Bureaucracy

Bureaucracy cover

Ludwig von Mises's Bureaucracy (Yale University Press, 1944) compares two methods: profit management, and administration whose results carry no market price. He calls bureaucracy neutral in itself, necessary for lawful government, and targets its extension across all production, where rigid rules would paralyze initiative. His charge spares officials' character.

A firm's branch accounts let headquarters delegate with one instruction, make the branch pay, since waste appears as loss. A police chief often improves service by spending more, and success returns no revenue, so free hands would overrun the appropriation. Authorized budgets and detailed rules constrain inputs. Good government can be valuable without a selling price, Mises stresses.

The same rules restrain officials empowered to imprison or shoot. In his 1944 example, twenty patrolmen cost less than thirty, but the added protection has no price, so Congress and the executive decide. Government enterprises inside a market can still calculate, he grants.

The book's distinctions help diagnose whether a dispute concerns managerial competence, accountability rules or a political choice about how much service to fund.

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