Chair’s Heavy Hand at the FTC Is an Example of the Administrative State Personified

Commentary

One of the leading purposes of the populist Make America Great Again movement is to dismantle what its members call “the administrative state.”

The populist take on the administrative state is that it is a vast bureaucracy, with the millions of civilian employees of the executive branch, that regulates an enormous percentage of the U.S. government, foreign policy, and economy. Congress nominally oversees their activities, but, in practice, the administrative state is largely left to its own devices, earning the enmity of the small-government, conservative populists that make up the MAGA movement.

How Did We Get Here?

The American administrative state was born of President Woodrow Wilson’s 1887 essay, “The Study of Administration,” written years before he was elected.

A progressive academic ( he was a Ph.D.), Mr. Wilson was elected with just a 42 percent plurality in a three-way race and is easily the least democratic of American presidents. He wrote of, and clearly preferred, a government run by the expert class, somewhat akin to Britain’s Whitehall. He wrote:

“We have enthroned public opinion; and it is forbidden us to hope during its reign for any quick schooling of the sovereign in executive expertness or in the conditions of perfect functional balance in government. The very fact that we have realized popular rule in its fullness has made the task of organizing that rule just so much the more difficult. In order to make any advance at all we must instruct and persuade a multitudinous monarch called public opinion—a much less feasible undertaking than to influence a single monarch called a king.”

One can easily surmise how such views, and the massive bureaucracy it engendered (which have both only expanded since Wilson’s presidency), are anathema to the populist MAGA movement. Arresting unaccountable governance by a purported “expert” class—Mr. Wilson’s vision—is the entire raison d’être of MAGA.

Government by the Experts

Nevertheless, Mr. Wilson’s vision of a government of “experts” is embedded throughout American government. Mr. Wilson not only advanced it in his term but also was preceded in it by a predecessor, Theodore Roosevelt, “The Trust Buster” (president from 1901–09), and was followed in it by Franklin Delano Roosevelt (president from 1932–45). Subsequent presidents have larded on the bureaucracy

Mr. Wilson’s most formidable government by experts is obviously the Federal Reserve (created in 1913, and technically independent of the Congress and the White House, though nominally “overseen” by both) and not part of the executive branch.

But perhaps there is no bigger example of governance by the expert class within the executive branch than at the Federal Trade Commission (FTC), the agency President Wilson created in 1914. Ostensibly, it was to protect “the public from deceptive or unfair business practices and from unfair methods of competition through law enforcement, advocacy, research, and education.”

A Law Unto Herself?

Today, there is, perhaps, no one who better personifies unaccountable governance by a purported “expert” class of unelected officials than Lina Khan, the FTC’s chair.

Ms. Khan wrote a 2017 ground-breaking Yale Law Journal article while still a law student. It asserted, among other things, that a shortcoming in U.S. antitrust jurisprudence allowed Amazon to use its aggressive price-cutting strategy, customer data, and delivery infrastructure to assert the same kind of monopoly power that railroad, oil, and steel tycoons had around the turn of the twentieth century before being broken up. The article made national news and made Ms. Khan an acknowledged thought leader in American antitrust before she was even 30 years old.

Newly elected President Joe Biden named Ms. Khan chair of the FTC in March 2021, to the pleasure of progressives like senators Elizabeth Warren (D-Mass.) and Amy Klobuchar (D-Minn.).

Industry groups were less enthusiastic and, perhaps, more prescient. Carl Szabo, an attorney and general counsel for the tech lobbying group Net Choice, for example, reportedly told The New York Times in a statement after Ms. Khan’s appointment that:

“Khan has a strong career in persuading the American left of her proposed reforms to antitrust law but the job of an FTC commissioner is to enforce antitrust laws as they are, not as the commissioner wishes they would be.”

It wasn’t long before Mr. Szabo’s concerns about Ms. Khan’s wishes for antitrust law were realized. Christine Wilson, a Republican member of the five-member FTC, accused Ms. Khan of “disregard for the rule of law and due process” in a Wall Street Journal op-ed last year and said she was forced to resign. “I refuse to give their endeavor any further hint of legitimacy by remaining,” Mrs. Wilson wrote.

Earlier this year, House Republicans called out what they termed “FTC dysfunction” under Ms. Khan, who is the youngest FTC chair in history. An interim staff report about her stewardship of the FTC said Ms. Khan was guilty of “neglect and mismanagement of the agency in furtherance of her personal pursuit of political and ideological aims …From the beginning of her tenure, Chair Khan demonstrated disinterest in leading career FTC staff to enforce the antitrust laws, and instead pursued an agenda set to remake the American economy according to her values.”

The interim report also accused Ms. Khan of repeatedly attempting to evade congressional oversight.

Ms. Khan has even earned the enmity of some Biden administration supporters—self-described “strong proponents of Bidenomics.” From their posts at the Yale School of Management, Jeffrey Sonnenfeld and Steven Tian wrote glowingly of Chair Khan as a trailblazer, but then pilloried her abysmal record challenging large mergers in court. Assessing her overall performance on mergers like Jet Blue and Spirit Air, the two management experts wrote that “Khan is overreaching from enforcement into active policy making.”

Time to Move On

Chair Khan may have some excellent insights into the intricacies and shortcomings of U.S. antitrust law. Her assertions about Amazon certainly have some merit, in my view. But she’s never been elected to anything. Unfortunately, like some in the bureaucracy, she thinks that her insights and expertise bestow upon her a special privilege to legislate, safely ensconced in the security of the bureaucracy and well away from the scrutiny and the will of the voters.

That may have been the kind of government Woodrow Wilson preferred—but not the kind the Founding Fathers imagined in the U.S. Constitution. They took great pains to ensure that power could never be centralized in one person or even one branch of government.

If Ms. Khan wishes to make the law, she should run for Congress. If she wishes to administer the law, she should follow what Congress legislates. But she should choose her path of public service and not blend the two.