What is the reason for Mises’ saying

Bureaucratic management is the method applied in the conduct of administrative affairs the result of which has no cash value on the market.

Remember: we do not say that a successful handling of public affairs has no value, but that it has no price on the market… (Bureaucracy, 47)

Prices of consumer goods presuppose a variety of such goods competing with each other for our money. When I buy a bag of candy, I know, by looking at its price and the prices of all other goods, what exactly and how much of it I have to sacrifice for the candy’s sake. The opportunity cost of the candy is 2 bottles of coffee creamer, 3 pounds of bananas, and so on in innumerable combinations almost ad infinitum.

But the government, specifically the executive branch, is a monopoly by explicit design. It has no competition, other than absence of government. But in Mises’ view, such absence would result in the destruction of society and the market and in a war of all against all. (So, anarchy has no cash value either.) Therefore, the government has no opportunity costs, and it is impossible to assign a money price to it:

It may well be that the greatest thing in Atlantis is its good system of government. It may be that Atlantis owes its prosperity to its constitutional and administrative institutions.

But we cannot compare them with those of Thule in the same way as we can compare other things, for instance, wage rates or milk prices. (48)

Nor are “good government” and “bad government” alternatives, because there can at any time be only one executor for all, whether good or bad.

Categories: Uncategorized


Leave a Reply

Your email address will not be published. Required fields are marked *