Bureaucracy

Originally, I discussed this topic in nine separate articles. What I intend to do this time is to minimize the number of pages by just giving the salient points provided in my previous summaries, and add a theological reflection at the end of this post. 

The titles of all the articles are as follows:

• The Ugliness and Indictment of the Bureaucratic System

• Profit Management

• Bureaucratic Management

• Bureaucratic Management of Publicly Owned Enterprises

• Bureaucratic Management of Private Enterprises

• The Social and Political Implications of Bureaucratization

• The Psychological Consequences of Bureaucratization

• Economically Informed Citizenry

• Sacrificing Liberty Via Bureaucracy, and

• Theological Response

The Ugliness and Indictment of the Bureaucratic System

There is a general consensus "that the terms bureaucrat, bureaucratic, and bureaucracy" are usually perceived as ugly and bad. Nobody want to be called a "bureaucrat." People in government prefer to be called "civil servant," "a functionary of the State unswervingly attending day and night to the welfare of the nation" (p. 1). 

Even progressives do not like the above labels. For them, bureaucracy is not a necessary element in their vision of the future of humanity. They think that bureaucracy is a system inherent in capitalism, which is inescapable in the inevitable process of its own disappearance. Once socialism becomes a reality, both capitalism and bureaucracy will be abolished. There is no need for any bureaucrat in socialistic paradise for the proletariat will take care of themselves. 

With this confusing atmosphere about the term, it is better to first ask about the nature of bureaucracy. Ludwig von Mises darkly paints the ugliness of the expansion of bureaucracy. He describes the bureaucratic system as an enemy of liberty, unconstitutional, "undemocratic," and "a replica of the totalitarian methods of Stalin and Hitler" (p. 3). Notice how Mises further depicts the economic destruction wrought by bureaucracy:

"It is imbued with a fanatical hostility to free enterprise and private property. It paralyzes the conduct of business and lowers the productivity of labor. By heedless spending it squanders the nation's wealth. It is inefficient and wasteful. . . . it has no definite plans and aims. It lacks unity and uniformity; the various bureaus and agencies work at cross-purposes. The outcome is a disintegration of the whole social apparatus of production and distribution. Poverty and distress are bound to follow" (ibid.). 

Though Mises perceives bureaucracy in this way, he blames neither the bureaucrats nor the bureaucracy itself. Rather, he traces the evolution of the system somewhere else. He found its source among political parties and pressure groups advocating for "government omnipotence" (p. 4). For Mises, criticizing the system itself is misleading for it fails to identify the source. Technical procedures themselves are not the problems, but totalitarian economic policies. It is therefore mistaken to blame the system if the bureaucrats are no longer acting as civil servants "but irresponsible and arbitrary masters and tyrants" (p. 9). The culprit is the new political system, "which restricts the individual's freedom to manage his own affairs and assigns· more and more tasks to the government" (ibid.). And besides, the political system considers the anti-business policy of bureaucracy as commendable, and any businessman who resists it is considered a public enemy. And so for Ludwig von Mises, simply focusing on the evils of bureaucratism is misleading. One must see beyond the symptoms and penetrate into the source, a new political system that advocates government omnipotence, and socialism is the only ideology that provides justification for totalitarianism. 

Profit Management

In the first chapter of the book, we will explore Mises' understanding of profit management under four sections - basic operation of the free market, economic calculation, the nature of profit management, and the nature of managing personnel under the profit system. 

Basic operation of the free market. Mises provides the meaning and goal of the free market. He understands free market as a "system of social cooperation and division of labor that is based on private ownership of the means of production" (p. 20). Profit is the goal in this system. 

One important feature of market economy is the sovereignty of consumers. They are the real bosses. They don't care about the track record of the company or of the entrepreneur. Their only concern is the present quality and the price of the product they are buying. And that is why business efficiency is measured by profit and loss, which is dependent on the decision of the consumers. Mises describes this mechanism as "economic democracy in which every penny gives a right to vote" (p. 21).

Economic calculation. In order to appreciate the importance of economic calculation, one must first grasp the significance of market prices and the origin and nature of profit. Market prices exist together with private ownership and profit motivation. However, bureaucratic management opposed these two basic foundations of the free market. Socialists think that maintaining them is detrimental to national interest. For Mises, this kind of mindset is prevalent among totalitarian governments.

This is one major difference between socialism and capitalism and at the same time between bureaucratic management and profit management. No economic calculation exists under socialism and bureaucratic management due to the absence of market prices, which serves as the common denominator among various factors in the economy. Without the market prices, there is no way to account the diverse skills of the large number of manpower, physical properties of material factors of production and the consideration of different places where these material factors are available. So without the market prices, the planners are blind. 

The nature of profit management. Under profit management, records such as the profit-and-loss account and the balance sheet are so important to determine the present status and future of an enterprise. Mises called them the "conscience of business" and the "compass of an entrepreneur" (p. 32). By studying them, the business owner can see the total picture of the business without digging into the details. These records are also beneficial to the general manager for he could easily detect which department of the enterprise is contributing to the growth of the company. And after knowing the situation, he could recommend expansion for the growing department and reform or shutting down a poor-performing department in order to arrest the continuous loss. 

The nature of managing personnel under the profit system. The records also help in assessing the performance of personnel. In the case of a department manager, his only concern is to see his department contributing profit to the company. If not, as mentioned above, the department will either closed down or the manager himself will be replaced with a more efficient one. So as the department manager does his best, it is not only for the benefit of the company, but also for the sake of his career or for possible financial incentives. 

Compare this under bureaucratic management where there is no record to show about profit and loss. In such an environment where there is no basis for performance, it is easy to retain incompetent workers due to personal considerations or sentimental reasons. Such practices are unsustainable under profit management for the consumers care for nothing but the quality and low price of products and services.

 Bureaucratic Management

This section is a summary of Chapter 2, which is about bureaucratic management. Mises explains this topic under five parts: 

• Bureaucracy under despotic government
• Bureaucracy within a democracy
• The essential features of bureaucratic management
• The crux of bureaucratic management, and
• Bureaucratic personnel management

Bureaucracy Under Despotic Government. In explaining bureaucracy under despotic government, Mises made two comparisons. The first comparison is between the nature of government of a ruler of a small ancient tribe and the kind of management a tyrant has over a large territory. The power of the first can be concentrated in his hands including the legislative, administrative, and judiciary whereas in the case of the second, delegation is necessary in order to expand his government. Here we see the role of regulations to maintain control and limit the power of the subordinates. 

