The regulatizing process and the boundaries of new public governance

Wisconsin Law Review

Volumn 2010, Issue 2, 2010, Pages 535-589

  Rubin, Edward ^a  

^a VANDERBILT UNIVERSITY   (United States)

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EID: 78650814457     PISSN: 0043650X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Conference Paper

References (498)

1. This has become a widespread movement during the past two decades in American, British, and Australian legal scholarship. See, e.g., IAN AYRES & JOHN BRAITHWAITE, RESPONSIVE REGULATION: TRANSCENDING THE DEREGULATION DEBATE (1992);
2. NEIL GUNNINGHAM ET AL., SMART REGULATION: DESIGNING ENVIRONMENTAL POLICY (1998);
3. Gráinne de Burea & Joanne Scott, Introduction: Narrowing the Gap? Law and New Approaches to Governance in the European Union, 13 COLUM. J. EUR. L. 513 (2007);
4. Michael C. Dorf, Legal Indeterminacy and Institutional Design, 78 N.Y.U. L. REV. 875 (2003);
5. Daniel A. Farber, Revitalizing Regulation, 91 MICH. L. REV. 1278 (1993) (book review);
6. Daniel A. Farber, Taking Slippage Seriously: Noncompliance and Creative Compliance in Environmental Law, 23 HARV. ENVTL. L. REV. 297 (1999);
7. Jody Freeman, Collaborative Governance in the Administrative State, 45 UCLA L. REV. 1 (1997);
8. Richard H. Pildes & Cass R. Sunstein, Reinventing the Regulatory State, 62 U. CHI. L. REV. 1 (1995);
9. Charles F. Sabel & William H. Simon, Destabilization Rights: How Public Law Litigation Succeeds, 117 HARV. L. REV. 1015 (2004);
10. Joanne Scott & Susan Sturm, Courts as Catalysts: Re-Thinking the Judicial Role in New Governance, 13 COLUM. J. EUR. L. 565 (2007);
11. Susan Sturm, Second Generation Employment Discrimination: A Structural Approach, 101 COLUM. L. REV. 458 (2001).
12. For overviews, see Orly Lobel, The Renew Deal: The Fall of Regulation and the Rise of Governance in Contemporary Legal Thought, 89 MINN. L. REV. 342 (2004);
13. Victoria Nourse & Gregory Shaffer, Varieties of New Legal Realism: Can A New World Order Prompt a New Legal Theory?, 95 CORNELL L. REV. 61 (2009).
14. Modern microeconomics is built upon this behavioral assumption, with varying degrees of subtlety. See ROBERT S. PINDYCK & DANIEL L. RUBINFELD, MICROECONOMICS 61-88, 254-55 (5th ed. 2001);
15. George J. Stigler & Gary S. Becker, De Gustibus Non Est Disputandum, 67 AM. ECON. REV. 76 (1977). In the form of rational-actor theory, it has been applied to a broad range of social (i.e., non-economic) behaviors.
16. See GARY S. BECKER, THE ECONOMIC APPROACH TO HUMAN BEHAVIOR (1978);
17. JAMES M. BUCHANAN & GORDON TULLOCK, THE CALCULUS OF CONSENT (1962);
18. MANCUR OLSON, THE LOGIC OF COLLECTIVE ACTION (1965);
19. Dennis C. Mueller, Rational Egoism Versus Adaptive Egoism as Fundamental Postulate for a Descriptive Theory of Human Behavior, 51 PUB. CHOICE 3 (1986).
20. See, e.g., DAVID W. JONES, UNDERSTANDING CRIMINAL BEHAVIOR: PSYCHOSOCIAL APPROACHES TO CRIMINALITY (2008);
21. Benjamin B. Lahey & Irwin D. Waldman, A Developmental Propensity Model of the Origins of Conduct Problems During Childhood and Adolescence, in CAUSES OF CONDUCT DISORDER AND JUVENILE DELINQUENCY 76 (Benjamin Lahey et al. eds., 2003).
22. Becker argues that sociopathic behavior is simply a variant of self-interested behavior. Gary S. Becker, The Economics of Crime, 12 CROSS SECTIONS 8 (1995).
23. See HANS KELSEN, GENERAL THEORY OF LAW AND THE STATE (Anders Wedberg trans. 1945) (2009);
24. HANS KELSEN, PURE THEORY OF LAW (Max Knight trans., 1934) (1967).
25. OLIVER E. WILLIAMSON, THE MECHANISMS OF GOVERNANCE 253 (1996). Williamson defines this as opportunism, in "contrast with simple self-interest seeking, according to which economic agents will continuously consult their own preferences but will candidly disclose all pertinent information on inquiry and will reliably discharge all covenants . ..."
26. Id. The opportunistic self-interest seeker clearly presents a greater challenge for a new public governance approach to regulation.
27. MAX WEBER, ECONOMY AND SOCIETY: AN OUTLINE OF INTERPRETIVE SOCIOLOGY 212-99, 956-1003 (Guenther Ross & Claus Wittich eds., 1978).
28. JURGEN HABERMAS, THE THEORY OF COMMUNICATIVE ACTION: REASON AND THE RATIONALIZATION OF SOCIETY 279-95 (Thomas McCarthy trans., 1984) (1981).
29. ANTHONY GIDDENS, THE CONSTITUTION OF SOCIETY: OUTLINE OF THE THEORY OF STRUCTURATION (1984).
30. NORBERT ELIAS, THE CIVILIZING PROCESS: THE HISTORY OF MANNERS AND STATE FORMATION AND CIVILIZATION (Edmund Jephcott trans., 1994) (1939). This is a continuously paginated volume containing two books which Elias published separately in 1939, THE HISTORY OF MANNERS 1-256 (Haus zum Falker 1939),
31. and STATE FORMATION AND CIVILIZATION 257-543 (Haus zum Falker 1939).
32. In fact, he relies largely on Freudian psychology, speaking of the desires that emerge from the Id, and constraints imposed by the superego. This perspective pervades the entire work, and is explicitly invoked and discussed in its most general and theoretical section.
33. ELIAS, STATE FORMATION AND CIVILIZATION, supra note 9, at 443-513.
34. Id. at 265-72.
35. Id. at 42-47, 441-524.
36. Periodization is always difficult. For present purposes, the Early Middle Ages, a term that historians now prefer to the more traditional "Dark Ages," extended roughly from 500 to 1000 AD, that is, from the fall of Rome to the beginnings of Western European expansion, and the Middle Ages or High Middle Ages from 1000 to 1400 or 1500 AD, that is, the period of expansion and increasing commerce up through the Renaissance, the age of exploration, and the Reformation. Of course, all people see themselves as living in modern times.
37. ELIAS, STATE FORMATION AND CIVILIZATION, supra note 9, at 275-86, 335-45. Around the turn of the millennium, peasants and clerics joined together in a social movement, the Peace of God, to condemn and combat the endemic violence in the society.
38. See Geoffrey G. Koziol, Monks, Feuds, and the Making of Peace in Eleventh-Century Flanders, in THE PEACE OF GOD: SOCIAL VIOLENCE AND RELIGIOUS RESPONSE IN FRANCE AROUND THE YEAR 1000, at 239 (Thomas Head & Richard Landes eds., 1992);
39. Hans-Werner Goetz, Protection of the Church, Defense of the Law, and Reform: On the Purposes and Character of the Peace of God, 989-1038, in THE PEACE OF GOD: SOCIAL VIOLENCE AND RELIGIOUS RESPONSE IN FRANCE AROUND THE YEAR 1000, at 259 (Thomas Head & Richard Landes eds., 1992).
40. ELIAS, THE HISTORY OF MANNERS, supra note 9, at 51-55.
41. Id. at 106-09.
42. Id. at 121-22.
43. Id. at 129-30.
44. Id. at 134-37.
45. Id. at 135.
46. Id. at 145-46.
47. Id. at 345-89.
48. See JOSEPH & FRANCES GIES, LIFE IN A MEDIEVAL CASTLE 218-22 (1974);
49. JACQUES LE GOFF, THE BIRTH OF EUROPE 157 (Janet Lloyd trans., 2005) (2005);
50. JOHN KEEGAN, A HISTORY OF WARFARE 321-28 (1994);
51. LYNN WHITE, JR., MEDIEVAL TECHNOLOGY AND SOCIAL CHANGE 97-103 (1964). A weakness of Elias's account is its exclusive focus on social interaction to the exclusion of technological factors.
