Title: Administrative Agencies: Their Structure and Powers | Business and the Legal Environment
Headings: Administrative Agencies: Their Structure and Powers
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
Key Takeaway
Exercises

Content: The Supreme Court has recognized the legitimacy of federal administrative agencies to make rules that have the same binding effect as statutes by Congress. Most commentators note that having agencies with rule-making power is a practical necessity: ( 1) Congress does not have the expertise or continuity to develop specialized knowledge in various areas (e.g., communications, the environment, aviation). ( 2) Because of this, it makes sense for Congress to set forth broad statutory guidance to an agency and delegate authority to the agency to propose rules that further the statutory purposes. ( 3) As long as Congress makes this delegating guidance sufficiently clear, it is not delegating improperly. If Congress’s guidelines are too vague or undefined, it is (in essence) giving away its constitutional power to some other group, and this it cannot do. Why Regulate the Economy at All? The market often does not work properly, as economists often note. Monopolies, for example, happen in the natural course of human events but are not always desirable. To fix this, well-conceived and objectively enforced competition law (what is called antitrust law in the United States) is needed.