10. The Unauthorized Growth of Bureaucratic Power

10 The Unauthorized Growth of Bureaucratic Power LOWELL BLAKE MASON This essay will deal with the present conflict between the public and private sectors in that area of polity generally referred to as trade regulation. Originally the public sector, following historically tested aims, proved its social value and its economic advantage to free enterprise by strengthening competi tion and protecting the consumer. This beneficial function of the public sector still operates; but right alongside there has developed what the biologists call a "sport"-abureaucratic mutation from the norm. This "sport" is against competition. For example: The Federal Trade Commission has already put orie phase of the Marxian mandate, "from each according to his abilities; to each according to his needs," into practice. Using the anti-price-discrimination statutes as a base, Federal Trade Commission decisions provide that every incompetent, sick, feeble, poor, bankrupt, lazy, careless or quarrelsome merchant with whom a producer does business must be let in on every promotion that is jointly worked out between the producer and his most competent, solvent, and cooperative distributor.

This "sport" is against the interests of the consumer: cease and desist orders are entered against small merchants if they secure business by saving a customer money. There are many orders like the Thomasville Chair case: 201 202 The New Argument in Economics .... the savings .... was not retained by the respondent, but was passed on to the customer .... It is our conclusion, therefore, that the respondent has violated .••. [the law].! This "sport" is against the interests of the cItIzen. While in a free-enterprise market a citizen gets the best he can, the Federal Trade Commission has extended its supervisory authority over· a certain kind of customer so that he may be sued for shopping around too much. If his friend, the storekeeper, saves him money once and gets caught doing it again, both of them can be liable for a $5,000 penalty. My paper will contend that this "sport" is not only gorging itself on the private sector, but, like a wasp anesthetizing a torpid caterpillar for the future consumption of its progeny, this muta tion, once it has sunk the teeth of its cease and desist order into the back of a single private entrepreneur, uses the decision as a precedent on which to feed future powers.

We now can document new facts and recent citations to sup port what I forecast in 1959: Mason's Law is concerned with the proliferation of powers ..... The most effective way peaceful totalitarianism can be achieved in the United States is through complete government control of the common everyday acts of all people, ... . . business, trade, and commerce. . . . . Today a series of administrative court decisions are being quietly built up in the world of commerce which may provide future prece dents for tyranny in any phase of a man's life ..... Are these agency precedents which shortcut the Bill of Rights dan gerous? The late Mr. Justice Jackson thought they were: "A court having in mind only the civil sanctions will approve lax policies, which later are imported into original proceedings ..... " Mason's Law holds that bureaucracy will arrogate to itself all power available under a statute· in spite of the limitations against tyranny in the Constitution. 2 The Unauthorized Growth of Bureaucratic Power 203 While I will mention the government's curtailment of com..

petition, with its adverse effect on the prices of consumers' goods, I shall not deal with the tremendous impact of public buying on the private sector-expenditures to maintain farm parity prices, appropriations to supply our own and our pur.. ported friends' military demands, government outlays for public ownership of the means of production (TVA, etc.), or foreign economic aid. As a critic of the growing public sector in trade regulation, I claim experience in this field. But not content with a broad approach to what Professor Stigler calls "the dense network of public controls over private economic activity," I have limited my expertise even more. For the past dozen years, I have cen tered attention on a fascinating phenomenon in the life of government bureaus, which burgeons for want of a better name under what I call Mason's Law. It is a law concerning the unauthorized growth of authority. I mean the constant tendency of government agencies to aggrandize their coercive powers far beyond what Congress gave them and often beyond what was permitted by our Constitution, as the words and language of that basic law were understood and accepted when it was, adopted.

