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  • Why Bureaucracies Suck

    Posted by Carl from Chicago on August 24th, 2010 (All posts by )

    It is important to keep in mind the ossifying effect of bureaucracies and their ability to grow and consume resources without impacting the situation that they were established to originally “fix”.  This occurs in the public sector (government) and in the private sector among foundations.

    A donor gave a gigantic donation to the Poetry foundation, a foundation dedicated to publishing “Poetry” magazine and also to helping the mission of poetry.  In the popular consciousness and in reality, being a poet would be the quintessential “starving artist”, since there is very little remuneration for this sort of work.

    So what would be the logical thing to do with this vast and unexpected donation, in excess of $100 million?  Perhaps the foundation could actually pay poets and sponsor their work and bring them out of penury?

    Nah… the thing to do is BUILD A BIG BUILDING FOR THE STAFF (and visitors).  In an expensive part of Chicago, in fact, where the cost of the building is a significant multiple of what it might cost elsewhere, say the suburbs of Chicago, or pretty much anywhere else in the US outside of New York or California.

    Per this article, the total cost of the building is expected to be $21.5 million.  Since nothing ever comes in on time or on budget, plan on it costing a bit more.

    …offices space are located on the second level, organized into three areas each for the administration, Poetry magazine and website staff, and programs staff. The building’s internal arrangement is configured so all spaces have views of the garden.

    Glad all of the staff now reside in a very high rent district, in a state of the art building, with a view of the garden.  I’m sure all of the starving poets out there will appreciate this fact.

    A classic example of a bureaucracy putting the needs of its staff ahead of its mission.

    Cross posted at LITGM


    14 Responses to “Why Bureaucracies Suck”

    1. Scott Says:

      According to Merriam-Webster, bureaucracy is “a system of administration marked by officialism, red tape, and proliferation”. I’m not sure what that has to do with the Poetry Foundation’s decision to invest in real estate and improving — well, creating some astounding — working conditions for the staff.

      The Poetry Foundation’s self-described mission states that “It exists to discover and celebrate the best poetry and to place it before the largest possible audience.” Sounds more like a talent scout and marketing agency. It doesn’t sound like “relief agency” for starving poets. Most poets have day jobs. Good ones earn a little money. That’s life in the USA. I’m glad the Poetry Foundation will be around for a long time to celebrate it and expand public awareness.

      For bureaucracy, check out your local government. The United Way would be a better example of a charitable bureaucracy.

    2. Robert Schwartz Says:

      I wondered what they were going to do with all of that money.

    3. Carl from Chicago Says:

      Uh, Scott, enjoy your day job over at the Poetry foundation.

      I stand 100% by my post that it is idiotic for them to spend this much of their grant on an elaborate HQ for staff in some of the highest cost real estate in the nation.

      That doesn’t seem to further the mission of poetry much for me.

    4. Jonathan Says:

      Of course they are going to blow a lot of the money on a fancy building. They might as well have struck oil. The donor might have been wiser not to donate the money all at once, not to donate all of it to one organization and not to donate without stipulating in great detail how it was to be used. Most institutions funded by bequests of this type are captured by the employees and become self-justifying bureaucracies dedicated to flouting the donors’ wishes. Look at the PBS donor list for prominent examples. The Hoover Institution, which is run according to its founder’s wishes, is a notable counterexample and is under constant pressure from groups that want to take it over and divert its resources to their own ends.

    5. Dan from Madison Says:

      That building looks pretty damned small for $21.5m. You could buy whole city blocks here in Madison for that type of coin (probably in some Chicago suburbs as well).

    6. Joe Wooten Says:

      Another example proving Jerry Pournelle’s Iron Law of Bureaucracy.

      “In any bureaucratic organization there will be two kinds of people: those who work to further the actual goals of the organization, and those who work for the organization itself. Examples in education would be teachers who work and sacrifice to teach children, vs. union representative who work to protect any teacher including the most incompetent. The Iron Law states that in all cases, the second type of person will always gain control of the organization, and will always write the rules under which the organization functions.”

    7. David Foster Says:

      Bureaucracies tend to develop in businesses as well as government and nonprofits; the difference is that there is usually someone who is incented to suppress them. A CEO friend referred to “playing whack-a-mole” with outbreaks of incipient bureaucratic behavior.

    8. Shannon Love Says:

      Another good example of Pournelle’s Iron Law of Bureaucracy is the Southern Poverty Law Center. A reader sent me their tax filing a few years back and it was rather shocking. They add assets of 300 million, presumably real estate. They had annual revenues of around IIRC 30+ million but paid out 5 million in executive compensation. What kind of charity organization spends 16% of its annual revenue on its corporate officers. For-profits don’t spend over 5% in the most extreme cases.

    9. JB1000 Says:

      I read this somewhere. No matter the original purpose of an organization, once it reaches a certain size, its first priority becomes the preservation of the organization. There is no better example of this than the Catholic Church and how they handled the very small number of pedophile priests.

    10. phil Says:

      But this is a private, voluntary association and they are always supposed to be superior and more efficient than government. In this case though it looks like they are just as incompetent and corrupt as government. If voluntary associations are this incompetent with something as trivial as poetry, why should I trust them with my health care?

    11. Michael Kennedy Says:

      The Catholic Church is a special example. It was taken over in the US in the 1960s by a leftist element that was also heavily gay. There is a pretty good book about this called Goodbye, Good Men. Some of the stories are quite shocking. I doubt the priesthood will recover in the US until celibacy is optional. The bureaucracy of the Church did pretty well for 2000 years until it came up against late 20th century libertinism.

    12. Helian Says:

      Nice post, Scott. I know you don’t realize you’re part of the problem, but you just illustrated it perfectly. I can’t wait for the building to be finished so I can discover all the great poetry out there thanks to my “enhanced public awareness.”

    13. Jonathan Says:

      But this is a private, voluntary association and they are always supposed to be superior and more efficient than government. In this case though it looks like they are just as incompetent and corrupt as government. If voluntary associations are this incompetent with something as trivial as poetry, why should I trust them with my health care?

      Because government bureaucracies are even worse.

    14. DJF Says:

      “”””But this is a private, voluntary association and they are always supposed to be superior and more efficient than government. “”””

      Overall this is true but there are plenty of examples of badly run private associations. Not all private associations are run well because they have people in charge and people are not perfect. Eventually most badly run private organizations will either reform or go out of business, though this can take some time if people (who are not perfect) continue to support them usually due to lack of information or effort.

      The difference with government run entities is that when things go bad they have the ability to take money in the form of taxes and reinforce failure so they keep on going long after most badly run private organizations reform or go out of business

      So the Southern Poverty Law Center can last for decades because the donors don’t know or don’t care about how the money is spent. The donors who don’t know are lazy and the ones who don’t care give money for reasons of ego or ideology. These are common human failing which effect all organizations both private and government. The government is worse because it can even take from those who object to the organization.