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The Ludwig von Mises Institute

Advancing Austrian Economics, Liberty, and Peace

Advancing the scholarship of liberty in the tradition of the Austrian School

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Mises said it right here. In these pages we find the crushing critique of nearly all modern reform movements, summed up in his sweeping conclusion:

"The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and by a resistance to every kind of improvement. They call themselves liberals, but they are intent upon abolishing liberty. They call themselves democrats, but they yearn for dictatorship. They call themselves revolutionaries, but they want to make the government omnipotent. They promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office. Every man but one a subordinate clerk in a bureau. What an alluring utopia! What a noble cause to fight!"

Mises explains that the core choice we face is between rational economic organization by market prices or the arbitrary dictates of government bureaucrats. There is no third way. And here he explains how it is that bureaucracies can't manage anything well or with an eye for economics at all. It is a devastating and fundamental criticism he makes, an extension of his critique of socialism. It has never been answered.

Written long before Public Choice economists began to take up the subject, Mises describes bureaucracies as both self-interested and economically irrational (thereby improving on the modern Public Choice critique). There is no reinventing government: if we are to have government do things for us, bureaucracies, which cannot behave efficiently, will have to do the work. This small book has grown in stature as Western economies have become more and more bureaucratized.

This volume's contents include:

  • Preface to the 1962 Edition
    • 1. The opprobrious connotation of the term bureaucracy
    • 2. The American citizen's indictment of bureaucratism
    • 3. The "Progressive" view of bureaucratism
    • 4. Bureaucratism and totalitarianism
    • 5. The alternative: profit management or bureaucratic management
  • Preface to the 1944 Edition
  • Introduction
  • I. Profit Management
    • 1. The operation of the market mechanism
    • 2. Economic calculation
    • 3. Management under the profit system
    • 4. Personnel management under an unhampered labor market
  • II. Bureaucratic Management
    • 1. Bureaucracy under a despotic government
    • 2. Bureaucracy within a democracy
    • 3. The essential features of bureaucratic management
    • 4. The crux of bureaucratic management
    • 5. Bureaucratic personnel management
  • III. Bureaucratic Management of Publicly Owned Enterprises
    • 1. The impracticability of government all-round control
    • 2. Public enterprise within the market economy
  • IV. Bureaucratic Management of Private Enterprises
    • 1. How government interference and the impairment of the profit motive drive business toward bureaucratization
    • 2. Interference with the height of profit
    • 3. Interference with the choice of personnel
    • 4. Unlimited dependence on the discretion of government bureaus
  • V. The Social and Political Implications of Bureaucratization
    • 1. The philosophy of bureaucratism
    • 2. Bureaucratic complacency
    • 3. The bureaucrat as a voter
    • 4. The bureaucratization of the mind
    • 5. Who should be the master?
  • VI. The Psychological Consequences of Bureaucratization
    • 1. The German youth movement
    • 2. The fate of a rising generation within a bureaucratic environment
    • 3. Authoritarian guardianship and progress
    • 4. The selection of the dictator
    • 5. The vanishing of the critical sense
  • Is There Any Remedy Available?
    • 1. Past failures
    • 2. Economics versus planning and totalitarianism
    • 3. The plain citizen versus the professional propagandist of bureaucratization

Publication Information 1944. Yale University Press. 1969, New Rochelle, NY: Arlington House.
Updated 1/5/2011