Tuesday, June 12, 2012

"A Lawyer's Administrative State"

[In an earlier post I noted the appearance of Louis Galambos’s The Creative Society–and the Price Americans Paid for It.  Here is an edited version of my comments on the book at an author-meets-readers session at last week’s Policy History Conference.] 

When I started reading of The Creative Society, I told anyone who would listen that I had never read a book better framed and executed to make a difference by someone who knew what he was about.  Here, I enthused, was a historian who understood what the professions and professionalism had contributed to modern America, who could illustrate his point across more historical subfields than most scholars could ever hope to master, who could write simply and engagingly enough to reach students and other general readers, and who had the stature and perhaps the insouciance not to lose them by burdening the text with references to the vast literatures he synthesized.

I still feel that way about the book, but as I read on I realized that Professor Galambos wrote it with a very different view of the present than I had in reading it.  As Professor Galambos said in his opening remarks at this session, this is a book with a happy ending for its protagonist the professionals.  To be sure, they’ve had to acknowledged that over the years they excluded from their ranks those who could have made society more creative and their professions more open to popular values.  Further, to quote the book, “the social process of professionalization tended to breed particular forms of hubris”; “the smokescreen of overweening pride” sometimes made it difficult for “the new aristocracy of professional experts” “to see what was happening” around them.  For this reason, Professor Galambos urges political leaders to supplement their expert advice with large doses of common sense and regard for popular sentiment.  Still, the book ends with professionals’ authority secure--so much so that our political discourse has become "a professional discourse.”

Well, I don’t know if it’s because I am biased by the great changes underway in the legal profession and Professor Galambos is seeing the world more clearly or if it’s just a difference in personal disposition, but my impression is that today the authority of professionals is being challenged as never before.  It is disputed, cabined in or simply ignored in public and private organizations, political life and public discourse.  In law, for example, market discipline, the disaggregation of work into routinized, easily outsourced, or even automated tasks and the collapse of lockstep compensation in the great corporate law firms is not only squeezing out the economic rents that lawyers have extracted over the years but also jeopardizing the individual autonomy that is a precondition of professionalism.  In political life, the claims of professional scientists on so crucial a matter as global warning are ridiculed and dismissed, and a contender for the Republican presidential deplored as snobbery the aspiration for post-secondary education that Professor Galambos celebrates.  As for public discourse, thanks to the internet, it now seems that any idea can gain a vast audience so long as it is expressed in a YouTube video in which someone does something odd with a cat.

In this somewhat anxious frame of mind, I interpreted Professor Galambos’s decision to include himself and his family in the book as a counter to those who would equate professionalism with elitism.  By invoking his own ancestry and experience, he can reassure the “wannabee professionals in training” in his intended audience that the professions have been the means by which generations of outsiders made their way into the middle class and that they can be the same vehicle of social mobility for them.

Because I think the organizations in which lawyers work have been changing so much recently, I finished The Creative Society impressed and grateful for what Professor Galambos had accomplished but also feeling the need for more insight into how the authority and influence of lawyers and other professionals changed with transformations in the institutions in which they worked.  To explain why, I’d like to paraphrase Professor Galambos’s argument about the lawyers’ contribution to what he calls “state crafting–American style.”  Usually, historians trace the legal profession’s contribution to statebuilding to the New Deal.  “When the New Dealers rolled up their sleeves and set out to make America over,” Arthur Schlesinger, Jr., once said, “their instrument was law.”  Jerold Auerbach went even further: the New Deal, he wrote, was “a lawyer’s deal.”  Before 1933, lawyers were thought to be enemies of the state builders.  Professor Galambos quotes the historian Richard McCloskey on “the native conservative bias of lawyers” in the late nineteenth century, and McCloskey was not alone.  In The Promise of American Life, for example, Herbert Croly wrote that “The tendency of the legally trained mind is inevitably and extremely conservative.... So far as reform has come to mean a tendency to political or economic reorganization, it has to face the opposition of the bulk of American legal opinion.”

Although Professor Galambos distances himself from William Novak and Brian Balogh on the nature of the federal government in the nineteenth-century, I don’t really see that he limits himself to Weber’s ideal type of bureaucracy when envisioning the American state.  Once you accept the possibility that real states could be organized in other ways than Weber’s orderly hierarchies you can see that lawyers commenced their building of the American state in the progressive era; it’s just that the state they built was one hospitable to their own interests and ideals.  Thus, in a chapter on the new economy, 1890-1930, Professor Galambos writes that the “profession that played the leading role in [the] bitterly contested and bruising process [of state building] was the law. . .  It would largely be lawyers who would craft the compromises essential to an American democratic society.”  Lawyers dominated “the gap between ideas and practice.”  Their profession was “accustomed to conflict, hardened to defeat, and strategically positioned to shape the emerging American administrative state.”  They were not dismayed by the “unsightly hodge-podge” that was regulation in America, including the independent regulatory commission, which was hard to square with an orthodox notion of the separation of powers.  To the lawyers, Professor Galambos writes, “this was just business as usual in coping with a world of myriad details.”  Lawyers who should have known better designed and implemented Prohibition; other lawyers drafted worker’s compensation laws and successfully defended them in court.