The second comparison is an expansion of the above fact, which is about the nature of power that a corporate manager of a certain branch has compared to the provincial governor. In the case of the manager, the system of accounting to check profit is sufficient to resolve the issue of control and limitation of power, while in the case of provincial governor, control and limitation of power are done through regulations. Under this system, compliance to regulations is the governor's primary preoccupation. This unavoidable fact changes the nature of management. 

This observation shows us the reason for the kind of service that people receive under bureaucratic management. Since bureaucrats lost their eagerness due to compliance to regulations, it is but natural to expect that the character of their service also deteriorates. 

Bureaucracy Within a Democracy. The above description also characterizes bureaucracy even within a democracy. Here, Mises' description of democracy is primarily focused not on its definition, but on "administrative technique of democratic government" (ibid.). In explaining the nature of democratic administration, Mises mentions the role of the law and the budget. In fact, he asserts that "the primacy of the law and the budget" are "the two pillars of democratic government" (ibid.).Mises' understanding of bureaucracy within a democracy is connected to this idea of the rule of law and the role of the budget.

The Essential Features of Bureaucratic Management. Reading this section, I see at least four essential features of bureaucratic management:

First, the goal in bureaucratic management is to limit the discretion of the subordinates. This is a different type of limitation from the previous one in which the goal is to protect the freedom of the citizens from the abuses of those in power. This limitation is necessary for an organization not to disintegrate. Unlike under profit management, limiting the discretion of the subordinates is unnecessary except for those related to business activities simply because the system of accounting provides a sufficient mechanism for oversight and control. So decentralization or division of responsibility is suitable without risking the unity of the company and the attainment of profit. 

The second feature of bureaucratic management is the inability to assess and verify its objectives in monetary terms and "accountancy methods" (p.46). That is why without strict regulations, government departments are prone to excessive expenses due to their aim to improve their services as much as possible. Again, unlike under profit management, there is a built-in system that discourages such excessive expenditure. The branch manager "will not spend more than necessary" because if he does, he is not only reducing the branch profit, but is actually "indirectly hurts his own interests" (ibid.).

The third feature is closely connected to the second. "In public administration there is no connection between revenue and expenditure" (p. 47). Bureaucracy is not engaged in any productive activity. Its revenue is taken from the people's wallet as mandated by the law in the form of taxes. 

Fourth, "there is no market price for achievements" (ibid.) under bureaucratic management, and therefore the management of its affairs can never "be checked by economic calculation" (p. 48). At this point, Mises gave us "a definition of bureaucratic management: Bureaucratic management is the method applied in the conduct of administrative affairs the result of which has no cash value on the market" (p. 47). By saying that the achievements under bureaucratic management has no market price, Mises does not mean that there is no value at all in government administration. He only means that the services provided by bureaucratic management is not subject to market transaction and therefore you cannot put a price tag on them. 

The Crux of Bureaucratic Management. Among the essential features of bureaucratic management, the absence of monetary value of its affairs is its most basic characteristic. This explains its poor performance compared to profit management. It is considered "wasteful, inefficient, slow, and rolled up in red tape" (p. 48). To address this anomaly, some would suggest to adopt profit management as a model. For Mises, such proposal does not make sense for it fails to see the basic difference between a private enterprise and public institution. In reality, poor quality of service is actually inherent in bureaucratic system simply because bureaucrats face unique problems that cannot be found under industrial management. And besides, there are other factors that poor performance of public administration can be attributed to such as "special political and institutional conditions" (p. 49) and unique situations that more satisfactory answers are simply not available. So the cause for poor performance is not simply negligence or incompetence on the part of bureaucrats. It is an inescapable nature in bureaucratic management. 

Summarizing the crux of bureaucratic management, this is what Mises has to say: 

The conduct of government affairs is as different from the industrial processes as is prosecuting, convicting, and sentencing a murderer from the growing of corn or the manufacturing of shoes. Government efficiency and industrial efficiency are entirely different things. A factory's management cannot be improved by taking a police department for its model, and a tax collector's office cannot become more efficient by adopting the methods of a motor-car plant. 

Bureaucratic Personnel Management. In the foregoing discussion, we observe that poor performance is an inevitable reality under government bureaucracy. The role of personnel management has a lot to say about this. At this point, we are going to identify four factors that contribute to the deterioration of bureaucratic services.

First, the environment itself. A bureaucrat is at the disadvantage in terms of quality work simply because he is working in an environment in which the outcome of his work cannot be measured in monetary terms. Though the nation pays for bureaucratic services, they cannot be accounted with monetary value. Their value depends on the discretion of the government. 

Second, the trend towards greater bureaucratization that called for regulation to protect clerks from their superiors. In describing this trend, Mises distinguished between the situation in America and in Europe. In America, there was a time that bureaucracy was not that influential and very few considered bureaucratic jobs as "exclusive calling" (p. 54). This only changed with the introduction of civil service provisions, but still, these bureaucrats maintained their personal freedom for they could choose to find jobs in private firms whenever they want. This was not the case in Europe. The access to return to private firms was only open for very few and exceptional men. Most bureaucrats were tied in public service for life. Their superiors had strong influence over their private activities. It was customary that they would share even the political perspective of the current cabinet members. Such situation was prone to abuses. In order to protect the clerks against the abuses of their superiors further regulations were made to relax existing regulations. This resulted to loosed standard that contributed later to the spread of poor performance. 

Third, the existence of superficial machinery in receiving applicants and in granting promotion. This machinery did not actually prevent the incompetent to be accepted into public service. In fact, it even excluded the most competent men. The worst result of this machinery particularly is that the clerks just simply comply with formalities and forget to excel in their jobs. 

Finally, the role of senior bureaucrats. "In a properly arranged civil service system the promotion to higher ranks depends primarily on seniority" (p. 55). This means that those who are qualified to be heads of the bureaus are mostly old men, those who have spent years in lower positions. The problem with these senior bureaucrats is that they have already lost their zeal in their work. They view innovations as disturbances. This is the reason why cabinet minister finds it difficult to introduce reforms. 

For Mises, the primary reason for low quality of service of public servants is in the nature of bureaucracy itself, which is characterized by the absence of clear standard of success. This affects personnel management. "It kills ambition, destroys initiative and the incentive to do more than the minimum required" (p. 56). 

