What organization has power as its origin and abuse of power as its product? In the U.S., we answer the Federal, State, county, and local authorities: the State, our governments. Abuse is not restricted to bribery, cronyism, subsidy, favoritism, and so on, but more generally includes all mis-application and mis-management of power. Since States are everywhere, abuse of power is everywhere. Government is poor management. Let us focus on one aspect of it, namely, poor management of civilian enterprises. (The needless carnage during wars by the ineptitude of State-run military organizations is another subject.)

"In recent years, the Russian fire management policy has been unclear, ineffective and non-transparent. The current situation is even more alarming..." We should not pick on Russia’s concern over forest fires. In merrie old England, there is no federal/state system. The central government supervises the localities, including the parks. "MPs yesterday rebuked the government over the ‘appalling state’ of the nation’s parks...inept planning guidance...management of the new opportunities fund...a ‘fiasco’...the country’s parks have suffered chronic neglect."

Nor should we discriminate among first, second, or Nth world governments. In Cameroon, which has a Ministry of Sports and Physical Education, there exists one FECAFOOT, the State-subsidized Cameroon Football Federation. Its general manager "confirms poor management." This includes "lack of solidarity, indiscipline, no precise organisational chart, wastage of resources..." A Cameroonian laments: "What a curse to be a citizen of a country where the leaders see the world only around themselves, not even a neighbour, and not even to talk of the future generations. Narrow roads are constructed to last as long as the minister monitoring the construction can still be in office. Town planning exists on papers but actual constructions are in total contradiction...Our leaders are all wolves and I wonder what crime we committed in the face of God to deserve such leaders."

Such letters and newspaper editorials appear regularly all over our blessed planet in every country on earth. A great many people of this earth are united in noticing one thing at least: the dreadful consequences of State power and its inseparable abuse. The day will come when many more will realize what the problem is and overcome their current divisions and inaction. In the mean time, there are many well-meaning souls who want more of the same, such as the Cameroon gentleman who calls for a government Book Development Council along the lines of the government’s Cameroon Music Corporation. After all, Ghana and Zimbabwe have theirs. In his letter, we learn that the United Nations arm, UNESCO, has promoted and funded book councils.

One should not sneer or laugh too much at countries with Ministries of Culture, Education, Sports, Higher Education, Tertiary Education, and Commerce. "And why beholdest thou the mote that is in thy brother’s eye, but perceivest not the beam that is in thine own eye?" Do we not subsidize stadiums? Can’t we find numerous State commissions or councils of arts? Do we not have a National Endowment for the Arts?

Governments that manage poorly, that is, all of them, are forever discovering a "need to learn." They forever create commissions to do expensive studies that produce "recommendations." This leads to "plans" that they promise to "implement." Always, they will "move forward." This of course always involves sucking up more money from the productive sector, invariably further impoverishing the country. Isn’t all of this absolutely the stupidest treadmill to poverty ever invented?

The demise of States will clearly come because human beings have the capacity to learn from their mistakes – even if we are sometimes rather slow at it. This will happen when a critical mass of ordinary people with the right idea finds a way to outwit and uproot those with the wrong idea who love and benefit from the State. It will happen without bloodshed because it will be a victory thoroughly prepared for by the spread of ideas and the preparation of a consensus. Even Mr. Krugman may change his tune and stop superficially blaming the New Orleans problems on a "can’t do government that makes excuses instead of doing its job." There is no such thing as a can-do government. A can-do government is a unicorn, a mermaid, or a sphinx – a mythical creature never seen and never to be seen.

What is the basis of this optimism? The breakdown of the Soviet Union was a step in the right direction. The growth of markets in China is another. The worldwide increase in the number of stock markets in the last 30 years is astounding. In Vietnam, the State-owned telecom company is under fire and there is talk of "opening markets by boosting competitiveness and shifting from a monopoly."

While we wait, let us educate ourselves and others. In England, "Almost three-quarters of local authorities lack the know-how to develop effective e-government." The U.S. Office of Management and Budget tells us that it grades 85% of U.S. departments and agencies as having poor financial management. This places them in the same league as the financially-challenged National Health Service of England. A Congressional subcommittee informs us that computer security among government agencies gets a D–grade. The GAO backs up this assessment. Other States like Canada are in the same straits. Chinese municipal web sites are as badly handled as many in the U.S., one would surmise. The U.S. government’s poor management of the huge tracts of land it owns is by now well-known. Closer to the news headlines, we find that red tape prevents North Carolina medical workers, camped in rural Mississippi, from getting the "few additional miles to reach the people they came to help."

