The Lost Franchise Agreement: Why Our Government Is Violating Its Operating Manual

The word "franchise" gets thrown around in politics almost exclusively in the context of voting. The "franchise" is the right to cast a ballot. Who has it, who doesn't, who's trying to take it away, who's trying to expand it. Every election cycle, the battle lines are drawn and redrawn on the margins of eligibility. But there's a deeper meaning of the word that we've lost. A more important one. And it explains why the federal government behaves the way it does - why it grows, why it overreaches, why it ignores limits, and why the people who hired it feel powerless to stop it. I'm talking about the political franchise in the original, contractual sense. The one the Founders wrote into the Constitution. The one we've allowed to be broken.

In the private sector, a franchise is a legal agreement. A franchisor - say, McDonald's - grants a license to a franchisee to operate under its brand name and system. The franchisee gets the brand's goodwill, its supply chain, its proven business model. In exchange, the franchisee agrees to follow strict rules: the menu, the quality standards, the décor, the operating hours, the reporting requirements. If the franchisee starts serving sushi, changing the logo, and ignoring the health code, the franchisor revokes the license. The franchisee is out. Why are franchise agreements so detailed and enforceable? Because the franchisor has a valuable asset to protect - its reputation, its brand, its system. It doesn't want some rogue operator running the name into the ground. So the franchisee gets limited authority, for a limited time, under specific terms, with the constant threat of revocation.

Now transfer that concept to government. The American Founding was an act of franchising. The franchisor was "We the People" - the sovereign citizens of the several states, acting through their ratifying conventions. The franchisee was the federal government. The franchise agreement was the Constitution. Examine the terms. They are breathtakingly specific. Article I, Section 8 lists the powers granted to Congress - coin money, establish post offices, declare war, raise armies, regulate commerce among the states, and about seventeen other items. That's it. Everything else was reserved to the states or to the people, as the Tenth Amendment explicitly states. The franchise was also temporary. Representatives serve two years. Senators originally were chosen by state legislatures for six years. The President gets four. No permanent ruling class. No lifetime appointment to administrative power. The people could fire the franchisee at regular intervals. And the franchise was geographically restricted. A representative must live in the district he represents. A senator must be a resident of the state. The federal government was not a roving, centralized command post; it was a collection of local agents, accountable to local constituents, for local interests.

The operating manual included the Bill of Rights - explicit prohibitions on what the franchisee could not do. No establishment of religion. No abridging speech. No unreasonable searches. No taking property without due process. The franchisee's powers were both enumerated and bounded. Henry Hazlitt, in his classic Economics in One Lesson, taught us to look at the unseen consequences. The Founders did that when they designed the franchise. They knew that power, once granted, would tend to expand. So they put in checks: separation of powers, bicameralism, federalism, the veto, judicial review, and the amendment process. All of these were safety valves, designed to keep the franchisee within the terms of the agreement.

It didn't take long for the franchisee to start exceeding the operating manual. But the real explosion came in the twentieth century. Consider the Department of Education. There is no mention of education in Article I, Section 8. Education was a state and local matter, exactly where it belongs because parents and communities have local knowledge - Hayek's knowledge problem made concrete. Yet in 1979, Congress created a cabinet-level department to oversee education. The franchisee unilaterally expanded its menu. Consider the Environmental Protection Agency. It was created in 1970 by executive order, not by an enumerated power in the Constitution. Congress later codified it. The EPA writes regulations that have the force of law - imposing fines, shutting down businesses, dictating land use. But Article I, Section 1 says "All legislative Powers herein granted shall be vested in a Congress of the United States." Not in an agency. The franchisee decided to delegate its legislative power to unelected bureaucrats, a clear violation of the separation of powers - the very structure James Madison called "a double security" for the rights of the people.

Consider the endless wars. The Constitution gives Congress the power to declare war. Since World War II, Congress has declared war exactly five times. We've had Korea, Vietnam, Iraq, Afghanistan, Libya, Syria, Yemen - all conducted under Authorizations for Use of Military Force, many of which were stretched far beyond their original intent. The franchisee started launching military operations without the specific approval the franchise agreement requires. Consider the administrative state generally. The Supreme Court's decision in Chevron v. Natural Resources Defense Council in 1984 told agencies that if a statute is ambiguous, the agency's interpretation gets deference - even though the agency is the one writing the rules and enforcing them. That's the franchisee writing its own operating manual and then judging whether it followed it.

