Why Bureaucracy?

Column 2017-9 (3/20/17)

     Most people are familiar with the word ”bureaucracy.”  
What is a bureaucracy?  Why do we have bureaucracies?  What are
bureaucracies intended to accomplish?  What do bureaucracies actually
accomplish?
 
    People free to choose work together to form many enterprises. 
These enterprises produce many things.  The consumers choose which
things they want and decide how much they are willing to pay.  To
succeed, an enterprise must be able to sell its products for more than it
costs to make them.

     To do this the enterprise must please customers.  The enterprises
that well serve their customers prosper.  Those that fail to please
customers perish.  Nothing more is needed to achieve accountability.

     Some enterprises don't sell their products to customers who are
free to buy or reject the products.  Such enterprises aren't accountable to
those they are supposed to serve.  Most such enterprises get their
income from appropriations.  The value of the product is never tested in
the marketplace.

     Most government products never face the marketplace test of
value.  Many departments in businesses share the same lack of
accountability to those they are supposed to serve.  How can
management know if the payroll or purchasing department is operating
effectively and efficiently?  Such departments don't compete for
customers.

     Businesses and some government enterprises commonly out
source services such as cleaning and payroll.  The providers of those
services then have customers to please.  This increases accountability.

     In free markets a business's final product is always subject to the
marketplace test when offered for sale.  In government the opposite is
true.  Some of government's suppliers compete in the marketplace.  The
final product is usually given away or sold to customers who have little
or no freedom to choose, such as those coerced to buy city water.

     Bureaucracy is an attempt to bring some accountability to
enterprises that escape real accountability to customers in the
marketplace.  Those who are accountable directly to their customers
don't need books full of rules about do and don't.  If they don't discover
and heed the right dos and don'ts their enterprise perishes.  That is real
and inescapable accountability..

     This accountability comes from the bottom up.  Bureaucratic
accountability is based on rules  from the top.  Bureaucrats, who at best
have some foggy idea what consumers want, make and attempt, or at
least pretend, to enforce the rules.

     Often the bureaucrats care little about what consumers want. 
Bureaucrats try to enforce the rules with slaps on the wrist and giving
more money to the worst performers.  Rules that started out as means to
an end become ends in themselves.

     Enforce the rule because it's the rule.  Never mind that the rule
frustrates the purpose for which the rule was made.  Soon the
bureaucrats and their minions lose sight of any purpose other than
survival and growth of the bureaucracy.  This process can continue for
so long as money can be squeezed from the taxpayers to pay for it.

     Attempts to reform bureaucracy will fail because human nature
and the bureaucratic environment dictate what any bureaucracy will do. 
With all its faults bureaucracy is still the best way to run an enterprise
that isn't accountable to consumers in the marketplace.  The only real
solution to the problems of bureaucracies is to replace them with
enterprises that are directly accountable to consumers in the
marketplace.

     Those who still complain that charter schools are less
accountable than district schools should read this column again.  
Charter schools may, or may not, have less pseudo accountability to the
bureaucracy.   They have far more real accountability to the consumers
they serve.  Charter schools must please those they serve.

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 Copyright 2017
Albert D. McCallum