The independence that markets actually require

There is a paradox at the heart of market capitalism that its loudest champions are the last to acknowledge: markets function best when the rules governing them are believed to be stable, and rules are believed to be stable only when the body writing them cannot be dismissed the morning after an inconvenient finding. The Supreme Court's ruling allowing President Trump to fire FTC Commissioner Rebecca Slaughter — overturning the long-standing Humphrey's Executor precedent, as CNBC reports — does not merely settle a constitutional question about executive power. It alters the expectations framework within which every regulated industry now operates.

I am not a constitutional lawyer, and I shall not pretend to adjudicate the text of Article II. But I am someone who watched, from rather close quarters, what happens when the mechanisms of economic governance are subordinated entirely to the political will of a single executive. The answer is not liberation. The answer is uncertainty — and uncertainty, as I spent much of my professional life arguing, is the sworn enemy of investment.

Animal spirits drive the investment decision. What a firm believes about the future stability of the rules is every bit as important as the interest rate at which it can borrow. An FTC whose commissioners serve at the president's pleasure is an FTC whose rulings carry an implicit asterisk: subject to revision upon political inconvenience. That asterisk is not costless. It reprices risk across every merger review, every consent decree, every market-conduct investigation. The inference is mine, but I hold it with some confidence.

The champions of this ruling will say, reasonably enough, that democratic accountability requires that elected presidents control the executive branch, and that unelected commissioners making consequential economic decisions without that accountability is itself a democratic deficit. I take the point seriously. It is not nothing. But the answer to that tension is not to collapse independent expertise into the Oval Office; it is to design clearer legislative mandates so that commissioners operate within democratically enacted limits while remaining insulated from day-to-day political pressure. The Bretton Woods institutions I helped design had precisely this architecture — mandate set by governments, execution insulated from individual ministers. It was not an accident.

The deeper issue — and here I am reasoning by analogy from my own era, since the specific institutional history after 1946 is beyond my direct knowledge — is that concentrated executive control over economic regulation tends to produce one of two outcomes: capture by the regulated industries when the executive is sympathetic to them, or weaponisation against disfavoured firms when the executive is not. Neither outcome serves the diffuse interests of consumers, workers, or the competitive market that genuine liberals claim to cherish. The FTC, whatever its imperfections, exists because those diffuse interests have no lobbyist in the room.

Full employment and broadly shared prosperity require, among other things, markets that are reasonably competitive and rules that are reasonably predictable. This ruling, as reported by CNBC, puts both at risk — not through any single dramatic act, but through the slow erosion of the institutional credibility that makes economic governance trustworthy in the first place. The long run has a habit of arriving.