Front Page Titles (by Subject) 5.: Bureaucratic Personnel Management - Bureaucracy
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5.: Bureaucratic Personnel Management - Ludwig von Mises, Bureaucracy 
Bureaucracy, edited and with a Foreword by Bettina Bien Greaves (Indianapolis: Liberty Fund, 2007).
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Bureaucratic Personnel Management
A bureaucrat differs from a nonbureaucrat precisely because he is working in a field in which it is impossible to appraise the result of a man’s effort in terms of money. The nation spends money for the upkeep of the bureaus, for the payment of salaries and wages, and for the purchase of all the equipment and materials needed. But what it gets for the expenditure, the service rendered, cannot be appraised in terms of money, however important and valuable this “output” may be. Its appraisal depends on the discretion of the government.
It is true that the appraisal of the various commodities sold and bought on the market depends no less on discretion, that is, on the discretion of the consumers. But as the consumers are a vast body of different people, an anonymous and amorphous aggregation, the judgments they pass are congealed into an impersonal phenomenon, the market price, and are thus severed from their arbitrary origin. Moreover, they refer to commodities and services as such, not to their performers. The seller-buyer nexus as well as the employer-employee relation in profit-seeking business is purely matter of fact and impersonal. It is a deal from which both parties derive an advantage. They mutually contribute to each other’s living. But it is different with a bureaucratic organization. There the nexus between superior and subordinate is personal. The subordinate depends on the superior’s judgment of his personality, not of his work. As long as the office clerk can rely on his chances of getting a job with private business, this dependence cannot become so oppressive as to mark the clerk’s whole character. But it is different under the present trend toward general bureaucratization.
The American scene until a few years ago did not know the bureaucrat as a particular type of human being. There were always bureaus and they were, by necessity, operated in a bureaucratic way. But there was no numerous class of men who considered work in the public offices their exclusive calling. There was a continuous change of personnel between government jobs and private jobs. Under civil-service provisions public service became a regular career. Appointments were based on examinations and no longer depended on the political affiliation of the applicants. Many remained in public bureaus for life. But they retained their personal independence because they could always consider a return to private jobs.
It was different in continental Europe. There the bureaucrats have long formed an integrated group. Only for a few eminent men was a return to nonofficial life practically open. The majority were tied up with the bureaus for life. They developed a character peculiar to their permanent removal from the world of profit-seeking business. Their intellectual horizon was the hierarchy and its rules and regulations. Their fate was to depend entirely on the favor of their superiors. They were subject to their sway not only when on duty. It was understood that their private activities also—and even those of their wives—had to be appropriate to the dignity of their position and to a special—unwritten— code of conduct becoming to a Staatsbeamter or fonctionnaire. It was expected that they would endorse the political viewpoint of the cabinet ministers who happened at the time to be in office. At any rate their freedom to support a party of opposition was sensibly curtailed.
The emergence of a large class of such men dependent on the government became a serious menace to the maintenance of constitutional institutions. Attempts were made to protect the individual clerk against arbitrariness on the part of his superiors. But the only result achieved was that discipline was relaxed and that looseness in the performance of the duties spread more and more.
America is a novice in the field of bureaucracy. It has much less experience in this matter than the classical countries of bureaucracy, France, Germany, Austria, and Russia, acquired. In the United States there still prevails a leaning toward an overvaluation of the usefulness of civil-service regulations. Such regulations require that the applicants be a certain age, graduate from certain schools, and pass certain examinations. For promotion to higher ranks and higher salary a certain number of years spent in the lower ranks and the passing of further examinations are required. It is obvious that all such requirements refer to things more or less superficial. There is no need to point out that school attendance, examinations, and years spent in the lower positions do not necessarily qualify a man for a higher job. This machinery for selection sometimes bars the most competent men from a job and does not always prevent the appointment of an utter incompetent. But the worst effect produced is that the main concern of the clerks is to comply with these and other formalities. They forget that their job is to perform an assigned duty as well as possible.
In a properly arranged civil-service system the promotion to higher ranks depends primarily on seniority. The heads of the bureaus are for the most part old men who know that after a few years they will be retired. Having spent the greater part of their lives in subordinate positions, they have lost vigor and initiative. They shun innovations and improvements. They look on every project for reform as a disturbance of their quiet. Their rigid conservatism frustrates all endeavors of a cabinet minister to adjust the service to changed conditions. They look down upon the cabinet minister as an inexperienced layman. In all countries with a settled bureaucracy people used to say: The cabinets come and go, but the bureaus remain.
It would be a mistake to ascribe the frustration of European bureaucratism to intellectual and moral deficiencies of the personnel. In all these countries there were many good families whose scions chose the bureaucratic career because they were honestly intent on serving their nation. The ideal of a bright poor boy who wanted to attain a better station in life was to join the staff of the administration. Many of the most gifted and lofty members of the intelligentsia served in the bureaus. The prestige and the social standing of the government clerks surpassed by far those of any other class of the population with the exception of the army officers and the members of the oldest and wealthiest aristocratic families.
Many civil servants published excellent treatises dealing with the problems of administrative law and statistics. Some of them were in their leisure hours brilliant writers or musicians. Others entered the field of politics and became eminent party leaders. Of course, the bulk of the bureaucrats were rather mediocre men. But it cannot be doubted that a considerable number of able men were to be found in the ranks of the government employees.
The failure of European bureaucracy was certainly not due to incapacities of the personnel. It was an outcome of the unavoidable weakness of any administration of public affairs. The lack of standards which could, in an unquestionable way, 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.
Bureaucratic Management of Publicly Owned Enterprises