Back in 1944, Ludwig von Mises wrote a little book titled Bureaucracy. You can download it for free here.
In his book, he contrasted a profit management system and a bureaucratic management system. A profit management system is based on open entry and competitive markets. There is no guarantee of any profit. Owners hire managers, and managers are supposed to obtain profits for the company. In contrast, in bureaucratic management, there are no owners. There are only politicians. The politicians hire managers. They fund the operations of the various bureaucracies. They place limits on what managers are legally allowed to do. The bureaucracies are run "by the book."
Entrepreneurs are future-oriented. They do not know what the future will bring. They have to allocate business assets in terms of their best guesses regarding future competition and future customer demand.
In contrast are bureaucratic managers. They are not paid to forecast the future. They are paid to do things by the book. Their income is guaranteed. They are paid by the state. There is no open entry. There is no competition. They are past-oriented. They must do things by the book. The book was written in the past.
Mises made the point that it is silly to expect bureaucratic management ever to run efficiently. There are no criteria for such efficiency. There is no profit-and loss-statement. There is no balance sheet. There are no capital markets. But there is guaranteed payment by the state. There is a book of rules, and bureaucrats must legally operate within this book of rules.
The two systems are very different in terms of how they are funded, and therefore they are very different in terms of how they operate. Mises made it clear that the two systems are very different, because the funding is different and therefore the success indicators are different. We should not expect either system to operate in terms of the criteria that govern the other system.
THE MILITARY IS A BUREAUCRACY
With this as background, let me make my point. The military is a bureaucracy. It is funded by the national government. There is no system of rival services. The military has a monopoly. There are not two armies in the United States. The Navy, the Air Force, and the Army compete for funding, but they do not indulge in shooting wars against each other.
The test of the efficiency of a military system is limited to war. War is when we have the bureaucratic equivalent of the substitution effect. One military establishment seeks to substitute its authority inside another nation. The other nation employs its military to do the same thing. This is the only real competition that any bureaucracy ever gets. The military in wartime is not like a peacetime bureaucracy. It really does have criteria of performance: victory. In a war, we see how well a particular military bureaucracy meets the criteria. It either wins or loses.
There is nothing comparable to this in peacetime bureaucracies. They do not go to war. There is no way to substitute a rival bureaucracy in terms of a profit-and-loss system. The military has its own profit-and-loss system, but only in wartime. Once the war begins, it must win on the battlefield.
This is why successful peacetime generals rarely survive long after the shooting starts. The criteria of performance are radically different in peacetime. In the peacetime army, the senior officer has a task: to make certain that his branch of the military gets more funding than the other branches get. His goal is to defeat the enemy: the rival branches. But as soon as the shooting starts, competition in an essentially uncontrolled environment begins. At that point, the criteria of success change dramatically. The officers who were good at milking the system for their branches either retire or else are put in desk jobs. They are not put into the battlefield unless they win the early engagements. The classic examples were Lincoln's appointees prior to Grant. A new generation of military commanders moves up through the ranks, either because the ranks have been thinned out by battlefield casualties, or because the top ranks have opened up because of career casualties. The peacetime generals are removed from power in the chain of command.
This is why military preparation before the war is not very efficient. There is no real competition. There is no testing ground for various theories of warfare and mobilization. The great test comes only when the war breaks out.
This is why we do not want a real test of the efficiency of the military. What we want is peace. There will be in-fighting to get access to politicians' funding, and as long as a war doesn't break out, all the citizens lose is money. But once the war breaks out, the nation starts losing lives. It also starts losing money in voluminous quantities. The military hospitals start filling up. This is the test that matters for a military system. All the other tests are irrelevant. This test is a life-and-death matter. This test determines which nation prevails.
CONCLUSION
It does no good to complain about the inefficiency of the military. What we want is an inefficient military. What we don't want is a war. We have our choice: an inefficient military or a war. There is no third choice. There never has been.
This is why I do not complain too much about waste in a peacetime military. Of course there is waste. There are almost no operating criteria to eliminate waste in any bureaucracy. But in a war, we do have criteria of efficiency: kill or be killed. Unlike all other bureaucracies, in a war, there are very specific criteria about success and failure. Military units get efficient, and they get efficient very fast. Efficiency is defined very simply: battlefield success.
My advice: Do not complain about an inefficient military, as long as there is no war.
I would rather have an inefficient military than a war.
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