WHY and HOW did everything around become a mess??? - Part 2

 Malignant Transformation of Bureaucracy

Earlier, we discussed the process of “bureaucratic fattening.” It is known that overweight in people occasionally can evolve into cancer. A cancerous tumor is a pathological process of unrestrained reproduction of transformed cells that deprive normal tissues of nutrition, suppress and destroy them, often resulting in a lethal outcome for the organism.

Similar processes take place in social organisms as a result of Parkinson’s fattening. Various agencies, branches, departments, and groups within the bureaucracy begin acting in their own selfish interests without coordinating their actions, often starting behind-the-scenes battles. The relations between various divisions become weird and unpredictable. At the same time, the situation in the managed systems becomes opaque, the process of governing slows down and often gets completely disrupted.

The competition within the bureaucracy intensifies, and nearly everyone gets involved in intrigues that become more important and prestigious than doing the main job. This often leads to real battles, which are being fought not just for power and money, but are actually games of prestige, intellectual scuffles, clashes of characters and simply entertainment for bureaucrats, a form of addiction.

The situation gets even worse in the information area. Normally, in the “pyramidic hierarchy,” information goes from bottom up, while commands from top down along the shortest paths. In this case, each bureaucrat has the minimally necessary number of subordinates to perform required functions; all connections are precisely defined, all functions are transparent, thus ensuring efficient operation. But such a hierarchy is utopic. In real life, information becomes an asset and a weapon of “phrenetic games,” whereas the paths for delivering information and commands become entangled and ambiguous. Those who should make decisions don’t have necessary information, while those with information are not involved in the decision-making process. Information gets delayed and/or reaches wrong parties, leading to massive distortion or even deliberate disinformation. This becomes the key factor that makes all attempts for planning and efficient management unsuccessful, as all socialistic planning systems eventually encounter.

Malignant transformation of bureaucracy is accompanied by its fast “dumbing down” and competence decline, as the superiors are afraid of competition and cannot tolerate subordinates who are smarter than they are. The workers are now being evaluated not on the merits, but on how well they serve their superiors and on the “correct” language they use. The bureaucratic services and agencies are overfilled with random people who often barely know what they are doing. The key positions are taken by people more prone to office intrigues than to solving real problems.

The transformation happens especially fast in ideological divisions and departments and actively metastasizes throughout the rest of the bureaucracy, ruining everything they touch. The malignant growth was led by communist parties in the USSR, its satellites, and in China; by the corporations (in essence, socialist trade-unions) in Italy during the Mussolini era, by the National Socialist Party in Hitler’s Germany, by the United Socialist Party in Venezuela, etc.

The process of malignant penetration of bureaucracy into social organizations, education, science, art, and the entertainment industry is in full swing. Bureaucracy tries to control the family life, personal healthcare, the process of bringing up children, even sex. Restrictions of freedom in society and specifically bureaucratic censorship are on the rise. A typical example is the absurd requirement for “political correctness,” which openly infringes on freedom of speech, declaring anything that the bureaucracy doesn’t like as inappropriate, undemocratic, hate speech, etc. The major structures, such as law enforcement agencies, the army, FDA and CIA in the USA, KGB in the USSR, FSB in Russia, are especially susceptible to malignant transformation.

The malignant bureaucracy bears no accountability to those who sustain it, while the population is being viewed as an “expendable resource” necessary to support the bureaucracy. People are being sacrificed for bureaucratic purposes – to strengthen the power and prestige, to usurp property, and to continue bureaucratic games.

The malignant growth of the bureaucracy happens by cooptation of ever-increasing numbers of people. This leads to cultural changes – bureaucratic positions become prestigious, and the following groups of people strive to get there:

• Young graduates, as they believe that serving in a bureaucracy ensures prestige and a hot career. The phenomenon of youngsters’ general drift towards bureaucracy was described in Germany during Bismarck’s times, in Russia under the Bolshevik's rule (and later in more recent Russia), in America under the administrations of F. Roosevelt, Kennedy, Johnson, Carter, and especially under Obama.
• Many representatives of creative intelligentsia – mostly untalented, but sometimes quite gifted – as this offers them advantages over competition and guarantees nice lifestyle.
• Teachers, professors, and academic scientists not too successful in science.

