Title: Administrative Agencies: Their Structure and Powers
Headings: 5.1
Administrative Agencies: Their Structure and Powers

5.1 Administrative Agencies: Their Structure and Powers
Learning Objectives
Why Have Administrative Agencies?
Why Regulate the Economy at All?
Ideal Conditions for a Free Market
History of Federal Agencies
Classification of Agencies
Powers of Agencies
The Constitution and Agencies

Content: There are no parties, institutions, or governmental units regulating the price, quantity, or quality of any of the goods being bought and sold in the market. In short, some forms of legislation and regulation are needed to counter a tendency toward consolidation of economic power and discriminatory attitudes toward certain individuals and groups and to insist that people and companies clean up their own messes and not hide information that would empower voluntary choices in the free market. But there are additional reasons to regulate. For example, in economic systems, it is likely for natural monopolies to occur. These are where one firm can most efficiently supply all of the good or service. Having duplicate (or triplicate) systems for supplying electricity, for example, would be inefficient, so most states have a public utilities commission to determine both price and quality of service. This is direct regulation. Sometimes destructive competition can result if there is no regulation. Banking and insurance are good examples of this. Without government regulation of banks (setting standards and methods), open and fierce competition would result in widespread bank failures.