Hovenkamp on Appraising the Progressive State

Herbert J. Hovenkamp, University of Iowa College of Law, has posted Appraising the Progressive State:

The most salient characteristics of the progressive state are marginalism in economics and a penchant for use of scientific theory and data in policy making. Both have served to make progressive policy less stable than classical and other more laissez faire alternatives. However, the progressive state has also performed better economically than alternatives, and by a wide margin. One of the progressive state’s biggest vulnerabilities is commonly said to be its susceptibility to special interest capture. The progressive state makes many decisions via either legislation or administrative agencies, and both are thought to be prone to special interest control at the expense of the public. Nevertheless, the superior economic performance of the progressive state calls that conclusion into question.

One severe weakness of the capture argument against the progressive state is that it uses the free market as a baseline for identifying what is in the public interest. Under such a standard, any theory of regulation that believes that market failure is more widespread and in need of correction will generate too many false positives suggesting capture. In fact, special interest capture often explains failures to regulate as much as special interest regulation itself, and today the former appears to dominate the latter in several important areas. Ironically one exacerbating factor in producing such capture is the structural features of the Constitution itself, which place much higher burdens on those seeking to regulate than on those seeking to resist it.