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Bureaucracy
Professor von Mises addressed himself to a particular what is the essential difference between bureaucratic management by government and market management in a system based on private ownership of the means of production? Mises does not discuss bureaus or bureaucrats, but inexorable principles of human action. He does not condemn bureaucracy, which is the appropriate technique for the conduct of government agencies such as courts of law, police departments, and the Internal Revenue Service; however, in economic production and distribution, the bureaucratic method is shown to be an abomination that spells universal ruin and disaster.
137 pages, Paperback
First published January 1, 1944
About the author
Ludwig von Mises
142 books1,082 followersLudwig Heinrich Edler von Mises (German pronunciation: [ˈluːtvɪç fɔn ˈmiːzəs]; September 29, 1881 – October 10, 1973) was an Austrian economist, historian, philosopher, author, and classical liberal who had a significant influence on the Austrian government's economic policies in the first third of the 20th century, the Austrian School of Economics, and the modern free-market libertarian movement.
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Displaying 1 - 30 of 65 reviews
December 30, 2022
2020-08-28 - Just finished listening to the audio version (available at www.Mises.org) of this short but hard hitting book. Wonderful. Much better than I had remembered. Highly recommended.
Still as relevant and on-point as ever, even though it was written in 1944. However, since the US has moved to a vastly larger government sector than in the 1940s, I doubt Mises would have stated the situation in the US now (2020s) in nearly the positive and optimistic terms that he did then. The bureaucratic state and mindset has captured huge swaths of control over the US economy since 1944, even though the US was deep in WWII at the time and then eliminated much of the bureaucracy after the war. Just think of **some** of the new government agencies with power over individuals and enterprise established since then: Medicare, Medicaid, HUD, EPA, Dept. of Education, Energy Dept., HHS, EPA, CPSC, OSHA, FDA (AMENDED), Federal Elections Commission, Civil Rights Commission, etc. etc. they go on almost forever.
This book is a great little intro to Mises and to the idea that free societies need minimal bureaucracies to deal with the basic functions of government: police, military, courts and very little else. And when government bureaucracies grow to control more of the economy, freedom is lost, in addition to the private enterprise efficiencies, creativity, productivity, etc. also lost.
I really liked this audio book. The narrator (unaccredited, unfortunately) was excellent and the book only took about 4 hours to listen to. I noticed only a few strange pronunciations (of German words) in the whole book. Excellent. Only problem with the audio book (any audio book) is that I am not able to take notes while driving and listening, so I have a tough time going back to find the parts I would love to highlight in a review like this. Bummer. Guess I need to reread or at least skim the book again to grab those parts to post here and other places, since they are so pertinent to events of today.
13 May 2019 - Writing this after reading a friend's great review (Pedro Jorge). I first read this book about 1977, the year I graduated from college. I liked it very much, but thought it was not as good as another great intro book of Mises', a collection of his essays/speeches - "Planning for Freedom." I have read it at least twice since then and have kept the same opinion.
However, Pedro's recent short review makes me want to read it again, which I will try to do soon.
Here are my thoughts from today that I posted under my friend's review:
"Need to read it again. But I love the simple proposition by Mises in this book that there is a world of difference between for-profit businesses and the government. The former is ruled by the voluntary actions of humans (consumers, via profit and loss for companies) and the latter is ruled by laws, regulations, infrequent elections and coercion. No matter how large a corporation gets, it is ruled by the former, as long as it does not have special privileges from government (which is increasingly and maddeningly true). And no matter how folks might wish otherwise, the government will NEVER be efficient at serving the real desires and needs, as witnessed by consumers' revealed preferences, of buying and abstaining from buying by all humans."
Still as relevant and on-point as ever, even though it was written in 1944. However, since the US has moved to a vastly larger government sector than in the 1940s, I doubt Mises would have stated the situation in the US now (2020s) in nearly the positive and optimistic terms that he did then. The bureaucratic state and mindset has captured huge swaths of control over the US economy since 1944, even though the US was deep in WWII at the time and then eliminated much of the bureaucracy after the war. Just think of **some** of the new government agencies with power over individuals and enterprise established since then: Medicare, Medicaid, HUD, EPA, Dept. of Education, Energy Dept., HHS, EPA, CPSC, OSHA, FDA (AMENDED), Federal Elections Commission, Civil Rights Commission, etc. etc. they go on almost forever.
This book is a great little intro to Mises and to the idea that free societies need minimal bureaucracies to deal with the basic functions of government: police, military, courts and very little else. And when government bureaucracies grow to control more of the economy, freedom is lost, in addition to the private enterprise efficiencies, creativity, productivity, etc. also lost.
I really liked this audio book. The narrator (unaccredited, unfortunately) was excellent and the book only took about 4 hours to listen to. I noticed only a few strange pronunciations (of German words) in the whole book. Excellent. Only problem with the audio book (any audio book) is that I am not able to take notes while driving and listening, so I have a tough time going back to find the parts I would love to highlight in a review like this. Bummer. Guess I need to reread or at least skim the book again to grab those parts to post here and other places, since they are so pertinent to events of today.
13 May 2019 - Writing this after reading a friend's great review (Pedro Jorge). I first read this book about 1977, the year I graduated from college. I liked it very much, but thought it was not as good as another great intro book of Mises', a collection of his essays/speeches - "Planning for Freedom." I have read it at least twice since then and have kept the same opinion.
However, Pedro's recent short review makes me want to read it again, which I will try to do soon.
Here are my thoughts from today that I posted under my friend's review:
"Need to read it again. But I love the simple proposition by Mises in this book that there is a world of difference between for-profit businesses and the government. The former is ruled by the voluntary actions of humans (consumers, via profit and loss for companies) and the latter is ruled by laws, regulations, infrequent elections and coercion. No matter how large a corporation gets, it is ruled by the former, as long as it does not have special privileges from government (which is increasingly and maddeningly true). And no matter how folks might wish otherwise, the government will NEVER be efficient at serving the real desires and needs, as witnessed by consumers' revealed preferences, of buying and abstaining from buying by all humans."
September 27, 2023
پیش از این در بررسی کتاب «لیبرالیسم» دربارهی فونمیزس، مکتب اتریشی، و لیبرالیسم کلاسیک نوشتم. آنچه باید اینجا تکرار کنم افسوسی است از بابت اینکه چرا کلاسیکهای لیبرالیسم باید پس از گذشت این همه سال در ایران ترجمه شوند تا تفکرات چپ -که بر اکثریت کتابها و رسانهها در ایران سلطه داشته- بتواند تا این حد بر ذهن روشنفکران و مردم ایران تأثیر بگذارد.
کتاب حاضر را که فونمیزس حدود هشتاد سال پیش، پس از مهاجرت به آمریکا نوشته به نوعی خطاب به جامعهی آمریکاست و برخلاف انتظار اولیهام شاید بتوان گفت در بعضی از بخشهایش از کتاب لیبرالیسم سادهتر، شیرینتر و مفیدتر برای جامعهی ماست.
فون میزس «بوروکراسی» را در تقابل با «مدیریت تجاری یا سودمدار» قرار میدهد. تعریفی که او از بروکراسی در کتاب ارائه میدهد شیوهای از مدیریت دولتی/حکومتی است که در آن باید به مقررات و دستورات دقیقی پایبند بود که از سوی مرجعیت یک مقام مافوق مشخص شده است. وظیفهی مقام بروکرات اجرای آن چیزی است که از طریق این مقررات و دستورات به او امر شده است.
راجع به کتاب بسیار میتوان گفت و نوشت ولی به نظرم، آوردن بخشهایی از کتاب با بیان خود جناب فونمیزس بهتر میتواند حق مطلب را ادا کند و جذابتر هم باشد.
بخشهایی از کتاب
کتاب حاضر را که فونمیزس حدود هشتاد سال پیش، پس از مهاجرت به آمریکا نوشته به نوعی خطاب به جامعهی آمریکاست و برخلاف انتظار اولیهام شاید بتوان گفت در بعضی از بخشهایش از کتاب لیبرالیسم سادهتر، شیرینتر و مفیدتر برای جامعهی ماست.
فون میزس «بوروکراسی» را در تقابل با «مدیریت تجاری یا سودمدار» قرار میدهد. تعریفی که او از بروکراسی در کتاب ارائه میدهد شیوهای از مدیریت دولتی/حکومتی است که در آن باید به مقررات و دستورات دقیقی پایبند بود که از سوی مرجعیت یک مقام مافوق مشخص شده است. وظیفهی مقام بروکرات اجرای آن چیزی است که از طریق این مقررات و دستورات به او امر شده است.
راجع به کتاب بسیار میتوان گفت و نوشت ولی به نظرم، آوردن بخشهایی از کتاب با بیان خود جناب فونمیزس بهتر میتواند حق مطلب را ادا کند و جذابتر هم باشد.
