A Curious Miscellany of Items Philosophical, Historical, and Literary

Manus haec inimica tyrannis.

Monday, June 27, 2011

Keeping Judges Leashed (But Not Muzzled)

Unelected legislators?
On June 8, 2011 there was a column in the Globe and Mail written by a very distinguished law professor at my university. In it, he argued that when choosing candidates to sit as Supreme Court justices, or indeed to sit in any court, we should rightly pay attention to the values they hold, as these will necessarily colour their interpretations of the laws. The precise details of Professor Hutchinson’s argument are less interesting to me than many of the reader comments to the web version of the column.

I myself was one of those who commented, and here is my exchange with another reader calling himself Peter Lucas:

PETER LUCAS: To say it’s unrealistic to expect judges follow the law is the same as saying it’s unrealistic for bus drivers to drive a bus. It’s their job.

SPECTACLED AVENGER: That’s very simplistic. It assumes there is no such thing as a hard case or an unclear or poorly drafted law. It also ignores the fact that societies may change while laws remain static, demanding a more flexible attitude by judges in order to avoid judgments that are absurd by anyone's standard.

Also, I’m not sure you have a good grasp of what law is. Law does not just consist of written statutes that can be mechanically read off from statute books, otherwise there would be no need for judges (or lawyers for that matter). Most of our existing law is unwritten and open-textured, or consists of broad and general principles that must be applied to very particular circumstances. Such law requires interpretation and judgment — which, after all, is why they’re called “judges”.

PETER LUCAS: Avenger, who determines if or when a society changes? Surely that should be the task of the voters through the elected parliament. It’s not a judge’s job to determine if there is a societal change.

I believe I have quite a good grasp of law and how it operates. Hence my concern about judges overstepping.

Your reply was good, thank you.

SPECTACLED AVENGER: Hi Peter. I suppose the problem with social change is that it’s incremental: we suddenly notice one day that it has happened. The people may notice it before the politicians do. And often politicians have a vested interest in not sticking their necks out on anything unless they’re forced to do so by the courts. I don’t have as much faith as you do in the representativeness of our “representative democracy”, which is why I think there’s a strong role for knowledgeable magistrates not beholden to the political game all the time. A difference of basic philosophies I guess?

Also, as a conservative (now there’s a slippery word), I like the idea of constitutional limits on government action. I dislike political entrepreneurs just as much as you dislike judicial ones.

*    *    *    *

Peter Lucas seems an intelligent chap, and good-natured too — he didn’t take my initially aggressive tone too personally.

(This aggressive tone is an unfortunate habit developed during many years’ training as a philosopher. I have tried to break myself of it, with some success. It is unpleasant. You will recognize this tone if you spend any time around academic philosophers. It is largely the reason why philosophers aren’t known for having many friends who aren’t themselves philosophers.)

However, Peter Lucas’ position is a common one among those less knowledgeable about how law works than he is. There is a layperson’s view which says that law is written down somewhere, and that it’s the judge’s job to simply apply it. End of story. If a judge is perceived to go beyond the text, he or she is presumed to be too “political”, a major no-no in the lay Canadian mind (and in the American one too, I imagine). “Political” judges “make law”, thus arrogating to themselves the power of elected legislators. Therefore, unelected “political” judges are undemocratic.

The Literalist View

The lay view supposes that judges are simply supposed to apply the laws. This presumes that laws are always clear and never in need of interpretation. If anything special at all is required of judges, it is simply the possession of a memory capacious enough to store large quantities of legal information. We can call this the literalist view of adjudication. It posits judges as semi-computational legal processors: facts are plugged into them and then matched up against their database of laws, and after some cogitation, out pops a judgment. It is an absurd view, which is why it’s disheartening to find that so many people — including many of our elected leaders — profess to believe in it.

Some fifty years ago, the great legal philosopher H.L.A. Hart remarked on law’s “open texture”. Typically, a law has a semantic core of settled meaning, surrounded by what he called the “penumbra” of contestable meaning. As an example, imagine you are walking in a park. You come across a posted sign that says “No vehicles in the park”. Some small print at the bottom of the sign refers the reader to Municipal By-law #5301-A35-7.

When you get home, you decide to look up Municipal By-law #5301-A35-7 on the city’s website. This by-law says that “No vehicles shall be permitted in any outdoor public park within the limits of the city.” As laws go, this one seems simple, no?

Assuming that there is no room to quibble over where the limits of the city are, or what are the limits of the park you like to stroll in, it seems that the key semantic concept in this by-law is the term “vehicle”. A car or motorcycle would probably be part of the law’s core of settled meaning here: you’d have to be pretty intellectually challenged not to consider a car as falling under the concept of “vehicle”. But what about a skateboard? A bicycle? An electric scooter? A pogo stick? A Russian wolfhound? Harder to say. Contrary to the literalist view, when we’re dealing with penumbral cases, the text of the law can give no guidance. One can’t just mechanically read the correct meaning off the text, even in as simple a case as the “No vehicles in the park” by-law.

The Original Intent View

Another more nuanced offspring of the literalist approach would be the “original intent” view. Here, if the judge must decide whether, say, a pogo stick is a vehicle, and if the text offers no guidance, then the judge should consider what the original intention of the law was. He might look to the statute’s preamble (if it happens to have one), or to the legislative debates surrounding the passing of the law. These might give him guidance as to what the legislators intended when they passed the law.

We can distinguish between two possible kinds of original intent, a strong form and a weak one. Strong original intent says that we should base legal interpretation on precisely what the framers of the law actually had in mind when the law was framed. This presents at least a couple of difficulties. First, we often simply lack evidence as to what a person was thinking at a given point in time.

Second, a legislature usually has multiple members, and they may all have slightly different things in mind when they vote for legislation. So which particular legislator’s intent should we deem authoritative? After all, there might not be just one intent.

