“For the main thesis of Professor von Mises is that bureaucracy is merely a symptom of the real disease with which we have to deal. That disease is excessive State domination and control.”
Bureaucracy: Hopeless From the Start | Foundation for Economic EducationIncentives matter! This simple two-word sentence is the heart of Economics 101. Ask any economist, and she will tell you, “Yes, incentives do matter!” It also seems so simple and obvious when you stop and think about it. Sadly, as we start to think of more complex issues and problems, the importance of this little phrase seems to get lost in the shuffle.
Take for example the issue of bureaucracy. Most bureaucracies are seen as terribly inefficient. The average person may even rant about how terrible the DMV or post office is (no matter how much it tries to appear like a normal business). Most people may understand that the problem has to do with incentives, but they will still probably think there is no choice but for the State to perform such functions. They likely believe that making a few changes or putting in the right bureaucrats can fix things.
Today’s document, Henry Hazlitt’s New York Times review of Ludwig von Mises’s Bureaucracy, shows why we come to view bureaucracies as inefficient. They simply lack the knowledge and incentive to perform efficiently no matter how benevolent the bureaucrats may be. As Hazlitt states, “For the main thesis of Professor von Mises is that bureaucracy is merely a symptom of the real disease with which we have to deal. That disease is excessive State domination and control.”
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