What a pleasure it has been to read these reviews. As I set out to write The Power and Independence of the Federal Reserve , this very audience—serious scholars and practitioners of administrative law who had thought hard about institutional design in other contexts besides the Fed—weighed heavily as one of the primary groups of interlocutors I hoped to reach. It is a rare delight to engage in this conversation with this group about Fed independence, Fed power, and how each sits, comfortably or uncomfortably, within the broader themes of government, accountability, and administration.
I’ve learned a lot from this symposium and have been given a lot to think about for the future. I expect I’ll shortly take up Daniel Hemel’s and Adam White’s excellent (if contradictory) analyses of the Federal Reserve System within the constitutional order, for example, among many other responses to our contributors’ essays. But for now I want to provide some closing thoughts about the intellectual and scholarly path ahead for the administration of the Federal Reserve. I’ll also conclude with why I think there is a scholarly role to play in that analysis well short of projects for political reform.
I began this research project with the usual academic puzzle: how could legal scholars overlook this important subject for so long? Yes, it’s true, I’m asking the same question that litters article and book introductions in perhaps hackneyed abundance. And yes, it’s true, my surprise may be the product of occupational psychosis that has led me to overemphasize the importance of the Fed given how much time I’ve spent researching it.
But I also think there’s an objective case to be made that the Fed as an institution has the largest ratio of power and importance to academic attention in law and history of any other institution in the United States. For economists it is perhaps the most studied of American institutions. Legal scholars and historians, my main disciplines, have treated the Fed peripherally if they have treated it at all. (There are, of course, important exceptions to this, both for legal scholars and historians, but there is no denying the central tendency away from the Fed in both disciplines.) Is there another like institution like it?
The research agenda, then, should remedy this oversight and bring that power-to-scholarly-attention ratio closer to one. As the scholars who have participated in this symposium have amply demonstrated, there is much more to this work than my book has provided, including new scholarly paths that will reject my framework or analyses. My hope is that this energy will continue to grow and expand such that a thriving discussion on the Fed’s structure, functions, authority, history, and indeed independence—whatever that means!—will be as unremarkable as similar discussions around other institutions of comparable stature.
Even as I make this familiar call that “more research is needed,” I must recognize that there’s a real chance that this conversation, at least among legal scholars and historians, won’t take root. The reality is that, for fascinating (if lamentable) institutional reasons, there isn’t an obvious place in history departments or law schools for a rigorous, institutional study of the Fed in all its ongoing complexity. Scholars at law schools who are interested in business law look at law primarily through the prism of Delaware corporate governance, federal securities regulation, and contract. Studying central banking—and financial regulation more broadly—doesn’t fit comfortably in any of those conversations. The Fed and Delaware Chancery don’t have a lot to say to each other, for example, and securities regulation—while much close to the Fed—concerns itself with mostly different questions. Contract law, too. This isn’t to say that the traditional approaches to business law aren’t valuable. It’s to say that they are very different.
History departments, for their part, have long deemphasized both economic history beyond the study of culture and institutional history. I think there’s an exciting opportunity to explore each, but historians aren’t, as yet, particularly interested. Again, not that the cultural history of capitalism doesn’t have value, just that it’s a different set of inquiries.
There’s the rub. Given the curricular demands at law schools and the gestalt of the discipline in history, there may not be as many institutional advantages for young legal scholars or historians to branch into this space as there might be to continue to debate mergers and acquisitions, the poison pill, and the Delaware General Corporation Law for lawyers, or the cultural and social challenges to capitalist institutions for historians. Given the truly heinous job market for historians and the still uncertain market for legal scholars, it’s a risky strategy to try to break a new path. My place on a business school faculty gives me some liberties here, but doing economic and institutional history at business schools isn’t exactly a tried-and-true path either.
If there are some institutional barriers to studying financial regulation, I take courage that these barriers are far from insurmountable. The community of scholars that focuses on financial regulation—at business schools and in economics departments, and yes including among historians and legal scholars—is growing. A long-suffering generation of scholars has been at this for decades, and the crisis has partially redirected interest among a younger generation (myself included) toward these foundational questions. I won’t make any predictions about whether there will be sea changes in what constitutes the study of economic history and business law, but count me among the optimists. These changes may come slowly, but I think they will come.
I’ll conclude with a question that occupies a chapter of my book and tends to become the core of legal scholarship generally: what should change about the world as a result of the things we learn? I have my proposals—including for giving the Board of Governors more control over the Federal Reserve Banks, and limiting the power of the Federal Reserve Chair—and I think these proposals and many others are worth considering, in a constant way. As I write in my conclusion, quoting the great central banking scholar and historian Charles Goodhart, “it is one of the proper functions of academics regularly to reassess and to challenge the legitimacy and value of existing institutional arrangements.” I think that reassessment and challenge is an important part of the academic process.
But it is not and should not become the only part. There is so much good work that remains to be done well short of projects for political reform. There is a thriving dialogue among economists, inside and outside central banks, as to the appropriate tools for a new economic world. There is not a correspondingly thriving dialogue among legal scholars and central banking lawyers, and the historians inside and outside the system are still a very small group. Hopefully, as the academic inquiry continues apace, that dialogue will grow along with it.
This is the final post of an online symposium reviewing Peter Conti-Brown’s new book The Power and Independence of the Federal Reserve. You can read the entire series, as well as other posts on the Federal Reserve, here.