Columbia Law Review March, 1998 267 a constitution of democratic experimentalism



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*277 forms of self‑insurance and provision for old age, putting vast numbers of citizens at risk of pauperization.
The precondition of a response was to relax certain rulings of the Supreme Court that interpreted the Commerce Clause, the Due Process Clauses, and other constitutional provisions in a way that barred federal and state regulation of most relevant aspects of economic activity. [FN25] The innovative resynthesis came through the application and extension of certain principles of mass production to the structure of government itself. As the problem‑solving capacities of the legislature were taken to be limited, Congress was permitted to delegate responsibility for regulating the economy to agencies such as the Securities and Exchange Commission, conceived of as the "board of directors" of the industry under its supervision, or to entities such as the National Labor Relations Board, whose purpose was to establish a collective bargaining regime within which labor and capital in the mass‑production industries could compose their differences. [FN26] The provision of old‑age and other kinds of insurance that citizens could no longer provide themselves was entrusted to bureaucracies patterned after organizations selling similar types of insurance in the private sector.
The result was a system more respectful of Madisonian distinctions than either its critics (aghast at the extension of federal power) [FN27] or its advocates (exhilarated at the prospect of a government at last with instruments equal to its tasks) [FN28] imagined. [FN29] Deliberation was still conceived as the exceptional task of establishing enduring, not to say everlasting, frameworks for social action. What did it matter that Congress delegated its framework‑making authority to agencies or boards if these delegations in the end provided stable arrangements by which the concerned parties could order themselves? This was an accommodation to the new organizational complexity of society itself; indeed, precisely by removing concern for the day‑to‑day problems of this complexly organized society from Congress and the state legislatures, the New Deal synthesis honored the *278 Madisonian ambition of preserving the dispassionate deliberative power of the democracy against the entanglements of clienteles and faction. Although the system of checks and balances now included various forms of congressional and judicial review of the exercise of delegated authority, [FN30] whether the checks and balances disorganized factional interests sufficiently to allow deliberation to prevail remained an empirical question, as it had been since the inception of the constitutional order.
Today, of course, it is commonplace to see the New Deal synthesis as inviting, rather than obstructing, the self‑serving politicization of regulation and public administration generally. But this view confuses a contingent outcome with a historical inevitability. To be sure, the users of the new administrative state‑‑firms in regulated industries and beneficiaries or potential beneficiaries of social insurance and welfare programs‑‑were quick to game the rules, urging the extensions and exceptions to regulations that suited their interests. But from roughly the New Deal through roughly the mid‑ 1970s, the new arrangements worked well enough to satisfy the citizenry and suppress questions about the constitutionality of the synthesis.
When the agencies and bureaucracies did lose the capacity to frame action within their appointed areas, and came to be seen as manipulated by those they were meant to regulate, much of their failure was directly connected to analogous disorientations in private‑sector firms and flowed in large measure from a common cause: the increasing volatility and complexity of social and economic circumstances. Firms found it increasingly difficult to apply their own uniform routines to increasingly differentiated problems; how could regulatory agencies establish a minimum uniformity of routines at the level of whole sectors of the economy? If the firms' halting efforts to adjust to the volatility in their markets led to continual changes in the conditions of employment and the prospects of employability of large parts of the work force, how could government social welfare and insurance programs premised on the risks, remedies, and inflexible organizational structures of the stable mass‑ production economy perform adequately? [FN31] Agencies that held fast to their rules were decried politically for their rigidity; agencies that made local accommodations to changing circumstances were suspected of favoritism and caprice. By the mid‑1980s, the accumulation of these grievances changed the debate about the purpose and prospects of the administrative state. From a discussion *279 of whether it was possible to limit the extension of entitlements, emerged a new debate about government's capacity to translate its general responsibilities to regulate economic and social life and protect vulnerable citizens into rules and social services worth their price.
Disorder brought forth partial correctives that disavowed the institutional premises of the New Deal synthesis without providing an alternative synthesis, and begot, in consequence, more disorder. As Congress and the executive, for example, came to doubt the fidelity of administrative agencies to sovereign purposes, each began to disregard the very limitations of its own decisionmaking capacities that had given rise to the administrative state, and attempted to achieve directly what it could no longer achieve through delegation. Thus, Congress increasingly resorted to detailed statutes to limit the interpretive latitude of agencies. [FN32] The executive, with its own agenda, subjected administrative rulemaking to review by new, highly centralized agencies whose purpose was to determine if particular rules conformed to that agenda‑‑often phrased in terms of a cost‑benefit analysis. [FN33] On the legislative side, the increased complexity of statutes and their accompanying reports invited interest groups to manipulate the legislative record. At the same time, centralized executive review increased the bargaining power of the executive as against the quasi‑independent agencies. However, the same bureaucratic centrality that gave the new monitoring agencies their power cut them off from the information they would need to use that power for any end more deliberate than decreasing the volume of regulation.
Meanwhile, two convergent developments have embroiled the Supreme Court in the disorganization of the national administrative state, with the result that the Court's own judgments have often become as confused and contentious in their detailed application as have congressional enactments or general administrative policies. The first is the triumph of the legal realist adage that much of law is politics. As a result, the sententious claim that it is decidedly the province of the judiciary to say what the law is, [FN34] has come to be seen as the exception to a more general principle of judicial acquiescence to political judgment‑‑even when, as in the case of administrative interpretations of statutes, majoritarian principles arguably provide greater support for judicial intervention than acquiescence. [FN35] Against this background, occasional judicial *280 invocations of the importance of checks and balances or state sovereignty appear to be little more than formalism, [FN36] as all actors understand the deep truth that the Court would not dare disrupt the deeply entrenched features of the post‑New Deal order. [FN37]
Cases such as INS v. Chadha, which invalidated a unicameral legislative veto on the grounds that it violated the Constitution's prescription for lawmaking, [FN38] shed harsh light on a constitutional reality at once unassailable and manifestly at odds with itself. Thus, some commentators puzzled how delegation of lawmaking authority by Congress to one legislative chamber could be less constitutional than delegation of comparable powers to administrative agencies. [FN39] For others, however, the more obvious and troubling question was just the opposite: How, given Chadha's seemingly straightforward rule, could the delegations to administrative agencies be lawful? [FN40] Yet critics who voiced this objection went unheard. On matters of structure, the Court and its defenders have made their peace with modern reality‑‑however uneasy or unprincipled that peace may be.
