Chevron Deference pays tribute to Metcalfe’s Law

As news of Donald Trump and Joe Biden has been spreading around the world lately, important events are taking place elsewhere that, with the addition of innovation, will likely have an impact long after the next presidential term ends.

An example: Loper Bright Enterprises In.Raimondoin which the Supreme Court, by a majority of 6 to 3 votes, overturned the 1984 decision, the so-called “Chevron respect.”

Under Chevron respect, courts were instructed to defer to regulatory agencies’ interpretations of Congress’s intent. In practice, that meant letting bureaucrats—especially environmental activists at the Environmental Protection Agency—interpret the rules on their own.

For example, when Congress wrote the Clean Air Act in 1970, it didn’t mention carbon dioxide as a “pollutant,” and yet the EPA, relying on its expertise (with help from the Sierra Club and others), decided to regulate it anyway. Why? Because that’s what empire-building zealots do.

This blatant abuse of power was stopped by the Supreme Court in 2022 in a decision that provided Loper Light.

As for the molecule in question, we might add that Congress, the proper source of federal law, has never regulated and probably never will regulate CO2 in the way it regulates, say, lead or arsenic. Oxygen is well known for its beneficial effects on life, and carbon is the fourth most abundant element in the universe—it is the central element in every organic compound. Carbon should be treated as a resource to be transformed, not as a toxin to be avoided.

So if the EPA “experts” believe CO2 is a pollutant, the rest of us need a second opinion. Thankfully, that’s exactly what the Supreme Court has guaranteed—a fair hearing, not Al Gore’s Hall of Fame.

Interestingly, when Chevron deference emerged four decades ago, seemingly a minor procedural issue. But with the mutagenic help of the bureaucracy, NGO-cracy, and media-cracy, Chevron has grown like a tumor. According to one study, “Chevron has been cited in more than 18,000 federal court decisions and has been cited to uphold at least hundreds of agency actions. Undoubtedly, behind the scenes, Chevron has influenced the agency’s approach to countless other decisions.”

Of course, such great power in the hands of Deep State Cthulhus – interspersed of course with the depredations of countless Lois Lerners and DEI-niks – caused a reaction that ended Loper LightTo sum up in words Federalist“The Supreme Court’s decision marks a major victory for a conservative legal movement that has spent four decades trying to dismantle the unfettered power granted to unelected bureaucrats.”

Of course, unelected bureaucrats and their now-controlled power still have their fans. Like Laurence Tribe, a former Harvard law professor turned prolific X-man, who tweeted, “The ones I feel sorry for are my administrative law colleagues who built their courses and careers around the intricacies of Chevron deference.” Dear reader, it’s your choice: either this is the greatest self-determination in history, or Tribe has a very, very, funny sense of humor. Cry, beloved bureaucracy!

However, if we look up from the boxes, we can see a greater impact Bright’s loper. Axial predicted several likely outcomes: The “winners” are tech companies, including Big Tech, while the “losers” are “activists and organizations that support stricter technology regulations.”

Sigh. We’ll have to get used to more innovation.

There will certainly be more of it, although American technology is already a Schumpeterian giant; compared to the rest of the world, the United States is gainProminent analyst Mary Meeker recently reported that American AI can boast more than triple investment by our next nine rivals (including China) total.

This boom in innovation will continue in cryptocurrencies. While some see the whole crypto thing as a scam, others see it as, uh, the building blocks of a new economic and political order. But only if they can get past the pesky bureaucrats.

In fact, crypto enthusiasts are turning on Biden. A particular target of crypto anger is the 46th president-elect, Securities and Exchange Commission Chairman Gary Gensler; his self-fulfilling activism has blossomed in Chevron era.

Now, cryptocurrency advocates are backing Trump, who promises to “get out of the way of innovation.” Meanwhile, another Republican, House Speaker Tom Emmer (R-MN), cheered Loper Light with ferocity and even greater force: “The Supreme Court’s decision to overturn Chevron respect limits the regulatory abuses of Gary Gensler and every other unchecked, unelected bureaucrat who makes law by regulation.”

Is crypto, AI or any other technology risky? Or even dangerous? Many people think so, and in a properly balanced, post-Chevron environmentalists have multiple options: They can petition each of the three constitutional branches of federal government—Congress, the Executive, and the Judiciary—demanding action.

But what can people do? NO no longer should one look for bold actions within the framework of an unclear constitution fourth branches of government: the EPA, the SEC, and probably every regulatory agency—a total of about 270. Observers are already tallying the likely impact Loper Light on transgender issues, net neutrality, and medical devices — to name just three of its three million revenues.

Nevertheless, in the face of regulatory changes, it is important to remember that nothing in Loper Light prevents Congress from taking any action it would like; this decision is a check NO-elected officials, not elected persons.

