About This Blog

Ludwig von Mises (1881-1973) was the greatest economist of my time. His greatest works can be accessed here at no charge.

Mises believed that property, freedom and peace are and should be the hallmarks of a satisfying and prosperous society. I agree. Mises proved beyond a shadow of a doubt that the prospect for general and individual prosperity is maximized, indeed, is only possible, if the principle of private property reigns supreme. What's yours is yours. What's mine is mine. When the line between yours and mine is smudged, the door to conflict opens. Without freedom (individual liberty of action) the principle of private property is neutered and the free market, which is the child of property and freedom and the mother of prosperity and satisfaction, cannot exist. Peace is the goal of a prosperous and satisfying society of free individuals, not peace which is purchased by submission to the enemies of property and freedom, but peace which results from the unyielding defense of these principles against all who challenge them.

In this blog I measure American society against the metrics of property, freedom and peace.

Sunday, November 27, 2011

Why Progressives Love Bureaucrats

Imagine the million and one tasks you do each day, from the simple to the sublime. You might buy food, go to work, maintain your car, provide healthcare for your kids, buy flowers for your wife and so on. Each of these tasks requires research, planning, a decision and, finally, action. Now imagine a world of seven billion individuals, each of whom is doing a million and one tasks of his or her own, researching options, planning, making decisions and acting. The scope and depth of this cumulative, daily, human action is truly mindboggling.

Now imagine a world wherein these millions upon millions of tasks are done not by individuals, but by an "authority" of some kind. Imagine a world wherein an "expert" in nutrition is in charge of buying food for every individual, a genius "Surgeon General" is in charge of providing healthcare for your family, a transportation "Czar" is in charge of getting you from here to there and a nature-sensitive ecologist is in charge of deciding where and when particular flowers may be picked and sold. Such a world is almost unimagineable. No one bureaucrat, no matter how smart, could personally act on behalf of seven billion people in the world, or even the mere 300-million people who live in the United States.

So, imagine now that these bureaucrats have assistants and that their assistants have assistants, so many assistants, in fact, that a particular assistant could personally act on behalf of all the individuals and families in a particular neighborhood or on a particular street. Moreover, imagine that these neighborhood assistants had access to the most powerful computers and the pooled resources of all US citizens. Could such a system "work?" Could the economies of scale -- central planning, mass production, bulk buying and so forth -- make such a system more efficient and effective than the "unplanned chaos" of every individual acting on his own behalf?

Although such a comprehensive bureaucratic system is not obviously impossible, reasonable people should still ask: Why attempt such a thing? What's the point? Isn't it obvious that it's far more practical, effective and efficient, when considered from the point of view of each individual, for Americans to do things for themselves rather than to put themselves in the care of some nameless, faceless bureaucrat?

Apparently not.

If it were obvious, a significant portion of the American population would not regularly vote for political candidates who promise to substitute bureaucratic action for individual action.

Socialists, progressives and collectivists -- authoritarians all -- might argue that the scenario I asked you to imagine is designed to be purposedly absurd. No progressive politician wants to put a government bureaucrat in charge of the daily, mundane chores Americans now do for themselves. Progressives want the democratic process to decide only the "big issues," i.e., the democratic process would decide the overall benefit and fairness of particularly broad "policy areas" of human action, such as healthcare, retirement security, education, transportation, the environment, and so forth. The "masses," they say, would remain free to manage their own "personal" affairs within the context of these democratically decided "big issues."

This argument has a certain appeal. Rather than leave life and death decisions and actions regarding these "big issues" in the hands of unknowledgeable laymen, doesn't it make sense to have scientists and academic "experts" in positions of authority to offer guidance on these "big issues?" The cummulative knowledge of these "experts," pooled with the resources of the many, would be certain to benefit each ordinary American far beyond their own individual capabilities and resources.

Here's the rub. Although such a "big issue" bureaucratic democracy may be well-intentioned, it could not be free. Merely passing a "big issue" law or creating a "big issue" rule or regulation does not ensure that all Americans will meekly obey it. Will these "big issue" politicians and bureaucrats be content to allow their political mandates and academic expertise serve as "guidance" only? Or will these authorities insist upon some means by which their "big issue" decisions are enforced as mandatory directives?

