Comparison of Mises versus Weber on Bureaucracy and its Consequences on Society - Essay Example

and Number of the Teacher’s Comparison of Mises versus Weber on Bureaucracy and its Consequences on Society Introduction Bureaucracy “denotes the general, formal, structural elements of a type of human organisation” (Weber (2) 50), particularly relating to governmental administration. It forms the lens through which modern government may be viewed. Ludwig von Mises (1881-1973), the Austrian economist and social philosopher, and Max Weber (1864-1920), the German sociologist, philosopher and political economist had different methodological approaches to the study of ‘bureaucracy’ based on its sociological and economic perspectives. Significantly, however, they were acquainted with one other, and also mutually admired each other’s work (Anderson 4). Mises’ economic analyses of bureaucracy also identified the key differences between bureaucracy, profitable organisations, and unprofitable organisations. He demonstrated that “government bureaucracy will be unable to engage in an economic calculation and thus will suffer from significant inefficiencies” (Francu and Hociung 159). Consequently, Mises clearly distinguished between bureaucratic management and profit management. On the other hand, Weber, considered as the ‘father’ of bureaucracy, proposed the fundamentals of an explicit theory of bureaucracy (Francu and Hociung 159). He not only pioneered the most “comprehensive, classic formulations about the characteristics of bureaucracy”, but his ideas also ranged across a whole spectrum of historical, political, economic, and political thought” (Weber (2) 50). According to Francu and Hociung (159), he built on the premise that increasing efficiency of the bureaucratic organisations in carrying out complex activities resulted in the growth of the bureaucratic organisation. Thus, the ideal bureaucratic system was an organisational scheme where competence and not force or tradition formed the basis for the allocation of power (Weber (1) 25-30). Thesis Statement: The purpose of this paper is to investigate the opposing perspectives of Ludwig von Mises and Max Weber on bureaucracy and its consequences on society. It will be argued that Mises had a better understanding and a more realistic approach emphasizing bureaucracy’s adverse effects on society and the economy, as compared to Weber’s views on the need for institutional structure. Comparison of Mises’ and Weber’s Approach to Bureaucracy Mises’ Austrian sociology is similar in some respects to the Weberian school; however they are two different methodologies. They usually address different topics. With the discipline of sociology becoming institutionalized around the Durkheimian or Weberian schools, Anderson (3) observes that it has become difficult to evaluate the two methodologies. On the topic of bureaucracy, however, the Weberian and the Austrian schools do overlap in the two sociologists’ works: Weber’s Economy and Society and Mises’ Bureaucracy, offering opportunities for comparison and analysis of the two schools. Both Mises and Weber consider bureaucracy as a primarily modern phenomenon, and one that “dominates and threatens the social organisation of the time” (Anderson 4). The scholars’ treatment of the problem of bureaucracy provides guidance on the explanatory power of each method of sociological analysis. Ludwig von Mises’ book Bureaucracy, 1944, compares socialism and capitalism, though it is a critique of state interventionism. Mises sharply condemns totalitarian regimes. The sociologist explains the characterstics of bureaucratic management, and the ways in which it differs from management for profit (Badun 267). While success in business management for profit can be measured by accounting; on the other hand, the purpose of a civil service cannot be evaluated in monetary quantities, or verified by a profit and loss account. An example is that, it is impossible to put a market price on reduced crime rate based on a particular piece of work by law enforcement or police department. Thus, according to Mises, the main problem of bureaucracy is the non-existence of any standards that can indisputably rate the performance of a civil service. At the same time, Mises acknowledges the need for bureaucratic management, limited to the courts, defence and the police force (Badun 268). Weber’s work is recognised as the earliest in the study of bureaucracy, on the basis of his landmark professional studies and researches in the area. He used the mechanisms of sociology to not only scrutinise the general, distinguishing attributes of the departments (bureaucrats bureaux), but also to evaluate the behaviour of bureaucrats or civil servants from the public administrations (Francu and Hociung 159). The perspectives of Mises and Weber in their approach to the concept of bureaucracy are from