This problem arises in acute form in US constitutional law. Conservative constitutional scholars will speak of the authority of the “Framers’ intent” for interpreting the Constitution. But why should the Framers be considered absolutely authoritative, rather than, say, the delegates to the individual state ratifying conventions? Choosing to vest this authority in the Framers has its own problems. For example, Article I, section 9 reads “The Migration or Importation of such Persons as any of the States now existing shall think proper to admit, shall not be prohibited by the Congress prior to the Year one thousand eight hundred and eight, but a Tax or duty may be imposed on such Importation, not exceeding ten dollars for each Person.” What “Framers’ intent” reading shall we give this in relation to the institution of slavery? Some delegates to the Constitutional convention saw this compromise provision as a step toward the eventual abolition of slavery, beginning with a ban on importation in 1808. Others saw it as a protection of slavery, since those states which had slaves could keep them, and states like Virginia that had a “surplus” slave population stood to profit economically by selling their unique product in the new territories once an import ban on slaves was in place and fresh supplies from Africa dried up. Thus, there seem to be at least two different and conflicting Framers’ intentions with respect to this section.

Third, besides the question of whose legislative intent should be authoritative, an intuitively reasonable interpretation of a statute might be nothing close to what the framers had in mind, for quite contingent reasons. For instance, in the “No vehicles in the park” example, imagine we find out that the by-law had been passed in 1820 with the intention of preventing injury to citizens from fast moving horses and carriages. Obviously, the framers in 1820 could not have had cars or motorcycles in mind when they passed the legislation. So, on the strong original intent view we would have to allow cars into the park, while horses would still be banned, because the framers did not (could not) have cars in mind when passing the legislation. This seems counterintuitive, making nonsense of the law and upsetting what we thought was the core meaning of the term “vehicle”. Too strong an original intent reading can lead to absurdity.

What about a weaker form of the doctrine? We might, for example, hold that it’s not only what the framers’ actually had in mind at the time, but also our judgment of what the framers would have in mind were they present now to adjudicate the case at hand. Thus, if the legislators of 1820 were around today, they would likely include cars within the ambit of the “no vehicles in the park” by-law.

Such an approach might work like this: If the original intent of the city councilors behind the “No vehicles in the park” law was to prevent damage to the grass in city parks, then objects that don’t cause damage to grass are not to be considered vehicles for the purposes of the legislation. Or if the intent was rather to prevent danger to people in the park from fast-moving vehicles, then kites and pogo sticks might be permissible. This helps us get around the problem of legislators in 1820 not having cars in mind when the legislation was drafted. Their ignorance of automotive technology doesn’t matter, so long as we can summon in our minds those legislators form the past and plausibly imagine that they would ban cars because they damage grass or pose a danger to people. We could call this weaker view a functional intent view, because it looks to the function that the law was formulated to serve.

Sounds straightforward, right? Not necessarily. For one thing, a law may no longer actually serve the function for which it was intended, in which case perhaps it ought not to be regarded at all (some might argue that the Second Amendment to the US Constitution is an example of this). It is doubtful that conservatives who espouse an original intent view of legal interpretation would want to go this far; after all, if the text exists, then it is law and ought to be followed. It is not for unelected judges to pick and choose which laws to enforce.

In addition to laws that no longer serve the function for which they were intended, some laws have been formulated to serve a specific function and still serve that function, even though everyone would rather they didn’t, for example, laws that systematically discriminate against certain historically despised groups. Here the conservative would say that it is for elected legislators rather than judges to repeal such legislation. But if the former have neglected to do so, must judges sit back and slavishly allow injustice to occur? That is not a conclusion I am entirely comfortable with, and I don’t think any self-respecting higher court judge would be comfortable with it either.

Public Choice Scepticism of Original Intent

As I have mentioned elsewhere, the public choice school of economics uses economic methods to model non-market (i.e. political) decision-making. Assuming that people act from rational self-interest, and assuming that legislators are human beings (a questionable premise, I know), we can also presume that politicians too act in the service of their rational self-interest. This explains such phenomena as rent-seeking and legislative logrolling.

Legislation is not a simple matter of elected representatives of the people’s will virtuously passing laws for the common good. Many laws are passed to serve special interests or the interests of legislators themselves. More often than not, legislation is the outcome of compromises and horse trading. Logrolling is a perfect example: various politicians strike bargains to support each others’ pet legislation, thereby ensuring that many bills are passed, none of which would garner a majority if politicians voted in the absence of quid pro quo commitments. The result is reams of legislation few people really wanted. Even when the legislation is desirable, it may be voted on for multiple reasons, some of them not in the public interest (as the constitutional slave trade clause above illustrates). Deal-making and self-interest are how things are done in Ottawa and Washington. This is the basis of the old joke that laws are like sausages: you might like them, but you don’t want to see how they’re made.

Given the above, the public choice approach to legislation has two implications for any original intent theory of legal interpretation:

1.    Due to the various overlapping interests that may converge in the formation of legislation, there may be no such thing as a single overarching and orthodox original intent. There may be multiple intents, in which case it is unclear which should be considered authoritative.

2.    Even if we can divine a single unified original intent, there may be no reason to believe that it was formed with a view to the common good, in which case it should not be considered authoritative.

I have been arguing that neither the literalist nor the original intent view of legal interpretation is coherent. In the absence of the guidance such theories would provide, we must rely on the wisdom and experience of professional and unelected judges. The populist distrust of judicial activism, whether well-founded or not, must yield in the face of necessity: judges must be allowed to exercise a degree of discretion in interpretation.

This does not mean that judges interpret laws based on mere whims or personal bias. There are many examples where judges have given decisions reluctantly, in the face of their own personal beliefs, because the law did not allow them to decide in the way they might prefer. Laws, legal principles, and a respect for their own office will act as guides to — and constraints on — how far judges can exercise discretion. It is very difficult to find examples where a judge has simply decided to ignore the law in the service of her own pet beliefs. A judge’s values matter, but they are not decisive.

