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Bureaucracy and Bureaumania

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 Bureaucracy and Bureaumania

Kim R. Sawyer*

November 21, 2021

__________________________________________________________________________________

1. Introduction
There have always been bureaucrats. Whenever three or more gather together, there is at least
one of them who wants rules to govern them, to categorise and standardise them, who wants a
committee to write a report, make the simple complex, and deem the irrelevant relevant.
Bureaucrats are not defined by their bureaus. Bureaucrats are defined by their minds.
The minds of bureaucrats are anchored to rules, and to spreadsheets determined by the rules.
Rules they impose on others are the rules they impose on themselves. Rules are their anchors.
Their rules enable them to categorise others, to standardise others, but mostly to judge others.
Those outside their spreadsheet of rules will always be the outsiders.

Bureaucrats are everywhere. They congregate in bureaucracies with those of similar mind, but
they can be found in any place where categorisation and standardisation empower them.
Consider the mind of the bureaucrat.

The lecturer set an exam where students were required to write answers within square boxes.
A student challenged their grade. One answer went outside the square, and it was not marked.
The lecturer would not concede. The student protested. The lecturer emailed a supervisor
suggesting the student be excluded from honours because they could be trouble.

Not all bureaucrats are this anchored. Not all bureaucrats want others to be inside their square.
What identifies the bureaucrat is the regimentation of their mind. There are many variants.
Some are benign. Authors who always use she rather than they signal their political correctness,
but also that they are a bureaucrat. Political correctness is bureaucracy under another name.
Political correctness is the spreadsheet of the bureaucrat. The spreadsheet empowers them.
Their mind is a mind of regimentation. Regimentation captures them and captures others.
Regimentation identifies them.

* Associate School of Historical and Philosophical Studies, University of Melbourne.

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When I first travelled to India in 1976 and spent three months on the trains, I observed the full
weight of bureaucracy. Railway ticket offices with tickets stacked three storeys high. The
Indian railway office is not unique. It is no different from the passport offices of Balzac1

“You’ll notice these sorts of Passports Offices in a great many countries, but you’ll never find
one that can hold a candle to the colossal offices of the Quai des Orfevres. The fans are always
kept on, even in winter. This factory is packed with policemen and a myriad of green cardboard
files and thousands of passport stubs! Here one can find out if, as the story goes, Napoleon
really did apply for a passport to travel to the Indies in 1788 and if the writing displayed any
distinguishing characteristics!

Bureaucrats cannot let go of documents. They need continuous reminders of their power.
Citizens are trapped by their web of red tape. Like insects, citizens must negotiate their web.
Like insects, citizens want to be free.

Bozeman and Feeney2 begin their book on red tape with testimony from a citizen of Virginia.

“There appear to be several hundred different agencies listed at the official Virginia
government website. Many of them contain similar words in their agency titles. How much
repetitive work is being performed by more than one agency? Why not consolidate agencies
that do similar work, or eliminate some of them altogether? We could probably save
thousands of dollars by downsizing the quantity of Virginia agencies.”

The citizen was right, but perhaps they did not understand the zero-sum game of bureaucracy.
They should have revisited those who first identified the problem.

Jacques Vincent de Gournay (1712–59) was an economist but a different kind of economist.
De Gournay was practical. De Gournay was a merchant who complained free trade was being
over-regulated. De Gournay complained of an illness in France that he called bureaumanie(a).
Bureaumanie was the stifling of the freedom of the market to protect the interests of the state,
the meddling in things best left alone. 3 Bureaumanie was like a virus.4

“The word encapsulated the hostile, almost dehumanising world that this system created and
de Gournay used it disparagingly to describe the situation in France to friends abroad. It made
the rounds. By the time the Revolution broke out in 1789, it had already entered several
dictionaries.”

The virus in eighteenth century France spread to the virus observed by the citizen in Virginia.
Bureaumania is a virus of the mind. Like all viruses bureaumania spreads across individuals.
Bureaumania anchors citizens to bureaucrats. Bureaumania incubates excessive rulemaking.
Bureaumania incubates bureaucracy.

Page | 2
Balzac (1799-1850) was the first writer to elevate bureaucrats to the centre stage of a novel.
Balzac was anti-bureaucrat. Balzac could never be behind a bureau or ruled by a spreadsheet.
Balzac was a free spirit. Free spirits are antidotes to bureaumania, seeing what needs to be seen.
In The Physiology of the Employee,5 Balzac defined an employee as

“A feathered mind, someone who needs a salary to live and isn’t free to resign, being
unequipped for anything other than producing endless piles of paperwork.”

Nothing has changed but the paperwork is now on a screen with texts, emails and spreadsheets.
Bureaucrats may have feathered minds when seeking promotion or the benefits of a sinecure.
Their minds are often not so feathered when imposing the singularity of their rules on others.
Bureaucrats are often loathed as this characterisation of Freiherr vom Stein in 1821 shows6

“We are ruled by buralists… They draw their salaries from the exchequer and write, write,
write, in silence, in offices behind closed doors, unknown, unnoticed, unpraised, and they bring
up their children to be equally usable writing machines.”

The bureaucrat writing machines are a form of leisure class that Veblen first identified.7

The New Leisure Class

“In 1899, Thorstein Veblen wrote The Theory of the Leisure Class where he identified leisure to
be an expenditure of superfluities which, to be reputable, had to be wasteful. A century later a
new leisure class has emerged with three principles; the necessary must be made unnecessary, at
least for them, the unnecessary must be made to look necessary and the differentiated must be
standardized. How does the new leisure class allocate their time?
The academic
30% of their time reading emails, 20% reading websites, 20% copying other applications, 20%
usurping other academics, and 10% teaching.
The student
30% of their time reading emails, 20% reading websites, 20% copying other assignments, 20%
usurping other students, 10% studying.
The lawyer
30% of their time reading emails, 20% reading websites, 20% copying precedent cases, 20%
usurping other lawyers, 10% arguing cases.
The politician
30% of their time reading emails, 20% reading websites, 20% copying other speeches, 20%
usurping other politicians, 10% for constituents.
The bureaucrat
30% of their time reading emails, 20% reading websites, 20% making red tape, 20% using red
tape to usurp others, 10% justifying red tape.
The new leisure class is the old leisure class, except leisure is now more of a necessity. “

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To understand bureaucracy, we need to understand that the bureaucrat is not just over there.
Within all of us there is the bureaucrat and anti-bureaucrat, a tendency for order and disorder.
All of us have a bureaucratic nature. Heinemann8 references Kafka’s bureaucratic mind

“Kafka's letters and diaries abound with references to his bureaucratic nature. In a 1917 letter
to the publisher Kurt Wolff, for example, Kafka refers to the deep-seated bureaucrat inside
me. An analysis of Der Bau one of his last stories, suggests that his literary representations of
what he termed beamtengeist, bureaucratic mind, instantiate a dialectical confrontation
between a longing for social solidarity and a solipsistic obsession with order and security.”

Kafka’s writing is that of the anti-bureaucrat rebelling against bureaumania. Perhaps he was
elevating his own dialectical confrontation, the confrontation that resides within all of us.