Milton Friedman would have a field day. He argued that economic freedom is the basis of political freedom. When the franchisee controls more and more of the economy - through regulation, taxation, and spending - it concentrates power in a way that undermines liberty. Friedman famously said, "If you put the federal government in charge of the Sahara Desert, in five years there would be a shortage of sand." The franchisee has put itself in charge of health care, education, energy, transportation, banking, agriculture, and almost everything else. Shortages, inefficiencies, and reduced freedom are the result. Thomas Sowell would point out the gap between intentions and results. The Department of Education was intended to improve schools. After spending trillions of dollars, student achievement has stagnated, and the bureaucracy has grown. The EPA was intended to protect the environment. It has produced a mountain of regulations, endless litigation, and often perverse incentives. The franchisee's good intentions don't change the fact that it is operating outside its license. Victor Davis Hanson would draw on the lessons of history. He would note that when a republic's central government becomes unaccountable and imperial, it eventually collapses - whether from within or from without. The Roman Republic's franchise was destroyed by a combination of executive power grabs, bureaucratic corruption, and the erosion of civic virtue. We are following the same script.

The Founders gave the judiciary the role of interpreting the franchise agreement. In Marbury v. Madison in 1803, Chief Justice John Marshall established that it is "emphatically the province and duty of the judicial department to say what the law is." For a while, the Court did enforce the contract. But starting in the New Deal era, the Court essentially surrendered. In Wickard v. Filburn in 1942, it ruled that a farmer growing wheat on his own land for his own use affected interstate commerce - because if he grew his own, he wouldn't buy wheat from someone else, and that aggregate effect was substantial. That stretched the Commerce Clause so far that there was virtually nothing the federal government couldn't regulate. The franchisee could now control every kernel of grain, every acre of land, every personal decision. In NFIB v. Sebelius in 2012, the Court upheld the individual mandate in Obamacare as a tax - even though Congress had explicitly said it was not a tax when passing the law. The franchisee was allowed to punish people for not buying a product. That's not in the franchise agreement. The CEO of the franchisor would never have granted that power.

Antonin Scalia, in his book A Matter of Interpretation, argued for textualism - the idea that laws mean what they say, not what a judge wishes they said. The Constitution is the ultimate text. When the Court stops reading it as written, it stops enforcing the franchise agreement. The franchisee is then free to operate without constraint. The obvious question: Why don't the people - the franchisor - just fire the franchisee? Part of the answer is that the franchisee has made itself very hard to fire. Incumbency rates in Congress are around 90 percent in most elections. Gerrymandering protects safe seats. The two-party system gives voters a binary choice - often between two candidates who both support the administrative state. The media, which is supposed to inform the franchisor, is itself part of the franchisee's ecosystem, dependent on access and advertising revenue.

But the deeper answer is that we've forgotten we are the franchisor. We've come to see the federal government as a permanent, distant, all-powerful entity - like the weather, not like a contractor we hired. The language of "the government owes me" has replaced "the government works for me." We've accepted the idea that the franchisee can do whatever it wants, as long as it wins elections. But the franchise agreement was designed to bind the government regardless of election outcomes. A majority of voters cannot vote to abridge free speech or to establish a religion. The franchisee's authority is limited even when elected.

We need to restore the political franchise. Here's how. First, term limits. The Founders expected rotation in office. No one should serve in Congress for thirty years. Term limits break the permanent class and make the franchisee accountable again. Second, repeal the administrative state. The legislative power belongs to Congress alone. Agencies that write binding regulations are a violation of the Constitution. We should sunset every federal agency and require explicit reauthorization - and then not reauthorize those that violate the franchise agreement. Third, return to the original meaning of the Commerce Clause. The federal government should regulate commerce among the states, not everything that touches commerce, not everything that might affect commerce, not a farmer's personal wheat patch. Fourth, amend the Constitution to require a supermajority for new spending or new regulations. The franchisee should not be able to pile up debt and rules with a simple majority. Fifth, educate the franchisor. The people must understand that the Constitution is not a suggestion. It is the franchise agreement. We hired the government. We can fire them. We can amend the contract. But first we have to recognize that the current arrangement is a breach.

Henry Hazlitt's lesson applies here: judge a policy by its long-term effects on everyone, not the short-term visible benefits to a few. Restoring the franchise would be painful for the political class in the short run. But in the long run, it would restore liberty, accountability, and prosperity. The political franchise was never meant to be a permanent, unlimited grant of authority to a self-perpetuating ruling class. It was a limited, temporary, revocable license to serve the people - under the terms they wrote themselves. The franchisee has violated those terms. It's time to enforce the contract. The people are the franchisor. Let's act like it.