Bureaucracy’s End

Playing by the rules is a relatively new version of the American Dream.

The phrase was added to the American Dream in the latter part of the 20th Century.   When the American Dream was first articulated in secular terms, the wording was a very simple: “deal honestly with others.”  Playing by the rules is a bureaucratic amendment to the Dream.  A needed change given the degree control the bureaucracy has over the economic system.

As we already know, bureaucracies were built to replace the nepotism, corruption, and capriciousness (of electoral spoils) in governance.  To accomplish this, they were built as meritocracies, with strict rules for how people are promoted and fired.

As bureaucracies grew in the last century, they naturally took on the role of managing our economies to ensure prosperity.  As part of that effort, the rules of meritocratic advancement were extended to every citizen, if they followed the rules handed down by the bureaucracy.   In short, if you play by the rules, your future success — i.e. a job, a home, a pension — is guaranteed by the bureaucracy.

Of course, as we’re finding out, this isn’t working out.

The bureaucracy isn’t able to manage the economy in a way that ensures prosperity, nor is it able to provide citizens with a set of rules with determined outcomes.   The bureaucracy our entire socio-economic structure is based on is being obsoleted.

The reason for the failure of the bureaucracy comes down to one simple flaw in its approach to decision making.   A flaw that makes it unable to manage the economic system effectively in the 21st Century or deliver on the promises made by the American Dream.

Bureaucratic decision making is based on predictable statistical outcomes.

Do x and y is the likely outcome.

In the world of the 20th Century and earlier, that was possible, in most cases due to the nature of the economy at that time.  In that economy and earlier, most of the economic processes, in aggregate, could be plotted as a normal distribution (a bell curve, gaussian, etc.).

We all know this curve from measures of human height to IQ scores to random noise.   As you can see, even with some variation, this distribution makes the management of outcomes possible.

Normal curve

However, that changed.

The inexorable technological advance that destroyed hard work, did something else.  It changed the dynamics of the economic, financial, and social systems the bureaucracy assumed it managed.  These technologies turned processes that were formally depicted by gentle, rolling hillock of the the Gaussian distribution into the steep cliff of the exponential non-linearity and fat tailed power laws.


A world that routinely produces those outcomes is completely at odds with the rational and foundation of bureaucratic management.

More tomorrow.


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Discussion — 4 Responses

  • Burgundy January 20, 2014 on 5:43 pm

    Seems like the experimental technology phase is maturing and the most efficient techniques are manifesting themselves exponentially. The System is becoming more deterministic and therefore doesn’t need the guiding hand of the bureaucrats in certain areas any more. Its functioning more like a genetic algorithm, moving further along an evolutionary path with each iteration and master of its own future. Much to the confusion of its bureaucratic controllers, at a loss as to why things aren’t the way they’re supposed to be.

    The poor bureaucrats are simply following the technological advances, trying to clear up the mess left behind, covering up the fact that they’ve lost control and trying to convince people they’re on top of it. For example the Fed is printing money like crazy because the Financial System demands it, because the Financial System is being bankrupted by financial and technical innovation that its lost control of. The economy has become a series of bubbles centred on innovation, improved techniques and technological advances that are bleeding capitalism dry. Money is pouring into non-profitable technological advancement and the worse things become the more money is going into it (bye, bye, retirement nest eggs).

    It depends on whose rules you play by. My bet is on technology and I’m going to play by its rules if I can work out what they are.

    • Burgundy Burgundy January 21, 2014 on 4:29 am

      The bureaucracy attempts to fight back using propaganda, scare tactics and threats:

      Five reasons why Bitcoin is the most dangerous currency in the world

      But as the bureaucracy is becoming obsolete it is increasingly being ignored. Its attempts to regain control simply spur people on to find new techniques to nullify its control. So the Bureaucracy invests ever greater amounts into technological developments (eg. NSA and intelligence services, the police, regulatory and population control). Its losing control over global finance, international trade, military superiority, the climate, water and agriculture requiring ever greater investment in technology.

      Technological advancement is ripping the Industrial Bureaucracy, Capitalism and the Nation State apart. Society isn’t escaping either, as those clinging to the failing structure are sucked into poverty and those obeying the new technical order prosper from the inequality created.

  • Ringdocus January 20, 2014 on 7:08 pm

    I live in rural Southern California where the attitude seems to be that the more rules the bureaucrats promulgate, the more folks seek forgiveness if caught, not permission (following the rules- obtaining permits – licensees, etc.) before starting.

    Further, two tier pricing e.g. $500 if by check or charge card or $450 if by currency is prevalent.