Weber provided a rational defence of bureaucracy. Human behaviour is conditioned by rules,

whether in the boardroom or the bedroom, on the interstate or internet. Rules are in our DNA.
Weber reasoned that bureaucracy based on the legitimacy of rules, order, and authority
provides an efficient template of governance. The rational bureaucrat rationalises for all of us.
There are two problems that Weber may have foreseen but the scale of which he did not foresee.
Not all bureaucrats are rational. Not all bureaucracies allow rational bureaucrats to be rational.
Many allow their bureaucratic nature to dominate, and bureaumania to overtake rationality.
Consider the case of Australian rugby player Quade Cooper. 9

A Denial of Citizenship
Australian rugby player Quade Cooper says he has had his application for Australian citizenship
rejected despite playing more than 70 tests for the Wallabies. Cooper, 33, was born in Auckland
and has New Zealand citizenship although he has lived in Australia since the age of 13. His
residency in Australia made him eligible for the Wallabies. However, he has been denied
citizenship multiple times. To obtain citizenship, residents generally need to satisfy strict rules
compelling them to reside in Australia without extended absence in the years before the
application. Cooper has been playing rugby abroad, most recently in Japan. But applicants for
citizenship can be exempted from the residency rules if they meet “special residency
requirements”. His rejection letter said he had not provided evidence to satisfy special residency
requirements, including that he was a “person engaging in activities of benefit to Australia” or
“engaged in particular kinds of work requiring regular travel outside of Australia.

The denial of citizenship to Cooper is similar to the denial of American citizenship to Bernt
Balchen, Admiral Byrd’s pilot in the flight over the South Pole in 1929. 10
History is replete
with such examples. Bureaucracy is often identified more with the irrational than the rational.

Page | 4
Weber recognised the need to limit bureaucracy but not the need to limit bureaucratic thinking.
Bureaucracy becomes a contagion. The virus is bureaumania, but the disease is bureaucracy.
John Stuart Mill identified why the disease is contagious.11

“The disease which afflicts bureaucratic governments, and which they usually die of, is routine.
They perish by the immutability of their maxims; and, still more, by the universal law that
whatever becomes a routine loses its vital principle, and having no longer a mind acting within
it, goes on revolving mechanically though the work it is intended to do remains undone. A
bureaucracy always tends to become a pedantocracy.”

Charlton 12was pessimistic as to the prognosis, describing bureaucracy as a cancer taking over
almost all social functions. Bureaucracy has eluded the immune system of the host democracy.
At first parasitic, the cancer becomes fatal. Bureaucracy becomes the death of democracy.
Merton 13was less pessimistic suggesting the problem with bureaucracy is an inability to adjust.

“This may be exaggerated to the point where primary concern with conformity to the rules
interferes with the achievement of the purposes of the organization. An extreme product of
this process of displacement of goals is the bureaucratic virtuoso, who never forgets a single
rule binding his action and hence is unable to assist many of his clients.”

Bureaumania is the virus of conformity, of risk aversion to anything except the rules.
Bureaucrats have one asset: their rules. They minimise risk through their invocation of rules;
minimising the deviation from rules; minimising their discretion; minimising their flexibility.
Rules rule them. Mao Zedong may have understood the bureaucrats even better than Balzac.
Mao’s Twenty Manifestations of Bureaucracy is a manifestation of antipathy to bureaucrats. 14

“At the highest level there is very little knowledge; they do not understand the opinion of the
masses; they do not listen to people; they are truculent and arbitrary; they force orders; they
do not care about reality; they maintain blind control; this is brainless, misdirected
bureaucracy. In other words, it is routinism. “

Perforce Mao offered no solution except genocide. He was like them. He was a bureaucrat.

There are antidotes to bureaucracy; to find them we must first look at the virus of bureaumania.
What is to be done? From a prison cell Chernyshevsky wrote What is to be Done? of men of
faith in progress and reason. Chernyshevsky showed what could be done. He influenced Lenin.
Lenin asked What is to be Done? Lenin prescribed a revolution,15 and we need another one.
We need a revolution of the mind. This paper discusses the possibilities.

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2. The Bureaucratic Mind
Bureaumania is a virus of rules. The bureaucratic mind is excessively anchored to rules.
Rules are not only the conventions imposed by others. Rules are what we impose on ourselves.
Rules are like speed limits. They are fixed points of attachment. They are anchors of the mind.
In Beyond Beyond Good and Evil16 I wrote of the anchors of the mind

“Mathematically a mind is like a vector space. A mind has anchors that span the space.
Anchors are basis vectors of the mind. Self-interest is the dominant anchor. There are others.
Belief, affiliation and prejudice anchor the mind. Anchors are certainties that span thoughts.
We refer to them because they are the basis of who we are, our reference points. We may not
believe in God, but belief will always be an anchor. How we vote is an anchor. Whether we are
prejudiced is an anchor of who we are. The anchors of our mind define us.”

The bureaucratic mind is over-anchored to rules. Every contingency is a risk to be minimised.

Within all of us there exists a bureaucratic mind. We are all enslaved by the need for order.
We are ordered by time. We are ordered by routine. We are ordered by the routine of others.
We are ordered by rationality.17

The Rational Man

I am a rational man,
In rationality, I have found the plan,
A lifetime plan that permits me to be me,
Or rather, for me to be, what they expect me to be.
Rationality, that is my God,
No higher being to admonish me, or to give me the nod,
The weekly sermon, probability without the sin,
Only the expectation of what is to be, and what may have been.
When there is a trend, I am a man with no fear,
If GDP grew three percent this year, expect three percent next year,
But of turning points; there can be no expectation,
Forecasting the unexpected, a rationalist damnation.
As a rational man, I need evidence,
DNA, RNA, or CCTV, anything else is pretence,
To believe, evidence is rudimentary,
But don’t test my rationality, it is beyond evidentiary.
As a rational man, I know who I am,
I monitor myself; I regulate myself, I eliminate life’s spam,
In the mind, rationality insures me, and rationality fulfils me,
And it fills my spirit, no need for spirituality.

We are bureaucrats bound by rationality, but some are more bureaucratic than others.

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Symbolically, the mind can be partitioned into bureaucratic and non-bureaucratic thinking.
Bureaucratic thinking depends on rules, but non-bureaucratic thinking depends on intuition.
The contest between them is within us, a Jekyll and Hyde contest of rules against freedom.
Judgment can be split into judgment by rules and judgment without rules

𝐽𝑢𝑑𝑔𝑚𝑒𝑛𝑡 = 𝐽𝑢𝑑𝑔𝑚𝑒𝑛𝑡|𝑅𝑢𝑙𝑒𝑠 + 𝐽𝑢𝑑𝑔𝑚𝑒𝑛𝑡|𝑊𝑖𝑡ℎ𝑜𝑢𝑡 𝑅𝑢𝑙𝑒𝑠 (1)

Rules are derived from convention and precedent. Rules allow us to minimise perceived risk.
The mind is like a portfolio manager. The mind minimises the risk in a portfolio of judgment.
The risk can be decomposed as

𝑅𝑖𝑠𝑘 = 𝑅𝑖𝑠𝑘|𝑅𝑢𝑙𝑒𝑠 + 𝑅𝑖𝑠𝑘|𝑊𝑖𝑡ℎ𝑜𝑢𝑡 𝑅𝑢𝑙𝑒𝑠 (2)

Without rules, judgment is more discretionary. Without rules, judgment is more spontaneous,
but without rules judgment is riskier. We depend on rules to limit the risk of our judgments.
We learn to judge. We judge with a telescope of judgment. We judge as we have judged before.
It is the essence of rational humanism.18

Taylor describes the needs of the bureaucratic mind19

“The bureaucratic mind has two needs: to achieve the financial goal set for it, and to keep
being employed. With employment comes a pension, perks, status, a title and the chance to
move up in the organization. The bureaucratic mind is akin to the legal mind. Both believe in
the supremacy of rules. The legal mind calls these laws; the bureaucratic mind, well, rules.
Both minds believe that without rules other humans not gifted with their insight into human
nature would go off the rails and descend into anarchy. Neither believe that individuals can
govern themselves with few rules or that training produces autonomy. Much time is spent
devising rules for every situation.”

