The Corporate State and the Fourth Branch
The federal bureaucracy is under a microscope as Elon Musk and his DOGE gang run roughshod over key government agencies including the Department of Health and Human Services and the Federal Aviation Administration, among several others. Federal government workers have been fired apparently indiscriminately, with many rehired shortly thereafter, sparking protests and widespread disapproval of Musk’s chaotic chainsaw approach. Musk and Trump are rapidly losing trust and goodwill, even among their allies.
The DOGE onslaught comes on the heels of the Supreme Court’s decision last summer in Loper Bright Enterprises v. Raimondo, which also spotlighted the federal administrative state, overturning 40 years of the Chevron doctrine, a legal test calibrating judicial review of federal agency actions. Whatever one thinks of Musk or the decision to scrap Chevron, there seems to be something in the air. The moment calls for a more careful and fact-based assessment of the administrative state and its place in American political economy.
The political left—defined broadly as defending labor, transparency and democratic control of government, environmental and ecological protection, and social equality—has tended to see the administrative state as at least necessary to its goals, and in any case as indispensable to effective government in an age when specialists and experts are thought to be needed to administer public policy in complex domains. Thus has a folk history built up around the administrative state, obscuring its record of abuses and collusions with corporate power.
Over the past 100 years in the U.S., there is a startlingly clear correlation between the size of the administrative state and the size and power of multinational corporations headquartered in the U.S. Trust in and deference toward the administrative state on the political left is disturbingly underdetermined by the available data. That is, it is far from clear that the net effect of an extremely powerful and centralized army of apparatchiks has been to regulate corporate power and protect Americans. The creation of these massive islands of concentrated power in the federal government has not curbed the exploitative, socially destructive excesses of capitalism. Notably and counter-intuitively (at least under the naive theory of centralized government power), some of the most independent federal agencies regulate some of the most powerful and unaccountable industries: for example, the Federal Energy Regulatory Commission and the Federal Reserve System rank as among the most insulated from democracy.
Reuters recently reported that as of this writing in March 2025, there are 438 federal agencies, directly employing more than 3 million people. But this is hardly the full picture: according to the Government Accountability Office, the U.S. gave about $760 billion to its manifold contractors in fiscal year 2023, up over $30 billion from the previous year. We have privatized many of the government’s most important functions through this state-corporate nexus, yet we have no information from the federal government on the number of contractors and subcontractors it employs at any given time.
From the founding period and before, the American ruling class has understood that a strong, centralized, active U.S. government is the key to creating modern commercial power. If this seems counterintuitive, it is only because our political discourse has lately become invested in the deeply naive and ahistorical idea that the state is there to limit the power of private capital. No idea in our politics is more misguided and unmoored from the historical and empirical record.
The folk belief that the American state serves as a real counterbalance to corporate interests is a shallow misconception contradicted by centuries of historical evidence. Among the core debates of the Framers was the role of the central government in the broader political and economic system. The Federalists argued in favor of a powerful and centralized national government capable of laying a deep institutional foundation of special prerogatives for commercial interests, in particular banking and financial institutions. Alexander Hamilton championed a robust central government intertwined with burgeoning corporate entities, not as a check on them, but as a way to empower them with special favors. His advocacy for the establishment of the First Bank of the United States exemplifies this merger of state power and corporate interests. Hamilton’s vision laid the foundation for a financial system where government authority and corporate power are not adversaries but partners.
Today’s federal government, true to its roots and its primary role in the system of production, furnishes its favorite corporate giants with an extraordinarily deep menu of advantages and privileges, designed to prop up and subsidize otherwise impossible size, and to make it far more difficult and expensive to operate at smaller scales. Because complying with their dictates is so absurdly expensive and labor intensive, executive branch agencies have become one of the most powerful tools corporations have for maintaining their size and power, curating the marketplace for those with the means and infrastructure to enter the game. State support of large-scale businesses is much more intensive than most Americans understand—and much more critical to corporate domination. The state and capital are mutually reinforcing and codependent, with overlapping leadership and shared priorities.
Today, although it was originally contemplated as the most powerful branch of the three, Congress is largely for show, having abandoned the legislative function to an outgrowth of the executive branch that now operates without meaningful democratic oversight. The executive branch has been operating outside of the prescribed constitutional structure for decades, performing the functions of all three branches, overseeing its own courts and judges, propounding administrative rules that are tantamount to law, and enforcing both the law and its own rulemaking.
There are several reasons that the American left should counsel extreme caution in embracing this kind of consolidated and unbound state power, not the least of which is that it exists to partner with today’s lordship: multinational corporations. Because this vast system is nowhere contemplated in the U.S. Constitution, there are no ready and available means to challenge its actions or hold it to account. Its fundamentally authoritarian and insulated character notwithstanding, the federal administrative state has somehow become progressive-coded within American political discourse.
