Book Review: Bureaucracy

Wednesday, February 8, 2012

Bureaucracy was written in 1944 by Ludwig von Mises, recognized as a prominent figure in the Austrian school of economics. Mises wrote this book only four years after fleeing Nazi Germany and immigrating to the United States.

In this book, von Mises explains the two types of management: bureaucratic management, which is both inevitable and inherent in government agencies such as the police department; and profit management, which is suitable and efficient in private business. “The capitalist system of production is an economic democracy in which every penny gives a right to vote. The consumers are the sovereign people” In contrast, the “so-called welfare state is in fact the tyranny of the rulers.” Bureaucracy has always existed in America in the administration of customs and of the foreign service, but what characterizes our time is the “expansion of the sphere of government interference with business and with many other items of the citizenry’s affairs.” And, according to Mises, that is the problem. The government should limit its activities to their proper sphere, including the national defense-- the first duty of government-- and leave businesses and individuals to do what they do best without needless rules and regulations that turn private businesses into bureaucracies.

Bureaucracy in business, Mises explains, is highly un-desirable since “Nobody can be at the same time a correct bureaucrat and an innovator. Progress is precisely that which the rules and regulations did not foresee; it is necessarily outside the field of bureaucratic activities.”

The State is not God, Mises emphasizes, speaking against what he calls “the fashionable philosophy of Statolatry;” but it sure tries to be: “You could revolt against a Bourbon king, and the French did it. This was, of course, a struggle of man against man. But you cannot revolt against the god State and his humble handy man the bureaucrat.” This trend toward “government omnipotence” would have been impossible, Mises notes, without the indoctrination of youth and the fact that a great part of voters are on the government payroll; thus, their representatives represent them, not as taxpayers, but as recipients of government salaries, subsidies, and welfare. However, the government cannot create happiness and abundance by a magic wand. It cannot give to anyone if it doesn’t take from someone. “Taxes, inflation, and credit expansion do not add anything to the available resources; they only make some people more prosperous to the extent that they make others poorer.”

Mises contrasts the rule of consumers (capitalism) to the “benevolent rule” of government guardianship, which he likens to the benevolent rule of a cattle breeder and concludes that “You cannot make a man happier by putting him under guardianship.”

This stultification brought on by government guardianship and a myriad of regulations is especially hard on the young. Under free-market capitalism there is every opportunity for success, and after a failure there is no reason for a “smart youngster” to despair. “Life is worth living because it is full of promise.” But under bureaucratization, the young have no illusions of their future: “[The young person] will enjoy security. But this security will be rather of the kind that the convict enjoys within the prison walls. He will never be free to make decisions and to shape his own fate. He will forever be a man taken care of by other people. He will never be a real man relying on his own strength.” The frustration young people felt was evidenced in youth movements in Germany (preceding World War I) and Italy (with the Fascist movement), but these were counterfeit rebellions, which were doomed because they were nothing but “confused expressions of uneasiness, without any clear ideas and definite plans.” The young people were “under the spell of socialist ideas” themselves and wanted first of all government jobs. When young people have nothing left to change and improve, when they are deprived of the opportunity of shaping their own fate, when their “only prospect is to start at the lowest rung of the bureaucratic ladder and to climb slowly in strict observance of the rules formulated by older superiors…this is more than a crises of the youth. It is a crises of progress and civilization. Mankind is doomed when the youths are deprived of the opportunity to remodel society according to their own fashion.”

Ludwig von Mises calls gullibility and the fading of the critical sense the most serious menace to the preservation of our civilization, and urges each citizen to educate himself in economics. Voting wisely, he says, is not a privilege, but a duty and moral responsibility. He calls for an unhampered labor market, claiming that allegedly pro-labor policies such as minimum wage laws cause chronic unemployment and that it is an “illusion to believe that government spending can create jobs for the unemployed, that is, for those who cannot get jobs on account of the labor unions’ or the government’s policies.” Mises explains, “Go right to the bottom of things is the main rule. Do not acquiesce in superficial explanations and solutions. Use your power of thinking and your critical abilities.” The opposition uses propaganda everywhere to convince the gullible, but “propaganda is always the propaganda of lies, fallacies, and superstitions. Truth does not need propaganda; it holds its own.” Democracy must be strenuously defended every day by people willing to learn enough to pass their own educated judgments on fundamental political and economic problems instead of depending on experts to do this for them.

There is no compromise: interventionism is a miry middle ground that sinks into socialism. It’s time to fight for liberty in the battlefield of public opinion.

Bureaucracy is a very interesting and educational work.