What would von Mises make of Musk's DOGE?

Classics revisited: “Bureaucracy” by Ludwig von Mises (1944)

‘Classics Revisited’ revisits a publication from a previous century from a present-day perspective, to show how much, or how little, has changed.

One of the most well-publicised announcements of president-elect Donald Trump is his plan to set up a “Department of Government Efficiency” (DOGE), headed by tech entrepreneur Elon Musk and pharma entrepreneur Vivek Ramaswamy. Despite its grand-sounding name, “DOGE” will be nothing like an actual government department. It is, in UK terms, more like the Darzi Review. In Trump’s words, DOGE’s role will be to "provide advice and guidance from outside of government", in order to assist his administration’s plans to "dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures and restructure federal agencies". 

The idea that you can shake up the public sector by bringing in private sector expertise is not new. For example, in 2005, the Blair government commissioned a review by the consultancy McKinsey on how to overhaul the Cabinet Office. The people who come up with such schemes usually start from the observation that private sector organisations tend to be more efficient, dynamic and innovative than their public sector counterparts. They don’t really have a theory why that is, so they assume that it must be something about the personalities of the people involved. Maybe the private sector is just full of efficient, dynamic and innovative people, while the public sector is full of wastrels and layabouts. If so, the obvious solution is to bring in some of those efficient people, in order to shake the inefficient ones out of their complacency.   

But this is as if the North Korean government tried to improve the poor performance of its state-owned enterprises by bringing in South Korean businessmen to manage them. It does not work that way. The Austrian economist Ludwig von Mises already explained this 80 years ago, in his book Bureaucracy.