52. R.H.C. DAVIS, A HISTORY OF MEDIEVAL EUROPE: FROM CONSTANTINE TO ST. LOUIS 288 (2d ed. 1988);
53. RICHARD MORTIMER, ANGEVIN ENGLAND 1154-1258, at 17-19 (1994);
54. W.L. WARREN, HENRY II, at 302-04 (1973).
55. ELIAS, STATE FORMATION AND CIVILIZATION, supra note 9, at 465-75.
56. Id. at 475-98.
57. Id. at 475-92.
58. Id. at 477.
59. Id. at 464.
60. Id. at 464-65, 499-513.
61. EMILE DURKHEIM, THE DIVISION OF LABOR IN SOCIETY (W.D. Halls trans., 1984) (1933);
62. MICHEL FOUCAULT, DISCIPLINE AND PUNISH: THE BIRTH OF THE PRISON (Alan Sheridan trans., 1979) (1977);
63. ANTHONY GIDDENS, CENTRAL PROBLEMS IN SOCIAL THEORY: ACTION, STRUCTURE, AND CONTRADICTION IN SOCIAL ANALYSIS (1979).
64. DURKHEIM, supra note 31. Elias refers to Durkheim only once in his introduction to the 1968 edition of his book where he identifies Durkheim as the originator of an idea developed by Talcott Parsons.
65. See ELIAS, THE HISTORY OF MANNERS, supra note 9, at 188. I am unable to explain why Elias does not engage Durkheim's work more fully.
66. DURKHEIM, supra note 31, at 68-87.
67. Id. at 200.
68. FOUCAULT, supra note 31, at 76-79. Both Foucault and Durkheim are centrally concerned with criminal law. Their theories of society, however, are quite general. The concern with criminal law probably stems from the view that criminal sanctions-the outright deployment of the state's coercive power to prohibit a particular action-are conceptually central to the process of social control. This is one of the views that new public governance has contested directly and convincingly.
69. See GIDDENS, supra note 31;
70. ANTHONY GIDDENS, THE CONSEQUENCES OF MODERNITY 177-78 (1990).
71. This is the definition typically used in administrative law treatises. See, e.g., ALFRED C. AMAN, JR. & WILLIAM T. MAYTON, ADMINISTRATIVE LAW 1 (2d ed. 2001);
72. WILLIAM FOX, UNDERSTANDING ADMINISTRATIVE LAW 1 (4th ed. 2000);
73. RICHARD J. PIERCE, JR., ADMINISTRATIVE LAW 1 (2008);
74. KEITH WERHAN, PRINCIPLES OF ADMINISTRATIVE LAW 1 (2008).
75. The use of the term "bureaucratic" does not make the definition circular (or pejorative) because we can rely on Weber's definition of bureaucracy. According to Weber, a bureaucracy is a government institution that has a defined jurisdictional area, a hierarchical organization, written (or electronically stored) files that guide its activities, a specialized, credentialed staff whose members devote their full working time to the institution, and a set of stable and exhaustive general rules that define its operations. WEBER, supra note 6, at 956-69.
76. For other definitions, see MARTIN ALBROW, BUREAUCRACY (1970);
77. BUREAUCRACY: THE CAREER OF A CONCEPT (Eugene Kamenka & Martin Kry gier eds., 1979).
78. Thus, an alien coming to Earth would be able to distinguish human beings from other organisms on the basis of the definition, but the definition conveys no essential information about human beings, that is, it is completely arbitrary, in terms of the nature of human beings, whether there exists on Earth a chimpanzee that has become entirely bipedal, or an ostrich that has evolved without feathers.
79. One treatise, see RICHARD J. PIERCE, JR. ET AL., ADMINISTRATIVE LAW AND PROCESS 1-24 (2004), adopts this approach, although in a somewhat different manner than the one used here.
80. The rule for the Cossacks, at least in legend, was that if they received a recruit who had never ridden a horse they assigned him to a horse that had never been ridden.
81. See Jeffrey C. Alexander, Toward a Theory of Cultural Trauma, in CULTURAL TRAUMA AND COLLECTIVE IDENTITY 1 (Jeffrey C. Alexander et al. eds., 2004);
82. Neil J. Smelser, Psychological Trauma and Cultural Trauma, in CULTURAL TRAUMA AND COLLECTIVE IDENTITY 31 (Jeffrey C. Alexander et al. eds., 2004).
83. See generally PETER L. BERGER & THOMAS LUCKMANN, THE SOCIAL CONSTRUCTION OF REALITY: A TREATISE IN THE SOCIOLOGY OF KNOWLEDGE (1966).
84. See DIANE VAUGHN, CONTROLLING UNLAWFUL ORGANIZATIONAL BEHAVIOR: SOCIAL STRUCTURE AND CORPORATE MISCONDUCT (1983);
85. Jack Katz, Cover-up and Collective Identity: On the Natural Antagonisms of Authority Internal and External to Organizations, 25 Soc. PROBS. 3 (1977);
86. Stewart Macaulay, Private Government, in LAW AND THE SOCIAL SCIENCES 445, 502-04 (Leon Lipson & Stanton Wheeler eds., 1986);
87. Diane Vaughn, Transaction Systems and Unlawful Behavior, 29 Soc PROBS. 373 (1982). Race creates special circumstances in this case, as it so often does in the U.S., but the resistance of organizations to racial integration can be regarded as another example of resistance to regulation.
88. See MELISSA FAY GREENE, PRAYING FOR SHEETROCK (1991);
89. JASON SOKOL, THERE GOES MY EVERYTHING: WHITE SOUTHERNERS IN THE AGE OF CIVIL RIGHTS, 1945-1975 (2006);
90. FREDERICK M. WIRT, THE POLITICS OF SOUTHERN EQUALITY: LAW AND SOCIAL CHANGE IN A MISSISSIPPI COUNTY (1970).
91. Instead, modern law consists largely of the implementation of social policy initiatives justified by a discourse based on instrumental rationality. This is generally described as the positivization of law. See, e.g., JÜRGEN HABERMAS, THE THEORY OF COMMUNICATIVE ACTION: REASON AND THE RATIONALIZATION OF SOCIETY 243-71 (Thomas McCarthy trans., 1984) (1981);
92. NIKLAS LUHMANN, A SOCIOLOGICAL THEORY OF LAW 159-264 (Martin Albrow ed., Elizabeth King & Martin Albrow, trans., 1985) (1971);
93. WEBER, supranote 6, at 217-26, 839-76.
94. For classic works on this subject, see, e.g., RAYMOND A. BAUER ET AL., AMERICAN BUSINESS AND PUBLIC POLICY (1963);
95. ROBERT A. DAHL, WHO GOVERNS?: DEMOCRACY AND POWER IN AN AMERICAN CITY (1961);
96. G. WILLIAM DOMHOFF, WHO RULES AMERICA? (1967);
97. JOHN W. KINGDON, AGENDAS, ALTERNATIVES, AND PUBLIC POLICIES (2d ed. 2003);
98. TERRY M. MOE, THE ORGANIZATION OF INTERESTS: THE ORGANIZATION OF INTERESTS (1980);
99. DAVID B. TRUMAN, THE GOVERNMENTAL PROCESS: POLITICAL INTERESTS AND PUBLIC OPINION (1962).
100. The active participation of interest groups, and specifically of firms potentially subject to government regulation, has been a mainstay of public choice theory, to be discussed in greater detail below.
101. See infra Part I.D. See also generally JOHN A. FEREJOHN, PORK BARREL POLITICS: RIVERS AND HARBORS LEGISLATION, 1947-1968 (1974);
102. MORRIS P. FIORINA, CONGRESS: KEYSTONE OF THE WASHINGTON ESTABLISHMENT (1977);
103. DAVID R. MAYHEW, CONGRESS: THE ELECTORAL CONNECTION (1974);
104. WILLIAM H. RKER, THE THEORY OF POLITICAL COALITIONS (1962).
105. See infra Part III. D.
106. See David B. Spence, The Shadow of the Rational Polluter: Rethinking the Role of Rational Actor Models in Environmental Law, 89 CAL. L. REV. 917, 917-19 (2001) (stating that noncompliance often results from inefficiency, rather than explicit resistance);
107. cf. Donald C. Langevoort, Agency Law Inside the Corporation: Problems of Candor and Knowledge, 71 U. CIN. L. REV. 1187 (2003) (noting the complexity of communication within corporations).
108. ELIAS, STATE FORMATION AND CIVILIZATION, supra note 9, at 465-75 (describing the "courtization" of warriors, their gradual transformation from independent military men to dependent courtiers).
