Photo Credit: Artem Podrez

Credit to @misslavegas for the title of my current article! I think attaching the idea of insanity to the term is a more honest and accurate description of the misuse and abuse of bureaucratic management.

I already mentioned in my previous post that there is a proper place for bureaucracy, and that is for a civil government to function to achieve cooperation and order in society. And that should be confined to protect people’s life, freedom, and property. Going beyond that would inevitably result in the ruin of many kinds, and our present article will deal with the first two types of such destructive results.

The insights in this article are taken from the 5th chapter of Mises’ book, Bureaucracy. In that chapter, he elaborated on the social and political consequences of bureaucratic management. Not sure if I need to apologize for expanding our questions this time from three to five. Anyhow, I hope that as you read the material, the following questions will be fairly answered:

• How would a private citizen respond to the bureaucrat’s attitude of contempt for human laws?
• Why do people seek a career in civil service? Is it really for the sake of public service as they want us to believe?
• Why is the increase in government spending seem to be unstoppable?
• What is the result of the bureaucratization of the mind?
• What is the worst social and political outcome of bureaucratization?

Contempt for Human Laws

In responding to the first question, we need to understand first what Mises’ describes as the bureaucrat’s contemptuous attitude towards human laws. At the outset, this implication seems to be farfetched and puzzling for bureaucratic management is characterized by strict compliance with regulations. And besides, the office of a civil servant is established through a legislative act (p. 76). And so, it is unthinkable for bureaucrats to entertain this kind of attitude as if they are operating on a different level of legislation. The only justification I observe for doing this is the bureaucrat's loyalty to the interests of the State.

For the advocates of state interference, a bureaucrat plays a very unique role. Mises elaborated on this in his concept of "the essence of the philosophy of bureaucratism" (p. 75). In this concept, a bureaucrat is perceived as the faithful servant of the State who wishes nothing but to implement the will of his master, and whoever dares to challenge that will is considered a social menace or the enemy of the State. This is the exact opposite of an individualist who is motivated by personal interests.

A bureaucrat is idealized. He is considered sincere and thinks of nothing else but his solemn task, to demolish the selfishness of the people. Moreover, a bureaucrat is "the champion of the eternal divine law. He does not feel morally bound by the human laws. . ." (ibid.). So, with this kind of intellectual atmosphere, a bureaucrat appears to be exempted from legal penalties provided that the purposes he serves are those of the State. It is, as if, a bureaucrat operates on a higher plane beyond human laws. This kind of mindset was common before the rise of totalitarian states in the past.

With such an intellectual defense in favor of bureaucracy, how would a private citizen respond? Mises provided an appropriate response:

You may be excellent and lofty men, much better than we other citizens are. We do not question your competence and your intelligence. But you are not the vicars of a god called 'the State.' You are servants of the law, the duly passed laws of our nation. It is not your business to criticize the law, still less to violate it. In violating the law you are perhaps worse than a good many of the racketeers, no matter how good your intentions may be. For you are appointed, sworn, and paid to enforce the law, not to break it (p. 76).

Since the above bureaucratic attitude is closely connected to the conflict between statist and individualist philosophies, I think it is appropriate at this point to mention the earlier section of the present chapter. There Mises introduced a very important distinction to help us clarify contemporary issues made blurred by statist ideas:

The political conflicts are no longer seen as struggles between groups of men. They are considered a war between two principles, the good and the bad. The good is embodied in the great god State, the materialization of the eternal idea of morality, and the bad in the 'rugged individualism' of selfish men. In this antagonism, the State is always right and the individual is always wrong. The State is the representative of the commonweal, of justice, civilization, and superior wisdom. The individual is a poor wretch, a vicious fool (p. 74).

Bureaucratic Complacency

Turning to the second question, we will find the answer in Mises’ long exposition about the unavoidable long-term outcome of bureaucratic management, which is complacency.

To see the significance of this second implication, we need to understand that though bureaucrats are paid to implement the law, the body of laws is not always perfect. It is a fact that unwise laws exist. And since the primary duty of a bureaucrat is to implement the laws of the land, it is not his fault if there are laws detrimental to the public good.

The same can be said with the merits of his actions. Though the services of civil servants are necessary to maintain order in society, this also holds in the case of other menial jobs such as scavengers and dishwashers. This is because under the division of labor everyone depends on the services offered by others. This social arrangement is important for those who specialize in their chosen fields. Considering this, bureaucrats, therefore, do not possess special claims "to the epithet pillar of society" (p. 77).