Tuesday, June 21, 2011

Three Views of Bureaucracy (Part 2)

The Department for Administrative Affairs
I was recently reading an article about Greece’s debt crisis in one of the newspapers, when I came across the grimly hilarious story of the Lake Kopais project. A government agency was set up in 1950 to drain Lake Kopais to make way for a road. The project was completed in 1957 and Lake Kopais no longer exists. But the government agency charged with looking after it still does. It employs thirty people and regularly advertises job openings. Auditors confess they have no idea what the people who work there do.

Some time ago I was strolling with my wife and we walked past a building housing the Multiple Sclerosis Society. Or it might have been the Canadian Diabetes Society. I can’t quite remember, and it doesn’t really matter. I asked my wife rhetorically what she thought would happen if a cure was found for multiple sclerosis. Would the MS Society disband? I opined that they would probably find a new reason for existence. Too many people in the organization depended on the salaries it provided. My wife thought I was being cynical. She was probably right. But then again, there is much in this world to be cynical about.

Gordon Tullock

Gordon Tullock would agree with me. He would say that in the event of a cure being found for multiple sclerosis, the MS Society is likely to find a way of perpetuating itself. However, at least the MS Society has a laudably concrete goal. The goals of many bureaucracies are either ill-defined or open-ended. Tullock notes that many bureaucracies are founded upon a mistake: they are set up to attain an objective, but after awhile it becomes apparent that the objective is unattainable by bureaucratic means. An example might be the “war on drugs”. Most of the answers to the “drug problem” involve changing markets and incentives, not by imposing enforcement and expanding government power. However, once the inability becomes apparent, rather than dismantling itself, the bureaucracy simply changes its objective. In effect, it moves the goalposts. Perhaps some day, when it admits the war on drugs is lost, the Drug Enforcement Agency (DEA) will become the Drug Education Agency, changing its activities just enough to stay in business. What we are unlikely to see is the disappearance of the DEA altogether.

In addition to the “moving the goalposts” strategy of bureaucratic self-perpetuation in the face of failure, I would add the “mission creep” strategy in the face of success. An example of this would be where an agency is set up to, say, fund research into finding a cure for some public health problem, say disease X. If the bureaucracy is successful, rather than disbanding, it is more likely to extend its mandate into other areas, like a cure for disease Y. This could be justified on the grounds of its previous success in eradicating X. This would be likely to happen in the case of the MS Society. As a matter of fact, the historically-minded would note that many a government agency’s current activities bear little relation to the activities it was set up to undertake, and for which it was named.

Both “moving the goalposts” and “mission creep” are two aspects of a more general phenomenon we might call “bureaucratic drift”. Tullock sums this up:

“As an experiment, if one examines the original arguments for the establishment of almost any government bureau and compares these arguments with those that may be currently offered for the retention of this bureau, one is likely to find that a considerable shift has occurred in the specification of the objectives that the bureau is supposed to attain. The governmental bureau becomes the permanent fixture, with the objective continually changing. Over time the vested interests of the bureaucrats themselves become more and more important in justifying the organization, although this can never be the sole argument in discussion with outsiders.” (p. 204)

As a matter of fact, they may never discuss it candidly even among themselves. The teachers’ union I once worked for was ever fruitful in devising and lobbying for new programs and policies, professedly for the betterment of children’s education, even though most of these seemed perversely designed to gradually destroy education. But what every one of those programs and policies would be successful at is creating more well-remunerated jobs for dues-paying union members. This is one way in which schools have become institutions in which actually educating children has become a small sideline activity.

There was of course a tension here, for although the union’s original raison d’être is presumably to advocate for the material interests of its members, from an individual member’s point of view it can easily seem like proportionately very little of the union’s time is spent furthering this objective. Instead, it seems to spend more time advocating for its pet educational theories — as if there didn’t already exist a Ministry of Education for this purpose. The union I worked for walked a tightrope between making it seem to its members as if it was looking out primarily for them, while making it seem to the government that it was working for the schoolchildren of Ontario. In reality, it was working for itself, and it did this by alternating between these two modes of activity, gaining for itself a broader legitimacy through an expanded mandate.

Before continuing, a word or two should be said concerning Gordon Tullock and the tradition in which he works. Tullock is a co-founder of the “public choice” school of economics and political theory. The distinct approach of public choice is to use the methods of economics to model non-market (e.g. political) decision-making. For example, rather than viewing the agencies of government as operating at the behest of a benevolent despot in order to provide services that benefit the common good, public choice begins with the assumption that individuals are self-interested. And since bureaucracies are collections of individuals, it would be strange if bureaucracies did not exhibit self-interested behaviour too. And the supposedly benevolent despot (i.e. the government) is also just another self-interested player in the game. Seen this way, we should expect bureaucracies to behave in ways that are irrational or perverse when seen from the viewpoint of the common good, but that are perfectly rational when seen from the viewpoint of their self-interest.

This approach is seen in the first of Tullock’s two books on bureaucracy, The Politics of Bureaucracy (1965). There, he uses the methodological individualism of public choice economics to examine the behaviour of individuals within a bureaucracy. Remember that previously I used the image of male peacocks’ feather to illustrate von Mises’ view of the selection pressures within bureaucracies. Tullock’s view is similar, but more nuanced. He begins with the analogy of a device that filters uranium 235 from heavier uranium 237. When it enters into a chamber, a gas that contains both U 235 and U 237 will pass through a filter. The filter is often not fine enough to stop some U 237 from passing through it, but nevertheless, at the end of the process, the resulting mixture will contain more of U 235 relative to U 237 than would be expected in an average amount of uranium. When the process is repeated, a little more U 237 is removed. After it passes through enough chambers, the result should be virtually pure U 235.

Similarly, a bureaucracy can be envisioned as a process with a number of chambers through which members pass. The contents of the chambers higher up in the chain tend to be composed of a certain type that has been selected for by the nature of the system, the U 235 of the bureaucratic structure. What is this type?

