It is commonly hoped that bureaucratic overhead will eventually be trimmed-but the writings of Martin Anderson, Edward 13anfield, Ludwig von Mises, and others paint the outlook for such improvement as rather bleak. And because the logic of bureaucratisin tends always to greater centralization, the sheer size of the problems to be solved will overwhelm the bureaucrats, no one of whom can hope to master even a minute proportion of the data involved. Thus, capital resources will be taxed and squandered. There is, of course, an irreducible bureaucracy essential to a civilized polity. But governments do not create wealth, and, as the bureaucratic sector grows relative to the sector of profit management, the percentage of society's capital which it absorbs will become larger, What is more, as this growth continues, and the price mechanism is distorted, or even - in areas of more purely bureaucratic management disregarded, state inefficiency will actually tend to increase, since the market price is in fact the guide of economic planning.
Visible hands are self-generating.
After one intervention has deflected market forces and distorted the indicators, fingers will be pointed to this dysfunction as a manifestation of capitalistic inadequacy, and cries will be heard for a second incursion to cure the effects of the first - though this will naturally not be recognized. The Federal Reserve System gave us the Great Depression and the New Deal. Government-fed inflation, at least once, yielded wage and price controls. Earlier this year, the state of California raised the minimum wage, and demand began to rise immediately for a state jobs-program to alleviate high unemployment among the young. Truly, the left hand knows not what the right hand doeth.