The second aspect of the Court's entanglement in the ongoing constitutional crisis followed directly from its acquiescence in the nationalization of politics by the New Deal. Expansion of federal powers left citizens looking for a substitute for traditional doctrines limiting the reach of government; at times, the Court was willing to provide these in the form of guarantees derived from the Bill of Rights and the Fourteenth Amendment. [FN41] Petitions for redress were addressed to the Court, sometimes, *281 as in the case of Brown v. Board of Education, [FN42] with modest success, sometimes, as in the case of Roe v. Wade, [FN43] with more contested results.
Whether as reluctant arbiter or rulemaker of last resort, the Court was no better at connecting shared general principles (for the Court, those found in constitutional text) to particular applications of those principles (here, concrete doctrines) than were other branches of government. Efforts to regulate constitutional matters directly produced a now familiar sequence of principled pronouncement, disagreement over the application of that principle, and eventual retreat. The Court's recent rediscovery of enforceable federalism‑based limits in the Tenth Amendment, the Eleventh Amendment, and the general pattern of the Constitution, [FN44] seems destined to repeat this sequence, as the Court's wistful categories collide with the reality of a world economy in which the global and the local are being connected with startling directness. [FN45]
The cumulative result has been, first, a fight over the Madisonian heritage between two broad camps that include most of the participants in the constitutional controversies surveyed at the outset, and, then, the beginnings of a truce as some of the chastened partisans find common ground at the traditional center of American jurisprudence. On one side of the dispute are the hard‑nosed advocates of minimal government who maintain that true deliberation in the Madisonian sense is impossible. This camp includes many of the originalists and theorists of public choice. They would sacrifice democratic ideals for a constitutional order that protected liberty at the cost‑‑assuming, as they may not, that it is indeed a cost‑‑of paralyzing government. The most practical among them sense that their program has a future on the condition that restoration of the eighteenth‑century Republic is used as a threat to deter further expansion of the administrative state, perhaps even to reinforce certain of its weakened structures, and not as a blueprint for disassembly. [FN46]
On the other side are the heirs to the civic republican tradition. These are the activists among the moralists and philosophers who would modify our current order to create an interpretive elite able to deliberate in Madison's sense. The most practical among them sense that their program has an audience only if the prospective administrative elite, mindful *282 of the limits of the New Deal, promises to resort to philosophical speculation only in the infrequent cases when all rules of thumb and other modest means fail. [FN47] Here, too, animating principle dwindles to last resort.
The common ground for the practically minded of both sides is marked out by the assumptions and categories of the legal process school that has held sway in American jurisprudence and law teaching in the post‑War period. This school, as developed originally in the works of Hart and Sacks, takes for granted that the branches of government have the functions attributed to them as a matter of practical and constitutional necessity. [FN48] The task of judges and lawyers is to apportion responsibility for deciding a particular case to the branch institutionally best fitted to the job at hand. The "new" legal process school that emerged in the late 1970s and early 1980s reaffirmed the integrity of the branches of government, but argued that the rules for assigning institutional responsibility for decisionmaking should be modified to accommodate the growing significance of statutory as against common law. [FN49]
The newest elaboration of the legal process view makes more modest assumptions about the capacities of the basic institutions themselves; hence, it is as much concerned with reducing the total burdens the branches of government bear together as guarding against the danger that one branch is overtaxed by responsibilities assigned to it by others. [FN50] For those approaching the traditional center from origins in civic republicanism, diminished expectations are born of a sense of the limits of the ultimate powers of theory, and, beyond that, cognition itself. However virtuous the institutions, they do not allow for the theoretically informed foresight in deliberation that would be necessary to avoid the welter of unintended consequences that thwart even the most dispassionate designs for a better republic; institutions limited in the ability to discharge their own affairs must be sparing in what they expect of others similarly disabled.
For those approaching the center from origins in public choice, the institutional infirmities result from a combination of the counterintuitive perversities both of choosing one of numerous, competing proposals by majority vote, and the extensive opportunities for rent‑seeking concealed by the forms of deliberation that these perversities, in part, create. [FN51] Respect for these infirmities sets limits on the obligations one institution may place on another, and so counsels against overzealous application of *283 constitutional checks and balances as a means of restoring pristine government. For both civic republicans and public choice theorists, these limitations rule out the first‑best world of deliberation unambiguously in the service of the public good, but they do not, on either view, exclude the possibility of second‑best management, able to do better than current arrangements precisely because it is no longer enthralled by the idea of the best. The common hope is that we can learn enough about the limits of our capacity for collective self‑determination to make constitutionally serviceable use of the current institutions of our democracy.
The assumption that American institutions cannot be fundamentally improved because of their inherent limitations may well prove no more durable than the earlier assumption of the legal‑process school that those same institutions were practically invulnerable to disruption because they were functioning well. How bizarre the assumption that the one feature of our institutions that remained fixed as they somehow slipped from unimprovable to incorrigible is their inaccessibility to deliberate alteration! Perhaps the early assumption of institutional inviolability even obscured possibilities for reform that could have reduced the disruption. In that case, the legal‑process idea of taking the institutions for granted becomes a form of self‑fulfilling prophecy. Or leaving this possibility to the side, why not suppose simply that the institutions of government worked well in the immediate post‑War period because by design, or by good fortune, they fit well with their environment? In time the environment changed, and the lack of fit explains the poor performance of the institutions. Whatever their defects, assumptions like these are surely as plausible as the notion that, whatever happens, the basic features of our government must remain as they are. Perhaps we have, in fact, no basic choices in the construction of our governing institutions. But how would we know unless, abandoning the legal‑process assumption that we do not, we try to conceive what those choices might be?
