Tuesday, April 22, 2014

Government Omnipotence Through Bureaucratism

I see government omnipotence through bureaucratism as the suitable title to summarize the ideas in the remaining three sections of the Introduction of Ludwig von Mises' Bureaucracy. In the first two sections, we learned the ugliness of the terms associated with bureaucracy and the indictment of the bureaucratic system. In the succeeding three sections, Ludwig von Mises gave us the overview how the "progressives" diverted the attention of the people from government bureaucracy to corporate bureaucracy, how the advocates of government omnipotence utilized the bureaucratic system to advance the power of the state, and how can we better assess the bureaucratic system by comparing it to profit management. After presenting Mises' ideas, I reflected on the concept of government omnipotence using R. B. Kuiper's essay, The Word of God Versus the Totalitarian State published in the Westminster Theological Journal in 1948. 

Corporate Bureaucracy. Under this section, we will see how did the "progressives" divert the attention of the people to big business by attacking its bureaucratic system. In it we find the nature of the accusation in general, the absence of "creative leadership" as the chief accusation, and the subtle way the government used the income tax to stifle creativity among entrepreneurs.

The Nature of Accusation. "Progressives" describe that big business dominates the corporate world, and paint it in most ugly terms. They portray its bureaucratic character with its "absentee ownership," the powerlessness of the stockholders in the management, the hiring of professional administrators and the absence of accountability, and the distribution of functions among different departments (p.11). They say that if the power of this huge corporations are not restricted, the latter will certainly make "puppets" out of governments. And so they call for the need of government interference in order to arrest the increasing power of big business. They see that there is no other way, and think that allowing the unhampered growth of business bureaucratism will surely harm the larger society. Mises saw this as a subtle diversionary tactic to shift the blame for economic woes from government bureaucratism to corporate bureaucratism. This is the reason why Ludwig von Mises wrote this book in the first place, to prove that the expanding size of a business enterprise does not lead to bureaucratism without the interference from the government. In fact, Mises argues that business bureaucratism is an outcome of government intervention in business activities. 

Creative Leadership. The absence of "creative leadership" is the most favorite criticism against business bureaucratism (p. 12). Mises responds to this charge by identifying that in political affairs such complain is common in societies that prepared the way for the emergence of dictatorial government. When it comes to business, the charge will not stand on the basis of facts derived from the experience of American businesses. Basically, American businesses exist and grow due to the presence of some creative pioneers who are flexible enough to adapt to the changing trend in demand and supply. These leaders utilize the latest technological discovery to produce and distribute "more, better, and cheaper" (ibid.) products. Contrary to accusation, these business leaders actually prevent bureaucratic system to develop. Instead, they motivate other businessmen to emulate their example, for if not, the latter will suffer the consequences of losing their businesses. 

Mises characterizes this type of leadership as possessing "restless dynamism and progressivism" (ibid.), which is an integral part in free market capitalism. The history of American corporations testify to the existence of a considerable number of such creative leaders. Mises has a high regard for such type of leaders, and he describes them as follows: 

"A true genius is very rarely acknowledged as such by his contemporaries. Society cannot contribute anything to the breeding and growing of ingenious men. A creative genius cannot be trained. There are no schools for creativeness. A genius is precisely a man who defies all schools and rules, who deviates from the traditional roads of routine and opens up new paths through land inaccessible before" (p. 13). 

Income Tax. However, government interference is capable to stifle such creativity. And this is best exemplified through "income tax" (ibid.). See Mises' explanation how the "income tax" prevents entrepreneurial creativity, the growth of an enterprise, and the emergence of bureaucracy:

"Let us look at one instance only, the income tax. In the past an ingenious newcomer started a new project. It was a modest start; he was poor, his funds were small and most of them borrowed. When initial success came, he did not increase his consumption, but reinvested the much greater part of the profits. Thus his business grew quickly. He became a leader in his line. His threatening competition forced the old rich firms and the big corporations to adjust their management to the conditions brought about by his intervention. They could not disregard him and indulge in bureaucratic negligence. They were under the necessity of being on their guard day and night against such dangerous innovators. If they could not find a man able to rival the newcomer for the management of their own affairs, they had to merge their own business with his and yield to his leadership" (pp. 13-14). 

"But today the income tax absorbs 80 or more per cent of such a newcomer's initial profits. He cannot accumulate capital; he cannot expand his business; his enterprise will never become big business. He is no match for the old vested interests. The old firms and corporations already own a considerable capitaL Income and corporation taxes prevent them from accumulating more capital, while they prevent the newcomer from accumulating any capital. He is doomed to remain small business forever. The already existing enterprises are sheltered against the dangers from ingenious newcomers. They are not menaced by their competition. They enjoy a virtual privilege as far as they content themselves with keeping their business in the traditional lines and in the traditional size. Their further development, of course, is curtailed. The continuous drain on their profits by taxes makes it impossible for them to expand their business out of their own funds. Thus a tendency toward rigidity originates" (p. 14).