109. Philip Selznick's account of institutionalization traces a similar process. See PHILIP SELZNICK, LEADERSHIP IN ADMINISTRATION: A SOCIOLOGICAL INTERPRETATION (1957)
110. [hereinafter SELZNICK, LEADERSHIP];
111. PHILIP SELZNICK, TVA AND THE GRASS ROOTS: A STUDY IN THE SOCIOLOGY OF FORMAL ORGANIZATION (1949)
112. [hereinafter SELZNICK, TVA].
113. ELIAS, STATE FORMATION AND CIVILIZATION, supra note 9, at 443-92.
114. There are various schools of organization theory that can be characterized in various ways. One list would consist of several components. For general systems theory, see, e.g., FRANK BAKER, ORGANIZATIONAL SYSTEMS: GENERAL SYSTEMS APPROACHES TO COMPLEX ORGANIZATIONS (1973);
115. LUDWIG VON BERTALANFFY, GENERAL SYSTEM THEORY: FOUNDATIONS, DEVELOPMENT, APPLICATIONS (1968);
116. LARS SKYTTNER, GENERAL SYSTEMS THEORY: IDEAS AND APPLICATIONS 301-37 (2001);
117. GERALD M. WEINBERG, AN INTRODUCTION TO GENERAL SYSTEMS THINKING (1975).
118. For decision theory, see RICHARD M. CYERT & JAMES G. MARCH, A BEHAVIORAL THEORY OF THE FIRM (1963).
119. Cf. MICHAEL D. COHEN & JAMES G. MARCH, LEADERSHIP AND AMBIGUITY: THE AMERICAN COLLEGE PRESIDENT (1974);
120. HERBERT A. SIMON, ADMINISTRATIVE BEHAVIOR: A STUDY OF DECISION-MAKING PROCESSES IN ADMINISTRATIVE ORGANIZATION (3ded. 1976).
121. For new institutionalism, see generally THE NEW INSTITUTIONALISM IN ORGANIZATIONAL ANALYSIS (Walter W. Powell & Paul J. DiMaggio eds., 1991);
122. W. RICHARD SCOTT ET AL., INSTITUTIONAL ENVIRONMENTS AND ORGANIZATIONS: STRUCTURAL COMPLEXITY AND INDIVIDUALISM (1994);
123. Lynne G. Zucker, The Role of Institutionalization in Cultural Persistence, 42 AM. SOC. REV. 726 (1977).
124. This list is in addition to the human relations theory discussed below. While all these theories differ from rational actor theory-which, in essence, dissolves the organization into individuals with independent motivations-there have also been various efforts to unify the two methodologies, see, e.g., DOUGLASS C. NORTH, INSTITUTIONS, INSTITUTIONAL CHANGE AND ECONOMIC PERFORMANCE (1990);
125. WILLIAMSON, supra note 5, at 219-49.
126. The human relations theory of organizations owes its origins to the Harvard Business School experiments at the Western Electric Company's Hawthorne plant in Chicago.
127. See generally ELTON MAYO, THE HUMAN PROBLEMS OF AN INDUSTRIAL CIVILIZATION (1933);
128. F.J. ROETHLISBERGER & WILLIAM J. DICKSON WITH THE ASSISTANCE OF HAROLD A. WRIGHT, MANAGEMENT AND THE WORKER: AN ACCOUNT OF A RESEARCH PROGRAM CONDUCTED BY THE WESTERN ELECTRIC COMPANY, HAWTHORNE WORKS, CHICAGO (1942).
129. For subsequent works of significance in this tradition, see, e.g., GEORGE C. HOMANS, THE HUMAN GROUP (1950);
130. KURT LEWIN, RESOLVING SOCIAL CONFLICTS: SELECTED PAPERS ON GROUP DYNAMICS (Gertrud Weiss Lewin ed., 1948);
131. DONALD A. SCHN, BEYOND THE STABLE STATE: PUBLIC AND PRIVATE LEARNING IN A CHANGING SOCIETY (1971);
132. SELZNICK, TVA, supra note 49;
133. HELEN B. SCHWARTZMAN, ETHNOGRAPHY IN ORGANIZATIONS (1993).
134. For example, J. GREGORY SIDAK & DANIEL F. SPULBER, DEREGULATORY TAKINGS AND THE REGULATORY CONTRACT: THE COMPETITIVE TRANSFORMATION OF NETWORK INDUSTRIES IN THE UNITED STATES (1998) makes the interesting observation that deregulation often reduces or eliminates the value of the private property in the previously regulated firm, although their suggestion that the firms be compensated for this loss of value by the government is unconvincing.
135. See William J. Baumol & Thomas W. Merrill, Regulatory Takings, Breach of the Regulatory Contract and the Telecommunications Act of 1996, 72 N.Y.U. L. REV. 1037 (1997). The suggestion here is that deregulation also decreases the human capital of the firm's managers in an industry that has been regulated for a length of time. While no argument will be made that they should be compensated for this loss, the reality of that loss may well lead them to favor the regulation's continued existence.
136. Lauren B. Edelman et al., The Endogeneity of Legal Regulation: Grievance Procedures as Rationalized Myth, 105 AM. J. Soc 406 (1999);
137. Lauren B. Edelman et al., Internal Dispute Resolution: The Transformation of Civil Rights in the Workplace, 27 LAW & SOC'Y REV. 497 (1993);
138. Lauren B. Edelman et. al., Legal Ambiguity and the Politics of Compliance: Affirmative Action Officers' Dilemma, 13 LAW & POL'Y 73 (1991);
139. Lauren B. Edelman, Legal Ambiguity and Symbolic Structures: Organizational Mediation of Civil Rights Law, 97 AM. J. Soc 1531 (1992);
140. Lauren B. Edelman & Mark C. Suchman, The Legal Environments of Organizations, 23 ANN. REV. SOC. 479 (1997);
141. Lauren B. Edelman & Mark C. Suchman, When the "Haves" Hold Court: Speculations on the Organizational Internalization of Law, 33 LAW & SOC'Y. REV. 941 (1999).
142. See also KEITH HAWKINS, ENVIRONMENT AND ENFORCEMENT: REGULATION AND THE SOCIAL DEFINITION OF POLLUTION (1984);
143. Stewart Macaulay, Private Government, in LAW AND THE SOCIAL SCIENCES 445 (Leon Lipson & Stanton Wheeler eds., 1986).
144. See generally CHRIS ARGYRIS & DONALD A. SCHÖN, ORGANIZATIONAL LEARNING: A THEORY OF ACTION PERSPECTIVE (1978);
145. PAUL R. LAWRENCE & JAY W. LORSCH, ORGANIZATION AND ENVIRONMENT: MANAGING DIFFERENTIATION AND INTEGRATION (1967);
146. CHRIS ARGYRIS, REASONING, LEARNING AND ACTION: INDIVIDUAL AND ORGANIZATIONAL (1982);
147. J. Friedmann & G. Abonyi, Social Learning: A Model for Policy Research, 8 ENV'T & PLAN. A 927 (1976).
148. See MICHAEL POLANYI, PERSONAL KNOWLEDGE: TOWARDS A POSTCRITICAL PHILOSOPHY (1958).
149. This approach owes much of its intellectual inspiration to MARTIN HEIDEGGER, BEING AND TIME 102-48 (John Macquarrie & Edward Robinson, trans., 1962) (1927).
150. EDGAR SCHEIN, PROCESS CONSULTATION: ITS ROLE IN ORGANIZATION DEVELOPMENT (1969).
151. ARGYRIS & SCHÖN, supra note 55;
152. ARGYRIS, supra note 55;
153. CHRIS ARGYRIS & DONALD A. SCHÖN, THEORY IN PRACTICE: INCREASING PROFESSIONAL EFFECTIVENESS (1974).
154. On emergent characteristics generally, see F. ALLAN HANSON, MEANING IN CULTURE (1975);
155. A.L. KROEBER, The Concept of Culture in Science, in THE NATURE OF CULTURE 118 (1952);
156. David Kaplan, The Superorganic: Science or Metaphysics?, 67 AM. ANTHROPOLOGIST 958 (1965);
157. Leslie A. White, The Concept of Culture, 61 AM. ANTHROPOLOGIST227 (1959).
158. See generally BERTALANFFY, supra note 51, at 30-49;
159. NIKLAS LUHMANN, SOCIAL SYSTEMS 1-59 (John Bednarz, Jr. with Dirk Baecker trans., 1995) (1984);
160. SKYTTNER, supra note 51, at 49-108.
161. See JON ELSTER, ULYSSES AND THE SIRENS: STUDIES IN RATIONALITY AND IRRATIONALITY 1-35 (1984) (arguing that human beings can act as global maximizers while animals or biological systems cannot).