بخشهایی از کتاب
میزس نفْسِ بوروکراسی را هرگز نفی نمیکند، بلکه مسئلهی او، مانند هر اقتصاددانِ مکتب اتریش، «اندازه و ابعاد» نظم بوروکراتیک است. از نظر او نه نفس بوروکراسی، بلکه ابعاد آن میتواند به آفتی جدی تبدیل شود. از یادداشت مترجم ص ۱۳
شهروندی که بهروزیاش را در بسط ادارات عمومی میجوید، طبعاً نمیتواند از فربه شدن بوروکراسی و ناکارآمدی آن گلایه کند. این همان خودکردهای است که تدبیری برایش نیست، مگر اینکه دریافت شهروند از راه و رسم کسب بهروزی تغییر کند. از یادداشت مترجم ص ۱۳
بین آزادیهای فردی و اختیارات ادارهی عمومی (دولت/حکومت) نسبتی معکوس وجود دارد. یعنی هرچه دامنهی اختیارات دولت بیشتر شود، آزادیهای فردی محدودتر میشود. بنابراین، کسب آزادیهای فردی یعنی محدود شدن اختیارات دولت و اساساً «آزادی» به معنای «آزادی در برابر حاکمیت» است. از یادداشت مترجم ص ۱۳
بسیاری از مردم اساساً از چنین دریافتی از آزادی رویگردانند، چون معتقدند دولت/حکومت اصلا باید اختیارات گسترده داشته باشد تا در زندگی مردم دخالت کند. طبعاً منظورِ همه از این مداخله نیز «خیر» است، میخواهند دولت اختیارات داشته باشد تا برای مقاصد نیک و بهروزیِ بیشتر در زندگی مردم دخالت کند. اما «شر» دقیقاً از همینجا شروع میشود. از یادداشت مترجم ص ۱۴
قشری از جامعه مشتاق مشاغل دولتیاند و از اینکه حقوقبگیرِ دولت باشند راضی و خوشنودند. شغل دولتی سنگر خوبی برای فرار از رقابت سخت اجتماعی در جامعهای آزاد است. طبعاً اینان از گسترش بوروکراسی دولتی استقبال میکنند و در برابر کوچکسازی آن مقاومت میکنند. اما وقتی بزرگ شدن دولت به معنای محدود شدن آزادی و دامنهی ابتکارات فردی باشد، یعنی اینان حاضرند برای زندگی بیدردسر شعاع آزادی شهروندان کاهش یابد. از یادداشت مترجم ص ۱۵
حکومت بدون ادارات و روشهای بوروکراتیک نمیتواند کار خود را انجام دهد و از آنجا که همکاریِ اجتماعی بدون دولتی مدنی نمیتواند کار خود را انجام دهد، حدی از بوروکراسی ناگزیر است. مردم از نفس بوروکراسی ناخرسند نیستند، بلکه از نفوذ بوروکراسی در همهی حوزههای زندگی و فعالیت انسان ناراضیاند. مبارزه علیه دستدرازیهای بوروکراسی در اساس قیامی علیه دیکتاتوری توتالیتر است. ص۵۶
نظام کاپیتالیستی نوعی دموکراسی اقتصادی است که در آن هر پنی حق رأی میبخشد. مصرفکنندگان، مردمِ حاکماند. سرمایهداران، شرکتداران و زارعان، وکلای شهرونداناند. اگر آنها از خواستِ مردم حاکم تبعیت نکنند، وقتی نتوانند با پایینترین هزینههای ممکن کالای مورد تقاضای مصرفکنندگان را تولید کنند، منصبشان را از دست میدهند. وظیفهی آنها این است که خادم مصرفکنندگان باشند. سود و زیان، ابزارهایی است که مصرفکنندگان از طریق آنها عنان فعالیتهای اقتصادی را محکم در دست میگیرند.ص ۶۱
اما در عصری زندگی میکنیم که انگیزهی سود از هر سو آماج حملات است. در افکار عمومی انگیزهی سود به منزلهی چیزی که اوج بیاخلاقی و برای خیر عمومی فوقالعاده زیانبار است، لعن میشود. دولتها و احزاب سیاسی مجدانه در تلاشاند آن را از میان بردارند و به تعبیر خودشان دیدگاه «خدمت» را جایگزین آن کنند، چیزی که در واقعیت به معنای همان مدیریت بوروکراتیک است.ص ۱۱۳
در شرایطی که بخش بزرگی از رأیدهندگان در فهرست حقوقبگیرانِ خدمات دولتی جای داشته باشند، دیگر دموکراسیِ نمایندهمحور نمیتواند پابرجا بماند. وقتی نمایندگان مجلس خود را دیگر نه امانتدارانِ مالیاتدهندگان، بلکه نمایندگانِ دریافتکنندگانِ حقوق، دستمزد، یارانه، حقوقِ بیکاری و دیگر مزایای خزانهی عمومی بدانند، کلکِ دموکراسی کنده است. ص۱۳۶
حقیقت این است که دولت تا چیزی از کسی نگیرد هیچ چیز هم نمیتواند بدهد. یارانه را دولت هیچگاه از منابع خود پرداخت نمیکند، بلکه همیشه از جیب مالیاتدهندگان یارانه میدهد. تورم و گسترش اعتبارات -که امروزه مطلوبترین روشهای سخاوتمندی دولت است- به حجم منابع موجود چیزی اضافه نمیکند. اینها برخی را ثروتمندتر میکند، اما صرفاً به همان میزان که عدهای دیگر را فقیرتر میکند. مداخلات در بازار، در قیمتهای کالاها و نرخهای دستمزد و بهره (که همگی آنها [در حالت طبیعی] طبق عرضه و تقاضا تعیین میشود)، ممکن است در کوتاهمدت باعث تحقق آنچه دولت میخواهد بشود، اما چنین تدابیری در بلند مدت همواره وضعیتی را پدید میآورد که نامطلوبتر از وضعیت سابق است.ص۱۴۰
مدتهاست که که در پی مداخلات دولت در اقتصاد خصوصی، یکپارچگی سیاست دولت به اجزایی ناهماهنگ تجزیه شده است. گذشت آن روزگاری که میشد از یک سیاست دولتی سخن گفت. امروزه در بیشتر کشورها هر وزارتی اهداف متفاوتی را دنبال میکند و از این رهگذر به تلاشهای دیگر وزارتخانهها آسیب میزند. وزارتِ کار در پی نرخهای دستمزد بالاتر و هزینههای معیشتیِ پایینتر است و در مقابل وزارتِ کشاورزیِ همان دولت در پی قیمتهایی بالاتر برای محصولات غذایی است و وزارت بازرگانی نیز میکوشد با وضع عوارض گمرکی قیمت کالاهای تولید داخل را افزایش دهد. یک اداره با انحصارات مبارزه میکند و اداراتی دیگر مشتاقند با عوارض امتیازنامه و دیگر ابزارها شرایط لازم را برای محدودیتهای انحصارگرانه ایجاد کنند و البته هر ادارهای هم متکی به نظرات متخصصانی است که در حوزههای خود تخصص یافتهاند.ص۱۴۲
کاپیتالیسم نظامی است که در آن هر کس این بخت را دارد که ثروتمند شود. برای هر کسی امکانهای نامحدودی وجود دارد. طبعاً این بخت به همه لطف نمیکند، بلکه عدهی بسیار اندکی میلیونر میشوند. اما هر کس میداند که تلاشِ سختکوشانه -و نه هیچ چیز کمتر از تلاشِ سختکوشانه- جواب میدهد. ص۱۵۳
استخدام در کارهای دولتی امکانی برای شکوفایی استعدادها و تواناییهای شخصی فراهم نمیآورد. تنظیمِ مقررات مترادف با افول ابتکار است. جوانان دیگر رویایی دربارهی آیندهی خود ندارند. آنها میدانند چه چیز در آینده در انتظارشان است.ص۱۵۵
دموکراسی داشتهای نیست که انسانها بتوانند بی هیچ دردسری از آن بهره برند. بلکه برعکس، گنجی است که هر روز از نو باید با تلاشهای بیوقفه از آن دفاع کرد و آن را به دست آورد.ص۱۹۳
August 16, 2021
One-stop shopping for a lot of Mises' idiotic arguments that are most popular with right-libertarians.
Corporate bureaucracy isn't "really" a bureaucracy because it's subordinated to the profit motive, and the "entrepreneur" is able to easily isolate each division of a firm and verify whether it is operating properly -- i.e., profitable -- through the miracle of double-entry bookkeeping. Never mind that the standard accounting methods are not neutral or immaculate, and that they maximize some privileged metrics at the expense of others. E.g., the accounting principles developed by Donaldson Brown at DuPont and GM treat wage labor as the only direct cost, while treating overhead, capital expenditures and administrative costs (through "overhead absorption," or the incorporation of overhead costs into the transfer price of goods "sold" to inventory) as the creation of value. As a result, management zealously shaves off every possible minute from wage labor -- even at the expense of eviscerating human capital and drastically degrading productivity -- while pouring enormous sums down a rathole on wasteful capital expenditures, and paying the boys in the C-suite bigger bonuses than the amount "saved" on downsizing.
Never mind that comparing one's own profit to the industry average is meaningless when the senior management cross-industry all share the same institutional culture, went to the same b-schools, are constantly shuffled back and forth between each other's c-suites and boards, and follow each other's "best practices."
And consumer sovereignty somehow turns capitalist corporations into "servants" of the average person. Never mind that "dollar democracy" weights voting rights according to wealth, and -- despite what neoclassical and Austrian economics says -- the distribution of income is NOT the reslt of some objective or neutral "marginal productivity." And when an industry has an oligopoly structure, the tendency is for firms' product offerings to be similar and poorly responsive, and for prices to be administered. Right-libertarian polemicists love to drag out the Edsel or New Coke, but far more typical is the Big Three Detroit automakers' agreement to delay introducing new technical features until all three were ready to retool.
Corporate bureaucracy isn't "really" a bureaucracy because it's subordinated to the profit motive, and the "entrepreneur" is able to easily isolate each division of a firm and verify whether it is operating properly -- i.e., profitable -- through the miracle of double-entry bookkeeping. Never mind that the standard accounting methods are not neutral or immaculate, and that they maximize some privileged metrics at the expense of others. E.g., the accounting principles developed by Donaldson Brown at DuPont and GM treat wage labor as the only direct cost, while treating overhead, capital expenditures and administrative costs (through "overhead absorption," or the incorporation of overhead costs into the transfer price of goods "sold" to inventory) as the creation of value. As a result, management zealously shaves off every possible minute from wage labor -- even at the expense of eviscerating human capital and drastically degrading productivity -- while pouring enormous sums down a rathole on wasteful capital expenditures, and paying the boys in the C-suite bigger bonuses than the amount "saved" on downsizing.
Never mind that comparing one's own profit to the industry average is meaningless when the senior management cross-industry all share the same institutional culture, went to the same b-schools, are constantly shuffled back and forth between each other's c-suites and boards, and follow each other's "best practices."
And consumer sovereignty somehow turns capitalist corporations into "servants" of the average person. Never mind that "dollar democracy" weights voting rights according to wealth, and -- despite what neoclassical and Austrian economics says -- the distribution of income is NOT the reslt of some objective or neutral "marginal productivity." And when an industry has an oligopoly structure, the tendency is for firms' product offerings to be similar and poorly responsive, and for prices to be administered. Right-libertarian polemicists love to drag out the Edsel or New Coke, but far more typical is the Big Three Detroit automakers' agreement to delay introducing new technical features until all three were ready to retool.
May 1, 2021
The Triumph of the Administrative Will
This work deals with the situation caused by overorganization of the economy, in particular private business, by public/federal/governmental administration.
To my surprise, the book tackles central questions raised in this fascinating book about the French Revolution and the ensuing 19th century: how to articulate the part played by the State (this powerful centralized state inherited from the absolute monarchy) and the part played by the citizens so as to avoid a new Terror? That is, how do you create conditions allowing all members of the population to seek their own interest without them excluding, or killing one another? It also addresses fundamental issues linked with equalitarian utopias (see Jacobins, Saint-Simon or Auguste Comte), or the dead end of imposing idle and hereditary privileged classes on the population (i.e. Old Regime nobility).
In the end, these questions prove to be much more contemporary and critical than it seems at first glance, in times when lobbies, partisans, activists, and the worldwide extension of trade challenge the very definition and frame of the nation, the country and the State, preferring loose communities bound by perceived common interests, more or less superseding nations, countries and States.
Some major quotes illustrating LvM's thought:
'Should authoritarian totalitarianism be substituted for individualism and democracy? Should the citizen be transformed into a subject, a subordinate in an all-embracing army of conscripted labor, bound to obey unconditionally the orders of his superiors? Should he be deprived of his most precious privilege to choose means and ends and to shape his own life?'
'Every dictator plans to rear, raise, feed, and train his fellowmen as the breeder does his cattle. [...] The cattle breeder also is a benevolent despot.
The question is: Who should be the master? Should man be free to choose his own road toward what he thinks will make him happy? [...]'
'The real bosses, in the capitalist system of market economy, are the consumers. They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterpriser.
They make poor men rich and rich men poor. They are no easy bosses. They are full of whims and fancies, changeable and unpredictable. They do not care a whit for past merit. As soon as something is offered to them that they like better or that is cheaper, they desert their old purveyors. With them nothing counts more than their own satisfaction. They bother neither about the vested interests of capitalists nor about the fate of the workers who lose their jobs if as consumers they no longer buy what they used to buy.'
'The ultimate basis of economic calculation is the valuation of all consumers’ goods on the part of all the people. It is true that these consumers are fallible and that their judgment is sometimes misguided. We may assume that they would appraise the various commodities differently if they were better instructed. However, as human nature is, we have no means of substituting the wisdom of an infallible authority for people’s shallowness.'
'We do not assert that the market prices are to be considered as expressive of any perennial and absolute value. There are no such things as absolute values, independent of the subjective preferences of erring men. Judgments of value are the outcome of human arbitrariness. They reflect all the shortcomings and weaknesses of their authors. However, the only alternative to the determination of market prices by the choices of all consumers is the determination of values by the judgment of some small groups of men, no less liable to error and frustration than the majority, notwithstanding the fact that they are called “authority.” No matter how the values of consumers’ goods are determined, whether they are fixed by a dictatorial decision or by the choices of all consumers—the whole people—values are always relative, subjective, and human, never absolute, objective, and divine.'
[...]
'Capitalism means free enterprise, sovereignty of the consumers in economic matters, and sovereignty of the voters in political matters. Socialism means full government control of every sphere of the individual’s life and the unrestricted supremacy of the government in its capacity as central board of production management. There is no compromise possible between these two systems.'
-----
Cf.the interrogations listed in my review of Interventionism: An Economic Analysis and Patrick's helpful answers to them
-----
Link to the text:
https://oll.libertyfund.org/title/gre...
Link to the audiobook:
https://www.youtube.com/watch?v=dgSvK...
Also see:
Another seminal work by Ludwig von Mises:
Interventionism: An Economic Analysis
A groundbreaking, fundamental essay on American institutions and the characteristics of modern democracy, by Alexis de Tocqueville, quoted by LvM:
De la Démocratie en Amérique, tome I
De la Démocratie en Amérique, tome II
The world-famous pamphlet by Thomas Paine:
Common Sense
The Gettysburg Address
-----
On the history of State monopoly:
Le goût de l'Inde
Musée de la Compagnie des Indes, Musée d'art et d'histoire de la ville de Lorient
-----
On the history and posterity of French Revolution and administrative centralisation:
Democracy in America (Tocqueville, again!)