The bureaucratic mind needs rules because they do not trust who they are or who they may be.
Rules hedge against Nietzsche’s homo natura20, against the risk of the anarchy within us.
Golding understood. Lord of the Flies 21 is the risk within all of us. As I have written before 22

“How quickly we disintegrate when the contracts that bind no longer bind. Our ancestry, our
associations and our expectations are the contracts which bind us. Without them, we return
to Golding’s Island, where we are anonymous and all around is anonymous, the island without
contractual obligations, the tribe of the unrefined. In every civilization, in every country and
within every person, there is a contest between the refined and the unrefined. “

The bureaucratic mind limits the possibilities. The bureaucratic mind is the mind of conformity.
The bureaucratic mind conforms to precedent. The bureaucratic mind conforms to convention.
The bureaucratic mind is the mind of rules.

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 The Materix

Our spreadsheet is ten by ten,

To fit into the sheet, you must be more open,
With one hundred cells, there’s a cell for everyone,
Why don’t you try C5, that doesn’t have anyone?

I’d rather be outside the sheet,

To be a C5 person, that would be a deceit,
I’m not like C4 or C6 or anyone in row C,
You don’t have the right to classify me.

We’re sorry, but that’s not good enough,

We need estimates of row and column sums, albeit rough,
We need means, standard deviations, and of course residuals,
But we don’t have room for those they call individuals.

If my only choice is to be standardised,

I should have lived in Ancient Athens, and been ostracised,
They say ostracism makes you numb and glum,
But it’s better than being a C5 in a column sum.

We’d like you in our sheet, because then you’re a mate,

Mates appoint mates, obligate mates and then honour mates,
Our sheet is the materix, by which we judge, and we rate,
Without the materix, we couldn’t govern the state.

To the contrary, I think the materix manipulates,

So that individuals are placed in cells to vegetate,
The materix governs by defining my rights,
I think I’d prefer to be outside and incognite.

In that case, we think you should leave the state,

Otherwise, you will die alone, and intestate,
And that will become your own master status,
Wouldn’t it be better to be a C5, and one of us?

No, I have attributes you haven’t seen,

I have a little of A1 and J10, and all cells in between,
I don’t fit in your system of being judged and being rated,
Your materix is only for mates, mates to be appreciated.

Does God have a spreadsheet?

With cells A1 to J10, the ones of our balance sheet,
Or does God know that I’m not a C5, and you’re not a B2,
Surely God knows there’s more to me and more to you.

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Rules are more than principles and more than standards.23 Rules are more binding and exact.
Rules are established ex ante to be inviolate.24 That is why they are preferred by bureaucrats.
Rules are instruments of the bureaucratic mind. Rules have the attributes listed in the textbox.

Rules

Ex ante
A rule is established ex ante to bind decisions of individuals during the lifetime of the rule.
A rule 𝑅(𝐾) initiated at time 𝑡0 for a lifetime 𝑇 relates to decisions 𝐷(𝐾) that are of type 𝐾.
Decisions under the rule’s jurisdiction are bound by the rule. Decisions converge to the rule.
Mathematically 𝐷(𝑖, 𝐾, 𝑡), the decision of individual 𝑖 at time 𝑡, converges to 𝑅(𝐾)

𝐷(𝑖, 𝐾, 𝑡|𝑅(𝐾)) ⇁ 𝑅(𝐾), 𝑡0 < 𝑡 < 𝑇 (3)

If the speed limit is 100km/hour, most will drive at close to 100km/hour, if seatbelts are
compulsory most will wear seatbelts, and if smoking is banned inside most will not smoke.
Rules bind decision making.
Certainty
A rule 𝑅(𝐾) is expressed with certainty. The specification must be exact and have no
fuzziness. Certainty means the rule is measurable, and deviations from the rule are measurable.
Invariance
A rule 𝑅(𝐾) is invariant across individuals subject to the rule. A rule is the same for everyone.
A rule is invariant over time until there is a change of rule.
Dominance
A rule 𝑅(𝐾) relating to decisions 𝐷(𝐾) of type 𝐾. dominates other considerations and rules.
Any exception must be exceptional, for example, if another rule overrules the existing rule.
Penalty
Every rule 𝑅(𝐾), has a penalty 𝑃𝑒𝑛(𝐾) for deviations from the rule. The penalty represents
the expected loss from not following the rule. A rule is defined by 𝑅(𝐾) and 𝑃𝑒𝑛(𝐾).

For the bureaucratic mind, the certainty, invariance and measurability of rules are appealing.
Rules establish the framework of order, the spreadsheet of what to do and what not to do.
Rules are ideal for minimising the risk to the bureaucrat, and for imposing risk onto others.
Bureaumania begins when individuals impose excessive rules binding them to a spreadsheet.
Bureaucracy begins with bureaumania.

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Bureaumania is the illness of excessive devotion to rules. Bureaumania entails control of the
self and others through rules. Taylor25 recognised the conformity of the bureaucratic mind

“The bureaucratic mind needs sameness and conformity, so it is mind-numbingly slow. That is
one of its weaknesses; it is fearful of change and protective of the status quo.”

Bureaumania results from conformity and control. The bureaucratic mind is geared to control.
The bureaucratic mind maximises their control by minimising the risk of their decisions. Their
risk is defined by the maximum deviation of their decisions from the rules they have imposed.
Formally for individual 𝑖, the risk of a decision 𝐷(𝑖) related to a rule 𝑅(𝐾) of type 𝐾 is

𝑅𝑖𝑠𝑘(𝑖, 𝐾) = 𝑚𝑎𝑥‖𝐷(𝑖) − 𝑅(𝐾)‖ (4)

where ‖𝐷(𝑖) − 𝑅(𝐾)‖ is a measure of the deviation of the decision from the rule of type 𝐾.
Maximising control is the same as minimising the risk of the deviation from rules of type 𝐾

𝑚𝑎𝑥 𝐶𝑜𝑛𝑡𝑟𝑜𝑙(𝑖, 𝐾) = min 𝑅𝑖𝑠𝑘 (𝑖, 𝐾) = 𝑚𝑖𝑛 𝑚𝑎𝑥‖𝐷(𝑖) − 𝑅(𝐾)‖ (5)

Individuals are in control when their decisions follow the rules they impose on themselves.
Individuals control themselves by limiting their maximum deviation from their rules. Formally,
the control of individual 𝑖 across all rules is given as

𝑚𝑎𝑥 𝐶𝑜𝑛𝑡𝑟𝑜𝑙(𝑖) = 𝑚𝑖𝑛 𝑚𝑎𝑥‖𝐷(𝑖) − 𝑅(𝐾)‖ 𝑓𝑜𝑟 𝑎𝑙𝑙 𝐾 (6)

