Parkinson’s Law, published in 1957, may be the best book ever written about bureaucracies. Parkinson’s Law is best known for its whimsical, but truthful, law on work: “Work expands so as to fill the time available for its completion.”
The book begins by describing how the number of Admiralty Officials nearly doubled from 1914 to 1928, while the number of ships in the Royal Navy declined from 62 to 20.
While this may be historically interesting, and worth a good chuckle, does it have any relevance to the world in which we live?
Here’s a quote from an article by former Defense Secretary John Lehman (circa 1980s):
“When the Department of Defense was created in 1947, the headquarters staff was limited to 50 billets. Today, 750,000 full time equivalents are on the headquarters staff.”
Of course, this is unfair because of the rise of new technologies, but perhaps Parkinson’s law was also at work.
Another example could be the EPA.
When the EPA was established in 1970, it had 4,084 employees. Today, it has 14,172 employees.
But this is down from 17,106 in 2012.
This infers there is a more likely scenario where the size of a bureaucracy ebbs and flows, while inexorably getting larger.
Parkinson only reported on the increase, and not how a bureaucracy inexorably grows by advancing, receding and then advancing again.
A good example is the history of the General Electric Company, while it was still a great company.
In 1950, Ralph Cordiner became President of General Electric, and shortly thereafter reorganized the company into a hundred different business units, established as Departments where the General Manager ran each business as if he were the president of that business.
Recognizing that the nearly 100 new GMs would need support in technical areas, Cordiner established a small cadre of experts at headquarters where each GM could call on an expert for technical assistance when needed. The GM’s were responsible for their businesses while the experts at headquarters merely provided support when asked to do so.
By 1980, the roles had become reversed. The size of the staff at headquarters, now located in Fairfield, Connecticut, had expanded. Staff members were now looking over the shoulders of the GMs and essentially giving their approval for actions each GM took.
In twenty-five years the bureaucracy had gone from a few technical experts to an army of bureaucrats overseeing each business.
Humor told the story.
“We’re from headquarters and we’re here to help you.”
“Experts from headquarters are like seagulls. They fly here, walk all over you and then fly home.”
Jack Welch reversed the situation by largely disbanding the bureaucracy in Fairfield and restoring the role of each GM to lead the business for which he was responsible.
Parkinson showed how bureaucrats are more concerned with growing their influence by establishing regulations that increase their responsibilities, with the subsequent need to hire subordinates to assist with their expanded role. All of which leads, inevitably, to a larger more powerful bureaucracy.
Parkinson showed how a bureaucracy operates by establishing rules and regulations, requiring approvals and review by other bureaucrats, so that no individual bureaucrat can be held responsible for any failure in outcomes.
Civil servants are largely protected by law from discipline and need only ensure they have had their actions reviewed and approved by others so they can’t be held responsible for what has inevitably become a joint decision.
Organizations, out of necessity, require experts.
Ensuring that the role of experts is limited to advising, and not allowing them to force their views on those responsible for operations, is essential for an organization’s success.
This is true for government’s and countries, as well as industry.
Big government with centralized planning means large bureaucracies.
As Engels said:
“Anarchy of social production is replaced by conscious organization according to plan.”
But who prepares the plan? Certainly, not the individual.
Experts are essential, but bureaucrats are a blight.
. . .