Bureaucratic Management of Publicly Owned Enterprises

The third chapter is about "Bureaucratic Management of Publicly Owned Enterprises," where Ludwig von Mises explained the subject under two sections:

•  The Impracticability of Government All-Round Control, and
• Public Enterprise within a Market Economy 

The Impracticability of Government All-Round Control. The gist of this section is that state central planning ends in economic chaos. Here Mises defines what socialism is and describes state central planning as its basic feature. Here is Mises' definition of socialism: "full government control of all economic activities" (p. 57). 

The reason why state central planning will not work is due to the absence of price structure derived from the market, which makes economic calculation impossible. He further describes state central planning as "self-contradictory" (ibid.) for without economic calculation, central planners are helpless and groping in the dark not knowing whether their performance is advantageous or disastrous. This will inevitably result into economic chaos. 

Public Enterprise within a Market Economy. Under this section, we will consider some of the inherent problems in public enterprises within a market economy. Like the experience of Russia and Germany, these state enterprises also have no difficulty in economic calculation due to the existence of market price within their respective countries.

One of the distinguishing marks of state enterprise is deviation from profit motivation. They consider other goals such as giving subsidy to some people more important and are willing to take loss to accomplish these goals. The problem with this approach is that it transfers the burden to the taxpayers. 

Since a public enterprise does not operate on the basis of profit motivation, the sources of principles to guide its operation are the precise regulations from the government, which determine the usefulness of their services. Unlike in the case of private enterprises, the criterion for usefulness is determined by the decision of the consumers validated through the price the latter are willing to pay. If there is any indication of profit loss, entrepreneurs must adjust in their operation for this is a symptom of public disapproval of certain products and services. 

The situation is different with government corporations. Deficit is not an indication of failure. It is in the very nature of public services for the aim is to provide services at low price even at the expense of subsidizing such services with taxpayers' money. 

Public behavior cannot serve as a criterion to assess the usefulness of government services. This is another inherent problem in public services. 

There is still another side to the problems in government services. This time it is related to the power of the manager of public enterprise to get more from public fund in order to improve their services. This is the reason why precise regulations are necessary for without them, managers are inclined to increase their expenditure. And since a manager of state-owned corporation is "not restrained by any considerations of financial success, the costs involved would place a heavy burden on the public funds" (p. 62). There is always a tendency for him to become wasteful spenders of the taxpayers' money. 

And so these are the problems in government owned and controlled enterprises simply because of the inherent character of bureaucratic management. 

Bureaucratic Management of Private Enterprises

Turning to chapter 4, Mises explained the bureaucratic management of private enterprises. Under this section, we will see the general process how government intervention caused bureaucratization in private enterprises, the two specific means government does it, and its unfortunate results. 

First means: interfering in company profit. Government intervenes in the affairs of private enterprises by putting a ceiling on profit and by pressuring corporations in the choice of personnel. 

Ludwig von Mises identified four "most frequent methods" (pp. 65-66) in controlling company profits:

• Profits are limited, and surplus goes to either of the three: the civil authority, the employees' bonus, or lower prices of products
• Price control to prevent excessive profits 
• Price control based on actual production cost plus certain percentage as determined by the authority, and
• Maximum profit is allowed but "greater part of it above certain amount" goes to taxation. 

The above measures discourage entrepreneurs to increase their profits. The incentive to lower costs and do business efficiently are lost. Without the benefits of increased profit, the burdens of the entrepreneurs increase through prohibitions and risks: prohibitions that hamper improvements and attempts to lower cost, and risks related to the cost of new tools and workers' salary demands. 

The sad thing is that once the performance of businesses deteriorate, entrepreneurs are blamed for lack of concern for public welfare. They are expected to give their best service even deprived of their profit incentives. Civil servants are praised as models of unselfishness. This is ridiculous. 

A bureaucrat can never be a model of an entrepreneur for productivity. It is not in the nature of bureaucracy to innovate. The bureaucrat's primary virtue is to follow the rules. 

Innovation and progress are contrary to bureaucratism. Under the free market, an entrepreneur has the liberty to test his plan even though the majority does not see its advantages. It is enough for him to convince few investors to launch his ideas. Under bureaucratic management, such liberty is absent. The first task of a bureaucrat is to convince those in authority, those who are used "to do things in prescribed ways, and no longer open to new ideas" (p. 67). Progress is impossible under such system. 

Therefore to say to an entrepreneur deprived of increased profit to follow the behavior of a bureaucrat is tantamount to saying to stop business progress. A person can never be both an entrepreneur and a bureaucrat. Progress is necessarily outside the sphere of bureaucratic management. 

Under profit management, the situation is different. Profit incentive motivates entrepreneurs to search for new methods of production, to improve the product or to reduce the price. However, such search involves capital risks. It is absurd therefore to demand from entrepreneurs to improve their performance without profit incentive. 

Second means: interfering in the choice of personnel. In 19th century, corporations submitted to the wishes of European governments in selecting men to compose the board of directors and in hiring salaried personnel. Most of these men were previous government workers and their relatives. They did not possess the necessary qualifications for their positions. All they did was to collect fees and share in profits. 

Due to increasing government intervention, it developed later that the required qualifications for those who would be appointed to top positions in the companies must possess the abilities to relate well with the government, political parties, and labor unions. Ordinarily, those who were considered most suitable to these key positions were former bureaucrats. 

This new breed of executives had not concerned about the company's productivity. Being familiar to bureaucratic system, they reshaped the company's operation. "For them government contracts, more effective tariff protection, and other government favors were the main concern. And they paid for such privileges by contributions to party funds and government propaganda funds and by appointing people sympathetic to the authorities" (p. 71). 

Therefore, bureaucratization is not a result of natural evolution of private enterprises but of the increasing intervention of the government in business affairs. 

Unfortunate results. In such a rotten corporate environment detailed above, inefficiency and corruption are the natural consequences. Because the government has become so powerful that it could either ruin or grant favor, corporations found the way to please their real boss. To stay in business, entrepreneurs resort to "diplomacy and bribery" (p. 72) to avoid the wrath of both the ruling and the opposing political parties. 

The bureaucratization of private enterprises is alien to free market. This is the natural outcome of interventionism. Corporations can no longer function apart from the favor coming from government bureaus. This is the end of innovation and creativity that will eventually reduce the quality of goods and services and increase prices. This is a great waste of resources and will finally lead to economic crisis. 

