Dear Friends,

It seems to me that if a person was to examine the issue open eyed, the reasoning person would ascertain that the primary source of friction in a modern economy, is the bureaucratic organization that is quickly becoming omnipotent. This should challenge everyone, to think of a way by which, the bureaucratic organization can be tamed. But it may very well be, that the time has passed to actually tame the bureaucratic beast, before we are gored by it’s horns of intransigence.

Look at the countries that used to have very effective economies and now have poorly performing ones. Japan is a perfect, and recent, example. Formerly Japan’s growth rate was unparalleled. People extrapolated that growth rate into the future and stood in awe. Japan would rule the Earth in a few decades… was the opinion in the 1980’s. Of course… that didn’t happen.

Instead, Japan went into recession, followed by slow growth. Japanese GDP has been slow for two decades. The government has gone from huge surpluses to giant deficits. The government has thrown billions of Yen at the slow growth, but slow growth seems to be the new norm, in Japan and elsewhere. This despite the good work ethic in Japan as well as the high education level.

Japan should be booming economically but it is not. Why do you suppose? They have used demand side economic stimulus. Far more than the bankrupt USA ever could. Yet, the Japanese economy remains in the doldrums. Many claim it is due to the aging of Japan. But in a true entrepreneurial society, change presents economic opportunity, to meet new needs.

Here we have touched the problem but we have yet to grasp it fully. In an entrepreneurial society, change is always opportunity but in a socialist society, change means hardship, because no one fills the new needs. Those needs are not filled so the people with them suffer, the potential entrepreneur suffers, because he or she didn’t get rich and the economy suffers because, it’s missing all the jobs that were not created when the entrepreneur didn’t get rich.

With the high level of educational achievement of the Japanese people why do you think there is not sufficient entrepreneurial energy to meet the new needs and enrich a new generation of entrepreneurs? The answer is the bureaucracy. Bureaucracy grows as a government matures. The good public servant never bends a rule no matter how idiotic that rule is. Bureaucracy is unbending and rigid. The real world is fluid. Bureaucracy seeks to change a complex system into a simple one.

The fundamental natures of human existences are complex systems, from our family life through neighborhood politics to the macro economy, we interact with complex systems all the time. The role of bureaucracy is to limit that complexity so we can more easily see the local peak. But bureaucracy begets bureaucracy. It quickly outgrows the need and smothers any economic recovery like a pillow a baby. Bureaucracy is unaffected, by the smothering of this or that, bureaucracy is it’s own best good.

Especially when it is a source of monopoly and hack jobs. Bureaucracy naturally breeds corruption, due to the fact that bureaucracy makes it’s own law, polices it’s law, then adjudicates it. No need for traditional governmental structures, that limit the power of any one unit by means of separation of powers, or some other outdated notion. No, it is much more efficient to invest all the power of government into one body, that is appointed for life and unaccountable. No way that could ever be a problem…

But, of course, it is. The material welfare of us and our children are manifestly lowered. Unless we get some kind of control over the growing bureaucracy we will be consumed by it. The very reason the Elite love it, it’s efficiency in passing regulation, and enforcing that regulation, is why it is so very dangerous. The only real means I can come up with is the citizen protection department of the NUMA.


John Pepin

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