I have been planning to write this essay for quite some time. Steven Bannon’s rant on the War Room this morning finally pushed me to do it because, while he knew the concept of “creative destruction,” he was a bit sketchy on where the idea came from, suggesting not only Joseph Schumpeter as its possible author but also Friedrich Hayek. Having expertise in the field of political economy, I thought to myself that I should go ahead and write it up so readers of Freedom and Reason can get a sense of the spirit behind the desire to deconstruct the administrative state. There’s a lot of fear out there about what all this entails, and one of the goals of this platform is help assuage fear so people can practically move forward without trepidation.
Schumpeter was an influential Austrian-American economist and political scientist who explored the dynamic nature of capitalism and its ability to generate growth through innovation, but he also warned of its vulnerabilities, particularly to social and political changes. Schumpeter coined the term “creative destruction” to describe the process by which capitalism perpetually renews itself through innovation. In Schumpeter view, new technologies and adaptive business models disrupt existing structures, leading to economic progress while simultaneously making older industries and jobs obsolete. He rooted this in the cyclical nature of economies (influenced by the Kondratieff Wave theory, which I may write about in the near future), attributing booms and busts to waves of innovation. Schumpeter thus emphasizes the critical role of entrepreneurs as agents of change who drive innovation—and the problem of bureaucratic fetters on that critical role.
In his book Capitalism, Socialism, and Democracy (1942), Schumpeter argued that capitalism would eventually give way to socialism due to its own success. He saw that the rise of large corporations and bureaucratization would erode the entrepreneurial spirit, leading to a managed economy. It is crucial here to clarify Schumpeter’s notion of socialism aligns more closely with a corporatist or technocratic conception than with the classical Marxist vision of a workers’ state. Schumpeter’s socialism is characterized by the bureaucratic management of economic resources, a shift from entrepreneurial capitalism to a system governed by large corporations, bureaucracies, and technocrats. This form of socialism emerges not from workers seizing the means of production but as an evolutionary outcome of capitalism’s own successes, leading to an administrative state.
Schumpeter’s concern is our present reality, but his concern was arguably insufficiently framed such that it would move the populace to resist more vigorously the rise of the administrative state in real time. Moreover, he saw this development as inevitable amid the complexification of the capitalist mode of production. For a more polemical and hopeful critique, then, we must turn to Friedrich Hayek, who viewed corporatist or technocratic developments as a grave danger to freedom and something that we can and should resist. In The Road to Serfdom (1944), Hayek warned that central planning, whether by bureaucratic elites or under socialism of the Schumpeter sort (or the Soviet style), leads inevitably to authoritarianism. And here we are.
I now to turn to the problem of authoritarianism in the American System, which I have discussed in create detail in past essays on this platform, and bring into view the administrative apparatus of the Executive Branch of the US Republic. One of the problems with the creation and proliferation of Executive Branch functions is the perception that they are original to the founding or otherwise organic to the Republic and therefore cannot be eliminated when they are determined to be redundant, useless, or detrimental to the overall government function, as well as to liberty. For example, when I tell people when the Department of Education was established as a Cabinet position, they are typically surprised, having assumed that this department was established much earlier and that it somehow contributed to the US supremacy as a scientific and technological powerhouse.
Actually, only four Cabinet positions were established in the first year in the first term of America’s first President, George Washington, the great wartime general who served as Chief Executive from 1789-1797: Secretary of State (to handle foreign affairs); Secretary of the Treasury (to manage the nation’s finances), Secretary of War (renamed Secretary of the Army in 1947 and absorbed into the Department of Defense); and Attorney General (established to provide legal advice to the President, becoming part of the Department of Justice in 1870). Secretary of the Navy, created to oversee naval affairs, would be established almost a decade later, in 1798 (absorbed into Department of Defense in 1947). After that there was a lull in the expansion of government, which then occurred incrementally. Let’s review:
The Postmaster General was a Cabinet-level position from 1829-1971, when the Postal Reorganization Act made the Postal Service an independent agency. Secretary of the Interior (1849) was created to manage domestic affairs, including natural resources and public lands. Secretary of Agriculture (1889) to oversee agricultural programs and policies. (Why not absorb this into the previous Cabinet post?) Secretary of Commerce and Labor (1903), now split into separate Departments of Commerce and Labor (1913). Secretary of Health, Education, and Welfare (1953), now split into two departments: Health and Human Services and the Department of Education (1979). Secretary of Defense (1947) to pull military leadership under a single authority. Secretary of Housing and Urban Development (1965) to address housing needs and urban issues. (Why not absorb into the Interior?) Secretary of Transportation (1966) to oversee transportation infrastructure and policy. (Interior?) Secretary of Energy (1977) to handle energy policy and nuclear management. Secretary of Veterans Affairs (1989). (Why not absorb into the Defense Department?) And, finally, Secretary of Homeland Security (2003) to coordinate national security and emergency preparedness.