Beginning at the lower rungs of the bureaucracy, we can envision a mixture of people: some are purely self-interested and ambitious, some might be idealists who identify strongly with the putative goals of the organization, and other will have mixed motivations. It is natural to suppose that those who are highly motivated to pass up through the ranks (i.e. the self-interested and ambitious types) will be more likely to do so. It would be nice to think that every boss rewards competence, but in reality he is just as likely to reward those able to please him, either through unquestioning loyalty, charm, or something more intangible but equally unrelated to organizational goals. In deciding who to promote, the bosses are likely to look for what in civil service terminology was once called the “sound man”. The sound man is not always or even often the best man (or woman, as the case may be) for contributing to organizational goals. But he is often the best man for fitting in nicely with the boss’s own goals. Remember, everyone is presumed to be self-interested in this model, bosses included.

Now, this does not mean that bosses like to reward schemers and knaves. They want people they can trust and would not knowingly promote the dishonest. But in large bureaucracies, surveillance is costly, and bosses are often wise to avoid damaging morale by watching the activities of subordinates too closely, as most people don’t like being assumed to be dishonest. The long and short of it, as Tullock notes, is that “it is impossible to design a system that will select against the man of relatively low morals. This is because the intelligent but unscrupulous man will always assume the morally proper course of action if, in fact, this should be the one that is most likely to be successful” (p. 26). In other words, most of the time, a certain minimal level of moral conduct is required, and both knights and knaves can do well enough in such situations. However, when a situation arises where the unscrupulous action will be rewarded, the knights balk while the knaves rise to the occasion and are promoted accordingly. Thus, Tullock contends that bureaucracies select for people of relatively low moral character — not for monsters mind you, but for a certain moral flexibility. Over-scrupulous angels and under-scrupulous devils are weeded out in favour of minimally scrupulous “flabby devils” (to use Joseph Conrad’s term). The optimal bureaucratic type is she who can make herself trusted most of the time, while taking advantage of opportunities available through occasional immorality.

Besides selecting for low moral character, Tullock claims that bureaucracies also select for intelligence. As you move up the bureaucratic hierarchy you will tend to encounter proportionally more intelligent people than in the lower levels. For example, imagine a boss who prefers to promote subordinates who are less intelligent than himself. You might assume this would mean that dumb people will rise to the top. But this is not so. Although he may promote stupid people, the boss is just as likely to promote smart people that are good at playing stupid. Furthermore, over the long run, those whom the boss promotes will not always have him for a boss. They might eventually acquire a new boss who likes smart people. Thus, the smart person who was acting dumb can now act smart, while the dumb people cannot similarly switch gears. They will be weeded out. Even the boss who prefers dumb subordinates will occasionally need them to do smart things from time to time, and only the smart person can pull this off.

However, when Tullock says that bureaucracies select for intelligence, he does not mean that having more smart people filtering up through the system will make the bureaucracy that much more efficient. This is because the “intelligence” in question has more to do with understanding what will please superiors than with understanding how best to carry out the functions of the bureaucracy — two quite different things. And remember, as it selects for intelligence, bureaucracy is also selecting for low moral quality. The end result is clever careerists who aren’t overly concerned about how much value they add to the organization but are very concerned with what value they get out of it.

The bulk of the rest of The Politics of Bureaucracy is devoted to the internal perspective of either the individual “reference politician” within the bureaucracy who seeks to advance up the hierarchy, or to the “sovereign” or boss, who does the managing and promoting. The latter encounters inevitable limitations on his surveillance and information processing capabilities. He can’t know everything or be everywhere all the time, so the larger the bureaucracy, the less he can know about what goes on, and the more time subordinates devote to activities to which the boss is either indifferent or opposed. To get around this problem, competent supervisors develop strategies to gain knowledge of what everyone is up to while minimizing the time and resources he must devote to this task. For example, rather than rely on his direct subordinates for information, he may develop a relationship with one or more people far down in the hierarchy, so that he has eyes and ears on the shop floor or the mailroom, thereby bypassing his dependence on direct inferiors who have every incentive to tell him what he wants to hear rather than what he needs to hear. Of course, what he is often looking for is information that will help his own career, not primarily information that will help the organization run more efficiently. In all, much of The Politics of Bureaucracy reads like Machiavelli’s Prince for bureaucrats.

In Economic Hierarchies, Organization and the Structure of Production (1992), Tullock deals with the inefficiencies that result from the dynamics of bureaucracy and its growth. As we saw in the previous post, Galbraith took note of the fact that bureaucratic structures are not confined solely to the public sector, but that large profit-making corporations have their bureaucracies too. This seemed to put the lie to von Mises’ notion that there is a strict demarcation between efficient profit management and inefficient bureaucratic management. For his part, Tullock doesn’t deny that business can be bureaucratic. However, he notes that corporations are subject to a kind of pressure that government agencies are not: when a corporate bureaucracy becomes bloated and inefficient the corporation in question becomes a takeover target. And when it is taken over, the new owner is most likely to realize efficiencies (i.e. profit from its investment) by shedding excess workers and streamlining operations.

Thus, on this point Tullock is somewhere between von Mises and Galbraith. Like Galbraith, he doesn’t deny the existence of private sector bureaucracies, though unlike Galbraith, he doesn’t see bureaucracy as something relatively benign. But more in the vein of von Mises, Tullock believes in a fundamental difference between public sector and private sector bureaucracies: the latter must sooner or later bow to the pressure to become efficient. This will happen either through the company getting its own house in order, or else through another company doing it for them. But Tullock’s process is messier: any bureaucracy, whether corporate or governmental, will display the same kinds of inefficiency, the only difference being that the former have a rough mid-course correction imposed on them from time to time.

Some Concluding Thoughts

Although I recognize many of my own experiences in these accounts of bureaucracy, I can also say that some realities are overlooked. For example, it is simply not the case that all members of a bureaucracy are exclusively or reliably self-interested. Some are. But many are willing, at least under the right circumstances, to undergo considerable self-sacrifice to achieve their organization’s goals, often because they identify personally with those goals.