Probably the most dangerous figures of a malignant bureaucracy are educated and talented people who came to the bureaucracy from “real life,” being attracted by promising outlooks. We knew a very smart engineer, an inventor, who held the position of a party organization secretary and then moved on to a higher bureaucratic level, where he enthusiastically invented “methods of maximally efficient control,” i. e. all kinds of ways to interfere with real work of the factory and ruin the life of people he once worked with. Average doctors, after becoming bureaucrats, destroy healthcare with idiotic rules, endless paperwork, insane requirements, and constant audits. Diplomatic bureaucrats cause damage to their country with nearly every action they take. Businessmen who move into bureaucracy invent methods of pillaging businesses, etc.

Bureaucracy Against Business

The main casualty of the malignant bureaucracy transformation is the market and free enterprises,  small and medium business, and the middle class in general. Growing bureaucracy tries to subordinate them, take away their property and their rights to make independent decisions and actions. This happens in various forms. In some cases, as nationalization of the industry and the trade either completely (like in the former USSR) or in certain areas (like in England during the socialist rule in the late 1940’s),  nationalization of American enterprises in Cuba in 1959-1960,  the mining industry in Chile under Salvador Allende,  oil production  in Venezuela in 1976, same in Rhodesia (now Zimbabwe), South Africa, etc.

In lighter versions implemented by bureaucrats under Mussolini, Hitler, and Franklin Delano Roosevelt, the enterprises were not nationalized but placed under strict control by the bureaucracy that specified production plans, prices, salaries, the number of employees, etc. and imposed huge taxes (sometimes exceeding 90%) moving their revenue to the national budget.

Managerial revolution

One of the most dangerous ways of bureaucratic transformation of businesses is the so-called “Managerial revolution”[1]. In this never-ending bureaucratic expansion, the power within the growing company is being transferred from the founders and owners to the hired bureaucracy – administrators, economists, financial people, advisers, etc.

Professional managers always strive to escape subordination to  business owners and rule the businesses in their own interests. Managers of large companies pay themselves huge bonuses and, unlike the real business owners, almost never suffer from failures, as nobody makes them return the previous payouts. This leads to the tendencies by hired managers to conduct business according to the principle “after me, the deluge.”

To a certain degree, this happens in all large commercial enterprises where the bureaucracy is in close contact with government and political bureaucracies, getting  contracts and special privileges from them, while providing huge “kick-backs” one way or another (organizing their entertainment, election support, etc.). And, of course, all of this is in total disregard of the rights of the owners (shareholders).

In 2019, there was a new step made in seizing power by the bureaucracy in private companies: managers of 181 large (and in some cases monopoly) corporations, including Amazon, Apple, AT&T, Bank of America, Boeing, Coca-Cola, etc., approved the updated “Principles of Corporate Governance.” They claimed that from now on, they will act not so much in the interest of the owners (shareholders), but “for the good of all Americans.” This may sound good, but essentially, it’s just an attempt by bureaucracies to get rid of the constraining control of the owners by simply robbing them using Marx’s and Lenin’s recipes. And this is much more dangerous than just dumb yapping about socialism by Bernie Sanders or Alexandria Ocasio-Cortez!

Bureaucracy and Big Business

The merger of bureaucratic elites with business is an ancient phenomenon. Rome at some point was governed by the triarchy of aristocrat Caesar, warrior Pompeius, and typical business oligarch Marcus Crassus. The family of Medici, Florentine usurers and then bankers, turned into a family of Medici dukes that played an important role in the history of Renaissance. Napoleon III and the Belgian king Leopold became the founders of huge businesses. There are multiple examples of this kind.