162. See LUHMANN, supra note 60, at 176-254. New institutional analysis is, among other things, an effort to combine the insights of human relations theory and general systems theory. One of its themes is that institutional isomorphism is not only a structural response but a human reaction.
163. Id. at 34-41, 218-21;
164. Gunther Teubner, Introduction to AUTOPOIETIC LAW: A NEW APPROACH TO LAW AND SOCIETY 1 (Gunther Teubner ed., 1987);
165. GUNTHER TEUBNER, LAW AS AN AUTOPOIETIC SYSTEM (Zenon Bankowski ed., Anne Bankowska & Ruth Adler trans., 1993) (1993).
166. Paul J. DiMaggio & Walter W. Powell, The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality, in THE NEW INSTITUTIONALISM IN ORGANIZATIONAL ANALYSIS 63 (Walter W. Powell & Paul J. DiMaggio eds., 1991);
167. Marco Orrú et al., Organizational Isomorphism in East Asia, in THE NEW INSTITUTIONALISM IN ORGANIZATIONAL ANALYSIS 361 (Walter W. Powell & Paul J. DiMaggio eds., 1991). New institutionalism is not a version of general systems theory; rather, it is conceived as a successor to Human Relations Theory and Decision Theory.
168. See Paul J. DiMaggio & Walter W. Powell, Introduction to THE NEW INSTITUTIONALISM IN ORGANIZATIONAL ANALYSIS 1 (Walter W. Powell & Paul J. DiMaggio eds., 1991). Nonetheless, its insights are consistent with the main conclusions of systems theory as well.
169. For an illuminating discussion of the role of the adversarial approach in law, see generally ROBERT A. KAGAN, ADVERSARIAL LEGALISM: THE AMERICAN WAY OF LAW (2001).
170. For a comparative account of the role of adversarial in the U.S. and other advanced industrial nations, see generally INSTITUTIONS & PUBLIC LAW: COMPARATIVE APPROACHES (Tom Ginsburg & Robert A. Kagan eds., 2005).
171. If one does not, then there is no point in trying to obtain compliance, and the entire inquiry collapses.
172. See Richard L. Abel, Risk as an Arena of Struggle, 83 MICH. L. REV. 772 (1985);
173. Susan Rose-Ackerman, Consensus versus Incentives: A Skeptical Look at Regulatory Negotiation, 43 DUKE L.J. 1206 (1994);
174. Kenneth A. Bamberger, Regulation as Delegation: Private Firms, Decisionmaking, and Accountability in the Administrative State, 56 DUKE L.J. 377 (2006);
175. Mark Burton & Justin Dabner, The Limits of the Responsive Regulation Model: What Really Defines the Relationship Between the New Zealand Inland Revenue and Tax Practitioners, 15 NEW ZEALAND J. TAX'N L. & POL'Y 111 (2009);
176. Cary Coglianese, Assessing Consensus: The Promise and Performance of Negotiated Rulemaking, 46 DUKE L.J. 1255 (1997);
177. William Funk, Bargaining Toward the New Millennium: Regulatory Negotiation and the Subversion of the Public Interest, 46 DUKE L.J. 1351 (1997).
178. See JOHN BRAITHWAITE, TO PUNISH OR PERSUADE: ENFORCEMENT OF COAL MINE SAFETY (1985);
179. John Braithwaite, Enforced Self-Regulation: A New Strategy for Corporate Crime Control, 80 MICH. L. REV. 1466 (1982);
180. Sidney A. Shapiro & Randy S. Rabinowitz, Punishment Versus Cooperation in Regulatory Enforcement: A Case Study of OHSA, 49 ADMIN. L. REV. 713 (1997)
181. Tom R. Tyler, Trust and Law-Abidingness: A Proactive Model of Social Regulation, 81 B.U. L. REV. 361 (2001). These studies do not specifically focus on advanced stages of regulation, but they seem to date from that phase of the process.
182. See generally NEIL GUNNJNGHAM ET AL., SHADES OF GREEN: BUSINESS, REGULATION, ANO ENVIRONMENT (2003).
183. It is thus a lineal descendent of the more venerable theory mat regulated parties capture their regulators and shape regulatory policy to their own advantage. See generally GABRIEL KOLKO, THE TRIUMPH OF CONSERVATISM: A REINTERPRETATION OF AMERICAN HISTORY, 1900-1916 (1963);
184. Samuel P. Huntington, The Marasmus of the ICC: The Commission, the Railroads, and the Public Interest, 61 YALE L.J. 467 (1952);
185. Thomas W. Merrill, Capture Theory and the Courts: 1967-1983, 72 CHI.-KENTL.REV. 1039(1997).
186. See Richard Ippolito & Robert T. Masson, The Social Cost of Government Regulation of Milk, 21 J.L. &ECON. 33 (1978);
187. ROBERT E. MCCORMICK & ROBERT D. TOLLISON, POLITICIANS, LEGISLATION, AND THE ECONOMY: AN INQUIRY INTO THE INTEREST-GROUP THEORY OF GOVERNMENT (1981);
188. Sam Peltzman, Toward a More General Theory of Regulation, 19 J.L. & ECON. 211 (1976);
189. George J. Stigler, The Size of Legislatures, 5 J. LEGAL STUD. 17 (1976);
190. Sherry Jo Wise & Todd Sandler, Rent Seeking and Pesticide Legislation, 78 PUB. CHOICE 329 (1994).
191. The self-interest motivating action must be material in nature, that is, it must involve the desire for wealth, income, power, or leisure, or conditions leading directly to those benefits, such as job security. Both proponents and critics of public choice, and rational actor theory in general endorse this view.
192. See JAMES M. BUCHANAN & GORDON TULLOCK, THE CALCULUS OF CONSENT: THE LOGICAL FOUNDATIONS OF CONSTITUTIONAL DEMOCRACY 3-39 (1962);
193. DONALD GREEN & IAN SHAPIRO, PATHOLOGIES OF RATIONAL CHOICE THEORY: A CRITIQUE OF APPLICATIONS IN POLITICAL SCIENCE 17-23 (1994);
194. STEVEN KELMAN, MAKING PUBLIC POLICY: A HOPEFUL VIEW OF AMERICAN GOVERNMENT 234-36 (James Q. Wilson ed., 1987);
195. DENNIS C. MUELLER, PUBLIC CHOICE in, at 9-14, 304-05 (2003)
196. [hereinafter MUELLER, PUBLIC CHOICE III];
197. Dennis C. Mueller, Rational Egoism versus Adaptive Egoism as a Fundamental Postulate for a Descriptive Theory of Human Behavior, 51 PUB. CHOICE 3 (1986);
198. Edward L. Rubin, Public Choice, Phenomenology, and the Meaning of the Modern State: Keep the Bathwater, But Throw Out That Baby, 87 CORNELL L. REV. 309, 313-28 (2002).
199. This is what John Ferejohn described as a "thick" theory of rationality. John Ferejohn, Rationality and Interpretation: Parliamentary Elections in Early Stuart England, in THE ECONOMIC APPROACH TO POLITICS: A CRITICAL REASSESSMENT OF THE THEORY OF RATIONAL ACTION 279, 282 (Kristen Renwick Monroe eds., 1991). If one allows non-material desires such as the desire for fame, political influence or subjective self-satisfaction to count as selfinterest, the theory collapses because it allows for any behavior whatsoever. Altruism, generally taken as the polar opposite of self-interest, can be easily explained in terms of the desire for fame, influence or self-satisfaction and, indeed, is almost impossible to explain without relying on those factors.
200. See, e.g., FEREJOHN, supra note 45;
201. FIORINA, supra note 45;
202. MAYHEW, supra note 45;
203. RKER, supra note 45;
204. Sam Peltzman, Constituent Interest and Congressional Voting, 27 J.L. & ECON. 181 (1984);
205. Sam Peltzman, An Economic Interpretation of the History of Congressional Voting in the Twentieth Century, 75 AM. ECON. REV. 656 (1985).