Reflections on the Revolution in France
La Révolution française déclare la guerre à l'Europe : L'embrasement de l'Europe à la fin du XVIIIe siècle
Nouvelle histoire des guerres de Vendée
Bonaparte: 1769-1802
La France du XIXe siècle. 1814-1914
-----
On the history of the USSR:
L'URSS. De la révolution à la mort de Staline (1917-1953)
Histoire de la Russie et de son empire
Leningrad: State of Siege
Carnets de guerre : De Moscou à Berlin 1941-1945
-----
On Nazism & the advent of Totalitarianism:
Berlin Alexanderplatz
Goodbye To Berlin
Nos ancêtres les Germains : les archéologues au service du nazisme
The Man in the High Castle
HHhH
Les Bienveillantes
Rhinocéros
La Peste
Matin Brun
-----
As a tragicomic illustration of work in a bureaucratic environment:
Post Office
Sound-Rack :)
Sonatine Bureaucratique - Erik Satie
This work deals with the situation caused by overorganization of the economy, in particular private business, by public/federal/governmental administration.
To my surprise, the book tackles central questions raised in this fascinating book about the French Revolution and the ensuing 19th century: how to articulate the part played by the State (this powerful centralized state inherited from the absolute monarchy) and the part played by the citizens so as to avoid a new Terror? That is, how do you create conditions allowing all members of the population to seek their own interest without them excluding, or killing one another? It also addresses fundamental issues linked with equalitarian utopias (see Jacobins, Saint-Simon or Auguste Comte), or the dead end of imposing idle and hereditary privileged classes on the population (i.e. Old Regime nobility).
In the end, these questions prove to be much more contemporary and critical than it seems at first glance, in times when lobbies, partisans, activists, and the worldwide extension of trade challenge the very definition and frame of the nation, the country and the State, preferring loose communities bound by perceived common interests, more or less superseding nations, countries and States.
Some major quotes illustrating LvM's thought:
'Should authoritarian totalitarianism be substituted for individualism and democracy? Should the citizen be transformed into a subject, a subordinate in an all-embracing army of conscripted labor, bound to obey unconditionally the orders of his superiors? Should he be deprived of his most precious privilege to choose means and ends and to shape his own life?'
'Every dictator plans to rear, raise, feed, and train his fellowmen as the breeder does his cattle. [...] The cattle breeder also is a benevolent despot.
The question is: Who should be the master? Should man be free to choose his own road toward what he thinks will make him happy? [...]'
'The real bosses, in the capitalist system of market economy, are the consumers. They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterpriser.
They make poor men rich and rich men poor. They are no easy bosses. They are full of whims and fancies, changeable and unpredictable. They do not care a whit for past merit. As soon as something is offered to them that they like better or that is cheaper, they desert their old purveyors. With them nothing counts more than their own satisfaction. They bother neither about the vested interests of capitalists nor about the fate of the workers who lose their jobs if as consumers they no longer buy what they used to buy.'
'The ultimate basis of economic calculation is the valuation of all consumers’ goods on the part of all the people. It is true that these consumers are fallible and that their judgment is sometimes misguided. We may assume that they would appraise the various commodities differently if they were better instructed. However, as human nature is, we have no means of substituting the wisdom of an infallible authority for people’s shallowness.'
'We do not assert that the market prices are to be considered as expressive of any perennial and absolute value. There are no such things as absolute values, independent of the subjective preferences of erring men. Judgments of value are the outcome of human arbitrariness. They reflect all the shortcomings and weaknesses of their authors. However, the only alternative to the determination of market prices by the choices of all consumers is the determination of values by the judgment of some small groups of men, no less liable to error and frustration than the majority, notwithstanding the fact that they are called “authority.” No matter how the values of consumers’ goods are determined, whether they are fixed by a dictatorial decision or by the choices of all consumers—the whole people—values are always relative, subjective, and human, never absolute, objective, and divine.'
[...]
'Capitalism means free enterprise, sovereignty of the consumers in economic matters, and sovereignty of the voters in political matters. Socialism means full government control of every sphere of the individual’s life and the unrestricted supremacy of the government in its capacity as central board of production management. There is no compromise possible between these two systems.'
-----
Cf.the interrogations listed in my review of Interventionism: An Economic Analysis and Patrick's helpful answers to them
-----
Link to the text:
https://oll.libertyfund.org/title/gre...
Link to the audiobook:
https://www.youtube.com/watch?v=dgSvK...
Also see:
Another seminal work by Ludwig von Mises:
Interventionism: An Economic Analysis
A groundbreaking, fundamental essay on American institutions and the characteristics of modern democracy, by Alexis de Tocqueville, quoted by LvM:
De la Démocratie en Amérique, tome I
De la Démocratie en Amérique, tome II
The world-famous pamphlet by Thomas Paine:
Common Sense
The Gettysburg Address
-----
On the history of State monopoly:
Le goût de l'Inde
Musée de la Compagnie des Indes, Musée d'art et d'histoire de la ville de Lorient
-----
On the history and posterity of French Revolution and administrative centralisation:
Democracy in America (Tocqueville, again!)
Reflections on the Revolution in France
La Révolution française déclare la guerre à l'Europe : L'embrasement de l'Europe à la fin du XVIIIe siècle
Nouvelle histoire des guerres de Vendée
Bonaparte: 1769-1802
La France du XIXe siècle. 1814-1914
-----
On the history of the USSR:
L'URSS. De la révolution à la mort de Staline (1917-1953)
Histoire de la Russie et de son empire
Leningrad: State of Siege
Carnets de guerre : De Moscou à Berlin 1941-1945
-----
On Nazism & the advent of Totalitarianism:
Berlin Alexanderplatz
Goodbye To Berlin
Nos ancêtres les Germains : les archéologues au service du nazisme
The Man in the High Castle
HHhH
Les Bienveillantes
Rhinocéros
La Peste
Matin Brun
-----
As a tragicomic illustration of work in a bureaucratic environment:
Post Office
Sound-Rack :)
Sonatine Bureaucratique - Erik Satie
May 8, 2019
This is just great. A masterpiece for mass consumption. Mises's address to all his fellow men.
Despite having been published some 70 years ago, it will probably remain relevant for many years to come (unfortunately).
It does not delve into the mechanics of inflation and the business cycle that could turn some people off. It just explains how the market process works, how the bureaucratic process works and what are the implications of neglecting a causal relationship between the economic organization of a society and its general opinion about freedom, hope and true social cooperation.
I couldn't recommend this highly enough!
Despite having been published some 70 years ago, it will probably remain relevant for many years to come (unfortunately).
It does not delve into the mechanics of inflation and the business cycle that could turn some people off. It just explains how the market process works, how the bureaucratic process works and what are the implications of neglecting a causal relationship between the economic organization of a society and its general opinion about freedom, hope and true social cooperation.
I couldn't recommend this highly enough!
August 15, 2021
"The profit motive is the means of making the public supreme"
August 13, 2013
This book is jam packed with great insights on the inherent failure of bureaucracy. Basically, since money is taken by coercion from the taxa payers, there is no sense of knowing whether the goods and services provided for by the state are in any way efficient or not. Furthermore, with the absence of the profit motive, the bureaucrat reverts to rigid rules and regulations to guide his/her management. Bureaucracy has no way to award good management and punish bad management, since there is no market that can bankrupt a company, or reward a company by profits. The bureaucratization has effects on all segments of society, as it forces it's rules on the citizens. The free enterprise system is gutted out by regulations that creates bureaucracy withing the capitalist system, rendering it inefficient and costly. In a bureaucratic system it is not merit and good managerial skill that makes someone successful but rather politics and kissing other people's ass in order to attain higher positions. This results in the impoverishment of the population in an economic sense but also in a cultural sense. The youth, instead of being creative and creating new business ventures, are conditioned to seek out government jobs that do not require any creativity, but rather obedience to the bureaucratic law. Criticism is not tolerated, and consent is demanded.
This is the state of affairs present now, and this is why Mises is such a smart thinker, considering this book has been written 70 years ago, but still terrifyingly relevant.
This is the state of affairs present now, and this is why Mises is such a smart thinker, considering this book has been written 70 years ago, but still terrifyingly relevant.
January 14, 2021
Bureaucracy is one of the best books I've read all year. It's a detailed analysis of the phenomenon that is bureaucracy. Whereas in general, we feel that it is a byproduct of trying to solve the problems of the age, this is really indicative of something much worse (and more profane); i.e., the attempt to systematically engineer society so that it is poured into the mould the intellectuals agree upon.
And I don't mean to weasel my way into a conspiracy theory, as I have seen this exact issue happen in Kuwait, my home-country. In issuing a new policy on banning and outlawing and regulating (because regulations are always welcome and protective in the mind of the populace), "what is seen and heard" [sic], the policy mandated that all books, tv programs, radio programs, or anything that can be seen or heard that is considered profane, or against the norms, or is in opposition to the prince of Kuwait, or derides the followers of the prophet or God or the prophet himself (often bundled, one representing the other), there will be legislature following up on the procedure to looking up, finding, and prosecuting or penalizing the offenders. And lo and behold, more than 8,000 books were banned in Kuwait, whereas in our sister state the United Arab Emirates (and Dubai in particular), they have Kinokuniya with over 8,000 books most of which might be easily banned here. This is the life of the laws, and this is the doings of bureaucracy. And the intellectuals who oppose these law only oppose them insofar as they do not reach the conclusions the intellectuals themselves want enacted.
It's not about creating good on earth. It's about satisfying the whims of the intellegentsia.
And I don't mean to weasel my way into a conspiracy theory, as I have seen this exact issue happen in Kuwait, my home-country. In issuing a new policy on banning and outlawing and regulating (because regulations are always welcome and protective in the mind of the populace), "what is seen and heard" [sic], the policy mandated that all books, tv programs, radio programs, or anything that can be seen or heard that is considered profane, or against the norms, or is in opposition to the prince of Kuwait, or derides the followers of the prophet or God or the prophet himself (often bundled, one representing the other), there will be legislature following up on the procedure to looking up, finding, and prosecuting or penalizing the offenders. And lo and behold, more than 8,000 books were banned in Kuwait, whereas in our sister state the United Arab Emirates (and Dubai in particular), they have Kinokuniya with over 8,000 books most of which might be easily banned here. This is the life of the laws, and this is the doings of bureaucracy. And the intellectuals who oppose these law only oppose them insofar as they do not reach the conclusions the intellectuals themselves want enacted.
It's not about creating good on earth. It's about satisfying the whims of the intellegentsia.
July 29, 2020
The conception of bureaucracy as economic organisation in the absence of the profit motive is one of the cleanest, clearest conceptions I have come across. It would be interesting to apply this conception to the modern university system, charities, and non profit organisations. What Mises does in this book is fascinating; instead of merely decrying the phenomenon of bureaucracy, he elevates the discussion to the description and analysis of its causes and effects in a scientific, value-free manner. I was expecting polemic, but I got economic theory. Brilliant stuff
May 23, 2013
The Bureaucracy analyzes and compares the structural organization in the functionality of private enterprise to bureaucratic agencies and public enterprise. The main objective of business administration is to make profit in the most efficient manner in serving the demands of the consumer. On the other hand, the main objective of public administration cannot be simply measured in terms of monetary value, so the marketplace has no ability to set any prices and achievement. It is impossible to know how well public administration is performed because the market cannot provide the information.
Ludwig von Mises stresses the importance of some bureaucratic structure, yet the failure of bureaucracy is not deficient policy nor corruption, but it is compliance with rigid hierarchical structure implemented by strict instruction, which does prevent arbitrary decision making.
Bureaucratic structure curtails competition and innovation where customary and antiquated methods become prescribed as the norm, and no new ideas are considered thereby no progress or reform becomes anew. Consequently, bureaucratic management has invaded business management where government interference with business is distorting the evolution of free enterprise. The burgeoning dependence on the discretion of government bureaucracy either ruins or favors particular industries, so business becomes less efficient and more corrupt in gaining the advantage in the market.
The most profound implication of bureaucratization is the bureaucrat as the voter. As government promulgates expansive powers of bureaucratic structures, the bureaucrat benefits greatly from public funds more than from individual contribution; therefore, the bureaucrat's greatest concern is not balanced budgets but ever expanding budgets because the means of increased income is only obtained by the expropriation of property from taxation.
Overall, Ludwig von Mises provides brilliant insight into the necessary but destructive apparatus of bureaucracy. Mises’ biggest concern was the prevention of the continued spread of socialism, and The Bureaucracy shows how complete social organization of bureaucratic structures stagnates society and individual initiative. The Bureaucracy definitely is still a must read for any advocate of Austrian School of Economics and free enterprise.
Ludwig von Mises stresses the importance of some bureaucratic structure, yet the failure of bureaucracy is not deficient policy nor corruption, but it is compliance with rigid hierarchical structure implemented by strict instruction, which does prevent arbitrary decision making.