D. A New Form of Deliberation
To reinvigorate our Madisonian heritage, therefore, we need a new model of institutionalized democratic deliberation that responds to the conditions of modern life. Such a reconceptualization must avoid the presumptions and coyness of an immediate partisanship claiming to speak for a revolution that speaks for itself. It must also resist the contrary rationalizing impulse that denies the possibility of all innovation by reducing novelty to a problem of classification in familiar categories or to new rules for rearranging the familiar furniture of our institutions. The foundation of this architecture would be a new connection between the broad pronouncements of the legislature and the courts, and applications of these pronouncements to particular situations. This connection would have to leave room for experimental elaboration and revision to accommodate varied and changing circumstances, yet credibly limit the opportunities for self‑dealing that this very openness of necessity seems to *284 create. It would have to address both the Madisonian concern about the self‑aggrandizing tendency of government and the equally Madisonian concern about the menace of oligarchy in the closed communities of small republics. [FN52] In addressing these concerns, the design would have to show the respect for individual rights that, in the American constitutional tradition, provides crucial protection against both the tyranny of the majority and the tyranny of entrenched interests. Finally, the design would have to show how the judiciary could protect these rights without paralyzing experimentation or usurping the sovereignty of the democratic people.
In this Article, we make a first effort to elaborate such an architecture and to show how Congress, the courts, administrative agencies, and the states would function within the structure it defines. We claim that many of the elements of this structure have already been established in the practices of state and local governments, Congress, administrative agencies, and the Supreme Court, and that its adoption might be accomplished piecemeal by drawing on the available precursors. To illustrate both the operating principles of the design and the possibility of its incremental realization, we bring it to bear on the recharacterization of the three central but troubled institutions of American constitutionalism: federalism, separation of powers, and judicial protection of individual rights. Within these broad categories, we examine particular controversies, including conflicts of economic interest, the provision of public services, and disputes over rights arising from moral differences. Our choice of controversies obliges us to develop a claim that a common set of experimental methods can be used to define legal boundaries in a wide variety of contexts. Our aim in introducing the detail required to address the full range of cases is to exemplify the class of solutions generated by our design principles, and, thus, make them available to an initial, informed appraisal; we do not aim to provide conclusive answers to particular controversies. A method founded on the generalization of experimental corrigibility would belie itself in proceeding otherwise.
The backdrop of our design is the pragmatist account of thought and action as problem solving in a world, familiar to our time, that is bereft of first principles and beset by unintended consequences, ambiguity, and difference. Thus, a central theme of the pragmatism of Peirce, [FN53] Dewey, [FN54] and Mead [FN55] is the reciprocal determination of means and ends. Pragmatists argue that in science, no less than in industry and the collective *285 choices of politics, the objectives presumed in the guiding understandings of theories, strategies, or ideals of justice are transformed in the light of the experience of their pursuit, and these transformations in turn redefine what counts as a means to a guiding end. Art epitomized for Dewey the essentials of pragmatist investigation, because in art means become ends, and the relation between them commands attention because of this immediacy: The picture is constantly reconceptualized in the painting. [FN56] Pragmatism thus takes the pervasiveness of unintended consequences, understood most generally as the impossibility of defining first principles that survive the effort to realize them, as a constitutive feature of thought and action, and not as an unfortunate incident of modern political life. [FN57]
This view of ambiguity of means and ends focuses attention on the possibilities of improving our ability to respond to shocks to our expectations, rather than on the search for first principles that will be immune to disruption. The pragmatists understood doubt as the recurrent yet always surprising breakdown of some of the settled beliefs and expectations upon which we must depend for active investigation of the world, not as the expression of a global skepticism about the very possibility of knowledge. Seen as localized breakdowns in our expectations, doubt spurs inquiry into remedial action and reforms conceptions. To emphasize just how much doubt depends on surprise, and how little on a first principle of skepticism, the pragmatists urged a simple test: Try to doubt a belief you hold deeply, and you will discover you cannot. [FN58] Thus, pragmatism guides us in better coming to grips with a circumstance that we have come to anticipate: That experience will again and again disrupt our habits and the understandings that rest on them. [FN59]
Pragmatism guides us further in characterizing as irreducibly social the inquiries that doubt prompts. More exactly, because of the ambiguities of means and ends, the early pragmatists argued, the intelligibility and actionability even to ourselves of our very own utterances and projects depends on how others interpret and react to them. [FN60] The collaborative investigation of differences in response to doubt is thus central to self‑ and mutual understanding. This view seems addressed to an age in which the diversity of opinion and situation seem at once to render *286 collective problems almost intractably complex, and yet, perhaps, to provide a resource for their solution. [FN61]
Pragmatism guides our project, finally and most directly, because it cuts across various spheres of human activity. Thus, it qualifies as a candidate for linking breakdowns and emergent solutions throughout public and private life. As a theory of thought and action through problem solving by collaborative, continuous reelaboration of means and ends, pragmatism suggests that advances in accommodating change in one area often have extensive implications for problem solving in others. Democracy was the method for reflecting on the connection of means to ends in social activity. Specifically, for Dewey, it was a method for identifying and correcting through public debate and action the unintended consequences of coordination among private actors. He was concerned to know what democracy, so understood, could learn from the methods of public scrutiny and experimentation by which science discerned and adjusted unworkable ideas about the natural world. [FN62] Today, when private solutions often seem to work and public ones often do not, this inquiry, limited and tentative though it remained, invites us to consider the possibility that the explanation for what we observe may lie not in the intrinsic features of the public and private spheres, but rather in historically contingent and publicly corrigible differences in the problem‑ solving methods currently applied in those spheres. [FN63]
The immediate instigation of our design for democracy is a series of innovations by private firms that suggest institutional devices for applying the basic principles of pragmatism to the master problem of organizing decentralized, collaborative design and development under conditions of volatility and diversity. The innovations, inspired by organizational breakthroughs in Japan, but no longer limited to Japanese firms or those in close association with them, are a response to markets that have become so differentiated and fast changing that prices can serve as only a general framework and limit on decisionmaking. To determine what to make and how, firms in this new economy must therefore resort to a collaborative exploration of disruptive possibilities that has more in common with pragmatist ideas of social inquiry than familiar ideas of market exchange. For instance, to establish initial product designs and production methods, *287 firms turn to benchmarking: an exacting survey of current or promising products and processes which identifies those products and processes superior to those the company presently uses, yet are within its capacity to emulate and eventually surpass. This benchmarking comparison of actual with potential performance disrupts established expectations of what is feasible. By casting pragmatic doubt on the advisability of current methods, benchmarking spurs exploration of the possibilities immediately disclosed and may lead to discovery of entirely new solutions through investigation of the surprising similarities and differences among various approaches. [FN64]
Following this initial benchmarking, distinct and effectively independent operating units of the firm, each responsible for one component of the overall project, propose changes to the provisional design based on the units' respective capacities and take account of implications for their own activities of the changes proposed by others. The discipline by which the whole and the parts are elaborated together is called simultaneous or concurrent engineering. Once production begins, breakdowns in the new routines trigger error‑detection and error‑correction systems that correct weaknesses of the design or production process that escaped earlier examinations. Continuous adjustment of means to ends and vice versa is, as in pragmatism, the means and end of collaboration among the producers. Moreover, the exchanges of information required to engage in benchmarking, simultaneous engineering, and error correction also allow the independent collaborators to monitor one another's activities closely enough to detect performance failures and deception before these latter have disastrous consequences. Because it ties mutual assessments of reliability to joint explorations of capability, we will speak of the system of collaboration as a whole as learning by monitoring.
