Dismantling Bureaucracy

There is some momentum in various quarters for what is referred to as ‘shrinking the state’ or the ‘smaller state’. More recently fans of Peter Drucker have promoted the concept of dismantling bureaucracy as a basis for transforming business. Both communities seek some form of liberation from their view of an all controlling state.

Marx also sought the ‘withering of the state’ as he also saw the need for a more open society free of control.

Ironically the 'state shrinkers' or 'small staters' like those that interpreted Marx [Stalinists/Maoists] in their pursuit of less state control or freedom from capitalist control, have increased the power of the state and reduced freedom for most citizens. In pursuing what appears to be a desirable objective, freedom, a perverse system is put in place to 'enforce' it.

To that end we have engaged in the 20th century in experiments with human organisation and today find our selves in a very distracted and dissatisfied state. I would observe that we should add dismantling monopoly to that set of concepts under the same cause of a more open and freer economy and society. I would also add that bureaucracy is widespread in monopoly as an organisational form because as Max Weber outlined bureaucracy developed as a means to inject order at scale over the modernising lives of our society.

In his excellent history of 15th-18th century Europe in the time of emerging capitalism Fernand Braudel articulates the liberating nature of the market and the stimulus to social development engendered by it. His thesis was that the true market was a natural evolution of human interaction that facilitated local producers and consumers across all Europe. He also noted the earlier roots of this in Asia.

A lot of our collective frustrations with the political and economic worlds appear to stem from an accumulation of resources in unaccountable forms and forums. The state is under siege today because it is increasingly acquiring control over our lives but delivering less value. The state is a rentier like the monopoly finance sector.

The concept of a market with a transparent exchange appeals to most societies as evidenced by the continued practice of market day. Monopoly control over production and exchange appears to have undermined the liberating nature of the market. Some have adopted a centrist and bureaucratic model as a counterweight, again displaying ignorance or indifference to the concept of transparent value exchange. Creating and sustaining value in a centralised system has not worked in any system or model. The Soviet era and the Cuban miracle are testimony to these experiments.

Over the last 40 years or so the world has danced to the 'neo-classical' tune but it is really a neoclassical state claiming to be and appearing as a market economy. In effect this is a monopolistic bureaucracy with integrated supply chains globally and with immense power of negotiation over simple producers. The same 40 year period has seen a real wage decline throughout the major economies resulting in a collapse in aggregate demand within 'advanced' societies.

The socialisation effect of the increasingly globallised system produces negative feedback that engenders innovation for new network models. Models that are transparent and have high retained value for all the participants. This is the Schumpeterian 'destructive energy' of change that flows through the long wave business cycle. Bureaucrats and monopsonists have taken us to a highly integrated and networked setting stimulating a highly socialised world of production and exchange.

Simple and transparent models of production and exchange are a realistic outcome from the networked and digitalised world. Evolution suggests organisms become pathological and consume or destroy their hosts. Bureaucracy and monopoly are the manifest form of that pathology in modern human society. New shoots will emerge to work without them.

These are crazy times but the fresh wind of change can bring a new, and once again open and transparent economy, if we can throw off all forms of concentration of power. This seems like a new bourgeois revolution, it is not a non-capitalist one, it is a new and highly socialised one. It might be a very authoritarian one. It will be what we make it.