Why one government arm investigates another is of interest, but if we follow the money trail we find that almost always these reports justify ever-more spending. The usual faults are always "a lack of funding" and a lack of enough oversight. That is, the solution is always another layer of management when it isn’t better planning, better training, more computers or better systems, improved coordination and a czar to oversee the whole mess.

Occasionally, a voice gets a glimpse of truth and realizes that "it’s not something that can be solved by a top-down approach by one person." before sinking back into the abyss of more funding and more coordination. A lengthy article about drought in Nairobi, Kenya ends up with a purposely unnamed official of a non-governmental organization who says: "Unless you plan proactively from bottom to top, then you are not addressing the issues affecting the communities. You have to plan with the communities, get them to know their own risks, build their capacity and then develop a proposal jointly with them, implement the proposal with them, evaluate the project with them. Top-bottom bureaucracy is a problem." Some Indonesians have learned that decentralizing cattle raising projects is far more effective than centralized projects coming from Jakarta.

In instances like these, people are discovering that flat organizations are often superior to vertical organizations. This happens because decisions are made closer to the location of the specific knowledge that is pertinent to those decisions. In vertical organizations, there are often know-nothing chiefs who dictate to the peons lower down the chain. Meanwhile the peons know what’s going on and, given the freedom to act on what they know, can produce superior outcomes.

An e-mailer who monitored the Katrina press stories round-the-clock related these (unchecked) stories. A national guardsmen gave water to a stranded woman saying on camera "It’s against the rules, but I gave her water." The rumor of a helicopter being fired at was denied by the head of that effort – but by then the networks, especially Fox, drove this home again and again. The president of Jefferson Parish said his telephone lines were cut by FEMA. The backhoe behind President Bush was a manufactured event as was the food stall, which stopped as soon as the President left. People on the ground typically know more than higher-ups and are in a better position to make decisions.

In the same vein, an e-mailer to me outlined a "pump and pipe brigade" concept in which volunteers from across the U.S. would enter New Orleans without government interference and create their own on-the-fly pumping organization that would not take months to drain New Orleans. His instinct is correct.

In fact, there is no need for the State to close off New Orleans for months to clean it up, either. Ordinary citizens can quickly learn whatever safety procedures may be required and create their own organizations and ways to clean the city up. It is actually important for New Orleans dwellers to return soon to participate in this process because they may wish to oversee the demolition of some of their properties, and there are insurance issues. Even if they live in makeshift dwellings with sanitary facilities brought in, if they voluntarily wish to take part in what is their property, this should be allowed. It is their right. The combined manpower and motivation of those who live in New Orleans should not be ignored and pushed aside.

Poor government management is independent of race, color, creed, nationality or any other characteristic except one: it’s management by government. This is why we are told by a U.N. agency that "The Iraqi authorities are doing about as sloppy a job managing their oil wealth as the American authorities did in the months after the U.S.-led invasion." The same board notes "that the U.S. Defense Contract Audit Agency, the Pentagon auditing arm, had tried to hide from it more than $200 million in apparent overcharges in contracts paid for with Iraqi oil money and awarded on a noncompetitive basis to Halliburton Co., once led by Vice President Dick Cheney." If we impeach all those who should be impeached, as Paul Craig Roberts passionately tells us is essential for the rule of law to survive in this country, who will end up as President?

Poor management is independent of employees. The people manning the government’s ramparts are just as capable as the people outside the State. They just behave differently. That’s because accountability is so much lower in a State job. This allows many to secure jobs that do not match their skills and capabilities. This allows many to hold onto their jobs despite poor performance. Civil service is poor service. Strategy and performance do not link up. Poor performance can persist because there is no sanction (such as losing money or having negative profits) against it. The wallets of taxpayers make good all the management mistakes of government.

It is an error to focus too greatly on blaming the lack of experience of FEMA’s head Michael Brown or Homeland Security’s Michael Chertoff for the woes of the Katrina experience. How do people who are inexperienced and/or incompetent at handling such responsibilities, such as they are, get into positions of power and responsibility? That is a more critical question. Working your way through the bureaucracies, either Party or governmental, is often the way. Mr. Brown was an attorney for most of his career before becoming FEMA counsel in 2001. He would hardly be expected to have the management skills to run FEMA. Mr. Chertoff also was a lawyer, prosecutor and judge. How does this qualify him for running Homeland Security? It doesn’t. But he helped figure out how to justify legally detaining terror suspects and he was a fund raiser for Bush in 2000.

It is an error to focus on cleaning up this corrupt system because the system of government is inherently corrupt. Poor public sector management – thy name is government.

Michael S. Rozeff

Also by Michael S. Rozeff

Michael S. Rozeff is a retired Professor of Finance living in East Amherst, New York. He publishes regularly his ideas and analysis on www.LewRockwell.com .

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