Bureaucratic structure curtails competition and innovation where customary and antiquated methods become prescribed as the norm, and no new ideas are considered thereby no progress or reform becomes anew. Consequently, bureaucratic management has invaded business management where government interference with business is distorting the evolution of free enterprise. The burgeoning dependence on the discretion of government bureaucracy either ruins or favors particular industries, so business becomes less efficient and more corrupt in gaining the advantage in the market.
The most profound implication of bureaucratization is the bureaucrat as the voter. As government promulgates expansive powers of bureaucratic structures, the bureaucrat benefits greatly from public funds more than from individual contribution; therefore, the bureaucrat's greatest concern is not balanced budgets but ever expanding budgets because the means of increased income is only obtained by the expropriation of property from taxation.
Overall, Ludwig von Mises provides brilliant insight into the necessary but destructive apparatus of bureaucracy. Mises’ biggest concern was the prevention of the continued spread of socialism, and The Bureaucracy shows how complete social organization of bureaucratic structures stagnates society and individual initiative. The Bureaucracy definitely is still a must read for any advocate of Austrian School of Economics and free enterprise.
September 22, 2013
3.5 out of 5, but I decided to be nice and round up to 4/5.
Firstly, I will say that it was a good treatment on bureaucracy and, more specifically, planned economy vs free markets. Mises is a good writer and makes persuasive arguments. However, that doesn't necessarily mean that his arguments are extremely in-depth. Given that this book is so short, I'm willing to let his brevity on some issues slide, but I will need to read more of his work in the future to understand his views on fascism and socialism.
Now my complaints. Mises equates "capitalism" with "free markets" and "socialism" with "command economy". That's fine if you want to define the words that way, but he instantly loses credibility with any modern left-leaning readers because these don't represent the modern usages of those terms. While this was probably accepted parlance when this book was written, I would have enjoyed it more if he had commented on systems such as market socialism. Though it was probably not intentional, parts of this book contain a straw man- that all "socialist" systems are a command economy. I suppose this really depends on your definitions, but I digress...
And, as always, this Austrian Econ book is slightly homophobic and more than slightly amerocentric. However, it gets a pass because it was written in the 1940s.
Overall, this book gave a fairly good overview of why the profit motive is a better organizing principle than bureaucracy, but I can't help but feel that Hayek's "Road to Serfdom" did it much better.
Firstly, I will say that it was a good treatment on bureaucracy and, more specifically, planned economy vs free markets. Mises is a good writer and makes persuasive arguments. However, that doesn't necessarily mean that his arguments are extremely in-depth. Given that this book is so short, I'm willing to let his brevity on some issues slide, but I will need to read more of his work in the future to understand his views on fascism and socialism.
Now my complaints. Mises equates "capitalism" with "free markets" and "socialism" with "command economy". That's fine if you want to define the words that way, but he instantly loses credibility with any modern left-leaning readers because these don't represent the modern usages of those terms. While this was probably accepted parlance when this book was written, I would have enjoyed it more if he had commented on systems such as market socialism. Though it was probably not intentional, parts of this book contain a straw man- that all "socialist" systems are a command economy. I suppose this really depends on your definitions, but I digress...
And, as always, this Austrian Econ book is slightly homophobic and more than slightly amerocentric. However, it gets a pass because it was written in the 1940s.
Overall, this book gave a fairly good overview of why the profit motive is a better organizing principle than bureaucracy, but I can't help but feel that Hayek's "Road to Serfdom" did it much better.
September 22, 2021
Mises nesse trabalho mostra como a burocracia, naquela época criticada pelos capitalistas e socialistas, é um mal existente no socialismo.
Diz que "Não se pode treinar gênios criativos. O gênio é quem desafia todas as escolas e regras, quem se aparta dos caminhos tradicionais e vai abrindo novas estradas em locais antes inacessíveis e inóspitos. É sempre um professor, nunca um aluno; é sempre alguém que se faz sozinho. Não deve nada a quem está no poder". Mas que as intervenções estatais, por outro lado, podem matar esse gênio.
Mises gosta muito da democracia, assim como em outros livros, não enxergando as diversas armadilhas que se coloca na falsa dicotomia democracia/totalitarismo.
Define a burocracia como o meio oposto à gestão com busca ao lucro, sendo, para Mises, necessária para a administração pública.
Enfatiza diversas vezes que no livre mercado não há a opção do capitalista de fazer algo que ele queira, ele é escravo das vontades dos consumidores.
Diz que Marx nunca explicou o que seria uma classe social, e mostra que só há perspectivas de melhora de padrão de vida no livre mercado, enquanto que no burocratismo não há mudanças, só a manutenção do status quo.
Finaliza dizendo que não se pode transformar o aparato produtivo do livre mercado em uma burocracia gigantesca, como queria Lenin. É uma crítica mediana ao burocratismo, ainda que Mises admita não ser por si só um problema, já que deve ser plenamente utilizada na administração pública, para que não se desvie da manutenção da democracia.
Tempo estimado de leitura: 3h
Diz que "Não se pode treinar gênios criativos. O gênio é quem desafia todas as escolas e regras, quem se aparta dos caminhos tradicionais e vai abrindo novas estradas em locais antes inacessíveis e inóspitos. É sempre um professor, nunca um aluno; é sempre alguém que se faz sozinho. Não deve nada a quem está no poder". Mas que as intervenções estatais, por outro lado, podem matar esse gênio.
Mises gosta muito da democracia, assim como em outros livros, não enxergando as diversas armadilhas que se coloca na falsa dicotomia democracia/totalitarismo.
Define a burocracia como o meio oposto à gestão com busca ao lucro, sendo, para Mises, necessária para a administração pública.
Enfatiza diversas vezes que no livre mercado não há a opção do capitalista de fazer algo que ele queira, ele é escravo das vontades dos consumidores.
Diz que Marx nunca explicou o que seria uma classe social, e mostra que só há perspectivas de melhora de padrão de vida no livre mercado, enquanto que no burocratismo não há mudanças, só a manutenção do status quo.
Finaliza dizendo que não se pode transformar o aparato produtivo do livre mercado em uma burocracia gigantesca, como queria Lenin. É uma crítica mediana ao burocratismo, ainda que Mises admita não ser por si só um problema, já que deve ser plenamente utilizada na administração pública, para que não se desvie da manutenção da democracia.
Tempo estimado de leitura: 3h
May 12, 2020
This is a good short book on some of the problems with our bureaucratic system. TLDR: it's socialistic
November 17, 2023
A frustrating book. Mises is essentially preaching to the choir since I'm about as staunch a free-market zealot as they come. But while I generally agree with Mises' broad points, I don't find his arguments here very satisfactory, thorough or efficient.
The book seems to wander all over the place and has all kinds of incomplete examples, analogies and arguments. It feels more like Mises grumbling to someone who already agrees with him about how bad government and bureaucracy are than a well thought out treatise or discussion. He's not properly explaining WHY bureaucracy causes problems, although he makes various important points - just not enough to justify the length of the book.
One pet peeve I have is when economists are imprecise in their explanations, for example using the phrase "the means of production" as if there's some simple notion of what constitutes "production" or some simple set of resources which are the "means" of producing things. I get Mises' arguments, but why fall into the trap of the language of Marxists? A true economist doesn't need to get bogged down in arbitrary categorisations like that.
I can work. Does that mean that I'm part of the means of production? Wealth can be "produced" in lots of ways, including via trade or discovery. If a gold mine is found, was the gold "produced"? If I tell a joke and a room full of people laugh, did I "produce" the laughter? If people pay me to be funny and I then buy stuff from overseas, did I "produce" the stuff I bought?
I just find it a bit annoying. I would focus more on the fact that people can create, discover or share wealth in all kinds of ways. That wealth needn't be merely things or manufactured goods, but can also be services, conditions, possibilities, information, etc. You might pay more for a cleaner hotel room. It's the condition of cleanliness that you value, not some thing which gets produced. And people don't have to value the same things. But everyone can become richer by their own estimate via work and trade. And there's no need to refer to any "means of production" in justifying or explaining this.
Some of his arguments are not completely convincing. For example, clearly the profit motive is far stronger and more objective than how gov't generally operates. But it's not clear that gov't can't have ANY effective feedback signals. This could have been explored more. Gov't tends to respond to rules and regulations. But there's no reason those rules couldn't include the maximisation of revenue and minimisation of costs - in other words, the maximisation of profit.
The relevant distinction is not that private businesses pursue profits while gov't doesn't. As I've said, gov't agencies could well be instructed to focus on profits. In fact, that's a common criticism of the police in Australia - that they "revenue raise" by catching people on petty crimes like speeding, perhaps deliberately setting the speed limit unnecessarily low. Hey, they're like a business! Maximising profits! Bureaucracy is not so bad after all!
No, what matters is that gov't gets money by force whereas companies get money from voluntary customers. It also matters that gov't often faces no competition, again by force, whereas companies are always in competition, even if they're the sole provider, because a new competitor could arise at any time.
Also, while clearly companies generally seek to maximise monetary profits, that's not always technically true. Some movie studios might deliberately gamble on an artistic film out of a sincere love for movies or a particular director or project. There are passion projects of all kinds. A baker might sometimes give free cakes to certain people, etc. What is relevant is not just money and profits, but the fact that there's a direct feedback system. That private businesses can only spend their own money and can only make money via voluntary customers. That's all that matters.
If all a business owner needs is to break even and put smiles on people's faces, if that's all he wants, then he can sustain his business. His "profits" needn't be only in money, they can also be in personal satisfaction, networking, future business opportunities, etc. Things which he values but which can't necessarily be easily measured in money terms.
In contrast, gov't agencies can indulge in massive losses and yet stay around or even grow. Their "customers" can be miserable and unsatisfied but have no alternative. They tend to get bogged down in unnecessary paperwork and endless red tape. They tend to attract people who like rules more than solving problems.
Mises could have gone into more concrete examples of bureaucracy in gov't and the kinds of issues that whole philosophy leads to. A famous example to me is the "hello nurse" phenomenon caused by the NHS in the UK around the 90s. Wait times in hospitals were "too high". So they needed to be brought down. Naturally, the bureaucratic solution was just that - to prioritise the minimisation of waiting times. Hospitals would be judged/assessed by waiting times and rewarded/punished as a result. Sounds reasonable. It's a feedback system - what could go wrong?
The result is predictable if you think it through. Hospitals started assigning "hello nurses" whose sole job was to greet patients and record their details, but nothing else. In other words, to meet the bare minimum required to say that the patient was no longer "waiting" but had been seen. Perhaps patients would be sent through to another area which was no longer counted as a "waiting area". On paper, this instantly reduced waiting times by a large margin. Wow, now patients only have to wait about 5 minutes to be seen instead of 45 minutes! But the reality was probably that it took even longer to actually get treated because of the addition of a bureaucratic layer - extra greetings and rooms to wait in.
This isn't about profits and losses but customer choice. Gov't rules and regulations tend to lead to the prioritisation of ticking boxes - doing the bare minimum to satisfy some condition. Meanwhile, free markets tend to lead to the prioritisation of satisfying customers. It's not just about the "profit motive" but the dependence on voluntary customers. Would you prefer a hospital that treats you within 20 minutes or one which greets you in 5 but makes you wait 3 hours after that?
When a customer uses a product or service, they don't just care about waiting time, they care about hundreds of factors. Including factors they might not explicitly state or be aware of. Eg) If you see a rat in the hospital waiting room, you might suddenly find that that's a deal-breaker. Markets naturally account for that - more paying customers will go to the business with lower waiting times, less rates and all kinds of other common sense expectations. But gov't services must articulate their rules which must be finite and be followed across the board. One loophole and the system fails. People stop thinking and just blindly follow rules, including in situations where the rules should no longer apply! Mises barely scratches any of this kind of stuff.
Nobody is as honest as when they spend their own money. So that's the best way to measure value. When people pay taxes, there's no guarantee they will get their money's worth. But when they pay a private company, the chances are far higher than they will get their money's worth and expect to! If they don't, they can immediately adjust their spending habits.
I don't think any of Mises' analysis is as precise or vivid as what I've outlined in just a few paragraphs here. Mises just keeps asserting things. Even if I agree, it's not that interesting. I mean, I could read a book full of objective facts, like 2 + 3 = 5, the sky is blue, killing is bad, 7 is a prime number, etc., and learn nothing. I want a book full of truth, but also with insights, good analogies and explanations, interesting anecdotes, statistics, direct quotes of counter-arguments, etc. This book feels more like a rant, albeit a relatively sober and logical one.
