Once More on the Managerial Menace, Its Rise, and Its Causes

eugyppius

Nov 21, 2023

∙ Paid

In The Managerial Menace, I considered the strange things that happen in academia, non-profit organisations and businesses when the resources available to them increase. As universities get wealthier, you might expect them to improve education, but instead they merely expand their administrative staff and embark on deranged decades-long construction crusades. As non-profits draw more donations, they tend not to divert more resources to their core functions, but rather to hire more staff and to increase various administrative projects like grant-making. And as businesses improve productivity, they do not merely book the increased profits, but also divert a sizeable portion of the new funds into the expansion of their white-collar ranks.

Very similar processes are at work in government, which I did not consider only because it is such an obvious example. On average, countries devote fully 10% of their gross domestic product and about 20% of public expenditures to public-sector employees. These are such incredible sums of money,

especially for wealthy developed nations, that they are hard to comprehend. In the European Union, 17% of the whole workforce is employed in the public sector. The same is true in the United States. The egalitarian Scandinavian countries are the bureaucratic leaders of the West; there, state employees account for 30% of everyone with a job. Even that is nothing compared to the Eastern Bloc before 1990, where the state controlled vast parts of industry and accounted for 70% to 90% of all employment. The same applied to China before its economic liberalisation. Plainly, egalitarian impulses and the redistributive programmes which proceed from them are not purely about social welfare. When the state takes in more resources, those resources serve above all to grow the size of the state itself; often, this is the form that social welfare programmes assume, and socialist ideologies which aim to fold most private enterprise into the state are very direct and unapologetic about their programme on this front.

It was not always thus. The great expansions to government bureaucracy happened in the wake of World War I. Through the nineteenth century, states only consumed about 10% of their GDP in total – the same portion they spend on payroll alone today. During the war they increased spending massively to fund their hostilities, growing themselves in the process. The same thing happened again in World War II. Obviously, the state did not shrink after 1918 or 1945, and so we can include expanded state managerialism among the transformations wrought by the great twentieth-century wars, one which is just as significant as the political realignment these conflicts achieved.

What all of these government bureaucrats do is an interesting question. Some of them surely have necessary jobs, but a great many collect enormous salaries and spend hours on projects that appear eccentric to outsiders. Consider the case of an old neighbour of mine, a very nice man who worked as a policeman for the city of Munich. I always assumed he drove about in a police car enforcing the law, or perhaps that he was a detective. As it turns out, these were very naive understandings influenced by overmuch television. Over lunch one day, he explained that he worked in an office full of other policemen who administered red-light cameras. Their job was to evaluate all the countless photos taken of various red-light jumpers in Munich and confirm that the offending driver had indeed jumped the red light. This was necessary mostly because drivers occasionally drive through red lights to make way for emergency vehicles, and in such cases they aren’t guilty of any traffic offence. That was what he did every day; it was his entire job.

If pressed, I would place this occupation in the “necessary” column, but it still unsettles me in various ways. Here we have a technological advance, introduced to save the mundane labour of traffic policing, which in turn requires its own kind of management. The cameras basically relocated policemen from the streets (where they are most useful) to bureaucratic offices (where they are not). I suspect that technological developments drive bureaucratisation in many other instances as well, but the question would require much further study. Now, it could well be that the red light cameras save labour on balance, but if that is the case with all such advancements put together, it is not expressed in the size of the overall police force, which has only grown in Germany relative to the population. In 2000, my envelope calculations show that there was one police officer for every 257 Germans; in 2021, we had one for every 239 Germans.