I think we know the answer to that question. Experience tells us that federal bureaucrats enjoy having power as well as position. They eagerly appoint assistants, and assistants to their assistants. They mandate that an assistant is assigned to each neighborhood and hamlet in America, there to enforce the authority of the head bureaucrat in Washington.

So we've come full circle. My original, supposedly "absurd" scenario is not so absurd after all. But, when considered from the point of view of each American citizen, can such a "big issue" democratic bureaucracy possibly be more effective and efficient than individuals acting of their own accord?

There are two reasons why individual action is far more effective and efficient than bureaucratic action.  The first reason is what Friedrich A. Hayek called "the problem of the utilization of knowledge." Hayek describes this knowledge problem as follows in his essay: "The Use Of Knowledge In Society:"
The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate "given" resources—if "given" is taken to mean given to a single mind which deliberately solves the problem set by these "data." It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.
In other words, individuals know more about their own specific circumstances, and their own particular wants and desires than any bureaucrat could possibly know. All the bureaucrat is able to do is gather economic data and form general opinions. It is absolutely impossible for him to know the ends and goals each particular individual chooses to pursue. In truth, bureaucrats are not interested in knowing about the specific dreams of everyday individuals. Bureaucrats are only interested in making sure that individual Americans do what they are directed to do. Therefore, when considered from the point of view of the individual and in the context of the wants and dreams of the individual, the bureaucratic mindset can only result in ineffectiveness, inefficiency and abject dissatisfaction.

Moreover, Hayek recognizes that, even if the bureaucrat could know the wants and dreams of individual Americans, he could not possibly know enough to satisfy these wants and make these dreams come true. Even with the most powerful computers at his disposal, even with the most brilliant academic "experts" at his side, the bureaucrat cannot distill the cumulative knowledge, experience and creativity of every American worker and entrepreneur into a single effective, efficient and satisfying directive. His attempts to do so must inexorably generate futility and frustration.

The second reason individuals are more effective and more efficient doing things for themselves is the incentive inherent in ownership. There is a popular saying: Nobody washes a rental car. Will any reader dispute the truth implied by this saying? It is human nature. An individual invests far more time and energy caring for his own property than for someone else's.

If I own my own home, I will maintain it. Why? Because the consequences of failing to maintain it fall directly at my own feet. If I live in federal, public housing, I will expect the ostensible owner of this housing, the federal government, to maintain it. If the roof leaks, I will call HUD, the federal Department of Housing and Urban Development, and speak to the bureaucrat in charge. The problem is that no bureaucrat at HUD really owns the house. The bureaucrat in charge of HUD is responsible for seeing that the HUD bureaucracy runs smoothly. Yes, there may be an assistant to an assistant to an assistant who is assigned to see that the roofs of public houses do not leak. But the interest this employee has in fixing a leaky roof is limited by his job description and the extent to which he can be blamed if the leaky roof  is not properly and promptly fixed.

Experience tells us that such a HUD employee is likely to think he is overworked and underpaid. He is likely to spend as little time and effort as possible responding to my request to fix the roof. It is absolutely certain this employee will not act like a private landlord who has a real interest in protecting the value of his owned property. Again, the inexorable result of bureaucratic action (or inaction) is ineffectiveness, inefficiency and, ultimately, dissatisfaction for those living in federal housing.

Does any reader disagree with this analysis? If not, then I ask the question once again: Why do Americans regularly vote for political candidates who promise to substitute bureaucratic action for individual action?

I think the answer is obvious. "Progressive" Americans who vote for bureaucratic action instead of individual action are not concerned about the ineffectiveness or the inefficiency, or even the dissatisfaction, inherent in bureaucratic action. Evidently, these progressive Americans favor bureaucratic action over individual action because they dislike or disagree with the actions taken by their follow citizens when these citizens are allowed the freedom to act as they, themselves, see fit.

Evidently, these authoritarian and progressive Americans feel they can control the politicians by their vote, the bureaucrats by the politicians, and the actions of their neighbors by the bureaucrat's edicts.

If I were a progressive, I guess democratic bureaucracy would sound pretty darn effective, efficient and satisfying.

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