Jun 16, 2015 - 9:15am

We Need a Magna Carta for the Regulatory State


Senior Editor, Digital Content

It’s been 800 years since England’s King John signed the Magna Carta and acknowledged that a sovereign’s authority was limited.

Allan Meltzer and Kenneth Scott, both of the Hoover Institution, explain how this document planted the seed of the Rule of Law:

Although general agreement on the precise definition of the “rule of law” is lacking, most agree that it includes the principles that people should be secure in their person and property and that the state’s authority over others remains grounded in legitimate institutions so that no government can impose its will on another unchecked.

Rule of law is often summarized as equal treatment under the law.

By far the most important contribution of the Magna Carta to the rule of law was that King John accepted that his authority was limited, not absolute, and that the limitation was open to negotiation. From this beginning, the rule of law gradually replaced unrestricted sovereign authority.

Separation of powers, divided government, constitutionally enumerated powers. These concepts of limited government sprouted from the 13th Century agreement between barons and king.

From the Magna Carta’s seed to the tree of limited government, we’ve been blessed with economic gain:

The rule of law is found in all countries whose populations enjoy a high standard of living. No country that did not endorse the rule of law has ever developed a high standard of living. Freedom under the law and successful economic development occur together. In our current period, a country like China cannot expect to achieve full development without adopting the rule of law.

By adopting the rule of law, countries reduce uncertainty, which is the foundation of homegrown innovation. The rule of law, and the freedoms that it brings, explain why the United States innovates in the arts, technology and other areas.

However, while “the opportunity to extend the principles that started with the Magna Carta never ends,” Meltzer and Scott warn, “neither does the challenge to freedom.”

Take, for instance, the ever-encroaching Federal Regulatory State.

“The administrative process has become about how unelected officials make laws,” William Kovacs, the U.S. Chamber’s Senior Vice President for Environment, Technology & Regulatory Affairs, told the Senate Judiciary Committee. The Rule of the Regulators has trumped the Rule of Law:

Congress has enacted many broad and vague laws that delegated significant policy making authority to agencies, which have used that authority to fill in many of the legislative gaps. This “gap filling” authority is supported by the courts as they grant deference to agency decisions rather than being a strong check on agency power.

Agencies fill in so many “gaps” they make more law than Congress, all the while ignoring the impacts analyses that Congress requires. Meanwhile, the courts avoid dealing with the complexity by granting tremendous deference to agency decisions. And Congress has focused so intently on the problems with specific rules that it has ignored for almost seventy years one of the most important aspects of our complex society—that while regulators make many laws, all legislative power is still vested in Congress and Congress needs to better ensure that agencies carry out its intent.

For example, after taking three regulatory actions over a six-month period, one agency—EPA—will have extended its reach farther than ever before:

By the end of the year, all these regulations will have been imposed on an economy still trying to generate sustained economic growth and higher incomes for all Americans.

The regulators must be better regulated. We need a Magna Carta for the Regulatory State.

We need reforms to the regulatory process that restore accountability, offers transparency, provides meaningful public participation, and guarantees a safe but swift permitting process.

Americans need a regulatory system that works for them, not one that stifles their opportunities for a better life.

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About the Author

About the Author

Sean Hackbarth
Senior Editor, Digital Content

Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.