Front Page Titles (by Subject) 5.: The Alternative: Profit Management or Bureaucratic Management - Bureaucracy
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5.: The Alternative: Profit Management or Bureaucratic Management - Ludwig von Mises, Bureaucracy 
Bureaucracy, edited and with a Foreword by Bettina Bien Greaves (Indianapolis: Liberty Fund, 2007).
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The Alternative: Profit Management or Bureaucratic Management
If we want to find out what bureaucracy really means, we must start with an analysis of the operation of the profit motive within the framework of a capitalist society. The essential features of capitalism are no less unknown than those of bureaucracy. Spurious legends, popularized by demagogic propaganda, have entirely misrepresented the capitalist system. Capitalism has succeeded in raising the material well-being of the masses in an unprecedented way. In the capitalist countries population figures are now several times higher than they were at the eve of the “industrial revolution,” and every citizen of these nations enjoys a standard of living much higher than that of the well-to-do of earlier ages. Nevertheless a great part of public opinion disparages free enterprise and private ownership of the means of production as dismal institutions that are detrimental to the immense majority of the nation and further only the selfish class interests of a small group of exploiters. Politicians whose main achievement consisted in restricting agricultural output and in attempts to put obstacles in the way of technical improvement of methods of manufacturing discredit capitalism as an “economy of scarcity” and talk about the abundance that socialism will bring about. The heads of labor unions, whose members drive their own motor cars, are enthusiastic in exalting the conditions of the ragged and barefooted Russian proletarians and in praising the freedom that the workers enjoy in Russia where labor unions have been suppressed and strikes are a criminal offense.
There is no need to enter into a detailed scrutiny of these fables. Our intention is neither to praise nor to condemn. We want to know what the two systems in question are, how they work, and how they serve the needs of the people.
In spite of all the vagueness in the use of the term bureaucracy there seems to be unanimity with regard to the distinction between two contrary methods of doing things: the private citizens’ way and the way in which the offices of the government and the municipalities are operated. Nobody denies that the principles according to which a police department is operated differ essentially and radically from the principles applied in the conduct of a profit-seeking enterprise. It will therefore be appropriate to begin with an investigation of the methods in use in these two classes of institutions and to compare them with each other.
Bureaucracy, its merits and its demerits, its working and its operation, can be understood only by contrasting it with the operation of the profit motive as it functions in the capitalistic market society.