Brexit and the Bureaucracy Beast
A leaked memo allegedly belonging to the UK government purports to show the chaos and uncertainty in which the British administration finds itself in trying to deal with its exit from the European Union. It is rumoured that the additional work required by the Brexit process will cost the taxpayer about £65 million, to be spent on 500 related projects and anywhere between 1,000 and 30,000 new civil servants. While the numbers in the memo—and even UK’s exit itself—are still in doubt, the discussions around them offer a couple of interesting insights into the workings of governmental bureaucracy.
On the one hand, the Brexit process is bound to be painful, as it requires disentangling British laws from the quagmire of European regulations that the UK has adopted over the 43 years of its membership. Surely, as healthy as this is, it will require additional manpower and funding in the short run. In hindsight, the only way in which this costly process could have been avoided was not to join the EEC in the first place. Otherwise put, bureaucracy must not be allowed to swell, it must be nipped in the bud, as reducing it will only become increasingly difficult. In fact, the costs of reducing bureaucracy will often act—though they should not—as a disincentive to demand such a process.
On the other hand, a characteristic of bureaucratic system—and of the state apparatus in general—is its ability to grow and even thrive in times of crisis. Even when the crisis concerns the bureaucratic system itself. In this particular case, the decision to leave the EU was motivated, in one form or another, by the overburdening of UK’s internal administration (and thus of British taxpayers) by the EU legislation and regulations. And yet, the very first step the UK government took, even before triggering Article 50, was the creation of a Brexit department in the cabinet. A department which has no means of calculating, in an economically rational way, the least costly exit procedure, and which—by virtue of its bureaucratic nature—has all the incentives to prolong the process indefinitely if possible, while allowing the bureaucratic apparatus to bloat. Bureaucracy 1 – Taxpayer 0.
In the end, the UK might end up replacing European bureaucracy with a homegrown version. Not that this will come as a surprise—it is, in fact, the more likely outcome. As Mises pointed out, "In all countries with a settled bureaucracy people used to say: The cabinets come and go, but the bureaus remain" (Mises, Bureaucracy, p. 55).