contrasting angles; consequently, their observations and conclusions differ completely, in relation to the nature of bureaucracy and its impact on society (Damien, 2013). It is clear that Mises explains his theory of bureaucracy on self-evident, obvious or axiomatic principles. According to Rothbard (1-2), the first principle of Mises is the axiom of human action which refers to purposeful behaviour, and forms an innate part of human beings “by virtue of their existence and their nature” (Rothbard 1-2), and “human action can be undertaken only by individual actors”. The second principle of Mises pertains to the “Law of Marginal Utility”, according to which the extent to which things are valued as a means to achieve goals, depends on the extent of their ability to accomplish objectives evaluated as more or less urgent (Rothbard 21). Mises asserted that both bureaucratic and non-bureaucratic action are carried out by individuals to achieve an end; the difference lies in bureaucracy pursues ends without taking profit into consideration; while the actions of non-bureaucratic institutions are profit driven. This explanation is applicable to the same institutions described by Weber and others as being a bureaucracy, but it also has the added advantage of specificity and distinctly demarcated categories preventing “overlap or contradictions in the conclusions that can be drawn from it” (Damien, 2013). This definition describes “government, business, charity or any institution that takes actions without consideration for profit or to the degree in which their decisions are not base don profit” (Damien, 2013). Thus, an institution is more bureaucratic, the less it takes profit into consideration, and vice versa. Weber’s theories on bureaucracies form part of a “purely formal and typological discussion” (Weber (1) 992). According to Oszlak (489), Weber’s description of the characteristics of the ‘ideal type’ of bureaucracy refers to one structured in a distinctly delineated hierarchy of offices. Further, in compliance with the impersonal duties of the offices, the different units and positions follow a hierarchical command structure. Functions are specified in writing, creating specialization of tasks and specific areas of competence. Moreover, “bureaucrats’ behaviour is subject to systematic control” (Oszlak 489). At the same time, Weber did not emphasize on the cause of bureaucraciees or the reasons for their deviation from his ideal type; nor did he explain the self-evident principles which were the origin of his ideal type (Anderson 6). On the other hand, Weber relies on “historical relativism and a general institutional perspective that is biased towards ‘collective phenomena’ as opposed to individual action in determining causal factors to describe bureaucracy” (Anderson 9). He accepted this as a part of reality, where core truths are not possible to discover because of the general characteristics of flawed perception. Hence, instead of attempting to find the reasons, Weber used observations mainly to predict outcomes (Anderson 6-9). Mises’ and Weber’s analysis of bureaucracy can be evaluated at two levels, including the conceptual/ methodological and the ethical. Both aspects are essential for appreciating the differences between their sociological methods (Anderson 16). Differences in the Sociological Method of Mises and Weber in Relation to Bureaucracy and its Ethics Weber uses the concept of ‘ideal types’ instead of general schemes and causal explanations. Ideal types are “conceptual instruments for comparison and the measurement of reality” (Anderson 5), which the sociologist employs to avoid assertions of scientific laws. On the other hand, Mises argues that ideal types are not scientific concepts. Despite ideal types not correlating with the reality, they are a theoretical instrument for describing phenomena, thus embodying the core of sociological theory. According to Weber, sociological analysis takes away from reality, while simultaneously promoting an understanding of it, revealing the extent of approximation a concrete historical phenomenon can be included within one or more of the concepts of ideal types. Although Weber’s ideal types help in analysing social structures, “they are so general that they miss important aspects of real actors in real life”, states Bendix (296). Weber’s emphasis on the idealized shape of bureaucracies was based on his belief that the idealized types were intentionally free from contradiction. Idealized types are derived from various historical examples, stressing on only particular non-contradictory aspects. Mises consequently concludes that rather than constructing sociological theory, Weber has constructed ‘universal history’ (Mises 114). Anderson (17) reiterates that due to Mises’ focus on managerial style, his sociological method had broader applications without the requirement for