The Social and Political Implications of Bureaucratization

Now we reach the 5th chapter of "Bureaucracy". In this chapter, we are going to learn the five social and political implications of bureaucratization:

Bureaucrats' contempt for human laws. This implication is puzzling for we have stated in previous article that bureaucratic management is characterized by strict compliance to regulations. And besides the office of a civil servant is established through a legislative act (p. 76). And so it is unthinkable for bureaucrats to entertain this kind of attitude as if they are operating on a different level of legislation. The only justification I observe in doing this is the bureaucrat's loyalty to the interests of the State. 

Bureaucratic complacency. To see the significance of this second implication, we need to understand that though bureaucrats are paid to implement the law, the body of laws is not always perfect. It is a fact that unwise laws exist. And since the primary duty of a bureaucrat is to implement the laws of the land, it is not his fault if there are laws detrimental to public good.

The same can be said with the merits of his actions. Though the services of civil servants are necessary to maintain order in society, this also holds true in the case of other menial jobs such as scavengers and dishwashers. This is because under the division of labor everyone depends on the services offered by others. This social arrangement is important for those who specialize in their chosen fields. Considering this, bureaucrats therefore do not possess special claims "to the epithet pillar of society" (p. 77).

At this point, Ludwig von Mises recognized the proper place of altruism in the development of civilization. However, contrary to ideas propagated by German statist philosophers, he argued that people search careers in public service not because of altruistic goals, but because of higher monetary incentive, ease of work and job security. For Mises, to maintain altruistic goals is nonsense. He further explained the real motivation why people seek career in civil service:

"In all countries most people joined the staff of the government offices because the salary and the pension offered were higher than what they could expect to earn in other occupations. They did not renounce anything in serving the government. Civil service was for them the most profitable job they could find" (p. 79).

Furthermore, Mises described that these personal motivations under bureaucratic system finally resulted to complacency as far as the civil service in Europe was concerned: 

"The incentive offered . . . consisted not only in the level of the salary and the pension; many applicants, and not the best ones, were attracted by the ease of the work and by the security. As a rule government jobs were less exigent than those in business. Besides, the appointments were for life. An employee could be dismissed only when a kind of judicial trial had found him guilty of heinous neglect of his duties. In Germany, Russia, and France, every year many thousands of boys whose life plan was completely fixed entered the lowest grade of the system of secondary education. They would take their degrees, they would get a job in one of the many departments, they would serve thirty or forty years, and then retire with a pension. Life had no surprises and no sensations for them, everything was plain and known beforehand" (ibid.). 

Growth in government spending. This increase in government spending is due to the fact of dual membership of a bureaucrat. He is both an employee and an employer. By employee, we simply understand "a government employee". By employer, we see that "under a democratic constitution," he is "a voter and as such a part of the sovereign, his employer" (p. 80). Due to this double membership, a conflict of interest emerged, and it is always the bureaucrat's interest as an employee that prevails over his interest as an employer. Practically, this means that "he gets much more from the public funds than he contributes to them" (ibid.). 

The bureaucratization of the mind. Among the social and political implications of bureaucratization, I think this is next to the worst simply because man's freedom to think has been suppressed in educational institutions. This was made possible through the expulsion of economic education from the universities. As a result, statist ideas became widespread. 

Mises' analysis is surprising and appears unfounded for universities throughout the world still teach economics. However, in the mind of Mises, the kind of economics being taught in the academe from his time onward is not real economics, but "wirtschaftliche Staatswissenschaften (economic aspects of political science)" (p. 83). Notice how Mises described the absence of economics in mainstream education and factors that contributed to such condition: 

"The modern trend toward government omnipotence and totalitarianism would have been nipped in the bud if its advocates had not succeeded in indoctrinating youth with their tenets and in preventing them from becoming acquainted with the teachings of economics" (p. 81).

"The outstanding fact of the intellectual history of the last hundred years is the struggle against economics. The advocates of government omnipotence did not enter into a discussion of the problems involved. They called the economists names, they cast suspicion upon their motives, they ridiculed them and called down curses upon them" (p. 82).

"In most countries of the European continent the universities are owned and operated by the government. They are subject to the control of the Ministry of Education . . . The teachers are civil servants like patrolmen and customs officers. Nineteenth-century liberalism tried to limit the right of the Ministry of Education to interfere with the freedom of university professors to teach what they considered true and correct. But as the government appointed the professors, it appointed only trustworthy and reliable men, that is, men who shared the government's viewpoint and were ready to disparage economics. and to teach the doctrine of government omnipotence" (ibid.). 

And so in order for the bureaucratization of the mind to be successful, economics professors were screened and books that teach economics perspective contrary to the view of the state could no longer "be found in the libraries of the university seminars" (p. 86). The only qualities required for professors of "social sciences were disparagement of the operation of the market system and enthusiastic support of government control" (ibid.). Mises described the end result of the bureaucratization of the mind:

"All that the students of the social sciences learned from their teachers was that economics is a spurious science and that the so-called economists are, as Marx said, sycophantic apologists of the unfair class interests of bourgeois exploiters, ready to sell the people to big business and finance capital. The graduates left the universities convinced advocates of totalitarianism either of the Nazi variety or of the Marxian brand" (p. 86). 

The supremacy of the tyrant's will. This is the final and the worst social and political implication of bureaucratization. The other way to describe this implication is the gradual erosion of liberty. Again, to clearly see the seriousness of this implication, better contrast the society under market and the society under government omnipotence. 

The Psychological Consequences of Bureaucratization

After sharing the social and political implications of bureaucratization, we now approach its psychological consequences. Ludwig von Mises discussed this in Chapter 6. He identified at least five results: misdirected youth, crisis of progress and civilization, elite paternal government, increasing violence leading to endless civil war, and disappearance of the critical sense. Let us consider the first result. 

Misdirected Youth. The first consequence that Mises mentioned was related to the youth. In order to grasp the strength of this argument, we need to identify the situation prior to the growing influence of bureaucratization. And this is best summarized in "Horatio Alger's philosophy" (p. 93) about a capitalist society. For Mises, this philosophy emphasized the most distinguishable feature of a capitalist society:

"Capitalism is a system under which everybody has the chance of acquiring wealth; it gives everybody unlimited opportunity. Not everybody, of course, is favored by good luck. Very few become millionaires. But everybody knows that strenuous effort and nothing less than strenuous effort pays. All roads are open to the smart youngster. He is optimistic in the awareness of his own strength. He has self-confidence and is full of hope. And as he grows older and realizes that many of his plans have been frustrated, he has no cause for despair. His children will start the race again and he does not see any reason why they should not succeed where he himself failed. Life is worth living because it is full of promise." (ibid.). 