Whatever views my colleagues have regarding the outcome of a social order based on a gorged public sector, all have as sumed that the growth was created by an outside source, the legislative. My paper deals with a growth that is generally spon taneous within the agency itself. It is not a growth of function, but a growth of power. Let me give three simple examples to illustra te: The function of a city sanitary commission is to collect garbage, sweep the streets, and condemn unsanitary or unsafe buildings. It should not have the power to run a press gang for recruiting street sweepers or garbag~ collectors or to break into a man's home without a warrant. The Sanitary Department of the City of Baltimore carries out the £unctionsenumerated. But it has assumed the prerogative of forcing its way into a man's home without a warrant. This aggrandizement of authority was cer:204 The New Argument in Economics tainly not contemplated by the drafters of our Constitution. 3 The function of a fire marshal is to put out fires and to ascertain when possible the causes of the fire. He should not have the power to seize and hold incommunicado for grilling any citizen, not even if charged with a crime. In Ohio, after a fire occurred on the premises of a corporation, a deputy fire marshal committed an officer of the company to the county jail because he refused to talk without his counsel being present.

A secret inquisition is not the function of a fire department; it is an assumption of tyrannical power. (Groban~ 352 u. S. 338.) The function of the Federal Trade Commission is to stop unfair acts and practices in commerce and to compile corporate statistics. This beneficial function of the public sector operates with the complete support of the private sector. Since the birth of the Federal Trade Commission in 1914, good government and honest business have maintained a fixed common goal with no shifting of the concept: protect the consumer against restraints of trade and deception. This is so because intelligent self-interest on the part of both business and the Federal Trade Commission dictates a joint adherence to a stable policy. Business supports this policy because price-fixing, fraud, and deceit in the market place deprive the honest merchant of mil lions of dollars of patronage and destroy the confidence of consumers.

The Federal Trade Commission supports this policy because its aid in suppressing business venality gives it the proudest kind of justification for the existence of one more alphabet agency in the federal network. During my eleven years on the Commis sion, I often inveighed against the thoughtless, stupid, and some times tyrannous procedures it used in controlling advertising. But in spite of these bureaucratic aberrations, one must express admiration for the unity of purpose between the Commission and private enterprise in this field. Better Business Bureaus, supported by private funds, and Federal Trade Practice Con ferences, supported by public taxes, work in close harmony. While less spectacular than litigated cases, here is the core in maintaining honest standards of sales promotion. Even in reThe Unauthorized Growth of Bureaucratic Power 205 calcitrant cases, or where the truth of factual statements IS In dispute, Federal Trade Commission litigation to carry out its legitimate function accords with established judicial procedures.

But under the guise of carrying out this function, the Com mission now assumes the power to presume a man guilty unless he can prove his innocence; it aSSUIlles the right to ignore statutes of limitations: a man can be charged with offenses dating so far back that he would never be able to marshal testimony in his defense; it assumes the power to prosecute a man for doing something that was not declared wrong until after he did it; it assumes the right to ignore facts and infer guilt; and it as sumes inquisitional powers. Because there is no such material entity as "the state"-only a horde of little human beings run ning around behind a great big fictitious label-personal power feeds on public authority. One set of administrative officers, calling themselves "the state," subjects another set of humans called private citizens to inquisition, penalties, and even im prisonment without recourse to the courts. When a prosecutor is authorized by statute to sit in judgment on his own case, it is impossible to stop the growth of personal power never originally contemplated by Congress when it created his function.

Much of this tyranny in trade regulation stems frqm the bureaucratic notion that the public sector can force the market place to protect the dreamy, the ill-favored, the incompetent, and even the just plain lazy. Even with a bloated public sector and all the tyrannous powers outlined above, this will never be accomplished. You and I might look down our noses because "a man of business knows that trade depends on people's desire for prod ucts they could easily live without. The desire, the taste, estab lishes the utility of all man-made things, a fifth of whiskey or a Fifth of Beethoven." But it is a fact, and being a man of catholic tastes, I find good in both and am glad the free market furnishes me a reasonable supply of each. But there are zealots who love one and reject the other. Their sense of values rises above the "common herd." This is why they want to nationalize everything.