206. WILLIAM A. NISKANEN, JR., BUREAUCRACY AND REPRESENTATIVE GOVERNMENT (1971). Niskanen's theory, which is somewhat implausible from a behavioral perspective (why exactly does the bureaucrat want to maximize the agency's budget when her salary is set by schedule) rests on three assumptions: that the agency is a monopolist (not always true, given turf battles), that it can conceal its costs (true only to a limited extent), and that it is given authority to make take-it-or-leave-it budget proposals (false, the Office of Management and Budget (OMB) produces the President's budget proposal and the Congressional Budget Office reviews that budget in detail, having been specifically created by Congress for that purpose). As Dennis Mueller, a strong proponent of public choice analysis, observes, "relaxing any of the assumptions of the original budget-maximizing-bureau model shifts the outcome away from the excessive budget result, and in several cases yields the optimally sized budget."
207. MUELLER, PUBLIC CHOICE III, supra note 72, at 368.
208. Public choice experiences similar problems in trying to apply the maximization model to another important group of appointed officials, namely judges.
209. See RICHARD A. POSNER, OVERCOMING LAW 109-44 (1995) for an implicit admission of defeat.
210. See C. NELSON DORNY, UNDERSTANDING DYNAMIC SYSTEMS: APPROACHES TO MODELING, ANALYSIS, AND DESIGN 3 (1993) ("A system is dynamic if the latest values of its variables depend on past values of the energy sources. We can think of a dynamic system as having memory; the effects of the energy sources integrate-accumulate over time."). Although "dynamic," as used in ordinary discourse, is laudatory and "static" is pejorative (no corporate executive would declare a new policy of static management) the terms are being used here in their technical sense. Many people, for example, favor a static theory of justice, where each case is decided on its own merits.
211. See Bamberger, supra note 67, at 409-16. In addition to the limits on individual decision-making, collective behavior by disparate actors is notoriously difficult to organize.
212. See JAMES G. MARCH & JOHAN P. OLSEN, AMBIGUITY AND CHOICE IN ORGANIZATIONS (1976);
213. SELZNICK, LEADERSHIP, supra note 49;
214. James G. March, Decisions in Organizations and Theories of Choice, in PERSPECTIVES ON ORGANIZATION DESIGN AND BEHAVIOR 205 (A.H. Van de Van & William F. Joyce eds., 1981);
215. Spence, supra note 47.
216. For example, they attempt to support the reelection maximizing model of legislative behavior by demonstrating that interest groups give contributions to candidates from whom they expect specific results that support their interests. James M. Snyder, Jr., Campaign Contributions as Investments: The U.S. House of Representatives, 98 J. POL. ECON. 1195 (1990);
217. Thomas Stratmann, Are Contributions Rational? Untangling Strategies of Political Action Committees, 100 J. POL. ECON. 647 (1992);
218. Thomas Stratmann, What Do Campaign Contributions Buy? Causal Effects of Money and Votes, 57 S. ECON. J. 606 (1991).
219. To quote a leading source on public choice theory: The interest group model of political competition rests on three legs: (1) an equation to explain how interest groups allocate their campaign contributions, (2) an equation to explain the effect of campaign contributions on the way representatives vote, and (3) an equation to explain the effect of campaign contributions on the outcomes of electoral contests. All three legs of the model have found empirical support.
220. MUELLER, PUBLIC CHOICE III, supra note 72, at 493. But none of this support addresses the causal arrow, that is, whether the contributions determine how legislators vote (the public choice assumption) or whether legislators' public-oriented decisions elicit contributions from those who will benefit from that decision.
221. See WILLIAM J. BAUMOL & ALAN S. BLINDER, ECONOMICS: PRINCIPLES AND POLICIES 255-324 (6th ed. 1998);
222. STEPHEN BREYER, REGULATION AND ITS REFORM (1982);
223. N. GREGORY MANKIW, PRINCIPLES OF MICROECONOMICS 201-20, 311-38 (3d ed. 2004);
224. ANTHONY OGUS, REGULATION: LEGAL FORM AND ECONOMIC THEORY (1994);
225. PINDYCK & RUBINFELD, supra note 2, at 327-51, 561-619.
226. This might not be the case if the legislators chose to encourage competition through partial nationalization; that is, by creating a public company to compete with the former monopolist, rather than assisting private companies in doing so. But Americans seem to be unfamiliar with partial nationalization and ideologically uncomfortable with it. This is at least one reason why the "public option" in some of the current health-care bills is so controversial.
227. See, e.g., Roger Cohen, Get Real on Health Care, INT'L HERALD TRIB., Sept. 14, 2009, at 9 (advantages of public and private options, as in France);
228. Karl Rove, How to Stop Socialized Health Care, WALL ST. J., June 11, 2009, at All ("If Democrats enact a public-option health-insurance program, America is on the way to becoming a European-style welfare state.").
229. See generally HAROLD LUFT, TOTAL CURE: THE ANTIDOTE TO THE HEATH CARE CRISIS 224-29 (2008).
230. George A. Akerlof, The Market for Lemons: Qualitative Uncertainty and the Market Mechanism, 84 Q.J. ECON. 488 (1970). A company that offers high quality used cars, to use Akerlof's example, will benefit from required disclosures of the car's quality.
231. See, e.g., JAMES DAVID BARBER, THE LAWMAKERS: RECRUITMENT AND ADAPTATION TO LEGISLATIVE LIFE (1980);
232. CHRISTOPHER J. DEERING & STEVEN S. SMITH, COMMITTEES IN CONGRESS (3d ed. 1997);
233. RICHARD F. FENNO, JR., CONGRESSMEN IN COMMITTEES (1973);
234. JOHN W. KINGDON, AGENDAS, ALTERNATIVES AND PUBLIC POLICIES (2d ed. 2003);
235. WILLIAM K. MUIR, JR., LEGISLATURE: CALIFORNIA'S SCHOOL OF POLITICS (1983).
236. My own study of the Truth-in-Lending Act's creation supports this view. Edward L. Rubin, Legislative Methodology: Some Lessons from the Truth-in-Lending Act, 80 GEO. L.J. 233 (1991). The person responsible for initiating the effort to enact this statute was Senator Paul Douglas of Illinois.
237. Id. at 242. Douglas was dead by the time I conducted the research, but I was able to interview several members of both his personal staff and the staff of the subcommittee that he chaired and that held hearings on the bill. All agreed that Douglas was motivated solely by the desire to enact what, in his view, was good public policy.
238. Id. at 242-43. There was virtually no support for the legislation when he began the effort in 1959; the consumer movement did not yet exist, and the concept was too novel for any of the possible beneficiaries, such as lawyers, to be aware of it.
239. Id. at 243-54. Financial institutions were adamantly opposed, however, and mobilized opposition to Douglas as well as to the legislation.
240. Id. at 243-46. None of this dissuaded Douglas from continuing his efforts, however.
241. Id. at 248-51. In fact, he lost his reelection bid in 1966 to Charles Percy, who made an issue of his support for the Truth-in-Lending bill.
242. Id. at 251.
243. See WEBER, supra note 6, at 24-26 (instrumentally rational action consists of "'means' for the attainment of the actor's own rationally pursued and calculated ends"). Even a public-oriented legislator who had no interest in reelection (a lame duck for example) or no concerns about it (because they have safe seats) would want to elicit the support of firms that benefit from the regulation in order to ensure its passage and effective implementation.
244. HABERMAS, supra note 7, at 279-95;
245. WEBER, supra note 6, at 24-26 (stating that value-rational action is "determined by a conscious belief in the value for its own sake of some ethical, aesthetic, religious or other form of behavior, independent of its prospects for success"). An essentially equivalent term is "deontological." Public choice theory essentially denies the existence of this mode of action. Even in its absence, however, the public choice theory of regulation is subject to the problem described above, because public-oriented behavior could be motivated by the desire for fame, approval, or election to a higher office. In fact, the claim that people are never value rational or deontological is highly implausible, as the case of Paul Douglas indicates.
246. See sources cited supra note 83.
247. John T. Scholz, Cooperation, Deterrence and the Ecology of Regulatory Enforcement, LAW & SOC'Y REV. 179 (1984);
248. John T. Schloz, Cooperative Regulatory Enforcement and the Politics of Administrative Effectiveness, 85 AM. POL. SCI. REV. 115 (1991);
249. John T. Scholz, Voluntary Compliance and Regulatory Enforcement, 6 LAW & POL'Y 385 (1984).
250. See also Robert A. Kagan & John T. Scholz, The "Criminology of the Corporation" and Regulatory Enforcement Strategies, in ENFORCING REGULATION 67 (Keith Hawkins & John Thomas eds., 1984).