The truthfulness of this philosophy was illustrated in the successful experiences of Thomas Alva Edison and Henry Ford in America. Many young men and women of the same generation as Edison and Ford confirmed this through their less known stories. These people were characterized with vision, energy, and personal responsibility. Mises described them as follows:

". . . the rising generation are driven by spirit of pioneer. They are born into a progressing society, and they realize that it is their task to contribute something to the improvement of human affairs. They will change the world, shape it according to their own ideas. They have no time to waste, tomorrow is theirs and they must prepare for the great things that are waiting for them. They do not talk about their being young and about the rights of youth; they act as young people must act. They do not boast about their own 'dynamism'; they are dynamic and there is no need for them to emphasize this quality. They do not challenge the older generation with arrogant talk. They want to beat it by their deeds" (p. 94). 

However, such mindset and attitude changed with the increasing influence of bureaucratization. Young men and women lost their vision and initiative. Their only dream was to secure a job in government bureaus. Referring to a typical young man that time, notice how Mises described this shift:

"The routine of a bureaucratic technique will cripple his mind and tie his hands. He will enjoy security. But this security will be rather of the kind that the convict enjoys within the prison walls. He will never be free to make decisions and to shape his own fate. He will forever be a man taken care of by other people. He will never be a real man relying on his own strength. He shudders at the sight of the huge office buildings in which he will bury himself" (ibid.).

Crisis of Progress and Civilization. As we have seen so far, the youth was the most affected sector of society due to bureaucratization. They felt uneasy, dissatisfied with what was going on, wanted change, but they did not know how. The reason for this was due to the success of the bureaucratization of the mind by means of education. The youth either due to absence or distorted understanding of the economy, all their cries for reform were actually vain efforts to beat the air. The youth movement failed for they did not possess the quality of mind to see the evil of socialization brought about by bureaucratization. 

Ludwig von Mises saw bureaucratization as a revival of caste system that characterized the age of feudalism. Under that age, the youth "are deprived of any opportunity to shape their own fate" (p. 97). He further described the similarity of adverse condition of the youth both under the caste system and the bureaucratic system. For the youth, "there is no chance left. They are in fact 'lost generations' for they lack the most precious right of every rising generation, the right to contribute something new to the old inventory of civilization" (ibid.). This is the reason why Mises stated that the kind of crisis brought about by bureaucratization was not only confined among the youth. He claimed, "This is more than a crisis of the youth. It is a crisis of progress and civilization" (pp. 100-101). 

Elite Paternal Government. This is the third psychological outcome of bureaucratization. In antiquity, Plato conceptualized this idea of paternal government as managed by the elite without ulterior motives. See how Mises described this class of leaders: 

"Plato's ideal and perfect state is to be ruled by unselfish philosophers. They are unbribable judges and impartial administrators, strictly abiding by the eternal immutable laws of justice" (p. 101). 

The problem with Plato's concept of ideal state was any departure from the ideal was perceived as deterioration. No change was allowed in order to protect the perfect society from degradation. This Platonic idea served as the pattern for all utopians who formulated their master plans. 

Mises further explained this error in Plato's philosophy: 

"It does not pay any attention to the evolution of social and economic conditions and to changes in human ideas concerning ends and means. . . The notion of progress in knowledge, in technological procedures, in business methods, and in social organization is foreign to Plato's mind" (ibid.). 

Increasing Violence Leading to Endless Civil War. In the most matured state of bureaucratization, increasing violence leading to endless civil war is its fourth psychological result. Mises explained how this came about. For those who advocate political salvation through an elite class of men, there is no doubt in their mind that a society must be governed in authoritarian fashion. However, the problem with dictatorship is that many are potential competitors. "If the decision between various candidates is not left to majority vote, no principle of selection remains other than civil war" (pp. 103-104). Mises backed up this assertion with a historical example.

The German "Fuhrer principle" is as old as the Roman Empire. The Emperor embodied "the most able and eminent man" (p. 104). However, the Empire started to collapse through "continuous civil war, anarchy, and rapid decay" (ibid.) when no one was qualified to replace the most perfect among men. "The rule of the worst was substituted for the rule of the best" (ibid.). "Treachery, rebellion, and murder became the selective principle" (ibid.). For Mises, "a system that can be wrecked by the fault of only one man is a bad system. . ." (ibid.). It is in this way that "a Fuhrer system must necessarily result in permanent civil war. . ." (ibid.). Here Mises seems to equate the Fuhrer system with the bureaucratic system in which violence is the ultimate basis. 

Disappearance of the Critical Sense. This outcome was surprising in an age that boasted about revolutionary ideas. Mises described this result as the absence of "common sense and self-criticism" (p. 105). Before enumerating examples of such lack of critical sense, Mises introduced first the socialists' interpretation of capitalism and their proposed alternative. For socialists, capitalism degrades human dignity, "weakens man's intellectual abilities," "spoils his moral integrity," discourages "benevolence and companionship," and promotes "hatred and a ruthless striving for personal success at the expense of other people" (ibid.). And so the replacement of capitalism with socialism is the only way to "restore the virtues of human nature" such as "amicableness, fraternity, and comradeship. . ." (ibid.). To accomplish this, competition, the mother of all evils must be eliminated. 

Other historical examples for the disappearance of critical sense include the adulation of the masses, the glorification of Stalin and the Soviet system, and the assumed superiority of bureaucratic management over the free market. 

In concluding the 6th chapter, Mises identified that the intellectuals were the most vulnerable sector of society that unreservedly embraced the bureaucratic propaganda:

"The most enthusiastic supporters of Marxism, Nazism, and Fascism were the intellectuals, not the boors. The intellectuals were never keen enough to see the manifest contradictions of their creeds. It did not in the least impair the popularity of Fascism that Mussolini in the same speech praised the Italians as the representatives of the oldest Western civilization and as the youngest among the civilized nations. No German nationalist minded it when dark-haired Hitler, corpulent Goering, and lame Goebbels were praised as the shining representatives of the tall, slim, fair-haired, heroic Aryan master race. Is it not amazing that many millions of non-Russians are firmly convinced that the Soviet regime is democratic, even more democratic than America?" (ibid.).

