Can Sir Humphrey Be Fired?

What a 1980s Sitcom Explains About the Supreme Court and the SEC

By Nick Morgan, Founder and President, ICAN Law 

Over the past few terms, the U.S. Supreme Court has invalidated major presidential initiatives and concurrently expanded presidential control over administrative agencies like the Securities and Exchange Commission. But what do these changes mean for ordinary investors and entrepreneurs?

ICAN’s scholar-in-residence, Alexandros Kazimirov, takes on that question in his recent paper, “The Power Broker Court.” At its heart is the major questions doctrine—the principle that an agency can’t make decisions of vast economic and political significance unless Congress has clearly given it that power. It’s not something most investors spend time thinking about. But it shapes what the SEC can and can’t do.

In the piece below, Alex makes those stakes plain with help from an unlikely source: a 1980s British sitcom. He explores the role of the bureaucracy, the principle of accountability, and the function of the courts. Alex ends with a warning: if restraint fails, judges will end up shaping policy. That means anyone watching out for investors has to work on more than one front—before the agencies, in Congress, and above all in the courtroom. Few individuals can afford to take on a federal agency alone.

ICAN scholar-in-residence Alexandros Kazimirov on accountability, agency power, and who really shapes policy now.

By Alexandros Kazimirov

There is an old British sitcom, Yes Minister, about the clash between administrative and political will that combines witty writing with masterful acting delivery. It takes place in the Department of Administrative Affairs in Whitehall, the seat of the British government, and focuses on the department’s permanent secretary (its most senior career civil servant), Sir Humphrey, who’s constantly plotting to keep the head of his department and cabinet minister, Jim Hacker, from formulating and enacting policy. In one of the episodes, Hacker’s private secretary, Bernard, in a moment of self-reflection, asks Humphrey whether civil servants should actually believe in the policies that they are implementing. With slight amusement, Humphrey responds, “What an extraordinary idea!” before dispelling this notion entirely— here is a clip. 

Humphrey’s answer boils down to this: the role of the civil servant lies in preserving a sense of stability and continuity as far away from the political process as possible. Humphrey views his role as carrying out policy; he is keen on doing it well, and he can’t let his own beliefs be part of that process because his next minister might task him with the exact opposite policy. In principle, Humphrey believes in the idea that insulating decisions from the influence of politically motivated actors improves policymaking, leaving expertise and efficiency to be the guiding principles in charting the most desirable regulatory approach. Except, Humphrey’s most favored regulatory approach is doing absolutely nothing and he frequently uses his stalling technique to that end.

The Proactive Humphrey

But what if we had a different kind of Humphrey? One who would be keen on acting rather than stalling. One who would be convinced that his policies were right and worth implementing. One who would be willing to challenge the status quo rather than preserve it. Would this type of Humphrey be a better version of a civil servant? The answer that has emerged from the U.S. Supreme Court over the past few terms is this: not unless Humphrey can be fired, and the department’s policies independently scrutinized. Remember, Humphrey is a permanent civil servant who reports to Hacker, and he is reprimanded when he errs but never dismissed. And unlike his superior, he doesn’t have to be (re)elected into office. That means that while Humphrey can actively shape policy, if the policy is flawed and costly, he won’t be held accountable for it.

One way of holding Humphrey accountable is by letting Hacker remove him from office for not doing his job well enough. The expectation is that Hacker will be able to supervise his staff better, run his department more efficiently, and promote more transparency in decision-making. Another way of holding Humphrey accountable is by scrutinizing the policies of the department through an external actor, someone outside the department who’s able to conduct the review: the courts. Then again, if Hacker ultimately answers for his policies at the ballot box, and a judge doesn’t, what justifies the authority of the review? The value of judicial review derives not from popular will but from its independence, principle, and ability to enjoin the government from overstepping.