In America, mass mergers of bureaucracy with business started with the development of all-encompassing corruption after the Civil War – businesses openly purchased services from lawmakers, mayors, the police, the state and federal bureaucracy[2]. And bureaucrats responded with complicating laws and coming up with restrictions on businesses to force them to pay more.

Integrated “business-bureaucracy systems” were formed to coordinate the activities in their common interest. Various temporary alliances kept emerging and falling apart, until President Woodrow Wilson, an outstanding theoretician and bureaucracy fan, came to power. One of his first actions that nearly endangered  the entire future for the USA was the creation of the Federal Reserve System as a hybrid of bureaucracy (government agency) and the higher financial oligarchy that were beyond the control of either Presidents or the Congress.

During the period of the “New Course to Socialism” from President Roosevelt, the governing bureaucracy penetrated into large and medium commercial companies and created there its own powerful bureaucracies. By the way, the exact same events took place in Italy under Mussolini’s fascist regime and in Germany under Hitler.

After Truman’s bureaucracy “mortification”, the process of bureaucratic regeneration (like in a freshwater hydra), started under Eisenhower’s rule. 

A hydra is a very primitive animal with incredible regeneration capabilities. Even cut into hundreds of pieces, each piece can get restored into a whole new organism. The “bureaucratic hydras” have the same capabilities.

Bureaucracies in the administration and in the companies licked their wounds, built up strength, re-established old and formed new connections... The first fearsome sign of a new bureaucratic rule was the emergence of the powerful military-industrial complex. This name given by President Eisenhower to the gang he himself created (even though officially he denied any connection to it) hides the most important fact that it is a “bureaucratic-military-industrial complex.”

The start of the information era led to the emergence of an even more rampant “informational-bureaucratic complex.” The most important element of a bureaucracy’s well-being is the ability to hide its actions and motives from the parties it controls, and at which expense it fattens. The development of information technologies could disrupt this “bureaucratic shyness.” This is why the first information companies created by Mike Bloomberg, Ross Perot[3], and others were in close contact with both administrative bureaucracies and the bureaucracies of large commercial companies. After the “dot-com bubble” blew up, the lead in the business was taken by the players who got support, essentially the monopoly rights, from the Clinton bureaucracy – Microsoft, Amazon, Google, etc.

The resource curse

An additional factor contributing to the malignant transformation of the bureaucracy is the resource curse. The bureaucrats, being in possession of a valuable market resource that can make them rich, no longer have the need or interest in normal development of the country, in mass production of various goods, in the domestic market, in education, science, technology, in increasing people’s living standards, etc. Instead, various subdivisions of the bureaucracy enthusiastically fight each other for controlling the “freebies,” while quickly making the country poor and occasionally even grinding it into pieces...

This is how Spain became a bankrupt state by the huge flows of gold and silver from South America; Poland in the 17th and 18th centuries was destroyed by very cheap grain; Argentina, in the early 20th century, by meat; the USSR, starting from 1970’s, Venezuela, and Nigeria by cheap oil; Kongo in the second half of the 20th century by various mineral resources, etc.

At the same time, countries with poor resources, such as Japan, Taiwan, Singapore, lately China, and some others that relied on the intellect and diligence of their people and were able to restrain the exorbitant appetites of their bureaucracies, became really rich...

