I have written several times about the differences between bureaucratic management and profit driven management ("Bureaucratic Management", "The Bureaucratic Mind", "Bureaucracy Revisited"), as well as argued that once the government is involved in a venture, even one previously run for profit, the management will inevitably become bureaucratic ("The Inevitability of Bureaucratic Management in Government Enterprises"). Worse still, I have also shown that, because of the changing tort system, as well as the welter of regulatory bodies ("Professional Education", "Licensing", "Business Licensing and Regulation", "Bad Economics Part 12", "Real Life and Regulation", , "Insider Trading", "Gun Control, The FDA and Regulating the Law Abiding") even for profit enterprises are beginning to show signs of bureaucratic management ("Somewhat Off-Topic Rants", "Organizations as Filters"), those with the most government involvement, regulation or highest reliance on government funding changing the most and earliest.  It has been a recurring theme of this blog, mostly because it provides a concrete example of the ways in which government involvement destroys private enterprise, much more concrete than some of my other, more abstract posts. ("How the Government Corrupts Relationships", "The Inherent Disappointment of Authoritarianism", "In Praise of Contracts ", "Greed Versus Evil", "Bad Economics Part 2", "Bad Economics Part 3", "Bad Economics Part 5", "Funding and the Corruption of Science", "Government Intervention and the Purpose of Government")

I was reminded of all this while watching an episode of the BBC series "Life on mars" (quite different from the US remake which premiered recently only to be almost immediately canceled).

Before I move on with the essay proper, let me add a few disclaimers. In what follows I will make several statements that seem to suggest a uniform distrust of the police. Nothing could be farther from the truth. One need only read my posts "Faulty Logic" and "All Life in a Day, or, How Our Mistaken View of History Distorts Our Understanding of Events", where I criticize the tendency of some libertarians to side with criminals to see I am hardly given to knee jerk antipathy toward the police. Nor am I prone to be "soft on crime", as my posts "Compassionate Execution", "The Death Penalty", "A Rational Approach to Punishment", "The Ends Justify the Means?", "Fair or Functional?", "Symmetry and Asymmetry in Government" and "Revisiting the Death Penalty" show. And, if that is not enough to show my beliefs about police are hardly hostile, my father spent his entire life in one form of law enforcement or other, and I spent my entire childhood associating with police officers and their families. Fourth of July picnics were spent at my uncle's house, sharing a backyard with his neighbor,  a Baltimore homicide detective, who routinely invited dozens of  his coworkers. Several summers I spent with the children of officers from around the nation at the Southern Police Institute Alumni Association gatherings. I could go on, but it should be clear that I have a quite balanced perspective on police. (Or, if anything, I am inclined to favor the police perspective.)

On the other hand, we need to be realistic. As I have been critical of the bureaucracy that exists in our otherwise admirable military ("Bureaucratic Management"), we need to be honest about the pressures placed upon the police. And in this case, those pressures also serve as an illustration of the general problems of bureaucracy. By pointing out these issues I do not mean to suggest all, or even most, police officers give in to such pressures, to suggest most police forces are corrupt. All I intend to do is to show the problems created by such pressures, and to argue that without exceptional individuals able to withstand such pressures, it would be quite easy for police forces and other bureaucratic organizations to give in to them.

So, what am I describing? After all these disclaimers, what did I mean when I mentioned the episode of "Life on Mars?"

In the episode in question, a suspect has died while in custody. Despite reluctance on the part of the rest of the department, the protagonist, Sam Tyler, begins his own investigation into the matter, and discovers that some other officers were involved. His chief decides to handle it internally and metes out punishment, but Sam, worrying about corruption, then takes the tape to a higher ranking officer. And that is where the significant bit occurs. The superintendent does not act, but says it is being handled internally and destroys the tape.

What made it such an interesting scene to me is how true that scene rings. Imagine you are an upper echelon police officer confronted with evidence of misbehavior by an underling. At first, likely you would want to act to put a stop to it, both to stop whatever wrongs were being committed, and, from a political perspective, to head off any future scandal should it become public.

But what if it were already stopped? What would you do then? You could still make a public show of handling it, hoping to make a name for being incorruptible. In addition, it would avoid any potential problems should the events ever become publicly known. On the other hand, by making it public you risk having your name associated with a scandal, becoming known as presiding over a scandal ridden department. And as no one wants it to become known, either the guilty, who want it buried, or those handling it, who obviously want it kept quiet, in the end, it is more likely you would hide it than make it public.