Economically Informed Citizenry

This last topic is my book review. I consider the book very short, but very difficult to read and vital to understand current socio-economic issues from Misesian point of view. After my separate summaries of the book's six chapters, I came to the conclusion that the social problem Mises discussed 70 years ago is still with us in the 21st century. And he identified this problem as totalitarianism. He believed that "mankind is manifestly moving toward totalitarianism" (p. 109). 

I suspect that many these days will simply dismiss this conclusion as antiquated. Perhaps, the skeptics will argue on the basis of the difference of external manifestations between Mises' time and our time. During Mises' time, both Hitler and Lenin's threat was visible and real. In our time, socialism both in its German and Russian patterns are considered thing of the past; at least, this is what most people think. 

However, my difficulty in accepting the credibility of the above objection is that the existing social symptoms deny it. Blaming free market for massive unemployment is still popular. Government interference in almost all aspects of the citizens' life is considered acceptable. Growth of government spending is uncritically accepted as necessary to boost the economy. In short, bureaucratic management is still growing despite the fact that many books have been published criticizing the inefficiency of the system. In this concluding article, I want to share the solution to the crisis of our time as Mises saw it, and the two great obstacles that citizens of democratic society must overcome. The material in this article is taken from Chapter 7 and from the Conclusion of the book. 

The Solution: Economic Education. One certain sign that Mises' analysis still describes our time is the absence of economically informed citizenry. For him, that was the need of his time, and I personally believe still remains the need of our time. This is the solution to contemporary crisis. Unless ordinary citizens are economically educated, there is no way for us to stop the onslaught of bureaucratization. The only remedy to stop mankind's direction toward totalitarianism is for the public to have a basic understanding how the economy works. 

See how Mises describes the significance of economic education in answering the central question between capitalism and socialism:

"This is entirely an economic problem. It cannot be decided without entering into a full scrutiny of economics. The spurious catchwords and fallacious doctrines of the advocates of government control, socialism, communism, planning, and totalitarianism cannot be unmasked except by economic reasoning. Whether one likes it or not, it is a fact that the main issues of present-day politics are purely economic and cannot be understood without a grasp of economic theory. Only a man conversant with the main problems of economics is in a position to form an independent opinion on the problems involved" (pp. 110-111). 

For Mises, to obtain this economic education is "the first duty of a citizen of a democratic community. . ." (p. 111). Without this education "democracy becomes impracticable" (p. 120). Furthermore, Mises describes democracy not as "a good that people can enjoy without trouble", but as "a treasure that must be daily defended and conquered anew by strenuous effort" (p. 121). 

Once a citizen fulfills this duty, he will be able to see the mistake in blaming the capitalists for mass unemployment; he will realize that unemployment under free market is only temporary, and; he will finally understand that "unemployment as a mass phenomenon is the outcome of allegedly 'pro-labor' policies of the governments and of labor-union pressure and compulsion" (p. 112). Moreover, an informed citizen will no longer "believe that government spending can create jobs for the unemployed"; he will grasp that "there is but one way toward an increase of real wage rates for all those eager to earn wages: the progressive accumulation of new capital and the improvement of technical methods of production which the new capital brings about", and; he will recognize that "the true interests of labor coincide with those of business" (ibid.). 

The Two Biggest Obstacles. However, fulfilling the above duty is not easy. There are many obstacles to overcome, and two of them are intimidation by professionals who strongly advocate bureaucratization and socialization, and the settlement to compromise between capitalism and socialism, the third way. Let us deal first with the first obstacle.

Intimidation by professionals. In this battle of ideas, an ordinary citizen has no match when confronted with objections coming from professionals. Mises identified that these professionals are almost everywhere:

"There are, first of all, the hosts of employees of the governments' and the various parties' propaganda offices. There are furthermore the teachers of various educational institutions which curiously enough consider the avowal of bureaucratic, socialist, or Marxian radicalism the mark of scientific perfection. There are the editors and contributors of 'progressive' newspapers and magazines, labor-union leaders and organizers, and finally leisured ambitious men anxious to get into the headlines by the expression of radical views" (p. 116). 

When these professionals raised objections, an ordinary citizen is immediately silenced, and does not know how to identify the error in their reasoning.

The goal in attaining economic education is "not to make every man an economist" (p. 115). Instead, "The idea is to equip the citizen for his civic functions in community life" (ibid.) and "to make the civic leaders fit for such encounters with professional preachers of bureaucratization and socialization" (p. 117). This type of education is important for "The conflict between capitalism and totalitarianism, on the outcome of which the fate of civilization depends, will not be decided by civil wars and revolutions. It is a war of ideas. Public opinion will determine victory and defeat" (p. 115). 

Settling for the third way, government interventionism. Now, in the mind of Mises, this second obstacle, settling for the third way is the most destructive result of the average citizen's disgust to seriously look into economic problems. Mises gave us a more elaborated explanation of the nature of this compromise:

The citizen "looks upon the conflict between capitalism and socialism as if it were a quarrel between two groups, labor and capital each of which claims for itself the whole of the matter at issue. As he himself is not prepared to appraise the merits of the arguments advanced by each of the parties, he thinks it would be a fair solution to end the dispute by an amicable arrangement: each claimant should have a part of his claim. Thus the program of government interference with business acquired its prestige. There should be neither full capitalism nor full socialism, but something in between, a middle way. This third system, assert its supporters, should be capitalism regulated and regimented by government interference with business. But this government intervention should not amount to full government control of all economic activities; it should be limited to the elimination of some especially objectionable excrescences of capitalism without suppressing the activities of the entrepreneur altogether. Thus a social order will result which is allegedly as far from full capitalism as it is from pure socialism, and while retaining the advantages inherent in each of these two systems will avoid their disadvantages. Almost all those who do not unconditionally advocate full socialism support this system of interventionism today and all governments which are not outright and frankly pro-socialist have espoused a policy of economic interventionism. There are nowadays very few who oppose any kind of government interference with prices, wage rates, interest rates, and profits and are not afraid to contend that they consider capitalism and free enterprise the only workable system, beneficial to the whole of society and to all its members" (pp. 117-118). 

I think there is no proper way to end this article than to quote a paragraph from the last page of the book. Ludwig von Mises describes the many inconsistencies of those who are proud to call themselves as champions of socialism: 

"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 for!" (p. 125). 

