The Online Library of Liberty

A project of Liberty Fund, Inc.

• Editor’s Foreword
• Preface to the First Edition
• Preface to the 1962 Edition
• Bureaucracy
• Introduction
• 1.: The Opprobrious Connotation of the Term Bureaucracy
• 2.: The American Citizen’s Indictment of Bureaucratism
• 3.: The “progressives’” View of Bureaucratism
• 4.: Bureaucratism and Totalitarianism
• 5.: The Alternative: Profit Management Or Bureaucratic Management
• I: Profit Management
• 1.: The Operation of the Market Mechanism
• 2.: Economic Calculation
• 3.: Management Under the Profit System
• 4.: Personnel Management Under an Unhampered Labor Market
• II: Bureaucratic Management
• 1.: Bureaucracy Under Despotic Government
• 2.: Bureaucracy Within a Democracy
• 3.: The Essential Features of Bureaucratic Management
• 4.: The Crux of Bureaucratic Management
• 5.: Bureaucratic Personnel Management
• III: Bureaucratic Management of Publicly Owned Enterprises
• 1.: The Impracticability of Government All-round Control
• 2.: Public Enterprise Within a Market Economy
• IV: Bureaucratic Management of Private Enterprises
• 1.: How Government Interference and the Impairment of the Profit Motive Drive Business Toward Bureaucratization
• 2.: Interference With the Height of Profit
• 3.: Interference With the Choice of Personnel
• 4.: Unlimited Dependence On the Discretion of Government Bureaus
• V: The Social and Political Implications of Bureaucratization
• 1.: The Philosophy of Bureaucratism
• 2.: Bureaucratic Complacency
• 3.: The Bureaucrat As a Voter
• 4.: The Bureaucratization of the Mind
• 5.: Who Should Be the Master?
• VI: The Psychological Consequences of Bureaucratization
• 1.: The German Youth Movement
• 2.: The Fate of the Rising Generation Within a Bureaucratic Environment
• 3.: Authoritarian Guardianship and Progress
• 4.: The Selection of the Dictator
• 5.: The Vanishing of the Critical Sense
• VII: Is There Any Remedy Available?
• 1.: Past Failures
• 2.: Economics Versus Planning and Totalitarianism
• 3.: The Plain Citizen Versus the Professional Propagandist of Bureaucratization
• Conclusion

5.

Who Should Be the Master?

Under any system of the division of labor a principle for the coordination of the activities of the various specialists is needed. The specialist’s effort would be aimless and contrary to purpose if he were not to find a guide in the supremacy of the public. Of course, production’s only end is to serve the consumers.

Under a market society the profit motive is the directing principle. Under government control it is regimentation. There is no third possibility left. To a man not driven by the impulse to make money on the market some code must say what to do and how.

One of the most frequent objections raised against the liberal and democratic system of capitalism is that it stresses mainly the individual’s rights, to the neglect of his duties. People stand on their rights and forget their obligations. However, from the social viewpoint the duties of the citizens are more important than their rights.

There is no need for us to dwell upon the political and constitutional aspect of this antidemocratic critique. The rights of man as codified in the various bills of rights are promulgated for the protection of the individual against governmental arbitrariness. But for them all people would be slaves of despotic rulers.

In the economic sphere the right to acquire and to own property is not a privilege. It is the principle that safeguards the best satisfaction of the wants of the consumers. He who is eager to earn, to acquire, and to hold wealth is under the necessity of serving the consumers. The profit motive is the means of making the public supreme. The better a man succeeds in supplying the consumers, the greater become his earnings. It is to everybody’s advantage that the entrepreneur who produces good shoes at the cheapest cost becomes rich; most people would suffer some loss if a law were to limit his right to get richer. Such a law would only favor his less efficient competitors. It would not lower but raise the price of shoes.

Profit is the reward for the best fulfillment of some voluntarily assumed duties. It is the instrument that makes the masses supreme. The common man is the customer for whom the captains of industry and all their aides are working.

It has been objected that this is not true as far as big business is concerned. The consumer has no other choice than either to patronize the business or to forego the satisfaction of a vital need. He is thus forced to submit to any price asked by the entrepreneur. Big business is no longer a supplier and purveyor but a master. It is not under the necessity of improving and cheapening its service.

Let us consider the case of a railroad connecting two cities not connected by any other rail line. We may even ignore the fact that other means of transportation are in competition with the railroad: buses, passenger cars, aeroplanes, and river boats. Under these assumptions it is true that whoever wants to travel is forced to patronize the railroad. But this does not remove the company’s interest in good and cheap service. Not all those who consider traveling are forced to make the journey under any conditions. The number of passengers both for pleasure and for business depends on the efficiency of the service and on the rates charged. Some people will travel in any case. Others will travel only if the quality and speed of the service and cheap rates make traveling attractive. It is precisely this second group whose patronage means for the company the difference between dull or even bad business and profitable business. If this is true for a railroad under the extreme assumptions made above, it is much more true for any other branch of business.