Of course very few of us are completely altruistic. Most of us have mixed motives for the things we do and the choices we make. If I have a choice between accepting a position with organization X whose goals I identify with, or one with organization Y whose goals I despise, other things being equal I am more likely to work for X. This indicates that self-interest isn’t the whole story. The relative role of self-interest in my motivations will be indicated by how much of a pay premium Y would have to offer to get me to work for them instead of for X.

Also, times have changed somewhat since these accounts were written. Due to calls for retrenchment in public finance, many public sector bureaucracies experience budgetary pressures under which even private sector organizations would buckle. In many respects, the university faculty I work in carries out its functions under almost crippling austerity. This is not to say that they never misallocate resources, for sometimes it seems that they would be willing to spend $10,000 in order to save themselves $5,000 in the name of fiscal economy. My point is that some of the pressures that von Mises and Tullock believed made private sector bureaucracies more efficient than public sector ones can be brought to bear on the latter too.


GALBRAITH, John Kenneth. The Affluent Society and Other Writings, 1952-1967. New York: Library of America, 2010.

MISES, Ludwig von. Bureaucracy. Indianapolis: Liberty Fund, 2007.

TULLOCK, Gordon. Bureaucracy (Selected Works, Vol. 6). Indianapolis: Liberty Fund, 2005.

Friday, June 10, 2011

Three Views of Bureaucracy (Part 1)

Administrative bloat, by the numbers (click)
Bureaucracy is commonly associated with government and its agencies. Thus, in a time when “big government” is public enemy number one, it seems natural that bureaucracy’s reputation would suffer accordingly. Indeed, the words “bureaucrat”, “bureaucratic”, and “bureaucracy” have an unmistakably pejorative ring to them. To call someone a “bureaucrat” is to insult them. To call oneself a bureaucrat — as I do — is to be self-deprecating. And yet, it was not always so. There was once a time when bureaucracy was not frowned upon, when it was regarded as a citadel of expertise, professionalism, and impartiality. We can still catch glimpses of this older view in the quaint and rather obsolescent term “civil servant”, which is now being replaced by the double plus good Newspeak word “public sector worker”.

In this post, I’d like to explore three economists’ contrasting views of bureaucracy. Since it will be fairly long, I will divide it in two parts. Readers familiar with the topic may wonder why I do not discuss the classic views of Max Weber and C. Northcote Parkinson (of “Parkinson’s Law” fame). First of all, they are just that — classics. Much of what they had to say has been subsumed in the three authors I discuss. Furthermore, I take them to be familiar enough to many readers that I really do not want to bore, and I don’t feel that I have anything to add by discussing them.

Second, with regard to Parkinson at least, I have never known quite how seriously to take him. Much of his work is humour rather than social science strictly speaking. For example, he lays out statistics (pictured) describing the British Admiralty’s administrative bloat despite the declining number of ships in the water and the growth of the Colonial Office despite the shrinkage of the British Empire. He then proceeds to develop a quasi-mathematical equation to describe the phenomenon, offered as if it explained the growth of bureaucracy in general, when in reality it can at best only describe the growth of a particular (British) bureaucracy. As such, it is not social science, though it is a very entertaining read.

Instead of Weber and Parkinson, I will focus on Ludwig von Mises, John Kenneth Galbraith, and Gordon Tullock.

Ludwig von Mises

The first view to consider is that of Ludwig von Mises, particularly as laid out in his small and at times overly polemical book Bureaucracy (1944). Von Mises, an Austrian émigré to the US, was one of the key figures in the neo-liberal Austrian School of economics. It should be noted straight away that for von Mises, “bureaucracy” is mainly associated with the operations of government, and in its limiting case, with the operations of socialist government. In other words, as with so much of his writing, the book is essentially an attack on socialism, in keeping with the concerns of the Austrian School.

Von Mises’ book is structured around a distinction between two kinds of management: profit management and bureaucratic management. The former is exemplified by the capitalist entrepreneur, who makes decisions based on supply and demand, the information about which he receives from the price system of markets: “To the entrepreneur of capitalist society a factor of production through its price sends out a warning: Don’t touch me, I am earmarked for the satisfaction of another, more urgent need. But under socialism these factors of production are mute” (p. 24). Price is determined by demand and supply, and if the price of a factor of production is too high for the entrepreneur to profit from manufacturing it into a good, this means that demand for that factor is such that it has already been allocated to a more efficient use, has been allocated to someone who wants it more and is willing to pay the price. The market is an elegant but sometimes cruel self-regulating mechanism for the efficient allocation of resources. So long as the entrepreneur is actuated by the profit motive, his profit management will be efficient.

The other thing to note about von Mises’ account of the system of profit management is that, in theory at least, all the people involved in it act freely. Nobody tells the entrepreneur what to produce. He can produce widgets or edible underwear, so long as he is willing to assume the risk of financial loss, such loss coming from a failure to correctly read the price signals of the market. The workers employed by the entrepreneur are not forced to work for him; they can quit whenever they want, and the terms of their employment relationship with him are stipulated beforehand. Relations in the profit system are contractual and individual liberty is preserved.

Bureaucratic management, by contrast, is based on the pursuit of some organizational goal which does not primarily involve profit maximization. For example, whereas an entrepreneur would manufacture and sell shoes to make a profit, a socialist planning bureaucracy would make them to supply people with shoes, in response to a government directive that they do so. If for some reason people don’t want shoes, or don’t want the shoes that the bureaucracy is producing, the bureaucracy is unlikely to respond to the change in demand. They will continue to churn out unwanted shoes until (hopefully) a countermanding government directive is issued. The obvious result is gross misallocation of resources.