Another pet peeve is some of the references Mises makes to trends at his place and time without specifying the details. All authors should mention the year and some other details when making casual observations about the "zeitgeist". "Everyone's been talking about Barbie lately" doesn't mean much unless I mention that it's 2023 and Barbenheimer has become a meme. There's no harm in giving a brief rundown on it if I'm gonna include it in my book.
Eg) Mises: "Moreover, America is an old democracy and the talk about the dangers of bureaucracy is a new phenomenon in this country. Only in recent years have people become aware of the menace of bureaucracy"
I'm not really clear as to what Mises is talking about here. What does "old" mean? Is Australia now an "old democracy" in 2023, with about 120 years under its belt? What "recent years" is he talking about? What "people"? How does he know that they're "aware of the menace of bureaucracy"? What circles is he hearing or observing this in?
To be blunt, a superior author like Thomas Sowell will simply quote intellectuals or use polls or other phenomena (with details like the year and time, perhaps a riot, political event, etc) to illustrate an idea of the "zeitgeist". He seldom refers vaguely to what "the people" are saying as Mises does in this book quite often.
I know Mises can be very logical (Human Action is very solid and thorough), but Bureaucracy was a big disappointment. I don't think anyone on the left could remotely be convinced by the arguments and countless assertions in this book. And surely that would be one of the main purposes of it. Sowell's books are far more insightful and persuasive. They always help me grasp things much better, they give tonnes of concrete examples and rarely turn into rants. Sowell's books can turn people. Mises is second tier by comparison. And this feels like a lazier, more insular effort, to be honest.
The book seems to wander all over the place and has all kinds of incomplete examples, analogies and arguments. It feels more like Mises grumbling to someone who already agrees with him about how bad government and bureaucracy are than a well thought out treatise or discussion. He's not properly explaining WHY bureaucracy causes problems, although he makes various important points - just not enough to justify the length of the book.
One pet peeve I have is when economists are imprecise in their explanations, for example using the phrase "the means of production" as if there's some simple notion of what constitutes "production" or some simple set of resources which are the "means" of producing things. I get Mises' arguments, but why fall into the trap of the language of Marxists? A true economist doesn't need to get bogged down in arbitrary categorisations like that.
I can work. Does that mean that I'm part of the means of production? Wealth can be "produced" in lots of ways, including via trade or discovery. If a gold mine is found, was the gold "produced"? If I tell a joke and a room full of people laugh, did I "produce" the laughter? If people pay me to be funny and I then buy stuff from overseas, did I "produce" the stuff I bought?
I just find it a bit annoying. I would focus more on the fact that people can create, discover or share wealth in all kinds of ways. That wealth needn't be merely things or manufactured goods, but can also be services, conditions, possibilities, information, etc. You might pay more for a cleaner hotel room. It's the condition of cleanliness that you value, not some thing which gets produced. And people don't have to value the same things. But everyone can become richer by their own estimate via work and trade. And there's no need to refer to any "means of production" in justifying or explaining this.
Some of his arguments are not completely convincing. For example, clearly the profit motive is far stronger and more objective than how gov't generally operates. But it's not clear that gov't can't have ANY effective feedback signals. This could have been explored more. Gov't tends to respond to rules and regulations. But there's no reason those rules couldn't include the maximisation of revenue and minimisation of costs - in other words, the maximisation of profit.
The relevant distinction is not that private businesses pursue profits while gov't doesn't. As I've said, gov't agencies could well be instructed to focus on profits. In fact, that's a common criticism of the police in Australia - that they "revenue raise" by catching people on petty crimes like speeding, perhaps deliberately setting the speed limit unnecessarily low. Hey, they're like a business! Maximising profits! Bureaucracy is not so bad after all!
No, what matters is that gov't gets money by force whereas companies get money from voluntary customers. It also matters that gov't often faces no competition, again by force, whereas companies are always in competition, even if they're the sole provider, because a new competitor could arise at any time.
Also, while clearly companies generally seek to maximise monetary profits, that's not always technically true. Some movie studios might deliberately gamble on an artistic film out of a sincere love for movies or a particular director or project. There are passion projects of all kinds. A baker might sometimes give free cakes to certain people, etc. What is relevant is not just money and profits, but the fact that there's a direct feedback system. That private businesses can only spend their own money and can only make money via voluntary customers. That's all that matters.
If all a business owner needs is to break even and put smiles on people's faces, if that's all he wants, then he can sustain his business. His "profits" needn't be only in money, they can also be in personal satisfaction, networking, future business opportunities, etc. Things which he values but which can't necessarily be easily measured in money terms.
In contrast, gov't agencies can indulge in massive losses and yet stay around or even grow. Their "customers" can be miserable and unsatisfied but have no alternative. They tend to get bogged down in unnecessary paperwork and endless red tape. They tend to attract people who like rules more than solving problems.
Mises could have gone into more concrete examples of bureaucracy in gov't and the kinds of issues that whole philosophy leads to. A famous example to me is the "hello nurse" phenomenon caused by the NHS in the UK around the 90s. Wait times in hospitals were "too high". So they needed to be brought down. Naturally, the bureaucratic solution was just that - to prioritise the minimisation of waiting times. Hospitals would be judged/assessed by waiting times and rewarded/punished as a result. Sounds reasonable. It's a feedback system - what could go wrong?
The result is predictable if you think it through. Hospitals started assigning "hello nurses" whose sole job was to greet patients and record their details, but nothing else. In other words, to meet the bare minimum required to say that the patient was no longer "waiting" but had been seen. Perhaps patients would be sent through to another area which was no longer counted as a "waiting area". On paper, this instantly reduced waiting times by a large margin. Wow, now patients only have to wait about 5 minutes to be seen instead of 45 minutes! But the reality was probably that it took even longer to actually get treated because of the addition of a bureaucratic layer - extra greetings and rooms to wait in.
This isn't about profits and losses but customer choice. Gov't rules and regulations tend to lead to the prioritisation of ticking boxes - doing the bare minimum to satisfy some condition. Meanwhile, free markets tend to lead to the prioritisation of satisfying customers. It's not just about the "profit motive" but the dependence on voluntary customers. Would you prefer a hospital that treats you within 20 minutes or one which greets you in 5 but makes you wait 3 hours after that?
When a customer uses a product or service, they don't just care about waiting time, they care about hundreds of factors. Including factors they might not explicitly state or be aware of. Eg) If you see a rat in the hospital waiting room, you might suddenly find that that's a deal-breaker. Markets naturally account for that - more paying customers will go to the business with lower waiting times, less rates and all kinds of other common sense expectations. But gov't services must articulate their rules which must be finite and be followed across the board. One loophole and the system fails. People stop thinking and just blindly follow rules, including in situations where the rules should no longer apply! Mises barely scratches any of this kind of stuff.
Nobody is as honest as when they spend their own money. So that's the best way to measure value. When people pay taxes, there's no guarantee they will get their money's worth. But when they pay a private company, the chances are far higher than they will get their money's worth and expect to! If they don't, they can immediately adjust their spending habits.
I don't think any of Mises' analysis is as precise or vivid as what I've outlined in just a few paragraphs here. Mises just keeps asserting things. Even if I agree, it's not that interesting. I mean, I could read a book full of objective facts, like 2 + 3 = 5, the sky is blue, killing is bad, 7 is a prime number, etc., and learn nothing. I want a book full of truth, but also with insights, good analogies and explanations, interesting anecdotes, statistics, direct quotes of counter-arguments, etc. This book feels more like a rant, albeit a relatively sober and logical one.
Another pet peeve is some of the references Mises makes to trends at his place and time without specifying the details. All authors should mention the year and some other details when making casual observations about the "zeitgeist". "Everyone's been talking about Barbie lately" doesn't mean much unless I mention that it's 2023 and Barbenheimer has become a meme. There's no harm in giving a brief rundown on it if I'm gonna include it in my book.
Eg) Mises: "Moreover, America is an old democracy and the talk about the dangers of bureaucracy is a new phenomenon in this country. Only in recent years have people become aware of the menace of bureaucracy"
I'm not really clear as to what Mises is talking about here. What does "old" mean? Is Australia now an "old democracy" in 2023, with about 120 years under its belt? What "recent years" is he talking about? What "people"? How does he know that they're "aware of the menace of bureaucracy"? What circles is he hearing or observing this in?
To be blunt, a superior author like Thomas Sowell will simply quote intellectuals or use polls or other phenomena (with details like the year and time, perhaps a riot, political event, etc) to illustrate an idea of the "zeitgeist". He seldom refers vaguely to what "the people" are saying as Mises does in this book quite often.
I know Mises can be very logical (Human Action is very solid and thorough), but Bureaucracy was a big disappointment. I don't think anyone on the left could remotely be convinced by the arguments and countless assertions in this book. And surely that would be one of the main purposes of it. Sowell's books are far more insightful and persuasive. They always help me grasp things much better, they give tonnes of concrete examples and rarely turn into rants. Sowell's books can turn people. Mises is second tier by comparison. And this feels like a lazier, more insular effort, to be honest.
March 13, 2022
Mises lacks the insight and arguments of Public Choice Theory to analyze bureaucracy so he can’t well demonstrate why bureaucracy will always be inefficient per se.
The book is redundant and deals a great part on socialism rather than on bureaucracy.
The book is redundant and deals a great part on socialism rather than on bureaucracy.
May 9, 2018
Highly recommended. For those that don't have the patience to read through Human Action, Bureaucracy is a great way to cut your teeth on sound economic reasoning as it pertains to the pursuit of big government policy. Human Action is still a must read, but I would recommend Bureaucracy to anyone, even those that don't have an interest in economics. Well reasoned, well written - an absolute classic.
July 14, 2020
I found it a bit basic. It regurgitates Mises main arguments in a concise form, it critiques socialists who are obsessed with planned economies.
All in all, I found the arguments a bit familiar, nevertheless, it is well written a fun to read, as well as being quite short.
All in all, I found the arguments a bit familiar, nevertheless, it is well written a fun to read, as well as being quite short.
January 20, 2023
A personal aside, coming from an undergrad and grad education where Marx was served for breakfast lunch and dinner, the Austrian school was always presented as a kind of Mordor, and Mises its greatest Sauron. Now, going back and reading libertarian economists like Hayek and Mises years later, I feel cheated of having had them and Marx and conversation, as it were, with the opportunity of weighing critiques seriously.
This short volume serves as both exegesis but also, especially in the last chapters, increasingly, as an exhortation. It is both analytical and political, in that sense could be paired with the Communist Manifesto for the purposes of having a rabid capitalist versus and rabid socialist view juxtaposed.
The central focus of the book is on the organization of work and workers under bureaucratic systems versus profit-oriented systems. Mises at no point declares that all areas of life should be subsumed by the profit-oriented system. He argues, in fact, that certain functions of the state MUST be managed bureaucratically (such as policing, writing laws, collecting taxes). The difference between the two modes of organizing labor boil down to the lack of having an economic measure to evaluate outcomes. In the case of bureaucratic management, it is "good" that there is a lack of economic measure to evaluate, say, public safety, because how would we measure that in terms of profits and losses--it is beyond that evaluator mechanism. Bureaucracy thus implements other ways of 'evaluating' itself, ultimately, in lots of box-checking, following massive amounts of rules as rigidly as possible, and being deferential to the pecking order, which often means the gerontocracy, and rejecting innovation. By contrast, the profit-motive system measures itself simply by...well, profit. How well it is meeting the demands of the public for a product, how well is it competing to provide the cheapest but "best" product. Innovation is king, the risk-takers are rewarded if they are able to build a better mouse trap, and it is 'democratic' in that it allows the public ultimately to move the market.
For Mises, freedom becomes restricted and society begins to become locked into the prison of bureaucracy when it expands beyond the necessities of preservation of life and property, when the state's incursion on systems of profit-seeking become expansive. Democracy itself begins to suffer when, like a feudal system, bureaucracy decides what product or service or initiative will be offered, and what price. He, like Hayek, sees socialist-leaning bureaucracy as the short road to totalitarianism, the authoritarianism of bureaucrats and their rules, conceding all areas of life to government control. He takes some shots at bureaucrats, similar to Hoffer in "The True Believer," as being people lacking creativity and innovation who can't hold their own in a competitive market and so need to preserve their fiefdoms to make it through life.
"In social life, rigidity amounts to petrification and death," he writes.
