Constitution Daily

Smart conversation from the National Constitution Center

Our Political System is Becoming Markedly Less Competitive

June 15, 2011 by Christopher DeMuth


Christopher DeMuth is D.C. Searle Senior Fellow at the American Enterprise Institute for Public Policy Research, where from 1986-2008, he served as president.The American Constitution uses competition to promote good government. Regular democratic elections limit incumbents' hold on power and open succession to outside competition. The "separation of powers" in our national government forces Congress and the president to compete for public favor and to balance each other's excesses; the 2010 election is only the latest to demonstrate that Americans like their government divided.

Our political system is, however, becoming markedly less competitive. State policy competition is being supplanted by "cooperative federalism" - as a result of federal policies (such as Medicaid) that encourage state uniformity and judicial policies that permit states to "export" taxes and regulatory requirements to citizens of other states. The National Labor Relations Board's effort to prevent Boeing from opening a plant in South Carolina rather than Washington state is a conspicuous effort to inhibit state policy competition.

But the most worrisome instance of declining political competition is the weakening - collapse might be a better word - of the separation of powers.Our national government is now, in many critical respects, a unilateral executive government with occasional oversight by Congress and the judiciary. Most domestic discretionary policy-making is conducted by regulatory agencies. The agencies are executive-legislative hybrids that write and enforce rules - de facto laws that often have enormous economic consequences - under very broad delegations of authority from Congress. The migration of lawmaking from Congress to regulatory agencies has been under way for many decades but has accelerated dramatically since the financial crisis of 2008.The causes of the decline of competitiveness in our political institutions are many and complex. But certainly one of them is a decline in public appreciation for the virtues of competition, amounting in many cases to a vain desire to be released from its demands.Before we continue much further, we should consider whether the world we are headed for - featuring numerous monopolies of power in the government regulating dependent economic monopolies in the private sector, with little in the way of democratic accountability - is likely to be better than the one we inherited.This excerpt from a recent article in the Philadelphia Inquirer is a preview of the  2011 John M. Templeton Jr. Lecture on Economic Liberties and the Constitution, to be delivered by Mr. DeMuth at the National Constitution Center at 6:30 p.m. Thursday. The public is invited to the free discussion, which will include Michael L. Wachter, professor of law and economics at the University of Pennsylvania. A podcast and transcript of the program will be made available here.

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