The inevitability of red tape

“My own hypothesis is that every big mistake (for example, an undetected embezzlement or a mishandled episode of harassment) produces a permanent bureaucratic response designed to prevent a recurrence. This is very costly to reverse (who wants to deal with the first big embezzlement just after they downsized the accounting department) even if it would, in some sense, be less costly to put up with occasional failures. Moreover, for both good and bad reasons, I think we are, as a society, becoming less tolerant of institutional failures across a wide range of activities (systematic wrongdoing by financial institutions is a major counterexample but, I think, exceptional). So, we have more checks and balances, and more bureaucrats to enforce them.”

Speaking as someone who works for a large bureaucratic organization this accurately reflects my experience.

= = = Moreover, for both good and bad reasons, I think we are, as a society, becoming less tolerant of institutional failures across a wide range of activities (systematic wrongdoing by financial institutions is a major counterexample but, I think, exceptional). = = =

I might say rather that we are less tolerant of the perception of failure (“the optics”) combined with the perception of missing institutional controls. Most large institutions I have dealt with since 2000 have been tolerating amounts of failure that would have been inconceivable to managers (or customers, or regulators) trained in the 1940s or 50s, but as long as the “perceptions are managed” and there is some sort of apparatus onto which investigations can be deflected all is well.

Is it the case that bureaucracy and red tape grow without limits? In every individual organization, in the aggregate, or in both? How much red tape is there today, compared with 2000, or 1980, or 1900? Suppose we were social scientists, and wanted to answer these questions in an empirical way: how would we measure bureaucracy?

Tainter again:

….between 1914 and 1967, the number of capital ships in the British Navy declined by 78.9 percent, the number of officers and enlisted men by 32.9 percent, and the
number of dockyard workers by 33.7 percent. Yet during this period the number of
dockyard officials and clerks increased by 247 percent, and the number of Admiralty
officials by 769 percent… between 1935 and 1954 the number of officials in the British Colonial Office increased by 447 percent. During this same period, of course, the empire administered by these officials shrank considerably (p 106-7)

Parkinson explained this rather thoroughly, bureaucrats generate work for themselves. This is one of the many reasons we need more capitalism and markets which systematically punish organizations that grow excessively bureaucratic.

Parkinson was simplistic in his conclusions – the dynamic applies to any complex organisations or societies, whether capitalist or not. The stats about the British Navy and the Colonial Office come from Parkinson’s work yet the same tendency is there in corporations. ALL organisations grow more bureaucratic as they grow more complex – its the byproduct of their own complexity.

There is red tape, and then again there is red tape.

I believe that it would be fair to say that modern societies are artifacts. As such, we change them, from time to time, often by adding complexity in order to meet perceived needs. Complexity is irritating and baffling, but is it really so bad in and of itself?

Consider an analogy. At one time I owned a telephone that had no transistors in it at all. It had an electromechanical bell, and a set of contacts that were interrupted dit-dit-dit by a spring-loaded rotary dial. This telephone, which I was able to understand pretty completely just by taking it apart and looking at it, was simple, reliable, and robust. Today I have a much more complicated telephone, containing perhaps millions of transistors, capable of much more exotic operation: it has multiple cordless handsets, answers incoming calls, and takes messages. But I can’t just take it apart and understand it.

Now compare the kind of government that went with rotary-dial phones to the kind of government we have today. Did we have racial and gender discrimination in those days? You bet. And not much recourse if you were a victim. Today we have bureaucrats whose job is to investigate complaints; a press that reports on the bureaucrats’ failures; and lots of hungry lawyers whose hope is to find a well-founded complaint that they can extract fees from. We also, in the days of rotary phones, had cars that didn’t have seat belts; we had lead-based solder holding our pipes together; we had DDT. It was also technically infeasible to record everybody’s telephone dialings on a call-by-call basis.

In the time between rotary phones and today, life got a lot more complicated. And partly as a result of that, our apparatus for controlling life’s little surprises has gotten more complicated, in exactly the same way as our apparatus for enabling telephony has gotten more complicated. So the paperwork associated with one class of complexity, i.e. that having to do with administrative procedures, is more complicated. And there’s more of it. Yes, that’s true. But my rotary-dial telephone didn’t come with a twenty-page user guide in four languages, either; and please let’s not talk about the technical standards documents that make smartphones compatible with the internet of things.

I could easily say much the same thing about universities, businesses, and quangoes. I will not.

Please don’t get me wrong. My goal is to describe complexity, not to praise it. There are badly written technical standards and user manuals, just as there are badly designed administrative procedures. But sometimes complexity (e.g. of paperwork) just happens in response to other complexities, and to fail to respond to an increasingly complicated reality just in order to keep one’s administration of it simple seems to me to be an error.

In science fiction, Frank Herbert’s interstellar empire in his “Whipping Star” universe included a Bureau of Sabotage, intended to derail bureaucracy at fast as it was built. Perhaps a useful institutional function to consider- a sort of organizational macrophage.

The race is not to the swift nor the battle to the strong. Social Darwinism does not create the “best” — but rather the most degraded.

The reason capitalism remains superior is not that it magically makes organizations immune. Capitalism is superior because it selectively kills the organizations whose performance degrades too much (whether because of bureaucratization or any other reason). By selectively culling the herd and demanding ever better performance, capitalism keeps the average level of performance not just high, but continually improving.