The last chapters are increasingly passionate pleas for democracy and against totalitarian thinking, for the citizenry to take their participation in that process seriously by understanding economics.
This book would have benefitted from more applied analysis, as he keeps everything at a 10,000 foot view--where does education fit into this? Health care? How MUCH policing? Are there not economic ways of measuring efficiency in even functions necessarily adopted to state governance?
Overall highly recommended for those seeking a counterpoint to Marx.
This short volume serves as both exegesis but also, especially in the last chapters, increasingly, as an exhortation. It is both analytical and political, in that sense could be paired with the Communist Manifesto for the purposes of having a rabid capitalist versus and rabid socialist view juxtaposed.
The central focus of the book is on the organization of work and workers under bureaucratic systems versus profit-oriented systems. Mises at no point declares that all areas of life should be subsumed by the profit-oriented system. He argues, in fact, that certain functions of the state MUST be managed bureaucratically (such as policing, writing laws, collecting taxes). The difference between the two modes of organizing labor boil down to the lack of having an economic measure to evaluate outcomes. In the case of bureaucratic management, it is "good" that there is a lack of economic measure to evaluate, say, public safety, because how would we measure that in terms of profits and losses--it is beyond that evaluator mechanism. Bureaucracy thus implements other ways of 'evaluating' itself, ultimately, in lots of box-checking, following massive amounts of rules as rigidly as possible, and being deferential to the pecking order, which often means the gerontocracy, and rejecting innovation. By contrast, the profit-motive system measures itself simply by...well, profit. How well it is meeting the demands of the public for a product, how well is it competing to provide the cheapest but "best" product. Innovation is king, the risk-takers are rewarded if they are able to build a better mouse trap, and it is 'democratic' in that it allows the public ultimately to move the market.
For Mises, freedom becomes restricted and society begins to become locked into the prison of bureaucracy when it expands beyond the necessities of preservation of life and property, when the state's incursion on systems of profit-seeking become expansive. Democracy itself begins to suffer when, like a feudal system, bureaucracy decides what product or service or initiative will be offered, and what price. He, like Hayek, sees socialist-leaning bureaucracy as the short road to totalitarianism, the authoritarianism of bureaucrats and their rules, conceding all areas of life to government control. He takes some shots at bureaucrats, similar to Hoffer in "The True Believer," as being people lacking creativity and innovation who can't hold their own in a competitive market and so need to preserve their fiefdoms to make it through life.
"In social life, rigidity amounts to petrification and death," he writes.
The last chapters are increasingly passionate pleas for democracy and against totalitarian thinking, for the citizenry to take their participation in that process seriously by understanding economics.
This book would have benefitted from more applied analysis, as he keeps everything at a 10,000 foot view--where does education fit into this? Health care? How MUCH policing? Are there not economic ways of measuring efficiency in even functions necessarily adopted to state governance?
Overall highly recommended for those seeking a counterpoint to Marx.
February 19, 2023
So I'm no libertarian, but I must say that I found this book to be quite enlightening. For me, the most important insight found in this book is Mises' point that bureaucracies have a tendency to become inefficient, whereas profit-seeking institutions don't. The reason for this being that profit-seeking acts as criterion of efficiency. So, in a business, you know that you make more than you spend because, well, you make a profit -- outputs exceed inputs! But, in bureaucracies, which are not profit-seeking by nature, how, then, do you know if you "get" more than what you put in? It seems like you can't know, and that's a problem.
But it's deeper than that. Because profit-seeking institutions make a profit only if customers buy their product, then that is an indication that the customers -- the public -- believe that what they are buying has value, or is value-able. If they didn't, then they wouldn't buy it. No one, after all, puts a gun to your head and forces you to shop on Amazon. Obviously there are cases where the public is confused, or they get cheated out of their money by bad businesses, but that is rare. Anyways, Mises thinks that this is democratic, in the sense that the public votes with their wallet and decides who gets "the money." But the problem for bureaucracies is that consumers aren't able to vote in this way because they don't aim to make a profit by selling their services to the public -- they get tax dollars instead. How, then, does the public decide which bureaucracies get funding and which shouldn't (and how much)? How do they decide which are valuable/useful? Should they?
Another interesting point: bureaucracies have incentives to spend and grow (capture tax dollars) while profit-seeking enterprises have incentives to cut costs and increase their profits. So what ends up happening in bureaucracies, and here I'm borrowing information from a different book, is that they create a ton of useless busywork/superfluous positions to justify salary increases for bureaucrats. Higher education is a good example of this phenomenon. Universities have seen an explosion of administrators in recent years, so much so that administrative hiring greatly outpaces faculty hiring. Why is that? It's because higher-level administrators create the office of "blah blah blah" and the committee on "blah blah" to increase their salaries. It's a way for them to say something like "look at how many lower-level admins I have to manage now -- you all have to pay me more for the extra work I now do." So, in effect, they ask for more public funding for salary increases and new administrative positions, which comes at the expense of the tax payers, students, and students' families. What that means is that bureaucrats have perverse incentives to increase costs, rather than reduce them so that they can justify their raises. Profit enterprises don't have this incentive since they get higher salaries by cutting costs and producing more profit.
Anyway, a lot more can be said, but it is worth noting that Mises doesn't think one form of management (profit or bureaucratic) is better than the other. He does think both are necessary, and most of this book is him pointing out the strengths and weaknesses of each, such as the tendency for bureaucracies to create mass conformity, hierarchy, excess rules, and stagnation, while profit-seeking institutions tend to promote innovation and dynamism. SUPER insightful book!
But it's deeper than that. Because profit-seeking institutions make a profit only if customers buy their product, then that is an indication that the customers -- the public -- believe that what they are buying has value, or is value-able. If they didn't, then they wouldn't buy it. No one, after all, puts a gun to your head and forces you to shop on Amazon. Obviously there are cases where the public is confused, or they get cheated out of their money by bad businesses, but that is rare. Anyways, Mises thinks that this is democratic, in the sense that the public votes with their wallet and decides who gets "the money." But the problem for bureaucracies is that consumers aren't able to vote in this way because they don't aim to make a profit by selling their services to the public -- they get tax dollars instead. How, then, does the public decide which bureaucracies get funding and which shouldn't (and how much)? How do they decide which are valuable/useful? Should they?
Another interesting point: bureaucracies have incentives to spend and grow (capture tax dollars) while profit-seeking enterprises have incentives to cut costs and increase their profits. So what ends up happening in bureaucracies, and here I'm borrowing information from a different book, is that they create a ton of useless busywork/superfluous positions to justify salary increases for bureaucrats. Higher education is a good example of this phenomenon. Universities have seen an explosion of administrators in recent years, so much so that administrative hiring greatly outpaces faculty hiring. Why is that? It's because higher-level administrators create the office of "blah blah blah" and the committee on "blah blah" to increase their salaries. It's a way for them to say something like "look at how many lower-level admins I have to manage now -- you all have to pay me more for the extra work I now do." So, in effect, they ask for more public funding for salary increases and new administrative positions, which comes at the expense of the tax payers, students, and students' families. What that means is that bureaucrats have perverse incentives to increase costs, rather than reduce them so that they can justify their raises. Profit enterprises don't have this incentive since they get higher salaries by cutting costs and producing more profit.
Anyway, a lot more can be said, but it is worth noting that Mises doesn't think one form of management (profit or bureaucratic) is better than the other. He does think both are necessary, and most of this book is him pointing out the strengths and weaknesses of each, such as the tendency for bureaucracies to create mass conformity, hierarchy, excess rules, and stagnation, while profit-seeking institutions tend to promote innovation and dynamism. SUPER insightful book!
October 22, 2023
MISES STRONGLY CRITIQUES BUREAUCRACIES---PARTICULARLY THOSE OF SOCIALISTS
Ludwig von Mises wrote in the Preface to this 1962 edition of this 1944 book, “There are two methods for the conduct of affairs within the frame of human society, i.e., peaceful cooperation among men. One is bureaucratic management; the other is profit management… There are areas of man’s activities in which there cannot be any question of profit management and where bureaucratic management must prevail. A police department cannot be operated according to the methods resorted to in the conduct of a gainful enterprise. A bakery serves a definite number of people…. It is the patronage of its customers that provides the … profitability---of the bakery’s business. A police department cannot sell its ‘products’; its achievements, however, valuable, even indispensable as they may be, have no price on the market and therefore cannot be contrasted with the total expenditure made in the endeavors to bring them about. This essay does not condemn or blame bureaucracy. It tries to point our hat bureaucratic management of affairs means and in what it differs for profit management. It further shows in which field bureaucratic management is the only possible method for the conduct of affairs.”
He wrote in the Preface to the original 1944 edition, “The main issue in present-day social and political conflicts is whether or not man should give away freedom, private initiative, and individual responsibility and surrender to be guardianship of a gigantic apparatus of compulsion and coercion, the Socialist State… The problems involved in the antagonism between socialism and capitalism can be attacked form various viewpoints. At present it seems as if an investigation of the expansion of bureaucratic agencies is the most expedient avenue of approach. An analysis of bureaucratism offers an excellent opportunity to recognize the fundamental problems of the controversy.”
He wrote in the Introduction, “Congress has in many instances surrendered the function of legislation to government agencies and commissions, and it has relaxed its budgetary control through the allocation of large appropriations for expenditures… we must realize that delegation of power is the main instrument of modern dictatorship. It is by virtue of delegation of power that Hitler and his Cabinet rule Germany… delegation of power can be used as a quasi-constitutional disguise for a dictatorship. But this is certainly not the case at present in this country. Congress has undoubtedly still the legal right and the actual might to take back all the power it has delegated… In the United States bureaucracy is based on constitutional grounds.” (Pg. 6) He adds, “This book will try to demonstrate that no profit-seeking enterprise, no matter how large, is liable to become bureaucratic provided the hands of its management are not tied by government interference. The trend toward bureaucratic rigidity is not inherent in the evolution of business.” (Pg. 13)
He argues, “It is true that under socialism there would be neither discernible profits nor discernible losses. Where there is not calculation there is no means of getting and answer to the question whether the projects planned or carried out were those best fitted to satisfy the most urgent needs… The advocates of socialism are badly mistaken in considering the absence of discernible profit and loss an excellent point. It is, on the contrary, the essential vice of any socialist management. It is not and advantage to be ignorant of whether or not what one is doing is a suitable means of attaining the ends sought.” (Pg. 33)
He admits, “The objectives of public administration cannot be measured in money terms and cannot be checked by accountancy methods. Take a nation-wide police system like the F.B.I. There is no yardstick available that could establish whether the expenses incurred by one of its regional or local branches were not excessive The expenditures of a police station are not reimbursed by its successful management and do not vary in proportion to the success attained.” (Pg. 50) He continues, “We do not say that a successful handling of public affairs has no value, but that it has no price on the market, that its value cannot be realized in a market transaction and consequently cannot be expressed in terms of money.” (Pg. 52)
He continues, “A police department has the job of protecting a defense plant against sabotage. It assigns thirty patrolmen to this duty. The responsible commissioner does not need the advice of an efficiency expert in order to discover that he could save money by reducing the guard to only twenty men. But the question is: Does this economy outweigh the increase in risk?” (Pg. 54)
He states, “A bureaucrat differs from a nonbureaucrat precisely because he is working in a field in which it is impossible to appraise the result of a man’s effort in terms of money.” (Pg. 58)
He acknowledges, “It would be a mistake to ascribe the frustration of European bureaucratism to intellectual and moral deficiencies of the personnel.. Many civil servants published excellent treatises dealing with the problems of administrative law and statistics… Of course, the bulk of the bureaucrats were rather mediocre men. But it cannot be doubted that a considerable number of able men were to be found in the ranks of the government employees.” (Pg. 61)
He recounts, “The outstanding fact of the intellectual history of the last hundred years is the struggle against economics. The advocates of government omnipotence did not enter into a discussion of the problems involved. They called the economists names, they cast suspicion upon their motives, and they ridiculed them and called down curses upon them. It is, however, not the task of this book to deal with this phenomenon. We have to limit ourselves to the description of the role that bureaucracy played in this development.” (Pg. 89)
He concludes, “Public administration, the handline of the government apparatus of coercion and compulsion, must necessarily be formalistic and bureaucratic. No reform can remove the bureaucratic features of the government’s bureaus. It is useless to blame them for their slowness and slackness… It is of no use to criticize the bureaucrat’s pedantic observance of rigid rules and regulations. Such rules in dispensable if public administration is not to slip out of the hands of the top executives and degenerate into the supremacy of subordinate clerks.” (Pg. 131)
He ends, “The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and by a resistance to every kind of improvement. They call themselves democrats, but the yearn for dictatorship. They call themselves revolutionaries, but they want to make the government omnipotent… Against all this frenzy of agitation there is but one weapon available: reason.” (Pg. 134)
This book may interest those studying Austrian economics, and economic history.
