Cameron’s “post-bureaucratic age”

In his recent article in The Spectator, David Cameron tells us that “the public must be given a core reason to vote not just against Labour but for the Conservative Party.” He goes on to provide one central idea which provides such a core: the Conservatives will “usher in a new post-bureaucratic age” – made possible by the “information revolution”, which enables “a massive transfer of power from central government agencies to individuals and local communities.”

But the word “bureaucratic” refers to management in government and the public sector. (Profit management, the whole basis of economic calculation and efficiency, is available only in the private sector.) In fact the “post-bureaucratic age”, at least in the West, came about during the 18th century, propelled in particular by Adam Smith. Hobbled as it now is, Smith’s “invisible hand” is the most powerful information system the world has ever seen, bar none. The internet is a mere sideshow which enhances knowledge of whatever market signals are allowed by the bureaucrats. And as government grows, the internet is increasingly likely to become a tool for officials to achieve their own objectives.

To be truly post-bureaucratic and move “from state to society” (another of Cameron’s favourite phrases) Cameron needs only to dismantle the former, abolishing or selling it piece by piece, aiming to cut both spending and taxes by say 50% in his first term and the same again in his second. This will allow an explosion in the division of labour and genuine market prices – prices which people can act upon (rather than just vaguely talk about in their “communities”). In this way the “society” bit will look after itself.

Instead, he talks about redistributing the proceeds of taxes at current levels (or worse) amongst the aforementioned “communities” – which in practice would naturally be taken over by local government or other bully boys such as Jack in The Lord of the Flies, or Napoleon in Animal Farm.

Terry Arthur is the author of Crap: A Guide to Politics.

Agreed. Not much more to add.

We will never not have bureaucracy. For some things (e.g. policing), it is the only effective way to manage the provision of the good (see Mises’ Bureaucracy). So we will never be post-bureaucratic (http://www.pickinglosers.com/blog_entry/bruno/20090327/post_bureaucratic...). It’s a question of the balance, and (as you say) removing bureaucracy from all those activities to which it is currently applied unhelpfully, unnecessarily and counter-productively.I think there is also a semantic issue in many complaints against bureaucracy and red-tape. I think they often really refer to bad incentives. http://www.pickinglosers.com/blog_entry/bruno/20090327/what_do_we_mean_b...

Your point about localism (and the Tories’ enthusiasm for it) is important. It is inconceivable that moving powers from the central bureaucracy to hundreds of local bureaucracies will reduce the total amount of bureaucracy. It will increase the arbitrariness and reduce the quality (if that’s possible) of decisions. Pace Simon Jenkins, we do not need to move power from the centre to local government or “communities” as enthusiasts like to euphemistically call it. We need to move power from government to individuals.

We should move asap from taxes on earned income and profits to taxes on privilege, such as the tax on land rental values which Milton Friedman held to be the least worst tax. I really don’t know why you deify the archaic Joint Stock Limited Liability Company or ‘Corporation’, when the UK LLP renders it redundant. To pay returns to rentier shareholders when you don’t need to – since it is simple within an LLP framework to obtain finance from stakeholders by (say) selling production forward – is simply inefficient. Likewise, why do you need banks as credit intermediaries (as opposed to service providers) when you can obtain trade credit “Peer to Peer” subject to a mutual guarantee?

“It is inconceivable that moving powers from the central bureaucracy to hundreds of local bureaucracies will reduce the total amount of bureaucracy.”
I don’t buy that. If it is a genuine decentralisation (as opposed to local authorities carrying out orders coming from a central authority), then it will result in competition between local authorities, and hence an incentive to keep bureaucracy within limits. If they don’t, they run the risk of losing taxpayers, businesses and wealth owners.

But the competition has to be genuine. Local authorities would have to raise all their own taxes locally. Mrs. Thatcher did what she did for a good reason in the 1980s – centralisation did lead (temporarily) to less socialism. All government redistribution (except that to poor individuals) should simply stop and we should then have a proper system of local government and political competition.