The private sector institutions of learning by monitoring suggest a public sector model of problem solving adapted to a polity in which omnibus, national measures can rarely address the particularities of local experience, yet locales in isolation from one another are unable to explore and evaluate even the most immediately promising solutions to their problems. The model requires linked systems of local and inter‑local or federal pooling of information, each applying in its sphere the principles of benchmarking, simultaneous engineering, and error correction, so that actors scrutinize their initial understandings of problems and feasible solutions. These principles enable the actors to learn from one another's successes and failures while reducing the vulnerability created by *288 the decentralized search for solutions. The system in which citizens in each locale participate directly in determining and assessing the utility of the services local government provides, given the possibility of comparing the performance of their jurisdiction to the performance of similar settings, we will call directly deliberative polyarchy.
The chief role of Congress in such a system would be to authorize and finance experimental reform by states and other subnational jurisdictions in such broad areas of public action as welfare, vocational training, or environmental protection. But this authorization would only be granted on condition that those who engage in the experiment publicly declare their goals and propose measures of their progress, periodically refining those measures through exchanges among themselves and with the help of correspondingly reorganized administrative agencies.
Accordingly, the primary role of courts would be to ensure that subnational experiments fall within the authorizing legislation and respect the rights of citizens. Judicial standards for both sorts of inquiry would be defined in part by reference to the possibilities successively revealed in the experiments themselves. Thus, the price communities must and should want to pay in this world for the right to experiment is to provide individuals in their own and other jurisdictions with information to judge their performance (including the methods by which performance is judged); this information allows individuals and groups to challenge arrangements they think violate their constitutional and other rights by reference to working alternatives that do not. In this way the vindication of individual rights encourages mutual learning and vice versa, and judges' discretion in applying broad principles is schooled and disciplined by actual experimentation with possibilities they could never have imagined. We call the overall system of public problem solving that combines federal learning with the protection of the interests of the federated jurisdictions and the rights of individuals democratic experimentalism.
Using the novel forms of local participation in service provision as well as the informative performance comparisons that democratic experimentalism provides, citizens of individual jurisdictions can hold their institutions to account. Looking at the ensemble of results against the background of changing goals, the electorate as a whole can judge the overall success of reform efforts. Eventually, this accountability could give rise to a new local politics of detailed debate on the advantages and disadvantages of current choices, given possibilities demonstrated elsewhere, as well as a new national politics focused on differing interpretations of the broad patterns of experimental results, and their implications for redirecting experimentalism and its institutions. Thus, democratic experimentalism does not pursue the chimera of replacing conflict with consensus. Its aim, rather, is to change the reasons and evidence produced in public debate, and with them the conditions for participation in civic life, so that our disputatious democracy is made both more effective *289 as an instrument of public problem solving and more faithful to its purpose of assuring the self‑determination of free and equal citizens.
E. Constitutional Interpretation
We offer the model of democratic experimentalism not as an alternative to the American constitutional tradition but as an interpretation of it. In doing so, we are mindful of John Hart Ely's observation that a rule of social order, whatever its virtues, is not a constitutional principle unless anchored in that tradition. [FN65] Democratic experimentalism, we claim, is precisely such a principle: It reinterprets democratic deliberation to advance the Madisonian project of using the institutions of government itself to foster practical cooperation despite the human propensity for opportunism, including especially the abuse of public power for private ends. It rests, moreover, on the bedrock of respect, associated in Madison's time with the idea of religious toleration, for diverse, changing understandings of the world, and the contentious varieties of individual and group life they inform, as antecedent to and protected by the Constitution.
In saying this, however, we do not mean to suggest that democratic experimentalism is solely, or even primarily, a matter of doctrinal reinterpretation to be accomplished without disrupting established institutions. Nor, on a broader understanding, do we mean to suggest that it is so exceptionally suited to (the famously exceptional) American circumstances that it is for practical purposes applicable only to them. In both regards our view is more nearly the opposite. We argue that given the interlocking institutional changes we propose, certain doctrinal reinterpretations in areas such as federalism and the separation of powers show the way beyond the current impasse, and bring the process of constitutional interpretation into accord with its Madisonian inspiration‑‑by which we do not mean a return to the original understanding, but a focus on experimentation and structure as the keys to both good and limited government. [FN66] Precisely because of the centrality of institutional change to our project, we suggest its feasibility by indicating instances, current *290 and historical, where public administration anticipates reforms of the kind proposed, and, more generally, by indicating why the preconditions for reform may be less demanding than commonly supposed. [FN67] Conversely, we note cases where the absence of corresponding institutional reform has vitiated doctrinal innovations of the type we urge. The aim is to underscore that institutional and doctrinal change require and complement each other in the project of democratic experimentalism, without suggesting that, because the changes are potentially self‑reinforcing, the progress of the project as a whole is somehow automatic.