Actually if we look at increasing bureaucratisation (which is the topic, rather than ‘performance’) then capitalist corporations demonstrate exactly the same constraints re. complexity as other forms of complex organisation. To take the example of Apple – as I understand it Apple started with only two employees (out of a garage?) and their ratio of ‘manager to worker’ was pretty damn good. :)

The increasing size and complexity of Apple as an organisation has led to an increasingly higher ratio of management (bureaucratisation) as they ‘spend’ more and more of their own resources on maintaining their own organisational functioning (in addition to their core function of designing and marketing consumer products). As Apple continues to grow and/or becomes complex (whether in terms of R&D or more likely marketing) the size and cost of the former rises relative to the latter.

Yes some companies find and implement better ways of doing this – but as a number of commentators above has mentioned ‘complexity’ does not equal ‘bad’. We (societies, organisations etc) implement complexity as a problem solving technique to address the challenges we face – it’s the essence of ‘progress’ after all. Yet in doing this we face declining returns on these investments in complexity.

Apple is a pretty damn successful company in relation to its competitors and it’s success is connected to its increasing complexity – but it is also facing this declining return on investment in complexity. Capitalism has nothing to do with it.

An explanation of the form, “It’s simple: it’s complex!” is kind of ridiculous on its face.

Touche.

And so simply expressed… :)

“My own hypothesis is that every big mistake (for example, an undetected embezzlement or a mishandled episode of harassment) produces a permanent bureaucratic response designed to prevent a recurrence.”
Sounds like the development of the US Civil Service. I think I remember reading that Andrew Jackson’s Sec Treasury absconded with the gold and high tailed to to France.

@floopmeister

>Apple is a pretty damn successful company in relation to its competitors and it’s success is connected to its increasing complexity – but it is also facing this declining return on investment in complexity. Capitalism has nothing to do with it.

You can”t consider apple in isolation. The whole point of capitalism is not individual companies, but multiple companies in competition. Yes, apple has managed the process well. and what is the consequence of that? Apple was rewarded with money from customers who, in buying apple products, did not buy other things. Other companies that did not manage the process as well declined. Hell, apple itself nearly collapsed completely in the 90s, precisely because it didn’t handle its growth well. the result? market share plummeted. Were apple not disciplined by competition, it probably would have gone on making the same mistakes it made in the 90s. Instead, motivated by the desire not to go under, it reformed itself. Want to place any bets on, say, the VA having a similar degree of transformation?

As the number of production units grows, the number of connections between production units grows roughly as the square of the number of units. So I don’t see why one should be surprised that the proportion of a company’s staff and coast which is dedicated to managing those connections should also increase with firm size. One might have independent reasons for believing that any given industry has too many administrators, but to simply read it off an increasing producer/administrator ratio is to ignore the fundamental theorems of operational research and/or cybernetics.

What MPAVictoria said up top: every seemingly pointless rule and bureaucratic burden within an institution can be traced back to a specific instance that demanded its creation. That’s the “Sitting On The Photocopier Is Grounds For Dismissal” principle. Because governments and large companies have greater longevity than smaller enterprises, more rules persist.

Of course, this means that smaller institutions are bound to repeat most of those specific instances themselves, or variants of them, and the most significant variable there is time.

By the way, this is why I don’t think we’ll need to be afraid of robots taking our jobs. We’ll just build even more complex organizations/firms and production processes, with lots of humans essentially doing supervisory roles over ever-increasingly large numbers of specialized machines/computers/automated processes, and other humans to tend to care of those humans, and so forth.

So the trade-off is between rules complexity and management, and system speed, adaptability and resources. Systems migrate towards greater complexity until the underlying resource flow is tapped out; then they migrate back towards simplicity.

Couldn’t agree more.

A really interesting area in this regard is military theory – a body of organisational philosophy in which these tensions are really pronounced. You get the concern with adaptability to changing conditions (and resource constraints most importantly) through a constant striving for simplicity… running up against the opposing tendency for ever-greater technological complexity as a problem-solving tactic. The tenets of counter-insurgency (simplicity and adaptability) vs the drive for technological dominance (Full Spectrum Dominance, as it were).

re floopmeister on this in the military, if you want to see the whole cycle in quick time, the Red Army 1930-45 is a really good example. Goes from rifle armies with a few attached bits to all arms corps by 40, back to rifles plus attached bits in late 41, then builds again to coordinated fronts by 44.

@Peter T

>Quite often government was well in advance of private enterprise (the Admiralty was managing a global network of command, dockyards, supply and maintenance for over 600 ships when 5 ships was a large commercial firm), sometime the reverse.

Up through the 19th century, you can argue that governments could keep pace and even exceed with capitalistic development, though here I note you’re quoting the example of the british admiralty. The Austrian, French or Italian admiralties were considerably less efficient. With the possible exception of the Prussian army, the Royal Navy was the most successful large organization in the world. Simply citing the existence of successful non-capitalist organizations proves nothing. There are always a few good militaries out there because militaries are subjected to the darwinian process of fighting other militaries. Capitalism works precisely because it creates the same darwinian existence, though fortunately without the bloodshed.

And once you get to the 20th century, it becomes increasingly impossible to pretend that the state can keep up. Organizationally, it’s literally decades behind at this point. there is indeed a larger force at work, but that force is capitalism. pointing to cell phone chargers while ignoring how and why cell phones came to be developed in the first place (and the many ways in which states actively hindered that process with telecom regulation designed for landlines) is simply burying your head in the sand.

floopmeister – David Glantz’s books take one through it in great detail.

Zamfir, helpful additional examples!