Kris, History indicates that the public-choice incentives operate in the opposite direction. Last time our local authorities had more autonomy (the 70s and early 80s), they didn’t use it so wisely. Market forces and management techniques work in genuine markets. They are not appropriate tools for the public sector. If genuine markets can be established, then the activities should be removed from the public sector altogether. If not, they will have to be managed bureaucratically, and competition will not be effective. Again, I recommend Mises’ Bureaucracy. Read online at http://mises.org/etexts/mises/bureaucracy.asp or buy from http://www.iea.org.uk/record.jsp?type=recommendedBook&ID=374

Bruno, Of course I favour outright privatisation over a decentralisation that holds the total size of government constant. The Soviet Union wouldn’t have been a much better model if it had split into 10,000 cantons and 10,000 mini-5-year-plans.
My point is that competition between local authorities acts as a strong check against governments taking over tasks they should not perform in the first place.
But this works only if local jurisdictions are responsible for raising their own revenue and have to make ends meet with that, without cross-subsidies. This would also include the possibility of a local authority going bankrupt.

Agreed. Not much more to add.

We will never not have bureaucracy. For some things (e.g. policing), it is the only effective way to manage the provision of the good (see Mises’ Bureaucracy). So we will never be post-bureaucratic (http://www.pickinglosers.com/blog_entry/bruno/20090327/post_bureaucratic...). It’s a question of the balance, and (as you say) removing bureaucracy from all those activities to which it is currently applied unhelpfully, unnecessarily and counter-productively.I think there is also a semantic issue in many complaints against bureaucracy and red-tape. I think they often really refer to bad incentives. http://www.pickinglosers.com/blog_entry/bruno/20090327/what_do_we_mean_b...

Your point about localism (and the Tories’ enthusiasm for it) is important. It is inconceivable that moving powers from the central bureaucracy to hundreds of local bureaucracies will reduce the total amount of bureaucracy. It will increase the arbitrariness and reduce the quality (if that’s possible) of decisions. Pace Simon Jenkins, we do not need to move power from the centre to local government or “communities” as enthusiasts like to euphemistically call it. We need to move power from government to individuals.

We should move asap from taxes on earned income and profits to taxes on privilege, such as the tax on land rental values which Milton Friedman held to be the least worst tax. I really don’t know why you deify the archaic Joint Stock Limited Liability Company or ‘Corporation’, when the UK LLP renders it redundant. To pay returns to rentier shareholders when you don’t need to – since it is simple within an LLP framework to obtain finance from stakeholders by (say) selling production forward – is simply inefficient. Likewise, why do you need banks as credit intermediaries (as opposed to service providers) when you can obtain trade credit “Peer to Peer” subject to a mutual guarantee?

“It is inconceivable that moving powers from the central bureaucracy to hundreds of local bureaucracies will reduce the total amount of bureaucracy.”
I don’t buy that. If it is a genuine decentralisation (as opposed to local authorities carrying out orders coming from a central authority), then it will result in competition between local authorities, and hence an incentive to keep bureaucracy within limits. If they don’t, they run the risk of losing taxpayers, businesses and wealth owners.

But the competition has to be genuine. Local authorities would have to raise all their own taxes locally. Mrs. Thatcher did what she did for a good reason in the 1980s – centralisation did lead (temporarily) to less socialism. All government redistribution (except that to poor individuals) should simply stop and we should then have a proper system of local government and political competition.

Kris, History indicates that the public-choice incentives operate in the opposite direction. Last time our local authorities had more autonomy (the 70s and early 80s), they didn’t use it so wisely. Market forces and management techniques work in genuine markets. They are not appropriate tools for the public sector. If genuine markets can be established, then the activities should be removed from the public sector altogether. If not, they will have to be managed bureaucratically, and competition will not be effective. Again, I recommend Mises’ Bureaucracy. Read online at http://mises.org/etexts/mises/bureaucracy.asp or buy from http://www.iea.org.uk/record.jsp?type=recommendedBook&ID=374

Bruno, Of course I favour outright privatisation over a decentralisation that holds the total size of government constant. The Soviet Union wouldn’t have been a much better model if it had split into 10,000 cantons and 10,000 mini-5-year-plans.
My point is that competition between local authorities acts as a strong check against governments taking over tasks they should not perform in the first place.
But this works only if local jurisdictions are responsible for raising their own revenue and have to make ends meet with that, without cross-subsidies. This would also include the possibility of a local authority going bankrupt.

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