The Bureaucracy Problem
Aaron Renn on Exit and Voice; Lynne Kiesling on Bureaucracy
we’re in a scenario where we need institutions, but the only logical move for most people is to turn their backs on them.
For example, we need institutions that perform some of the functions of universities. But since individually none of us has the ability to reform universities, the best strategy is to not send them our money, either as donations or tuition.
One can argue that the big challenge of our time is to implement an alternative strategy for addressing broken institutions.
Higher education is broken? Execute a different approach.
Journalism is broken? Keep growing Substack.
The two political parties are broken? Find a way to create a third party.
Lynne Kiesling channels Claude channeling Anthony Downs on bureaucracy.
Early bureaucracies are lean, flexible, and mission-driven. They attract idealists, policy entrepreneurs, and technical experts. …
As the agency proves its usefulness or builds political support, it grows in size, scope, and complexity.
More formal procedures are introduced to ensure consistency, accountability, and legality. Standardization becomes a defense against political or legal backlash.
Specialized subunits emerge. Jurisdictional boundaries harden.
Political goals shift from mission accomplishment to budget maximization and turf protection….
The agency matures. Most staff are career bureaucrats with narrow, procedural roles.
Risk-aversion increases: taking bold action can jeopardize one's career, while inaction rarely leads to punishment.
The agency becomes internally focused—process over outcomes, compliance over experimentation.
I would argue that this applies to the private sector as well as government. A company starts out small, informal, and flexible. As it grows, especially past the Dunbar number, it needs formal procedures and rules. These help prevent missteps but also stifle creativity. Also, it begins to attract a different type of manager—someone who values perks and status rather than achievement.
Claude continues,
The organization becomes primarily concerned with self-preservation.
That is the “self-licking ice cream cone” stage in the bureaucracy’s life cycle.
Note Kiesling’s use of Claude to summarize a book. I used to comb through book reviews in order to decide whether I wanted to read a book. Now I use Claude.
Profit vs. Nonprofit
I believe that the bureaucratic life cycle and its pathologies are present in profit-seeking corporations as well as in nonprofits and in government. However, the late stages of the cycle can last much longer in the nonprofit and government world. The creative destruction of the market works better at flushing the dead cells out of the system.
substacks referenced above:
@
@
"But since individually none of us has the ability to reform universities, the best strategy is to not send them our money, either as donations or tuition."
From "our money" you left out "government grants and government-subsidized student loans and tax exemptions and zero-scrutiny foreign student visa issuance and extremely selective enforcement of numerous laws and the unique capacity (indeed, by the government's insistence via legal or extralegal means) to run their own kangaroo courts and tolerating the practice of fungible-fund-bundling of teaching and research and "administrative overhead" to allow obscure slush fund structures and cross-subsidation of numerous public bads and so forth."
Let Harvard become the For-Profit Harvard Corporation with many separate Learning, Research, Youth Athletics, and Social Networking divisions firewalled off from each other and treated like any other for-profit corporation, and they can do what they want, within the laws and rules that apply to all other corporations.
That last paragraph is the key. Government is a coercive monopoly and its bureaucracies have very little obstacle to becoming immortal. Businesses have competition and either keep their bureaucracies in check, or go under.
An example of trying to kill off a useless bureaucracy which never should have been created, in 1897, a tea tasting board: https://reason.com/2024/03/17/after-a-century-the-federal-tea-board-is-finally-dead/
"Fifteen months after Reid passed away, the federal Board of Tea Experts was finally gone for good — after existing in a sort of limbo for more than two decades in which it had no members and no budget. Its obituary: a brief September 2023 notice in the Federal Register, which records the doings of the executive branch agencies, announcing that the FDA was removing "the Board of Tea Experts from the Agency's list of standing advisory committees" in accordance with the law passed by Congress in 1996 — yes, 27 years prior."