Sacrificing Liberty through Bureaucracy

Those of us who advocate personal and economic freedom should remind ourselves occasionally not to be surprised anymore if most people we know take the expanding power of the government for granted. To expect otherwise is unrealistic simply because the progressive propaganda has been successful and has already conquered mainstream education and media for so long. Inflation, deficit spending, and bigger welfare package are just few examples of the activities of bigger government that people consider normal. I think this is not only confined in the Philippines; it is a global trend. And the most effective tool that has brought this economic disaster is the growth of bureaucracy. 

In Bureaucracy, Ludwig von Mises argues throughout the book that economic and personal freedom has been consistently coerced by the State through the gradual expansion of bureaucratic management. Though citizens feel this coercion through the subtle squeezing of their pockets, it is very rare to find someone who knows the details how it is being done. I think the book will give us such ability to distinguish the voice of freedom from the counterfeit ones.

Reasons for Writing the Book. Why did Ludwig von Mises write this book? Is his description unique only in his time? Is the message of Bureaucracy no longer applicable for the 21st century? Reading Bureaucracy for yourself will help you find out the answers to these questions.

For Mises, the reason he investigated the growth of bureaucracy in US, France, Germany, and Russia is that he thinks that this is the best way to study the conflict between socialism and capitalism. Through this study, one can see whether human society is heading towards "freedom, private initiative, and individual responsibility" (p. iii) or towards a coercive and interventionist state or in other words, towards "individualism and democracy" or "authoritarian totalitarianism" (ibid.). 

In the mind Mises, socialism has been utilizing bureaucracy to gradually lead society to totalitarianism. Bureaucracy and totalitarianism are interconnected. In our days, though we do not see full-blown government control of everything yet, but the growing expansion of bureaucracy is a sure indication that nations are heading into that direction. In other words, the most and highly bureaucratized society will experience constant suppression of personal and economic liberty. The reason why our time is more dangerous than the previous ones is because majority of the people do not have this realization. They don't see bureaucratization as a threat to liberty. They think that the compromise between socialism and capitalism is the way to go. They do not see that it is actually this "middle way" that is accomplishing this totalitarian goal. 

Reviewing Chapters 5 and 6 of the book, you will realize that additional reasons exist in the mind of Ludwig von Mises that caused him to write this book. In Chapter 5, he mentioned one alarming social and political implication of bureaucratization, the bureaucratization of the mind. Mises observes that educational institutions no longer provide the necessary training of the mind, to think liberally, that is, the kind of education that protect personal liberty and the market economy. He laments that economic education has already been expelled from mainstream universities and has been replaced with "wirtschaftliche Staatswissenschaften (economic aspects of political science)" (p. 83). 

 And here is the end result of the bureaucratization of the mind:

"All that the students of the social sciences learned from their teachers was that economics is a spurious science and that the so-called economists are, as Marx said, sycophantic apologists of the unfair class interests of bourgeois exploiters, ready to sell the people to big business and finance capital. The graduates left the universities convinced advocates of totalitarianism either of the Nazi variety or of the Marxian brand" (p. 86). 

Due to the success of the bureaucratization of the mind, Mises is right in saying, "The universities paved the way for the dictators" (p. 87). 

And so I think, Mises wrote Bureaucracy to counter the trend towards the bureaucratization of the mind and shift it towards liberty. 

Again in Chapter 6, we find that through this book, Ludwig von Mises offers direction to the misguided and activist youth. He desires to stop the crisis of progress and civilization. He hopes for a peaceful society where bureaucratic violence and endless civil war have no place. And finally, he dreams to see the critical sense among the citizens of democratic society restored. 

As a whole, this book is the attempt of Ludwig von Mises to provide the basic training of the mind to understand the critical issues of our time. This is his way to inform the average citizens of democratic nations by providing them fundamental understanding how bureaucracy affects personal and economic liberty. 

Is Mises Correct? Is Mises correct in his assertion that the conflict between socialism and capitalism being decided in favor of the former through bureaucratic expansion? Is his message still relevant that the struggle between private ownership and state or collective ownership of factors of production being advanced in favor of totalitarianism through bureaucracy? Is he correct that the bureaucratization of the mind has been successful in producing university graduates who advocate totalitarianism either the German or Russian brand? Is he correct that the growth of bureaucracy the primary cause of social unrest, violence, and civil wars? 

Obviously, the answer to the above questions is affirmative. And only basic economic education is the remaining antidote to stop all this insanity. Many other writers agree with this. 

In September 29, 2012, Art Carden of Forbes wrote "The Greatest Thinker You've Never Read: Ludwig von Mises". For Carden, Mises "was the greatest social thinker of the twentieth century." Carden sees that Mises' greatest contribution was the "demonstration that socialism cannot function as a rational economic system and that private ownership of the means of production is necessary if value is going to be maximized and waste is going to be minimized in the production process." And so Carden agrees that Mises "ended the debate over whether an economic system based on common or social ownership of the means of production could function" with the essay Economic Calculation in the Socialist Commonwealth. Carden ends his article with a solemn warning taken from Human Action:

“The body of economic knowledge is an essential element in the structure of human civilization; it is the foundation upon which modern industrialism and all the moral, intellectual, technological, and therapeutical achievements of the last centuries have been built. It rests with men whether they will make the proper use of the rich treasure with which this knowledge provides them or whether they will leave it unused. But if they fail to take the best advantage of it and disregard its teachings and warnings, they will not annul economics; they will stamp out society and the human race.”

Carden is not alone. Other reputable authors and leaders in the not so recent past confirmed the greatness of Mises and his ideas. Sylvester Petro, former professor of labor law at New York University describes Mises' writings as a different kind "from anything I had ever read before" (p. 157). He said this in spite of his wide reading "in the classics, in logic, in philosophy, in epistemology, in law, in economics, in social theory, in politics and all the rest" (ibid.). Leonard Read, "the founder of the Foundation for Economic Education" said of Mises' ideas as "a fountain source of new students for generations to come" (p.133). And finally Lawrence Fertig, "an American advertising executive and a libertarian journalist and economic commentator" compared Mises with mainstream economists: 

"Great honors were showered on economists whose major accomplishments had been to promote a major inflation which, by the end of the 20th Century, was acknowledged to be the source of tremendous social unrest and economic crises. These were the fashionable economists who were sponsored by wealthy Foundations and indeed by most of the intellectuals of Academe. But when economic historians of the future came to evaluate precisely who had made the most significant contributions to economic theory-to those broad and fundamental principles which explain human actions in the practical world people must live in-their puzzlement increased. For they could find only a meager record of academic honors or monetary prizes by leading ivy-league universities accorded to the one economist who had discovered and formulated some of the most brilliant economic theories of that century. His name was Ludwig von Mises" (p.178).