Professor Galambos calls the result “a lawyer’s administrative state.”  It acted incrementally, on a case-by-case basis, reacting to specific facts rather than in accordance with an “overall plan or theory of government.”  It did take “a decisive step away from democracy by shifting authority to professional expertise,” but because proceedings were adversarial, matters could and often did end in compromises that left “the existing power structure of the nation” unchanged.  The compromises the lawyers struck were usually fine for their propertied clients, but, Professor Galambos acknowledges, they did not do enough for others.  Still, by 1930 Americans had grown accustomed to seeing governments deploy professional expertise to address a wide variety of problems.  “This was a decisive governmental innovation, “ Professor Galambos writes, “and a credit to the lawyers who shaped it.”

When I line up Professor Galambos’s account with my own understanding of lawyers and the administrative state in the early twentieth century, I find that the two accord fairly well, with much congruence and perhaps some differences in emphasis.  To jump to one of the differences: Professor Galambos tends to emphasize what lawyers added to the capacities of the state.  He observes that the skill set they acquired in courtroom litigation and boardroom negotiations made them excellent brokers of interests and jobbers of ideas.  Although I don’t doubt that lawyers made such contributions, they also made other ones that drew upon the experiences of particular branches of the profession at particular moments in time.  If generic, they contirbutions were more distinctively associated with a well-trained legal mind.

Ajay Mehrotra found a terrific example of lawyers' particular contribution to state building in Russell Leffingwell’s service as Undersecretary of the Treasury during World War I.  No one in the federal government knew how to manage the issuance of public debt or perform other feats of public finance on such a scale, but a Cravath lawyer with scores of securities issues and corporate reorganizations under his belt had more than a clue about what to do.  From Bartholomew Sparrow’s first book, it seems that similar considerations led the investment banker James Forrestal to bring Struve Hensel, his lawyer at Milbank Tweed, with him to Washington in 1940 to ready the Navy’s procurement system for the enormous challenge it suddenly faced.

I’ll confess that I’m a bit uneasy about identifying a more generic yet still distinctively legal contribution of lawyers to state capacity, because they have been trained and worked in very different ways during the twentieth century.  The best statement of the one I’ll venture came to me second hand.  In the early 1970s, a young associate at the law firm of Covington & Burling looked up in exhaustion from the voluminous record of a rate case before the Interstate Commerce Commission and put a question to her boss, the great Washington lawyer Charles Horsky.  “Charlie,” she wailed, “why do lawyers have to do this?”  Horsky replied, “Because we understand relevance.”  That is, lawyers are trained to identify or, perhaps more accurately, construct a governing principle for some situation out of a welter of legal and policy considerations and use it to pick and choose from among those “myriad of details” that Professor Galambos mentioned and to arrange them in a logical order.

As important as the lawyers’ contribution to state capacity has been, in the early twentieth century, at least, lawyers’ contribution to the autonomy and internal organization of state agencies was even greater.  When some new social or economic program was passed into law, officials rarely had a preexisting Weberian bureaucracy at the ready to implement it.  Some sheepdog was needed to keep administrators from straying off the compound and into the clutches of patronage-hungry politicians or regulated interests.  A sheepdog–or some more vicious canine–was also needed to make mezzobureaucrats and other subordinates follow the lead of top administrators and to keep information flowing from the front line to policymaking staffers.  At the new agencies of the Progressive Era and the New Deal, lawyers often performed these roles.  They policed boundaries and secured lines of authority until bureaucratic routines and systems could be established.

What most enabled elite lawyers to perform these tasks was not what you might infer from Professor Galambos’s emphasis on how many of them held positions in the political branches of government.  In fact, and as Lord Bryce discovered, most elite lawyers withdrew from partisan politics well before 1900.  In the 1870s they organized bar associations to take the courts back from the bosses.  If courts could be made secure repositories of judicial expertise by putting them above partisan politics, why couldn’t administration be made a secure vessel for the other kinds of expertise the new century seemingly required?  Small wonder, then, that, as Daniel Rodgers writes, “the expert-staffed public regulatory commission” powerfully caught the imagination of the corporation-lawyer-turned-reform-governor Charles Evans Hughes or that, in time, many other Wall Streeters would join Hughes in considering commission government “an answer with legs . . . , capable of application to many different specific circumstances.”

For some time I’ve been pursuing such issues in the weeds of the New Deal’s legal divisions and the doctrines of administrative law.  I’ll conclude by mentioning one of the things I realized about the lawyers’ contribution to the American administrative state only because I emerged long enough to read The Creative Society.

And that’s about when to date the end of the period of lawyers’ greatest authority within the federal government.  When Professor Galambos addresses the question directly, he emphasizes growing influence of economists and other professionals and the ill repute the bar suffered when some of its members were caught up in the Watergate scandal.  But Professor Galambos’s discussion of the federal government’s belated but enthusiastic adoption during World War II of organizational forms that had long been common among the nation’s corporations suggests an additional factor.  The lawyers’ influence within the administrative state may well have been greatest when their services as a surrogate for bureaucracy were most needed.  It waned when administrators could turn to fully articulated bureaucracies to keep subordinates in line and on task.

I started by praising The Creative Society as a much-needed and astute intervention into public debate.  I’ve closed by revealing what it taught a scholar about a subject he thought he knew fairly well.  It is remarkable when a book does both, but it’s just another day at the office for a historian who knows as much about as many things as Louis Galambos does and can express as well as Louis Galambos can.