January 24, 2016

WHICH IS WHY, RATHER THAN PIECEMEAL REFORM...:

On Bureaucracy and the Left (Guy Patrick Cunningham, January 21st, 2016, LA Review of Books)

Bureaucracy, like almost all human inventions, is a tool, and it reflects political priorities. It will never, on its own, be able to counteract power imbalances, because those imbalances will influence the laws that set the perimeters bureaucracy acts within, the priorities executives set for regulators, and the market signals that regulators look to for information. But it is not the source of those imbalances, and any critique of bureaucracy worth keeping needs to acknowledge this. To Graeber's credit, he readily acknowledges that there are situations where bureaucracy is not only useful but necessary, offering organ donation programs as an example where waiting lists, lotteries, and paperwork are the safest ways to tame an inherently arbitrary process. More importantly, he embeds his criticisms of bureaucracy in a much larger intellectual framework. For Graeber, the bureaucratization of society is a part of something even more troubling: "The gradual fusion of public and private power into a single entity, rife with rules and regulations whose ultimate purpose is to extract wealth in the form of profits."

Before launching into his critique of total bureaucratization, though, Graeber turns his attention to the more prevalent, conservative critique of bureaucracy, specifically as articulated by Austrian School economist Ludwig von Mises in his 1944 book Bureaucracy. This is important, because the Austrian critique still influences thinkers and regulators from across the political spectrum. For example, Sunstein's Valuing Life owes no small debt to von Mises's fellow Austrian School economist Friedrich Hayek -- Sunstein even explicitly credits Hayek with forging many of his ideas. Since Sunstein served as administrator of the White House Office of Information and Regulatory Affairs (OIRA) during most of Barack Obama's first term, he shows the impact of the Austrian School critique in the mainstream American politics, even among liberals. In Graeber's summary, von Mises argues "that by definition, systems of government administration could never organize information with anything like the efficiency of impersonal market pricing mechanisms." Hayek famously developed this line of thought even further, and this is what appeals to Sunstein, who advocates "government by discussion," and details how the Obama-era OIRA "aggregates" information from a variety of public and private sources, as well as incorporating market cues, in an effort to alleviate this inefficiency. So the laissez-faire Austrian School not only influences how we talk about bureaucracy, but how the regulatory state itself operates.

Graber however, finds that critique lacking. First he notes that von Mises's ideas about bureaucracy are rooted in the belief that the kinds of welfare states then being constructed in nations like France and the United Kingdom would inevitably lead to "fascism" -- a prediction that has quite obviously not come true in the 70-plus years since Bureaucracy's publication. He also objects to the way von Mises fails to account for the way bureaucracies and markets actually come into being, noting that, "Historically, markets are generally either a side effect of government operations [...] or were directly created by government policy." Indeed, much of Graeber's most famous book, Debt: The First 5000 Years, concerns itself with explicating that history. The result, in Graeber's view, is that markets and bureaucracy cannot be separated. He points at the explosion of legal clerks, registrars, and police during the British Industrial Revolution as one example of this process. He argues that "even right-wing critics like von Mises were willing to admit -- at least in their academic writing -- that markets don't really regulate themselves, and that an army of administrators was indeed required to keep any market system going."

It's worth noting that the deregulation of the post-Reagan/Thatcher years -- which was often executed in the name of Austrian School principles -- hasn't reduced the role of bureaucracy in everyday life. Graeber himself labels deregulation a "scam," and half-jokingly asserts the "Iron Law" that:

[A]ny market reform, any government initiative intended to reduce red tape and promote market forces will have the ultimate effect of increasing the total number of regulations, the total amount of paperwork, and the total number of bureaucrats the government employs.

Financial markets in particular are symbiotic to government. After all, governments maintain currencies, enforce debts (especially through the court system), and underwrite financial institutions. Graeber puts it succinctly: "There's no such thing as an 'unregulated' bank. Nor could there be." Certainly, it's fair to wonder how a nation where most bank deposits are insured by the federal government (and where economic crises are answered with massive public bailouts for financial institutions) could ever really "deregulate." So Graeber is correct that any real left-wing critique of bureaucratization needs to reckon with the financialization of the American economy.

But Graeber takes this reckoning and uses it to introduce an even more potent conversation about structural violence and its effects. Graeber traces the arbitrariness of bureaucracy to the violence underlying society's institutions: "All of these are institutions involved in the allocation of resources within a system of property rights regulated and guaranteed by governments in a system that ultimately rests on the threat of force." Throughout history, property rights have only existed when backed by some form of government. 

...we should amend the Constitution to require that all government regulations and hirings have sunset clauses.
Posted by at January 24, 2016 7:53 AM

  

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