resorting to ideal types and their associated shortcomings. An important example is the way in which ‘efficiency’ is defined. Weber’s ideal type is too general to distinguish between different types of efficiency, hence Weber overlooks “the contradiction in how efficiency is used when it comes to human action in bureaucracy versus private enterprise” (Anderson 17). Efficiency being the same by Weber’s idealized definition, he considered bureaucracy as inevitable in both government as well as in business. The nature of bureaucratic management remains the same, irrespective of its locus; hence Weber’s hope that private bureaucracy might counterbalance public bureaucracy is not considered possible. Thus, the more bureaucratic a private enterprise becomes, it is more likely to be taken within the interests of public bureaucracy, “reorient itself away from meeting consumer needs, and push consumers to look towards the state to meet those needs” (Anderson 17). Profit management is the only effective response to bureaucratic management in the economy. Weber observes that economic calculation is central to rational economic behaviour; however he mistakenly believes that bureaucratic management suitably fits into the profit management model. According to Weber, the rationality directing human action is the same, “an efficient coordination of means and ends, instead of being one of several praxeological categories” (Anderson 17) such as time and valuation, that the analyst may employ. Weber considered the rational value of efficiency as the driver of capitalism, which created the adoption of bureaucratic design that is also rationally efficient. Bureaucratic efficiency suited the private enterprise well because it supported the profit objective through its “stable, strict, intensive, and calculable administration” (Anderson 17). Capitalism in its contemporary stages of development requires the bureaucracy, while on the reverse aspect, capitalism is the most rational economic basis for bureaucratic administration and facilitates its growth in the most rational form, especially because it is the supplier of necessary finances. Mises recognises this risk because his approach perceives bureaucracy “not merely as a structure, but as a style of management” (Anderson 18). According to Mises (235), efficiency has different implications under each style. Private enterprises are ruined by bureaucratic definitions of efficiency, because private firms practice efficiency on economic calculations, not rules. Mises’ theory of the business firm causes him to avoid Webers’ mistake in applying the concept of bureaucracy in private business. Mises’ emphasis on economic calculation and the importance of organisational goals including profit versus bureaucratic, permits this to be seen (Anderson 18). On the other hand, Weber does not employ this perspective. He depends on an integrative conceptualisation to direct his analysis, and not universal laws of human action. General ideal-type methods like Weber’s blur significant distinctions because of the analyst’s reliance on the theoretical concept rather than the facts of human behaviour and their subsequent manifestations in human action. According to Mises (84, 92), Weber’s categorization of the types of social action were paradoxical, separating economic action from other types of action, and in an erroneous manner. Weber’s making of distinctions were when he should not have done so, and when he did not do so, he should have, asserts Mises (92); adding that his misunderstandings are the outcome of not beginning with universal propositions about human action. Mises (92) argues that the laws of sociology are neither ideal types nor average types. On the other hand, they are the expression of that which is singled out of the rich variety of phenomena from the point of view of the science that seeks to understand the essential and the necessary in every moment of human action, which are then generalised. Thus, causal relationships significantly “ express that which necessarily must always happen as far as the conditions they assume are given” (Mises 98). These are not statements of ideal-typical probability; they are merely statements of correlation and not causality. Mises’ and Weber’s approaches to the emerging bureaucratic class are different. While Mises focuses on the “real, coercive, and violent power of the state in imposing bureaucratic regulations and models upon other organizations” (Anderson 19), contrastingly Weber emphasizes more on the impact bureaucrats have in spreading structural and cultural uniformity. The incursion of bureaucracy is not the expected outcome; it is based on the will of bureaucrats. According to Weber, bureaucracy appealed to rational law and values. On the other hand, Mises demonstrated that bureaucracies are legitimated through the propaganda of bureaucrats, the Religion