Here's something good!

Sheldon Richman has a good piece on why bureaucracies can't be reformed by placing business leaders at their helm:

John Tierney is an excellent columnist, by far the best on the New York Times op-ed page. He showed it last week when he contrasted Wal-Mart’s superlative emergency preparedness with the government’s horrible performance during Hurricane Katrina. As he wrote, Wal-Mart is

one of the few institutions to improve its image here after Katrina sent a 15-foot wave across the north shore of Lake Pontchartrain. If you mention the Red Cross or FEMA to people in Slidell [Louisiana], you hear rants about help that didn't arrive and phone lines that are always busy. If you mention state or national politicians, you hear obscenities.

But if you visit the Wal-Mart and the Sam's Club stores here, you hear shoppers who have been without power for weeks marveling that there are still generators in stock (and priced at $304.04). You hear about the trucks that rolled in right after the hurricane and the stuff the stores gave away: chain saws and boots for rescue workers, sheets and clothes for shelters, water and ice for the public.

Tierney says that among Louisiana officials, “there's even been talk of letting Wal-Mart take over FEMA's job. The company already has its own emergency operations center, where dozens of people began preparing for the hurricane the week before it hit by moving supplies and trucks into position. …I'm afraid the Wal-Mart Emergency Management Agency will be a tough sell on Capitol Hill. But I'd vote for WEMA.” At the least, he suggested, Wal-Mart chief Lee Scott should run FEMA.

But Tierney misses an important point. Wal-Mart did so well precisely because it is not a government agency or contractor. There is no reason to believe that Scott could run FEMA better than a political appointee or career bureaucrat. This is not meant as an insult. Rather, it’s a comment about bureaucracy. There’s an old conservative idea that government can be run like a business, but years ago Ludwig von Mises, in his classic Bureaucracy, showed that this is a misconception.

In that little book Mises contrasts the essential nature of a government bureau with that of a for-profit enterprise. As he points out, these forms of organization could not be less alike. An enterprise can prosper only if it pleases consumers, who are free at any time to take their money and search for satisfaction elsewhere. Thus business owners have an infallible guide to how well they are doing: the profit-and-loss sheet. If consumers don’t want a company’s products badly enough to pay a profit-yielding price, the business has two choices: do better or sell out to someone who will. The free market gives business owners indispensable tools for calculating success or failure: market prices for both inputs and outputs.

This combination of consumer sovereignty, free competition, and the price system—which all flow from the same thing: individual liberty—makes it possible for enterprises to perform efficiently. That is why market-based societies are far more prosperous than socialist societies and why freer economies do better than more-regulated economies.

Richman seems to be coming down harder on Bureaucracies than Mises does. Mises points out that the machinery of coercion that is Government needs to be tied down tightly by the Rule of Law lest it get out of control.

Oops, gotta go.