Similarly, in constructing democratic experimentalism from the materials of American institutions and constitutional doctrine, we mean to be offering an extended and, to us, particularly pertinent example of how a familiar type of representative, constitutional democracy may be transformed into a novel, directly deliberative one; we do not mean to suggest American exceptionalism. The principles of direct deliberation are informed by fundamental and widely diffused changes in the organization of cooperation, and could be connected to a renewed understanding of the concepts of freedom and equality of citizens that form the common heritage of modern constitutional democracies. [FN68]
In presenting democratic experimentalism and the private sector developments with which it has affinities, we draw contrasts with hierarchically centralized organizations. In describing these latter organizations, we do not mean to suggest that the industrial or administrative world was ever in fact governed by a single comprehensive principle. Indeed, on the regulatory side, we will be at pains to show that many of the entities and practices that developed under the nominal aegis of the Progressive Era and the New Deal were in fact guided by principles more congenial *291 to our project than to the principles associated with those periods. (A similar argument could be developed on the private sector side, although we will not develop it here.) [FN69] Furthermore, our sustained argument for continuing incremental transformation as both a descriptive account of social developments and a blueprint for reform flies in the face of any neat periodization. Thus, in the Conclusion, we challenge the leading epochal account of American constitutionalism precisely because it overemphasizes cataclysm and particular forms of popular mobilization at the expense of incremental change. Nonetheless, hierarchical organizational principles have been extraordinarily influential in the architecture of existing institutions. Fighting fire with fire, we aim to propose a set of alternative principles. Therefore, we will refer to "New Deal" institutions knowing that the appellation is partly misnomer. In the succeeding parts, we develop our notion of democratic experimentalism and locate it within the American constitutional tradition. Part II recounts the development and global spread of learning by monitoring in the private sector. Part III explains the ways in which learning by monitoring can function in the public sector, as democratic experimentalism. Part IV fleshes out the details of democratic experimentalism by recounting its partial emergence in a diverse group of settings. Part V then explains how such piecemeal reforms might be integrated into a new national framework by describing some of the new roles for familiar institutions within the context of democratic experimentalism.
The final three parts of the Article test and refine democratic experimentalism by showing how it suggests mutually reinforcing solutions to central dilemmas of constitutional interpretation. In Part VI, we use ideas about the relation of means to ends that are at the core of democratic experimentalism to derive a model of federalism that specifies limits to the authority that the national legislature should exercise over subnational jurisdictions and conditions on the experimental autonomy of the latter. Our model suggests criticisms of recent efforts by the Supreme Court to revive traditional federalism distinctions effaced by the New Deal, as well as standards for distinguishing those current federal‑state programs that already incorporate principles of democratic experimentalism, from other methods of devolving power from the federal government to the states‑‑such as current welfare reform legislation‑‑that do not. In Part VII, we propose a democratic‑ experimentalist resolution to the delegation problems associated with administrative law and with the crisis in separation of powers more generally. Finally, in Part VIII, we explain how democratic experimentalism can be used to guide application of the broad individual rights that the Court finds protected by the Constitution to particular circumstances, thus relaxing the tension between *292 the very concepts of entrenched constitutional rights and self‑ determination by the polity.
II. Centralized and Decentralized Organizational Forms
The organizing features of the American economy play an important role in shaping our governmental institutions, and, beyond that, our ideas of what public administration and even the democratic public can do. [FN70] Thus, the public administration archetypal of the New Deal is largely patterned on the giant, mass‑production corporations that dominated the American economy from the last decades of the nineteenth century until the last decades of our own. Government improved the efficiency of its own organizations by adopting the corporations' successful techniques. To monitor and limit the corporations' power in American life, it created regulatory institutions that meshed with corporate forms. [FN71] The congruities produced by deliberate imitation and accommodation were renewed and extended as government recruited successive generations of corporate managers, schooled in the vast private bureaucracies that dominated the post‑War economy, to apply their lessons to the modernization of public administration. To grasp the logic and limits of our administrative state, we begin, therefore, with a review of the operating principles of the economic organizations on which it was modeled. To grasp the possibility of fundamental reform of that state, we show how, under competitive threat, the corporate model has been so profoundly transformed as to redefine our very idea of an organization, and thus enlarge the possibilities of joint action in public and private affairs.
The corporations that embodied the idea of efficiency for most of the last hundred years were centralized, hierarchical, and vertically integrated: Headquarters set goals, and hierarchically ranked, specialized subunits realized them. As long as they worked, these features were seen as expressing basic, incontrovertible, and mutually reinforcing principles of efficiency, governance, and cognition that became synonymous with effective human action. [FN72]
The first of these principles, efficiency, concerned the division of labor. Adam Smith gave powerful reasons for thinking that a top‑of‑the‑widget maker and a bottom‑of‑the‑widget maker can produce more per *293 unit time than two whole‑widget makers working separately, and that addition of more and more specialized resources will yield commensurate increases in productivity. Smith's ideas culminate in the familiar notion of economies of scale associated with mass production: The greater the production volume, the lower the unit cost of the product. [FN73] Mass production supposes a superintendent with comprehensive knowledge of market possibilities and production techniques who will design the product and initiate subdivision of production into specialized tasks, each of which can be further decomposed by subordinates. Consequently, the hierarchical firm separates the conception and execution components of production, centralizing the former at the top of a corporate hierarchy.
The second principle, governance, in many ways a corollary to the first, concerns the vulnerabilities created by efficient specialization itself. The more highly subdivided the production of any product, the tighter the connections among the single components of the production process. Conversely, the less likely it is that any of those components can be put to use in other production processes. (Consider the example of an auto‑body maker outfitted with the highly specialized equipment to produce at the lowest possible cost all the bodies for a particular make and model of car.) Owners of highly specialized, complementary resources cooperate, therefore, at great risk. Whoever invests first in the joint project can be held up by a partner who simply refuses to commit the complementary resources‑‑without which the initial investment is worthless‑‑except under terms more favorable than originally agreed. (The auto‑body maker has no market without the assembler; the assembler has no product without the supplier.) But the threat of expropriation deters the initial investor, so the joint project is paralyzed by the prospect of the vulnerabilities it creates. Vertical integration (the assembler, say, buys the auto‑body maker) is the organizational answer to this danger of opportunism. If a single owner has exclusive or residual control‑‑the power to dispose of assets unless their use is otherwise specified by prior contract‑‑over all phases of production so specialized that there are very few sellers and buyers of the relevant goods and services, the possibility of holdups disappears. [FN74] Possession, through ownership, of these residual *294 control rights, moreover, arguably helps solve coordination problems that arise within the resulting integrated firm, for the owner can use the threat of dismissal to discipline employees who use ambiguities in their employment contracts for their own benefit at the expense of the enterprise. [FN75] Thus, the assignment of property rights follows the logic of vertical integration, giving the economy its basic structure and providing a means for its continuous direction.
