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E all of the above plus it's an active tool in ensuring the rich and powerful stay rich and powerful while shutting down anyone who might threaten their wealth and power -- on the government side by ensuring there's always a bureaucrat in between two people so there's always justification for spending more money, and on the big business side by ensuring the bar for entry is so high you can only buy from them.
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(Long post, but long posts are what civics look like, and short pithy posts are what tribal politics look like)

I've been growing more and more convinced that the state isn't the right answer at all. It's an answer which must necessarily be authoritarian to be effective, must be totalizing, and therefore will always be absolutely corrupt because absolute power corrupts absolutely.

Whether we like it or not, as a free people we need to find ways to regulate our behavior outside the state. It can be an extremely high level ideology that binds people together, it can be a religion, but the one thing that I can't be is a totalizing state. If you have a totalizing state, especially the sort of totalizing state that rules over a whole continent, there is no option but to be dumb, absolute, and highly corrupt.

Under a democratic system, it doesn't matter how informed voters are if there is no choice that's going to actually change anything. If the bureaucratic state is deeply entrenched, and it gets to set its own rules outside of the democratic system, you have the same problem of a big dumb system: at best, you can vote for a rep who will abolish the system or keep it, at worst you pick between several reps who intend to keep a system. Their powers don't even go into regulations.

The only way you can remotely change the way all these regulatory agencies regulate is through voting for a single office: The president. At that point, your vote really loses most of its meaning because the meaning is so diluted. If you voted for Donald Trump, did you vote for him to ban yellow dye #5? Did you vote for him to deregulate the coal industry? How about the other 60 million people who voted for him? If you voted against him, were you voting to keep yellow dye #5 legal? This is one reason why the ability to make rules was supposed to live with congress and the senate where you were supposed to be able to go to your local congressman or senator and say "I'd really like to see the coal industry stay regulated and yellow dye #5 made illegal" and he might listen because compared to the population there were relatively a lot of congressmen in particular who would have to represent their constituents or lose. As the US population has grown, the number of congressmen or senators has not, so that vote has been diluted as well.

The administrative state can be even more insidious than you'd even think. For example, do you know how you find out what the rules are around many technical fields? You have to pay the NGO who created the rules that the regulator has incorporated into their regulations. In other words, not only does the legislature not actually create the regulations, the regulator doesn't either. It's a third party who does, and then you can't know what the regulations are until you pay an exorbitant fee to get a copy of them from the NGO. Forcing people to pay to know what laws they live under (and there is a distinction between regulations and laws but not for our purposes here -- they're all government edicts you must follow or face government punishments) is a violation of fundamental democratic rights.

So there are two major problems here:

One is that the state ultimately should be the final safety net and not the first or it needs to be something a democracy cannot manage -- an authoritarian, totalizing beast that micromanages everything and thus can never have enough resources because it always needs to be bigger to act as the ultimate regulator of all things.

Two is that the structure of the administrative state is such that democracy is irrelevant anyway and the only elected office that has any control over it is one man or woman at the head of the executive.

The first problem is solved by a new way of looking at the world that doesn't see the state as the be-all end-all of all things. If we can't get away from looking at the world that way, we can't have liberal values by definition. The key is to have multiple things with power that help to mediate behaviors that are working together and in opposition. In the past, you've had it where the state, the military, the market, the church, the family, and labor all worked in this way, and that's how you got the freest outcome. Where any one group became too powerful, liberty will fall. One of the embodied dangers of postmodernism is that it tears everything down, and as it tears down the things that used to protect society, fewer and fewer things are left, with fewer and fewer checks and balances on that power.

the second problem would be solved by taking the ability away from government to let someone else create the rules so they don't have to. It isn't regulators with rule making authority, and it isn't the courts. It's the legislative branch, and if individuals don't want to do that job they shouldn't take the job. It is further improved by massively increasing the number of congressmen, and likely the number of senators, to ensure each needs to carefully represent their smaller number of voters or risk losing in an election in their area.

Looking at a world with high levels of central planning, high levels of uniformity, and a powerful dependance on the state, this is the definition of anti-liberal values. Decentralization, plurality, and independence are the heart of liberal values, so if we are to seek to be liberals, this is the path we must walk.

And if the argument is, for example, "we need state intervention to ensure our food supplies are safe", then the legislature should be the one voting on the rules, and they should be the ones who fund enforcement of the rules they set, and they should be the ones accountable if they make rules and fail to fund their enforcement.