All specialists, whether businessmen or professional people, are fully aware of their dependence on the consumers’ directives. Daily experience teaches them that, under capitalism, their main task is to serve the consumers. Those specialists who lack an understanding of the fundamental social problems resent very deeply this “servitude” and want to be freed. The revolt of narrow-minded experts is one of the powerful forces pushing toward general bureaucratization.

The architect must adjust his blueprints to the wishes of those for whom he builds homes; or—in the case of apartment houses—of the proprietors who want to own a building that suits the tastes of the prospective tenants and can therefore be easily rented. There is no need to find out whether the architect is right in believing that he knows better what a fine house should look like than the foolish laymen who lack good taste. He may foam with rage when he is forced to debase his wonderful projects in order to please his customers. And he yearns for an ideal state of affairs in which he could build homes that meet his own artistic standards. He longs for a government housing office and sees himself in his daydreams at the top of this bureau. Then he will construct dwellings according to his own fashion.

This architect would be highly offended if somebody were to call him a would-be dictator. My only aim, he could retort, is to make people happy by providing them with finer houses; these people are too ignorant to know what would best promote their own well-being; the expert, under the auspices of the government, must take care of them; there should be a law against ugly buildings. But, let us ask, who is to decide which kind of architectural style has to be considered good and which bad? Our architect will answer: Of course, I, the expert. He boldly disregards the fact that there is, even among the architects, very considerable dissent with regard to styles and artistic values.

We do not want to stress the point that this architect, even under a bureaucratic dictatorship and precisely under such a totalitarianism, will not be free to build according to his own ideas. He will have to comply with the tastes of his bureaucratic superiors, and they themselves will be subject to the whims of the supreme dictator. In Nazi Germany the architects are not free either. They have to accommodate themselves to the plans of the frustrated artist Hitler.

Still more important is this. There are, in the field of esthetics as in all other fields of human endeavor, no absolute criteria of what is beautiful and what is not. If a man forces his fellow citizens to submit to his own standards of value, he does not make them any happier. They themselves alone can decide what makes them happy and what they like. You do not increase the happiness of a man eager to attend a performance of Abie’s Irish Rose by forcing him to attend a perfect performance of Hamlet instead. You may deride his poor taste. But he alone is supreme in matters of his own satisfaction.

The dictatorial nutrition expert wants to feed his fellow citizens according to his own ideas about perfect alimentation. He wants to deal with men as the cattle breeder deals with his cows. He fails to realize that nutrition is not an end in itself but the means for the attainment of other ends. The farmer does not feed his cow in order to make it happy but in order to attain some end which the well-fed cow should serve. There are various schemes for feeding cows. Which one of them he chooses depends on whether he wants to get as much milk as possible or as much meat as possible or something else. Every dictator plans to rear, raise, feed, and train his fellowmen as the breeder does his cattle. His aim is not to make the people happy but to bring them into a condition which renders him, the dictator, happy. He wants to domesticate them, to give them cattle status. The cattle breeder also is a benevolent despot.

The question is: Who should be the master? Should man be free to choose his own road toward what he thinks will make him happy? Or should a dictator use his fellowmen as pawns in his endeavors to make himself, the dictator, happier?

We may admit that some experts are right in telling us that most people behave foolishly in their pursuit of happiness. But you cannot make a man happier by putting him under guardianship. The experts of the various government agencies are certainly fine men. But they are not right in becoming indignant whenever the legislature frustrates their carefully elaborated designs. What is the use of representative government, they ask; it merely thwarts our good intentions. But the only question is: Who should run the country? The voters or the bureaucrats?

Every half-wit can use a whip and force other people to obey. But it requires brains and diligence to serve the public. Only a few people succeed in producing shoes better and cheaper than their competitors. The inefficient expert will always aim at bureaucratic supremacy. He is fully aware of the fact that he cannot succeed within a competitive system. For him all-round bureaucratization is a refuge. Equipped with the power of an office he will enforce his rulings with the aid of the police.

At the bottom of all this fanatical advocacy of planning and socialism there is often nothing else than the intimate consciousness of one’s own inferiority and inefficiency. The man who is aware of his inability to stand competition scorns “this mad competitive system.” He who is unfit to serve his fellow citizens wants to rule them.

VI

The Psychological Consequences of Bureaucratization