There’s a connection from this thread to Chris’s recent post about the banning of political philosophy at “lesser” British tertiary education institutions.

https://crookedtimber.org/2015/03/13/political-philosophy-now-illegal-in-the-uk/

In addition to that post’s takeaway, the document to which it links is a masterpiece of administrative self-dealing … almost certainly prepared by a consultant, it requires that educational institutions conduct “bespoke risk analysis” of the identified risk (in this case, radicalization), thus spawning a whole new class of administrators and consultants to produce the analysis, which in turn will get a checkmark from the government administrator about whether the institution has met its duty in this respect.

As Atrios might say, Grifters (or in this case, Bobos) gotta grift …

Ex-government bureaucrat and now (occasional) university teacher here.
The real paradox is how, over the last generation or so, the cost of providing government functions as a whole has risen, in most countries, but the quality of what is done, and the number of those doing it, has fallen sharply. Further to JQ’s point above, this did not happen by accident, but was deliberately engineered.
In the pre-market fanaticism era, state functions were generally organized in a rational and hierarchical fashion which was quite effective and efficient. This was because hierarchies enable work to find the correct level, questions and information to be passed up and guidance to be passed down. It was far from perfect, of course, but it worked because it was a system established by trial and error over a long period of time. The size of the state increased during the 20th century increased because it was obliged to take on more functions , and because those functions became much more complex. (Parkinson’s example, intended as a joke, originally derived from the fact that naval technology became massively more complicated during that period.)
But all that changed in the 1980s for three reasons. First the attack on the very idea of government , hollowing out and closing down, as typified by the endless, recurrent, “savings” and “economy” exercises which slowly bled organisations to death, and led to senior decision makers spending stupid amounts of time arguing over this detail of how this organisation and that organisation could be merged to save tiny sums of money. But secondly, since the work still needed to be done, much of it was contracted out to large unaccountable consortia on whom government became dependent, and who thus wound up charging what they liked. Indeed, many governments no longer have the resources even to judge whether the money is being spent properly. We have painfully relearned the lesson of the 20th century (that most things that are really important to society are too difficult and complex to leave to the private sector) but there are no longer the resources to take any action on that judgement, even if the political will existed. Third, and most important, the ideological obsession with seeing everything as a “market” and transforming public services into just “services” to be provided as cheaply as possible. Since most public functions cannot actually be run in these terms, a huge amount of effort has to go onto making them look as though they are. This is what Mark Fisher called “market Stalinism” – a vast superstructure of pointless bureaucracy which exists to bury the actual work of the public sector under a pile of business-sounding gibberish, and which takes money and resources away from what actually needs to be done, like teaching, or paying benefits. In order to justify its existence it has to create endless “internal markets”, “targets” “norms” and so forth, which not only create lots of useless jobs and spend lots of money, they also consume a lot of the time of the people who are doing the actual work.

For some reason my first attempt at posting this disappeared into moderation. No idea what I said …..
Ex-government bureaucrat and now (occasional) university teacher here.
The real paradox is how, over the last generation or so, the cost of providing government functions as a whole has risen, in most countries, but the quality of what is done, and the number of those doing it, has fallen sharply. Further to JQ’s point above, this did not happen by accident, but was deliberately engineered.
In the pre-market fanaticism era, state functions were generally organized in a rational and hierarchical fashion which was quite effective and efficient. This was because hierarchies enable work to find the correct level, questions and information to be passed up and guidance to be passed down. It was far from perfect, of course, but it worked because it was a system established by trial and error over a long period of time. The size of the state increased during the 20th century increased because it was obliged to take on more functions , and because those functions became much more complex. (Parkinson’s example, intended as a joke, originally derived from the fact that naval technology became massively more complicated during that period.)
But all that changed in the 1980s for three reasons. First the attack on the very idea of government , hollowing out and closing down, as typified by the endless, recurrent, “savings” and “economy” exercises which slowly bled organisations to death, and led to senior decision makers spending stupid amounts of time arguing over this detail of how this organisation and that organisation could be merged to save tiny sums of money. But secondly, since the work still needed to be done, much of it was contracted out to large unaccountable consortia on whom government became dependent, and who thus wound up charging what they liked. Indeed, many governments no longer have the resources even to judge whether the money is being spent properly. We have painfully relearned the lesson of the 20th century (that most things that are really important to society are too difficult and complex to leave to the private sector) but there are no longer the resources to take any action on that judgement, even if the political will existed. Third, and most important, the ideological obsession with seeing everything as a “market” and transforming public services into just “services” to be provided as cheaply as possible. Since most public functions cannot actually be run in these terms, a huge amount of effort has to go onto making them look as though they are. This is what Mark Fisher called “market Stalinism” – a vast superstructure of pointless bureaucracy which exists to bury the actual work of the public sector under a pile of business-sounding gibberish, and which takes money and resources away from what actually needs to be done, like teaching, or paying benefits. In order to justify its existence it has to create endless “internal markets”, “targets” “norms” and so forth, which not only create lots of useless jobs and spend lots of money, they also consume a lot of the time of the people who are doing the actual work.

Further to what David said – I worked briefly as a bureaucrat in the health department, in public health. In public health there are lots of little grants and tenders to external organisations. It’s partly because public health, as opposed to say, hospitals, isn’t taken seriously, so you don’t have big ongoing program funding, you have lots of smaller short term grants that are highly dependent on the government of the day and the current political fashion. There is also another political imperative – these little grants are very useful for local MPs making good news announcements in their electorates.