This assumes separability, one rule for each decision. However, rules are often not exclusive.
More than one rule is relevant to each decision, one rule is relevant to more than one decision.
Control can then be expressed in terms of the aggregate of all rules

̃ )‖
𝑚𝑎𝑥 𝐶𝑜𝑛𝑡𝑟𝑜𝑙(𝑖) = 𝑚𝑖𝑛 𝑚𝑎𝑥‖𝐷(𝑖) − 𝑅(𝐾 (7)

̃ is the set of all rules followed by individual 𝑖.

where 𝐾

Equation (7) is the equation of the bureaucratic mind of control, conformity and risk aversion.
The bureaucratic mind invokes rules and precedent because rules and precedent minimise risk.
If there is no rule, there will be no decision. Discretionary judgment is too risky for them.
Discretion creates precedent, the risk of the unknown, and of unknown rules. The bureaucratic
mind is incentivised to create more rules to minimise risk, but they must be certain of the rules.
Rules conform the bureaucrat to their spreadsheet. Rules are the embryos of the bureaucrat.
Rules are the embryos of bureaucracy.

Page | 10
 3. The Bureaucrat
Strauss provides an insight into bureaucrats by quoting from a British parliamentary committee
on the training of civil servants,26

“The faults most frequently enumerated are over devotion to precedent; remoteness from
the rest of the community, inaccessibility and faulty handling of the general public; lack of
initiative and imagination; ineffective organization and waste of manpower; procrastination
and unwillingness to take responsibility or to give decisions.”

The faults are attributes of bureaucrats, aligned to rules and precedent, lacking innovation, and
minimising risk through indecisiveness; but one attribute is missing: their need for control.
Consider two individuals 𝑖 and 𝑗. Individual 𝑖 may want to impose rules on 𝑗, and individual 𝑗
may want to impose rules on 𝑖. More likely both individuals want to impose rules on each other.
There may be common rules that form the basis of a social contract between the individuals.
But there will also be individual specific rules. The bureaucrat is the individual who maximises
the imposition of rules on the other and minimises the imposition of the rules by the other.
Formally, individual 𝑖 is the bureaucrat if they maximise control over the decisions of 𝑗.

̃𝑖 )‖
𝑚𝑎𝑥 𝐶𝑜𝑛𝑡𝑟𝑜𝑙(𝑖) = 𝑚𝑖𝑛 𝑚𝑎𝑥‖𝐷(𝑗) − 𝑅(𝐾 (8a)

and minimise the control of 𝑗 over their decisions

̃𝑗 )‖
𝑚𝑖𝑛 𝐶𝑜𝑛𝑡𝑟𝑜𝑙(𝑗) = 𝑚𝑖𝑛 𝑚𝑎𝑥‖𝐷(𝑖) − 𝑅(𝐾 (8b)

̃𝑖 ), 𝑅(𝐾
𝑅(𝐾 ̃𝑗 ) are the rules of 𝑖 and 𝑗.

This asymmetry defines the bureaucrat. The bureaucrat maximises control over others but
minimises the control others have over them. The bureaucrat often violates the golden rule 27
"To do unto others as you would have them do to you.” Not all bureaucrats are like this.
Not all of them break the golden rule, but enough do to represent bureaumania.

Equations (8a) and (8b) are the equations of the bureaucrat. There are four assumptions
I. The rules of the bureaucrat are assumed to dominate the rules of others.
II. There is a separability between the bureaucrat and those they control.
III. The bureaucrat minimises accountability by minimising the control others have over them.
IV. The bureaucrat maximises externalities to others but minimises externalities to them.

Page | 11
Equations (8a) and (8b) represent the contest between the bureaucrat and those they control.
The control by bureaucrats and the control of bureaucrats is central to public administration.28
Is the bureaucrat the master or the servant? Sometimes they are both master and servant.
Eisenstadt 29 suggests both possibilities

“It may either give the bureaucrat almost unlimited and uncontrollable power both over his
clients and his non-bureaucratic superiors (such as political lay leaders) or make him into a
subservient tool of any master who may arise. These two seemingly contradictory possibilities
have, in practice, at times developed side by side in one and the same organization.”

The bureaucrat is the master of control. The bureaucrat is also a servant to rules they impose.
The bureaucrat converges to the rules and expects others to do the same. The battle for control
between bureaucrats and those they control is a battle over the rules.

We can think of the problem in terms of externalities. It is customary to consider externalities

using Coase’s social cost theory,30 of how to restrain a firm from inflicting harm on others.
Coase noted the problem is reciprocal, not just how to restrain firm A, but whether A should
be allowed to harm B or B to harm A. We are dealing with a problem of a reciprocal nature.
However, suppose that firm A is a bureaucracy that determines the rules, or at least imposes
the rules on firm B. A bureaucracy may impose negative externalities on B, just as any firm
may impose negative externalities on B. A bureaucracy imposes negative externalities through
excessive delays, red tape, documentation, obstruction, lack of discretion and through control.
The great negative externality of bureaucrats is the control they have over those they control.
Control is an externality that is not easily redressed. There is no social cost theory of control.

Who controls the bureaucrats and who regulates the regulators is a recurring policy dilemma.
In The Independent Regulator 31 I wrote of the ideal observer of Firth, 32 an observer who most
would like to be their observer and judge, an absolute to which benchmarks are benchmarked,
a proxy for God, omniscient and omni percipient, cognizant of the facts and consequences of
every action. The ideal observer is disinterested. They exhibit the impartiality of Bentham 33

“Every man should count for one and none for more than one”

If only every bureaucrat had this inscribed on their bureaus and embedded in their minds.
Mashaw34 described an ideal administrative process to be like judicial and legislative processes,
where the pursuit of justice and general welfare should be the motivating ideal of bureaucrats.
If only bureaucrats decided with the impartiality of Louis IX of France who made decisions
under an oak tree and was renowned for justice. 35 If only bureaucrats were like Louis IX.

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Bureaucrats make errors. Bureaucratic errors are rarely acknowledged, and more rarely costed.
Bureaucratic errors become precedents for more errors and for cover-ups of errors.
Bureaucracies specialise in the branching process based on the errors of bureaucratic minds.
Mashaw36 looked at the cost of error in the Social Security Administration’s disability program.
At the time, disability claims averaged $30,000 and the cost of deciding a claim averaged $500,
implying a substantial increase in costs could be justified by the benefit of increased accuracy.

Decisions usually cannot be costed like this; nor can the implied benefits be determined.
However, it does suggest a framework for social cost based on the value assigned to decisions.
Consider a decision by bureaucrat 𝑖 relating to individual 𝑗. Let 𝑉(𝐷(𝑖)) be the value the
bureaucrat assigns to the decision, and 𝑉(𝐷(𝑗)) the value the individual assigns to the decision.
Suppose the bureaucrat and individual costs are 𝑇(𝑖) and 𝑇(𝑗), as represented in Figure 1.