The third principle, cognition, is more general; indeed, it largely accounts for the first two. It ties the most basic features of organizations to the limits of human cognition, and particularly our manifest inability to perform all the calculations necessary to assess fully the costs and benefits of the choices plausibly open to us at any moment in anything like the available time. To act, given this bounded rationality, we must economize our limited attentiveness by making use of the expedients of habit and the subdivision of complex tasks into simpler ones. By habit, we take crucial *295 elements of our situation so for granted that we can reckon with the assumptions thus made without the need to be attentive to what we are assuming and how it shapes our further thoughts. By the subdivision of mental tasks, we break problems down into chunks whose separate solutions are within our cognitive grasp, and which can then be fitted together into a comprehensive solution to the original question. [FN76]
When problems are sufficiently complex as to require collaborative solutions, the expedients of thought become the very structuring principles of organization that economic consideration already suggests: Centralization and hierarchy are both necessary to partition problems into manageable chunks. But they also ensure that subordinates, who, by definition, know things their superiors cannot, do not make self‑interested use of their expertise. Routines‑‑the organizational equivalent of habits‑‑likewise do double duty. First, they establish the connections among the parts and the limits on the operation of each part necessary to maintain the integrity of the whole. Second, the limits set by routines constrain the possibilities for self‑dealing that specialization affords. The cognitive gains from hierarchical specialization and routinization, moreover, are mutually reinforcing. The more routinized a task, the easier it is to learn (and this, as Smith observed in his analysis of the gains to subdivided labor, explains the almost superhuman dexterity of operators performing simple, repetitive jobs); [FN77] but the more routinized the operations‑‑the more, say, it consists of a few repetitive movements of the hand‑‑the easier it is to decompose it further. (Smith counted this possibility of further simplification as another source of the efficiency gains of the division of labor, and suggested it might be accomplished either by attentive workers or "philosophers" specializing in this very task. [FN78])
Smith's insights concerning specialization suggest that organizations, no less than persons, are condemned to a pathos of knowledge. To know we must specialize; yet in specializing we come to be defined by what we unknowingly take for granted. Hence, the true price to the organization of gains through specialization (beyond the risk that a shift in demand will devalue dedicated equipment) is a kind of institutional self‑oblivion. [FN79] To pursue its ends effectively, the organization must stop inquiring *296 why its ends are its ends or why it pursues them as it does. When the routines become entrenched as the inevitabilities of common sense, the organization is the prisoner of its history, choosing within the limits imposed by its forgotten initial choices.
Palliatives and partial antidotes exist. The destiny of particular institutions may be contained in their initial choices. But new institutions can be formed to address new needs; and if they are, the struggle to survive given scarce resources selects the organizations with routines most suited to the demands of their environments. [FN80] Hence, organizational efforts in the aggregate are not misdirected even if particular organizations cannot reorient their activities to accommodate change. Alternatively, anticipating their own congenital rigidity, organizations might establish counterinstitutions, such as research laboratories, whose purpose is to routinize the creation of knowledge that renews crucial aspects of current routines. *297 But in attempting to correct the defects of organizations from without, these devices acknowledge implicitly that they could not be corrected from within, and so ratify the view that the astonishing accomplishments of hierarchically specialized institutions are necessarily associated with the danger of stultification.
During the years of the post‑War expansion, these potential cognitive and economic costs were a wholly theoretical prospect, and so vastly outweighed by the benefits of specialization that these benefits alone came to be taken for granted as defining the logic of efficiency. But starting in the mid‑1970s, for reasons we will not consider here, the stable markets for standard goods on which this system of production had rested became fragmented and volatile, and some of the costs of specialization were suddenly manifest and onerous. [FN81] In volatile and fragmented markets, the formerly acceptable risk of amortizing the huge initial investment in the design of highly complex products and production systems required to achieve economies of scale became dauntingly risky. Firms that responded to foreign competition with bold projects could easily miss their markets and be left with nothing but write‑offs to show for their temerity. Firms that responded cautiously watched as developments passed them by. For a time, this Hobson's choice seemed a cruel fact of nature. Even as foreign firms developed new organizational forms to compete under the changed conditions, American companies found the prospect of any production system more efficient than their own so incredible that they attributed the foreigners' success to good fortune (low wages), guile (dumping), or culture, instead of trying to learn from their example. Adjustment was therefore delayed or misdirected, for example, to forms of cost reduction that left the old system intact. But in the last decade, under continuing competitive pressure, American firms have indeed come to make sense of, increasingly adopt, and even develop an alternative to mass production that achieves efficiency without paying the price of forgetful rigidity.
This new kind of firm is federated, not hierarchical and centralized: Decisions of higher level entities are crucially shaped by the decisions of their constituent units. They are open, not vertically integrated: Components or services crucial to the final product of one firm can be provided by independent outside companies, and the firms' internal specialized producers can provide outsiders with crucial inputs. [FN82] Such outward differences are the result of distinctive principles of efficiency and governance;*298 these, in turn, are rooted in a new understanding of cognitive possibilities that makes routines accessible to deliberate evaluation without subverting them as guides to normal activity.
The basal unit of the new firm is the team or work group. This unit has the responsibility to achieve the goals it agrees upon with its collaborators by the means that it determines through deliberation as a group. Thus, unlike the specialized subordinates in the hierarchy of a mass producer, the work group is free to change its internal organization and to choose inputs (tools, engineering services, components, and so on) from within or outside the work group's company. Anticipating this need for continuous adjustment of internal and external connections, members of the group will have, or will acquire through training, related but distinct specialties, as this diversity helps the group adapt to changing circumstances. Because of its autonomy, the work group is for most purposes an independent firm, whatever its formal legal status.