The aggrandizement of boundless executive power has been a thoroughly bipartisan project for decades, arguably for the country’s entire history. For all of our talk about democracy, Americans are inured to the rule of supposed experts nominally working in the executive branch, but in fact standing in a nebulous liminal space. The ability of federal government power to inhabit this dimension—and the willingness of the other branches to delegate their powers and functions to it—is among the American state’s most powerful and invulnerable tricks for consolidating power.
In the overturning of Chevron’s rule that the judiciary defer to the government’s “reasonable” (in practice, this supposed test is a non-test that acts to auto-validate executive branch action) interpretations of its own rules and regulations, there is an opportunity to genuinely decentralize and democratize our political system, restoring political power to the people and elected officials. Under the standard pronounced in Chevron, neither the judiciary nor the legislature need take any responsibility for particular outcomes: the “reasonableness” of an agency rule was formulated in a way that made it nearly impossible to question the government’s actions. Fundamentally, the legal question at issue is who has the constitutional prerogative to resolve an “ambiguity in a statute meant for implementation by an agency.” Such sweeping deference to government power opened a space for the most dangerous kinds of government overreach and abuse. It also coincided with a period of dramatic corporate consolidation and rapidly widening inequalities of wealth and income, yielding larger corporate organizations more closely tied to and reliant upon the federal government.
Writing for the Chevron 6-3 majority in its reversal of the D.C. Circuit, Justice John Paul Stevens reasoned that “[w]hile agencies are not directly accountable to the people, the Chief Executive is, and it is entirely appropriate for this political branch of the Government to make such policy choices.” The Chevron opinion held that where there “is a reasonable choice within a gap left open by Congress,” the judicial branch should not step on the toes of the political branches of government. “In such a case, federal judges—who have no constituency—have a duty to respect legitimate policy choices made by those who do.” The argument was decidedly pro-democracy. But in employing this democratic reasoning, Justice Stevens did not seem to fully understand the de facto relationship between the president and the administrative state, assuming that the former could exercise control over the latter.
In the Supreme Court, what appear to be disagreements and debates about the substance of the law are often much more questions about what is actually happening in fact. Already by the time Chevron was decided, neither Congress nor the White House had the reins of the fourth branch. In practice, federal agencies had grown quite independent, in the sense of answering to no one. Unless we treat constitutional law as akin to the reading of tea leaves or the interpretation of augurs, addressing this factual question about accountability mechanisms requires an empirical analysis of a given agency’s design, one focused on requirements that insulate it from direct democratic influence and control.
Today, few of the Chevron doctrine’s champions care to recall that the case was in fact a challenge to the EPA’s adoption of a more lax, industry-friendly standard, which opened the door to more air pollution in violation of the text and intent of the Clean Air Act; the EPA’s position was supported by industry intervenors in the litigation, including Chevron. In fact, it was no less a progressive hero than Ruth Bader Ginsburg whose opinion in the D.C. Circuit was reversed by the Supreme Court in the case. The flaw in Chevron was present at the outset: the focus of the legal inquiry for judges should be the congressionally enacted statutory language, not the whims of agency “experts” beholden to powerful and well-organized industry groups. Part of the importance of allowing Congress to make the laws is that if we permit the executive branch to make them, as Chevron did in practice, we might get a Reagan undermining the Clean Air Act—or a Donald Trump undermining just about everything.
The close of the Chevron era opens the door to the active reclamation of democracy—understood correctly as genuine and direct participation in political decisions that affect us—from the stranglehold of bureaucratic and corporate elites. If federal judges no longer have to abdicate their constitutional function, reengaging with robust judicial review, we may find that the text of the statutes themselves already demand much stronger protections for, for example, labor and the environment. As Chevron itself demonstrated, it is not at all clear that federal agencies should be more careful than judges to preserve Congress’s intent.
The causal factors acting on this question are so dense and variable that the balance of power should be preserved rather than further undermined. The focus should be the balancing mechanism. The judiciary could adopt standards of review that are more stringent than those currently used to test the legality of government actions. Few Americans today know that even apart from the Chevron test, Supreme Court precedent requires Article III judges to rubber stamp almost anything the federal government does through a legal test called the “rational basis” standard. This test requires judges to make “every possible presumption is in favor” of the validity of government action under the law, even ignoring the facts of the case at bar in favor of hypothetical scenarios that could have rendered such action valid.
Legal scholars Jennifer L. Selin and Pamela J. Clouser McCann have admirably set out to study the relationship between the perceived “need for neutral, expert administrative decision-making” and democratic responsiveness and accountability. Their goal is to give “qualitative, theoretical, and empirical insight into ‘the concept of bureaucracy beyond judicial review.’” In a recent paper, Selin and McCann show that “combined with statutory provisions dictating agency independence, increasing an agency’s exposure to unelected federal judges can increase administrative responsiveness to elected legislators.” While the authors see this result as ironic or surprising, it is not clear that it should be so, for the strong expectation of judicial review surely motivates federal agencies to align their actions with the contemplated preferences of elected representatives in Congress.
