I used to have a sign in my office that said “Bureaucracy is the Enemy.” Today I saw Pournelle’s Iron Law of Bureaucracy for the first time, and I agree with it. The law says, “In any bureaucracy there are two types of people; those who work to further the actual goals of the organization, and those who work for the organization itself. The second type will always gain control of the organization and write the rules under which the organization operates.”

I would cite NASA as an example. In the early days great things were accomplished. Now NASA is unable do accomplish anything despite still having a large budget. They are bound up in bureaucratic rules, and make disastrous decisions. Public education is another example: bureaucrats rise to the top and make rules that frustrate good teachers and cause them to leave.

I have seen the same thing at the project level in industry. Initially much progress is made, but soon the bureaucratic maze slows progress to a snail’s pace. Many functional leaders think that they can write procedures, which, if followed to the letter, will always achieve success. They don’t think they need creative people, and, in fact, don’t even want them.

I think this law of bureaucracy is why capitalism beats socialism. In capitalism, competition causes organizations to re-structure or be destroyed by more efficient new businesses. Socialism has no such mechanism.