Coordination of these groups is by the methods of iterated goal setting introduced above. For example, the new‑van team in an automobile firm sets the general performance characteristics of the vehicle it is designing by benchmarking evaluation of the best features of current vans and the prospects of incorporating innovations under development into its own design. [FN83] It next decomposes these general goals, again by reference to leading examples and comparison of possibilities, into subtasks such as the design of an engine, transmission, or heating, ventilation, and air conditioning system, and chooses a specialist team from inside or outside the parent company to realize each of the initial conceptions.
The separate specialist teams elaborate all the subsystems concurrently, applying to that task the same kind of evaluation of competitors' successful efforts and developmental possibilities used in the van team's first round of benchmarking. In addition, they benchmark the planned capacities of the capital goods, work organization, and other production methods central to their eventual products to ensure that those employed will be at least as efficient as the ones used by the most capable competitors. Engine plants, for instance, will compare their prospective performance, measured in units such as person‑ hours, capital investment, or square feet of factory space per motor produced, with the actual performance of plants making engines with similar technical specifications at similar production volumes and with similar warranties of reliability. [FN84] Units producing a service rather than a physical product will benchmark the *299 service: [FN85] The purchasing department of the automaker, for example, will aim to spend no more time and incur no greater costs, in locating potential suppliers and qualifying them as actually able to perform at the required levels, than the most proficient purchasing departments in the same or related industries. [FN86] Then, as groups begin to gain experience in prosecuting the tasks as originally defined, the initial overall goals are modified by the methods of simultaneous engineering. [FN87] Thus, the engine group may find a way to improve its target specifications or to cut the cost of manufacture if the design characteristics of the transmission are modified accordingly.
Refinement of the eventual design continues by means of just‑in‑time or inventoryless production methods and the error‑detection and correction methods associated with it. In just‑in‑time production, parts are supplied to each work station only as needed‑‑ideally, one at a time. [FN88] This production method renders disruptions and defects immediately visible. Breakdowns at one station halt production by disrupting the flow of parts to downstream operations; defects introduced in one manufacturing step make it difficult or impossible to accomplish the subsequent ones correctly. To assure the flow of production, therefore, the source of the disruption or defect must be identified in a failure of workmanship or an imperfection of design or operating organization. Such inquiries typically require tracing long causal chains back to improbable origins by an insistent series of questions sometimes called the five whys: (1) Why is machine A broken? Because no preventive maintenance was performed; (2) Why was the maintenance crew derelict? Because it is always repairing machine B; (3) Why is machine B always broken? Because the part it machines always jams; (4) Why does the jam recur? Because the part is warped from heat stress; (5) Why does the part overheat? A design flaw. [FN89] Again, *300 parallel questions arise for firms or units of firms providing services rather than manufacturing products.
Thus, error detection and correction, like benchmarking and simultaneous engineering, reveal possibilities for improvement in unexpected (mis‑) connections among the parts of complex endeavors, and the cumulative effect of these results is captured in improvements in the benchmark standards for various processes. Just as benchmarking and simultaneous engineering are often carried out by groups or teams with diverse experiences, so too is error detection and correction: Without diversity of experience, a problem‑solving group could hardly follow the zigzag path traced by the answer to successive whys.
These practices, and benchmarking above all, link the performance of the firm more directly to that of its competitors and collaborators at any one moment, while establishing a record that provokes and partially guides discussion of its own overall objectives. Benchmarking can begin with internal comparisons and investigations. Motor units in the same corporation can exchange performance data; the purchasing department asks its customers‑‑internal units and the outside firms supplying them‑‑to evaluate the services it provides by measures of their choice. But these measures can only be first, preparatory steps towards comparison with others. This next step requires separate companies and units within these companies to pool data on the actual performance of key processes. In volatile markets like the current ones, companies cooperate in this way‑‑often creating industry institutes that provide comparative performance measures of each company's processes, on the condition that the request be accompanied by a full description of the inquirer's own current results‑‑because no firm can risk assuming that its current processes, no matter how much they improve on past practice, are competitive, let alone superior. [FN90]
This swelling flood of data leads inevitably to a debate on how best to channel the information it contains; that debate becomes part of the broader discussion of the firm's direction and purpose. Once everything is in principle measurable by comparison, there is no avoiding the questions of what to measure. If the goals of the corporation could be reliably translated into progress on certain financial measures, and improvement on these connected to measurable progress on certain benchmarks of *301 operating activity, the answer would plainly be to focus on the latter. But under volatile conditions neither step is possible. [FN91] In some situations, profitability or return on invested capital captures the firm's overall position; in others, growth in market share, expenditures on research and development as a percent of sales, share of recently introduced products in the total product mix, product development time, or share of revenues earned from licensing new techniques may be far more revealing of the firm's prospects. The relation of any of these measures to particular operating practices is likely to change as well. All this variability entails constant reevaluation of the utility and precise characterization of both summary indicators and the operating measures associated with them. Reevaluation of performance measures can in turn prompt reconsideration of the larger, strategic purposes they reflect. Therefore, the most sophisticated of the new firms engage in benchmarking and simultaneous engineering of the measurement practices of benchmarking and simultaneous engineering themselves. These sophisticated firms use comparisons with measurement practices in related firms as a way of orienting their own use of measures, and they link changing judgments of what to measure and how in each subunit with coordinate changes in the others. [FN92] These deliberations do not suffice to steer the firm under current conditions, but they are increasingly recognized as necessary for it.
The master cognitive innovation of this new type of firm is embodied in precisely these apparently modest, surprisingly commonsensical institutions. For benchmarking, simultaneous engineering, and error‑detection methods, such as the five whys, are procedures for doing just what the standard view of effective action says cannot be done given bounded rationality: routinely questioning the suitability of current routines. The initial specification of new designs (benchmarking), the concrete realization of these approximations (simultaneous engineering), and their practical application (error detection), occur at just those times when self‑interrogation seems most valuable but most difficult. This timing obligates the actors to search for solutions in a circumscribed space of possibilities (the set of best current or potential designs of any activity entangled in the causes of a certain breakdown). The actors could not have anticipated the exact contours and contents of these possibilities; thus, the yield of procedures like the five whys is likely to be unfamiliar and disconcerting enough to force reevaluation of habitual responses. The *302 new firm is therefore a member of a new class of institutions defined not by the fixed routines to which they are oblivious, but rather by the routines they use for interrogating and altering their routines (including, of course, the particular methods of self‑interrogation). Think of the new institutions as pragmatist in that they systematically provoke doubt, in the pragmatist sense of an urgent suspicion that habitual beliefs are poor guides to current problems.