Legal scholars and political commentators have tended to underestimate the importance of incentives and material interests in favor of abstract and idealistic notions about how government actors are likely to behave. Quite unsurprisingly, it turns out that an agency’s design features are the factors that best predict how much or little political responsiveness we can expect to find in its actions.
Selin relied on “a Bayesian latent variable model to capture the relationship between observed features of agency design found in statutory law and two distinct dimensions of agency independence.” The first of these two dimensions, the Decision Makers Dimension, is “the ability of political actors to influence the structure of key agency leadership.” Here, design features “such as multi-member governing boards, fixed and staggered terms, and conflict of interest provisions correlate with increased structural autonomy.” Selin contrasts such features to statutory provisions that permit the president to remove leaders at will, or that make an agency “a bureau within the executive departments.”
We may pause to ask here: what could an executive branch agency possibly be if Congress has attempted to make it something other than a bureau within an executive department? This question goes to the heart of the problem with Chevron. The second dimension (the Policy Decisions Dimension) looks at the contours of ex post review of administrative branch actions, i.e., the ways political actors monitor and control agency behavior after the fact, beyond the initial design parameters.
Legal scholars have created a “dynamic agency exposure index” in an attempt to measure the exposure of agency decisions to judicial review over time. More scholarship of this kind is desperately needed, as it probes the actual, functional relationships between powerful actors in government rather than speculating using vaguely defined terminology that seldom describes much of anything. As the authors note, “judicial review has distinct costs and benefits that legislators must balance when making the decision to delegate.”
Fundamentally, however, the Constitution’s non-delegation doctrine means that Congress is not permitted to decide in advance, during the legislative process, how much exposure administrative agencies have to federal courts: “The availability of judicial review is the necessary condition, psychologically if not logically, of a system of administrative power which purports to be legitimate, or legally valid.” Nevertheless, legislators do very often attempt to calibrate this exposure during their legislative wrangling.
While the literature points to a “tension between a need for expertise and control in administrative policy,” this, too, is almost always a false choice, as federal agencies are seldom merely applying cold expertise in their decision making. In the real world, material interests, incentives, and agency design matter much more than any polite pretense about ostensibly neutral experts. Under contemporary American technocracy, “expertise” is more often a cudgel against democratic accountability than it is an attempt to predict the results of a given policy. The political left understands this well in certain contexts, such as criminal justice, where a whole cottage industry of supposed experts on “terrorism” sprang up precisely to allow the government to steamroll civil liberties and the constitutional rights of criminal defendants. But in other contexts, we fall into the comforting belief that federal agencies are our benevolent protectors, forgetting that one can find a qualified expert to sign a report or study in support of just about any position.
Today’s expert class represents, “a contempt for (if not a profound fear of) the citizenry.” Expertise is never objective, neutral, or unbiased; it is recreated through social processes that are always suffused with political and normative positions, and these are often quite invisible to the expert himself, even taking for granted a good faith desire to produce objective science. The experts are beholden to the system of corporate power they are charged with regulating. Modern bureaucratic systems are constructed to render society “legible” for the various administrative purposes of the central power. These systems introduce a process of simplification, reducing complex local realities into standardized forms that make it possible to govern through top-down decrees.
A more decentralized and fact-sensitive approach to the review of agency actions would help to prevent organized commercial lobbies from capturing their regulators. Unlike federal agencies, federal judges “are relatively decentralized in their decision-making,” which can have salutary effects in instances where the executive branch behaves in high-handed, imperious ways. Writing in the Yale Journal on Regulation, law professor Kevin Frazier argues that we have abandoned an important “anti-power-concentration principle” in our legal and political tradition:
Restoration of this principle is critical to preserving liberty in an age of massive corporations and huge agencies having retained significant resources and substantial influence over our political system as well as our individual lives.
Mammoth scale preempts participation in government in that it requires the rule of the few as a matter of course: as a practical matter, given the size of the country in both physical and demographic terms, the United States government’s institutions must be steered by an extremely small group with access to real decision-making power at the national level. Real political power is exceptionally and dangerously concentrated within a group of people that could be on the order of thousands—for a country of over 340 million people.
There is no substantive democracy in the United States today. Large, hierarchical organizational forms are, ceteris paribus, much more readily able to create and maintain the conditions of domination and exploitation, burying the individual within a rigid command structure in which power is held in the hands of a small coterie at the top. The most important decisions the federal government makes are the most removed from democracy by design, usually predicated on classified information and involving unelected national security and intelligence officials. With large scales comes increasingly impenetrable opacity, rendering accountability in its normal sense impossible, and providing an open season for would-be predators like Donald Trump and Elon Musk.