Figure 1
Social Cost of the Bureaucrat

𝑉(𝐷(𝑖)) 𝑉(𝐷(𝑗))

𝑇(𝑖) 𝑇(𝑗)

If bureaucrat 𝑖 decides to assign a value of 𝑉(𝐷(𝑖)), then the private cost to individual 𝑗 is

𝑃𝐶(𝑖, 𝑗) = [𝑉(𝐷(𝑗)) − 𝑉(𝐷(𝑖))] + 𝑇(𝑗) (9)

The maximum social cost is the private cost in the event that the bureaucrat is wrong.
Typically, the social cost of a bureaucrat is between 0 (no error) and 𝑃𝐶(𝑖, 𝑗) (maximum error).
We cannot easily assign values to decisions. One method is to ask the bureaucrat to put
themselves in the place of the other individual. Perhaps then they will understand the social
costs that may be imposed on others.

Not only are the social costs hard to estimate, but the negative externalities are hard to redress.
Remedies for social costs typically involve taxes, liability and property rights, for example
carbon taxes, pollution liabilities and emission trading schemes used to penalise polluters.
Remedies like taxes cannot be applied to bureaucrats. No government would ever consider
taxing bureaucrats for their errors. We cannot impose liabilities on them for their blunders.
We cannot extract property rights from them. Rather they tend to be protected and promoted.
They are protected because we have not found any remedy for the social costs they impose.
The challenge is to find a remedy.

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Bureaucrats legitimatise themselves as controllers of others.37 Self-legitimacy is their stamp.
They classify themselves into a separate category that underwrites their control. Their decisions
are final or nearly final, for to appeal their decisions is to be trapped in their web of indecision.
Decisions are an imprimatur of their control, non-decisions are an even stronger imprimatur.
Even Presidents cannot change them. Franklin D. Roosevelt is alleged to have remarked38

“The Treasury is so large and far-flung and ingrained in its practices that I find it impossible to
get the action and results I want—even with Henry [Morgenthau] there. But the Treasury is
not to be compared with the State Department. You should go through the experience of trying
to get any changes in the thinking, policy and actions of the career diplomats and then you’d
know what a real problem was. But the Treasury and State Departments together are nothing
compared to the Navy. The admirals are really something to cope with—and I should know.
To change anything in the Navy is like punching a feather bed. You punch it with your right
and you punch it with your left until you are finally exhausted and then you find the damn bed
just as it was before you started punching.”

There was a New Deal but not a New Deal with bureaucrats. They were too much in control.
Bureaucrats control with documents, from their memos and mission statements to manifestos.
de Gournay labelled bureaucracy as rule by writing desk. 39 The writing now has many forms.
Documents signal rules, both the known and unknown. Documents signal their control.
Documents are underwritten by contingencies, the what if bureaucrats lose control.
Bureaucracy is the web of documentation that Balzac identified in The Bureaucrats40

“After 1818 everything was discussed, compared, and weighed, either in speech or writing;
public business took a literary form. France went to ruin in spite of this array of documents;
dissertations stood in place of action; a million of reports were written every year; bureaucracy
was enthroned.”

A million reports have become billions of reports. Tax Acts that were once 100 pages long are
now 10,000 pages long; lease agreements that once had five pages have more than 100 pages.
There is no greater bureaucracy than the legal system. 41 With every new infraction, a new law.
Since 1789 more than 30,000 US Federal statutes have been enacted. The rule of law has
become a telescoping sum of laws. The legal system is yet another telescoping bureaucracy.
We are entrapped by bureaucrats. We are entrapped by rules. We are entrapped by documents.
Balzac saw the bureaucracy that we all see.42

“It fulfills no real physical function, but one can’t earn a penny in France without it being
mandated or requested by official correspondence, substantiated by producing all the
necessary financial statements, paid on proof of receipt. All requests and receipts are filed,
inspected, verified by bespectacled people. They are frightened by the slightest irregularity. “

The bureaucrats are in control.

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Bureaucrats exercise control through the certainty of their rules, decisions and documents.
Bureaucrats are biased towards certainty.43 Bureaucrats hedge the branching process of what if
by constructing option-like rules to limit the behaviour of those over whom they control. Let S
be the bureaucrat’s valuation of the current state of the world, Su the value the bureaucrat wants,
and Sd the value the bureaucrat wants to prevent, analogous to the binomial option pricing
framework used in pricing stock options.44 The bureaucrat option model is shown in Figure 2.

Figure 2
The Bureaucrat Option Model

Su

Sd

S is the valuation by the bureaucrat of the current state of the world that they want to control.
The bureaucrat constructs a portfolio of S and put options to protect the valuation

𝑆 + 𝛼𝑃 (10)

𝑃 are put options that hedge against a fall in the valuation, 𝛼 > 0 is the number of put options.
The put options are a combination of the rules, decisions and documents that the bureaucrat
uses to hedge against a fall in the valuation. They protect their valuation through put options.
The options are specific, protecting against specific risks. Because they are so specific, there is
an incentive to create more rules to hedge against risks in other directions. Hence the
bureaucratic option model becomes a branching process of rules to hedge against every risk.
The bureaucrat is the buyer of the put options, the sellers are the individuals whom they control.
Alternatively, we can regard the bureaucrat as a seller of put options on the behaviour of others.
The bureaucrat anchors behaviour of others. The bureaucrat controls through their rules.
Control is measured by the behaviour of others and by the valuation of the portfolio in (10).
The bureaucrat is in control when the rules prevent the value of their portfolio from falling.
The valuation is the valuation of control.

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Bureaucrats control with rules and decisions, but also by restricting the access to information.
The market for information is asymmetric. The bureaucrat typically has more information,
more than citizens and citizens’ advocates, and more than the politicians who represent them.
Bureaucrats are information rich. They monopolise information because it is what they do.
They collect, create, process, and mediate information. Hull describes their role in mediation45

“Just as discourse has long been recognized as a dense mediator between subjects and the
world, newer anthropological scholarship on bureaucratic documents treats them not as
neutral purveyors of discourse, but as mediators that shape the significance of the signs
inscribed on them and their relations with the objects they refer to.”

Most importantly bureaucrats set the price of information. Downs46observed that information
is costly because it takes time, effort, and money to process. Bureaucrats have the advantage.
They can set the price of information arbitrarily high through redaction, denial, and delay, yet
they can mask their pricing under the rubric of transparency and freedom of information.
Bureaucrats are monopolists. They set their own price on information.

The reason bureaucrats control so easily is they have isolated themselves from competition.
They are not subject to competitive forces in the production and evaluation of their output.47
Citizens typically cannot choose between the output of bureaucrat A and bureaucrat B.
Bureaucrats are monopolists imposing rules, producing documents and information, but for
whom the demand is guaranteed. The price of their output is not determined by market forces.
Similarly, the price of their input is not determined by market forces. Their salaries are
determined by themselves, not productivity. Their appointments are often tenured for the term
of their working life, not their productive life. They are separated from the force of markets.
Mercier put it aptly 48
when he wrote “the clerks are all the more powerful with their pens
because their actions are never visible.” They control invisibly to minimise their risk.

Bureaucrats also control because of the compliance of those they control. Many complain about
bureaucracy, but few redress their complaint. The problem is not so much of individual
bureaucrats, but bureaucrats within a bureaucracy. There are few opportunities for feedback.
Bureaucrats will never be rated. Appeals against their decisions only underwrite bureaucracy.
Who Regulates the Regulators? is a question asked in perpetuity, but never answered.
Bureaucrats and those they control are in conflict, like the conflict between the democrat and
bureaucrat that is within us but, unlike the conflict within, the conflict with bureaucrats is rarely
resolved with compassion. Instead, the bureaucratic response is almost always dispassionate.
It is the dispassion of rules.