251. ROBERT AXELROD, THE EVOLUTION OF COOPERATION 7-8 (1984).
252. Id. at 17-19, 73-105;
253. see id. at 18 ("The framework is broad enough to encompass not only people but also nations and bacteria.").
254. Id. at viii.
255. Id.
256. For an expanded discussion of the strategy and its advantages, see AYRES & BRAITHWAITE, supra note 1, at 19-53.
257. For an explication in a specific regulatory context (occupational health and safety regulation), see EUGENE BARDACH & ROBERT A. KAGAN, GOING BY THE BOOK: THE PROBLEM OF REGULATORY UNREASONABLENESS (2002).
258. BARDACH & KAGAN, supra note 91, at 33-56.
259. Id. at 58.
260. Edward L. Rubin, The New Legal Process, the Synthesis of Discourse, and the Microanalysis of Institutions, 109 HARV. L. REV. 1393 (1996).
261. See, e.g., BRIAN BALOGH, A GOVERNMENT OUT OF SIGHT: THE MYSTERY OF NATIONAL AUTHORITY IN NINETEENTH-CENTURY AMERICA (2009);
262. WILLIAM E. NELSON, THE ROOTS OF AMERICAN BUREAUCRACY, 1830-1900 (1982);
263. STEPHEN SKOWRONEK, BUILDING THE NEW AMERICAN STATE: THE EXPANSION OF NATIONAL ADMINISTRATIVE CAPACITIES, 1877-1920 (1982);
264. Jerry L. Mashaw, Administration and "The Democracy": Administrative Law From Jackson to Lincoln, 1829-1861, 117 YALE L.J. 1568 (2008);
265. Jerry L. Mashaw, Reluctant Nationalists: Federa Administration and Administrative Law in the Republican Era, 1801-1829, 116 YALE L.J. 1636 (2007).
266. See MARTHA DERTHICK & PAUL J. QUIRK, THE POLITICS OF DEREGULATION 147-73 (1985);
267. ALFRED E. KAHN, THE ECONOMICS OF REGULATION: PRINCIPLES AND INSTITUTIONS 209-19 (1988);
268. THOMAS K. MCCRAW, PROPHETS OF REGULATION 222-99 (1984).
269. In the early days of aviation, even after the War, barnstormers would travel from town to town offering rides, crop dusting, or skywriting in a desperate effort to make money off the new technology. R.E.G. DAVIES, AIRLINES OF THE UNITED STATES SINCE 1914, at 6 (1972)
270. [hereinafter DAVIES, AIRLINES].
271. A well-known comment by a pilot from this era is that "the most dangerous thing about flying was 'the risk of starving to death.'" T.A. HEPPENHEIMER, TURBULENT SKIES: THE HISTORY OF COMMERCIAL AVIATION 5 (1995);
272. see also NICK A. KOMONS, BONFIRES TO BEACONS: FEDERAL CIVIL AVIATION POLICY UNDER THE AIR COMMERCE ACT, 1926-1938, at 12 (1978).
273. . See DAVIES, AIRLINES, supra note 97, at 54-55;
274. HEPPENHEIMER, supra note 97, at 6, 25;
275. KOMONS, supra note 97, at 16-17;
276. WILLIAM LEARY, AERIAL PIONEERS: THE U.S. AIR MAIL SERVICE 1918-1927, at 160-70 (1985);
277. HENRY LADD SMITH, AIRWAYS: THE HISTORY OF COMMERCIAL AVIATION IN THE UNITED STATES 88-89, 112-16(1942).
278. See KOMONS, supra note 97, at 14.
279. DAVIES, AIRLINES, supra note 97, at 16-30;
280. LEARY, supra note 98;
281. CARL SOLBERG, CONQUEST OF THE SKIES: A HISTORY OF COMMERCIAL AVIATION IN AMERICA 13-29 (1979);
282. SMITH, supra note 98, at 50-93. Prior to 1925, the only commercial airline was Aeromarine airways, which flew seaplanes from Florida to Havana and other points in the Caribbean but went bankrupt in 1924.
283. See DAVIES, AIRLINES supra 97, at 5-10;
284. LEARY, supra note 98, at 160-70;
285. SMITH, note supra 98, at 86-88, 161.
286. HEPPENHEIMER, supra note 97, at 8-12;
287. KOMONS, supra note 97, at 17-21;
288. LEARY, supra note 98.
289. See DAVIES, AIRLINES, supra note 97, at 33;
290. LEARY, supra note 98, at 222-24.
291. Air Mail Act, ch. 128, 43 Stat. 805 (1925).
292. See HEPPENHEIMER, supra note 97, at 11-12;
293. KOMONS, supra note 97, at 66-67;
294. SMITH, supra note 98, at 94. Representative Clyde Kelly, the sponsor who gave the Act its popular name, was known to be a strong supporter of the railroads.
295. DAVIES, AIRLINES, supra note 97, at 33;
296. HEPPENHEIMER, supra note 97, at 11.
297. For a description of the license granting process, see SMITH, supra note 98, at 103-12, 118-22.
298. Air Commerce Act of 1926, ch. 344, Pub L. No. 254, 44 Stat. 568 (1926).
299. See SMITH, supranote 98, at 97-102.
300. HEPPENHEIMER, supra note 97, at 1-17;
301. KOMONS, supra note 97, at 7-33;
302. SOLBERG, supra note 100, at 30-45.
303. KOMONS, supra note 97, at 65-88;
304. SMITH, supra note 98, at 94-102.
305. KOMONS, supra note 97, at 99-104;
306. SMITH, supra note 98, at 99-102. The original appropriation for the Aeronautics Branch of the Commerce Department was $550,000.
307. Id. at 99.
308. DAVIES, AIRLINES, supra note 97, at 99.
309. Id. at 36-55;
310. LEARY, supra note 98, at 224-26;
311. SMITH, supra note 98, at 103-12.
312. DAVIES, AIRLINES, supra note 97, at 89.
313. See id. at 41-42 ("True to the tradition of the West, the men who pioneered the first mail lines were colorful characters, the kind who were prepared to take risks, and use unorthodox methods to promote their ideas if necessary.") In addition to Eddie Rickenbacker, who will be discussed infra notes 147-166, Harris Hanshue, president of Western Air Express, was also a race car driver.
314. See DAVIES, AIRLINES, supra note 97, at 43.
315. DAVIES, AIRLINES, supra note 97, at 39-53;
316. KOMONS, supra note 97, at 191-97;
317. SMITH, supra note 98, at 117-55.
318. R.E.G. DAVIES, REBELS AND REFORMERS OF THE AIRWAYS 6 (1987) [hereinafter DAVIES, REBELS] (according to Davies, a story that Varney Airlines employees would send neatly packaged bricks to one another is apocryphal but indicative);
319. KOMONS, supra note 97, at 193-94,
320. SMITH, supra note 98, at 125-26.
321. Another trick, taking advantage of the Post Office Rule that registered mail had to be padlocked, was to put each registered letter in a separate sack, with its own heavy padlock.
322. KOMONS, supra note 97, at 193.
323. DAVIES, AIRLINES, supra note 97, at 54-55;
324. KOMONS, supra note 97, at 191-96.
325. HEPPENHEIMER, supra note 97, at 31;
326. KOMONS, supra note 97, at 197;
327. SMITH, supra note 98, at 156-57. Brown was a Bull Moose Republican, who shared Roosevelt's belief in a strong central government, rather than Harding and Coolidge's distrust of it. On that basis alone, he would have been a natural appointment for Hoover. In addition, however, he had played a crucial role in securing the Republican nomination for Hoover, and in the subsequent presidential campaign. He was, in fact, one of the most powerful people in Washington.
328. Brown drafted the act and played a crucial role in its passage. See HEPPENHEIMER, supra note 97, at 34;
329. KOMONS, supra note 97, at 200;
330. SMITH, supra note 98, at 158. Its operative language stated: "The Postmaster General is authorized to award contracts for the transportation of airmail by aircraft between such points as he may designate to the lowest responsible bidder at fixed rates per mile for definite weight spaces ...."§4. This shift from using the weight of mail actually carried to the freight capacity of the airplane carrying it was designed to end the junk mail and heavy object abuses, but had the secondary effect of favoring companies that could afford to purchase larger aircraft. Brown also tried to add a provision allowing him to award contracts without competitive bidding, but Representative Kelly, who was irritated that someone else was drafting airmail legislation, managed to eliminate the provision from the final statute.