So for Mises, the "income tax" was used by the government to choke the growth of an enterprise. This was economically destructive, which results were not only confined in the US. Similar picture could also be observed in other countries. Mises complains, "In all countries all tax laws are today written as if the main purpose of taxes were to hinder the accumulation of new capital and the improvements which it could achieve" (ibid.). 

Based on the foregoing analysis, we can say that the "progressives' " criticism of the absence of creative leadership among corporations is inaccurate. The real problem is that innovators are prevented from using their gifts for businesses to grow for they are restricted by governments' economic policies. 



Government Omnipotence. The next section shows how the advocates of government omnipotence utilized the bureaucratic system to advance the power of the state. Mises started his argument by narrating first that "The history of government bureaucratism is very old," and "It characterizes the governments of ancient Egypt and imperial China" (p. 15). In fact, the rise of modern government bureaucratism out of the ruins of feudalism was simply an attempt on the part of the state to substitute "the supremacy of a multitude of petty princes and counts" with bureaucratic management (ibid.). In Europe, France was the most successful in achieving this goal, the goal of abolishing "the autonomy of powerful vassals and of oligarchic groups of aristocrats" (ibid.). The process culminated during the French Revolution where "the arbitrariness of the kings" was eliminated, and "made the law supreme in the field of administration and restricted the scope of affairs subject to the discretionary judgment of the officeholders" (pp. 15-16). The victory of the law did not wipe out the bureaucratic system. Instead, it has been transformed and now clothed with "legal and constitutional basis" (p. 16). 

In the place of kings' arbitrariness, a new form of arbitratriness emerged. The administrative system of France in the 19th century was an example how the law was used to subdue "the arbitrariness of the bureaucrats" (ibid.). France served as a model for other nations to follow. Prussia followed after the footstep of France. In the case of Great Britain and the United States, there was much confidence that they were following a different path. They think that their concept of "rule of law" safeguarded them from the arbitratriness of the bureaucrats. However, Mises indicated that both the British and the Americans were mistaken for their experience showed "that no legal precautions are strong enough to resist a trend supported by a powerful ideology" (ibid.). Interventionist ideas and "socialism have undermined the dams erected by twenty generations of Anglo-Saxons against the flood of arbitrary rule" (ibid.). 

From this brief overview, we learned that totalitarianism grows through the expansion of government bureaucracy. But this does not mean that in order to protect freedom, bureaucracy must be totally eliminated. Mises upholds that "some amount of bureaucracy is indispensable" (p. 18). What people reject is not the legitimate, but the excessive power of bureaucracy. And we know that it is excessive when it intrudes "into all spheres of human life and activity" (ibid.). Such intrusion will ultimately results into deeper poverty and social chaos. Notice how Mises describes the relationship between bureaucratism and totalitarianism: 

"Totalitarianism is much more than mere bureaucracy. It is the subordination of every individual's whole life, work, and leisure, to the orders of those in power and office. . . . It forces the individual to renounce any activity of which the government does not approve. It tolerates no expression of dissent. It is the transformation of society into a strictly disciplined labor army- as the advocates of socialism say-or into a penitentiary- as its opponents say. At any rate it is the radical break from the way of life to which the civilized nations clung in the past. It is not merely the return of mankind to the oriental despotism under which, as Hegel observed, one man alone was free and all the rest slaves, . . . . It is different with modern socialism. It is totalitarian in the strict sense of the term. It holds the individual in tight rein from the womb to the tomb. . . . The State is both his guardian and his employer. The State determines his work, his diet, and his pleasures. The State tells him what to think and what to believe in" (p. 17). 

Profit Management. The best way to assess the bureaucratic system is by comparing it to profit management "within the framework of a capitalist society" (p. 18). Both "The essential features of capitalism" and the nature of the bureaucratic system are not widely known. The former has been misrepresented through "spurious legends" (ibid.). Capitalism has been discredited "as an 'economy of scarcity,' " whereas socialism has been praised as the economy of abundance. Mises refused to give a detailed analysis of these "fables" (p. 19). (He did that elsewhere). His primary concern in the book is to show "what the two systems in question are, how they work, and how they serve the needs of the people" (ibid.). 

In ending the Introduction, Mises gave us what he thinks to be the consensual understanding about the distinction between the two systems of management. Profit management is "the private citizens' way" and the bureaucratic management is "the way in which the offices of the government and the municipalities are operated" (ibid.). 

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. 

Conclusion. In the the last three sections of the Introduction of Bureaucracy, you will see the overview of Ludwig von Mises' thesis that government omnipotence advanced by diverting the attention of the people from government bureaucratism to corporate bureaucratism, and that the advocates of the increasing power of the state failed to understand that the market with its system of profit management does not develop bureaucratic system without government intervention. In this article, I also shared R. B. Kuiper's essay about irreligion as the theological cause for the increasing power of the state. We learned further that focusing on justice is the primary task of the state and that the biblical concept of man is contrary to totalitarianism.

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, L. (1944). Bureaucracy. New Haven: Yale University Press.


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.