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4. Bureaucracy
Bureaucrats control through bureaucracy, a word too amorphous to define yet so often used.
Bureaucracy is more than an army of clerks behind bureaus; more than lakhs of documents
stacked high in an Indian railway station; more than the thousands of freedom of information
requests rejected each year in Australia; more than the legal cases that take years to resolve.
Bureaucracy is a bureaucratic mind becoming the mind of many, rather than the mind of one.
Bureaucracy is the network that legitimises bureaucrats, legitimises their rules, and legitimises
the bureaucratic way of thinking. Bureaucracy allows bureaucrats to control.

Bureaucracy is a network like other networks, but more. Bureaucracy protects the bureaucrats,
minimises their risk and maximises their control over outsiders. What makes bureaucracy
different is that the bureaucrats become accountable only to themselves, not to others.
Bureaucracy is a self-fulfilling network that expands through the control imposed on others.
Bureaucracy can exist anywhere provided there are enough bureaucratic minds and enough
incentives for those minds to propagate and network, as Downs (1965) suggested49

“It also means that even very large profit-making organizations (such as General Motors) are
not bureaus, though parts of such organizations (such as the public relations department of
Chevrolet) can be bureaus if their specific outputs cannot be evaluated in a market. Some more
typical examples of bureaus covered by the theory are the Roman Catholic Church (except for
the Pope, who is elected), the University of California, the Soviet central planning agency, the
U.S State Department, the New York Port Authority, and the Chinese Communist army.”

Downs defined a bureaucrat as a person who works for a large organization that they receive
money from, and whose performance is evaluated by the organization rather than by a market.
We define a bureaucrat by their mind, by their adherence to rules and the minimisation of risk.
A bureaucrat can work for any organization but will always be committed to rules and risk.
The mind defines the bureaucrat. They are accountable to their bureaucratic mind of rules.
Weber defined bureaucracy in terms of ten characteristics.50

“The bureaucrat is personally free, observing only the impersonal duties of their office. There
is a clear hierarchy of offices. The functions of the offices are clearly specified. Officials are
appointed on the basis of contract, selected on the basis of professional qualification, with a
salary graded according to the position in the hierarchy. The official can always leave the post,
and sometimes it may also be terminated. The official’s post is his sole or major occupation.
There is a career structure, and promotion is possible either by seniority or merit, and
according to the judgment of superiors. The official may appropriate neither the post nor the
resources which go with it. The official is subject to a unified control and disciplinary system.”

Weber identified every characteristic of bureaucracy except the bureaucratic mind.

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Bureaucracy is a network of the mind. The bureaucratic mind is the common factor to which
bureaucrats converge. The importance of the mind was elevated in Franz Kafka’s The Trial.51
The Trial is the trial of the bureaucrat against the unknown and arbitrary rules of bureaucracy.
It is a trial within every bureaucracy, a trial of reputation within the network of bureaucracy.
Hodson et al (2013)52 offer this perspective on the mind games that exist within bureaucracy

In this article, we offer such a conceptualization, rooted in the writings of Franz Kafka, which
draws together five well-documented facets of real-world bureaucratic life not theorized in
Weber’s formal-rational model – particularism, chaos, contested goals, abuse of power, and
a climate of uncertainty and fear.

Indeed, contests of the mind define bureaucracy. Contests of the mind are contests for
reputation that have resulted in the dominant attributes observed in all bureaucracies, whether
in government agencies, politics, academia, the legal system, NGOs, or in large corporations.
In all bureaucracies, the small dominates the large, technicalities dominate common sense,
precedent dominates originality, the language of the network dominates all other language,
complexity dominates simplicity, restriction of information dominates freedom of information.
Bureaucracy is a network of the mind.

Like all networks, bureaucracy separates itself from outsiders, but the imperative is greater.
Strauss understood the importance of the separation between bureaucrats and outsiders 53

“The individual official may only be a small cog, but he forms part of a very large wheel, and
his modest share in the power wielded by the organization as a whole tends to colour his
attitude towards all outsiders who have no part in his great mystery…The administrative
official thus belongs to two worlds and has to perform the difficult task of balancing their
requirements in his daily work. “

Bureaucracy is like a growing organism. Charlton called bureaucracy a cancer 54

“Bureaucracy feeds-upon and assimilates opposition. Bureaucracies are indeed no longer

separable but form a linked web; such that to cut one bureaucracy seems always to imply
another, and larger, bureaucracy to do the cutting. Over much of the world, public life is now
mostly a matter of ‘bureaucracy speaking unto bureaucracy’. Observations and opinions from
individual humans simply don’t register.”

Let us colligate the above discussion to identify the features of the network of bureaucracy.
First the network is hierarchical. There is always a chief bureaucrat, either a CEO, Vice-
Chancellor, Chief Justice, Secretary of a Department, Minister, Prime Minister or President.
This is the node to which all other nodes of the network are connected or aspire to be connected.
Each bureaucrat is connected to a supervisor, thereby establishing the hierarchical network.

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Network rules determine the behaviour of bureaucrats. The rules relate to promotions,
appointments to and resignations from the network, and the reputations of network members.
Network rules determine how the bureaucrats are promoted and how they are to be reputed.
The network of bureaucracy exists to impose control on outsiders using rules and decisions.
The network purpose is to minimise the risk to insiders and maximise the control on outsiders.
The network of bureaucracy must be sufficiently clustered to be closed to outsiders. Separation
from outsiders ensures bureaucrats are accountable only to themselves, and not to outsiders.
The network converges to the bureaucratic mind. One mind represents all.

We can formalise using reputation options developed in Sawyer and Gygax (2018, 2019).55
The reputation of individuals is a portfolio of their reputation without a network plus the
reputation options they buy on individuals with whom they connect. An individual connects to
a network if the value of the portfolio with the network exceeds the value without the network

𝑅 + 𝛼1 𝐶 + 𝛼2 𝑃 > 𝑅 (12)

𝑅 is the reputation value of the individual without a network, 𝛼1 𝐶 + 𝛼2 𝑃 the value of a

portfolio of reputation options the individual purchases on other individuals in the network.
Equation (12) explains why an individual networks, to leverage the reputation of others in the
network, yet to protect themselves from any decline in the reputation of the network.
Bureaucrats join the bureaucracy to leverage the reputation of the bureaucracy. The bureaucrat
purchases reputation options on other bureaucrats in the bureaucracy, that is to be a bureaucrat.
Their reputation is underwritten by Balzac’s blue suit and red ribbon in the buttonhole. To be
a bureaucrat is to be known by a title as well as a name, minimising the risk to their reputation.
The bureaucrat also sells put options on the behaviour of outsiders, making bureaucracy
different from other networks. The put options on outsiders gives them control over outsiders.
The value of the bureaucrat’s reputation is then

𝑅 + 𝛼1 𝐶 + 𝛼2 𝑃 + 𝛽𝑃 ∗ (13)

𝐶 and 𝑃 are call and put options on the reputation of bureaucrats (bureaucracy), 𝛼1 , 𝛼2 > 0.
𝑃∗ are put options the bureaucrat sells on the behaviour of outsiders, 𝛽 < 0.