The impact in terms of red tape is that you still have to have accountability for all these little grants – so someone in the agency has to write a report, and someone in the bureaucracy has to read it and do something with it, and then we have to hire some consultants to do an evaluation of all the grants, and the bureaucrats have to liaise with the consultants and do something with their report, and so it goes. Then the new government comes in and cuts all the programs, regardless of what the evaluation said, and then they hire consultants to do ‘reform’ and set up some new programs, with some new names, and then the local MPs make a new set of announcements, and so it goes.

One of the best summaries on the topic in my opinion is Steve Randy Waldman, Regulation, legitimation, neutralization. There’s too much there for me to summarize, so here’s an excerpt. (It’s maybe 10 minutes to read the whole thing, which I strongly recommend.)

When organizations misbehave, it is important to understand that they do so in spite of being filled for the most part by people of good will. We should try to understand how they manage this.

One way that they manage this is by virtue of the regulation that exists ostensibly to control the misbehavior.
….
…[I]t’s important to note, both among bankers and spies, we do not end up with an absence of regulation. Instead we end up with a festival of regulation undermined by a few strategic lacunae.
….
Regulation and compliance serves a straightforward human function. It substitutes for and absolves participants of the duty they would feel, as human beings, to exercise independent judgment about the nature of the work they are doing. There is nothing odd or conspiratorial about saying this. Organizations wouldn’t function if every organizational action were subject to idiosyncratic review and veto by each participant.

Labourers v. Managers – While I agree the phenomenon of bureaucratic growth is real, I am not sure this is evidence of it.

Once upon a time everything was built by labourers. Now things are built by truck drivers, lorry-mounted-crane operators, bulldozer and excavator drivers, and so on – and because their muscles are augmented by petrochemicals, fewer of them. The mechanisation of labour reduces the number of labourers by replacing them with different job titles, and fewer of them.

Likewise the movement of labour into the service sector (driven by automation and mechanisation of manufacturing) replaces Foreman with Manager. It doesn’t necessarily increase the combined number.

The original Iron Law of Bureaucracy, from 1910 (not Jerry Pournelle’s, who has replaced the original on Google):

It grows.

A couple of thoughts:

1. As a University, one of our biggest customers is the government (there are paying students as well, of course). There is a certain amount of paperwork that we can’t eliminate, because if we don’t do it them the government won’t give us the money. And there isn’t a competitive market in this, because if another university that competes with us tries to cut costs by not doing some of this paperwork, then they will lose big time because the government won’t give them any money (and will instead give it to us, who keep on doing the paperwork).

2, Research is an extremely high-risk activity. You spend on the order of a million dollars on a medium-sized research project, and its pretty much a lucky dip what you’re going to discover. The people on the government side handing out research grants know this (and are relying on a statistical law of large numbers thing where they’re funding a diverse groups of universities to work on a diverse set of problems). On the other hand. the paper-pushers at both government and university ends like to work under the pretense that the risks are low: the government pays us the money, and we will write a report. There will definitely be a report (low risk) which will keep the paper-pushers happy. What the report actually *says* on the other hand is a different matter (and a different group of assesors, more attuned to the reality of research risk, gets to judge that).

“Moreover, for both good and bad reasons, I think we are, as a society, becoming less tolerant of institutional failures across a wide range of activities (systematic wrongdoing by financial institutions is a major counterexample but, I think, exceptional).”
I agree with those who agree with this. x100
It goes beyond “institutional failures,” though. We’re a society of consumers, and most of us expect to be satisfied with the products we consume. This applies to higher ed and just about everything else. If there’s a freak storm, everyone wants theirs to be the first block whose power comes back up. If someone acts unethically, it’s not enough to blame that person–something must be done to keep it from ever happening again. There seems to be less understanding (or acceptance) that sometimes shit just happens, no matter how many layers of beaurocracy you have in place.

cassander 04.07.15 at 6:16 am:
‘… And once you get to the 20th century, it becomes increasingly impossible to pretend that the state can keep up. …’

In a capitalist state, corporations are part of the state, although not usually part of the (visible) government, and the owners of the corporations are an important part of the state’s ruling class. In normal times, the government does what it’s told to do, which among other things is to provide certain services and buffers for the ruling class’s main, most important interests, by mediating conflicts between those interests and between those interests and other interests outside the ruling class, like those of the population in general. The complexity of the state’s service institutions, such as the government, education industry, medical industry, media, and so on, are going to keep pace with the complexity of the capitalist industrial system, because that is their job, their raison d’être. (When elements of them fail, they are replaced.) The complexity can only be managed through bureaucracy — the managerial and administrative apparatus. Apparently complexity is highly productive, because complex systems have prevailed. Bureaucracy is necessary to complexity; therefore, bureaucracy is productive. For this reason, large, powerful corporations are highly bureaucratic and are ensconced within highly bureaucratic states.

He may not be very popular at CT but David Graeber has been writing a lot of good stuff about this issue recently.

“Parkinson explained this rather thoroughly, bureaucrats generate work for themselves. This is one of the many reasons we need more capitalism and markets which systematically punish organizations that grow excessively bureaucratic.”

… what? We already have capitalism and markets, and it’s pretty clear that there’s no correlation between those and decreased bureaucracy. Indeed, if anything it’s the reverse: look at the education system, where a move towards more business-like methods has corresponded with a gigantic growth in bureaucracy.

David 04.07.15 at 12:29 pm

This is excellent, David.