Group discussion of problems renders the resulting flood of alternatives tractable. Group discussion meets an immediate objection to problem solving through extensive collaboration rather than hierarchical decomposition of tasks: the geometric explosion of pairwise contacts that such collaborations might seem to entail. If A must consult first with B, then with C, and the latter two must then meet by themselves, the sheer number of consultations is unmanageable unless the group is minuscule. If, however, the collaborators meet together‑‑a possibility, strikingly, not contemplated in the theories of bounded rationality‑‑one meeting substitutes for many.
But group discussion does more than economize on participants' time. [FN93] It pools the diverse capacities and experiences of its members in judging the alternatives produced by benchmarking, simultaneous engineering, and problem‑solving searches. Thus, the new‑van team, for example, convokes specialists in engine and transmission design as well as in styling, marketing, and manufacturing to discuss proposals about the target market in relation to desired engine performance. Each proposal illuminates the others, and all are seen in light of the diversified knowledge of the group. The result is that both the group and its members are enlightened by the interplay of diverse disciplines and projects. Or the error‑correction team convokes specialists in various phases of production, design, and maintenance: At successive rounds of inquiry each specialist's explanation provides a hypothesis to test, helping to evaluate the plausibility and implications of alternatives, and, in the aggregate, ensuring a sufficiently broad canvass of likely causes. The upshot in both cases is to reveal possibilities that would remain obscured if those same proposals for new designs or explanations of the causes of disruption were scrutinized one by one, or jointly by a lone evaluator. Think of group problem solving as complementing the pragmatist search institutions by providing for the pragmatist collaborative explorations of the ambiguities they reveal.
This twofold information pooling‑‑of plans or problems on the one hand and perspectives on the other‑‑yields efficiency gains of a distinctive*303 kind. Where the hierarchical decomposition of tasks leads to economies of scale, information pooling yields economies of scope: The greater the variety of projects undertaken, the less costly it is to undertake yet another variety of those projects. One source of these gains is suggested directly by the cognitive properties of the new institutions. Comparisons among (in part) unfamiliar alternatives (competing designs, various possibilities for realizing these, alternative explanations of the origins of defects) reduce the likelihood of insular, self‑absorbed decisions, while clarifying the implications and thus reducing the risks of discovering costly shortcomings of particular decisions long after they have been made. A second source of efficiency gains is the self‑reinforcing character of disciplined information pooling itself. Just as decomposition of tasks facilitates further decomposition, so the methods of collaborative investigation of ambiguity lead, within and among work groups or project teams, to increasing facility in the use of those methods and corresponding increases in the scope of alternatives that can be canvassed, and the depth to which their several implications can be examined.
The cumulative, empirical effect of these efficiency gains is to allow firms that have mastered the pragmatist disciplines to overturn the verities of the earlier mass‑production system, transforming the competing desiderata of that world into mutually reinforcing attributes of the new one. Thus, it counted as a truism of mass production that exploration of many design alternatives hindered timely and rigorous pursuit of any one. The experience of firms in the personal computer and other technologically sophisticated industries with extremely short product life cycles shows, on the contrary, that pursuit of many alternatives is the best way to understand the advantages and disadvantages of each, and so contributes to selection of the best current possibilities. The counterintuitive result is that increasing the range of design alternatives considered at the start of a product cycle speeds selection of one, and increases the quality of the choice. [FN94] Think of this as the global scanning advantage of learning‑by‑monitoring firms. Similarly, in mass production a decrease in efficiency was taken to be the price for an increase in quality. Isolated efforts to increase accuracy seemed inevitably to interfere with the automaticity of production, reducing the throughput of the system per unit time, and decreasing productivity. [FN95] Coordinated efforts to increase accuracy (except as the by‑product of the increasing decomposition of tasks) seemed *304 unmanageably complex. [FN96] But the error‑detection and correction methods of learning by monitoring reveal local defects in the organization of production that remained hidden under less exigent conditions. Elimination of these defects affords possibilities for raising overall efficiency‑‑through minimizing downtime due to breakdowns, through the introduction of delicate automation equipment whose operation depends on maintenance of tight tolerances, and through reduction in the reworking of botched products‑‑that are simply unavailable in environments more tolerant of fault. The counterintuitive result is that the higher the quality of the parts of the new system, the greater the efficiency of the whole. [FN97] Think of this as the aggregate efficiency effect of local learning by monitoring.
Pragmatist information pooling provides an alternative solution to the problem of opportunism as well. That problem arises in mass production, we saw, as a direct consequence of hierarchical specialization. Resources specific to one project in such a system have only scrap value if put to another use, and expertise is so fragmented and specialized that the doings of one actor or group are inscrutable to others. Hence, in hierarchical firms, vertical integration, possession of residual control rights by a unitary owner, and the corresponding direction of the integrated enterprise by authority and incentives are a response to the temptations of holdups and deception. The new institutions, in contrast, so transform the conditions of cooperation that these incitements to trickery do not exist in anything like their accustomed form, and new forms of trickery can be countered by the very exchanges of information required for the exploration of ambiguity. The master resource in the new system is the ability to redeploy resources fluidly, as demonstrated in both the command of the novel search routines and in the capacity to reuse an increasingly high percentage of the physical equipment committed to one project in subsequent ones. The latter is accomplished, for example, by extensive use of flexible capital equipment that can be reconfigured by reprogramming the computers that guide its operation and changing one type of tool‑bearing module for another. Moreover, the greater a work team's command of the search routines and problem‑solving disciplines, the more accomplished the team becomes at such redeployment. The effect is that product‑specific resources lose their specificity. "De‑specified," in the form of general‑purpose assets, they are no longer the instruments or objects of holdups.
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