Bureaucracy

Bureaucracy contrasts the two forms of economic managementthat of afree-market economy and that of a bureaucracy. In the market economyentrepreneurs are driven to serve consumers by their desire to earn profits andto avoid losses. In a bureaucracy, the managers must comply with orders issuedby the legislative body under which they operate; they may not spend withoutauthorization, and they may not deviate from the path prescribed by law.

Ludwig von Mises here lucidlydemonstrates how the efficiencies of private ownership and control of publicgood production ultimately trump the guesswork of publicly administeredplanning through codes and officialdom.

Ludwig von Mises (18811973) was the leading spokesman of the AustrianSchool of economics throughout most of the twentieth century.

Bettina Bien Greaves is a former resident scholar and trustee of the Foundationfor Economic Education and was a senior staff member at FEE from 1951 to 1999.