The Answer Is Transaction Costs Barking Cats: On the "Nature" of Bureaucracy
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Jun 10, 2025 The discussion dives into the frustrating realities of bureaucracy, highlighting the infamous inefficiencies of agencies like the DMV. It reveals how government practices create burdensome 'trouble costs' that citizens bear. Humorously cracking open historical quotes, the conversation points out the paradox that while bureaucracy promises productivity, it often delivers ineffectiveness. The deep-rooted structural challenges in healthcare bureaucracy are examined, with personal anecdotes shedding light on the urgent need for reform and innovation.
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Bureaucracy's Nature Is Fixed
- Bureaucracies behave like cats that can't be made to bark; their actions follow their nature, not human desires.
- Government agencies' dysfunction is systemic, not due to individual bad actors or mistakes.
Bureaucracies Ignore Convenience Costs
- Bureaucracies treat money costs and inconvenience costs very differently compared to private businesses.
- Unlike businesses, bureaucracies cannot substitute money cost reduction with better convenience because they lack profit motives.
Passport Control Wait Customer Costs
- Mike Munger’s experience at Charlotte airport showed long passport line waits due to limited agents.
- People would gladly pay extra fees to cut wait times, but bureaucracy doesn't capture this preference.