One time I had the task of rationalizing the engineering data flow for a very large commercial computer system, which was a thing of rags and patches. I found that the worker bees had no idea of how their work fit into the overall system, and the managers had no idea what the workers actually accomplished. Neither had anything like a desire to change in any way. In the end all I did was install some new patches aimed at particular problems. Later BBN came in with large funding support from top management, applying Advanced Analytic Metrics and extensive charting to the problem and fucked things up seriously. A common tale, I would suspect. Certainly the computer code was also like that: we could patch things, but never allowed to fix anything. Too risky.

But I don’t think that has anything to do with tuition increases (and declining educational value), which is about a simple ripoff scam, similar to housing or savings and loan bubbles. Capturing profits while externalizing costs.

As for private companies, large amounts of bureaucracy exist to protect the company from the employees. As companies threw away the psychological contract, making it clear to employees that they were disposable, trust declined. Hence you get a corresponding increase in protective bureaucracy.

There the number of tasks for major institutions to keep up with is increasing at an increasing rate (especially with technology), and it is a bit of a Red Queen effect as you have to adapt to those adapting around you.

The Ivy League school with which I have some technological interaction has in fact signficantly reduced the number of actual IT service positions in recent years, due to the crashing endowment requiring “belt tightening.” (By “IT service” I mean those charged with directly maintaining hardware and software systems.) At the same time, additional senior management positions have been created, so that they now have a CIO, a CTO, five Associate CIOs, a Senior Director, an Executive Director, and a Chief Information Security Officer (the latter of which is, theoretically at least, most clearly driven by the changing tech landscape). I remain stubbornly unconvinced that the growing rate of information technology tasks requires more managers overseeing few IT workers. Following a major failure of core computing resources during midterms, when it was demonstrated that there was no fail over in place in the event of a localized power outage, the new CIO declared this “a wake up call,” though for whom remained unspecified.

Outside of IT, this is the same institution that (1) announced a plan to study how geographically disjoint departments could share office staff, and (2) announced that a recently-created vice provost position was being split into two positions, with the same original salary for each.

These are the sorts of anedotes that make me remain so attached to Professor Quiggin’s (b) in the original post. Because at this particular institution at least, rank-and-file administrative staff who would presumably be most necessary for any genuine growth in day-to-day administrative needs are not the ones who are substantially increasing their numbers, or even increasing at all.

Red tape and exploding bureauocracies(sic) are a social response to increasing productivity.

I’m getting here late, and it is just one perspective, from one college, but I do not observe bloat in the administration of my own institution (specifically my (very large) college, that I am pretty familiar with). There is a lot of administration to be done, and it is difficult and complex work. In fact, I would say we are under-resourced, especially re advising, and re fundraising. There are academic units that are too small to be efficient, and there is probably some admin over-staffing there, but faculty resistance to change is pretty strong, and it takes administrators to counter it. I always tell students to take their parents to the L&S admin building so that they can see how lavishly the administrators spend on themselves (it is the oldest, pokiest, building on campus — the Dean’s office is marginally bigger and nicer than mine, but it is a small margin, and mine has a view of the lake).

Peter T: much appreciated.

” …what I said was that all organizations grow more complicated over time, and that capitalism prunes the ones that grow too complicated for their own good.”

But history repeatedly shows that characterizing this belief as a general law is demonstrably false. The counterexamples are numerous, often large wrt the relevant economy, and more durable than individual human lifespans. In fact, the way you have characterized this is much much more inaccurate: many very complex organizations intertwine increasingly over time with whatever governments are relevant, and immunize themselves against the (mostly theoretical) um… lets call it gardening of the mystical capitalism you seem to have faith in.

@Russell L. Carter 04.08.15 at 12:46 am

>But history repeatedly shows that characterizing this belief as a general law is demonstrably false.

What history would that be? Because last I checked, the list of dead companies is very, very long.

>In fact, the way you have characterized this is much much more inaccurate: many very complex organizations intertwine increasingly over time with whatever governments are relevant, and immunize themselves against the (mostly theoretical) um…

I agree. the world needs more capitalism to make this less of a problem….

Cassander:

What I find ridiculous is your inability to understand or appreciate the difference between “capitalism is a system that tends towards good results” and “capitalism produces perfect results every single time with no exceptions.”

What I find ridiculous is your inability to understand or appreciate the difference between “unregulated capitalism leads to disaster every time” and “well-regulated capitalism often leads to good results”, combined with your suggestion that the failures are always caused by state actors and never their non-state counterparts.

But that’s OK, because I don’t even agree that capitalism tends towards good results. Capitalism describes the relationship between capital, labor and IP. I don’t view that as the source of whatever “success” we might identify somewhat-sorta-capitalist societies. Instead I see that as just one mechanism among several for encouraging energetic engagement with social progress, technical problems and human creativity. I think that capitalism is likely, in the long run, to be one of the worst mechanisms of doing this, and that alternate systems, which place a high value on liberty but also deny special value to capital over labor will turn out to be lead toward more and deeper good, in an egalitarian sense.

@Russell L. Carter

>Everything I said remains exactly true.

what you said was entirely empty of content. how on earth does “history prove” that capitalism does not prune bad companies?

@Paul Davis
>, combined with your suggestion that the failures are always caused by state actors and never their non-state counterparts.

I didn’t suggest that, you suggested that. to quote you, “many very complex organizations intertwine increasingly over time with whatever governments are relevant.” You suggested the only failure mode of capitalism was firms immunizing themselves from capitalism, not me.

>and that alternate systems, which place a high value on liberty

funny how scarce on the ground those seem to be, and how bad the alternatives proposed in the 20th century were. But I’m sure you’ll get it right next time!