Of course, the day may come when conservatives will no longer trust Congress to protect their rights. After all, if Washington is powerful, there is always the risk that someone will seize the reins of that centralized power and gallop off in the wrong direction.

We might add that liberals are right to have the same concerns. If the right does not trust democratic universal answers, the left need not trust Republican universal answers. We humans, all 340+ million of us, are simply too diverse, in every way, to fit on the same bed of Procrustes.

Justice Neil Gorsuch aptly presented this argument in his concurrence Loper Light: “Chevron compliance requires courts to ‘put a finger on the scales of justice in favor of the most powerful litigant, the federal government,’” he wrote. He continued: “Chevron compliance guarantees ‘systematic bias’ in favor of the political party that currently holds the levers of executive power.” That is not what any lover of freedom should want: a dominant central state using the law to become more dominant.

Fortunately, there is an answer to this dilemma: distributed power, or federalism, or states’ rights. It’s all in the Constitution, as well as in such important supporting documents as The Federalist Papers.

For example in Federalist 45James Madison wrote,

The powers delegated by the proposed Constitution to the Federal Government are few and limited. Those to be left to the State Governments are many and indefinite. The former will be exercised chiefly with respect to external Purposes, such as War, Peace, Negotiation, and Foreign Commerce; with which last will be most connected the power of taxation. The powers reserved to the several States will extend to all Purposes, which, in the ordinary Course of Affairs, affect the Life, Liberty, and Property of the People; and the Internal Order, Improvement, and Welfare of the State.

Madison believed that the states were a closed defense against excessive federal power; he later wrote the proto-Calhounian Virginia Resolutions to emphasize this view.

Some, of course, will argue that the Constitution is outdated and therefore inadequate to solve national and global problems. After all, Madison and company were conscious of virtually nothing that we would today call “technology.” But since the even less technologically advanced days of Aristotle—the Stagirite was widely studied by the Founding Fathers—true political wisdom has changed little.

What’s more, in a miraculous twist of fate, the timeless wisdom of the Constitution aligns harmoniously with the newfangled laws of Silicon Valley. Specifically, Metcalfe’s Law, which, according to Techopedia, states:

The influence of a network is proportional to the square of the number of nodes in the network. We focus on the number possible connections between nodes. For example, if a network has 10 nodes (i.e. computers, servers, and/or connecting users), its proportional value is 100 (10 x 10).

It’s the same basic principle as with brain cells: the more of them you have, the smarter you are. But you don’t have to be a technologist or biologist to see the same logic everywhere: the busier the intersection, the port—or the lemonade stand—the more value.

So let’s apply Metcalfe’s law to Loper Light and federalism. In the absence of the lowest common denominator of a wet blanket of federal bureaucracy, the states will be free to experiment. In Metcalfe’s terms, that’s potentially 50 nodes of state experimentation, as opposed to one federal node. And using Metcalfe’s math, that’s 50 times 50, so 2,500. Meanwhile, for the federal government, it’s one times one, which is… one.

Now, one might immediately object that comparing nodes to states is, well, comparing apples to pixels. After all, states, being fixed systems, do not respond as flexibly to new data as a neural network.

Fine. No doubt some states will be as stubborn and lethargic as the federal government, but over time more states will try new things. And we can no more predict where this process will end than we could predict previous twists and turns in history and technology.

Indeed, if Trump wins in November, blue states will be the trailblazers for anti-Washington claims. And if Biden (or some other Democrat) wins, red states will become nonparticipants. If the center doesn’t hold, that’s good news for the extremes—and it’s the extreme lords who try new things.

Yes, bring in those Brandeis laboratories of democracy, because they can also be laboratories of prosperity.

Here is prominent tech investor Balaji Srinivasan: “Technology is going to accelerate. Because Chevron’s compliance is over. And regulators can’t just make laws anymore. So countless new startups have just become feasible.”

Cryptocurrency investor Marty Bent added: “With the Supreme Court’s Chevron deference ruling, the economy has shed an anchor that has held it back for more than a generation. The balance of power, as the founders designed it, has been shifted back in the right direction.”

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Are these tech-bullshit right or wrong? We’ll find out. Because even if Democrats keep the presidency and appoint SCOTUS justices who would try to restore the Chevron Deference, many states, tech giants, and regular people will certainly #resist.

Forty years ago, Chevron Deference crept in on tiny cat feet, only to grow into a rabid lion. But now that it’s been caged, those who don’t want to be eaten are on guard. And according to Metcalfe, the guards will be reinforced by new networks of nodes.

Vigilant citizens, showing no respect for false expertise, are a proven defense against arrogant intrusion. Chevronism has been repealed. In the future, if states want, any attempt to return may be pushed away.