of the State. “Thus, again, Mises offers a more powerful and comprehensive theory of bureaucracy” (Anderson 19) taking into account the structure of bureaucracies, the style of management within them, the reasons for their expansion into areas for which they are unsuitable, and human choice and valuation. It is evident that Mises offers a more helpful, causal analysis than does Weber whose analysis is inclined towards correlation, not cause. “Weber describes an ideal type of bureaucracy, notes its harmful effects, and illustrates with several historical examples” (Anderson 19). However, Mises has stronger instruments because his starting point is human action. It is identified that bureaucracy “originates in situations in which economic calculation cannot be conducted, it is legitimated by the ideology of statolatry” (Anderson 19), and is based on a plan of interventionism. Mises begins with the scientific laws of human action, with bureaucracy as one of its consequences. Thus, Weber’s difficulties reveal the epistemology of the social sciences, demonstrating what happens when the development of theory does not in fact start with human action. Mises (127) observes that in sociology, “the value judgements that are made in human action are ultimate data”. Weber’s errors in his understandings of bureaucracy and human action are due to his emphasis on the wrong data. Holton and Turner (61) assert that Weber consequently misconstrues the impact of bureaucracy. The reason for these problems is Weber’s aversion to construct a general theory of social action. Conclusion This paper has examined the contrasting viewpoints of Mises and Weber on bureaucracy and its impact on society. The analysis of the core phenomenon of bureaucracy by the two classic scholars, promotes an increased understanding of the strengths and weaknesses of each sociology, besides raising awareness of the foundation for a social science based on human action. The evidence indicates that the greatest strength of Mises is his realism about the morally adverse influence of bureaucracy upon human freedom. In contrast to Weber, he does not isolate bureaucracy into different ideal types of sociological categories. Mises focused on the larger picture of the destructive effects of totalitarianism and its closely associated concept of bureaucracy. Weber promotes bureaucracy’s efficiency and its rise and impact, however he is worried about its influence. His indecisiveness forms the basis for much of his writings, projecting a sense of disillusionment and pessimism. Mises identifies destructionism as innate to bureaucratic order. Bureaucracy has to be countered by all who desire freedom and the benefits available to all in a market system. Further, cooperation, competition, and the uncertainty that arise from risk have to be confronted, for optimal future outcomes. Every person in society has to take responsibility and be a part of the intellectual struggle against bureaucracies. Therefore, it is concluded that Mises had a better understanding and a more realistic approach highlighting bureaucracy’s adverse effects on society and the economy, as compared to Weber’s views on the need for institutional structure. Holton and Turner (45) reiterate that, “it is not Weber but Mises who shows us the way” to understanding, dignity and freedom in society and the economy. Works Cited Anderson, William P. Mises versus Weber on Bureaucracy and Sociological Method. Journal of Libertarian Studies, 18.1 (2004): 1-29. Badun, Marijana. Bureaucracy by Ludwig von Mises. Review. Financial Theory and Practice, 29.3 (2005): 267-272. Bendix, Reinhard. Max Weber: An Intellectual Portrait. New York: Doubleday, 1960. Francu, Laurentiu G., and Gabriel I. Hociung. The Bureaucracy in the Current Economic Climate. Theoretical and Applied Economics, 6.571 (2012): 157-164. Holton, Robert J., and Bryan S. Turner. Max Weber on Economy and Society. London: Routledge, 1989. Manier, Damien. On Bureaucracy: Mises versus Weber. 13 April 2011. 16 March 2013. Mises, Ludwig von. Bureaucracy. New Haven: Yale University Press, 1944. Mises, Ludwig von. Epistemological Problems of Economics. 3rd Edition. The United States of America: Ludwig von Mises Institute Publications, 2003. Oszlak, Oscar. “Regimes and Contention”. Handbook of Political Sociology: States, Civil Societies, and Globalization. Eds. Thomas Janowski, Alexander M. Hicks, and Mildred Schwartz. Cambridge, UK: Cambridge University Press, 2005, 482-505. Rothbard, Murray N. Man, Economy, and State with Power and Market. Auburn, Alabama: Ludwig von Mises Institute Publications. Weber, Max. (1). Essays in Sociology. London: Oxford University Press, 1958. Weber, Max. (2). “The Formal Structure: The Concept of Bureaucracy”. Reading 2. Public Admininstration: Concepts and Cases. 9th ed. Ed. Richard J. Stillman. New York: Cengage Learning, 2009, 50-62. Read More