” how on earth does “history prove” that capitalism does not prune bad companies?”

The existence of counterexamples to a conjecture doesn’t imply that the existence of examples of the implications of the conjecture don’t exist. Your characterization of what I wrote is simply incorrect.

What’s a bad company? Because I’m with Paul Davis here, I’m not understanding what your
definition of “ones that grow too complicated for their own good” is.

We certainly agree that something pruned all those quite simple companies in my small town, and continue to do so. What is it? I heard the other day somebody say this word “competition”. Maybe it’s relevant? Careful… there might be further deployments at scale.

One thing I think hasn’t really been mentioned is the very real fear of being made an example of bad behavior in the media. The actual physical cost of some mishap (say sexual indiscretion by a manager) might be manageable, but if your institution becomes the media posterboy for whatever it is that you screwed up on, damages can multiply manyfold. Thats especially true of many government or quasi-government functions, there are professional muckrakers out their just looking to make their career by destroying your’s and you will be willing be spend highly to reduce the risk.

From the OP: “A bigger question raised by the piece: why does bureaucracy and red tape seem to grow without limits?
…
The obvious explanations are
(a) stupidity; and
(b) administrative bloat benefits administrators and they are the ones who make the decisions

I don’t think either of these works adequately.
…
My own hypothesis is that every big mistake (for example, an undetected embezzlement or a mishandled episode of harassment) produces a permanent bureaucratic response designed to prevent a recurrence. ”

I think John Quiggin’s hypothesis would fit with the idea of polycentric governance of public goods. I was just reading A Polycentric Approach for Coping With Climate Change (Elinor Ostrom 2010) as it was recommended in a paper by I think Mark Diesendorf and Delina that you could combine wartime mobilisation institutions with polycentric governance in a rapid response to climate change. The idea is that as too much centralisation is impractical and not responsive enough, successful governance is often polycentric in nature, but while polycentric governance increases trust and reciprocity you also need officials (red tape bureaucrats) to monitor and also to be in charge of sanctioning.

@William

>Even if the image of capitalism being hawked by cassander — that of a self-correcting clockwork — were more than an adolescent ideological fantasy, the damage done to millions of people as it clanked its way from one crisis to another would cry out for amelioration of one kind or another

A fantasy you say, typing on a computer made by capitalists on an internet built by capitalists. The clockwork isn’t fantasy, you use it every day. The fantasy is your vision of some alternative, and those fantasies have done a hell of a lot more harm than capitalism. Wealth undermines representative government? It is widespread wealth that makes representative government possible. You beclown yourself with your own metaphors.

Ah yes – that well known venture capitalist Tim Berners Lee, who invented the WWW and the first internet browser while working at CERN (the multi-government-funded nuclear research institute in France).

He then went on to work for a range of research or non-profit organisations (such as the World Wide Web Consortium at MIT) focusing on the potential of his invention (which was released to the world patent and royalty free).

Yep – a shining example of cut-throat competition and the unfettered market.

“My own hypothesis is that every big mistake (for example, an undetected embezzlement or a mishandled episode of harassment) produces a permanent bureaucratic response designed to prevent a recurrence. This is very costly to reverse (who wants to deal with the first big embezzlement just after they downsized the accounting department) even if it would, in some sense, be less costly to put up with occasional failures. ”

What you are describing is a ratchet effect. For such an effect to occur, it must be easy to “slip” in one direction and very difficult to reverse that direction. These mechanisms are in play in your example – a rational response to something going wrong is to change systems to reduce that error, which will make them more complicated, and no-one wants to remove those safeguards and face responsibility for a re-occurance.

A similar example can be found in the War on Terror – it’s very easy to go in the direction of more operational power for the security apparatus, and very difficult to require them to reduce that power. If, for example, they announced that they would no longer inspect shoes, then shoes would become the obvious vehicle for smuggling contraband.

Um in Australia the government telecom did this until they privatized it more recently , and the government is supposed to be laying a national broadband network for us too

Yeah, and isn’t it funny how the privatised version we have been offered since the change of government is going to be so much worse than the one the government was originally planning to provide…

Today I went to a railway station I used regularly many years ago. It reminded me of the conversations here about privatisation and red tape. All stations (including this one) used to be staffed, but in the lead up to public transport privatisation in Melbourne in the late 1990s, thousands of staff on trains, railway stations and trams lost their jobs, and were replaced with ticket machines and signage (both generally poor quality).

Partly as a result of this, and also partly because of widespread community anger, fare evasion went up, as did vandalism and violence on unstaffed stations. Gradually, in addition to having to bail the private operators out financially several times, the state government has had to introduce a range of measures to address this, particularly ticket inspectors and more lately, armed security staff on stations.

While it’s quite possible that the costs still remain lower than the previous costs of employing staff on public transport and stations, the cultural and social consequences have been pretty bad. There have been numerous reported incidents of ticket inspectors behaving like thugs, especially towards young people. When I now go to my local station after five o’clock and see three armed security guys hanging around, it just feels creepy.

As I say, it may still cost less than the old system, and as for red tape, I don’t really know. There is certainly some, including for all the legal action associated with the ticket inspectors (a system of lower on-the-spot fines has recently been introduced, and inspectors given training in how to behave decently, but for years the system was both unwieldy and unpleasant), but there may also be less ‘red tape’ than the old system. But the social impacts have been very unpleasant.

Not completely on-topic I guess, but it is an example of how privatisation can introduce different forms of red tape, and new costs, both economic and social.