At an afternoon tea in Ann Arbor the other day, a sweet young 206 The New Argument in Economics lady took me to task for opposing the principle of a state theatre. Equipped with only a general aversion against anyone in govern ment telling me what I must like, I decided to stand mute. She ended her diatribe against private enterprise by saying: "Com missioner Mason, do you know that because we do not have state-supported theatres, there are thousands of people in the backwoods of Northern Michigan who have never seen the modern dance?" This telling indictment of the private sector is unanswerable. It is true. I think it would be a good thing if thousands of people in the backwoods of Northern Michigan could see the modern dance; I would like to see it myself. If the day comes when we have in our Cabinet a Secretary of Terpsich ore, I hope he will be so imbued with dedication that he will not sleep until every backwoodsman in Northern Michigan has seen how a swan dies in pink tights.

As a student of tyranny, I do not fear too big a public sector in the modern dance. If we are to have a Secretary of Terpsichore, he will not have to resort to writs of assistance (such as James Otis fought against prior to the Revolutionary War),lettres de cachet (used by the Louises of France before the French Revolu tion), or the imposition of sanctions wIthout trials (see Hitler, et al.) in order to get the backwoodsman into the state theatre. If there are girls in the cast, the government will not have to call the wagon; he'll be glad to walk. Of course, if the Secretary of Terpsichore moves down into Southern Michigan and the other forty-nine States, it's going to cost a pretty penny. But this paper does not deal directly wtih profligacy, only with its aftermath-tyranny. Whether the government puts on girlie shows or buys up eight billion dollars worth of products that a farmer cannot sell in the open market, there is no occasion for the aggrandizement of unauthorized authority. Mason's Law is inoperative here because those who are directly affected need no coercion. They think that they are getting something for nothing. As the late Al Smith once said, "Nobody shoots Santa Claus." But dignified free riding is only one bait in the trap to lure the unwary toward a total public sector.

The Unauthorized Growth of Bureaucratic Power 207 Fear has persuaded some of the great minds of this country to question the value of the private sector. Walter Lippman has written: The national power, which we must have in order to hold our place in the world, is expensive, inconvenient, irritating, and dangerous. But though we must be acutely vigilant, we must not delude ourselves into thinking that we can do without it.4 Adlai Stevenson puts these questions: Can our American system prevail in competition with the central planning, control, and direction of the Soviet system? Can we mobilize, organize, and utilize our human and natural resources as effectively as they can? Can we do so without imposing controls that imperil the very freedom and values we in the United States are trying to preserve? Are our institutions adequate to conduct foreign policy in compe tition with the speed, secrecy, and certainty of the Kremlin?

German and Russian comparisons can offer no hope for those who are against our total public sector. It still thrives in Russia with no outward signs of decadence. The German total state was never cured. It was killed at the cost of millions of lives. And to top it all, the greatest obstacle to the glorious millennium of sociological universalism, the Supreme Court's former view that the Constitution was an absolute law instead of a relative postulate, has now been removed. 'There are other factors, of course, such as the indifference of people to liberty; the attrac tiveness of universal largesse; and the operation of Mason's Law, enhanced as it is by the appetite for power of the governing elite and the fact that the great mass of bureaucrats under them are like the vendors of college pennants outside the university stadium. When they go home at night, they are not concerned with the great principles for which the university stands or even with the question of who won the 'game, but solely with such questions as how many souvenirs they sold, how many 208 The New Argument in Economics inquisitions were inaugurated, how many complaints they filed, how many injunctions were granted, how many fines were as sessed, how many cease and desist orders were issued.

Past a certain point, the growth of the public sector spells tyranny. When the state has become omnicompetent, omnivorous of inde pendent social forces, when it engages endlessly in warlike activity, in an increasingly complicated regulation of trivial economic be havior, and when it engages in vast propaganda and publishing enter prises-the stakes of politics and the perquisites of office are great indeed. Finally, they tend to become too high to let power be won and lost in the accidents of free elections and secret ballots. Gradually many things short of military tyranny are done to insure the proper outcome of elections, chiefly through controlling the flow of propa ganda and the necessary corruption of voting procedures. 5 Tyranny is never trivial. Those who would fight it effectively should bear two things in mind. First, its identification. The old tyrannies, at least in the United States, are long gone.

