Democracy and the Origins of the American Regulatory State

Abstract

The political scientist Samuel DeCanio's book combines fine-grained historical analysis with theory drawn from political science. DeCanio's historical project is to understand the establishment of the American regulatory state. Rejecting arguments that populist demands in the late nineteenth century led directly to the creation of bureaucratic regulatory authority in the Treasury Department and the Interstate Commerce Commission (icc), DeCanio offers a much more contingent story of institutional development. He carefully takes readers through the political twists and turns of debates over monetary policy and railroad regulation that resulted in the placement of such decision making in bureaucratic agencies. Following the Civil War, the economic dislocations of industrialization led populists to call for government action, but few were clamoring for bureaucratic solutions. However, the Democratic party, undergoing an ideological transformation, was increasingly willing to push for strong laws. Republicans, in turn, fearing Democrats' new willingness to support the public's “irrational policy demands[,]” moved to contain this new authority in institutions free from popular control (p. 241). Without political checks, these agencies faced no penalty for imposing Republicans' unpopular policies (in particular, the Treasury's use of the gold standard and the icc's grant of exemptions from price discrimination rules). Thus, DeCanio argues, regulation through bureaucracy was created to fend off the kind of reform that the public actually wanted. (And as an unintended consequence, the Treasury Department and the icc, created to solve immediate political problems, would serve as models for future governance.)