Ludwig von Mises wrote in the Preface to this 1962 edition of this 1944 book, “There are two methods for the conduct of affairs within the frame of human society, i.e., peaceful cooperation among men. One is bureaucratic management; the other is profit management… There are areas of man’s activities in which there cannot be any question of profit management and where bureaucratic management must prevail. A police department cannot be operated according to the methods resorted to in the conduct of a gainful enterprise. A bakery serves a definite number of people…. It is the patronage of its customers that provides the … profitability---of the bakery’s business. A police department cannot sell its ‘products’; its achievements, however, valuable, even indispensable as they may be, have no price on the market and therefore cannot be contrasted with the total expenditure made in the endeavors to bring them about. This essay does not condemn or blame bureaucracy. It tries to point our hat bureaucratic management of affairs means and in what it differs for profit management. It further shows in which field bureaucratic management is the only possible method for the conduct of affairs.”
He wrote in the Preface to the original 1944 edition, “The main issue in present-day social and political conflicts is whether or not man should give away freedom, private initiative, and individual responsibility and surrender to be guardianship of a gigantic apparatus of compulsion and coercion, the Socialist State… The problems involved in the antagonism between socialism and capitalism can be attacked form various viewpoints. At present it seems as if an investigation of the expansion of bureaucratic agencies is the most expedient avenue of approach. An analysis of bureaucratism offers an excellent opportunity to recognize the fundamental problems of the controversy.”
He wrote in the Introduction, “Congress has in many instances surrendered the function of legislation to government agencies and commissions, and it has relaxed its budgetary control through the allocation of large appropriations for expenditures… we must realize that delegation of power is the main instrument of modern dictatorship. It is by virtue of delegation of power that Hitler and his Cabinet rule Germany… delegation of power can be used as a quasi-constitutional disguise for a dictatorship. But this is certainly not the case at present in this country. Congress has undoubtedly still the legal right and the actual might to take back all the power it has delegated… In the United States bureaucracy is based on constitutional grounds.” (Pg. 6) He adds, “This book will try to demonstrate that no profit-seeking enterprise, no matter how large, is liable to become bureaucratic provided the hands of its management are not tied by government interference. The trend toward bureaucratic rigidity is not inherent in the evolution of business.” (Pg. 13)
He argues, “It is true that under socialism there would be neither discernible profits nor discernible losses. Where there is not calculation there is no means of getting and answer to the question whether the projects planned or carried out were those best fitted to satisfy the most urgent needs… The advocates of socialism are badly mistaken in considering the absence of discernible profit and loss an excellent point. It is, on the contrary, the essential vice of any socialist management. It is not and advantage to be ignorant of whether or not what one is doing is a suitable means of attaining the ends sought.” (Pg. 33)
He admits, “The objectives of public administration cannot be measured in money terms and cannot be checked by accountancy methods. Take a nation-wide police system like the F.B.I. There is no yardstick available that could establish whether the expenses incurred by one of its regional or local branches were not excessive The expenditures of a police station are not reimbursed by its successful management and do not vary in proportion to the success attained.” (Pg. 50) He continues, “We do not say that a successful handling of public affairs has no value, but that it has no price on the market, that its value cannot be realized in a market transaction and consequently cannot be expressed in terms of money.” (Pg. 52)
He continues, “A police department has the job of protecting a defense plant against sabotage. It assigns thirty patrolmen to this duty. The responsible commissioner does not need the advice of an efficiency expert in order to discover that he could save money by reducing the guard to only twenty men. But the question is: Does this economy outweigh the increase in risk?” (Pg. 54)
He states, “A bureaucrat differs from a nonbureaucrat precisely because he is working in a field in which it is impossible to appraise the result of a man’s effort in terms of money.” (Pg. 58)
He acknowledges, “It would be a mistake to ascribe the frustration of European bureaucratism to intellectual and moral deficiencies of the personnel.. Many civil servants published excellent treatises dealing with the problems of administrative law and statistics… Of course, the bulk of the bureaucrats were rather mediocre men. But it cannot be doubted that a considerable number of able men were to be found in the ranks of the government employees.” (Pg. 61)
He recounts, “The outstanding fact of the intellectual history of the last hundred years is the struggle against economics. The advocates of government omnipotence did not enter into a discussion of the problems involved. They called the economists names, they cast suspicion upon their motives, and they ridiculed them and called down curses upon them. It is, however, not the task of this book to deal with this phenomenon. We have to limit ourselves to the description of the role that bureaucracy played in this development.” (Pg. 89)
He concludes, “Public administration, the handline of the government apparatus of coercion and compulsion, must necessarily be formalistic and bureaucratic. No reform can remove the bureaucratic features of the government’s bureaus. It is useless to blame them for their slowness and slackness… It is of no use to criticize the bureaucrat’s pedantic observance of rigid rules and regulations. Such rules in dispensable if public administration is not to slip out of the hands of the top executives and degenerate into the supremacy of subordinate clerks.” (Pg. 131)
He ends, “The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and by a resistance to every kind of improvement. They call themselves democrats, but the yearn for dictatorship. They call themselves revolutionaries, but they want to make the government omnipotent… Against all this frenzy of agitation there is but one weapon available: reason.” (Pg. 134)
This book may interest those studying Austrian economics, and economic history.
January 15, 2023
Great passages are included in this book some of which I chose to quote below.
"All specialists, whether businessmen or professional
people, are fully aware of their dependence on the
consumers’ directives. Daily experience teaches them that,
under capitalism, their main task is to serve the consumers.
Those specialists who lack an understanding of the
fundamental social problems resent very deeply this
“servitude” and want to be freed. The revolt of narrow-minded experts is one of the powerful forces pushing toward
general bureaucratization."
"Every half-wit can use a whip and force other people to
obey. But it requires brains and diligence to serve the public.
Only a few people succeed in producing shoes better and
cheaper than their competitors. The inefficient expert will
always aim at bureaucratic supremacy. He is fully aware of
the fact that he cannot succeed within a competitive
system. For him all-round bureaucratization is a refuge.
Equipped with the power of an office he will enforce his
rulings with the aid of the police."
"At the bottom of all this fanatical advocacy of planning
and socialism there is often nothing else than the intimate
consciousness of one’s own inferiority and inefficiency. The
man who is aware of his inability to stand competition
scorns “this mad competitive system.” He who is unfit to
serve his fellow citizens wants to rule them."
"German Marxians coined the dictum: If socialism is
against human nature, then human nature must be
changed. They did not realize that if man’s nature is
changed, he ceases to be a man. In an all-round
bureaucratic system neither the bureaucrats nor their
subjects would any longer be real human beings."
"All specialists, whether businessmen or professional
people, are fully aware of their dependence on the
consumers’ directives. Daily experience teaches them that,
under capitalism, their main task is to serve the consumers.
Those specialists who lack an understanding of the
fundamental social problems resent very deeply this
“servitude” and want to be freed. The revolt of narrow-minded experts is one of the powerful forces pushing toward
general bureaucratization."
"Every half-wit can use a whip and force other people to
obey. But it requires brains and diligence to serve the public.
Only a few people succeed in producing shoes better and
cheaper than their competitors. The inefficient expert will
always aim at bureaucratic supremacy. He is fully aware of
the fact that he cannot succeed within a competitive
system. For him all-round bureaucratization is a refuge.
Equipped with the power of an office he will enforce his
rulings with the aid of the police."
"At the bottom of all this fanatical advocacy of planning
and socialism there is often nothing else than the intimate
consciousness of one’s own inferiority and inefficiency. The
man who is aware of his inability to stand competition
scorns “this mad competitive system.” He who is unfit to
serve his fellow citizens wants to rule them."
"German Marxians coined the dictum: If socialism is
against human nature, then human nature must be
changed. They did not realize that if man’s nature is
changed, he ceases to be a man. In an all-round
bureaucratic system neither the bureaucrats nor their
subjects would any longer be real human beings."
January 12, 2018
Bureaucracy is a classic. Von Mises lays out the case for free enterprise clearly. His argument is based on the distinction between bureaucratic management and profit management. In the latter, the measure of success is profit, pure and simple. Firms that cannot satisfy the consumer, that cannot profit, die. In bureaucracies, it is much more complex. There is no single measure of success. So, in the end, bureaucrats must satisfy the rules and regulations the governments create to hold them in check.
Despite the deficiencies of bureaucratic management, von Mises believes it has its place. There are places where profit management cannot work. This distinguishes him from some later writers who would put free market principles in place everywhere. And his characterization of the crux of bureaucratic management rings true.
Yet his vision of the way profit management works is much too simple. In particular, he believes that senior management charges their subordinates simply to create profits, then leaves them alone to do it. That does not happen in the real world.
There are other problems with his analysis, many of which stem from the era in which von Mises wrote the book. In 1944, after all, Hitler had yet to be defeated and the Soviet Union was on the verge of its biggest victory. This makes the book a period piece. All the same, it makes arguments that still echo today. And it makes them in a clear and uncompromising fashion. Whichever side of those arguments you find yourself on, Bureaucracy is well worth reading.
Despite the deficiencies of bureaucratic management, von Mises believes it has its place. There are places where profit management cannot work. This distinguishes him from some later writers who would put free market principles in place everywhere. And his characterization of the crux of bureaucratic management rings true.
Yet his vision of the way profit management works is much too simple. In particular, he believes that senior management charges their subordinates simply to create profits, then leaves them alone to do it. That does not happen in the real world.
There are other problems with his analysis, many of which stem from the era in which von Mises wrote the book. In 1944, after all, Hitler had yet to be defeated and the Soviet Union was on the verge of its biggest victory. This makes the book a period piece. All the same, it makes arguments that still echo today. And it makes them in a clear and uncompromising fashion. Whichever side of those arguments you find yourself on, Bureaucracy is well worth reading.
August 21, 2022
The world would probably be a better place if the most often set college book were Mises' "Bureaucracy" than Marx's "Communist Manifesto", although I'd settle for both being mandatory. Both of them have the advantage of being short and simple, "Bureaucracy" because paper was rationed in 1944 when it was published. That means that there's not a word wasted, and no room for obfuscation. You get a clear description of capitalism and bureaucracy, two bookends from Mises' point of view, with nothing to muddle the basic ideas.
Life was evidently simpler in 1944, especially in the United States. Mises had a boyish trust in his adopted homeland that is heart-breaking when one considers modern politics.
Life was evidently simpler in 1944, especially in the United States. Mises had a boyish trust in his adopted homeland that is heart-breaking when one considers modern politics.
"Although the evolution of bureaucratism has been very rapid in these last years, America is still, compared with the rest of the world, only superficially afflicted."Still, without the burden of disillusionment, Mises offers a clear-eyed description of the form of bureaucracy that we now know mostly as the managerial elite, that stratum of society that lies like a leaden blanket over Western societies.
"Thomas Alva Edison and Henry Ford did not have to overcome any obstacles erected by shortsighted governments and a narrow-minded public opinion."
September 17, 2021
A handy little book that definitely changed my thinking on the topic a little. Mises rightly points out that it is extremely difficult to run government like a business and yet we are prone to making dubious comparisons between the efficiency of various sectors of the private market and certain government functions. While we may agree that comparing a private postal service to a government postal service is apt, we could not compare a private postal service to the function of the legislature.
I like his point that bureaucracy is almost always worse than it should be, but some level of bureaucracy is unavoidable when it comes to government functions. He takes great pains to note, however, that the expansion of bureaucracy into areas better served by the private market is among the most serious and important political and economic issues of our time.
Definitely an easy and insightful read: 4.75/5.
I like his point that bureaucracy is almost always worse than it should be, but some level of bureaucracy is unavoidable when it comes to government functions. He takes great pains to note, however, that the expansion of bureaucracy into areas better served by the private market is among the most serious and important political and economic issues of our time.
Definitely an easy and insightful read: 4.75/5.