“There is an inverse relationship between utility and reward. The most lucrative, prestigious jobs tend to cause the greatest harm. The most useful workers tend to be paid least and treated worst. …
The inverse relationship doesn’t always hold. There are plenty of useless, badly-paid jobs, and a few useful, well-paid jobs. But surgeons and film directors are greatly outnumbered by corporate lawyers, lobbyists, advertisers, management consultants, financiers and parasitic bosses consuming the utility their workers provide.”

Kleptoremuneration
George Monbiot, 31st March 2015
http://www.monbiot.com/2015/03/31/3709/

Bureaucracies can be used to provide a ritualized response, in substitution for effective control. The use of bureaucracies outside of armies to provide actual, technically expert forms of control over a broad span and scope is a relatively recent phenomenon historically, beginning most prominently with railroads. The oldest bureaucratic institution in the world is the Roman Catholic Church, which can trace features of its institutional existence back to the days when Rome had Kings. The Roman Church survived the fading away of the pagan cults, the fall of the Roman Empire, and the dissolution of medieval feudalism.

Ritual bureaucracy — putting on a theatrical performance — is perhaps specially adaptive to particular categories of human activity: religion, of course, especially in its civic or tribal manifestations; the administration of justice (or “justice” if you are appropriately cynical); the dignity and security of the state; the administration of money and finance; palliative health care; and the education of the young. There’s a Wizard of Oz aspect to these activities: it’s not important if Scarecrow is knowledgeable or skilled; what’s important is that he has the appropriate credentials to “prove” that he’s smart. The semiotics of historic bank buildings and the uniforms of royal guards are well-known, and the sociology of how medical doctors present themselves deserves to be better known.

There’s necessarily a lot of political tension associated with ritual bureaucracy. It can absorb and segregate a lot of resources and its ritual enactments can themselves have profound effects on political culture. The Dissolution of the Monasteries and the Enlightenment were profound milestones in the emergence of modernity because they were profound milestones in the decline of the medieval Church in its cultural domination and command of resources.

The American experience with the security state, especially post-9/11 is instructive. Vast resources have been absorbed into the Department of Homeland Security, the very name of which is a fascist slogan, and, yet debates over its substantive and functional effects quickly reduce to anecdotal absurdity: plots thwarted that turn out to be nothing more than the idle fantasies kindled to faint sparks by undercover agents badly placed, or vast assemblies of hay stacks but no method to search for needles. What purpose the TSA serves beyond making air travel unpleasant and reminding us to be scared? Well, it’s a great cover for creating privileges for the new aristocracy, of course! You, too, can get a pass thru security or crossing the border. (I have one of those passes that permits me to cross the Mexican border in about 15 minutes, where it takes the plebs upwards of 3 hours. What a crock! And, concomitant with the anti-egalitarian aspects, an enormous waste of resources.)

Education and health care are other sectors that are particularly susceptible to ritual bureaucracy and hijacking of resources. It seems to me that the examples JQ gave of prophylactic bureaucracy could be re-interpreted as ritual bureaucracy, precisely because they are implemented in an educational institution, where ritual bureaucracy co-exists with craft production processes (teaching and research) little aided by functional bureaucracy.

The contrast with functional bureaucracy might be highlighted by the Toyota just-in-time philosophy, which did so much to reduce the resources absorbed in auto assembly and manufacture.

@TM
Jesus that is a strong, strong article. Thank you.

“Which is, indeed, a big deal, both in making cars and making pharmaceuticals.”

Bruce you really don’t know anything about the pharmaceutical market and what effect “just in time” has had on the increase occurrence of drug shortages do you?

“I did think Bruce’s argument seemed to be veering towards ‘if Toyota are so good at making cars, why doesn’t the government let them run schools’….”

Yep and he is veering into an area I happen to know a lot about. “Just in Time” manufacturing is great for reducing costs and increasing productivity. It is very bad at responding to unexpected supply shocks. The old fatter inventories had their advantages.

Igor Belanov: I did think Bruce’s argument seemed to be veering towards ‘if Toyota are so good at making cars, why doesn’t the government let them run schools’….

Oh, dear god . . .

MPAVictoria: . . . he is veering into an area I happen to know a lot about.

I’m not going to respond further to your comments. Your stupidity just makes me angry, and it’s not something I enjoy.

“I’m not going to respond further to your comments. Your stupidity just makes me angry, and it’s not something I enjoy.”

Whatever brings you the greatest happiness Bruce. :-)

We’ve clearly misunderstood you then, Bruce. I hope your huff wasn’t evidence that you can’t explain what you actually mean?

I can explain, Igor. Would it do it any good? You read a awful lot into a single sentence. I shudder to imagine what you might do with multiple paragraphs.

Val,

I got 50 cents says MPAV is male as well.

;^)

I understand Bruce Wilders degeneration – and particularly like the description of ritualistic versus functional bureaucracy.

Bruce Wilder – I am wondering if the difference since 2000 is in part due to the demise of IBM type systems and the rise of everyone has a PC. When everyone had centralized IBM type systems people at least tried to understand the flow. Now everyone has their own PC and their own spreadsheet which contributes to what we perceive as bloat. Bloat is clerks trying to co-ordinate their ecxel spreadsheets., office towers filled with bloat.

palliative – (of a treatment or medicine) relieving pain or alleviating a problem without dealing with the underlying cause.

Probably not quite the right word for the context — much of health care would cost less and do less harm, if it were rational and palliative, rather than intent on enacting the dramatic mission of “saving lives” by means of heroic surgeries, pioneering drug treatments and like “cures”. I know from my own family experience, the very real benefits of well-administered hospice care.