At this point, Ludwig von Mises recognized the proper place of altruism in the development of civilization. However, contrary to ideas propagated by German statist philosophers, he argued that people search for careers in public service not because of altruistic goals, but because of higher monetary incentives, ease of work, and job security. For Mises, to maintain altruistic goals is nonsense. He further explained the real motivation why people seek a career in civil service:

In all countries, most people joined the staff of the government offices because the salary and the pension offered were higher than what they could expect to earn in other occupations. They did not renounce anything in serving the government. Civil service was for them the most profitable job they could find (p. 79).

Furthermore, Mises described that these personal motivations under a bureaucratic system finally resulted in complacency as far as the civil service in Europe was concerned:

The incentive offered . . . consisted not only in the level of the salary and the pension; many applicants, and not the best ones, were attracted by the ease of the work and by the security. As a rule, government jobs were less exigent than those in business. Besides, the appointments were for life. An employee could be dismissed only when a kind of judicial trial had found him guilty of heinous neglect of his duties. In Germany, Russia, and France, every year many thousands of boys whose life plan was completely fixed entered the lowest grade of the system of secondary education. They would take their degrees, they would get a job in one of the many departments, they would serve thirty or forty years, and then retire with a pension. Life had no surprises and no sensations for them, everything was plain and known beforehand" (ibid.).

Increase in Government Spending

Shifting to the third question regarding the seemingly unstoppable nature of government spending, for Ludwig von Mises this is due to the fact of dual membership of a bureaucrat. He is both an employee and an employer. By employee, we simply understand "a government employee". By employer, we see that "under a democratic constitution," he is "a voter and as such a part of the sovereign, his employer" (p. 80). Due to this double membership, a conflict of interest emerged, and it is always the bureaucrat's interest as an employee that prevails over his interest as an employer. Practically, this means that "he gets much more from the public funds than he contributes to them" (ibid.). Mises explained further the relationship between this dual membership and concern for a higher salary:

This double relationship becomes more important as the people on the government's payroll increase. The bureaucrat as the voter is more eager to get a raise than to keep the budget balanced. His main concern is to swell the payroll" (ibid.).

Mises narrates that it is this unfortunate deterioration that contributed to the downfall of democratic institutions both in Germany and France. He explains that a considerable number of the electorate looks to the state as the source of income (ibid.). This was true in the case of "hosts of public employees," those employed in nationalized corporations, "the receivers of the unemployment dole and social security benefits, as well as the farmers and some other groups which the government directly or indirectly subsidized. Their main concern was to get more out of the public funds" (ibid.).

Mises compared this lamentable decline to the situation in the 19th century. During that period, government expenditures were restricted as much as possible. Mises' description remains true wherein today thrift is regarded as detestable, and "boundless spending was considered a wise policy" (p. 81).

With this kind of trend, Mises claims that representative democracy will not last long. Its destruction depends on the extent of the number of bureaucrats depending on a government payroll. Once this parasitic trend spreads all over the system that leads to the destruction of the productive sector of the economy, we know that the collapse is at hand. Mises saw this as "the antinomies inherent in present-day constitutional issues" and has led many to despair about the future of democracy (ibid.).

University Graduates as Champions of Statist Ideals

Our economist identified that the bureaucratization of the mind of university students is one of the social and political implications of bureaucratic management. I think this is next to the worst simply because man's freedom to think has been suppressed in educational institutions. This was made possible through the expulsion of economic education from the universities. As a result, statist ideas became widespread.

Mises' analysis is surprising and appears unfounded for universities throughout the world still teaching economics. However, in the mind of Mises, the kind of economics being taught in the academe from his time onward is not real economics, but "wirtschaftliche Staatswissenschaften (economic aspects of political science)" (p. 83). Notice how Mises described the absence of economics in mainstream education and the factors that contributed to such condition:

The modern trend toward government omnipotence and totalitarianism would have been nipped in the bud if its advocates had not succeeded in indoctrinating youth with their tenets and in preventing them from becoming acquainted with the teachings of economics (p. 81).

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, cast suspicion upon their motives, ridiculed them, and called down curses upon them (p. 82).

In most countries of the European continent, the universities are owned and operated by the government. They are subject to the control of the Ministry of Education . . . The teachers are civil servants like patrolmen and customs officers. Nineteenth-century liberalism tried to limit the right of the Ministry of Education to interfere with the freedom of university professors to teach what they considered true and correct. But as the government-appointed the professors, it appointed only trustworthy and reliable men, that is, men who shared the government's viewpoint and were ready to disparage economics. and to teach the doctrine of government omnipotence" (ibid.).

