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Controlling the Regulatory State

  • Regulatory State

People tend to think about big government in terms of taxes and government spending. Big governments are the ones that have high taxes and big expenditure programs. Government regulations are a major component of big government, and the regulatory state often leads to more oppressive and more corrupt government than big spending. Consider, for example, the Scandinavian countries that have a reputation for big government–that is, big spending–but that are less oppressive and less corrupt than governments that spend less, but regulate more.

The regulatory state in the United States is rapidly growing, in financial regulation, in health care, in environmental regulation, and really, in all areas of life. Too often, executive agencies (the EPA is a prime example) will write their own regulations that appear to go well beyond any legislative intent that the agencies cite as the legal basis for those regulations. Executive agencies have taken on the legislative powers that are supposed to reside with Congress.

One proposal to do something about out-of-control regulation is a recently-proposed Regulation Freedom Amendment to the US Constitution.

The complete text of the proposed amendment reads, “Whenever one quarter of the Members of the U.S. House or the U.S. Senate transmit to the President their written declaration of opposition to a proposed federal regulation, it shall require a majority vote of the House and Senate to adopt that regulation.”

This would allow Congress to take on the constitutional responsibilities they are supposed to have in the first place to determine the scope of the regulatory state. It would take away from the agencies the power to unilaterally create law. The process would be easy and transparent. If a significant minority of the House or Senate opposed a regulation, the Congress would then have the power to vote it up or down by a simple majority vote.

This is a legislative power Congress should have, and you’d think Congress would want this power. One route the proponents of the amendment are using to build support is to go to state governors and legislators to build pressure for a constitutional convention to adopt the amendment. The idea is, if there is enough pressure from the states, Congress would act to preempt the states.

I wonder about this strategy, especially in light of the fact that you’d think members of Congress would view the amendment as a way to shift power to them and away from the executive branch. And, the burden the amendment would place on Congress would be low.

Strategy aside, the Regulatory Freedom Amendment does appear to provide a potentially effective mechanism to constrain the increasingly burdensome regulatory state.


Contact Randall G. Holcombe

Randall G. Holcombe is an Associated Scholar of the Mises Institute, DeVoe Moore Professor of Economics at Florida State University, past President of the Public Choice Society, and past President of the Society for the Development of Austrian Economics. He received his Ph.D. in economics from Virginia Tech, and has taught at Texas A&M University and Auburn University. Dr. Holcombe is also Senior Fellow at the James Madison Institute and was a member of the Florida Governor’s Council of Economic Advisors. His books include From Liberty to Democracy: The Transformation of American Government (2002), Producing Prosperity (2013), and Political Capitalism: How Economic and Political Power Is Made and Maintained (2018). His primary areas of research are public finance and the economic analysis of public policy issues.