Bureaucracy bonanza

A beast of our own making?

For someone who’s writing a PhD I don’t enjoy reading very much. Sitting down with a book in my hands might feels very nice, but I take information in much better by listening, which is why my appetite for radio and podcasts is insatiable. One of my all-time favourite is “Behind the Bastards”and in particular the “The Not-At-All-Sad History of Libertarian Sea Nations”, in which journalist Robert Evans tells us tales from the many attempts of Libertarians to start independent states or republics in which to fully live to their visions of liberty and personal sovereignty, free of government-tyranny. And one by one, these stories come to similar conclusions: people who start out vehemently resisting government interference and “the nanny state” come together and gradually begin reinventing the same: regulation.

Like the story of people buying a boat to sail the high seas where each can buy themselves into a cabin, run a crypto-mining deck and be free. But turns out, when everyone wants to cook meals in their cabins, that creates a fire hazard. Who here hasn’t set off their office’s smoke detectors via a burnt toastie? But its’ pretty bad on a boat in international water, so you can’t have people have toasters in their rooms, they need to use communal kitchens. But then someone has to keep those clean, and not all people on the boat can make their coffee at the same time in the morning… aaaaand long story short, you end up with a highly-regulated, tightly controlled set of boat-rules and people fleeing the ship at the next port.

Everyone who’s ever lived in a flatshare knows this. When people live together we can all broadly gesture to “we’re all grown-ups here” and expect things to somehow work out - but you’ll find yourself in a filthy kitchen with no clean mug for your tea.

When we think of regulation’s cousin – bureaucracy – the way in which regulation is enacted and operated in our various levels of government, it’s difficult not to come to negative connotations though. Bureaucracy is a beast to be slayed, always too much, always a barrier.

Photo by Annie Spratt

It’s easy to forget what regulation and bureaucracy is about: it reflects what we value, what we protect, and how we want to balance out those pesky dynamics of seemingly rational people acting in their self-interest after all.

I’ve recently seen this referred to as “Chesterton’s Fence”, the idea of an old-rotten fence that seems pointless, and only once it’s torn down it becomes clear what purpose the fence was serving. A bit like “there’s no glory in prevention” – stiched on my throw pillow from covid times. It’s a useful metaphor, and I expect since we have neighbours on our planet who are tearing down a whole lot of old fences with very little regard for their purpose, we’ll see what they were protecting them from in due time.

On the other hand, it is true that regulation and the bureaucracy that follows has a way of taking on a life of its own. And that usually has to do with the mindsets that feed the call for regulation in the first place.

An excellent example for this comes from my good ol’Germany and concerns people who receive social support, the “dole”. All people that get support get a set amount of money per month to cover power cost. However, it’s been raised that some people live in old houses in which water is heated centrally and charged to all renting parties equally. Here, people on the dole have no chance to carfully watch their own hot water consumption so that it fits within the budget they’re getting. For these cases, separate regulation was set up: they get a little extra. But not just nilly-willy – the extra amount they’re getting is staggered based on the number of people in the household AND their ages.

There are 4 different statutes for different age ranges: 0-6, 7-14, 15 year old (exactly), and above.

What the heck do german lawmakers think happens with hot water when you’re 15?!

Regardless, that is what the regulation says, and the appropriate bureaucracy has to be set up to take applications, assess, review documents and confirm all of that. Every year anew. THAT is bureaucracy bonanza!

What drives a state into such madness? With the distance that I now have after living in NZ for over 15 years, I can say that while Germany has a strong sense of a social state, there’s also a great stream of envy – the thought of someone getting something they don’t deserve. “Some lazy bum just sits around all day enjoying themselves and getting their needs met for free, when I have to work hard and pay taxes for them.” Social envy is running high, with ill-meaning actors fanning the flames at every opportunity. You might know the US-version, Reagan’s “welfare queen”.

So we need regulation, because we can’t possibly have someone getting something they don’t deserve, right?

Only, it’ll cost ya. The bureaucratic apparatus that is takes to generate, accept, process and maintain all the applications for a few extra Euros for hot water from hundreds of thousands of people is an enormous cost. And yes, let’s not forget that bureaucracy does create barriers that continuously reinforce social immobility, because those people most in need to extra support often find it difficult to battle the reams of paper and government-speak that’s involved.

But when we can show it’s clearly uneconomical – then can that fence come down? This has been attempted a times in Germany, when local economic institutes showed that for the money that it costs to administrate the entire student support system to assess who deserves payments or not – you could give every single enrolled student the maximum amount. No questions asked.

So when something can be shown to be uneconomical – can that fence come down then? Or what might be unintended consequence?

As so often, that depends – in the case of the student support there’s a good case that the numbers would hold water, as universities can’t really be “flooded” with new students who all enroll just to get free money. Enrollment at German universities is extremely vigorous, there are no “empty” seats really, and universities are already quite well-practiced at weeding out no-shows.

On the other hand, it has been shown in the US that money spend on auditing and investigating wealthy tax payer had a rate of recovering $12 on each dollar spent in the efforts (btw, where can I invest in that?).

A lot of people resent the idea that the state “just hands out money” and people don’t deserve it. But there’s a risk that regulation creates a mindset where policy-makers always just rather opts for regulating, checking, limiting, assessing something. I’ve heard it said that this mindset particularly grows when lawyers are directly involved in drafting policy (sorry dear valued lawyers).

It’s one of those psychological phenomenon’s that we all seem to be privy to: we might think well and positive about an individual we know personally, but we often assume that groups of people are all idiots that can’t be trusted.

It’s the old idea: one idiot can ruin it for everyone. One crypo-mining libertarian on a boat burnt their panini and now none of them can have toasters in their cabins anymore, right?

In that sense, regulation and the bureaucracy we put in place to check on it can mirror our fears, our prejudice, and our discomfort with ‘otherness’ that obfuscates actual evidence and science. Particularly when that evidence is gathered through the social sciences – because, they’re not really sciences, eh?

Today I’ve used a lot of overseas examples, and thought I might be leaning out the window here – I doubt things are as severley papered-up here as far as the bureaucratic monster is concerned. But those barriers that exist have the potential to be damaging nevertheless.

As exemplified by the proposition to remove the living wage as a requirement from government contracts. This has been presented as a means to:

“Streamline and simplify the process for New Zealand businesses."

To me, this is a perfect example of something that – yes – one can call bureaucracy. But here is a rule that was established with a policy-effect in mind, so that contractors and sub-contractors can’t keep dumping people’s salaries and squeeze profits off that when working for the government. And if we believe this slightly slim-numbered survey, this doesn’t even reflect the will of the broader population.

Bureaucracy, to me, is a powerful mechanism of unintended consequences, and a stabiliser of the status quo for better and for worse. We’d be very wise to keep it at bay and slash at it where we can, but we must also be aware of what it says about us as a population what we regulate, and for whom we tear down fences.