Nobody quarters troops in our homes in times of peace. In fact, today's tyrannies cannot be identified by any of the outward earmarks that made yesterday's tyrannies so easy to recognize, and there are many false tracks to mislead us. Tyranny lurks in the changed attitude in America regarding the absolute and relative in law. In human relations, and that is all trade regulation is, of course, there are absolutes. All wise men know them; all wise men also know that the minute we define an absolute, we limit it. Human definitions, being finite, contaminate the absolute with man's finitude. But the fact that we cannot define this does not mean we should live "as if" there were no absolutes. The surgeon knows he cannot attain perfect asepsis, but this does not persuade him to abandon all its techniques-white gowns, scrubbed hands, rubber gloves. He operates "as if" he could attain the absolute.

If we argue that there are no absolutes in law, because finite man using a finite language cannot verbalize an infinite aim, we The Unauthorized Growth of Bureaucratic Power 209 are doomed. The wagon of the law, having lost its star, is hitched to nothing but the tendentious, balancing of one evil against another, one good against another. This relativism (or "balancing" as it is called in the Supreme Court) denies the need to live "as if" there were absolutes. Our Constitution is no longer a leasehold in perpetuity, with only those changes allowed that are mutually agreed to by the landlord state and the citizen tenant. We are mere day-to-day occupants,.-tenants at the will of the landlord. The big-print covenants protecting the liberty of the individual on the front page of the Constitution are all modified by fine print inserted on the back page one hundred and fifty years after the document was executed. The denial that the Constitution is an absolute in law or that it must be lived up to as if it were an absolute has. loosed the floodgates of tyranny. Already it has set aside these established protections to liberty.

I am talking about the protections to liberty-not liberty itself. Liberty is an abstract concept. How can it be measured? Shall we say that because twenty million Kulaks and White Russians died or were put into concentration camps or were shot in Siberia, Russia has suffered a twenty per cent decrease in liberty? Ridiculous! The number of people shot, sued, or exiled has nothing to do with the increase or decrease of legal precedents maintaining or destroying our protections, to liberty. Of the forty protections we have in our Constitution, some of which I shall enumerate for you, the loss of just one (the right of habeas corpus) would empower bureaucracy to put everybody in jail. Fortunately, this protection has not been lost. On the other hand, the ones we have lost have not led (so far) to such an increase in fines, penalties, or imprisonments as would alarm the public. Those who want total government have no intention (and, indeed, they would not have the power now) of applying their present authority against everyone at this time.

This comes later. For the present, it is only a whip over every man or business in interstate commerce. Because of the losses in our protections to liberty suffered to date, we now have a situa tion in which not one businessman could successfully defend 210 The New Argument in Economics himself against some governmental accusation that could be brought against him. But liberty cannot be expressed in the same terms as GNP, population increase, or profit and loss. Liberty is a moral evalua tion incapable of measurement except in the scales of our shifting cultures. To the slave, liberty may mean only the privilege of dying. To me it means the right to make my own mistakes, not someone else's,.-.not even the government's. We are talking about the protections to liberty when we say that we have lost nearly a third of them in the last decade. A protection to liberty is not an abstract idea; it is a rule of conduct for government in its relations with individual men.

The protections we are talking about are put down in black and white in that seldom quoted and much abused document known as the Constitution of the United States. Besides these protections, there are other fundamental concepts. of fair play so ingrained in our present-day mores that it is unthinkable that anyone does not know what they are or that any arm of government would dare to defy them. You can count these pro tections on your fingers and, as I tick off the ones we have lost and cite the precedents where we lost them, arrive at your own profit-and-Ioss statement or take mine after you check my addi tion and subtraction. Article I of the Bill of Rights gives us our freedom of expression-the protections to our right of free speech, to assem ble, to read newspapers, to go to the church of our choice or to none at all, to petition Congress. Of course we have these rights. If we did not, I would not be openly writing this article.