If a firm in the profit system were to fail to read market signals in this way, it would be eliminated. If a bureaucrat fails to do so, only his superiors can get rid of him, an outcome made less likely by the fact that (i) the superiors are less likely to know that such a failure has occurred, because, being further removed from the market, they may be even more blind to its signals than the subordinate is, and (ii) the subordinate was likely selected by his superiors not for his ability to read market signals, but for his ability to flatter and please them.

This latter point is important. Personal success and advancement in the bureaucratic system has less to do with one’s ability to add value to the organization or to society and more to do with one’s ability to please one’s superiors. As von Mises colourfully puts it, “The capitalist variety of competition is to outdo other people on the market through offering better and cheaper goods. The bureaucratic variety consists in intrigues at the ‘courts’ of those in power” (p. 86). In the profit management system all must work together to compete against other firms for market survival, and the market grants survival only to those who are efficient. In the bureaucratic management system, by contrast, it is not the market but one’s superiors who grant survival and advancement. Subordinates are more likely to compete against each other in currying favour with superiors. Thus, conflicting personal goals will tend to work against the goals of the bureaucracy, resulting in inefficiency and, again, a misallocation of resources. In the profit system, “survival of the fittest” means survival of those who can add value. In the bureaucratic system it means survival of those who have characteristics superiors find personally pleasing (e.g. an ability to flatter). The elaborate tail feathers of a male peacock are attractive to females. This adds to the male’s reproductive value, but not to his productive value. The perverse selective pressures in bureaucracies tend to mean that they too fill up with pointless peacocks.

Another selection mechanism von Mises notes in bureaucracies is age-seniority. The idea of a “career” is peculiar to bureaucratic structures. One enters the organization and expects to advance up a cursus honorum of regular graded promotion until one gets old and retires. Everyone in the organization has a stake in maintaining this structure so that some day they too can look forward to secure ascent. This means that at any given moment, the higher rungs of the ladder will be dominated by people of age. In short, bureaucracies are gerontocracies, run by the aged. With this comes a built-in culture of conservatism that shuns risk and finds change suspicious. As von Mises puts it, “no progress and no reforms can be expected in a state of affairs where the first step is to obtain the consent of the old men” (p. 56).

As the responsibilities of government expand, the bureaucracy necessary to carry out these responsibilities likewise expands. Many functions that were once in the realm of the profit management system are taken over by bureaucratic management, with all its inefficiencies: “The makers of the Constitution never dreamed of a system of government under which the authorities would have to determine the prices of pepper and of oranges, of photographic cameras and of razor blades, of neckties and of paper napkins” (p. 6). And yet this was the system von Mises saw as having arisen in many European countries in the nineteenth century, and which he feared was now making its way to America under the auspices of the New Deal’s price controls, expanding regulatory regime, and direct employment of masses of workers. He saw it all as the introduction of socialism in America by stealth, which is why he was so keen to show to his American readers that an inefficient system (social-democratic bureaucratism) that had been a disaster in Europe would be equally a disaster for his adopted homeland, a veritable “road to serfdom” as his erstwhile protégé Friedrich Hayek described it.

John Kenneth Galbraith

It is not difficult to spot many flaws in von Mises’ jaundiced view of bureaucracy. Aside from its over-the-top polemical tone, for our purposes we can focus on two glaring shortcomings. First, he has a rather quaint view of the nature of the capitalist firm that was already largely out of date when he wrote. He speaks of entrepreneurial or owner-dominated firms competing directly against each other in free markets. These are companies owned and directed by shrewd businessmen who invariably manufacture simple products like shoes and wire coat hangers. It is the sort of stuff one expects to find in Adam Smith or David Ricardo, not in a mid-twentieth century economist. Either he was only dimly aware of the large multinational corporation, or he thought it didn’t matter for the purposes of his exposition. In any case, his resulting argument smacks of anachronism.

Second, and in a similar vein, von Mises writes as if bureaucratic management is only to be found in the political sphere, in the functioning of states and their governments. Again, if he had looked at the nature of the large multinational corporations that were already coming to dominate the American economy in his time, he would have seen that bureaucratic management was just as likely to be found in the firm as in government.

John Kenneth Galbraith’s The New Industrial State (1967) fills these gaps left by von Mises, while restoring the reader’s faith in big business and big government. Where von Mises largely ignored the large corporate behemoths in favour of the figure of the old-time entrepreneur, Galbraith took large corporations as the typical representative of modern capitalism, a move justified by fact that, even then, a mere handful of them controlled most of America’s assets and dominated its production.

The large corporation came about in an age of increasing technological complexity. Adam Smith’s nail factory was a simple operation. By contrast, the production of an automobile or a computer, from sourcing of materials, to planning and design, to factory re-tooling, and to eventual arrival on the market takes a long time. As a general rule, technologically complex products involve a production process that requires a larger amount of capital, more planning, more steps, and more people with more specialized skills. Overall, such a production process requires — from the very beginning to the final arrival of the product on the market — more time.

Given the amount of time and capital required by modern production, producers have very little tolerance for market instability. Because of its planning needs, the firm needs to be able to rely on stable prices and minimal fluctuations in market supply and demand. It needs to plan production well in advance, and such plans must be able to take advantage of projections based on variables that will not change drastically several years down the road.

All of these needs favour the enlargement of the firm. For example, a very large producer can leverage lower prices from its suppliers, or it can purchase in large enough quantities to enable discounting, or it can purchase enough to meet its needs farther into the future. And once it gets large enough, a company may have the advantage of being able to control supply and demand, rather than merely react to it. For example, on the supply side, it might be able to vertically integrate its operations, in effect becoming its own supplier and thereby doing away with much of the need to rely on the market for its purchasing. On the demand side, large amounts can be invested in market research and market testing and in large advertising campaigns to both create and condition the market for the reception of the firm’s product. All of these strategies represent so many ways of eliminating risk from — and establishing stability in — the production process.