Equation (13) explains why an individual becomes a bureaucrat. If the value in (13) exceeds
their reputation without the bureaucracy, the individual will join the bureaucracy. They
minimise the risk to their reputation and maximise their control over outsiders.

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Every network converges to some common factor, whether a common opinion about someone
or something, a common attribute or common association. There is some form of commonality.
Every network has barriers that exclude outsiders, and every network builds reputation.
56
Members may subcontract choices to the network. They are conditioned by the network.
Self-categorisation theory maintains that individuals conform to the normative positions of a
57
group because it provides validation of themselves. (Hogg, Turner and Davidson (1990))
Networks legitimise individuals.

Network convergence may be strongest in a bureaucracy. Every bureaucrat minimises risk.

Every bureaucrat is committed to the network rules related to appointments and promotions.
Every bureaucrat is committed to the rules and decisions that are used to control outsiders.
Bureaucracies converge to the bureaucratic mind, the common mind of bureaucrats.
Bureaucracies legitimise bureaucrats. Bureaucracies legitimise their control over outsiders.
Control over outsiders renders the network of bureaucracy different from most other networks.
Bureaucracies are not just separate from outsiders; they want to control the outsiders.
Convergence in a bureaucracy begins and ends with the bureaucratic mind.

The bureaucratic mind determines who becomes a bureaucrat and what bureaucracy becomes.
Bureaucracy converges to the mind of bureaucrats where the small dominates the large,
technicalities dominate common sense, precedent dominates originality, the language of the
network dominates other language, complexity dominates simplicity, restriction of information
dominates freedom of information. Bureaucracy exists everywhere, in football clubs, art
galleries, churches, law firms, political parties, universities and NGOs. Bureaucracy is more
than just bureaucrats, red tape and rules. Bureaucracy is a state of mind of risk and control.
Bureaucracy is a system that has framed a new reality as identified by Charlton (2010)58

“One reason is that bureaucracy is able to frame reality, such that the more that bureaucracy
dominates society, the more bureaucracy seems to be needed; hence the response to any
bureaucracy-generated problem is always to make more and bigger bureaucracies. It is this
positive feedback system which is so overwhelming. Mere human willpower is now clearly
inadequate to combat bureaucratic expansionism. The main self-defence of modern
bureaucracy, however, is to frame reality. Since bureaucracies now dominate society, that
which bureaucracies recognize and act-upon is ‘reality’; while those which bureaucracies do
not recognize does not, for practical purposes, exist. Bureaucracy-as-a-system, therefore,
constructs a ‘reality’ which is conducive to the thriving of bureaucracy-as-a-system.”

Democracy and bureaucracy will always be in conflict. Naffis-Sahely references the conflict
as like that between Dr. Jekyll and Mr. Hyde59

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“Isaac Deutscher hit the nail on the head when he called the State and the bureaucracy the
Jekyll and Hyde of human civilization…Dr. Jekyll, a respectable physician who is possessed of
conscience and altruism, represents the State, or rather the imperfect embodiment of our
collective aspirations. Mr. Hyde, who stands for the bureaucracy, beats people to death
without a moment’s thought. ..In a sense, Hyde was always destined to win, not because the
triumph of evil is inevitable, but because divorcing oneself from one’s humanity-or as Balzac
might have put it, fencing the feathered mammal into an office where his ideal of humanity
becomes progressively warped over time, to the point where he loses faith in both his fellow
human beings and himself-leads to the creation of the ultimate killing machine.”
Almost certainly this is an overstatement; nonetheless bureaucracy does kill the human spirit.
The conflict between democracy and bureaucracy encourages bureaucrats to congregate as one.
The mind of one bureaucrat becomes the mind of many bureaucrats, but they are the one mind.
Bureaucracy minimises the risk for bureaucrats. Bureaucracy ensures no bureaucrat takes
responsibility. No bureaucrat, yet every bureaucrat, is responsible for their decisions.
Bureaucrats become cogs in a controlling machine that uses the power of the bureaucracy.
The bureaucracy masks their errors and minimises their risk.

Let us summarise as a bureaucrat may summarise, an executive summary of the discussion.

The bureaucrat is the master of control. The bureaucrat is a servant of the rules they impose.
The bureaucrat minimises risk through rules; every rule hedges another risk. The bureaucratic
mind is the foundation of bureaucrats, and the foundation of the ruling class of bureaucracy.
Rules determine the decisions that become precedents in the telescoping sum of bureaucracy.
Bureaucracy is the purest monopoly where the demand for services is guaranteed by the state.
The price of outputs and inputs of bureaucracy is determined by bureaucrats, and not markets.
Bureaucracy and democracy are in perpetual conflict, the conflict between rules and freedom.
Bureaucrats represent the rules. Citizens represent freedom. Sometimes both are represented.
Balzac seemed to know.60

“Families whose sons thronged the colleges allowed themselves to be lured by the vision of a
bespectacled young man in a blue suit with a red ribbon peering brightly out of his buttonhole,
who could draw a salary of a thousand a month in recompense for a few hours a day at some
Ministry, where he would be tasked with overseeing some project, turning up late and leaving
early, having like Lord Byron, plenty of leisure hours at his disposal, which he could devote to
his love affairs, or promenades in the Tuileries gardens, endowed with a slightly roguish air,
ensuring he was seen everywhere, attending variety shows, balls, being admitted to the
choicest circles, spending his wages, thereby giving everything he earned from France back to
France and still providing a service.”

Bureaucrats, the masters and servants of the ages.

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5. What is to be Done?
We need bureaucrats, but not their bureaumania. The rule that we need most is the golden rule
“Do unto others as you would have them do to you.” To change bureaucracy, we must change
bureaucrats to think like Louis IX of France rather than one who wants all the answers in boxes.
To change bureaucracy, we need bureaucrats to be like Firth’s ideal observer, to have the
impartiality of Bentham,61 that everyone should count as much but not more than a bureaucrat.
To change bureaucracy, we need to change the bureaucratic mind.

To change the bureaucratic mind, we need a revolution in thinking to change their thinking.
Bureaucrats need to be more democratic, Dr Jekyll rather than the Mr Hyde of bureaucracy.
The trade-off between bureaucracy and democracy is like a trade-off between debt and equity.
There is an optimal level of debt beyond which increasing the level of debt reduces firm value.
And there is an optimal level of bureaucracy beyond which the value to society will decrease.
We are not the first to identify this. Weber suggested bureaucracy may accumulate power to
the point where it controls the organization it serves. 62 Bureaucracy may control democracy.
I have written before of What is to be Done? Restating what was written there63

“What is to be Done; the question asked when we look back to look forward. It’s the question
asked at the beginning of the day, the beginning of the year, the beginning of a new
government, the beginning of a new generation. It is the question asked by revolutionaries. In
What is to be Done? Chernyshevsky wrote of the new men of faith in socialism, progress and
reason. Chernyshevsky from his prison cell showed what could be done by influencing Lenin
who, in 1902, asked What is to be Done? It is the question of revolution.”

Bureaucracy must be changed from within to do the opposite of what bureaucrats normally do.
For bureaucrats to be less bureaucratic, we must reverse the tendency of the bureaucratic mind.
We need to reduce their risk aversion, their addiction to rules, and their need to control others;
induce them to be more discretionary and less committed to the precedents of others; to value
simplicity rather than complexity; to be legitimised by others rather than by other bureaucrats.
To deregulate bureaucracy, we need to deregulate the bureaucratic mind.

