President-elect Donald Trump’s announced cabinet and White House staff appointments for his next administration have attracted praise from supporters, outrage from opponents, and even criticism from libertarian podcasters like Ron Paul and Radio Rothbard hosts Ryan McMaken and Tho Bishop regarding Trump’s hawkish national security picks. Everyone agrees that “personnel is policy” though, meaning that the outspoken policy preferences of many of Trump’s appointees marks a sharp departure from the status quo in Washington DC.
Much like the former Cold War sport of “Kremlinology”—where pundits and academics claimed to discern shifts in Soviet policy by observing which personalities were standing closest to the Great Leader during Red Square military parades or by reading between the lines of whatever banal statements Pravda and Izvestia were publishing about them—contemporary observers of American politics now attempt to do the same thing based on which personalities are being trotted out at Trump’s rallies and what Trump writes about them on his Truth Social posts. A number of news outlets have even started excitedly parsing Trump’s statements to speculate about the current status of what they call Trump’s “bromance” with Elon Musk and its possible policy implications.
Some credit the phrase “personnel is policy” to Ronald Reagan’s Director of Personnel, Scott Faulkner, who used it to argue for the appointment of hard-line conservatives during Reagan’s 1980 transition. Think tank wonks and pundits have since widely adopted it as a truism for every presidential transition, without paying much attention to what such a phrase implies about the nature of America’s political system. So how do we reconcile this phrase with the old-fashioned notion that America is a republic governed by elected office-holders whose powers are constitutionally limited and separated from one another?
To bring this question into sharper focus, we can turn to Austrian economist Ludwig von Mises’s description of the relationship between elected office-holders and bureaucrats:
The two pillars of democratic government are the primacy of the law and the budget.
Primacy of the law means that no judge or office-holder has the right to interfere with any individual’s affairs or conditions unless a valid law requires or empowers him to do so....
The administration, in a democratic community, is not only bound by law but by the budget. Democratic control is budgetary control. The people’s representatives have the keys of the treasury. Not a penny must be spent without the consent of parliament. It is illegal to use public funds for any expenditures other than those for which parliament has allocated them.
Bureaucratic management means, under democracy, management in strict accordance with the law and the budget. It is not for the personnel of the administration and for the judges to inquire what should be done for the public welfare and how public funds should be spent. This is the task of the sovereign, the people, and their representatives. The courts, various branches of the administration, the army, and the navy execute what the law and the budget order them to do. Not they but the sovereign is policy-making.
In the absence of objective market tests of profit-and-loss (such as exists in private businesses in a free society, but not in any government), subordinates always have to be bound by detailed rules to prevent them from abusing their discretion to act contrary to the goals of their superiors. In other words, to the extent that the phrase “personnel is policy” is true, voters do not have the power to determine policy. When Mises uses the term “democracy” he means a limited state that cannot rule by edict. Naturally, then, in this conception of democracy, it is mutually exclusive with policy-making by the bureaucracy. Red tape is, in fact, a good thing when it is used to tie up bureaucrats, not businesses.
It might be argued that the discretion of subordinates can be limited if their superior keeps a sufficiently close eye on all of them and promptly fires anyone who defies his will. Presumably, Trump could make his will known to his appointees easily enough without having to publish it as formal regulations in the Federal Register, and Trump is world-famous for not being shy about firing subordinates. However, a single office-holder can’t closely monitor the activities of hundreds of appointees continuously, nor can these appointees, in turn, control the behavior of the thousands of tenured civil servants beneath them without a credible threat of detecting and dismissing them whenever they violate published regulations.
Controlling tenured bureaucrats requires auditors from the General Accounting Office checking the books, vigorous scrutiny of bureaucratic behavior by Inspectors-General, and outsiders interested in extracting information from the bureaucracy and publicizing it with the aid of whistle-blowers, Congressional investigations, and Freedom of Information Act requests to pressure and empower office-holders to enforce bureaucratic discipline.