Yet the problem with this twofold approach to accountability is that it is contradictory. It gives the minister greater control over his department and concurrently subjects his actions to independent review. In other words, if Hacker’s power is both aggrandized and constrained, how is the outcome different from what preceded it? Part of the answer is that some of the control has been transposed to the courts whose independent judgment determines policy outcome. For now, the optimal approach for Hacker is to cooperate closely with Humphrey and come up with a plan to carry out policy in a way that does not trigger outside review. And if it can’t be avoided, to make sure that the policy survives it.

The other part of the answer depends on how strictly the courts scrutinize policies. Judges ought to be mindful of their limited role, so as not to interfere with Hacker’s job and end up shaping policy in the same exact way that Humphrey initially did. Much depends on self-restraint from all sides. Carrying out policy must be a measured and authorized exercise, and the review must be principled and evenhanded (more on that in a future post).

Humphrey’s Origins

Sadly, much of this self-restraint has been lost. Let’s start with the bureaucracy. At the individual level, we don’t have permanent civil servants like in other countries, because we extend the call to serve to everyone rather than just a select few who may grow accustomed to their proximity to power and become complacent in the process. But at the institutional level, we have created a sizable bureaucracy that outlasts any particular government and wields significant power (and not always judiciously). We have struck this bargain, however, because for a long time we were intrigued by the idea of an American Humphrey, namely that the role of a civil servant lies in preserving a sense of stability and continuity outside the political process.

Initially, part of the appeal was due to the need to restore public confidence in government and financial institutions after the 1929 crash and the Great Depression. There was also a belief that, being largely insulated from politics, Humphrey could serve the public interest more effectively. So we framed public interest broadly and put Humphrey in charge. Humphrey would protect investors (the SEC), Humphrey would make wire and radio communication services accessible (the Federal Communications Commission), Humphrey would correct the inequality of bargaining power between workers and employers (the National Labor Relations Board), and so on. But while the mandates were well-intentioned, they were so open-ended in their formulation that they conferred immense discretion on how to accomplish these goals. The exercise of this discretion proved to be contingent on government priorities, policy trends, and administrative skill. By and large, Humphrey created good law and prosperity. Other times, he added complexity without accomplishing much. A few times, his decisions cost ordinary investors a fortune.

In other words, we have seen many different versions of Sir Humphrey and Jim Hacker. And yet, through highs and lows, wins and losses, defending the public interest contributed to a process that gradually enlarged the coercive power of the state at the expense of individual freedom. To withstand this formidable force was impossible unless one could turn to the bulwark against state coercion: the courts. In a courtroom, a single individual can stand as Humphrey’s equal and defend his rights from government encroachment.

Consequently and over time, judges responded by applying the twofold accountability approach to Humphrey. In sum, the courts now hold Humphrey accountable by making him removable from office and scrutinizing the policies of his department through judicial review to prevent further overreach in the pursuit of the public interest. It is a recognition that even if the role of a civil servant lies in preserving a sense of stability and continuity outside the political process, the process of decision-making itself is not immune from political considerations, and those belong to elected officials.

Humphrey’s Respectful Burial

Does this mean that Humphrey’s independence is now gone? Not quite. Whether the norms of independence will be preserved will likely differ from department to department and from minister to minister. Indeed, agency independence is not an all-or-nothing argument. As Roberta Karmel, a former SEC Commissioner, once wrote, even with removal protections gone, “two other earmarks of independence—agency control of its own litigation and independent funding—are more important as a practical matter.” But it also means that unless all sides embrace a sense of self-restraint and modesty, everyone will spend more time in court, and it will be judges that end up shaping policy rather than Hacker or even Humphrey.

Alexandros Kazimirov is a legal scholar and ICAN’s scholar-in-residence. Formerly, he was a research fellow at the American Antitrust Institute. After graduating from Berkeley Law School, he was appointed a Transatlantic Technology Law Forum Fellow at Stanford Law School.

Author Bio: Nick Morgan is President of the Investor Choice Advocates Network (ICAN), a nonprofit public interest litigation organization advocating for economic liberty, capital formation, and entrepreneurship rights on behalf of small investors and entrepreneurs facing SEC and FINRA overreach.