Standing against the ‘Concentration’ of Public and Private Power

In Federalist 51, James Madison described how the Constitution safeguards liberty by preventing “a gradual concentration of the several powers” of government in one department. On Monday, the Supreme Court heard arguments in two cases that involve an equally pernicious form of concentration: the convergence of state and private power.

In Murthy v. Missouri, the Court heard claims that numerous officials in the Biden administration were engaged in a coordinated pressure campaign, urging social-media platforms to flag, demote, or remove posts that the administration considered “misinformation” about topics such as Covid-19 and vaccines. Dozens of emails revealed that White House and agency staff demanded that platforms target specific speakers, including Tucker Carlson and Robert F. Kennedy Jr., and certain messages for scrutiny, and threatening consequences if they were not silenced.

Similarly, in NRA v. Vullo, the Court considered claims by the National Rifle Association that Maria Vullo, the former superintendent of the New York Department of Financial Services, leveraged her regulatory power over banks and insurance companies to coerce them into denying basic financial services to the NRA. According to the complaint, Vullo openly criticized the NRA’s advocacy for Second Amendment rights and took several steps to ensure that banks and insurers would “sever ties” with the NRA.

At issue in both Murthy and Vullo is whether government officials who browbeat private businesses into denying service to Americans based on the content of protected speech can be held to account under the First Amendment. But beyond this important legal question, the cases point to a larger structural threat to liberty — the rise of a comprehensive managerial state fusing public and private power.

Increasingly, the expansive power of the administrative state is rivaled by the largest tech and financial firms. The six largest publicly traded tech companies in the United States today — which include Alphabet (Google) and Meta (Facebook) — have a combined market capitalization of nearly 13 trillion dollars. The four largest social-media platforms — YouTube, Facebook, WhatsApp, and Instagram (the latter three owned by Meta) — have nearly 9.5 billion monthly users. The five largest domestic U.S. banks — which include JPMorgan Chase and Bank of America — hold combined deposits of over 6.5 trillion dollars.

The sheer scale of those companies and their control of critical aspects of the American economy gives them tremendous leverage over the lives of everyday Americans. And that leverage, if weaponized by government actors bent on silencing certain speakers or messages, could prove fatal to civil liberties.

Unfortunately, evidence is mounting that the government is doing precisely that. On March 7, the House Select Subcommittee on the Weaponization of the Federal Government held a hearing that revealed a dragnet effort, carried out by federal financial regulators, to gather information from financial institutions about regular citizens who hold views the government dislikes.

The subcommittee issued a report showing how the FBI and the Treasury Department’s Financial Crimes Enforcement Network (FinCen) distributed materials to financial institutions instructing them to use Merchant Category Codes to search for transactions for “small arms” and purchases at sporting-goods stores such as Bass Pro Shops and Dick’s Sporting Goods. Shockingly, FinCen also circulated to financial institutions a report prepared by the far-left Institute for Strategic Dialogue designating as “hate groups” organizations such as Eagle Forum, Family Research Council, and Alliance Defending Freedom.

During his testimony at the hearing, Dr. Jordan Peterson observed that the appropriation of private levers of power by state regulators posed the “danger of eliminating the private sphere in its entirety,” an arrangement that echoes the social-credit system of Communist China and that threatens the liberties of all Americans, regardless of their political persuasion.

In Murthy and Vullo, the Court has the opportunity to begin disentangling the public and private spheres of power. This step is necessary, but not sufficient. As former Supreme Court justice Antonin Scalia once reminded Congress, “The foundation of our freedom is not based in the Bill of Rights. That was an afterthought. Every tinpot dictator has a Bill of Rights which he casually ignores. What was debated in 1787 and what ensures our freedom is our structure of government which holds each branch . . . to account.”

Solving for the public-private convergence requires more than a Supreme Court order that bureaucrats comply with the First Amendment on a case-by-case basis. Rather, it requires the Court, Congress, and even state lawmakers to prevent the administrative state from merging with the private sphere in the first place. This requires eliminating undue deference to administrative agencies — something the Court may do this term — and Congress reengaging the art of lawmaking instead of making open-ended delegations of authority to bureaucrats.

These and other reforms are necessary if private businesses are going to make business decisions based on market signals, not emails from federal regulators. The alternative is an all-encompassing managerial state that leaves no room for freedom of thought and conscience.