We structure medical care around dramatic shared conceptions, which are often at odds with the technically effective measures and possibilities, beginning with (what was until very recently) the god-like role of the physician. If we were serious about improving health and health care, in a purely technical and instrumental sense, we wouldn’t bother with health insurance, which is just a huge scam and rip-off administered by vast, pernicious bureaucracies. We would have bureaucracies administering cheap, but effective public health measures like vaccinations and monitoring the food supply for contamination, which don’t require either insurance or a personal physician for execution.

There have been a number of politically salient controversies over the past few years about various treatments and campaigns. Breast and prostate screenings are the subject of technical and political controversy, because it is not clear from statistical studies that they do much of anything to improve or extend life. But, get a diagnosis of cancer from such an “early” screening, and see how easy it is, emotionally, to avoid a battery of tests, one or more surgeries and various drug and radiation treatments. You are thrust into a dramatic enactment by the diagnosis and everything about the medical “care” that follows is shaped as much or more by the drama than a technical appreciation of the balance of probabilities. And, to be cynical, the doctors, technicians and businesses involved make a lot of money, and, yes, they may even improve the rate of cancer treatment “cures” by treating a lot of cancers “detected early” that would have retreated into remissions spontaneously or in response to very mild measures.

I’m not saying that there’s an alternative to bureaucracy, nor am I saying that bureaucracy is not part of the problem. In my view, bureaucracy is perfectly congenial with enactments of political theatrics, and bureaucracies can thrive on delivering them. That was my point in bringing up the example of the Catholic Church, a hierarchical organization that has survived many centuries (not incidentally doing service to the state, and providing education and health care).

I am saying that, though we use bureaucracies to administer systems, including systems of manufacturing (as in an auto factory) or systems of medical care or systems of education, the problems we attribute to bureaucracy may be symptoms of problems with the system design. The bureaucracy and the design of the system the bureaucracy administers are not the same thing. Bureaucracies do tend to be conservative with regard to the systems they administer, for a variety of reasons that I will presume I do not need to detail here, and those that are not, will tend to disappear quickly. Bureaucracies administering highly successful systems tend to acquire and endeavor to preserve good reputations.

My point @ 108 is that bureaucracies can be employed to administer systems where reputation is the product, in a medium-is-the-message sense, and how they allocate resources in response to a perceived “mistake” or “failure” will be characteristically affected. Ritual prevention answers the need for a “meaningful” response.

I threw in the single-sentence reference to Toyota and “just-in-time” at the end, as a reminder that there are contrasting examples of bureaucratically administered systems, where a mistake is feedback for tightening control and the end result of the response will be the deliberate pursuit of a refining of the system to use less resource, because the administrators of the system actually want to reduce the number and severity of errors. That is, they want functional improvement, not just a “meaningful” response.

There is a lot of political tension built into modern tugs-of-war over bureaucratic performance. I don’t think college or high school students are automobiles, or that Toyota should be running schools instead of factories, but I recognize that the factory model has been affecting school politics for many decades. The political rhetoric around measuring school or teacher performance by testing students certainly reflects it; I didn’t bring it up, though. And, though I do not know anyone, who thinks Toyota should be running schools, I know a number of people — friends — who have sent their children to Catholic schools out of concerns about the quality of the public schools. These become deeply felt issues for people, who are betting their children’s futures on education, and who implicitly believe in some dramatic narrative about the role of a “good” education in economic success.

etween 1914 and 1967, the number of capital ships in the British Navy declined by 78.9 percent, the number of officers and enlisted men by 32.9 percent, and the
number of dockyard workers by 33.7 percent. Yet during this period the number of
dockyard officials and clerks increased by 247 percent, and the number of Admiralty
officials by 769 percent…

During that period, the RN invented sonar, tachymetric fire control, the aircraft carrier, replenishment-at-sea, modern amphibious warfare, introduced maritime radar and maritime airborne radar, moved from coal to oil to nuclear propulsion, introduced a whole lot of analogue computing, tossed it in favour of digital, built its own air force, built a submarine force, went from biplanes to all-metal monoplanes to jets and helicopters, and got the Bomb. Further, there were a *lot* of people in the RN of 1914 whose job it was to shovel coal. An important driver of the move to oil fired ships was to save on labour.

So I’m not really surprised it employed a lot of people in procurement and I think this insight is not actually particularly profound. Also, imagine the counterfactual – the RN stayed with the “simple” technology of 1914 (not actually all that simple) rather than giving way to the evils of “complexity”. Even Hitler could have beaten that!

between 1935 and 1954 the number of officials in the British Colonial Office increased by 447 percent.

this may track the swing to development postwar, or again it might reflect secondees from the rest of government in preparation for independence. however, I get a feeling of “checky” numbers here and suspect an apples/oranges comparison. also, Tainter’s snark is just inaccurate.

The empire the Colonial Office ruled over was not, in fact, smaller in 1954 than 1935, but in fact larger. India was never ruled by the Colonial Office, which distinction has foxed him, and the first colony to go independent was Ghana in 1957. I need to check this, but the post-war UN trust territories might have come under their authority, too.

I think the sackings of bureaucrats tend usually to be gestures or kneejerk spending cuts, and you’re right that they always throw the baby out with any bathwater. One of the major issues is shifting bureaucrats out of the public sector and into poorer pay and conditions, because politicians think that bureaucrats immediately become wealth creators once they’re in the private sector.