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Mises Wire
Thomas J. DiLorenzo
12/12/2024
In private business “here is no need to limit the discretion of subordinates by any rules or regulations other than that underlying all business activities, namely, to render their operations profitable.”—Ludwig von Mises, Bureaucracy, p. 46
In this quote from his classic 1944 book Bureaucracy, Mises explains why private, for-profit businesses need not, and should not, be bureaucratic and entangled in rules and regulations mandated from the top of an administrative hierarchy. Instead, they should, make the best use of decentralized “knowledge of time and place” to do their jobs. Mises’ admonition that the focus of capitalist enterprises is and should be to “make a profit” later became, in the hands of Chicago School economists, “maximize shareholder value.” This view is most widely associated with Milton Friedman and was accepted by American corporate management, for the most part, for many years.
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