The U.S. has an enormous army of white-collar professionals who have never been elected by anyone and are completely anonymous and largely invisible to the people, but who hold extraordinary power and discretion. If the normative policy goal is something like full, material social and economic equality, then such agglomerations of power and influence are a perilous approach. Community self-reliance and resilience are also undercut by the choice to subdue social life, subjecting it to the arbitrary commands of the government agency underbosses and caporegimes. Hierarchical, authoritarian, and undemocratic, these agencies operate internally very much like private corporations. There is no meaningful feedback mechanism or source of accountability, as the overwhelming majority of executive branch personnel are never tested in the crucible of electoral politics.
Our political dialogue abides several frameworks, competing and complementary, for making sense of institutions and policies. These frameworks operate along several axes; we have the common right vs. left spectrum, but we may also think of political bodies and particular policies in terms of several other antagonisms (for example, authority vs. liberty, centralized vs. decentralized, hierarchical vs. horizontal, capitalist vs. socialist, individualist vs. collectivist, nationalist vs. internationalist, reformist/incrementalist vs. revolutionary, bureaucratic vs. participatory, elite vs. popular, and the list goes on). These ways of conceptualizing tensions within the political world are not necessarily mutually exclusive, and it is not always clear how we should expect them to interact with one another.
Instead of allowing superficial political coding to dominate our conception of the executive branch and its function, preempting more materially grounded ways of approaching it, we should strive to understand it in terms of its actions and the kinds of relationships it creates. Part of what is needed to embark on such an approach is an ability to step outside of inherited categories and concepts, confronting on-the-ground reality more directly and honestly. Massive, highly centralized government bodies are gravity wells irresistibly attractive to those who want to wield and profit from unaccountable power.
Regardless of the intentions or subjective mental states of their founders, their creation was and remains a way to extend the power and influence of a ruling class whose members occupy the highest positions in both the formally public and private sectors—and, as we shall see, this distinction is also a false one that does not reflect the reality of our political economy. Though our mainstream political conversation stubbornly refuses to acknowledge the clear connection, scale matters tremendously to accountability and the lack thereof. There is no doubt that the administrative state of today performs many socially beneficial and broadly popular functions, but we can magnify their benefits tremendously by removing them from the hands of the few and integrating them into real human-scale communities of people.
A genuinely people-focused socialist economy can only be had at a small scale because the Brobdingnagian institutions of the state and capital will always be captured and controlled by a rich, mobilized elite. It is not only the organizations established to regulate the system of production that must change—it is primarily the system of production itself that must be altered fundamentally to serve the needs of the community of people rather than a small ruling class. After-the-fact tweaks through a superimposed regulatory regime will never suffice to address issues that arise from the most fundamental structural features of capitalism. A people-focused economic system is attainable only at scales comprehensible to human beings.
As Helena Norberg-Hodge explains, “It is in robust, local-scale economies that we find genuinely ‘free’ markets; free of the corporate manipulation, hidden subsidies, waste, and immense promotional costs that characterize today’s global market.” A genuinely free economy might see people regain control and value through community land trusts and commons, local currencies and credit unions, mutual aid and solidarity networks, and cooperative enterprises and agriculture. We can start right now. No one in the state will help us prefigure this new social economy, “self-managed, decentralised, built and organised from the bottom-up in a federal structure.”
We find, as E.F. Schumacher argued, “amazingly small means leading to extraordinarily satisfactory results,” results that value people more than abstract, misguided notions of growth and capital accumulation. He wanted to shift our focus away from false dichotomies (like public vs. private and state vs. market) and toward the more meaningful and explanatory question of size and scale. While at the appropriate small scale, private ownership is “natural, fruitful, and just,” it becomes something very different at today’s massive scale, “a fiction for the purpose of enabling functionless owners to live parasitically on the labor of others.” In no way was Schumacher advancing the counterfeit limited government promised by today’s conservatives and right-wing “libertarians,” which would rip from government anything socially ameliatory, leaving only the crushing power of global corporations. Schumacher argued that our obsession with growth and colossal size is in fact profoundly irrational, alienating us from each other, the land (and the natural world more generally), and even ourselves. He recommended a political economy of “simplicity and non-violence,” with local, sustainable systems of production replacing distant corporate power. Schumacher’s ideal is a network “pluralistic economic systems rather than a global monoculture”—not one system imposed from on high, but a diverse ecosystem of interlinked bioregional economies.
Government such as we’ve had—rigidly top-down, oligarchical, centralized, distant—is by definition a government we could not participate in, and this is by design. It is important for the left to remember that, particularly at or near the top of the pyramid, the regulators and the regulated are the very same people, constantly reshuffled through the infamous revolving door that connects the fourth branch and the corporate ruling class. The secret is to take down the pyramid and build something better for people.
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