Those at the Founding are necessary. But some of the others in that list are problematic, and we should revisit them. The Education Department has become captured by woke progressivism (SEL, DEI, Queer Theory, CRT, etc.) and repurposed for indoctrination in corporate statist ideology; the bureaucrats there are engaged in social engineering for the benefit of the power elite. Consequently, the United States has slipped from top dog in the world to lagging dozens of other countries in producing knowledgeable citizens. Some on the right might argue that it’s not a matter of eliminating the department but capturing it and pressing down into the masses an alternative ideology. But indoctrination is not the point of education. Education should be concerned with the development of critical thinking and practical skills. This is best left to local governments, those thousands of engines of innovation. Parents need choice and democratic control over the apparatus. The American System is, after all, founded on the principle of federalism.
I am not going to go through all of these departments (I parenthetically suggested some consolidation above), but while I am here, in addition to the Department of Education, I would like to schedule for termination the Department of Homeland Security. We should then eliminate the CIA, the CISA, and the FBI. Whether the Department of Justice should be abolished is something on which I need to reflect further, but I am leaning towards returning the Attorney General’s office strictly to the role of President’s counsel. I am bringing up the Justice Department because of its embeddedness in the domestic security apparatus. At the very least, we need to end the power of the administrative state to wage war against American citizens, and this will require a radical reorganization of the entire apparatus, during which its powers should be drastically diminished. What would be a particularly useful redesign of all this might be found in a Department of National Integrity, which would oversee immigration and naturalization, the charter ensuring states would have the power to determine whether those who cross the national border would be allowed to cross state borders.
The rise of the administrative state, as critiqued by Schumpeter and Hayek, presents a grave danger to the preservation of liberty and the proper functioning of democracy. Schumpeter’s vision of a bureaucratized, corporatist socialism driven by capitalism’s own excesses may seem inevitable, but Hayek’s warning in The Road to Serfdom urges us to resist this trajectory. The expansion of executive agencies and the entrenchment of bureaucratic power foster conditions ripe for authoritarianism, where central planning and administrative overreach undermine both individual freedom and democratic accountability. To counter this, we must recognize that many of these institutions, far from being organic extensions of the Republic’s founding principles, are modern impositions that can and should be reevaluated and in some cases eliminated. The federalist structure of the American System provides a framework for decentralization and local governance, offering a path to reclaim liberty from the grip of technocratic control. By dismantling unnecessary and counterproductive elements of the administrative apparatus, we not only honor the principles of limited government and self-rule but also safeguard the entrepreneurial and democratic spirit essential to preventing the slide into authoritarianism. This endeavor demands vigilance and bold action to ensure the preservation of liberty for future generations.
Don’t be afraid of change. Face the challenge with the courage of the men who built this nation. Republicans now control the White House, the Senate, the House, the Supreme Court, and thirty-seven of fifty governors’ mansions. Eighty percent of counties across the United States shifted towards the Red. Many of these Republicans—an ever growing number of them—are not the Republicans of old. They are populist-nationalists and classical liberals. Indeed, there has been a mass exodus of liberals from the Blue to the Red team, seeing the reformed Republican Party as the place where the founding principles and values of America now reside. Moreover, the party has become the nucleus of the innovative spirit that drives not only economic but societal and personal development, represented by, among others, Elon Musk and his various endeavors. We now live in a new era. We can and must reclaim the greatest of America and build a future where all Americans prosper and live more freely. We owe this to future generations.
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