Though Trump himself is an elected official, under the American Constitution, the task of his office is merely to execute laws and not to promulgate them. In theory, Congress is supposed to make the laws and the budgets that govern the bureaucracy, not delegate such powers to the president or his subordinates. Not only does the “personnel is policy” premise imply that the American government is controlled by the bureaucracy, it also implies that Congress has been giving up its role as a serious policy-making body, and that its elected members are becoming superfluous.
So what put American constitutional separation of powers in such distress? Another Austrian economist, Friedrich von Hayek, explained in The Road to Serfdom how rule of law is incompatible with collectivist economic planning:
It is important clearly to see the causes of this admitted ineffectiveness of parliaments when it comes to a detailed administration of the economic affairs of a nation. The fault is neither with the individual representatives nor with parliamentary institutions as such but with the contradictions inherent in the task with which they are charged. They are not asked to act where they can agree, but to produce agreement on everything—the whole direction of the resources of the nation. For such a task the system of majority decision, is, however, not suited. Majorities will be found where it is a choice between limited alternatives; but it is a superstition to believe that there must be a majority view on everything.
Since majorities can’t agree on the totality of the ends to be pursued, another path must be taken:
It is the essence of the economic problem that the making of an economic plan involves the choice between conflicting or competing ends—different needs of different people. But which ends do so conflict, which will have to be sacrificed if we want to achieve certain others, in short, which are the alternatives between which we must choose, can only be known to those who know all the facts; and only they, the experts, are in a position to decide which of the different ends are to be given preference. It is inevitable that they should impose their scale of preferences on the community for which they plan.
In other words, government economic planning requires bureaucratic specialists who are not bound by majority opinion. Every step taken in the direction of substituting government planning for private profit-seeking plans creates an impetus towards bureaucratizing policy-making, and taken far enough necessitates the installation of an economic dictator to oversee and coordinate planning.
There is another phenomena that has empowered bureaucracies at the expense of the voters, namely, the use of “national security” in the post-World War II period as a pretext to exempt certain bureaucrats from administrative and budgetary oversight and effectively placing them outside the rule of law. University of California, Berkeley Professor Emeritus Peter Dale Scott popularized the phrase “Deep State” to characterize how elements of an intelligence community—capable of executing covert operations under cover of plausible deniability—can exploit secrecy, black budgets, penetration of private and governmental institutions, and informal networking with special interests, organized crime, and foreign intelligence agencies to exercise power independently of the elected officials they nominally serve, even to sometimes turn against these officials.
Set in the context of Mises’s analysis of what is required to keep bureaucrats subordinated to office-holders, Scott’s warnings about the emergence of the Deep State constituting a standing threat to limited, constitutional government makes perfect sense, as does Senator Charles Schumer’s ominous 2017 warning that the intelligence community was upset with President Trump and had “six ways from Sunday” of getting back at him.
History has since vindicated Schumer’s judgment. Trump’s political survival up to now, in the face of determined Deep State opposition, has been even more wildly improbable than his head having been merely grazed instead of blown apart by a would-be assassin’s bullet. However, saving constitutional government from the Deep State and from rogue bureaucrats will require much more than just a turnover of personnel. It is essential to restore the primacy of law and budgetary control over bureaucratic discretion, and that, in turn, requires a retreat from government economic planning and from the delegation of Congressional powers to the executive.
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No Mises Bust at the University of Vienna
2024-11-04
This past summer I joined my son in Vienna. He was there on a fellowship from his senior year at Carleton College to study architecture, in particular the work of Otto Wagner, the Secession movement, and so on. I had only been there once before, when backpacking during law school. I accompanied him on his explorations and we feasted on Viennese cuisine at places recommended by local friends. I suggested that we take time to visit the University of Vienna, so that I could see the monuments to famous Austrian economists who had taught there. The lobby highlights Nobel prize winners, including Friedrich von Hayek; and in the “Colonnade,” or “arcade courtyard” (Arkadenhof, also locally referred to as the aula), there are dozens of monuments—busts, bas-relief plaques—dedicated to noted
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