Private Power and Public Safety
Recognizing that private standards cannot be dismissed as "voluntary" leads directly to larger concerns about the coercive use of private
power. As Grant McConnell argued in Private Power and American Democracy, it is "unreasonable to assert that private associations are both important to general policy and yet so unimportant that their political life may be ignored." McConnell described as "orthodoxy" an "unstable amalgam of very different ideas" favoring the exercise of private power in America. While that "orthodoxy" certainly favors the basic elements of a vibrant market economy—McConnell wrote about the modern corporation, agriculture, and labor—the argument does not carry over to private safety standards. There is tremendous skepticism about private regulation in this country.
First, the United States has a strong legal tradition that embodies a liberty-based concern for the protection of individual interests against the exercise of "police powers." The legitimacy afforded private action in the business world, where social arrangements are more consensual than coercive, simply does not extend to actions perceived as "regulatory." Concerns about the due process of private standards-setting are widespread. These concerns were fundamental to the FTC's effort to regulate private standards-setters. Lacking the constitutional order of public government, these groups appear particularly vulnerable to Robert Michels's "iron law of oligarchy"—the tendency of organizational leaders to acquire and promote interests different from those of their members. The tendency of private organizations to develop "internally nondemocratic and bureaucratic structures" is "generally accepted as fact by social scientists." Although the FTC did not adopt the process-based regulations, it retains legal jurisdiction, and its attorneys retain heightened interest, in pursuing complaints concerning private abuses of due process.
The second argument against private standards is more substantive. The political critique of pluralism suggests that when private groups dominate the policymaking process, the results are rarely (if ever) in the public interest. "The most entrenched, the best organized, and frequently the oldest" interests are likely to benefit most from the resulting policies. This criticism need not imply bad motives or exclusionary practices on the part of private standards-setters. Even organizations that encourage participation of various groups are unlikely to hear from some interests. The "logic of collective action" suggests that consumer and other diffuse interests will often be underrepresented, whatever the forum. These interests might be galvanized effectively (but temporarily) by a catastrophe, but in the long run the concentrated interests of the regulated are likely to prevail.
The argument is familiar in the public sector, where agencies are often thought to favor the interests of the regulated. Based on observations about the Interstate Commerce Commission, the Civil Aeronautics Board, and the Federal Communications Commission, for example, Grant McConnell argued in 1966 that "accommodation" with private interest groups tends to "eliminate public values from effective political consideration."
Theodore Lowi has argued more recently that the "parceling out" of public policymaking to private interests is "co-optive" and destructive of public values. Private safety standards appear to be the ultimate extension of this phenomenon. Lacking the presence of outside interests, private regulatory institutions seem nothing more than a variation of the fox guarding the chicken coop. Lowi makes specific reference to private standards in the second edition of The End of Liberalism, condemning these arrangements as "prime examples of the continuation and reinforcement of 1960s liberalism applied to public policy."