Weber suggested mechanisms to prevent bureaucracy from strangling us.64 Collegiality where
more than one person is responsible for decisions; separation of powers where responsibility
for the same function resides with two or more agencies; unpaid public officials as advisers;
limit the tenure of bureaucrats and select them by lot; and elected bodies to control decisions.
Weber argued bureaucracy should be representative of the democracy that underwrites it, but
Weber did not consider the bureaucratic mind.

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The most obvious mechanism to reduce red tape and bureaucracy is deregulation. The 1980’s
was the decade of deregulation that led to a substantial elimination of regulatory constraints
and a substantial reduction of bureaucrats. Some bureaucrats resisted but most acquiesced. 65
As I wrote in The Independent Regulator66

“Deregulation is the logical response to the problem of regulatory accountability. When

regulations cannot be fully prescribed, observed or measured, or there is a risk of
overregulation, it is often simpler to deregulate and let institutions self- regulate through
markets. But can markets impose the moral imperative of regulation? Can markets embed the
omniscience and omni percipience of the ideal observer? Can markets prevent the market
failures which have led to regulation? The spectrum of possibilities from self-regulation to over
regulation underlines the uncertainty as to how to regulate, and the uncertainty as to the
market for regulation. The market for regulation has never been well understood.”

Deregulation does not reform the bureaucratic mind, only the number of such minds.

Another solution to excess bureaucracy is to subcontract using public-private partnerships. 67

The standard partnership is a contract between a private entity and government to deliver
infrastructure with improved performance and accountability, greater innovation, reduced risk
and less impact on the public sector borrowing requirement. A partnership reduces bureaucracy
without sacrificing risk, a partial solution to bureaucratic sclerosis, but only a partial solution.
It is preferable to change the thinking of bureaucrats, not only in government agencies, but
wherever bureaucratic minds dominate. We need to consider the motivation of risk and control.
How can we induce bureaucrats to be less risk averse and less controlling?

Returning to the question of judgment. Judgment is less risk averse when it is based on the
weight of evidence and individual circumstance rather than fixed rules. Sunstein posited that68

There are two stylized conceptions of legal judgment. The first …places a high premium on the
creation and application of general rules. On this view, public authorities should avoid
"balancing tests" or close attention to individual circumstances. They should attempt instead
to give guidance to lower courts, future legislators, and citizens through clear, abstract rules
laid down in advance of actual applications. The second conception …places a high premium
on law-making at the point of application through case-by case decisions, narrowly tailored
to the particulars of individual circumstances. On this view, public authorities should stay close
to the details of the controversy before them and avoid broader principles altogether.”

Case-by case decision making is consistent with the common-sense view of weighing the
relevance of all evidence, as I argued in Beyond Reasonable Doubt, 69 allowing judgments to
be more discretionary, not just in the law courts but in government agencies and beyond.
Judgment concerns a portfolio of argument, and the portfolio should be balanced.

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We need less formatting, less spreadsheeting and more diversity and in all areas of our thinking.
We can afford to be less bureaucratic, more intuitive, and return to Nietzsche’s homo natura.70
As a simple illustration, consider the formatting in submission of articles to academic journals.
Academics format their papers not only in terms of the guidelines of the journals, but also in
terms of unwritten guidelines: citing the right people, acknowledging the right people, using
the right pronouns, having the right number of pages, writing in the right area of their expertise;
writing so only the chosen few can understand. The risk aversion shown in submissions to
journals is repeated in all other areas of academia. Academic correctness is like rule-based law.
The correctness minimises risk but inhibits innovation. Academics have become bureaucrats.
Academia and the law have become enclaves of privilege, bastions of the bureaucratic mind.
The law has become accessible only to lawyers, and academia accessible only to academics.
Like all bureaucracies, they have separated themselves from those who they are meant to serve.
The solution is to reward innovation.

Ideas are the language of innovation, but ideas are seldom rewarded in a bureaucracy.
Bureaucracy is not like a financial market where higher risk is rewarded with higher returns.
To change the minds of bureaucrats, we need to reward and not penalise, risk taking and ideas.
The simplest mechanism is to make the bureaucratic contract more akin to a social contract.
Consider a bureaucratic contract with the following principles.

• The bureaucrat is rewarded for ideas, not only implementation of rules.

• The bureaucrat is rewarded for simplicity, rather than complexity.
• The bureaucrat is rewarded for common language.
• The bureaucrat is rewarded for discretionary judgment on a case-by-case basis.
• The bureaucrat is rewarded for expeditiousness.
• The bureaucrat has a limited tenure appointment.
• The remuneration of the bureaucrat has two components; a fixed component and a
supplementary component based on their ideas.
• The bureaucrat is also appraised by citizens for whom they make decisions.

The contract with bureaucrats would therefore be more like a social contract, an exchange
agreement between bureaucrats and the citizens, as well as between bureaucrats and the state.
The contract would also ratify the important rule of natural fairness; that bureaucrats should
“Do unto others as they would have others do to unto them. “

It would be the contract of the ideal bureaucrat.

Page | 24
6. Conclusion
Bureaumania is the illness of excessive commitment to rules. First identified by de Gournay,
bureaumania is everywhere. We do not have to be John Stuart Mill or Balzac to understand.
Rousseau seemed to understand. He began The Social Contract with 71

“Man was born free, and everywhere he is in chains. Many a one believes himself master of
others, yet he is a greater slave than they. How has this change come about? I do not know.”

Bureaumania is like a virus, the virus of conformity, of risk aversion to anything except rules.
Within all of us there is a contest between the bureaucratic and non-bureaucratic mind, between
rules and freedom. Bureaumania results when the bureaucratic mind is allowed to dominate.
Rules are more than principles. Rules are certain, established ex ante, and not to be violated.
Rules are instruments of the bureaucratic mind that minimise risk and maximise control.
Bureaucratic minds are the embryos of bureaucrats.

Bureaucrats control others through rules. They separate themselves from those they control.
They account only to bureaucrats. They minimise the control outsiders have over them.
Bureaucrats maximise externalities to outsiders but minimise the externalities from outsiders.
They are the masters of others but the servants of rules. Their social cost is difficult to estimate.
Their externalities are difficult to redress. We have not found the remedy.

Bureaucracy is the network that legitimises bureaucrats, legitimises their rules, and legitimises
the bureaucratic way of thinking. Bureaucracy allows bureaucrats to control. Bureaucracy is a
network like other networks, but more. Bureaucracy protects bureaucrats, minimises their risk
and maximises their control over outsiders. Bureaucracy is the network of bureaucrats.
Bureaucracy is also the network of the bureaucratic mind.

Bureaucracy and democracy are in conflict between bureaucratic rules and citizens’ freedoms.
The remedy is to change the mind of bureaucrats. The contract with bureaucrats should be a
social contract between bureaucrats and citizens, rewarding bureaucrats for innovation,
simplicity, discretion, and even compassion, so the citizens are not the slaves of bureaucrats.
Balzac has the last word.72

“The Academy of Moral and Political Sciences would do well to endow a prize for whoever
answers this question: Which is the better state? The one that accomplishes a lot with a few
employees, or the one that accomplishes little with many employees?”

Perhaps a bureaucrat knows.

Page | 25
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ENDNOTES

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