Because of the uncertainties introduced by longer production time frames, there is another very fundamental change in the way firms operate. Whereas von Mises wrote on the assumption that his entrepreneurial firms were profit maximizing, the large multinational firm tends to be profit satisficing. “Satisficing” is a relatively recent word coined to describe activity whereby an economic actor aims to earn an adequate profit rather than the most profit, to earn “just enough” rather than “as much as possible”. Because firms have to project so far into the future, and because a longer future is more strewn with variables and uncertainty, decision-making tends to become more conservative. A plausible profit target is chosen, and the firm adheres to the plan devised for achieving it. If a firm were to aim at the highest profits possible, it could only do so by taking risks. But a long and expensive production process makes the cost of failure so high that the risk is not worthwhile.

Such complex operations involve larger requirements for administration and information processing — in short, for bureaucracy. Galbraith notes that in the large corporation, the man at the top is less autonomous than von Mises’ entrepreneur-owner. Information filters up to him (and his board) from various lower-level committees composed of bureaucrats with expertise in the various areas of the complex production process. In the past the entrepreneur could plausibly oversee all the operations of his company. This has become impossible for at least two reasons. First, the sheer size of the organization makes it impossible. Second, the different kinds of knowledge and expertise required throughout the production process are too many and various to be possessed by one person. So planning and decision-making get channeled through committees, through group organization (through “teams”, in current management jargon). Executives, right up to the very top of the organizational structure, ignore the advice of their bureaucracies at their peril. Leaders become followers, partly through knowledge of their own ignorance.

(Interestingly, according to Galbraith, what goes for the executives also goes for the shareholders. Their lack of expertise, their numbers, and their lack of organization make them mostly passive spectators. Directors are not as answerable to shareholders as neoliberal theorists like Milton Friedman make out.)

Galbraith rightly brings to our attention that the private sector too has its bureaucracies. He also adds that the activities of private sector bureaucracy are naturally coordinated with the activities of public bureaucracies in order to better serve the needs of modern production. This interrelationship can work in a couple of ways. First, there is the “What’s good for General Motors is good for America” phenomenon (or the “Too big to fail” phenomenon as it’s known today), where a company becomes so big and so vital to the overall economy that its interests cannot be safely ignored in government policy-making. Government is put into the position of having to pick winners and losers in the economy, which is precisely what happens when it introduces tariffs (on foreign competitors’ products) or subsidies (to domestic producers), or in other cases opens access to its markets (for factors of production required by the big firms).

Second, particularly in the United States, there is the military-industrial complex, with its monopsony markets, in which firms produce highly specialized military products for a single purchaser — the government. Obviously, governments have every incentive to smooth the production process for the firms that cater to their very specific needs and will tailor their economic policies accordingly. And of course, firms have every incentive to lobby governments to tailor their military and foreign policies to the needs of industry.

All of this means that private and public bureaucracies work hand in glove in an overall economic planning system that becomes little distinguishable from its socialist counterpart. However, Galbraith is not overly critical of this system. Rather, he sees it as integral to the standard of living we’ve become accustomed to in the modern technological age. If it’s an evil at all, it’s a necessary one.

Wednesday, June 1, 2011

Making Canada Safe for Torture

Notice of Algernon Sidney's high treason conviction
More than once The Spectacled Avenger has had occasion to sharply rebuke Canada’s Prime Minister, Stephen Harper. It was never my intent for this to become a partisan political blog, and I promise it won’t. For one thing, I will limit myself to venting my rage about Mr. Harper only when he occasionally does something particularly egregious. Unfortunately, his record in this regard means that I will be venting on a semi-regular basis. Also, since I don’t have an allegiance to any political party, technically speaking, my rants are non-partisan.

In any case, readers from Canada and abroad may find somewhat of interest in my observations on the progress of Mr. Harper’s reign, because it offers one of those rare historical opportunities to observe, step by painful step, how a true despot, in the oldest traditions of the term, assumes total control of a society that was previously social democratic in political orientation. In that spirit, I offer the latest move by the government of Canada — or should I say, the Harper Government™ — in that direction.

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Mr. Harper’s Conservative Party will be holding its convention beginning June 9, at which they will discuss and vote on party policies. One of the items up for discussion is an overhaul of Canada’s treason laws. As usual, the Conservatives have identified yet another group that they want to “get tough” on. And in this instance they have chosen a group whom only the foolhardy would attempt to defend.

Now, although followers of Mr. Harper tend to be among the least inquisitive of mortals, the rest of us might wonder why treason law reform is necessary. Does Canada’s Criminal Code contain a dangerous legal gap surrounding treason? No. Has there been a recent rise in treasonous activities for which the existing laws have proven inadequate? No. Have the Canadian people been clamoring for treason law reform? Well, again, no.

Then what, pray, is the motivation behind this new initiative? Unfortunately, as with so many of this government’s activities, in the absence of plausible reasons, we are left to speculate, and too often these speculations sound vaguely like conspiracy theories. Unfortunately, as is again so often the case with this government, even when they bother to offer reasons, conspiracy theories tend to sound much more plausible.

Treason Law in Canada

We should first take a quick look at the treason law that is already on the books, before considering the effects of proposed changes to it. Section 46 of the Criminal Code distinguishes between treason and high treason. Here is the relevant text:

"High treason
(1) Every one commits high treason who, in Canada,
   (a) kills or attempts to kill Her Majesty, or does her any bodily harm tending to death or destruction, maims or wounds her, or imprisons or restrains her;
   (b) levies war against Canada or does any act preparatory thereto; or
   (c) assists an enemy at war with Canada, or any armed forces against whom Canadian Forces are engaged in hostilities, whether or not a state of war exists between Canada and the country whose forces they are.