Let us go on to the other protections to liberty which our ancestors most certainly had, and which a good many people today labor under the delusion they still have. In fact, if I were to ask you the following questions, wouldn't you answer yes? Is every man presumed innocent until proved guilty? Are there statutes of limitations that prevent a man from being charged with offenses dating so far back that he would be unable to marshal testimony in his defense?

The Unauthorized Growth of Bureaucratic Power 211 Are there prohibitions against ex post facto trials?-that is, can government punish a man for doing something that was not declared wrong until after he did it? Are there rules against conviction by hearsay~that findings of facts against a man must be based on legally acceptable evidence? Do you thin~ only a judge can. sentence you to jail? If some one who was not a judge did s·entence you to jail, do you think you would at least be allowed to have your lawyer present? Does everyone have the right to his day in court? Are there prohibitions against prosecutors acting as judges in their own cases? If you are accused, do you have a right to trial by jury? Are you protected from punishment for something someone else did? Must everyone be treated alike under the law? Is your home your castle, which no official may violate except with a search warrant issued by a court?

You would undoubtedly tell me these and many other funda mental concepts of Anglo-American jurisprudence are the breath of life in the United States. But you are forty years behind the times, and you should be brought up to date. From 1914 on, our legal code has gradually been split into two parts: One is enforced by the courts, most of which observe the letter and spirit of our Bill of Rights. The other part is enforced by administrative commissions and minor officials of state and city bureaus who operate in what they call "the public interest." This part of our legal code grows quietly and unob trusively ever more powerful through an ever increasing assump tion of authority. How? We are following the Russians, not to Communism, but we are "shortening the punch" between the policeman and the punishment in those matters that do not appear important in the public eye. Russia, during her period of militant Communism, treated those charged with crimes of violence and offenses involving moral turpitude with tolerance and circumspection. On the other hand, those accused of violating the state's political and economic 212 The New Argument in Economics demands were sentenced to death or exiled to Siberia without any semblance of trial as we know the word here in America.

In the United States we can see a growing acceptance of this same thesis: that violation of the economic commands of the state is more dangerous to our material welfare than criminal offenses and therefore can be punished without due process. In the case I described earlier, where an administrative officer in Ohio (not a judge, but a deputy fire marshal) sentenced a man to jail after holding a secret inquisitorial proceeding, the Supreme Court upheld the sentence because the inquisition "was an administrative investigation of incidents damaging to the economy ..... " But Mr. Justice Black, the Chief Justice, Justices Douglas and Brennan jointly protested that the due process provision of the Fourteenth Amendment was an absolute, and "for a state to compel a person to appear alone before any law enforcement officer and answer questions in secret against his will was a secret inquisition, justly feared by free men every where .... a breeding place for the arbitrary use of official power and the beginning of tyranny as well as the indispensable instru ment for its survival."

In the second example of administrative tyranny, a man was fined because he would not let an officer into his house without a warrant. The Supreme Court, weighing the rights of an individ ual who was not accused of any crime, on the one hand, against the convenience of the government, on the other, sustained the conviction because the officer who demanded entry into the home without a warrant could not take the time to get a warrant. "He had to be in his office at 3:30 P.M. every day to take care of his reports." This theory, that the protections to liberty in the Constitution are absolute only when applied to criminals and mere relative protections when applied to owners of property, was caustically commented on by Mr. Justice Douglas in a dissent joined in by the Chief Justice and Justices Black and Brennan. The fallacy in maintaining that the Fourth Amendment was designed to protect criminals only was emphasized by Judge Prettyman in The Unauthorized Grow'lh of Bureaucratic Power 213 District of Columbia v. Little, 85 U. S. App. D. C. 242. The basic premise of the prohibition against searches was not protection against self-incrimination; it was the common-law right of a man to privacy in his home 1 a right which is one of the indispensable ultimate essen tials of our concept of civilization. It was firmly established in the common law a~ one of the bright features of the Anglo-Saxon con tributions to human progress. It was not related to crime or to sus picion of ,crime. It belonged to all men1 not merely to criminals, real or suspected. So much is clear from any examination of history, whether shght or exhaustive. The argument made to us has not the slightest basis in history. It has no greater justification in reason.

