In this quick-hit episode, IEA's Editorial Director Kristian Niemietz discusses Ludwig von Mises' 1944 book "Bureaucracy" and its relevance to modern government reform efforts. The conversation explores why simply bringing private sector managers into government - like the recent initiative involving Elon Musk - might not be the solution Mises would have recommended.
Niemietz explains how Mises saw bureaucracy not as inherently good or bad, but as an inevitable way of organising activity when economic calculation isn't possible. Unlike private companies that can measure success through profit and loss, public sector organisations lack clear metrics, leading them to focus on following processes rather than achieving outcomes. This fundamental difference, rather than the quality of personnel, explains why government departments operate differently than businesses.
The discussion then turns to practical implications, comparing different approaches to government reform - from internal efficiency improvements to outright privatisation. Niemietz suggests that while Mises might have been too extreme in rejecting all possibilities for improving state efficiency, his core insight remains valuable: rather than trying to make government do everything better, we should focus on determining what government should and shouldn't do in the first place.
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