The Online Library of Liberty

A project of Liberty Fund, Inc.

• Associate Editors
• Editorial
• Bibliographical Essay: Eric Foner, Radical Individualism In America: Revolution to Civil War
• I: Methodology
• Scientific Paradigms and History
• Kuhn's Paradigm
• Paradigm Choice, Art, and Reason
• Do Concepts Mold Percepts?
• Paradigms Vs. Research Programmes
• Kuhn and Historical Truth
• Paradigms and Determinism
• A Historian Between Paradigms
• Survival of the Fittest Paradigms?
• Fumbling Toward Truth
• Necessary Truths and Reality
• Economic Laws
• “pure” Vs. “grubby” Knowledge
• Paradigms and Social Change
• II: Consensus, Obedience, and Dissent
• State and Society
• Consensus and Authority
• Civil Disobedience
• Dissent and Virtue
• Underdevelopment Vs. Consensus
• Democracy Vs. Elitism
• Majority Tyranny
• Majority Frustration
• Consensus Vs. Politics
• Consensus and Rights
• Consensus Vs. Majority Rule
• III: Consent and Coercion
• The Right Against Coercion
• Private Property and Coercion
• Consent, Coercion, and Property
• Threats Vs. Offers
• A Clockwork Orange, Freedom, and Coercion
• Weak Will Vs. Compulsion
• Freedom and Using Others
• Equality and Social Coercion
• Human Action Vs. Behavior
• IV: Regulation
• The Regulating Class
• Regulation and Revolution
• Land Expropriation
• State Planning
• Hoover As Regulator
• State Science Research
• The Costs of Research
• Anti-trust
• Sec Regulation
• Sunset Laws
• V: Social Control
• Power and Servility
• State Vs. Education
• Public Vs. Private Education
• Public Schools Vs. Privacy
• Truant Officers As Scapegoats
• Were Professionals Technocrats?
• The Courts and Social Control
• The Army and Social Control
• Land Use and Control
• VI: The Liberal Tradition
• The History of Liberalism
• Freedom and Progress
• Reason and Progress
• Individualism, Property, and Revolt
• Liberal Class Analysis
• Nature and Liberty
• Free Trade and Development
• Liberalism In Transition
• “positive” Liberalism
• Utilitarian Illiberalism
• Spencer and Laissez-faire
• Mill: Liberal Or Socialist?
• Research Fields
• Economics
• Education
• History
• Law
• Philosophy
• Philosophy of Science
• Political Philosophy
• Political Science
• Sociology
• Statement of Ownership, Management, and Circulation (act of August 12, 1970: Section 3685, Title 39, United States Code)

The Regulating Class

Paul H. Weaver

• Associate Editor, Fortune magazine

“Regulation, Social Policy and Class Conflict.” Public Interest 50 (Winter 1978): 45–63.

The politics of regulatory agencies, as one widely discussed theme in social science asserts, is dominated by an “iron triangle” consisting of the regulated industry, the regulatory agency, and the congressional subcommittees with jurisdiction over the agency. The domination arises, according to this theme, because the interest of these parties in regulation is intense and direct, whereas that of the public is weak and diffuse, and therefore generally unrepresented in policy-making. A competing argument developed by such scholars as Louis Jaffe and James Q. Wilson holds that the real bias of regulatory agencies is not that they favor the regulated industry, but that they have an enormous stake in regulating per se, and that the “special interests” the agencies really serve are those involved in the regulatory process itself.

We can challenge the validity of the “iron triangle” theme by contrasting the older regulatory agencies (ICC, CAB, or FCC) with some of the newer regulatory agencies such as OSHA and the EPA. Since 1974 there has been a movement to reform and sometimes even to abolish the older regulatory agencies, and this reform movement has consequently severely weakened the “iron triangle.” Much of the literature on the “iron triangle” is misleading because it tends to focus exclusively on these older regulatory agencies. It ignores the more recent emergence of a fundamentally different type of regulatory agency, reflecting a major expansion of the field of regulation into such areas as health, safety, and the environment.

These new agencies are fundamentally different from the older variety and they now far exceed the importance of the older variety in terms of their scope of power, expenditures, and personnel. Most significantly, these new agencies are deliberately organized along functional lines, transcending individual industries, and therefore resistant to cooptation by regulated companies.

The new agencies are controlled by a new “iron triangle” consisting of public interest groups, the press, and the federal government as a whole (but especially the courts and Congress). In the view of this new “iron triangle,” government regulation of business is not primarily an instrument of economic policy, allegedly correcting the deficiencies of the market, but rather it is social policy seeking to transcend markets altogether.

Government regulation of this new type asserts a world view. Policy of this large sort is never created by mere interest groups but by classes—groups that possess a distinctive culture and relationship to the means of production and that intend to dominate and “define” societies, that is, to rule. The real animus of the new class is not so much against business or technology but against the liberal values served by corporate capitalism, and the benefits that these institutions provide to the broad mass of American people: economic growth, widespread prosperity, material satisfaction, and a belief in an open and self-determined future. We should be concerned over the fate of the traditional private sector, which has failed to aggressively defend itself against this new challenge to its values.