(2) Every one commits treason who, in Canada,
   (a) uses force or violence for the purpose of overthrowing the government of Canada or a province;
   (b) without lawful authority, communicates or makes available to an agent of a state other than Canada, military or scientific information or any sketch, plan, model, article, note or document of a military or scientific character that he knows or ought to know may be used by that state for a purpose prejudicial to the safety or defence of Canada;
   (c) conspires with any person to commit high treason or to do anything mentioned in paragraph (a);
   (d) forms an intention to do anything that is high treason or that is mentioned in paragraph (a) and manifests that intention by an overt act; or
   (e) conspires with any person to do anything mentioned in paragraph (b) or forms an intention to do anything mentioned in paragraph (b) and manifests that intention by an overt act.

As for penalties, section 47 says that high treason will get you a minimum sentence of life imprisonment. Mere treason under 46(2)(a),(c) or (d) gets you maximum life imprisonment. Treason under 46(2)(b) or (e) gets you maximum life imprisonment if committed in wartime, or maximum 14 years if committed in peacetime. The Code has other provisions that needn’t detain us here (e.g. the alleged treason must be witnessed by more than one person, and the suspect must be brought to trial within three years of committing the alleged act).

Getting Tough on Traitors

Although it’s rather lacking in fine detail, the Conservatives are proposing to try treasonous activity under 46(2)(a) as “high” treason under 46(1), thereby making this class of offenders subject to minimum life imprisonment, thereby expanding the class of offenders deemed “high” traitors. Put another way, as it currently stands, anyone caught levying war against Canada — by, for example raising troops and supplying them with arms — is guilty of high treason, while anyone who uses force against Canada in said war is guilty of treason only. The proposed change would collapse the latter category into the former: the rank and file in such a war would also be guilty of high treason, along with their leaders and organizers.

This in itself would probably not be very worrying from a human rights standpoint. But it doesn’t stop there. High treason would be expanded to include those fighting against Canada or its allies. It is not entirely clear what will constitute “ally” for their purposes (but you can bet this would include Israel). Canada is, and has been historically, allied to some pretty dubious regimes (again, Israel comes to mind). Anyone who makes a moral stand and decides to take up armed struggle against one of these regimes could be branded a high traitor under Canadian law. So you’d better be careful before you go off to fight in something like a modern-day Spanish Civil War. Also, if I get in trouble with the police at a G8 summit meeting in another country, by say throwing a rock or resisting arrest, will I have left myself open to a charge of high treason under Canadian law? For that matter, what happens if I do it here in Canada?

This change would effectively narrow my scope for moral action in the world. It seems designed to curb dissent. It allows the Government of Canada to decide who my international friends will be, where and how I can take a moral stand, while punishing me to the utmost possible extent of the law if I don’t unquestioningly adhere to the government’s alliances, even where such alliances are likely to be based on the government’s amoral (or immoral) judgments of political expediency.

Making Canada Safe for Torture

But even that is not the worst of the proposed changes. Having greatly extended the ambit of the high treason offense, the Conservatives are also proposing to strip high treason offenders of their Canadian citizenship. Not being a constitutional scholar myself, I’m not even sure that this is constitutionally possible: Can a Canadian citizen be stripped of her citizenship? I know that naturalized Canadians can be, if for example they have obtained citizenship under false pretenses. But can a native-born Canadian citizen lose her citizenship? I confess ignorance here, so if any readers can enlighten me, please feel free to do so. It is an especially worrying question for someone in my situation. I am a native-born Canadian citizen. I do not hold any other citizenship, nor ever have. This means that if I am ever convicted of the new and expanded crime of high treason and have my citizenship taken away as a result, I would be rendered stateless.

Bad things tend to happen to stateless people. They fall into legal black holes — and sometimes quite literal ones too. A Bush administration official once candidly described the detention camp at Guantanamo Bay as “the legal equivalent of outer space”. He meant that prisoners at Guantanamo were beyond the reach of the protections afforded in the US Constitution, beyond the reach of habeas corpus, beyond the reach even of international law. Omar Khadr is one of the unfortunates locked away there. Khadr was a fifteen-year-old Canadian citizen when he was captured by US troops fighting with the Taliban in Afghanistan. Despite repeated rulings by the Canadian Supreme Court requiring the Canadian government to request his extradition back to Canada, the government has stubbornly refused to do so, which is a good indicator of where this government stands on the issue of human rights and the rule of law.

As a matter of fact, the changes to the treason laws contemplated by the government seem to have been designed with Khadr specifically in mind. He was caught fighting not against Canada, but against one of its allies. Being a minor, he should not have been subject to the usual rigors of the law. Being a Canadian citizen, Canadian officials had a duty to protect him (although they instead chose to shirk this duty). Under the proposed changes, once convicted by a Canadian court, he could be stripped of his citizenship and made to simply disappear, to have God-knows-what done to him. The Canadian government might be enabled to set up its own versions of Guantanamo.

Here is where the conspiracy theory comes in. Suppose someone is convicted of high treason under current laws. As it stands, he will spend the rest of his life in jail. As far as sentencing goes, that is the highest penalty one can receive for any crime under Canadian law (we do not have the death penalty). Such an offender can never again pose a threat to Canada. So what would be gained by adding the further penalty of stripping him of his citizenship? There seems to be only one plausible answer: the aim is to remove obstacles that currently stand in the way of the prisoner’s being abused and tortured. The purpose of the measure is to create a deep dark memory hole down which people who aggressively express dissent against the government, its policies, or its putative “allies” can be made to disappear.

If you think I’m being paranoid, then please feel free to offer me a better explanation for why the Conservatives would introduce such a measure. In the absence of such an explanation, all I have to go on, besides logic, is this government’s past conduct in relation to human rights. To refresh your memory, such conduct includes: refusing to repatriate one of its own citizens being held and probably tortured in a foreign concentration camp (Omar Khadr), refusing to follow up on the “extraordinary rendition” and torture of one of its citizens (Maher Arar), refusing to release documents showing Canadian complicity with prisoner torture in Afghanistan, and the mass arrest of over a thousand innocent citizens — many of them savagely beaten by police — at last year’s G20 summit in Toronto. Past actions seem to warrant present paranoia.

Manus haec inimica tyrannis.