and utopian ideology of “free markets”? On the reality index, Lessig is way ahead of you.

  • http://enigmafoundry.wordpress.com eee_eff

    Now, I certainly realize how unpopular this will be to some, but if you believe in the plain text of the Constitution then you should respect the right of citizens (including corporate entities) to petition (i.e., “lobby”)

    Silly.

    First, citizens do not equal corporations.
    See:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1010954

    Second, lobbying is very different from petitioning.

  • http://info.shine.com/Industry/1.aspx Your industry informationguide

    With so many things going wrong, there is a need for better governance and bureaucrats. But then, it again depends on people coming together to voice their opinions and form string bonds for the betterment of the world.

  • Brett Glass

    Hmmm. Isn't the assertion that “you can't fix DNA” a racist remark?

    In any event, it's interesting that Lessig first calls for an end to unnecessary regulation and then, almost immediately, calls for “network neutrality” legislation. I guess Google is paying him well.

  • Brett Glass

    Hmmm. Isn't the assertion that “you can't fix DNA” a racist remark?

    In any event, it's interesting that Lessig first calls for an end to unnecessary regulation and then, almost immediately, calls for “network neutrality” legislation. I guess Google is paying him well.

  • Brett Glass

    Hmmm. Isn't the assertion that “you can't fix DNA” a racist remark?

    In any event, it's interesting that Lessig first calls for an end to unnecessary regulation and then, almost immediately, calls for “network neutrality” legislation. I guess Google is paying him well.

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