September 12, 2022
Bureaucracy is an introduction, in many ways, to his book ''Socialism'' and ''Omnipotent Government''. Short and clear, it is an appetizer to many of von Mises works. A few interesting points are made, for example, that, since a bureaucrat basically work in a public good context, and that there is no economic value to the processes generated by the bureaucracy itself, the bureaucrat will act in order to follow the rules, for the sakes of the legitimacy of the bureaucracy, which finds its power in the rules and laws themselves, provided by the sovereign, the state. The rigidity of the structure creates a strict contour around what is acceptable and what is not, often arbitrarily, which limits youth and innovative ideas, and idea which Mancur Olsen would probably agree with. The text would have been better if the history of the bureaucracy in Prussia would have been expanded upon, but I guess we can't have all of the good things.
June 1, 2023
کتابی متوسط از قلم و نویسندهای قَدَر قدرت.
اگر کسری از مفاهیم و نکتهسنجیهای این کتاب از میزس را نویسنده و متفکری دیگر قلمی میکرد، آن نویسنده جایگاهی بس والا در ذهن من کسب میکرد، اما فون میزسی که کنش انسانی را نوشته و به ظرافت تمام در کتاب لیبرالیسم خود، مبانی لیبرالیسم کلاسیک را شرح میدهد در این اثر نتوانسته صلابت کلام را حفظ کند. گاها میزس استدلالهایی میکند که اگر فروض و پیششرطهای آن را از دیگر آثار میزس، اقتصاد اتریشی و لیبرالیسم کلاسیک اخذ نکنیم ادعاهایی پا در هوا و ضعیف مینمایند.
بدین علت در مقام قیاس با دیگر آثار میزس، بوروکراسی، ضمن روانبودن و بینشافزا بودن از مرتبهی والایی بر خوردار نیست.
ترجمهی کتاب هم عالی بود و واژهگزینیهای آقای تدینی عالی و دقیق بود و لحن نویسنده را نیز تماما منتقل میکرد.
در نهایت پیشنهاد میکنم این کتاب را به خوانندگان اگر "لیبرالیسم" از میزس را به ترجمهی مهدی ت��ینی خواندهاند.
به نظرم اولویت با مطالعهی کتاب لیبرالیسم است.
اگر کسری از مفاهیم و نکتهسنجیهای این کتاب از میزس را نویسنده و متفکری دیگر قلمی میکرد، آن نویسنده جایگاهی بس والا در ذهن من کسب میکرد، اما فون میزسی که کنش انسانی را نوشته و به ظرافت تمام در کتاب لیبرالیسم خود، مبانی لیبرالیسم کلاسیک را شرح میدهد در این اثر نتوانسته صلابت کلام را حفظ کند. گاها میزس استدلالهایی میکند که اگر فروض و پیششرطهای آن را از دیگر آثار میزس، اقتصاد اتریشی و لیبرالیسم کلاسیک اخذ نکنیم ادعاهایی پا در هوا و ضعیف مینمایند.
بدین علت در مقام قیاس با دیگر آثار میزس، بوروکراسی، ضمن روانبودن و بینشافزا بودن از مرتبهی والایی بر خوردار نیست.
ترجمهی کتاب هم عالی بود و واژهگزینیهای آقای تدینی عالی و دقیق بود و لحن نویسنده را نیز تماما منتقل میکرد.
در نهایت پیشنهاد میکنم این کتاب را به خوانندگان اگر "لیبرالیسم" از میزس را به ترجمهی مهدی ت��ینی خواندهاند.
به نظرم اولویت با مطالعهی کتاب لیبرالیسم است.
November 26, 2023
"Bureaucracy" is a classic work by Austrian economist and social philosopher Ludwig von Mises, first published in 1944. In this succinct yet influential book, Mises examines the nature and consequences of bureaucracy within the context of government administration and intervention in economic affairs.
Mises begins by defining bureaucracy as the management of societal affairs through a hierarchical organization characterized by specialized offices, procedures, and a division of labor. He acknowledges the necessity of administrative structures to carry out the functions of government but is critical of the inherent inefficiencies and challenges posed by bureaucratic systems.
A key theme in "Bureaucracy" is Mises' exploration of the economic aspects of bureaucracy. He contends that bureaucracy is an impediment to effective economic coordination due to its inherent limitations in processing and interpreting dispersed and dynamic information. Mises argues that the competitive market, with its price system, is a superior mechanism for efficiently allocating resources, as it harnesses the decentralized knowledge of individuals and adjusts to changing conditions.
Mises also addresses the role of bureaucracy in the context of government intervention. While recognizing the perceived need for government regulation in certain situations, he cautions against the expansion of bureaucratic powers beyond essential functions. Mises argues that an ever-growing bureaucracy tends to stifle individual initiative, creativity, and entrepreneurship, ultimately hindering economic progress.
Furthermore, "Bureaucracy" explores the potential for bureaucracies to develop their own interests and objectives, often diverging from the goals of the broader society. Mises warns against the emergence of a bureaucratic class with its own set of priorities, detached from the interests of the citizens it is meant to serve.
In conclusion, "Bureaucracy" is a thought-provoking analysis of the challenges and pitfalls associated with bureaucratic systems, particularly in the realm of economic governance. Mises' emphasis on the importance of individual freedom, market processes, and limited government intervention remains relevant in discussions about the role of bureaucracy in contemporary societies. The book serves as a foundational work in understanding the economic and societal implications of bureaucratic structures and remains a valuable resource for those interested in the intersection of economics and governance.
"The socialists assert that capitalism is degrading, that it is incompatible with man's dignity, that it weakens man's intellectual abilities and spoils his moral integrity. Under capitalism, they say, everybody must regard his fellow men as competitors. Man's innate instincts of benevolence
and companionship are thus converted into hatred and a ruthless striving for personal success at the expense of all other people. But socialism will restore the virtues of human nature. Amicableness, fraternity, and comradeship will be the characteristic features of a future man. What is needed first is to eliminate this worst of all evils, competition.
However, competition can never be eliminated. As there will always be positions that men value more highly than other positions, people will strive for them and try to outstrip their rivals. It is immaterial whether we call this emulation rivalry or competition. At any rate, in some way or other, it must be decided whether or not a man ought to get the job he is applying for. The question is only what kind of competition should exist."
"German Marxians coined the dictum: If socialism is against human nature, then human nature must be changed. They did not realize that if man's nature is changed, he ceases to be a man. In an all-round bureaucratic system, neither the bureaucrats nor their subjects would any longer be real human beings."
"The inefficient expert will always aim at bureaucratic supremacy. He is fully aware of the fact that he cannot succeed within a competitive system. For him, all-round bureaucratization is a refuge.
Equipped with the power of an office he will enforce his rulings with the aid of the police.
At the bottom of all this fanatical advocacy of planning and socialism, there is often nothing else than the intimate consciousness of one's own inferiority and inefficiency. The man who is aware of his inability to stand competition scorns "this mad competitive system." He who is unfit to serve
his fellow citizens wants to rule them."
"The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and by a resistance to every kind of improvement. They call themselves liberals, but they are intent on abolishing liberty. They call themselves democrats, but they yearn for dictatorship. They call themselves revolutionaries, but they want to make the government omnipotent. They promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office. Every man but one is a subordinate clerk in a bureau. What an alluring utopia! What a noble cause to fight!"
Mises begins by defining bureaucracy as the management of societal affairs through a hierarchical organization characterized by specialized offices, procedures, and a division of labor. He acknowledges the necessity of administrative structures to carry out the functions of government but is critical of the inherent inefficiencies and challenges posed by bureaucratic systems.
A key theme in "Bureaucracy" is Mises' exploration of the economic aspects of bureaucracy. He contends that bureaucracy is an impediment to effective economic coordination due to its inherent limitations in processing and interpreting dispersed and dynamic information. Mises argues that the competitive market, with its price system, is a superior mechanism for efficiently allocating resources, as it harnesses the decentralized knowledge of individuals and adjusts to changing conditions.
Mises also addresses the role of bureaucracy in the context of government intervention. While recognizing the perceived need for government regulation in certain situations, he cautions against the expansion of bureaucratic powers beyond essential functions. Mises argues that an ever-growing bureaucracy tends to stifle individual initiative, creativity, and entrepreneurship, ultimately hindering economic progress.
Furthermore, "Bureaucracy" explores the potential for bureaucracies to develop their own interests and objectives, often diverging from the goals of the broader society. Mises warns against the emergence of a bureaucratic class with its own set of priorities, detached from the interests of the citizens it is meant to serve.
In conclusion, "Bureaucracy" is a thought-provoking analysis of the challenges and pitfalls associated with bureaucratic systems, particularly in the realm of economic governance. Mises' emphasis on the importance of individual freedom, market processes, and limited government intervention remains relevant in discussions about the role of bureaucracy in contemporary societies. The book serves as a foundational work in understanding the economic and societal implications of bureaucratic structures and remains a valuable resource for those interested in the intersection of economics and governance.
"The socialists assert that capitalism is degrading, that it is incompatible with man's dignity, that it weakens man's intellectual abilities and spoils his moral integrity. Under capitalism, they say, everybody must regard his fellow men as competitors. Man's innate instincts of benevolence
and companionship are thus converted into hatred and a ruthless striving for personal success at the expense of all other people. But socialism will restore the virtues of human nature. Amicableness, fraternity, and comradeship will be the characteristic features of a future man. What is needed first is to eliminate this worst of all evils, competition.
However, competition can never be eliminated. As there will always be positions that men value more highly than other positions, people will strive for them and try to outstrip their rivals. It is immaterial whether we call this emulation rivalry or competition. At any rate, in some way or other, it must be decided whether or not a man ought to get the job he is applying for. The question is only what kind of competition should exist."
"German Marxians coined the dictum: If socialism is against human nature, then human nature must be changed. They did not realize that if man's nature is changed, he ceases to be a man. In an all-round bureaucratic system, neither the bureaucrats nor their subjects would any longer be real human beings."
"The inefficient expert will always aim at bureaucratic supremacy. He is fully aware of the fact that he cannot succeed within a competitive system. For him, all-round bureaucratization is a refuge.
Equipped with the power of an office he will enforce his rulings with the aid of the police.
At the bottom of all this fanatical advocacy of planning and socialism, there is often nothing else than the intimate consciousness of one's own inferiority and inefficiency. The man who is aware of his inability to stand competition scorns "this mad competitive system." He who is unfit to serve
his fellow citizens wants to rule them."
"The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and by a resistance to every kind of improvement. They call themselves liberals, but they are intent on abolishing liberty. They call themselves democrats, but they yearn for dictatorship. They call themselves revolutionaries, but they want to make the government omnipotent. They promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office. Every man but one is a subordinate clerk in a bureau. What an alluring utopia! What a noble cause to fight!"
October 19, 2020
PL: Dość ciekawa pozycja, którą mam wrażenie można streścić w kilku zdaniach, ale i tak warto po nią sięgnąć przynajmniej z dwóch powodów - jest krótka, a po drugie, dzięki uprzejmości PAFERE, ebook jest za darmo. Zmienia odrobinę perspektywę spojrzenia na biurokrację i daje mocnego prztyczka w nos zwolennikom kontroli i mnożenia urzędów.
ENG: Quite interesting book, which I suppose it could be condensed in few sentences. However it is worth to read due to it is short and Polish version of ebook is free thanks to PAFERE organisation.
Book changes perception of bureaucracy and gives at least few strong arguments against control and office multiplication supporters.
ENG: Quite interesting book, which I suppose it could be condensed in few sentences. However it is worth to read due to it is short and Polish version of ebook is free thanks to PAFERE organisation.
Book changes perception of bureaucracy and gives at least few strong arguments against control and office multiplication supporters.
June 26, 2022
The book is an attempt to highlight the dangers posed by bureaucratization of Economy (which he identifies a tool and first step towards a Totalitarian One Party Command Economy like Nazi Germany or Soviet Russia, which he defines as socialism) and the benefits of profit minded enterprise in a democratic capitalist economy. Von Mises' ideas may appear a bit too extreme at the start but as he goes on to define his terms and expand upon them, they start to make more sense. He argues that corruption, ill thought policies etc are not the only problem of bureaucratization, instead the very idea is fundamentally flawed.
July 26, 2018
for contemporary society, this book is relevant as hell. People are trying to get everything while doing nothing and do so with government, they think, that government has an unlimited money and cruel capitalists are plundering mere workers. They give a credit to enormous monster, which is bureaucracy and think, that it will solve every problem which they face. What a laziness of people. We must know, that technological advance, which brings welfare to the people, is only possible in capitalist, competitive system.
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