Just as happened in the show.

The reason I bring this up is that it is a problem inherent in bureaucratic management, and one absent in profit management. Bureaucratic positions are inherently political. Lacking any measure of performance, any external gauge of success or failure, bureaucracy is inherently judged by arbitrary standards, which allow political considerations enter into every decision. Worse still, the more important the decision, and the more prominent the actor, the more political the decision. And so, as decisions become more significant and far reaching, the less they are decided based on anything other than purely political considerations.

Not that all political pressures are necessarily negative. As I said above, some political pressure exists encouraging transparency and vigilance against corruption. However, as we all have seen from the actions of politicians, whatever the pressures inclining them to honesty, the pressures inclining them to silence any potential scandal are stronger.

But it only makes sense. Let us imagine I am in charge of a large government agency. I have two interests. First, doing something spectacular that will make my name known and advance my career. However, barring that, I want to avoid any scandal which may bring in the politicians or lawyers, as the result of such a scandal is likely to end my career immediately, without hope of recovery. In fact, given a choice which offers the possibility of great success and the possibility of great failure, I would choose to avoid such an act every time, as success brings only very limited praise, and often results in credit being taken by those above, while failure will always result in career death. And so, bureaucracy favors those who present a bland, unremarkable face to the world, and that means a tendency to hide scandals, as even a scandal properly handled by an agency is still a scandal. It is better to be invisible than do the right thing.

What makes this even more interesting is how it has come to enter the private sector.

At one time such considerations were unknown in the private sector. Yes, some bosses would try to cover up the misdeeds of underlings, but it was rare. As praise is more easily obtained in profit-driven firms, and shame is less of a driving force, there is little reason to avoid revealing scandals that have been handled. In a normal business, the firing of a troublesome underling is seen as a non-event. Even a criminal underling can be terminated without loss of status. And so, in general, private firms did not concern themselves with such problems, they handled law breakers the way people in everyday life do, turning them in to police.

Oddly, by all their measures intended to stop "corporate wrong doing", through regulation ("Professional Education", "Licensing", "Business Licensing and Regulation", "Bad Economics Part 12") and liability suits ("The Problem With Tort Reform", "Red Herring"), the left has created the corporate misdeeds they feared. One example that comes to mind is the familiar story of tort liability. Trains have traditionally blown horns when approaching narrow bridges to warn anyone likely to be using such bridges as a shortcut that a train is approaching. However, the lawyers, knowing how the courts now think, point out that to do so it to confess that the railroads know people are likely to be on the bridge, and, even though the people are doing wrong, and the bridges are posted as dangerous, it will make the railroads liable. And so, rather than provide a common sense warning, the trains do the more dangerous thing and approach the bridge without warning, all to avoid liability.

And the same is true of misdeeds within enterprises. As misdeeds may draw tort liability upon the whole firm, thanks to our insanely expansive tort system, and may even draw government investigation if it receives enough attention, or involves one of the firms that government loves to questions (oil, tobacco, investment houses, banks, and so on). And so, just as government bureaucracy has been doing for some time, private enterprises are beginning to act in the bureaucratic manner, hiding their misdeeds and refusing to properly police their ranks for fear that doing the right thing will bring them liability or even government censure.

Of course, this should come as no surprise to anyone who has read my blog for any time. In "How the Government Corrupts Relationships" I described the many ways government involvement destroys private relationships, turning us from collaborators into adversaries, where an adversarial relationship is not needed. Nor was that my first writing on this topic. In "In Praise of Contracts " and elsewhere I have pointed out much the same thing, that the way to encourage peaceful, voluntary, mutually satisfactory interactions is to minimize government involvement. The minute you allow government to involve itself too freely, not only do you have inevitable corruption ("Transparency, Corruption and Reform"), but strife between all parties involved.

And yet, oddly, the left, and many on the right, unfortunately, continue to promote government involvement as the best means to keep business honest, when in truth it does nothing more than bring the corruption, bureaucracy and other defects inherent in government to the private sector. (cf "Greed Versus Evil",  "Planning For Imperfection", "Fairness and the Free Market")