331. SMITH, supra note 98, at 160-61.
332. HEPPENHEIMER, supra note 97, at 33-35;
333. KOMONS, supra note 97 at 202-10;
334. SMITH, supra note 98, at 156-86.
335. HEPPENHEIMER, supra note 97, at 35
336. Id. at 35-36;
337. KOMONS, supra note 97, at 202-10;
338. SMITH, supra note 98, at 167-86. Harris Hanshue, president of Western Air Express and one of the pioneers of commercial air service, was forced to merge his company with Transcontinental Air Transport, forming the new TWA (Transcontinental & Western Air), and was furious about the way he had been treated.
339. DAVIES, AIRLINES, supra note 97, at 89-92;
340. SMITH, supra note 98, at 167-86.
341. DAVIES, AIRLINES, supra note 97, at 155-56, 161-63;
342. HEPPENHEIMER, supra note 97, at 55-57;
343. SOLBERG, supra note 100, at 140-43;
344. SMITH, supra note 98, at 214-48. The irony of the situation was that many of the airline executives who attended the "spoils conferences" felt bullied and abused by Brown, but were then accused of collusion by the Black Committee. Harris Hanshue, for example, was forced to resign the presidency of TWA, despite his resentment over the company's formation. See supra note 120. Of course, however badly they felt at the time, the surviving airlines had benefitted enormously from the restrictions on competition that the agreement provided.
345. See DAVIES, AIRLINES, supra note 97, at 89-92.
346. Executive Order 6591 (Feb. 19, 1934).
347. See DAVIES, AIRLINES, supra note 97, at 156-57;
348. HEPPENHEIMER, supra note 97, at 57-59;
349. SOLBERG, supra note 100, at 143-44;
350. SMITH, supra note 98, at 249-51. As Heppenheimer reports, the Air Corps was "a backwater within a peacetime army .... Pilots flew no more than an hour a day, weekdays only. They definitely were a fair-weather force, unaccustomed to flying at night or in poor weather."
351. HEPPENHEIMER, supra note 97, at 58. The Air Corps became responsible for air mail delivery in February, and the weather that year was particularly severe.
352. CONRAD BLACK, FRANKLIN DELANO ROOSEVELT: CHAMPION OF FREEDOM 321-22 (2003);
353. DAVIES, AIRLINES, supra note 97, at 157-61;
354. HEPPENHEIMER, supra note 97, at 59-60;
355. KOMONS, supra note 97, at 272-74;
356. SOLBERG, supra note 100, at 144-46;
357. SMITH, supra note 98, at 253-58.
358. Air Mail Act of 1934, Pub. L. No. 73-308, 48 Stat. 933.
359. DAVIES, AIRLINES, supra note 97, at 194;
360. KOMONS, supra note 97, at 266-69;
361. SOLBERG, supra note 100, at 198-99;
362. SMITH, supra note 98, at 285-88. Komons describes the Act as a "hodgepodge of conflicting ideologies."
363. KOMONS, supra note 97, at 267. One thing it did that was fully consistent with the New Deal ideology was to permit direct federal support for airport construction,
364. see HEPPENHEIMER, supra note 97, at 119.
365. DAVIES, AIRLINES, supra note 97, at 194-98;
366. SMITH, supra note 98, at 291-300.
367. Civil Aeronautics Act of 1938, Pub. L. No. 75-706, 52 Stat. 973.
368. DAVIES, AIRLINES, supra note 97, at 200-03;
369. KOMONS, supra note 97, at 363-79;
370. SMITH, supra note 98, at 301-09. Unlike the previous administrators, the Department of Commerce and the Post Office, the CAA, like the successor CAB, was established as an independent agency
371. . DAVIES, AIRLINES, supra note 97, at 202;
372. SMITH, supra note 98, at 304-05. The statute's primary sponsor, Senator Pat McCarran, explicitly sought to place airline regulation under the control of an apolitical agency.
373. KOMONS, supra note 97, at 268;
374. SMITH, supra note 98, at 285.
375. DAVIES, AIRLINES, supra note 97, at 203-09;
376. SMITH, supra note 98, at 357-62.
377. W. David Lewis, Introduction: Ambivalent Relationship: Airline Executives and Federal Regulation to AIRLINE EXECUTIVES AND FEDERAL REGULATION: CASE STUDIES IN AMERICAN ENTERPRISE FROM THE AIRMAIL ERA TO THE DAWN OF THE JET AGE 1, 16 (W. David Lewis ed., 2000).
378. Donna M. Corbett, Donald W. Nyrop: Airline Regulator, Airline Executive, in AIRLINE EXECUTIVES AND FEDERAL REGULATION: CASE STUDIES IN AMERICAN ENTERPRISE FROM THE AIRMAIL ERA TO THE DAWN OF THE JET AGE 125, 126-30 (W. David Lewis ed., 2000).
379. Id. at 141-52.
380. See DAVIES, AIRLINES, supra note 97, at 540. Similarly, the President of United Airlines, W.A. Patterson was a banker who was put in charge of a small airline owned by Boeing and United Aircraft that was subsequently merged into United. He became President of United when the Roosevelt Administration reauthorized private airmail service in 1934, and remained in that position for over thirty years.
381. BARBARA STURKEN PETERSON & JAMES GLAB, RAPID DESCENT: DEREGULATION AND THE SHAKEOUT IN THE AIRLINES 25 (1994).
382. Roger E. Bilstein, CR. Smith: An American Original, in AIRLINE EXECUTIVES AND FEDERAL REGULATION: CASE STUDIES IN AMERICAN ENTERPRISE FROM THE AIRMAIL ERA TO THE DAWN OF THE JET AGE 83, 83-85 (W. David Lewis ed., 2000).
383. Id. at 85-86;
384. SMITH, supra note 98, at 291-92. Smith was suspected of opposing Cord's acquisition of Southern Air, but he overcame this disadvantage because of his obvious talent. Cord soon fled to Europe, presumably to escape investigation by the SEC, leaving Smith to run the airline unencumbered.
385. This is the airplane that transformed passenger air travel into a remunerative business. See DAVIES, AIRLINES, supra note 97, at 189-93. Smith's role in the process was actually more crucial than merely being the first airline executive to order the plane. He apparently persuaded Donald Douglas to produce the plane by modifying the DC-2 he was already producing to accommodate more passengers. Originally, the plane was produced in two version, the Douglas Sleeper Transport, or DST, with fourteen berths, and as a dayplane, the DC-3 itself, with twenty-one seats.
386. See id. at 190;
387. THOMAS PETZINGER, JR., HARD LANDING: THE EPIC CONTEST FOR POWER AND PROFITS THAT PLUNGED THE AIRLINES INTO CHAOS 12-13 (1995). "DC" stands for Douglas Commercial.
388. Bilstein, supra note 131, at 86;
389. SMITH, supra note 98, at 292-93.
390. Smith's feat was particularly impressive because American had an outstanding debt of $3,415,000 that had to be refinanced before the RFC would approve the loan.
391. DAVIES, REBELS, supra note 114, at 84.
392. Id.
393. Id. at 117
394. Bilstein, supra note 131, at 118.
395. Michael Gorn, Robert F. Six: Continental Giant, in AIRLINE EXECUTIVES AND FEDERAL REGULATION: CASE STUDIES IN AMERICAN ENTERPRISE FROM THE AIRMAIL ERA TO THE DAWN OF THE JET AGE 169, 170-71 (W. David Lewis ed., 2000).
396. DAVIES, REBELS supra note 114, at 31-32.
397. Gorn, supra note 139, at 171-72;
398. ROBERT J. SERLING, MAVERICK: THE STORY OF ROBERT SIX AND CONTINENTAL 15-21 (1974).
399. DAVIES, REBELS, supra note 114, at 32-33;
400. Gorn, supra note 139, at 173-75;
401. SERLING, supra note 140, at 21-32.
402. Gorn, supra note 139, at 176.
403. Id. at 180. Six proclaimed that Continental's "application was filed so early that it was acknowledged by the new . . . chairman [Ed Noble] ... on [the] stationery of his former firm, the Life Saver Corporation." Id. (internal quotation marks omitted).
404. Id. at 177.
405. DAVIES, AIRLINES, supra note 97, at 38-39;
406. SERLING, supra note 140, at 111-17;
407. Gorn, supra note 139, at 188-89. There was more passenger traffic on the Chicago-Los Angeles route than there was on Continental's entire network at the time.
408. Around this time, Six divorced his wife, who had given him his start in business, and married Ethel Merman, the Broadway singer and actress. They were divorced in 1961, however, and Six then married Audrey Meadows, a television actress who played Jackie Gleason's wife on The Honeymooners.
