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Tuesday, October 10, 2017

The Tyranny of Administrative Power

The most dangerous threat to freedom doesn't come from the President or the legislature, but from unelected officials making unchecked decisions.

As freedom erodes, we look for causes. We blame a succession of presidents eager to issue more executive orders and a Congress eager to pass more laws regulating our personal lives and businesses. Columbia University law professor Philip Hamburger points us to another culprit that is endangering our liberty, one we may not have yet considered: administrative power.  

Administrative power is power primarily exercised by unelected bureaucrats, often through regulatory agencies, commissions, committees, and administrative law proceedings.

Hamburger won the 2016 Manhattan Institute’s Hayek Prize for his book Is Administrative Law Unlawful? “Administrative power evades governance through law,” he explains in his shorter work The Administrative Threat, “and thereby circumvents constitutional processes and procedural rights.”

According to Hamburger, we used to assume “a rule could have the obligation of law” if it came about in one of two ways: Either the rule “came from the constitutionally established legislature elected by the people” or “a judicial decision…if it came from the constitutionally appointed judge exercising independent judgment.”

“Through administrative power,” Hamburger argues, there now exists a third but “unconstitutional” way by which the “the executive purports to create legal obligation.” In short, administrative power, Hamburger writes, is “the very sort of power that constitutions were expected to prevent.” He warns that power wielded through administrative power “binds Americans and deprives them of their liberty.” 

Administrative power, acting on behalf of crony capitalists, poses a dire threat to the well-being of one of the most economically free states in America, New Hampshire.

New Hampshire

New Hampshire is not exempt from the age-old scourge of mankind: the desire to get something for nothing. In the Cato Institute report “Freedom in the 50 states,” New Hampshire is ranked as the freest state in the country.  Without a sales tax or income tax, its tax burden is one of the lowest in the country. At the same time, New Hampshire’s  unemployment rate is one of the lowest in the country and its median household income is one of the highest. Fueled in part by natural beauty and a clean environment, New Hampshire often ranks first in quality of life surveys, too.

Tourism ranks as the second most important industry in New Hampshire with four-season recreational opportunities, from skiing to hiking to leaf peeping. The White Mountains and the Lakes Region attract millions of foreign and domestic visitors annually, 17 million alone this past summer.

What could possibly go wrong?

New Hampshire is not exempt from the age-old scourge of mankind: the desire to get something for nothing. In New Hampshire, administrative power is the conduit for crony capitalists to take advantage of federal subsidies and state mandates for hydropower and wind power.

These subsidies and mandates relieve so-called green energy producers of the burden of meeting the needs of consumers. Then, not having to meet a market test of viability, proposed energy projects need only the permission of nine unelected members of the New Hampshire Site Evaluation Committee (SEC).

Not So Green Hydropower Power from Quebec

Imagine your business depends on tourists eager to get away from the cities and experience nature. Would you entertain a proposal from a power company to run high voltage power lines, strung on up to 160 foot high towers, for 192 miles through some of the most beautiful parts of the state?  Would you allow heavy construction equipment to block country byways and small-town main streets for months at a time? Would you be concerned if disruptions due to construction were to bankrupt businesses?

In Quebec, hydropower is produced by building dams that flood Canada’s Pessamit Innu First Nation lands. Right now, the SEC is nearing a vote on the application of the power company Eversource to construct the Northern Pass through the state to transmit hydroelectric power from Quebec primarily to Massachusetts.

The project is not necessary to meet the power needs of the regional electrical grid. Instead, hydroelectric power is being demanded in Massachusetts primarily to meet that state’s legal requirement that utilities fill “one-sixth of the state’s total electricity requirements” through electricity generated by hydropower. In a process designed to favor crony capitalists, Eversource will be among those judging whether their proposal is accepted in Massachusetts.

Hydropower is expensive energy and is often sold at above free-market prices. If it wasn’t a crony capitalist boondoggle, there would be no need for proponents to lobby Massachusetts to pass a mandate to require hydropower. In Ontario, Canadian contracts for renewable energy have awarded up to 40 times the market price for electricity.       

Hydropower claims to be “green” energy. Yet, in Quebec, hydropower is produced by building dams that flood Canada’s Pessamit Innu First Nation lands. In the process, large amounts of methane gas, “30 times more potent as a greenhouse gas than carbon dioxide,” is produced.

Administrative Power Produces Tyrannical Results

Did New Hampshire voters approve the Northern Pass? No. On the contrary, the towns in NH are virtually unanimous in opposition to the project and some towns have even raised non-tax money from residents to fight this project. NH towns can’t block the project even if the Northern Pass encroaches on their property and roads. New Hampshire is a Dillon’s Rule state; towns have limited home-rule rights under Dillon’s Rule. As for abutters to the Northern Pass project, NH courts have already ruled against their property rights bankrupting some businesses even before construction has begun.

Did the New Hampshire legislature approve? No. The legislature turned over absolute authority for such projects to an administrative committee.

New Hampshire residents may be forced to pay for the construction of the Northern Pass because the Canadian state-owned utility Hydro-Quebec claims it won’t pay one penny for construction to transmit its hydropower through New Hampshire.

You might wonder how anyone could seriously consider approving an economically unviable project with such high costs.

The granting of unconstitutional, absolute power to an administrative body results in tyranny, not liberty. Consider the members of the Site Evaluation Committee. Most of the members are state commissioners who owe their state jobs to nominations by the governor with confirmation by the NH Executive Council. Chris Sununu is NH’s current governor; his election campaign was funded in part by the power company that is pushing hard for the Northern Pass. No matter how well-intentioned the members of the SEC are, they are not independent. “It is difficult to get a man to understand something, when his salary depends on his not understanding it,” wrote Upton Sinclair in his account of running for governor of California in 1934, I, Candidate for Governor.

Acting on behalf of Eversource, the Site Evaluation Committee is relying on a study that considers only the benefits and not the costs of the project.

Also, not considered in the Committee’s approval process is whether a proposed energy project would even exist without subsidies and mandates. Already the SEC has approved heavily subsidized wind power projects to mar the scenic beauty of the state.  

As Hamburger observed, edicts by administrative bodies deprive many of due process. Opponents of the Northern Pass have already been deprived of due process by the SEC.

Liberty “is present only when power is not abused, but it has eternally been observed that any man who has power is led to abuse it: he continues until he finds his limits,” wrote Montesquieu, in The Spirit of the Laws. “So that one cannot abuse power,” he explains, “power must check power by the arrangement of things.”

The “arrangement of things,” understood by America’s Founding Fathers, requires constitutionally prescribed checks and balances and limits on power. The granting of unconstitutional, absolute power to an administrative body results in tyranny, not liberty.

In New Hampshire, the absolute administrative power of the SEC—a power that poses an existential threat to the character and economic well-being of the state—is accepted as a given. Yet, the absolute power it exercises is unconstitutional and potentially tyrannical. No wonder Hamburger calls administrative power the “the civil liberties issue of our time.”

  • Barry Brownstein is professor emeritus of economics and leadership at the University of Baltimore. 

    To receive Barry's essays subscribe at his Substack, Mindset Shifts.

    His essays also appear at the American Institute for Economic Research, Intellectual Takeout, Learn Liberty, The Epoch Times and many other publications. Barry’s essays have been translated into many languages, most frequently Spanish and Portuguese. He is the author of The Inner-Work of Leadership.

    Barry holds a Ph.D. in economics from Rutgers University and a B.S. in mathematical statistics from CCNY.