Mises made one interesting observation about the statement delivered by Emil du Bois-Reymond in 1870. The latter said: "We, the University of Berlin, quartered opposite the King's palace, are, by the deed of our foundation, the intellectual bodyguard of the House of Hohenzoller" (ibid.). For Mises, this statement "characterizes the spirit of German universities" in the 19th century. This statement is important for Bois-Reymond said this "in his double capacity as Rector of the University of Berlin and as President of the Prussian Academy of Science" (ibid.).

The reason why economics was outlawed from European universities was due to the hostility of statist advocates against the concept of economic laws. They considered such a concept "a kind of rebellion" and "heresy" (p. 83). For if the economists were correct that economic laws exist, "then governments cannot be regarded as omnipotent. . ." (ibid.).

And so, in order for the bureaucratization of the mind to be successful, economics professors were screened and books that teach economics perspectives contrary to the view of the state could no longer "be found in the libraries of the university seminars" (p. 86). The only qualities required for professors of "social sciences were disparagement of the operation of the market system and enthusiastic support of government control" (ibid.). Mises described the result of the bureaucratization of the mind:

All that the students of the social sciences learned from their teachers was that economics is a spurious science and that the so-called economists are, as Marx said, sycophantic apologists of the unfair class interests of bourgeois exploiters, ready to sell the people to big business and finance capital. The graduates left the universities convinced advocates of totalitarianism either of the Nazi variety or of the Marxian brand (p. 86).

And so, Emil du Bois-Reymond was right. Universities are the intellectual bodyguards of the State and they were successful in fulfilling their duties. This explains the widespread influence of European totalitarianism. "The universities paved the way for the dictators" (p. 87).

The Supremacy of the Tyrant's Will

This is the final and the worst social and political implication of bureaucratization. The other way to describe this implication is the gradual erosion of liberty. Again, to clearly see the seriousness of this implication, better contrast the society under market and the society under government omnipotence.

Under a market society, the public is regarded as supreme. It is the will of the masses that determine the activities of the specialists. The consumers are the decision-makers whether an enterprise will succeed or not. Again, Mises briefly explains how this supremacy operates:

He who is eager to earn, to acquire, and to hold wealth is under the necessity of serving the consumers. The profit motive is the means of making the public supreme. The better a man succeeds in supplying the consumers, the greater become his earnings (p. 88).

Profit is the reward for the best fulfillment of some voluntarily assumed duties. It is the instrument that makes the masses supreme. The common man is the customer for whom the captains of industry and all their aides are working (ibid.).

However, due to government interference in private enterprises through bureaucratic operation, the sovereign will of the people is subtly suppressed in the name of protecting their interests. Such interference as has already been elaborated elsewhere will naturally lead to low-quality products and higher prices. In its final stage, the logical result of such intervention is the submission of the people's will to the tyrant's will. And so, in contradistinction to a market society, under government omnipotence the tyrant's will is supreme. For Mises, the critical question to ask is: "Who should be the master? Should a man be free to choose his own road toward what he thinks will make him happy? Or should a dictator use his fellowmen as pawns in his endeavors to make himself, the dictator, happier?" (p. 91). Again, Mises asked: "Who should run the country? The voters or the bureaucrats?" (ibid.).

But of course, the will of the tyrant is done through the help of an expert who assumes to know better what's good for the people. This expert is fully aware that he cannot implement his plan within a competitive system, and so he is hostile to it, and that's why he seeks bureaucratic protection. Mises saw this kind of attempt as nothing but socialism and central planning, which at the bottom of it is the "consciousness of one's own inferiority and inefficiency" (p. 92). Mises ends the chapter: "He who is unfit to serve his fellow citizens wants to rule them" (ibid.).

Conclusion

Sorry for the long content. I hope I did not waste your time reading this article. As you can see by now, the reasoning and the logic in the fifth chapter of the book are tight and sometimes difficult to follow. The path to understanding isn’t easy particularly when it comes to socio-economic and political issues of our time. However, I believe that Mises’ arguments are sound and provide a more common sense and realistic assessment of what is going on in most societies today.

Grace and peace!

References:

Mises, Ludwig von. (1944). Bureaucracy. New Haven: Yale University Press.

Social and Political Implications of Bureaucratization

Bureaucracy and the Right Direction