409. Rickenbacker was born in 1890, Nyrop in 1912, Smith in 1899 and Six in 1907.
410. W. David Lewis, A Man Born Out of Season: Edward V. Rickenbacker, Eastern Air Lines, and the Civil Aeronautics Board, in AIRLINE EXECUTIVES AND FEDERAL REGULATION: CASE STUDIES IN AMERICAN ENTERPRISE FROM THE AIRMAIL ERA TO THE DAWN OF THE JET AGE 242, 244-46 (W. David Lewis ed., 2000).
411. Id. at 247-50.
412. Id. at 252.
413. Id.
414. Id. at 253-59. His airmail venture, called Florida Airways, failed in less than a year because of the collapse of the Florida real estate boom and a freak accident that damaged three of its planes while they were on the ground in Nashville.
415. Id.
416. Id. at 262-63.
417. Id. at 263-64.
418. Id. at 266.
419. Id. at 266-67.
420. MacArthur was being reprimanded for making public statements critical of the President, the same behavior for which he was ultimately dismissed by Harry Truman. See DAVID MCCULLOUGH, TRUMAN 834-56 (1992).
421. Lewis, supra note 148, at 266-67. For Rickenbacker's own account of the incident,
422. see EDWARD RICKENBACKER, SEVEN CAME THROUGH (1943).
423. Id. at 268-72.
424. DAVIES, AIRLINES, supra note 97, at 160;
425. KOMONS, supra note 97, at 260;
426. Lewis, supra note 148, at 260;
427. SOLBERG, supra note 100, at 144. This is certainly one of the most famous quotes in the history of American commercial aviation; it was widely noted at the time and is mentioned in almost every history of the subject. Needless to say, it did nothing to endear Rickenbacker to the Administration, even (or perhaps especially) after it proved to be correct.
428. Lewis, supra note 148, at 278-81.
429. Id. at 272-73.
430. Id. at 268-74;
431. PETZINGER, supra note 133, at 176;
432. SOLBERG, supra note 100, at 351-52. Rickenbacker also had his pilots trained to fly straight through turbulence, rather than around it, thereby keeping to the scheduled arrival times, but giving the passengers a harsher ride.
433. Id. at 352. Probably no corporate decision reflects Rickenbacker's personality as fully as that one
434. Lewis, supra note 148, at 279-80.
435. Id. at 276-80.
436. Id. at 280-82.
437. DAVIES, AIRLINES, supra note 97, at 539 (describing Baker as running his airline "with the rugged individuality which had characterized his early life," a description that could certainly be applied to Rickenbacker as well). Not surprisingly, the two men hated each other.
438. Id.
439. George E. Hopkins, Fortunate in His Enemies: George T. Baker, National Airlines, and Federal Regulators, in AIRLINE EXECUTIVES AND FEDERAL REGULATION: CASE STUDIES IN AMERICAN ENTERPRISE FROM THE AIRMAIL ERA TO THE DAWN OF THE JET AGE 213, 216 (W. David Lewis ed., 2000).
440. Id. at 217-18.
441. Id. at 225. Although a certain sense of impropriety and general sleaziness attaches to Baker, unlike the other executives profiled here, he was a creative executive. He was also one of the innovators of interchange arrangements, where airlines share routes by selling tickets to each other's flights.
442. Id. at 228-29.
443. Id. at 222-25.
444. DAVIES, AIRLINES, supra note 97, at 243;
445. Hopkins, supra note 168, at 222-26.
446. On the elections and people's expectations about the results, see MCCULLOUGH, supra note 157, at 653-719.
447. See generally GARTH LEAN, FRANK BUCHMAN: A LIFE 261-83(1985). Moral Rearmament was a reincarnation (as it were) of Buchman's Oxford Group. There are indications that it harbored pro-Nazi sentiments before the War.
448. Hopkins, supra note 168, at 226.
449. Id. at 227.
450. Id. at 227-28.
451. Id. at 227-29.
452. Id. at 231.
453. Id. at 231-32. With his fortune made, Baker, an instinctively imperious person, may have decided that he was tired of groveling, and sold his interest in National the following year.
454. Id. at 214.
455. The failure of Aeromarine, see supra note 100 and accompanying text, demonstrates this.
456. The two goals did not fully overlap because the safety regulations applied to all commercial air traffic, including cargo carrying and recreational flying.
457. Although the regulations had only been in place for twelve years when the CAA was created, and fourteen when it was succeeded by the CAB, the majority of pilots had entered the field within those twelve years because of the rapid pace of commercial aviation's growth, a pace greatly accelerated by Charles Lindbergh's flight. During the fiscal year that preceded his flight, there had been 1,800 pilot's license applications; in the year following it, there were 5,500.
458. SMITH, supra note 98, at 123.
459. ARGYRIS, supra note 55, at 88;
460. ARGYRIS & SCHÖN, supra note 55.
461. Lewis, supra note 148, at 251-52, 258. Six became a pilot in 1927, when licensing was already in place, and did not become an executive until 1935.
462. Id. at 171-73.
463. Lewis, Supra note 148, at 264-65.
464. Id. at 276-80.
465. Id. at 272.
466. Lewis speculates that Rickenbacker may have been consciously putting on an act, but it was not an act that was likely to impress the Board with his willingness to cooperate. Based on the biographical accounts of Nyrop, Smith, and Six, it is hard to imagine any of them engaging in this behavior, even as a strategy. Corbett, supra note 129, at 125-68;
467. Bilstein, Supra note 131, at 83-124; Gorn, Supra note 139, 169-212.
468. Lewis, supra note 148, at 281-82.
469. See JON ELSTER, ULYSSES UNBOUND 69 (2000) ("One can impose costs on oneself by announcing publicly that one is going to quit, thus raising the stakes by adding shame and loss of prestige to other costs of relapse.").
470. AXELROD, supra note 87, at 58.
471. BARDACH & KAGAN, supra note 91, at 64-67.
472. See DERTHICK & QUIRK, supra note 96, at 148-64;
473. MCCRAW, supra note 96, at 229-99;
474. PETERSON & GLAB, supra note 130, at 49-89;
475. PETZINGER, supra note 133, at 86-105;
476. ANTHONY SAMPSON, EMPIRES OF THE SKY: THE POLITICS, CONTESTS AND CARTELS OF WORLD AIRLINES 133-46 (1984);
477. JAGDISH SETH ET AL., DEREGULATION AND COMPETITION: LESSONS FROM THE AIRLINE INDUSTRY (2007).
478. See HABERMAS, supra note 44, at 243-70 (stating Weber's idea that modern law is positivistic does not mean that morality is absent from government, but rather that it move from the level of law to the level of public policy).
479. DAVIES, AIRLINES, supra note 97, at 130-31, 651-59. The DC-1, DC-2 and DC-3 planes, which flew 170-80 miles an hours and had a range of 500 miles, revolutionized passenger travel in the pre-CAB era. The Fokker Super Universal had a range of 740 miles, but a top speed of only 118 mph; the Ford tri-motors flew at 100110 mph and the Lockheed Vega flew at 135 mph.
480. HEPPENHEIMER, supra note 97, at 25, 73.
481. Id. at 25.
482. SMITH, supra note 98, at 115.
483. HEPPENHEIMER, supra note 97, at 25;
484. PETZINGER, supra note 133, at 9.
485. HEPPENHEIMER, supra note 97, at 25.
486. PETZINGER, supra note 133, at 8. There were also other hazards; a number of passengers died when they walked into a turning propeller.
487. HEPPENHEIMER, supra note 97, at 25.
488. See supra text accompanying note 147 (discussing Eddie Rickenbacker's refusal to respond to this inducement was at least as important as his anti-government politics in alienating the CAB).
489. HEPPENHEIMER, supra note 97, at 14;
490. SAMPSON, supra note 193, at 28-36;
491. SMITH, supra note 98, at 88.
492. SAMPSON, supra note 193, at 77-86;
493. SMITH, supra note 98, at 311-26.
494. DAVIES, AIRLINES, supra note 97, at 508-29;
495. HEPPENHEIMER, supra note 97, at 196-226;
496. PETZINGER, supra note 133, at 16-17. The first commercial jet aircraft flights occurred in 1958.
497. The second Bush administration pursued a strategy of undermining regulatory programs it disliked, but could not get Congress to repeal, by choosing political appointees who opposed the program that they were supposed to run, leaving staff level positions unfilled, and indicating that regulatory initiatives were unwelcome.
498. HABERMAS, supra note 44, at 243-70.