Theological Response. 

Four years after the publication of Bureaucracy, R. B. Kuiper of Westminster Theological Seminary published an essay in November 1948, The Word of God Versus the Totalitarian State. The essay has five sections: the function of government, the nature of man, the autonomy of spheres, the kingship of Christ, and the sovereignty of God. Since Mises explained in the Introduction that totalitarianism is the destiny of bureaucratic system, I want to share what Kuiper has to say on the subject limiting my summary to the first two sections of his essay. 

Kuiper began his essay by citing two historical facts related to war propaganda and the generally accepted reason for the ascendancy of totalitarianism. It was believed that the purpose of both WW1 and WW2 was to make the world a better place for democracy. But what was actually accomplished through the two world wars were the emergence of totalitarian states such as Italy, Germany, Japan, and Russia.

Furthermore, it was also believed that the neglect of spiritual values and widespread materialism prepared the way for totalitarian governments. People were willing to trade their liberty for "a big paycheck" (p. 199), and they didn't care about the expansion of government's power as long as the economy was secured. It was alleged that such attitude was prevalent during economic depression both under the Roman Empire and in the 1930s. Though there was an element of truth to this belief, R. B. Kuiper identified them not as the roots, but the symptoms of totalitarian ascendancy. He traced the cause somewhere else, which he described as "basic evil" - "irreligion and false theology" (ibid.). And he cited the experience of Israel concerning this matter as recorded in the Old Testament. 

When the Israelites instead of fulfilling their calling to be a great nation before the surrounding nations through God's nearness to them by answering their prayers, through the possession of divine decrees and laws, and through careful obedience to these laws (Deuteronomy 4: 5-8), instead they wanted to follow after the footstep of the nations by asking a king to rule them. God clearly revealed to Samuel that the act of the people was not aimed against Samuel as the nation's judge, but an act of rebellion against Him. The Lord said, "it is not you they have rejected, but they have rejected me as their king" (1 Samuel 8:7). Kuiper deduced a universal application from this section of biblical history: 

"In this sinful world no nation can get along without human government. But that nation which fears God most, walks in His ways most faithfully, and so honors Him most consistently as its king, has the least need of government by men. Contrariwise, in the measure in which a nation denies the sovereignty of God, in that very measure it is certain to ascribe sovereignty to the men that rule it. The people that will not have the God of sovereign love reign over it is bound to accept the rule of despotic men. In a word, the basic cause of state totalitarianism is irreligion" (pp. 199-200).

At this point, Kuiper exposed the negligence of "the church of the social implications of the gospel of Jesus Christ" (p. 200). Modernism gently dealt with totalitarianism; fundamentalism "has been handicapped by its strong aversion toward any sort of social gospel;" both Roman Catholicism and American Protestantism have their own vision to put up a totalitarian church; and neo-orthodoxy failed to comprehensively grasp the nature of totalitarianism. As a result, all failed to arrest the continuous growth of totalitarianism. In terms of comprehensive study of totalitarianism, Kuiper thinks that "Dutch Calvinism has perhaps done best of all" (p. 201). In this essay, Kuiper aims to provide an introduction to understand totalitarianism. 

The Function of the Government. For R. B. Kuiper, the exact limit of government function is not easy to determine. To him, both "general revelation in nature and history" and the Bible are necessary to identify the legitimate role of the government. And basic to biblical revelation is that the state was instituted by God to prevent sin in destroying human society. To achieve this goal, the state's primary task is "the enforcement of justice and to abstain from all activities not bearing directly on the upholding of justice" (p. 203). Faithfulness to this task is the only antidote to totalitarianism.

Reading The Law, Frederic Bastiat exposed how modern states departed from their primary task. The concept of "social justice" of today's "progressives" is egalitarian and philanthropic in nature, and that is why instead of arresting the growth of totalitarianism, the law serves as a tool to expand state totalitarianism. Welfarism is the central program in this new kind of "justice," which Bastiat accurately identified as "legal plunder."

The Nature of Man. Turning to biblical revelation to understand the nature of man, we read that the word of God both humbles and exalts man. The Bible teaches that man is totally depraved, "that every imagination of the thoughts of his heart was only evil continually" (Genesis 6:5), that his heart is "deceitful above all things" (Jeremiah 17:9), and that no one is righteous, no one understands and seeks God (Romans 3:10-11). The goodness that we find in natural man is due to God's common grace. And yet at the same time, the Bible exalts man simply because he is made in the image of God. Considering this twin biblical truths about the nature of man, totalitarianism is against the revealed will of God. 

Without civil government, human society would turn into hell. And at the same time, simply because politicians and bureaucrats are also under the power of sin, the government cannot be trusted with total control over all the activities of its people. It is not destined for man to have this kind of power; such desire is "satanic" in nature (p. 206). 

Moreover, R. B. Kuiper believes that "The institution of the state by God was His method of punishing man's rebellion against Him" (p. 205). And tyrannical government is the most extreme form of this kind of punishment. In ending the second section of his essay, our author presents two additional biblical motifs related to human nature to strengthen his argument against totalitarianism. These are private property and the voluntary consent of the governed. The latter serves as the basis that the state instead of acting as tyrant is actually a servant of the people. 

In concluding his essay, R. B. Kuiper argues that it is part of Christian duty to resist a totalitarian state. He shows us the way to stop the growing power of the state. It cannot be done through war for it leads to further growth of the state. Roman Catholicism cannot do it for its brand of totalitarianism cannot find biblical warrant. The principles of French Revolution are also not capable to defeat it for the dictatorship of the proletariat is just the opposite face of statist dictatorship. The only remaining solution is a return to the Word of God. Such return would mean that people should stop looking up to the state as the panacea to all our economic ills, that people should neither deride nor fight the state if it is doing its proper task, and that people should not trust the state, but criticize it when it is transgressing beyond the limits of its legitimate task.  

References: 

Mises, Ludwig von. (1944). Bureaucracy. New Haven: Yale University Press. 135 pages.

Kuiper, R. B. (1978). The Word of God Versus the Totalitarian State. The Journal of Christian Reconstruction. Retrieved April 23, 2014, from http://chlcdnpubs.s3.amazonaws.com/JCRv05n01%20L.pdf.