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Bureaucracy in America

Around election time every year, a few people are always heard to say that the kind of people we really need in civil government are those who can reduce the effects of bureaucracy and make the government run more efficiently.

  • Timothy D. Terrell,
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Around election time every year, a few people are always heard to say that the kind of people we really need in civil government are those who can reduce the effects of bureaucracy and make the government run more efficiently. Some want to "run government like a business," so that the government will cut costs like a business and produce the goods and services the citizenry really want. Government bureaucrats are portrayed as unintelligent, unimaginative drones who do not have the common sense to see when their rules are contrary to the "public good." Maybe reforming the government bureaucracy is as simple as getting politicians to appoint bright, well-motivated individuals from the business world to run government agencies.

Though this solution may seem attractive, it misses something important. There are problems inherent in civil administration itself that will corrupt any "outsider" who believes that bureaucracy can be successfully expunged from the halls of government. It is not so much a matter of succumbing to the temptations of power as it is the necessity that government use bureaucratic forms of administration. If one wishes to limit bureaucracy, one must limit the State itself.

Lately I have been led, through several conversations, to consider again the issue of what the biblical limits to the State really are. If a particular function is not explicitly given to the State in the Bible, is it therefore forbidden to the State? Does it then become a matter of wisdom as to whether or not we want to give the State authority in that area? Is there, in other words, a regulative principle of the State? It has not been an easy question to answer to my satisfaction. Yet even without a bulletproof argument explicitly from Scripture for limiting the State to the functions positively required of it in the Bible, there are powerful arguments for what we might call the minimalist State. The minimalist State is a State that, for whatever reason, does not stray from positive biblical requirements (e.g., organizing national defense, or punishing murderers and other criminals). The problem of bureaucracy, as it turns out, is one of the better arguments for the minimalist State.

One of the greatest works on bureaucracy is Ludwig von Mises's little book Bureaucracy, which appeared in 1944. In it, Mises contends that it is misguided and futile to think that placing businessmen in charge of government agencies is going to cure the problem of bureaucracy. An entrepreneur appointed to head up a bureau becomes a bureaucrat, and not necessarily a better one than his predecessor. Because a government agency by definition is not a profit-seeking entity, his objective is no longer profit, but compliance with the rules and the regulations. The hiring of management consultants is subject to the same difficulties. Because a government bureaucracy is not selling a product in an open market, there are no prices. In a free economy, prices provide crucial information about the relative costs and benefits of using resources in different ways. Without that information, bureaucrats are left without much to go on in deciding how to allocate goods and services. "Lenin was mistaken in holding up the government's bureaus as a pattern for industry. But those who want to make the management of the bureaus equal to that of the factories are no less mistaken," wrote Mises.1

It is not as though bureaucrats lack talent, or that entrepreneurs placed in a government bureaucracy lose I.Q. points. The problem is that the bureaucratic setting does not provide the incentives for efficiency that exist in the private sector. As Mises argues, bureaucrats may not have any "intellectual or moral deficiency," or "incapacities of the personnel." Rather, bureaucratic weakness is

…an outcome of the unavoidable weakness of any administration of public affairs. The lack of standards which could…ascertain success or nonsuccess in the performance of an official's duties creates insoluble problems. It kills ambition, destroys initiative and the incentive to do more than the minimum required. It makes the bureaucrat look at instructions, not at material and real success.2

Without the profit system to provide an indicator of success or failure, the bureaucrat is judged by the scrupulosity of obedience to the regulations. At the same time, costs become the bureaucrat's friend. More employees in the agency mean a larger budget and pay raises for the bureaucrat.

There is really no alternative to bureaucracy, whenever the government steps into a new role. Mises says in the preface to the 1962 edition of Bureaucracy that in some fields (e.g., police protection) bureaucracy is "the only possible method for the conduct of affairs." With the growth of government, therefore, bureaucracy grows. "A government cannot do without bureaus and bureaucratic methods. And as social cooperation cannot work without a civil government, some amount of bureaucracy is indispensable. What people resent is not bureaucratism as such, but the intrusion of bureaucracy into all spheres of human life and activity."3

Mises points out that the typical emotional attack on bureaucracy misses the point. It does not, as it should, place blame for the bureaucracy on factors outside the bureaucracy.

Those who criticize bureaucracy make the mistake of directing their attacks against a symptom only and not against the seat of the evil. It makes no difference whether the innumerable decrees regimenting every aspect of the citizen's economic activities are issued directly by a law, duly passed by Congress, or by a commission or government agency to which power has been given by a law and by the allocation of money. What people are really complaining about is the fact that the government has embarked upon such totalitarian policies, not the technical procedures applied in their establishment. It would make little difference if Congress had not endowed these agencies with quasilegislative functions and had reserved to itself the right to issue all decrees required for the conduct of their functions.4 [p. 8]

Reducing the effects of bureaucracy, then, requires limiting the scope of government.

[B]ureaucracy in itself is neither good nor bad. It is a method of management which can be applied in different spheres of human activity. There is a field, namely, the handling of the apparatus of government, in which bureaucratic methods are required by necessity. What many people nowadays consider an evil is not bureaucracy as such, but the expansion of the sphere in which bureaucratic management is applied.5

Here, then, we see one of the chief virtues of the minimalist State. A State that is as small as possible — that performs the basic functions of providing national defense and punishing that set of sins rightfully called "crimes" — is a State that will produce the fewest problems of bureaucracy. If we restrict civil government to the powers positively laid out for it in the Bible, we minimize the costs of bureaucracy.


1. Ludwig von Mises, Bureaucracy (Grove City, PA: Libertarian Press, 1983 [1944]), p. 57.

2. Ibid., p. 61.

3. Ibid., p. 20.

4. Ibid., p. 8.

5. Ibid., p. 48.

  • Timothy D. Terrell

Timothy Terrell is associate professor of economics at Wofford College in Spartanburg, South Carolina. He is assistant editor of the Quarterly Journal of Austrian Economics and is an Associated Scholar with the Mises Institute.

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