To say that a man suspected of crime has a right to protection against search of his home without a warrant, but that a man not suspected of crime has no such protection, is a fantastic absurdity. It is true there is a general uneasiness among practicing at torneys over the loss of our protections to liberty through balancing the convenience of the government against an individ ual's rights. And lawyers often write learned articles in legal journals and talk before professional societies on the subject, and all too often that is all they do; But who besides the lawyers cares about due process? Most people think due process (the right to confront your accusers, etc.) applies only to those charged with crime. The constant association of due process with alleged communists, thieves, kidnapers, and bank robbers degrades the high regard that this basic concept of liberty and justice once commanded. This denigration occurs simply because these pro tections to liberty are seldom dramatized except when called into play by the arrest, indictment, or trial of those charged with crime.

People do not realize that the Bill of Rights and due process deal only collaterally with accused persons. Their major function is to protect democracy (using the word in its broadest sense), not persons. Such protection is the only way people can insure themselves against the blunders, tyrannies, and officiousness of their servants in government from tpe President on down, who, with what they consider the best of intentions, if exempted from the restrictions of our Constitution, will ultitnately destroy it.

214 The New Argument in Economics Every hour of the day and night due process should guard the liberties of those in the private sector against the tyrannies of those in the public sector. Just where is the proper balance between the public and private sectors? Already, .... the Federal Government operates over one hundred business type activities. It is, among other things, the largest electric-power producer in the country, the largest insurer, the largest lender and the largest borrower, the largest landlord and the largest tenant, the largest holder of grazing land, the largest holder of timber land, the largest owner of grain, the largest warehouse operator, the largest shipowner, and the largest truck-fleet operator. Mr. Roland R. Hughes, former Director of the Budget, is responsible for this glowing picture of the American public sector, but Mr. Hughes ends on this sour note: "For a country which is a citadel and the world's principal exponent of private enterprise and individual initiative, this is rather an amazing list."

Nevertheless, the "do-gooders" cry, "Our society has reached a level of private wealth never seen before on this earth. Yet at the same time there is poverty in the public sector of the econ omy." We are spending 31 per cent of our GNP now in the public sector; England, 36 per cent. Is either too much or too little? The answer must be drawn to fit the ideals of our nation. Advocates of a greater public sector have deplored the passing of a handicraft economy and the population explosion. To them, technology has relegated the sanctity of the individual what Russell Davenport calls "the dignity of man"-to a minor part in life. We must forget self. Man has no status as a single person; only his communal effort is significant. Our national ideal is that the mass is greater than the sum total of individuals. Hence, the old fetish of personal liberty so feverishly expounded in our Constitution and Declaration of Independence must be reinter preted in terms of present sociological and technological conditions.

If this be so, then the Federal Trade Commission and all The Unauthorized Growth of Bureaucratic Power 215 administrative officials are on the right track. There should be more inquisition, more breaking into homes, mare orders to cease and desist, more incarceration without trial. 'The more quickly the commands of the public sector are made known and obeyed, the stronger the state. Is this our national ideal? Strangely enough, its advocates have no stomach for submitting the question to the people. They will not attack the sanctity of the individual by a direct request to the Congress; they will only betray it. NOTES 1. F. T. C. Docket No. 7273. 2. The Language of Dissent (Cleveland, Ohio: The World Publishing Company, 1959). 3. Franks v. Baltimore, 359 U.S. 374. 4. Washington Post, June 27, 1961. 5. National Review, Francis G. Wilson, February 25, 1961.