Perversion of administrative objectives

A typical effect of “social cancer” is the inversion and perversion of the bureaucratic system’s objectives that often reach the point of absurdity. For example:

• A bureaucracy created to fight something harmful for society is never in a hurry to conquer the evil, even if it’s possible, as this will immediately render this bureaucracy useless. It does just the opposite – starts supporting and developing whatever it was supposed to fight. During the Prohibition, the police contributed to the active development of bootlegging. Police would arrest drug dealers, with one hand, and help them survive, with the other hand. Drug dealers, in turn, allow the police to attain “small victories” from time to time – intercept drug batches, imprison small-scale dealers... The courts practice “telephone justice,” and the police operation gets disrupted in preventing crime and prosecuting real criminals.
• The bureaucracies that are created to support something useful for society often start wrecking it. Those who are supposed to provide national security draw the country into ventures that increase the dangers and, at the same time, support the growth of influence and income of the particular bureaucracy. By the end of the “Obama era,” it turned out that the Pentagon and the intelligence agencies were actually stonewalling the real work, substituting it with paperwork and intrigues. Striving for more power and self-protection, these agencies rush into politics, try to influence it in their own interests, distorting facts, breaking the laws, and sabotaging the orders by elected leaders of the country. The Environment Protection Agency not just complicates life for most people but itself poses more threat to the environment than any violators of their rules. For example, the 2019-2021 fires in California were mostly caused by the activity of environment protection organizations that forbade the preventive cleaning of forests from deadwood... Fighting shale oil production is forcing us to pay tens of extra dollars for each fueling...
• Avalanches of inspections, approvals, revisions, evaluations... The lives of the “controlled” and even the “controlling” clerks from the lower bureaucracy level turn into an endless violation of rules, often criminally punishable, and make everyone fully dependent on the superiors. Terrible stress in the “controlled” and “controlling” and absolute distrust of everyone result in a totally uncontrollable raging bureaucratic machine with no brakes.
• Governing the society gets mostly reduced to providing “general directions.” In the USSR, authors often faced the following situation: a high-level official, in a lengthy and incoherent manner, mouths banalities and ideological slogans before a professional audience and requests to immediately solve the problems that were not getting solved for the past 50 years. The speaker looks like a total idiot. But we know that in reality he is a smart guy, and the essence of his speech is the ritual “pep talk to subordinates.” Imagine our astonishment when we encountered the same exactly “administrative method” in the Ford company, when we started our business in America! The only difference was that instead of calls for building communism there were just as meaningless calls for global cooling of planet Earth. We later saw similar rituals in various companies and realized that the bureaucracy is the same everywhere. As Kipling wrote, “And the Colonel's lady and Judy O'Grady are sisters under their skins.”
• The high art of avoiding making decisions and the “blame shifting” game, i.e., throwing over unpleasant work and/or the important and dangerous decisions to others, is in full bloom. For example, the US Congress must make laws in the best national interest. But politicians don't really like to spend their time for meticulous work of lawmaking, and they are mostly not even qualified to do that. So, the work is “shifted over” to various government agencies and lawyers paid by lobbying organizations. Evidently, these laws turn out to be useful for those who prepare them, but not necessarily for those who elect the lawmakers.

The vast majority of people simply cannot imagine the scale and the harm of the actions by the malignant bureaucracy. Even Trump, who became president to fight it, apparently grossly underestimated the complexity of this task. We will later review this in detail.

 

[1] The theory of Managerial revolution was developed in 1941 by James Burnham who was first a fanatical communist and then became the communists’ worst enemy. He claimed that the managers who don’t depend on the capitalist property can manage the enterprises in the best interest of the entire society. But he did not explain why they would do that instead of pursuing, just like all other bureaucrats, their own personal interests rather than “people’s” interests. The seizure of power by managers (royal advisors, ministers, priests, etc.) happened multiple times in history. For example, in the late 5th century, Europe was dominated by the powerful Merovingian empire. But the descendants of the legendary Merovech who got named “lazy kings” preferred entertainment, while leaving the governing  to their counsellors – majordomos. Eventually these counsellors overthrew the kings and took their thrones.

[2] Today they are doing the same thing through the legal lobby system.

[3] Ross Perot paid the bureaucracy by “stripping the presidency” of its enemy – George Bush Sr. We can only guess how other information monopolists pay the bureaucrats, knowing that “there is no free lunch.”